LNG

Australian liquefied natural gas plant operator Santos reported a decline in LNG sales income as production and Asia-Pacific prices fell and the Darwin plant continued to suffer feed-gas issues as the supplying field depleted.

Sempra Energy has been communicating with the US Federal Energy Regulatory Commission to make sure certain final design enhancements for the already approved fourth liquefaction Train at the Cameron LNG plant in Louisiana will not be subject to any pre-filing processes.

Sempra said it had requested a determination from the Director of the Office of Energy Projects in November 2021 that the scope of the amendment would not be caught up in new regulatory hold-ups.

Cameron LNG has since provided additional information regarding the scope of the altered design.

The company emphasized that the prospective modifications to the previously-approved Train 4 project as proposed by the amendment will not “involve significant state and local safety considerations that have not been previously addressed”.

These include the addition of LNG storage tanks, increasing throughput requiring additional tanker arrivals or the use of larger vessels.

Sempra stated that the proposed design enhancements for Train 4 would not alter or impact the existing marine facilities and would not change Cameron LNG’s current Waterway Suitability Assessment (WSA).

Coast Guard

The company said it had engaged with the United States Coast Guard regarding the proposed amendment and the USCG had determined that Cameron LNG was not required to submit a new “Letter of Intent” or revision to its current WSA for the amendment.

While some parts of the design have been enhanced, others have been withdrawn.

Importantly, there is the removal of the construction of a fifth Train and associated utilities and condensate storage tanks permitted with the original expansion permit.

One of two boil-off gas compressors previously permitted would not be needed and the construction will be wholly within the footprint authorized by the FERC.

However, Sempra noted that the expansion amendment would include about a dozen other design enhancements and additions for Train 4.

Among them are the addition of a feed-gas booster compressor to increase feed-gas pressure to Train 4, a propane refrigeration package to cool the dehydration unit feed gas within Train 4 and the use of “open art technology” on the NGL extraction process in lieu of a proprietary process. 

UK energy consultants Wood Mackenzie said that the North West Shelf LNG export project in Western Australia, operated by Woodside Petroleum, could have up to 7 million tonnes per annum of spare capacity available by 2027.

French major Total SA has changed its name to Total SE on global stock markets to identify as a European rather than a French company just after it confirmed that project financing was in place for the Mozambique LNG project using Area 1 feed-gas in the Rovuma Basin.

“Total has registered with the Trade and Companies Register of Nanterre (near Paris) as a European Company,” said Total.

The new SE addition means “Societas Europaea (SE)”, Latin for European company. The Total name was previously followed by the French term “Société anonyme (SA)” , meaning a public limited company, the equivalent of Plc in English.

“This follows negotiations with employees’ representatives in 25 countries of the European Economic Area,” added Total, which has a global workforce of around 100,000 people.

It noted that members of the Special Negotiating Body for management and unions had approved and signed an agreement relating to the procedures for the involvement of employees in this new European Company.

“The Company will now be listed as Total SE on stock markets trading its shares and American Depositary Shares,” explained Total.

However, its identifying ticker on the Paris Euronext exchange (FP) and New York Stock Exchange (TOT) will remain unchanged.

The shares were last trading at €33.83 per share, down 1.75 percent, and valuing the company at around €88.45 billion ($101Bln).

The change to Total's name was announced as the energy major's Chief Financial Officer Jean-Pierre Sbraire said that he was pleased with the signing of the $14.9-billion senior debt financing agreement for Mozambique LNG.

The joint venture includes the development of the Golfinho and Atum natural gas fields located in Offshore Area 1 concession and the construction of a two-Train liquefaction plant with a total capacity of 13.1 million tonnes per annum.

“The signing of this large-scale project financing, less than one year after Total assumed the role of operator of Mozambique LNG, represents a significant achievement and a major milestone for the project,” declared CFO Sbraire.

“It demonstrates the confidence placed by the financial institutions in the long-term future of LNG in Mozambique,” he added.

“This key milestone has been reached thanks to the dedication of the Mozambique authorities and the financial partners of the project,” stated the CFO.

Total said that the African venture represented a total post-financial investment decision outlay of $20Bln.

“The project financing amounts to $14.9Bln, the biggest ever in Africa, and includes direct and covered loans from eight Export Credit Agencies (ECAs), 19 commercial bank facilities and a loan from the African Development Bank,” Total explained.

The ECAs that participated in the financing included Export Import Bank of the United-States (US-Exim), Japan Bank for International Corporation (JBIC), Nippon Export and Investment Insurance (NEXI), UK Export Finance (UKEF), Servizi Assicurativi del Commercio Estero of Italy (SACE), Export Credit Insurance Corp. of South Africa (ECIC), Atradius Dutch State Business (Atradius) and Export-Import Bank of Thailand (EXIM Thailand).

The Area 1 shareholding has Total as operator with a 26.5 percent participating interest alongside Mozambican state energy company ENH (15 percent).

Japan’s Mitsui & Co. owns 20 percent, India’s ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each hold 10 percent and Thailand’s PTTEP 8.5 percent. 

The Gazprom-run Sakhalin liquefied natural gas export plant in the Russian Far East has started maintenance work and has shut down one of its processing Trains.

Sakhalin Energy, the plant operating company, had originally planned for work to be done on both Trains at the same time, but logistical difficulties occurred caused by the Covid-19 pandemic and resulting safety measures.

The main buyers of Sakhalin cargoes are Japanese, South Korean and Chinese energy companies.

The shareholders in the plant are Gazprom with 50 percent plus one share, Royal Dutch Shell with 27.5 percent and Japanese companies Mitsui and Co. and Mitsubishi Corp. with 12.5 percent and 10 percent respectively.

Under its new plans some scheduled maintenance work has now been postponed until 2021.

“Due to current economic downturn and the pandemic challenge, we had to modify the initial turnaround scope,” said a Sakhalin Energy statement.

“To ensure the safety of our people and reliable production, the company has decided to follow the original timeline, but shut down only one Train at the LNG plant,” the company added.

LNG production at the two-Train Sakhalin plant has remained at just over 11 million tonnes per annum in recent years. The plant was Russia's first and came on stream in 2009.

The newer Yamal LNG plant started up in 2017 with output of 16.5 MTPA from three Trains and is operated by independent Russian natural gas company Novatek.

A long-planned expansion at the Sakhalin plant and the construction of a third liquefaction Train has so far failed to take place.

However, Gazprom notes that regular de-bottlenecking and equipment adjustments over the past 11 years has seen output raised to more than 11 MTPA from the nameplate capacity of 9.6 MTPA.

LNG cargoes produced and marketed at Sakhalin are supplied on a free-on-board basis and shipped by the company’s LNG carriers, “Grand Elena”, “Grand Aniva” and “Grand Mereya”.

Two other vessels, the “Amur River” and the “Ob River” carriers are used by the company under long-term charter agreements.

Oil Search, the Papua New Guinea-focused oil and gas company listed in Australia, said its overall production increased by 5 percent, supported by a continued strong performance from the PNG LNG plant as talks continued on building three new processing Trains.

The LNG plant, located northwest of the capital Port Moresby, produced at an annualised rate of 8.7 million tonnes per annum in the first three months of 2020.

Total revenue from Oil Search’s overall operations from PNG to Alaska dropped 20 percent to US$395.4 million from US$446.7 in the previous quarter, impacted by a 13 percent fall in sales due to timing of shipments and the oil price drop.

Oil Search, headquartered in PNG and listed on the Australian Securities Exchange, said it was well placed to withstand a prolonged period of oil price weakness and advance its growth projects when market conditions improve.

The company noted that formal negotiations had been suspended in January on the LNG expansion between ExxonMobil, on behalf of the P'nyang co-venturers, of which it is part, and the PNG Government.

“Discussions have resumed with the State, aimed at reaching an agreement that is fair and balanced for all stakeholders,” said Oil Search.

“This agreement is required before the LNG expansion project can move into the front-end engineering and design phase,” it explained.

“Oil Search remains committed to progressing the three-Train integrated expansion project, a highly cost-effective development, at the appropriate time,” stated Oil Search.

The two existing LNG Trains at the plant northwest of Port Moresby have a nameplate capacity of 6.9 MTPA, though have consistently produced more and will be the site of any future expansion.

Three new liquefaction Trains are proposed in the delayed plan. The five Trains when operational would have capacity of nearly 20 MTPA and would give PNG a more substantial role as a regional producer.

The P’nyang gas field licence, controlled by PNG LNG plant operator ExxonMobil, also includes Australian-listed Santos as well as Oil Search.

The separate Papua Gas Agreement for other feed-gas resources has already been approved and signed.This comprises holders of the onshore PNG Elk-Antelope gas field licence, led by Total and also including shareholders in the P’nyang field lease, ExxonMobil as well as Oil Search.

Elk-Antelope onshore gas fields are covered by petroleum retention licence PRL15 and by the Papua Gas Agreement and the P’nyang onshore gas fields are in the PRL3 licence area of PNG.

“The first quarter of 2020 has been one of the most volatile periods in history for Oil Search and the global oil and gas industry in general,” said new Managing Director Keiran Wulff, who succeed Peter Botten.

“The company has taken swift steps to ensure that we are in the strongest position possible to weather a potentially protracted period of global disruption,” he added.

In its North American operations oil discovered at the Mitquq and Stirrup fields in Alaska, with flow rates above expectations

Swiss-Swedish company ABB said it was chosen to provide the electric propulsion and power distribution package for Southeast Asia’s first liquefied natural gas hybrid tug ordered to operate in the Port of Singapore.

ABB said its equipment, including energy storage, control and automation technology will be at the heart of the first tug capable of switching between low-emission LNG engines and zero-emission battery power.

The tug, which will operate in Singapore harbour, has been ordered by Sembcorp Marine subsidiary Jurong Marine Services for delivery from the Singapore shipyard by the end of 2020.

LNG as a fuel virtually eliminates sulphur-oxide emissions, while the Maritime Port Authority of Singapore (MPA) is also incentivizing its use to support the International Maritime Organization’s aims to halve ship carbon-dioxide emissions in the years ahead.

ABB said the project represents the first delivery of ABB’s award-winning power and distribution system, the Onboard DC Grid, for a tug application.

Leveraging the system, the vessel will be able to deploy 904 kilowatt hours of battery power for zero-emission operations, as well as for peak shaving, improving utilization of electricity use on board.

“This is a breakthrough in the tug market for the ABB’s energy storage technologies and a strong validation of Onboard DC Grid™ as the ultimate solution for power management efficiency for hybrid propulsion,” said Juha Koskela, Managing Director of ABB Marine & Ports.

“Future-proofing for a different energy mix makes particular sense for tugs and other port service vessels, as the most likely candidates to face imminent environmental restriction, added Koskela.

“This is also a great example of a local team meeting a regional priority,” he stated.

ABB noted that gas-fueled engines face a particular challenge when it comes to handling the fast-changing load capabilities demanded by tugs.

“Leveraging the Onboard DC Grid system, the tug’s engines will be able to run at variable speeds for optimized LNG fuel economy at each load level,” said the company.

“Additionally, through integration with an energy storage source, the batteries will be able to provide power to the tug’s propulsion system almost instantaneously,” added ABB.

The first US LNG cargo for more than a year is heading for the Chinese port of Tianjin, east of Beijing, from the Cameron export plant in Louisiana operated by Sempra Energy.

China said that pipeline natural gas from Russia would soon start flowing to help meet future energy needs across several areas of the Chinese Northeast, though supplies during 2020 would amount to less than the equivalent output of one standard Train of LNG.

LNG Canada, the largest export project proposed for the Pacific Coast province of British Columbia, could hold a ground-breaking ceremony before the end of 2018 as the joint venture led by Royal Dutch Shell gets back on track.