LNG

Santos Ltd, the Australian operator of two liquefied natural gas export plants and a main shareholder in Papua New Guinea LNG assets, has signed a long-term supply deal with Hokkaido Gas Co., the Japanese utility.

Algeria plans to export liquefied natural gas to Asia and South America after the refurbishment of the Skikda liquefaction and export plant on the North African nation’s Mediterranean coast with new storage facilities and a larger jetty to be constructed by a consortium of Chinese contractors.

Toufik Hakkar, the Chief Executive of state-run Algerian oil and gas company Sonatrach, made the statement during a briefing following the signing on February 17 of an engineering contract for the Skikda LNG upgrade.

Sonatrach signed an agreement with two Chinese engineering companies to build a new LNG storage tank with 150,000 cubic metres capacity and to modernize the jetty and loading facilities.

The contract is with China’s Sinopec Luoyang Engineering Co.  (LPEC) and Sinopec International Petroleum Services Corp. (SIPS).

The work will also include the dismantling of two 20-year-old storage tanks at the Skikda facility.

The Skikda plant currently has 4.5 million tonnes per annum of LNG export capacity.

“The loading capacities and the capacities of the port of Skikda do not make it possible to supply the larger ships serving distant markets,” said Hakkar.

Renovation

“With the renovation of the port and the construction of this new storage tank, we will be able to go to these markets which constitute a strong added value,” explained the CEO, mentioning Asia and South America.

Sonatrach has several contracts for the Skikda plant, including one with TotalEnergies to supply 2 MTPA of LNG to the French market, primarily through the LNG terminal at Fos Cavaou near Marseille.

The agreement also includes the sub-charter of a TotalEnergies LNG carrier to Sonatrach.

The supplies for TotalEnergies are delivered ex-ship (DES) to Fos Cavaou through to December 2023.

“This engineering, procurement and construction contract is worth 25 billion Algerian dinars ($178 million) and will take 40 months to complete,” stated Hakkar.

The contract was signed by Sonatrach’s Director of Central Engineering and Project Management Farredj Aoudjehane and the SIPS General Manager in Algeria, Xu Zhenqiang.

“The agreement marks a new stage of cooperation between Sonatrach and Sinopec International Petroleum Services,” said Xu.

“During the implementation period, Sinopec will do its best to guarantee the completion of this project under the necessary safety conditions and with high quality within the set deadlines,” added the Chinese executive.

French industrial gases company Air Liquide, plans to build an air separation unit (ASU) in the Lingang Economic District of Tianjin Port, the growing centre of Chinese LNG imports for use in the domestic market and by industry.

Air Liquide, whose latest China plans were announced in a statement to the Euronext stock exchange in Paris, has been supplying industrial gases to the Chinese Tianjin industrial basin for many years and operates seven Chinese production facilities.

“With an oxygen production capacity of more than 2,000 tons per day, this ASU will notably allow Air Liquide to support the growth of the chemical and steel industries in the Tianjin basin, secured by a new long-term supply agreement with a major customer,” said the company.

Air Liquide will build, own and operate this new ASU, which has been designed leveraging the group’s latest state-of-the-art technology, for the low-carbon and energy-efficient production of oxygen, nitrogen and argon.

One Air Liquide’s main competitors in China is Air Products, the US company based in Pennsylvania which combines its industrial gas business with its LNG equipment making.

Air Products is the world’s leader in LNG technology and equipment, but is also investing in industrial gas provision in various Chinese provinces.

Air Liquide’s main LNG sector sales are linked to its Turbo-Brayton cryogenic equipment, with around 50 units sold over the last two years.

The technology, developed by Air Liquide and based on the Turbo-Brayton principle, reliquefies LNG boil-off gas on vessels transporting the product, thereby significantly reducing greenhouse-gas emissions during transportation.

Air Liquide now operates nearly 100 industrial gas facilities in China and employs close to 5,000 people with a strong presence in the key coastal industrial areas.

The latest Air Liquide investment in Tianjin, which borders Hebei Province and the Beijing municipality, will incorporate a dedicated capacity to support small-and-medium sized customers of liquid and packaged gases. It is planned to be operational in 2022.

The latest investment will amount to around €60 million ($70M), added the company.

The Chinese operator Beijng Gas is developing more LNG import capacity in Tianjin, which already has two import facilities.

The company’s Nangang import project at Tianjin is currently scheduled to come on line in 2022 with 10 tanks and up to 2 million tonnes of storage.

The Beijing Gas terminal will have an initial 5 million tonnes per annum of LNG capacity and adds to the supply available from Sinopec’s Tianjin North import terminal and the Floating Storage and Regasification Unit (FSRU) capacity deployed in recent years by China National Offshore Oil Corp.

Air Liquide’s China subsidiary currently operates seven ASUs in Tianjin in the industrial gases sector, as well as a network of multi-sourced pipelines that deliver oxygen, nitrogen and hydrogen to adjacent customers.

“One of the most important industrial cities in the country and the largest port in Northern China, Tianjin is a key basin for Air Liquide in China,” explained François Abrial, a member of Air Liquide Group’s Executive Committee supervising the Asia-Pacific region.

“This new investment in the 8th ASU clearly demonstrates our commitment to the long-term partnership we have built with our customers there,” added Abrial.

Venture Global, the US developer of three LNG export plants in Louisiana, has spoken at the Gastech Virtual Summit in favour of LNG in the energy transition as a counter to huge new coal power-generation plans in China and the power cuts in the US state of California, he referred to as “green-outs”.

Elengy, the French import terminal operator, said the Montoir-de-Bretagne facility in Western France was fully booked between 2023 and 2035 with only a small portion of capacity available in 2021 and 2022.

The Gladstone liquefied natural gas joint venture involving Santos of Australia, Petronas of Malaysia, Korea Gas Corp, and French major Total, plans to open up more Queensland coal-seam gas supplies to boost the long-term viability of the plant on Curtis Island.

French energy major Total said second-quarter adjusted net income dropped 19 percent to $2.88 billion from $3.55Bln in the same three months of 2018 in results offset by a more than doubling of liquefied natural gas sales and the acquisition of Mozambique LNG assets from Occidental Petroleum.

Total said second-quarter LNG sales more than doubled to 8.5 million tonnes from 3.9MT in the same three months a year ago.

First-half LNG sales came to 16.2MT versus 7.7MT in the first half of 2018.

The company said that while gas prices fell sharply there was an increase in LNG sales.

“Compared to the second quarter of 2018, operating cash flow before working capital changes increased by 77 percent, driven by a doubling of LNG sales,” said Total.

“Total LNG sales more than doubled compared to last year for the second quarter and first half 2019 thanks to the start-up of Yamal LNG Trains 2 and 3 in Russia, Ichthys LNG in Australia, the first Cameron LNG Train in the US and the acquisition of the portfolio of LNG contracts from Engie in 2018,” explained Total.

Total also stated that its signing of an agreement with Occidental Petroleum of the US to acquire Anadarko Petroleum’s assets in Africa, including its LNG stake in Mozambique, would capitalize on the French company’s strengths.

“In Mozambique, it leverages its expertise in LNG, in Ghana, the deep offshore and, in Algeria, its historic presence,” said Chairman and Chief Executive Patrick Pouyanné.

“The Group continues to grow in LNG with the signing of a sales contract with the Chinese company Guanghui, the takeover of Toshiba’s LNG portfolio (Freeport LNG) and the start-up of Cameron LNG,” added Pouyanné.

“This strategy is complemented by the divestments such as the recent sale of mature assets in the UK North Sea,” stated the CEO.