LNG

Elixir Energy, the Australian exploration and production company with plans for a small-scale liquefaction plant using coal-seam gas to provide clean fuel for trucks in Mongolia, is making progress in its South Gobi Desert operations with prospective resources having almost doubled to 14.6 trillion cubic feet.

Nov 24 (LNGJ) - Australian LNG plant operator Santos said it welcomed the approval by the Federal Environment Ministry of the Narrabri Gas Project in New South Wales and will now embark on a 12-18 month appraisal program ahead of a final investment decision. Adelaide-based Santos operates the Gladstone LNG plant in Queensland and has a stake in Darwin LNG and the export facility in Papua New Guinea. The Narrabri project is for coal seam gas development with around 850 wells planned.

   Santos Chief Executive Kevin Gallagher said the conditions on the Narrabri Gas Project approval were consistent with those already set by the New South Wales Independent Planning Commission and generally in line with those for the company's Gladstone LNG operations, where Santos operates safely and efficiently, while protecting water resources and the environment. “Santos is excited about the prospect of developing the Narrabri Gas, a 100 percent domestic gas project that will deliver the lowest-cost source of gas for NSW customers,” added the CEO.

Australian LNG plant operator Santos, with stakes in two Australian plants and Papua New Guinea LNG, said the past quarter represented the “the trough for LNG prices”, with higher prices expected on oil-linked contract and Japan-Korea Marker spot prices through to the New Year.

Santos, the Australian liquefied natural gas shareholder in three Asia-Pacific plants, maintained solid second-quarter earnings levels as its average realised LNG price was US$8.27 per million British thermal units, less than a dollar lower than a year ago.

Australian LNG plant operator Santos expects to recognise a non-cash impairment charge in the range of US$700-US$800 million before tax, most of it attached to LNG, due to the revised oil price and the effects of Covid-19 and energy market demand fundamentals.

Elixir Energy, the Australian exploration and production company with plans for a small-scale liquefaction plant using coal-seam gas to provide clean fuel for trucks in Mongolia, is making progress in assessing resources in the South Gobi desert region.

Australian liquefied natural gas export plants in Western Australia and Queensland exported a total of 93 cargoes in May, with six of them spot cargoes, down from 101 shipments the previous month, while deliveries to China kept their momentum as Japan and South Korea imports were lower or flat.

Australian LNG operator Santos has completed the acquisition of the northern Australia and Timor-Leste assets of US major ConocoPhillips for a reduced purchase price of US$1.265 billion because of the oil price slump.

SK E&S, a leading South Korean LNG operator and utility company, has sold its entire stake in a Chinese private natural gas company to improve its own finances amid the demand and prices drop in the energy industry.

The energy unit of SK Group said it sold all of its remaining 10.25 percent stake, amounting to 535 million shares, in China Gas Holdings through a block deal on the Hong Kong Stock Exchange, according to a regulatory filing.

The sale price was 1.80 trillion South Korean won (US$1.47 billion).

China Gas is the largest independent Chinese city-gas distributor and owner of over 550 filling stations for gas-powered vehicles.

The Chinese company has been in a partnership with Kunlun Energy, a subsidiary of LNG importer PetroChina, to connect households and businesses to city gas in China’s northeast provinces.

SK E&S said the move to sell the Chinese shares was aimed at improving its own financial structure as it also increases its energy investments in Australia.

It had previously sold a 3.3 percent stake in China Gas in September 2019 for 786.8 billion won. Currently, only its subsidiaries own stakes in CGH, totaling 1.45 percent.

The company is a unit of the SK Group, the third-largest conglomerate in South Korea, and a competitor to Korea Gas Corp, the largest LNG importer.

SK E&S, which has booked volumes from Freeport LNG in Texas, also has capacity at two South Korean import terminals, the Boryeong and Kwangyang facilities.

It is additionally a shareholder in the Barossa natural gas field development in Australia’s Northern Territory that will provide feed-gas for the Darwin LNG export plant at Wickham Point.

The shareholdings for that venture and Darwin LNG have changed after ConocoPhillips agreed to sell its Northern Australian assets to Adelaide-based energy and LNG player Santos.

Santos has signed agreement to sell a 25 percent interest in Darwin LNG to SK E&S.

It also sold a 12.5 percent interest in the Barossa filed development to the largest Japanese LNG importer, JERA Co. Inc.

Papua New Guinea’s liquefied natural gas expansion seems to have moved to the back of the line for ventures likely to make progress in the next two years as its hold-ups came before the most recent industry challenges led companies to defer multiple projects.