LNG

Australia’s left-wing government has rowed back from starting to ban hydrocarbons and putting the nation on a path to economic and energy suicide by on July 23 deciding to issue exploration and production licences for natural gas for the East, Southeast and West coast markets.

July 5 (LNGJ) - The Australian Competition and Consumer Commission (ACCC) has issued a warning to the nation on East Coast natural gas supplies and the trend for LNG exports. “The long-term supply outlook for gas makes shortfalls possible from 2027,” said the report.

   “The East Coast gas market may experience gas supply shortfalls as early as 2027 unless new sources of supply are made available. The potential emergence of supply shortages is one year earlier than previously reported,” the ACCC warned. The short-term outlook concluded that there was “sufficient gas” for the fourth-quarter of 2024 and early 2025. “There is expected to be enough gas to meet East Coast demand, even if all un-contracted gas of LNG producers is exported,” the report added.

The Australian Government said the nation’s LNG export revenues are expected to decline from A$72 billion (US$47Bln) in the current fiscal year to just under A$45Bln by 2028-2029 as volumes flow in a tight market, though prices will ease in real terms towards the end of the decade.

March 27 (LNGJ) - Inpex Corp. , the Japanese oil and gas major and operator of the Ichthys LNG export plant at Bladin Point near Darwin in Australia’s Northern Territory and developer of the Abadi LNG project in Indonesia, said that annual revenues declined by 6.5 percent to 2.164 trillion yen ($14.3Bln) from 2.316 trillion yen in 2022. Net profits dropped 35.5 percent to 321.7Bln yen ($2.12Bln) from 498.4Bln yen in the previous year as LNG and petroleum prices declined.

   The Tokyo-based company said that adjusted profits from the Ichthys LNG plant in 2023 amounted to 364.6 billion yen ($2.4Bln), which was an 8.8 percent return on invested capital (ROIC) on the joint venture. Inpex’s average realised natural gas price dropped by 18.2 percent to $5.62 per million British thermal units from $6.87 per MMBtu in 2022. “Inpex increased exploration activities surrounding the Ichthys gas field and for the Bonaparte carbon-capture and storage offshore Australia,” it added in a presentation. Inpex’s net sales revenues from crude oil decreased by 9.3 percent to 1,608 trillion yen ($10.62Bln) in 2023.

Western Australian LNG operator Woodside reported a plunge in annual earnings of 74 percent as it focused on its next phase of growth in the Scarborough Gas project, Sangomar oil offshore Senegal and on the Trion venture in the Gulf of Mexico.

The Australian LNG plant operator Santos welcomed a decision from the Federal Court of Australia to clear the way for pipe-laying to commence for the Barossa Gas Export Pipeline to help provide new feed-gas supplies to the Darwin LNG plant in Australia’s Northern Territory.

The decision in favour of Santos saw the Court dismissing and application and discharging an injunction that had prevented pipelay activities south of the 86 kilometres (53 miles) point offshore.

“As per the ruling and in accordance with the Environment Plan in force for the activity, Santos will continue pipe-laying activity for the Barossa Gas Project,” said Adelaide-based Santos.

Barossa plan

The Santos-operated Barossa Gas Project is an offshore gas and condensate venture that proposes to provide a new sources of gas to the existing Darwin LNG facility
for which the previous resources from the Bayu Undan gas field in the Timor Sea have depleted.

Barossa gas shareholders also include South Korean and Japanese investors, including the largest Japanese LNG importer JERA Co. Inc.

Under the renewed Barossa plan feed gas will come from the Barossa field, located in Australian waters about 285km offshore Darwin, from 2025.

Project infrastructure will comprise a floating production storage and offloading (FPSO) facility and the subsea production system and the pipelines.

Santos noted that up to eight subsea wells are planned to be drilled in the Barossa field with a contingency plan for an additional two wells.

Gas and condensate would be gathered from the wells through the subsea production system and then brought to the FPSO facility via a network of subsea infrastructure.

Initial processing would occur at the FPSO facility, to separate the natural gas, water and condensate extracted from the Barossa field.

The dry natural gas would then be transported through the gas pipeline for onshore processing and export from Darwin LNG.

The condensate would be transferred from the FPSO to specialised tankers for export.

Chiyoda Corp., the leading Japanese energy and LNG engineering company, has been awarded a technical service agreement (TSA) by the Indonesian Donggi-Senoro LNG project, the all-Asian venture whose largest shareholder is Japan’s Mitsubishi Corp.

“The agreement covers engineering, technology, and process safety support for the LNG plant and is scheduled to be carried out for three years,” said Chiyoda.

The LNG plant produces around 2 million tonnes per annum of LNG and has long-term contracts with Japanese and South Korean buyers.

Chiyoda said its Operations & Maintenance (O&M) division established at the start of 2023 would take the lead in providing the services.

The contract will also make use of Chiyoda’s consulting and engineering capabilities as a part of the plant-OSTM Services.

Service-focused

Chiyoda noted that this service was set up in September 2023 to offer field-centred physical maintenance support for industrial plants with “inherent digital technologies affording to the customer deep insight” into the plant status.

Production at Donggi-Senoro LNG commenced in August 2015 and the plant has been operating at a high rate since its start-up.

The facilities liquefy and export feed gas from the Senoro-Toili block and the Matindok block onshore gas fields in Indonesia’s Central Sulawesi province.

Mitsubishi owns around 45 percent of the Donggi-Senoro joint venture and the other partners are Korea Gas Corp., the Indonesian state-owned oil and gas company Pertamina and Indonesia’s largest publicly-listed energy company Medco.

When Donggi-Senoro started it was the first LNG project exclusively owned and operated by Asian companies without the participation of international oil majors.

However, Mitsubishi is now one of Japan’s leading LNG stakeholders with assets and supplies from North America, including LNG Canada, Malaysia, Brunei, Australia and Russia.

The Donggi-Senoro customers are Japanese utility giant JERA Co. Inc., which takes delivery of 1 MTPA, Kogas with 700,000 tonnes per annum and Japan’s Kyushu Electric Power contracted for 300,000 tonnes per annum.

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.

Gaztransport and Technigaz (GTT), the French LNG storage technology company, has signed a deal with another Chinese shipyard that will allow the use of designs for tanks in floating storage and regasification units (FSRUs) as well as floating production vessels and conventional LNG carriers for the largest Chinese shipping group.

Australian regulators and constantly shifting government energy policies are causing extensive delays that endanger the completion of the A$18.7 billion (US$12.25Bln) takeover of Origin Energy by a North American consortium of investment funds and with a resultant side-deal also giving Saudi Aramco access for the first time to the liquefied natural gas sector.