LNG

Siemens Energy said its HL-class gas-fired power technology is poised to enable particularly low-emission, economical and flexible power generation from mid-2024 for Taiwan's increasing LNG imports.

Taiwan in July 2021 signed a new LNG supply with Qatar Petroleum for 1.25 million tonnes per annum of cargoes as the Taiwanese use more of the fuel and expand their infrastructure.

Taiwan is still Asia’s fifth-largest importer after North Asia’s top three of Japan, China and South Korea and with India in fourth place.

The Taiwanese are constructing a third LNG import terminal to meet increasing demand after imports rose 6 percent last year to 17.75 million tonnes.

Under the Taiwan expansion plans, the national energy company CPC Corp. is developing its third LNG import terminal in the Taoyuan district of Datan Borough.

The first phase is under construction and could be completed by 2023. A second expansion phase is also proposed with the target of full commissioning by 2025.

The first expansion of Taiwan’s existing Tai-Chung LNG terminal was completed at the end of 2019.

Further work is planned, including the addition of another berth and associated tanks, to be carried out in two phases.

The 1.8 MTPA expansion project at Taiwan’s second terminal, the Yung-An facility, including three new storage tanks and related regasification facilities, is expected to be completed by the end of 2026.

Consortium

Siemens Energy, together with its consortium partner CTCI Corp, the leading Taiwanese engineering, procurement, and construction (EPC) company, will build the Sun Ba Power Phase II combined-cycle power plant.

“The plant will be an important building block in Taiwan's energy transition, which aims to shift from coal and nuclear power to environmentally friendly gas-fired power plants and renewable energies,” explained Munich-based Siemens Energy.

“The Sun Ba II facility will be built in Tainan in southwest Taiwan, and have an installed electrical capacity of 1,100 megawatts (MW),” added the company.

“It will be fired with regasified liquefied natural gas and Siemens Energy will also provide long-term service for the plant's core components,” it stated.

The customer is the independent power producer Sun Ba Power Corp.

“We are very excited to contribute to the energy transition of Taiwan with our leading HL-class gas turbine technology,” said Karim Amin, Executive Vice President Generation at Siemens Energy.

“This technology offers substantial value for Sun Ba Power Corp.'s project, as it combines high power density with world-class efficiencies,” added Amin.

“As a result, a large amount of electricity can be produced at the lowest possible cost while driving significant CO2 reductions at the same time,” he explained.

As one of the world's foremost manufacturers of semiconductors and a technology leader, Taiwan depends on secure and affordable power supply.

“Since Taiwan must import its entire natural gas requirements as LNG at comparatively high costs, the efficiency of gas-fired power plants has a particularly strong impact on their economic viability,” declared Siemens Energy.

Sun Ba II is designed as a multi-shaft combined-cycle power plant in which two gas turbines and one steam turbine each drive its own electrical generator.

Siemens Energy's scope of supply includes the plant’s power island, consisting of two SGT6-9000HL gas turbines, one SST-5000 steam turbine, three SGen6-2000P generators, two heat-recovery steam generators and the SPPA-T3000 control system.

“The service contract includes long-term service over 25 years for both gas turbines, the generators, the steam turbine and the heat recovery steam generators,” said Siemens Energy. 

Cargoes of liquefied natural gas were still the subject of high prices in North Asia and Europe as the Japan-Korea Marker for spot cargoes hit the $10 per million British thermal units mark while European benchmark LNG values increased to their highest in 2021.

Japanese spot LNG prices soared for contracted and delivered cargoes in January to as high as $18.50 per million British thermal units, back to the levels they were in 2014 that prompted the Japanese government to start publishing prices.

US energy major Chevron Corp. said it had temporarily closed a unit that separates natural gas and associated liquids at its Wheatstone LNG offshore central processing facility after finding an issue during routine maintenance.

Thailand’s Electricity Generating Public Company (Egco) has applied to the state regulator for a licence to import liquefied natural gas, making it the sixth company to be on the country's list for more LNG supplies.

Egco submitted the application to the Thai Energy Regulatory Commission (ERC) for permission to import 250,000 tonnes per annum to fuel three gas-fired power plants.

The company said the power plants included the 256-megawatt Banpong plant in Ratchaburi, the 121MW Klongluang facility in Pathum Thani and the 120MW co-generation plant in Rayong province.

Egco said the Banpong and Klongluang plants could use additional supplies. They already have an existing sales agreement with Thai state oil and gas company PTT, previously the nation’s sole importer of LNG.

“In the long term, the company may coordinate with other LNG shippers to make purchases through the same contracts when global LNG prices are declining or when demand for gas in Thailand declines,” said Egco.

The four other LNG import licence holders are the state’s Electricity Generating Authority of Thailand (EGAT), Gulf Energy Development, Hin Kong Power and B.Grimm Power.

PTT previously had a monopoly on imports until EGAT was given an LNG import licence in 2019.

The Egco group has a total of 28 power plants in Thailand and in other Asian countries, including Laos, the Philippines, Indonesia and Taiwan.

Its existing plants have total contracted capacity of around 5,475 megawatts, while three others are under construction with total capacity of 331MW.

Egco, which is listed on the Stock Exchange of Thailand, saw its earnings hold up despite the challenges of the Covid-19 pandemic.

The company posted third-quarter net profits of 2.26 billion Thai Baht ($74.9M) compared with 2.82Bln baht ($93.25Bln) in the same three months of 2019, a decline of around 19.5 percent.

Third-quarter revenues amounted to 9.83Bln baht ($325M) versus 10.71Bln baht ($353M) in the prior-year quarter.

The new LNG importers will be accommodated by the expanded capacity at the Map Ta Phut LNG import terminal in Rayong that has been operating since 2011.

PTT has completed several expansions at Map Ta Phut with the most recent from 10.7 MTPA capacity to 11.5 MTPA.

A second regasification terminal adjacent to Map Ta Phut and called Nong Fab LNG is expected to be completed in 2022 with total regasification capacity of 7.5 MTPA. 

Japanese spot LNG prices for October contracted cargoes jumped by $1.50 per million British thermal units from the previous month and were also higher than in the same month of 2020 as North Asian market demand increased.

Australia exported a record 79.1 million tonnes of LNG in the 12 months to June 2020, up 5.9 percent from 74.7MT a year earlier while domestic gas consumption grew on both the East and West coast markets in the second quarter in contrast to the experience during Covid-19 across most of the developed world.

Australian domestic gas consumption on the East Coast was 7.7 petajoules higher quarter over quarter in the second three months of the year, according to the monthly report from consultants EnergyQuest.

“Gas-use-for-power (GPG) was down by 5.9 petajoules in the quarter, though other gas-use (residential, commercial and industrial) increased by 13.6 petajoules with increases in all states except New South Wales,” said the report.

EnergyQuest noted that as one of the world’s major LNG producers Australia is to some extent becoming a price-maker
in relation to spot prices.

The Platts Japan-Korea Marker has increased from US$2.15 per million British thermal units at the start of July to US$4.66 per MMBtu on 4 September.

“This coincides with unexpected outages at the Western Australian Gorgon LNG project due to the shut-downs for repairs,” said the report.

The national regulator, the Australian Competition and Consumer Commission publishes East Coast netback gas price estimates based on the Platts JKM.

This means that unexpected developments in Western Australia that affect spot prices will directly feed in to East Coast netback
estimates and possibly East Coast prices.

“To this degree any domestic contracts indexed to LNG spot prices will be hostage to unexpected shutdowns by West Coast projects, as well as projects elsewhere in the world,” EnergyQuest explained.

The overall Australian LNG export market followed the rest of the world on the score that towards the end of the year the industry began to buckle under the weight of a global glut of the fuel.

Production of LNG in the second quarter of 2020 fell to 19.1MT, the lowest since the third quarter of 2018. 

In July. Australian projects shipped a total of 5.8MT (85 cargoes), only marginally lower than 5.9MT (85 cargoes) in June, but well below the record level of 7.0MT in December 2019.

“From May onwards, the effects of Covid-19 on Australian LNG (in an already oversupplied LNG market) began to hit home,” said the report..

“Projects began extending maintenance periods to rein in production and experienced cargo deferrals. Of the 85 Australian cargoes shipped during June, 33 cargoes were delayed during the month,” it added.

The immediate impact on LNG price realisations was mixed.

Producers such as Woodside Petroleum, operator of the North West Shelf and Pluto LNG export plants, with a relatively high proportion of spot cargo sales, felt the biggest price impact.

However, the East Coast Australia-Pacific LNG facility and the Santos-run Gladstone LNG saw out the full year to end-June 2020 with little deterioration in realized prices.

Total export revenue for the year to June was A$47.8 billion (US$34.8Bln), down only 3.8 percent from a year earlier.

However, the negative impact on prices and revenues was accelerating thereafter.

Export revenue in the second quarter of A$10.5 billion was down 16.1 percent from $12.6 billion in first quarter.

“Queensland’s LNG projects finished the financial year strongly. All three projects shipped record tonnages in FY 2020,” said the report.

“Queensland LNG export revenues were steady at A$4.16 billion between Q2 2019 and Q2 2020 and up slightly from the first quarter. However, revenues are likely to have turned down from July,” it added.

The latest round of quarterly reports by Australian oil producers laid bare the full effect of the pandemic-led collapse in oil prices.

Realised oil prices for Woodside Petroleum, which emerged in Q2 2020 as the country’s largest oil producer, plunged to US$31 per barrel in the second quarter of 2020, down 55 percent from US$69 per barrel in the same period of 2019.

“The latest price was also down sharply from Woodside’s average realised price of US$52 per barrel in the first quarter of 2020,” said the report.

“The country’s second and third largest oil producers, Beach Energy and Santos, suffered a similar fate to Woodside,” it added.

PTTEP of Thailand, the oil and natural gas producer, has reduced its spending plans for the rest of 2020, though would remain on track with key investments in projects such as Mozambique LNG and development of the company’s largest ever southeast Asian natural gas discovery in the Lang Lebah field offshore Sarawak.

PTTEP, whose official name is Exploration and Production Public Company Ltd, noted in its latest newsletter to shareholders that it had adjusted investment plans to cope with the impact from the Covid-19 pandemic that suppressed domestic energy demand.

PTTEP said its 2020 expenditure has been reduced by 15-20 percent with some exploration activities deferred, while maintaining reasonable capital expenditure levels to ensure the continuity of the energy supply of the country.

In the LNG sector, PTTEP has an 8.5 percent stake in the Area 1 licence of the Rovuma Basin offshore Mozambique in southeast Africa.

Part of the overall stake, about 26 percent, was transferred to French major Total from Anadarko Petroleum of the US as a side-deal to the Occidental Petroleum takeover in 2019 of Anadarko.

PTTEP in 2019 also made a Malaysian acquisition from Murphy Oil of the US, including a large stake in the Rotan natural gas discovery offshore Malaysia, which is subject to a floating LNG joint venture.

“PTTEP will continue with investment in development projects such as Mozambique Area 1 and additional drilling activity in the Malaysian Lang Lebah gas field in Block Sarawak SK410B, to ensure the first production of these projects in the next four years as planned,” stated the Thai company.

PTTEP’s Lang Lebah gas field is the largest commercial discovery of petroleum resources it has ever made in what was its first exploration well at the Sarawak SK410B Project just over a year ago.

The natural gas discovery at Lang Lebah-1RDR2 encountered 252 metres of net gas pay and has an estimated several trillion cubic feet of gas in place.

The SK410B project is located in shallow waters about 90 kilometres offshore Sarawak in PTTEP acreage of around 1,870 square kilometres.

PTTEP in its post Covid-19 and oil crisis review revised downwards its overall estimated sales volume in 2020 to 362,000 barrels of oil equivalent per day, a decrease of 7 percent overall from the previous target.

However, the company said it was staying on track with its current investments and was also ready to spend on expansion.

“After the oil price crisis, PTTEP is ready for investment opportunities as we follow our strategic expansion plans that emphasize Southeast Asia where we have built expertise and experience and in the Middle East,” said the company.

PTTEP said it had expanded investment in Thailand, Malaysia, the United Arab Emirates and Oman for short and long-term gains as well as acquired projects that immediately generate income.

The company was also prepared for digital transformation through investment in new businesses that will enhance technical performance.

“Through these strategies, we aim to achieve solid growth and maintain Thailand’s energy security in the long term,” said the company.

The PTTEP update also included a mention of the company’s celebration of its 35th anniversary.

A ceremony was held at PTTEP headquarters in Bangkok to mark its founding in 1985 with the mission as a state-owned petroleum exploration and production enterprise to strengthen national energy security.

The event was attended by senior board members and executives.

They were led by Prajya Phinyawat, Chairman and Head of the Independent Directors Committee of PTTEP, Tongchat Hongladaromp, Advisor to the Board and former PTTEP President, as well as Phongsthorn Thavisin, the current President and Chief Executive.

The Singapore Energy Market Authority is seeking to appoint two new official liquefied natural gas importers for the Asian city state as future natural gas use is set to expand along with its activities as a regional LNG Hub.

Australian deliveries of liquefied natural gas cargoes to nations like China and Japan are reported to be as normal as projects can continue to live with current low oil prices of around US$30 per barrel and a price of about US$3.60 per million British thermal units.