LNG

Australia said that liquefied natural gas demand is expected to increase by just under 2.5 percent in 2024, largely driven by the needs of customers in Asia-Pacific nations and by market dynamics in China.

MidOcean Energy, the LNG assets company formed and managed by global infrastructure investor EIG, said Japanese trading house Mitsubishi Corp. had made a strategic investment.

EIG is a leading institutional investor in the global energy and infrastructure sectors with around $23 billion under management and also announced on March 28 that it had completed the acquisition of the portfolio interests in Australia of Tokyo Gas.

Mitsubishi has been an active player in the LNG sector for over 50 years and is involved in 12 projects, including the LNG Canada venture that comes on stream soon in the province of British Columbia.

The Japanese company made the investment In MidOceam to develop its clean-energy portfolio while fulfilling its responsibility as a stable energy supplier to Japan.

EIG’s MidOcean said that Mitsubishi’s investment, the details of which were not disclosed, deepened MidOcean’s blue-chip base and builds on its “significant momentum” since launching in late 2022.

Blue-chip investors

“We are thrilled to have Mitsubishi join as an anchor investor,” said De la Rey Venter, Chief Executive of MidOcean.

“Mitsubishi has been a pioneer of the global LNG industry and has consistently demonstrated its expertise and foresight in identifying valuable opportunities,” Venter added.

“Their investment is a testament to the strong fundamentals of the LNG market and MidOcean’s strategy to create a competitive long-term growth platform in LNG,” stated the MidOcean CEO.

R. Blair Thomas, EIG’s Chairman and CEO, said he welcomed a strategic partnership with a company such as Mitsubishi.

“The world’s energy transition needs are contributing to rapid growth in global LNG demand, and we look forward to continuing to execute on this attractive and important opportunity,” added Thomas.

Tokyo Gas deal

MidOcean’s recent completion of the acquisition of the Tokyo Gas assets in Australia gives it stakes in the Chevron-operated Gorgon LNG, the Pluto LNG project run by Woodside Energy and the Shell-operated Queensland Curtis LNG venture.

As part of the transaction, MidOcean said it would open an office in Perth in Western Australia to support and oversee the projects.

EIG is headquartered in Washington DC and also has offices in Houston, Texas, London, Sydney, Rio de Janeiro, Hong Kong and Seoul.

For the completion of the MidOcean-Tokyo Gas deal Barrenjoey, Barclays and JP Morgan acted as financial advisors to EIG and MidOcean in connection with the transaction.

White & Case acted as legal advisor to EIG and MidOcean.

EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds around the world.

Hess Corp., the New York-based oil and gas company being acquired by Chevron Corp. in a transaction agreed in October and valued at $53 billion, is trying to re-assure Chevron that one of its main assets in Guyana was safe from any pre-emption purchase offer from the other shareholders in the block.

Chevron Corp., the US major oil and gas company with LNG operations in Australia and Africa, has received a vote of confidence from US investor Warren Buffett whose Berkshire Hathaway has taken its stake to almost 7 percent.

Buffett’s Berkshire Hathaway has increased its stake in San Ramon, California-based Chevron by over 15.84 million shares.

This transaction has brought Berkshire Hathaway's total share count in Chevron to 126.09M shares, representing about 5.96 percent of Buffett’s investment portfolio and 6.81 percent of Chevron's outstanding shares.

Lower price

According to Berkshire Hathaway data, the Chevron shares were acquired at an average price of $149.16 each and were valued at $18.80 billion.

Buffett is a celebrity figure among America’s small retail investors and is known to his fans as “The Oracle of Omaha”.

Buffett’s other main energy investment is in Houston, Texas-based Occidental Petroleum which forms 4.19 percent of the Berkshire Hathaway portfolio. The Buffett firm also has a huge 50 percent represented by shares in Apple Inc.

Chevron’s shares have recently risen to $154.63 per share, backed by positive earnings and the company’s acquisition agreement signed in October 2023 with US oil and gas company Hess Corp.

The value of the Buffett stake has already risen and at current prices on February 19, 2024, is now worth just short of $20Bln at $19.49Bln.

Chevron recently reported annual net profits of $21.41Bln, down from $35.60Bln in the previous year, though apart from 2022 the Chevron performance was the strongest since 2013.

LNG projects advance

Chevron listed among its highlights as achieving first natural gas production from the Gorgon Stage 2 development in Western Australia where its operates both the Gorgon LNG and Wheatstone LNG export plants.

Chevron also reached a final investment decision with partners to construct a third gathering pipeline that is expected to increase natural gas production capacity at the Leviathan gas field and a future LNG hub in the East Mediterranean offshore Israel.

The company additionally expanded the Bayou Bend carbon-capture and sequestration project on the US Gulf Coast through an acquisition of nearly 100,000 acres.

However, Chevron assets in the Permian Basin in Texas and New Mexico also helped to underpin the earnings.

Chevron posted an increase in its Permian production by 10 percent in 2023 with US quarterly output coming to 1.16 million barrels per day compared with 895,000 barrels per day, helped by the 2023 acquisition of US independent oil and gas company PDC Energy.

Chevron is also paying $53Bln for New York-based Hess, giving it access to major oil discoveries in the South American nation of Guyana as well as more US shale assets in the Bakken Shale Basin of North Dakota.

US majors ExxonMobil Corp. and Chevron Corp. recorded their second-largest annual profits in 10 years as oil and natural gas production increased and Chevron shipped record LNG cargoes from Australia even amid work stoppages.

Chevron Corp., the energy major and liquefied natural gas operator in Western Australia and Angola, and with a small LNG fleet said that the President of Chevron Shipping Company, Mark Ross, was retiring from the company in May “after 33 years of distinguished service”.

The San Ramon, California-based company said that Ross would be succeeded by Barbara Pickering, currently Vice President of Operations at the shipping unit.

Chevron Shipping employs around 2,000 people worldwide and operates a modern fleet of 30 ships and also charters third-party vessels  to transport LNG, crude oil, liquefied petroleum gas, refined petroleum products and chemicals around the world.

The company said that Ross had led Chevron Shipping since 2015 and prior to that, he served as Vice President of Operations of the company for four years.

He joined Chevron in 1990 and has held positions of increasing responsibility in Chevron’s Midstream, Upstream and Downstream organizations.

ABS director

He is also a Director of the American Bureau of Shipping and the UK P&I Club and is a past Chairman of the Oil Companies International Marine Forum (OCIMF) and the Society of International Gas Tanker and Terminal Operators (SIGTTO).

He holds a bachelor’s degree in chemical engineering from the University of California at Berkeley, a master’s degree in chemical engineering from the University of Illinois at Urbana-Champaign, and a Master of Business Administration degree from the University of California at Berkeley.

His successor Barbara Pickering received a bachelor’s degree in Maritime Studies from Liverpool University in the United Kingdom and joined Chevron in 1991 as a ship charterer in London.

She has held positions of increasing responsibility with Chevron in the UK, Australia and the United States. She also currently serves as a Vice Chairman of OCIMF.

“Under Mark’s leadership, Chevron Shipping has delivered exceptional safety and environmental performance and has greatly expanded its marine capabilities,” said Colin Parfitt, President of Chevron Midstream.

“We thank Mark for his many contributions and wish him well in the future,” added Parfitt.

Ross said that it had been an honor and privilege to have worked for Chevron Shipping and to have served as President for the past nine years.

“I take immense pride in what we have accomplished in transforming Chevron Shipping into a world-class marine organization,” Ross explained.

“Words cannot properly express how I feel about our organization and the deep appreciation I have for the people who run it - onboard our ships, at our terminals and ashore. I have known Barbara for 30 years and I am thrilled she will now lead our company,” Ross stated.

The US finished 2023 at the top of the liquefied natural gas exports league as shipments to Europe were ramped up to replace Russian volumes while Australia finished second because of maintenance, strikes and regulatory obstructions for future ventures and Qatar was in third place ahead of its massive expansion plans.

Chevron Corp., the operator of liquefied natural gas projects in Western Australia and Africa, said it expected a capital expenditure range of $15.5 billion to $16.5 billion and an affiliate spending budget of around $3Bln for 2024.

Petronet LNG, the owner of the largest Indian import terminal at Dahej in the West Coast state of Gujarat and a smaller facility at Kochi in the southwest state of Kerala, reported 10 percent higher fiscal second-quarter net profits, though revenues dropped by over 22 percent from the same quarter last year because of much lower prices.

The company reported consolidated net profits of 818.10 crore Indian rupees ($98.24 million) for the second quarter of the fiscal year compared with 744.25 crore rupees ($89.37M) in the second quarter of 2022 and 789.85 crore rupees ($94.85M) in the previous 2023 quarter to the end of June.

The company’s consolidated revenues from operations were much lower this year than last because of higher prices that prevailed in 2022.

The fiscal second-quarter revenues dropped by over 22 percent to 12,532.57 crore rupees ($1.30 billion) from 16,079.97 crore rupees ($1.93Bln) reported in the same quarter of last year.

However, the fiscal second-quarter income was higher than the 11,656.38 crore rupees ($1.39Bln) logged in the April-June quarter of 2023.

Dahej efficiency

“The robust financial performance of the current quarter and half year was achieved due to efficiency in operations and higher capacity utilization of the Dahej Terminal, that remained consistently above 90 percent in the current quarter and half year, taking a huge leap from the utilization level in fiscal 2022-23 that was below 80 percent,” Petronet explained.

The Petronet board of directors also approved investment of around 20,685 crore rupees ($2.48Bln) for the development of a petrochemicals project including a propane and ethane handling facility near the Dahej terminal site, located north of Mumbai.

Earnings per share increased to 5.45 rupees ($0.065) versus 4.96 rupees in the prior-year quarter.

The earnings statement showed that during the quarter to the end of September 2023, the Dahej terminal processed 210 trillion British thermal units (TBTU) of LNG compared with 182 TBTU during the corresponding quarter of 2022 and 217 TBTU during the previous quarter from April-to-June 2023.

Overall LNG volumes processed by the company during the three months, including the Kochi terminal, came to 223 TBTU, as against the LNG volume processed in the corresponding and previous quarters, which stood at 192 TBTU and 230 TBTU respectively.

The company receives about 8.5 million tonnes per annum under three principal long-term supply contracts, two with Qatar and one with the Chevron-operated Gorgon LNG plant in Western Australia.

Petronet is also planning a third import facility and its first on the East Coast at the Port of Gopalpur in the state of Odisha.

Petronet was formed by the Government of India in 1998 specifically to import LNG.

Shareholders in Petronet, which began operations in 2004, include the other big Indian energy players, GAIL India, Indian Oil, Bharat Petroleum Corp. and Oil and Natural Gas Corp.

Indian liquefied natural gas imports surged by more than 20 percent last month helped by lower prices and higher domestic gas demand while gas output offshore the Bay of Bengal also increased.