LNG

ExxonMobil Corp., the largest US oil company and leading LNG producer and a partner of Qatar, continues in talks to acquire Texas-based Pioneer Natural Resources in what would be its largest acquisition since the historic tie-up between Exxon and Mobil in 1999. 

ExxonMobil Corp., the largest US oil and natural gas major, plans to acquire Denbury Inc., the developer of carbon-capture and storage (CCS) solutions and with assets in the LNG production hub area of the US Gulf Coast, for $4.9 billion in an all-share transaction.

ExxonMobil Corp., the largest US oil company and leading LNG producer and a partner of Qatar, said changes in natural gas prices would impact its second-quarter Upstream earnings by $1.8 billion to $2.2 billion compared with the first quarter even as the company was also overhauling trading activities and embarking on oil projects in Guyana and LNG expansion.

Slovakia, the land-locked European Union member most dependent on Russian natural gas, has signed a liquefied natural gas supply deal with US major ExxonMobil Corp, and will receive the volumes via import facilities in Italy and Croatia.

The LNG supply agreement has been signed with the main Slovakian energy company, Slovenský Plynárenský Priemysel (SPP).

“A contract with a strategic partner like ExxonMobil opens new opportunities in access to natural gas and LNG,” said SPP in a statement without mentioning volumes nor prices

SPP also explained that gas transportation arrangements to the land-locked central European country had been secured from LNG terminals in Italy and Croatia.

Slovakia uses around 5 billion cubic metres of natural gas per annum and has mostly received Russian pipeline supplies from Gazprom that had to transit through Ukraine.

The EU nation is one of the countries most affected among the 27-member EU bloc as it had also previously relied on Russia for more than 85 percent of its gas.

Analysts noted that two-thirds of Slovakia’s oil has also come from Russia and meant the Slovakians had been opposed to more packages of sanctions cutting Russian supplies.

Polish pipeline

Earlier in September Slovakia was also able to have a guarantee of pipeline natural gas via Poland.

LNG importer Poland inaugurated a new natural gas pipeline interconnector between Poland and Slovakia as part of EU funding to help create a Polish gas hub supplying central and northeast EU countries.

The latest pipeline connects the gas networks of the two countries and will ensure supply delivery to comply with the EU strategy of diversifying routes.

The completion of the pipeline is a small part of an EU plan to create a North-South gas infrastructure corridor between the Baltic Sea, the Adriatic and Aegean Seas, the eastern Mediterranean Sea and the Black Sea.

The Poland-Slovakia pipeline with a total length of 165 kilometres (103 miles) was an EU Project of Common and received more than €100 million ($99.6M) of EU funding through the Connecting Europe Facility and which represented around 40 percent of the project’s costs.

The EU gas network had previously supported flows between the Russian Federation and Western Europe before the Ukraine invasion in mid-February 2022. 

ExxonMobil Corp., the long-standing partner of Qatar in oil and gas and LNG, has become as expected the fourth signatory of a joint venture stake in the North Field East LNG expansion project.

Qatar and Saudi Arabia have spoken up for the LNG and oil export prospects of the Arab Gulf region and with both countries also embracing technologies for carbon-capture and renewable energies.

ExxonMobil confirmed it was delaying a final investment decision for the Rovuma liquefied natural gas project in Mozambique, probably into 2021 at the earliest, but US Gulf Coast spending plans remain on track.

The FID had been expected for later in 2020, though the US major said it was continuing to actively work with its partners and the government to optimize development plans.

The Coral LNG development continues offshore Mozambique continues as planned.

The Mozambique update came in a statement from ExxonMobil saying it was reducing its 2020 capital spending by 30 percent and lowering cash operating expenses by 15 percent in response to low commodity prices resulting from oversupply and demand weakness from the Covid-19 pandemic.

“Capital investments for 2020 are now expected to be about $23 billion, down from the previously announced $33Bln,” said ExxonMobil.

The 15 percent decrease in cash operating expenses is driven by deliberate actions to increase efficiencies and reduce costs, and includes expected lower energy costs.

“Despite the reductions, ExxonMobil expects to meet its projected investment of $20Bln on US Gulf Coast manufacturing facilities made in its 2017 'Growing the Gulf' initiative,” said the US major. This spending is mainly on refining and chemical-manufacturing projects.

The company also expects to reach its proposed US investment of $50 billion over five years announced in 2018,” it added.

ExxonMobil said in October 2019 that it planned to invest more than $500M in the initial construction phase of its Rovuma project in Mozambique as part of the Area 4 resources development with its partners, including Italian energy company Eni and China National Petroleum Corp.

“After a thorough evaluation of the impacts of the pandemic and market conditions, we have worked closely with business partners to plan and execute capital adjustments that preserve long-term value, maximize cost efficiency, and put us in the strongest position when market conditions improve,” said Darren Woods, Chairman and Chief Executive of ExxonMobi.

“The long-term fundamentals that underpin the company’s business plans have not changed - population and energy demand will grow, and the economy will rebound,” Woods added.

Exxon’s Rovuma Basin stake, jointly held with Italian firm Eni, will produce LNG from three feed-gas reservoirs located in the Area 4 block offshore Mozambique’s northern coast.

ExxonMobil is the lead company for the Mamba gas fields and LNG project development and costs are estimated at around $30Bln.

Area 4's consortium is formed by Mozambique Rovuma Ventures, comprising ExxonMobil with 25 percent, Eni with 25 percent and China’s CNPC, also known as PetroChina, with 20 percent.

The remaining 30 percent of shares in that licence are held in parcels of 10 percent by South Korean utility and energy company Korea Gas Corp., Galp Energia of Portugal and Mozambique’s state energy compny ENH.

A separate project for Area 4 resources is the Coral floating LNG joint venture with capacity of around 3.4 MTPA already under construction and scheduled to come on stream in 2022.

ExxonMobil will lead the development of liquefaction and LNG operations on behalf of the Area 4 joint venture, while Eni will be in charge of the construction and bringing on stream of the upstream facilities.

Eni had completed its sale of a 25 percent indirect interest in the Area 4 licence block in the Rovuma Basin to ExxonMobil in November 2017.

The development plan for the first phase of the LNG venture currently specifies the design and construction of two LNG Trains, which will each produce 7.6 MTPA of LNG.

ExxonMobil and LNG business partner Qatar Petroleum won three exploration blocks offshore Tierra del Fuego at the southern tip of South America during Argentina’s first bid round, adding to their onshore acreage in the world-class onshore Vaca Muerta shale basin.

Qatar Petroleum and ExxonMobil have made a final investment decision to proceed with development of the Golden Pass LNG export project in Texas and have awarded construction contracts to a US-Japanese consortium for work to begin within weeks and for the facility to be operational in 2024.

“Golden Pass will provide an increased, reliable, long-term supply of liquefied natural gas to global gas markets, stimulate local growth and create thousands of jobs,” said ExxonMobil Chairman and Chief Executive Darren Woods.

An engineering consortium comprising McDermott and Zachry Group of the US and Japan’s Chiyoda Corp. have been awarded the contract to build the plant.

“The extensive experience of ExxonMobil and Qatar Petroleum provides the expertise, resources and financial strength needed to construct and operate an integrated liquefaction and export facility in the US,” added Woods.

The Golden Pass project is located on the Sabine-Neches Waterway in Texas. It is 70 percent-owned by Qatar Petroleum while ExxonMobil holds the remaining 30 percent stake, having acquired 15 percent from former shareholder ConocoPhillips.

Originally designed as an import facility before the shale-gas revolution, Golden Pass will be reconfigured at a cost of more than $10 billion to export up to 15.6 million tonnes per annum of LNG.

“It is expected to create about 9,000 jobs over the five-year construction period and more than 200 permanent jobs during operations,” said ExxonMobil.

McDermott, Chiyoda and Zachry will perform engineering, procurement, construction and commissioning of three Trains, each with capacity to produce 5.2 MTPA.

“McDermott has extensive experience in executing major projects along the US Gulf Coast,” said Richard Heo, McDermott's regional Senior Vice President.

“We will apply not only our vertically-integrated capabilities but also some of the best practices and lessons learned for major construction projects in the region,” he explained.

“We will also leverage the existing relationships we have with our partners and our customers to ensure that the Golden Pass project is a success,” stated the McDermott executive.

Golden Pass is part of ExxonMobil’s plans to invest more than $50 billion over the next five years to build and expand manufacturing facilities in the US.

“This project builds upon the successful international relationship between ExxonMobil and Qatar Petroleum, with Qatar Petroleum joining ExxonMobil in exploration and development activities in Argentina, Brazil and Mozambique,” said the US major.

The US Federal Energy Regulatory Commission has already approved the Golden Pass project, concluding that it “would result in some adverse environmental impact, though impacts would not be significant with implementation of proposed mitigation” by the developers and the regulators.

ExxonMobil has extensive assets in the US Gulf Coast area and is the biggest leaseholder in the Permian Basin, which it owns in parallel with pipelines and petrochemical infrastructure and plants that extend from South Texas into Louisiana.

The FERC has also approved permits for the associated Golden Pass Pipeline linking the plant to the major pipelines bringing in shale-gas resources.

ExxonMobil’s growing Gulf expansion programme consists of 11 major chemical, refining, lubricant and energy projects at proposed new and existing facilities along the Texas and Louisiana coasts.

KBR Inc., the leading US liquefied natural gas engineering company, said it was retained by the Papua New Guinea Department of Petroleum to provide consulting, advisory and engineering services for multiple projects linked to the Oceania nation’s LNG expansion.