LNG

Dec 20 (LNGJ) - Norwegian pipeline gas company Equinor and German state-owned firm Securing Energy for Europe (SEFE), formerly a unit of Russia's Gazprom before it was nationalized by the German Federal Government after the Russian invasion of Ukraine, have signed a wide-ranging gas supply deal. Equinor has agreed to supply 111 terrawatt hours, or 10 billion cubic metres of natural gas per annum, to SEFE from January 2024 until 2034 and with an option for another five years and at terms reflecting market prices.

   “This is a response to Europe’s need for long-term, reliable supply of energy,” said Equinor’s Chief Executive Anders Opedal. “The gas will be delivered to Trading Hub Europe (THE) in Germany, Title Transfer Facility (TTF) in the Netherlands and at the National Balancing Point (NBP) in the UK,” said a joint statement. The agreements were signed in Berlin by CEO Opedal and SEFE’s CEO, Egbert Laege. “After the Troll gas sales agreement in 1986, this is one of the largest gas sales agreements Equinor has entered into as a company,” the Norwegians added.

Norwegian oil and gas company and LNG export plant operator Equinor has submitted a fast-track plan to the government for development and operation of the Eirin natural gas field gas field in the North Sea that will provide more supplies to the Europe.

Eni, the Italian energy major and significant liquefied natural gas developer and market participant, said it agreed to acquire natural gas fields in Algeria from UK major BP because of the “great strategic value” they now held.

Equinor confirmed that the Hammerfest LNG plant was resuming production in mid-May and would be part of the Norwegian company’s new planned natural gas production surge for Europe.

Norwegian energy company Equinor, whose Hammerfest LNG plant comes back on stream in mid-May 2022, said “unprecedented” European natural gas prices in the second half resulted in record high annual and fourth-quarter adjusted earnings after gas output was boosted.

Equinor, the Norwegian LNG production plant owner and pipeline natural gas supplier to the European Union and the UK, has entered into an agreement with Canada’s Vermilion Energy to sell its non-operated stake in the Corrib natural gas project in Ireland.

The Corrib field started production in 2015 and is located 83 kilometres (51 miles) off Ireland’s northwest coast in water depths of almost 350 metres.

The equity gas volumes to Equinor for 2021 are estimated at 58 million standard cubic feet per day.

Equinor and Vermilion have agreed a consideration of US$434 million, before closing adjustment, with an effective date set at 1 January 2022.

The transaction is organised through a share sale of Equinor’s 36.5 percent of the Corrib project, alongside Vermilion, the operator with 20 percent, and Dublin-based Nephin Energy with 43.5 percent.

Hedging

As part of the transaction, Equinor and Vermilion have agreed to hedge approximately 70 percent of the production for 2022 and 2023, and have also agreed a contingent payment that will be paid on a portion of the revenue if European gas prices exceed a given floor level.

“The Corrib field has been an important non-operated project for Equinor for several years,” said Arne Gürtner, Equinor senior vice president responsible for the United Kingdom and Ireland.

“We have taken the decision to sell the asset to focus our portfolio, in line with our strategy, to capture value from the current strong market and to free up capital that we can re-invest elsewhere,” added Gürtner.

The deal is subject to approval by partners, the Irish government and regulatory bodies.

The sale of Corrib means that Equinor will no longer have active business presence in Ireland, after also deciding to withdraw from an early phase offshore wind project in the country.

Equinor’s Hammerfest LNG plant on Melkoya island in northern Norway is currently closed after a fire occurred on September 28 last year.

The facility, which supplies European LNG terminals, is expected to re-open after repairs in the first quarter of 2022.

The East African nation of Tanzania has resumed talks with international oil and gas companies on developing substantial offshore natural gas resources for LNG production.

The Energy Minister of Tanzania, January Makamba, said talks had been held with various major oil and gas companies.

“I have started negotiations for the $30 billion Tanzania LNG project. The project will transform our economy,” stated Makamba.

Equinor of Norway, which has ownership of exploration and production licences, said talks with the Tanzanian government were expected to focus on conditions that would enable companies to invest.

“For the past two months, we've worked hard behind the scenes to get here. We're confident that a final investment decision will come sooner than is traditionally the case,” Minister Makamba declared.

The Norwegian company said it was pleased to be engaging and framing the commercial, fiscal, regulatory and legal priorities for any future project in the African country.

Tanzanian President Samia Suluhu Hassan held talks in October 2021 with Royal Dutch Shell Chief Executive Ben van Beurden and the long-planned LNG export project was discussed.

Equinor and Shell and several other companies, including Pavilion Energy, of Singapore, have stakes in the Tanzanian gas fields.

Shell became the operator of blocks 1, 3 and 4 in Tanzania in February 2016 after its takeover of BG Group and has also been working closely with the Tanzanians.

The Block 2 in the same Basin as Shell’s licence area is operated by Norway’s Equinor.

The Basin occupies an offshore area of some 75,000 square kilometres between the Tanzanian continental shelf edge and in water depths ranging from 500 metres to 3,300 metres.

Net contingent resources in the four Blocks are estimated to be at least 20 trillion cubic feet, sufficient to support a three-Train LNG development.

Equinor has a production-sharing agreement with Tanzania Petroleum Development Corp (TPDC) and is the operator with a 65 percent participating interest, while US major ExxonMobil has a working interest of 35 percent in the PSA.

TPDC has the right to participate in any project and would have a 10 percent interest.

Equinor made nine natural gas discoveries in Block 2, one of four explored blocks with proven resources offshore Tanzania.

The Norwegian company had previously said it aimed to work on the LNG project with Shell.

Norwegian oil and gas company Equinor, the leading producer and exporter of West European pipeline natural gas and LNG, has brought on stream the third stage of the Troll gas field, extending the production lifespan beyond 2050.

Equinor, the Norwegian oil and natural gas company and operator of the currently closed Hammerfest LNG export plant, reported second-quarter net income of $1.94 billion after a previous loss, helped by higher price and progress in the projects portfolio.