LNG

Baker Hughes, the US liquefied natural gas equipment-maker and energy services and technology company, was awarded a contract from Algerian state-owned oil and gas company Sonatrach for a gas-boosting project to supply Italy and the European Union.

The project is in the Hassi R’Mel gas field in Laghouat province of central Algeria, which produces and supplies over half of the North African nation’s natural gas.

The giant Hassi R’Mel field had been in long-term decline but this new venture is aimed at increasing gas volumes.

The project will also increase and stabilize feed-gas supplies to the Mediterranean Coast from the Hassi R'Mel hub to the port of Arzew where one of the nation’s two LNG exports plants is located. in Algeria.

System support

Baker Hughes is part of a consortium with Italian engineering company Maire Tecnimont that will supply Sonatrach with 20 compression trains to enhance the resilience of Algeria’s energy system.

“The agreement strengthens Italy-Algeria bilateral relations as Baker Hughes and Tecnimont will leverage their Italian industrial expertise to deliver on the project,” said a statement.

The contract is part of a broader order awarded to the consortium.

The signing ceremony for the contract took place in Algiers in the presence of the three company Chief Executives Rachid Hachichi of Sonatrach, Lorenzo Simonelli of Baker Hughes and Alessandro Bernini of the Maire Tecnimont group as well as Mohamed Arkab, Algeria’s Minister of Energy and Mines.

The part of Baker Hughes award comprises the supply of the 20 compression trains based on the US company’s Frame 5 gas turbine and BCL compressor technology, which will be installed across three gas boosting stations within the Hassi R’ Mel gas field.

The field is located 550 kilometres south of Algiers and is the largest gas field in Algeria and will a key source of energy supply for Algeria and the EU.

Key project

Baker Hughes CEO Simonelli said the agreement is part of an historic collaboration with Sonatrach for key energy projects.

“We have long believed that it is critical to increase gas within the overall global energy mix,” added Simonelli.

“This project helps to solve for energy producers the multi-faceted challenge of driving sustainable energy development as energy demand increases,” the CEO explained.

“ We are proud to support such a critical energy project in partnership with Tecnimont,” Simonelli stated.

Algeria became the second-largest gas supplier to Europe in 2023, further strengthening the country’s role in enhancing the energy security of the continent, particularly in Italy where Algeria represents the biggest single source of import.

The Hassi R’ Mel project is part of a broader strategic collaboration between Algeria and Italy, which includes recently signed agreements to foster bilateral cooperation and for Italy to provide financial support for Algeria’s gas production.

Russian natural gas pipeline supplier Gazprom said it was ready in technical terms to build new gas pipelines to Turkey via the Black Sea and building on existing TurkStream and BlueStream links rather than restoring the damaged Nord Stream pipelines linked to Germany under the Baltic Sea.

TechnipFMC, the US oil and gas services company based in Houston, was awarded an engineering, procurement, construction and installation contract by UK major Shell plc for the Jackdaw gas development in the UK North Sea to help offset rising LNG imports.

The company said the contract, whose value was not disclosed, covered pipelay for a 30 kilometres tieback from the new Jackdaw platform to Shell’s Shearwater platform, as well as an associated riser, spool-pieces, subsea structures and umbilicals.

The tieback will use pipe-in-pipe technology, which is designed for high-pressure, high-temperature usage.

“We’re excited to embark on this significant project together in the UK North Sea,” said Jonathan Landes, President, of Subsea at TechnipFMC.

“Our strong technical record and our ability to design, engineer, construct and install were key to our success in winning this award,” stated Landes.

Shell in the UK took the final investment decision in July 2022 to develop the Jackdaw gas field following regulatory approvals granted earlier in the year as European countries tried to underpin their domestic supplies hit by the Russian war in Ukraine that led to sanctions.

Development plan

The Jackdaw field is located about 250 kilometres (155 miles) east of Aberdeen, Scotland, and is adjacent to the UK-Norway median line.

The field is 100 percent owned and operated by an affiliate of Shell UK which became part of the Shell group of companies in 2016 after BG Group was taken over.

The Jackdaw development consists of a new Wellhead Platform (WHP), four production wells and the 30km pipeline from the Jackdaw WHP to the Shearwater gas hub.
Peak production from the field is estimated at 40,000 barrels of oil equivalent per day.

Shell said that the UK North Sea remained one of Shell’s core Upstream positions, attracting capital to high margin hydrocarbon projects that can be resilient to commodity price cycles.

The gas from the Jackdaw field will come ashore at the St Fergus gas terminal in Scotland.

The project is expected to come on stream by 2025 and at peak production rates could represent over 6 percent of projected UK North Sea gas production in the middle of this decade.

Shell has said that the Jackdaw gas field was part the company’s broader intent to invest up to £25 billion ($30Bln) in the UK energy system in the next decade.

The company added at the time that the St Fergus terminal that will handle the Jackdaw gas will also be part of the development of the Acorn Carbon Capture and Storage project, which will aim to sequester carbon dioxide from industrial clusters in Scotland, the UK and northern Europe.

The Nord Stream II natural gas pipeline project, which will bring Russian gas to northern Germany and the European Union in competition to LNG and backed by leading Europe-based energy companies such as Royal Dutch Shell, has formally resumed pipe-laying in German waters after being given a sanctions waiver by the current US Administration.

Fluxys LNG, the operator of the Zeebrugge import terminal in Belgium, has opened a subscription window from April 30 to May 24 for unloading slots and additional storage services at the facility.

The Dutch Title Transfer Facility natural gas price has strengthened its position as the main continental European day-ahead and month-ahead gas trading instrument, widening its lead over the UK National Balancing Point price and with both prices followed in volume terms by German and Italian virtual hubs.

Natural gas trading through London in the popular European Dutch TTF, rose by 34.17 percent in March compared with a year ago while trading in the day-ahead UK benchmark NBP was down by 7.42 percent year-on-year.

The Dutch TTF and UK NBP prices are also the main indicators used when pricing Atlantic Basin LNG cargo trades.

Germany’s two day-ahead trading hubs were among the next three in volume terms, though separated by Italy, while the French PEG hub came sixth in the volumes list.

The Dutch TTF logged 2,723,912,634 megawatt hours of over-the-counter bilateral and cleared monthly trades, a rise of 12.61 percent over February 2019 and a 37.14 percent increase year-on-year from March 2018, according to the figures from the London Energy Brokers’ Association.

The London body is the industry association representing the UK Financial Conduct Authority-regulated wholesale market brokers in the OTC and exchange-traded European energy markets.

Figures also showed that the average day-ahead Dutch TTF price was 15.69 euros per megawatt hour ($5.17 per million British thermal units equivalent) in March 2019 versus 23.23 euros per MWh in March 2018, a price fall of 32.46 percent.

The UK NBP had 616,189,691 megawatt hours of bilateral and cleared OTC trades in March, a month-on-month rise of 17.17 percent, though the number was down 7.42 percent compared with March 2018.

The average NBP day-ahead price was 39.48 pence per therm ($5.15 per MMBtu) compared with 63.15 pence per therm in March 2018, a drop of 37.48 percent.

The other March OTC trading totals logged by London for European natural gas were:

NetConnect Germany (NCG) virtual trading point day-ahead volume 188,367,429 MWh; Italian Punto di Scambio Virtuale (PSV) 179,156,300 MWh; German Gaspool 120,795,08 MWh; France PEG 64,808,928 MWh; Austrian VTP 63,791,943 MWh; and Zeebrugge Hub 51,548,595 MWh.

The other European day-ahead gas hubs traded 26,502,029 MWh of contracts.

Gasum, the natural gas network operator in Finland and owner of the Skangas LNG distribution business, plans to invest in the construction of around 50 more natural gas filling stations for heavy-duty vehicles in Finland, Sweden and Norway by the beginning of the 2020s.

Sept 8 (LNGJ) - Norway is celebrating its 40th anniversary as a natural gas exporter to Europe. The opening of the Norpipe pipeline on 8 September 1977 marked the start of Norwegian gas deliveries to European countries. The event was celebrated by Norwegian pipeline operator Gassco at an event in Emden in Germany. Gassco’s gas infrastructure and pipelines cover 8,800 kilometres and include process plants in Norway and terminals in Germany, Belgium, France and the UK. The 40-year-old Norpipe is a 440-kilometre gas pipeline that runs from the Ekofisk field in the Norwegian North Sea to Gassco’s terminal at Emden. “Norway has played an important role over 40 years in securing energy for Europe, and Norwegian gas will remain a key component in the European energy mix,” said Gassco Chief Executive Frode Leversund.