LNG

July 19 (LNGJ) - Chinese liquefied natural gas imports declined in June, though the number of cargoes received in the first half of 2024 showed an increase of almost 14 percent. China imported 5.62 million tonnes of LNG in June, or 83 cargoes, a decrease of almost 5.6 percent on the 5.96MT, or 88 cargoes, received in June 2023, according to data from the General Administration of Customs.  

   China’s network of 25 regasification terminals had imported 6.57MT of LNG in May 2024, an increase of 2.5 percent from the 6.41MT received in May 2023. During the period from January to June 2024, China received 38.05MT of cargo deliveries, an increase of around 13.8 percent on the 33.50MT of shipments delivered in the same six months of last year.

ExxonMobil Corp. and its partners in the huge oil and gas discoveries offshore the tiny nation of Guyana in the northeast corner of South America are moving forward on an LNG export project.

China National Offshore Oil Corp., the Chinese energy major and with international and domestic LNG interests, has claimed a “major exploration breakthrough” with a natural gas play in ultra-deep waters of the South China Sea.

The Lingshui 36-1 gas field is located in the western South China Sea with an average water depth of around 1,500 metres.

The main gas-bearing play is the Ledong formation with an average burial depth of 210 metres.

CNOOC said the field has been tested to produce over 10 million cubic metres per day of open flow natural gas.

“The exploration in ultra-deep water ultra-shallow gas plays in the South China Sea is faced with world-class engineering and technical challenges,” the company explained.

Success

CNOOC Chief Executive and President Zhou Xinhuai said the successful testing of Lingshui 36-1 was a breakthrough for the exploration in such plays.

“The company will continue to tackle the challenges on the exploration and development of the resources in such plays, to expedite the utilization of natural gas in deep waters,” he added.

“The successful testing of Lingshui 36-1 further expands the resource base for the development of a trillion-cubic-metres gas region in the South China Sea,” stated Zhou.

CNOOC said in May 2024 that production started at its largest natural gas field in the central Bohai Sea offshore China.

CNOOC said start-up was at the Bozhong 19-6 Gas Field in Block 5 .

The Bozhong 19-6 natural gas and condensate field phase I development project is the first 100 Bcm field in Bohai Bay to be put into production.

CNOOC said the field would provide the Beijing-Tianjin-Hebei and Bohai Rim regions with “a more stable and reliable” supply of clean energy.

The company is also using the development to promote the green and low-carbon aims of China.

The main production facilities include a wellhead platform with 10 development wells planned to be commissioned and full production reached by 2026.

CNOOC holds 100 percent interest in the Bozhong 19-6 project and acts as the operator. 

March 8 (LNGJ) - China National Offshore Oil Corp. (CNOOC), one of the largest Chinese LNG players, said it made a discovery at Kaiping South in deepwater of the eastern South China Sea, which adds over a 100 million tons of oil equivalent proved in-place volumes. “The well tested to produce an average of 7,680 barrels of crude oil and 0.52 million cubic feet of natural gas per day,” said CNOOC.

   “The discovery fully demonstrates the broad prospects for exploration in the deepwater South China Sea and further expands the resource base for the company's high-quality development,” explained Zhou Xinhuai, CNOOC Chief Executive and President. “In recent years, CNOOC has achieved remarkable breakthroughs in oil and gas exploration in the eastern South China Sea, building a new growth pole for offshore oil and gas production,” added Zhou.

ExxonMobil Corp. and its partners in huge oil and gas discoveries offshore the tiny nation of Guyana in the northeast corner of South America may develop a liquefied natural gas project at the behest of the Government.

French energy major TotalEnergies said it was assessing the possible impact of US sanctions on the Arctic LNG II project on the Gydan Peninsula of northern Russia in which it has a direct 10 percent stake and a total interest of 21.5 percent via its shareholding in Russian natural gas company and LNG developer Novatek.

TotalEnergies was a leading player in two Arctic LNG joint ventures and a shareholder in the Novatek company itself as well in the existing Novatek-operated Yamal LNG plant, though announced last year it was looking for ways to pull out after Russia invaded Ukraine in February 2022.

In contrast with other global energy majors like Shell and ExxonMobil Corp. that have cut ties with Russia after its invasion of Ukraine, the French company has held on to several investments, including minority stakes in Yamal LNG and Arctic LNG II.

Before the latest sanctions imposed on November 2 by the US on Russia over the Ukraine invasion, TotalEnergies had said it would honour its gas contracts in Russia as long as there were no sanctions involved.

Consequences

“The consequences of the designation of Arctic LNG 2 as a SDN (special designated nationals) entity by the US authorities on TotalEnergies' contractual commitments to Arctic LNG II are currently being assessed,” said TotalEnergies

The company had previously said in March 2022 it had decided to no longer book proved gas reserves for the Arctic LNG II project nor contribute any more investment capital to the project, which is scheduled to come onstream in the first quarter of 2024.

TotalEnergies booked an impairment of $4.1 billion in its first-quarter earnings of 2022 for Arctic LNG II out of a total of $14.8Bln in Russia-related asset write-downs for all of 2022.

Novatek Chairman Leonid Mikhelson has pledged to bring the Gydan Peninsula liquefaction and export plant on stream in early 2024.

Two liquefaction Trains have already been installed on gravity-based platforms at an LNG assembly yard in the town of Belokamenka in the Murmansk region and have been towed to the site.

Each liquefaction Train installed on the platforms will have production capacity of 6.6 million tonnes per annum to total almost 20 MTPA in nameplate capacity.

During the first half of 2023 a total of over 80 gas wells were completed at the Utrenneye gas field to provide feed gas for Arctic LNG II.

All three liquefaction Trains at the Arctic LNG II plant were originally scheduled to come on stream in a two-year time span from 2023, though issues with the supply of technology have delayed the start-up.

Basic LNG modules were constructed in China for the liquefaction Trains and the first was delivered back in September 2021 to the Murmansk assembly site.

China modules

The modules were built at the Wison shipyard at Zhoushan in the eastern Chinese province of Zhejiang.

The first Chinese module was delivered to the Murmansk yard in September 2021, five months before the Ukraine invasion.

Novatek controls 60 percent of the Arctic LNG II project and its other remaining active partners out with TotalEnergies are from China and Japan.

They are China National Petroleum Corp., China National Offshore Oil Corp. and a consortium comprising Japanese companies, including Japan's Mitsui & Co. and the Japan Organization for Metals and Energy Security, previously known as JOGMEC.

All the shareholders in the project will have offtake. The biggest shareholder Novatek signed sales and purchase agreements in 2022 with two Chinese energy companies, ENN Group and Zhejiang Energy Gas Group.

The Russian company's subsidiary, Novatek Gas and Power Asia, signed a deal with ENN’s trading firm ENN LNG (Singapore) Ltd.

LNG deliveries to ENN will be on a delivered ex-ship (DES) basis whereby Novatek supplies the shipping to ENN’s Zhoushan LNG receiving terminal in eastern China.

China National Offshore Oil Corp. (CNOOC), a leading LNG market participant among Chinese oil and gas majors, reported a more than 8 percent fall in third-quarter profit on lower realised oil and natural gas prices even as production increased.

China National Offshore Oil Corp. and French energy and utility company Engie have completed a yuan-settled liquefied natural gas trade through the Shanghai Petroleum and Natural Gas Exchange, the third such LNG trade achieved by the Chinese.

The yuan transaction was completed on the Shanghai Petroleum and Natural Gas Exchange (SHPGX), according to a statement from the trading platform.

The statement added that under the yuan-denominated agreement an LNG cargo of about 65,000 tonnes would be delivered in November.

China has recently emphasized its need where possible to settle oil and gas trades in yuan in an attempt to establish its currency internationally and to weaken the dollar's dominance in energy trading.

CNOOC had previously conducted China's first yuan-settled trade with French major TotalEnergies in March 2023 and Singapore's Pavilion Energy also settled such a deal in August.

Das Island cargo

The first 2023 yuan-settled LNG trade involved TotalEnergies and Abu Dhabi National Oil Company’s trading unit as well as CNOOC.

The cargo from that transaction arrived in May 2023 and was unloaded at the main terminal in southern Guangdong province.

The shipment from Das Island in Abu Dhabi in the United Arab Emirates was delivered by the “Mraweh” LNG carrier, a mid-sized vessel with 135,000 cubic metres of capacity.

CNOOC said at the time that the cargo delivery to the Dapeng terminal marked progress by China towards more yuan settlement of cross-border energy trade

CNOOC had purchased the Das Island cargo from TotalEnergies at the Shanghai Exchange.

China has raised the issue over the past several years of seeking more use of the Chinese currency with nations like Saudi Arabia and other energy exporters.

Analysts note that the Chinese economy would benefit hugely even if China only partly paid for its oil and gas in yuan.

China imported more than 500 million tonnes of crude oil last year and more than 100 million tonnes of natural gas by pipeline and as LNG and with the LNG portion amounting to 63.44 million tonnes.

China LNG Group Ltd., a Hong Kong-based company with assets along the value chain in mainland China, has said its billionaire Chief Executive Dr. Kan Che (Billy Albert) Kin, was stepping down while the company was also changing its name to better reflect its activities.

The Mozambican Government is considering a project led by Italian energy company Eni for the deployment of a second floating liquefied natural gas plant called the Coral North project to match the Coral South plant that went on stream in November 2022.

Agência de Informação de Moçambique (AIM), the official Mozambique news agency, carried the report in its latest bulletin.

The project will be developed by a consortium headed by Italian oil and gas major Eni and was in the “pre-viability environmental study” stage for deployment in the Rovuma Basin offshore Mozambique.

The Eni study was cited by AIM as saying that the second FLNG plant would be “the most efficient way to maximise the recovery and profitability of the gas reserves” of the Coral natural gas field.

FLNG costs

“The investment envisaged in the second platform is US$7 billion and is still subject to approval by the Mozambican government,” said the official news agency.

“Under the current schedule, the new platform would begin to produce LNG in the second half of 2027,” it said.

“That means that the platform will be in production before the onshore LNG plant planned for the Afungi Peninsula in Palma district by French oil and gas company TotalEnergies,” added the report.

“The resumption of work by TotalEnergies will depend on whether the French company is satisfied with the recent improvements in the security situation,” said AIM.

The report said that the Mozambique Government expects the Coral North FLNG plant to be anchored about 10 kilometres (6.2 miles) from the existing Coral South facility which has been liquefying natural gas since October 2022.

“The platform has the capacity to produce 3.37 million tonnes of LNG a year and the Coral North platform would double that figure,” it said.

The first LNG cargo was lifted on the 13th of November 2022 from the “Coral Sul FLNG” vessel.

Upstream operator

Eni is the upstream operator of the Area 4 licence resources containing the Coral gas reservoir.

The “Coral-Sul FLNG” vessel was constructed at Samsung Heavy Industries shipyard in Geoje in South Korea and is the first floating LNG facility ever deployed in the deep waters of East Africa.

The other partners of Eni in the first FLNG project were US major ExxonMobil Corp., China National Petroleum Corp., Galp Energia of Portugal, Korea Gas Corp. and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), the state energy company.

BP of the UK has a long-term agreement spanning over 20 years to purchase 100 percent of LNG output from the Coral South FLNG venture.

The new Coral North project was first mentioned by the Coral gas field shareholders to Mozambique President Filipe Jacinto Nyusi when the President visited the “Coral-Sul FLNG” vessel for a ceremony on November 24, 2022.

“They discussed with the President the possibility of replicating the success of the Coral South project with further FLNG developments as well as other onshore projects,” said Eni at the time.