LNG

NewMed Energy, a stakeholder in the largest Israeli offshore natural gas field and a likely future LNG feed-gas supplier, said it was looking more unlikely that it would proceed with the process of being listed on the London Stock Exchange through a reverse takeover of UK company Capricorn Energy.

The expected completion date of the NewMed merger with London-listed Capricorn was the first quarter of 2023.

However, Capricorn has been caught up in a dispute with a major shareholder and has put back a meeting of all shareholders to approve the deal with NewMed.

Capricorn had previously cancelled its proposed merger with UK rival Tullow Oil in favour of the combination with Israel’s NewMed, which was first announced on September 29, 2022.

There had been plans for a $1.4 billion merger between Tullow and Capricorn, which is based in Edinburgh and was formerly known as Cairn Energy.

Among its assets, NewMed holds the rights to 45 percent of the Leviathan Israeli offshore gas field with the other major shareholder in the field being Chevron Corp.

Cyprus gas field

NewMed also has the Aphrodite gas field in Cyprus's offshore economic zone waters, making it one of the biggest players in the East Mediterranean.

In the latest merger developments, Capricorn released a statement to the London Stock Exchange whereby it had decided to adjourn Capricorn's shareholder meeting called for the purpose of approving the NewMed transaction, to February 22 instead of February 1.

An alternative shareholder meeting was called at the request of one significant Capricorn shareholder, Palliser Capital (UK) Ltd., for the replacement of the serving directors of Capricorn with new directors that were proposed by Palliser and a meeting for this purpose was then scheduled to take place on February 1 instead of a meeting to approve the NewMed deal.

Members of the board of Capricorn, including the Chairman of the board and the Chief Executive, resigned immediately from the board and it was also the intention of two other directors, including the Chief Finance Officer, to resign from the board before the February 1 meeting called at the request of Palliser.

NewMed said that in view of these developments and the resignation of most of the Capricorn board members, the probability for the closing of the UK transaction had “significantly decreased”.

The Israeli company said it was continuing to examine strategic alternatives with the aim of “maximizing value” for its own shareholders.

NewMed is currently in the midst of plans to promote the expansion of the Leviathan gas field offshore Israel and the development of the Aphrodite reservoir alongside the launch of exploration and production of natural gas in other Middle East countries.

The Leviathan gas field in addition to supplying the Israeli domestic market also supplies Egypt and Jordan with gas and has existing plans to possibly supply feed gas for liquefaction at the two Egyptian LNG plants, Idku and Damietta, located east of Alexandria.

NewMed Energy, formerly Delek Drilling and owner of the largest Israeli offshore natural gas field and a likely future LNG feed-gas supplier, is continuing with the process of being listed on the London Stock Exchange through a reverse takeover of UK company Capricorn Energy.

Australian energy company and LNG operator Woodside Petroleum said it had made operational advances in 2020 in the midst of several challenges and was also progressing with its project development offshore Senegal in West Africa.

Woodside Petroleum, the Australian liquefied natural gas operator, plans to make the proposed Burrup Hub in Western Australia a globally competitive LNG venture with measures such as debottlenecking the offshore Scarborough gas field.

“The debottlenecking we are looking at is aimed at increasing the capacity of the offshore part of the system for Scarborough and we can do that for a modest amount of anywhere between $100 million to $200 million of capital,” explained Chief Executive Peter Coleman in a recent briefing to analysts.

“It's mainly around increasing the pipeline size and so telescoping the pipeline,” said Coleman.

“Some parts of the pipeline are limited in diameter because of the water depth they are in, but as we get into the shallower waters, we have identified an opportunity to increase the diameter, therefore decreasing the backpressure on the platform,” the CEO added.

Coleman stated that this move has the potential to take the project from an offshore LNG equivalent of 6.5 million tonnes up to 8 million tonnes, plus the company’s domestic natural gas commitments.

The CEO added that minor modifications to the onshore plant would also be necessary.

“The assumption is that we've got two options that we are still optimising,” said Coleman.

“One is a closed loop option within the Pluto site itself where we would potentially back out Pluto Train 1 volumes,” he added.

“The other option there on that side is increasing the capacity of Train 2 and this type of design of Train has a history of being able to produce above nameplate capacity so we're looking to see if we can bring that opportunity forward,” stated Coleman.

He also explained that there was a second main option to side stream it across to the North West Shelf (field).

Coleman also noted that the foundation contract holders for Pluto LNG Train 1, the Japanese utilities Tokyo Gas and Kansai Electric, would face changes to their plant status.

Coleman said the company had chosen not to extend the contract of one of the buyers and was in negotiations with the second one.

Coleman also mentioned progress on the Sangomar field development offshore Senegal in West Africa for which a final investment decision was made at the start of the first half.

“We moved straight into project execution to support our targeted first oil in 2023,” said Coleman.

“A number of activities have progressed, although we've also been closely managing the risks of Covid-19 on the supply chain and project schedule,” he added.

He mentioned advances made on the Sangomar field’s floating production, storage and offloading (FPSO) unit.

“The oil tanker, which will be converted to the FPSO, was purchased by our contractor in February and will undergo tank inspection and cleaning this year, with modifications targeted to commence in the fourth quarter,” he added.

“Technical work is steaming ahead with detailed design engineering for the FPSO and the commencement of major topsides equipment fabrication,” said the CEO.

“Our contracting and procurement team has also been busy with purchase orders for long lead items being awarded in readiness for drilling operations targeted to commence in mid-2021,” he concluded.

Woodside has also given notice of exercising its pre-emption rights on the sale by UK oil and gas developer Cairn to Russian company Lukoil of its Sangomar assets.

Lukoil agreed to purchase the entire Cairns participating interest in Senegal’s Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture.

In accordance with the joint operating agreement, the terms of Woodside's acquisition of Cairn's entire stake will reflect those of the Cairn-Lukoil transaction.

These include the upfront purchase price of US$300 million plus working capital adjustments, including reimbursement of Cairn's development capital expenditure incurred since 1 January 2020.

Woodside's equity interest in the RSSD joint venture after completion of the acquisition will increase to approximately 68 percent and Woodside will remain operator.

Coleman said the acquisition represented an opportunity for Woodside to deepen its interest in a well understood, world-class asset with near-term production, while also protecting shareholder interests by removing the potential uncertainty of US sanctions applying to the Sangomar Field Development because of Russian involvement.

Woodside Petroleum, the Australian LNG plant operator, is considering whether to block Russian company Lukoil from becoming a partner in the $4.2 billion Sangomar project offshore Senegal after the Russians agreed to buy Cairn Energy’s Senegal assets.

Australian liquefied natural gas operator Woodside said it had submitted its plans for the Sangomar Field Development project offshore Senegal, the West African nation also participating in separate floating LNG projects led by BP of the UK.

Woodside Petroleum, the Australian liquefied natural gas developer, said it was moving forward with its front-end engineering design activities for its joint venture offshore Senegal in West Africa where BP and other companies are developing floating LNG projects.

Leading Australian oil and gas company and LNG producer, Woodside Petroleum, is aiming to commercialise a huge field offshore Senegal by 2022 and said it could form the basis of a West African oil and natural gas hub.