LNG

TotalEnergies, the French major with a world-class LNG portfolio of 44 million tonnes per annum, is increasing its natural gas infrastructure investments by paying £450 million ($575M) for a gas-fired power plant in the UK to help mitigate its large holdings of intermittent renewables in the British energy markets.

TotalEnergies has signed an agreement with the North American institutional investor EIG for the acquisition of all the shares of West Burton Energy in the UK Midlands.

West Burton Energy owns and operates the West Burton B gas-fired power plant in the English county of Nottinghamshire.

West Burton B comprises three combined-cycle gas turbines (CCGT) with total output of 1.3 gigawatts.

Commissioned in 2013, it is one of the UK’s most advanced power plants and supplies some 1.8 million homes. A 49 MW battery storage system was added in 2018.

“This acquisition rounds out TotalEnergies’ renewable power generation capacity in the UK with a flexible asset that mitigates intermittency to enable the supply of firm power to customers,” explained the French company.

Capacity needs

“Given the size of the company’s renewable portfolio in the country, which currently stands at 1.1 GW of gross installed capacity and 4.5 GW under development, TotalEnergies assesses its need for gas-based power generation capacity at 700 MW, so the company therefore plans to divest 50 percent of the acquired assets,” TotalEnergies added.

“The deal will also allow TotalEnergies to strengthen its trading capabilities in the country’s electricity and gas markets,” said the company.

TotalEnergies plans to supply the gas-fired power plant from its natural gas production in the UK where it operates 30 percent of the projects.

Earlier in June, TotalEnergies also signed two new LNG medium-term and long-term LNG accords in Asia.

These comprised a sales and purchase agreement (SPA) with Indian Oil Corp. (IOCL) for the delivery to India of up to 800,000 tonnes per annum of LNG for 10 years from 2026.

Korean LNG

The second accord was a heads of agreement with Korea South-East Power for the delivery to South Korea of up to around 500,000 tonnes per annum of LNG for five years from 2027.

The company said that these agreements allow TotalEnergies to secure medium-term outlets for its global LNG supply portfolio.

They also strengthen the company's footprint in Asian markets, where it is particularly committed to supporting its customers with their decarbonization strategies.

JERA Co. Inc., Japan’s biggest liquefied natural gas importer and utility company, reported an increase in fiscal full-year profits while revenues plunged nearly 22 percent because of a decrease in electric power sales.

Woodside Energy, the operator of the Northwest Shelf LNG project and Pluto LNG in Western Australia, has completed the sale of a 10 percent non-operating participating interest in the Scarborough Gas joint venture for US$910 million to the LNG Japan group.

The completion follows Woodside’s announcement in August 2023 that it had established a strategic relationship with LNG Japan that involved equity in the Scarborough project, potential LNG offtake and collaboration on opportunities in new energy.

“The sale proceeds received by Woodside of US$910M for equity in the Scarborough Joint Venture comprise the purchase price, reimbursed expenditure and escalation,” said Woodside in a statement.

Trading houses

Woodside’s sale and purchase agreement is with a jointly owned subsidiary of LNG Japan, which is a 50-50 joint venture between two Japanese trading houses, Sumitomo Corp. and Sojitz Corp., and a Japanese state-owned agency called the Japan Organization for Metals and Energy Security (Jogmec).

The Scarborough gas field project comprises the Pluto Train 2 joint venture and modifications to Pluto Train 1 to process Scarborough gas.

The venture includes the Scarborough field itself and associated offshore and subsea infrastructure.

The Scarborough field is located 375 kilometres (233 miles) off the coast of Western Australia and the reservoir contains less than 0.1 percent carbon dioxide.

Scarborough gas will be processed at the Pluto LNG facility, where Woodside is currently constructing a second liquefaction Train .

In addition to the sale of a 10 percent non-operating participating interest to Japan LNG, Woodside additionally stated in February 2024 that it had entered into an SPA with the largest Japanese LNG importer and power company, JERA Co. Inc. for a 15.1 percent non-operating participating interest in Scarborough.

Commitment

“LNG Japan’s commitment to the Scarborough Joint Venture is a demonstration of the value our customers place on gas as a long-term source of energy as they navigate the energy transition,” said Woodside Chief Executive Meg O’Neill.

“Completion of the sale to LNG Japan is a significant milestone as we progress toward first LNG cargo from Scarborough targeted in 2026,” O’Neill stated.

“We are also pleased to welcome Japan Organization for Metals and Energy Security’s equity investment,” the CEO added.

“Jogmec’s support reflects the contribution Scarborough gas will make to Japan’s energy security,” she added.

Woodside still holds a 90 percent interest in the Scarborough venture and will remain as operator.

Following completion of the transaction with JERA Woodside’s interest will be 74.9 percent in the Scarborough venture.

After completion of the JERA deal, Woodside estimated that as of 26 March 2024, the Perth-based company’s Scarborough field proved (1P) undeveloped reserves are reduced by 128.7 million barrels of oil equivalent to 1,158.3 million barrels of oil equivalent.

TC Energy Corp., the North American pipeline operator already supplying two LNG projects with feed-gas near Kitimat in British Columbia via the Coastal GasLink, has linked up with another First Nation-backed LNG project near Prince Rupert in BC with a potential feed-gas pipeline sale deal.

The Philippines aims to increase liquefied natural gas import capability through a joint venture formed by three of the largest Filipino power companies to acquire one of the nation’s two operating LNG import facilities as the economy grows.

New Fortress Energy, the US integrated LNG and power company that owns, operates or provides natural gas to 30 facilities in five countries has almost tripled net profits in the past year.

Seatrium of Singapore has renewed a long-term favoured customer contract with the liquefied natural gas fleets of Greek shipping line GasLog and for the LNG carriers operated by UK-based major Shell.

Seatrium said the accords with Gaslog and Shell International Trading and Shipping Co. (STASCO) provide for ship repairs, refurbishment and upgrading of LNG vessels from 2024 to 2029 with an option for a further renewal.

“This contract marks a collaborative partnership between Seatrium and these two leading maritime companies with whom the Group has established a long history of collaboration,” said a statement from Seatrium.

The Singaporean Seatrium Group was formerly called Sembcorp Marine Ltd and renamed as Seatrium following its merger with Keppel Offshore & Marine.

“The GasLog and Shell contracts involve the repairs, refurbishment and upgrading of a combined fleet of 43 LNG carriers docking at Seatrium Repairs and Upgrades, a wholly-owned subsidiary of Seatrium,” noted the shipyards company.

Joint planning

“It also supports joint planning, information and experience sharing and leveraging complementary resources of the Group to achieve sustainable targets in health and safety and environmental quality, cost efficiency and timely deliveries,” the group added.

Kostas Karathanos, Chief Operating Officer of GasLog LNG Services, said that he was pleased with the contract renewal.

“We are delighted to renew our favoured customer agreement for another five years,” explained Karathanos.

“We have enjoyed many years of partnership to refit the majority of our fleet here and trusted Seatrium in the conversion of our floating storage regasification unit (FSRU),” Karathanos added in reference to the FSRU deployed off Alexandroupolis in northeast Greece.

Tender

“The recent tender we jointly ran with STASCO indicates that Seatrium remains a competitive shipyard offering high quality services,” the GasLog COO stated.

“This aligns with our strategic direction of optimising costs and leveraging our competitiveness,” said Karathanos. 

Alvin Gan, Executive Vice President for Repairs and Upgrades at Seatrium, said the accord with STASCO and GasLog enhanced the status of the shipyard group.

“The selection of Seatrium as the LNG refit partner in Singapore is a major boost to Singapore’s status as a major global hub,” the Seatrium executive said.

Seatrium is the world’s leader for LNG upgrades and the conversion of LNG carriers, holding an extensive track record of 11 FSRU conversions since 2007.

FSRU conversions are highly complex processes that involve extensive modifications to the vessel’s structure, systems and equipment.

JERA Co. Inc, Japan’s biggest liquefied natural gas importer and utility company, has signed an accord with a unit of Indonesia’s state-owned power supplier PT PLN (Persero) to cooperate on LNG supplies for Indonesian domestic use.

Trafigura, the global commodities trading firm, said its traded liquefied natural gas volumes declined slightly in the past year and while market volatility had eased the energy supply chain remained “brittle” amid changing inventories and continuing geopolitical concerns.

Inpex Corp., the operator of the Ichthys LNG plant in Australia and developer of the Abadi LNG project in Indonesia, said it received written approval on December 6 for the revised Plan of Development (POD) for the Indonesian Abadi joint venture and would be moving on to the front-end engineering and design phase.