LNG

Argentina is moving forward with more natural gas production both onshore and offshore with LNG market participant, the French major TotalEnergies, announcing the start of drilling at the Fenix gas field off the southern Argentine province of Tierra del Fuego.

National Petroleum Corporation of Namibia (Namcor) in southwest Africa said a third discovery had been made by partners Shell and QatarEnergy in the deep-water offshore Orange Basin as hopes were also raised for future revenues from associated gas like northern neighbour and LNG exporter Angola.

State-owned Namcor said the light oil discovery was the third made in the Basin after drilling the Jonker-1X exploration well.

The well is located in Block 2913A and 2914B (PEL 0039), 270 kilometres (168 miles) offshore southern Namibia.

Shell and QatarEnergy each hold a 45 percent stake in the PEL 0039 concession while Namcor has a 10 percent shareholding.

The well was drilled in Block 2913A and 2914B, following drilling operations which commenced in December 2022 and were completed safely early in March 2023.

The Jonker-1X discovery is the third well drilled in the past year in the licence area held by Shell.

Namcor said that the “Deepsea Bollsta” semi-submersible rig owned by offshore firm Odfjell drilled the well to a total depth of 6,168 metres in a water depth of 2,210 metres.

The acquired data is being evaluated and further appraisal drilling is planned to determine the size and recoverable resources potential of the discovery.

Potential

“The discovery has proven the exciting potential of the deep-water Orange Basin,” said Namcor Managing Director Immanuel Mulunga.

Saad Sherida Al-Kaabi, the Qatar Minister of Energy Affairs and the Chief Executive of QatarEnergy, said he was pleased with the encouraging discovery.

“I would like to take this opportunity to congratulate our partners Shell and Namcor, and to congratulate and thank the Government of the Republic of Namibia, which has been very supportive of this exploration effort,” said Al-Kaabi.

This announcement follows two similar announcements by QatarEnergy in February 2022 of oil discoveries in the Graff-1 well and in the Venus-1X prospect, both located in the Orange Basin.

In addition to the PEL-39 Exploration Licence, QatarEnergy also holds interests in PEL-56 (30 percent) and PEL-91 (28.33 percent) in offshore Namibia covering a total area of 28,327 square kilometres.

March 6 (LNGJ) - China Gas Holdings, one of the leading Chinese city-gas company that recently agreed to buy LNG cargoes from Venture Global’s Plaquemine liquefaction and export project in Louisiana, has expanded its stake by another 32.4 percent at a cost of $245 million in the city-gas company of Hohhot City and seven surrounding counties and development zones in Inner Mongolia.

   “Upon completion of the transaction, China Gas will hold 96.5 percent equity interest in the target company and the remaining 3.5 percent will be held by Inner Mongolia State-owned Capital Operation Co.,” said China Gas.

The price cap on Russian crude oil backed by the 27-nation European Union and the G7 group of leading western economies entered into force on December 5 and may have an impact on other energy markets and prices.

In addition to the price cap on Russian crude the EU-G7 coalition will cap prices of petroleum products such as gasoline from February 5 in 2023.

“The cap has been set at a maximum price of $60 per barrel for crude oil and will be adjustable in the future in order to respond to market developments,” said a statement on December 3 from the European Commission in Brussels.

“This cap will be implemented by all members of the Price Cap Coalition (EU and G7) through their respective domestic legal processes,” the Commission added.

The price cap, which comes on top of the EU import ban on Russian seaborne crude oil and oil products and the corresponding bans of the G7, is aimed at reducing the revenues Russia earns from oil as a sanction against the invasion of Ukraine in February 2022.

The G7 nations include the EU countries of France, Germany and Italy in addition to the US, Canada, Japan and the UK.

These measures apply to Russian crude oil falling under CN code 2709 00 and Russian petroleum products falling under CN code 2710.

Exceptions

“There is a 45-day wind-down period for seaborne Russian crude oil purchased above the price cap, provided it is loaded onto a vessel at the port of loading prior to 5 December 2022 and unloaded at the final port of destination prior to 19 January 2023,” the Commission explained.

“Maritime-related services and maritime transport can be provided during this period. There is no equivalent provision for petroleum products,” it added.

The Commission stated that “the EU's sanctions against Russia are proving effective and are damaging Russia's ability to manufacture new weapons and repair existing ones” as well as hindering its transport of material.

“The geopolitical, economic, and financial implications of Russia's continued aggression are clear, as the war has disrupted global commodities markets, especially for agrifood products and energy,” added the Commission.

The statement explained that the crude oil cap did not affect the full EU import ban on Russian crude and petroleum products and the specific exceptions and derogations which were already agreed in previous sanctions packages.

“These exceptions and derogations allow certain EU Member States to continue importing crude oil and petroleum products from Russia due to their specific situation or to import seaborne crude oil from Russia if the supply of crude oil by pipeline from Russia is interrupted for reasons beyond their control,” said the Commission.

“Specific projects which are essential for the energy security of certain third countries may be exempted from the price cap,” it added.

Analysts explained that while the EU's ban on importing Russian seaborne crude oil and petroleum products remains fully in place, the price cap will allow European operators to transport Russian oil to third countries, provided its price remains strictly below the ($60) cap.

“The price cap has been specifically designed to reduce further Russia's revenues, while keeping global energy markets stable through continued supplies,” said the Commission.

“It will, therefore, also help address inflation and keep energy costs stable at a time when high costs - particularly elevated fuel prices - are a great concern in the EU and across the globe,” it declared.

The East African nation of Tanzania said it signed a framework agreement with Norwegian energy major Equinor and UK-based Shell to intensify studies on a new LNG export project.

Sempra Infrastructure, the liquefaction and LNG export affiliate of California utility Sempra, has signed an agreement with French and Japanese partners to develop the expansion project of the Cameron LNG export plant in Hackberry in Louisiana.

US energy and LNG engineering company McDermott International has been awarded a contract by Australian export plant operator Woodside to develop the Scarborough gas field in Western Australia for Pluto LNG.

Wood Mackenzie, the energy and LNG consulting firm, has acquired another UK consultancy, the privately-held Roskill, a leading player in fields of metals and materials supply chain intelligence for the energy transition.

“Combining Roskill’s capabilities with Wood Mackenzie reinforces our ability to provide comprehensive, integrated analysis across the energy, and metals and mining value chain,” said Neal Anderson, President of Wood Mackenzie.

“In particular, Roskill adds market-leading analysis, data, and insight on battery raw materials metals, which are an integral component of the energy transition,” stated Anderson.

Wood Mackenzie is based in Edinburgh in Scotland and was itself acquired by Nasdaq-listed US firm Verisk in 2015.

Verisk said that Valerie Purvis has expanded her leadership remit and will be assuming the role of Global Head of Metals and Mining, including Roskill.

This appointment is in addition to her current responsibility as Global Head of the Chemicals business, which she has led for the last three years.

Commenting on the addition of Roskill, Purvis said that in her opinion said the “green” growth stimulus packages and commitments to net carbon neutrality by many of the major economies and major companies are increasing the pace of the energy transition.

“Integrated, in-depth analysis of the value chain for these metals and materials is crucial to understanding the transition,” added Purvis.

“I’d like to welcome the Roskill team as we add to the depth and breadth of the analysis, data and insight we provide for our customers as they evolve,” she stated.

Wood Mackenzie said in its most recent presentation at a conference in Australia that Australian producers should be at the forefront of “green LNG”, a form of cargo trading that includes offsets for environmental projects.

Wood Mackenzie senior analyst Daniel Toleman said that countries with carbon neutrality pledges now account for 30 percent of the global gas demand and 75 percent of LNG demand.

The list includes some of Australia’s largest LNG customers such as Japan and South Korea.

“In addition, faced with new and lower-cost LNG supply coming online over the next decade from Qatar and Russia, Australian producers must do more to avoid losing market share,” explained Toleman.

“As the world’s largest LNG supplier in 2020 and a jurisdiction leading the push to decarbonise, Australia can be a frontrunner in green LNG,” he stated.

However, other analysts have noted that faddish “green LNG” cargoes accounts for only a small share of the global LNG market, less than 1 percent of delivered cargoes, including in 2021. 

The supply and demand for liquefied natural gas are expected to be significantly expanded in two of three scenarios outlined in the “BP Energy Outlook”, leading to a more competitive, globally integrated natural gas market.

Burckhardt Compression, the Swiss manufacturer of compressor systems and a service provider for LNG and other markets, has continued its global expansion by agreeing to acquire the 40 percent of Chinese company Shenyang Yuanda Compressor it didn’t already own.