LNG

Algeria is preparing for more pipeline natural gas deliveries to the European Union as well as more LNG exports as new gas fields are developed amid more discoveries in the prolific gas basins of the North African nation.

The Algerian state oil and gas company Sonatrach has just appointed a new Chief Executive in Rachid Hachichi and he has just held talks with Claudio Descalzi, the CEO of Italian major Eni, the company with the most widespread interests in Algeria.

The talks between Descalzi and Hachichi in Algiers on October 12 were also attended by the Algerian Minister of Energy and Mines Mohamed Arkab.

“Eni and Sonatrach shared the joint programs for the development of Eni’s operated gas production as well as gas and LNG exports to Europe,” said Eni.

Descalzi also updated Minister Arkab on the progress of the accord signed by Eni and Sonatrach in January 2022 on upstream decarbonization, includingdetection of fugitive gas emissions in pipelines and plants and the identification of flaring-down opportunities in Sonatrach’s fields.

Eni currently has equity production of about 130,000 barrels of oil equivalent per day and is the key international energy company in terms of Algerian oil and gas operations.

Ten discoveries

Sonatrach also revealed that Algeria had made 10 new hydrocarbon discoveries in the nine months to the end of September 2023, adding to the 16 other discoveries made in 2022.

Arkab met the Eni CEO after also attending the 25th ministerial meeting of the Gas Exporting Countries Forum (GECF) held on October 10 in Malabo, the capital of  Equatorial Guinea, an LNG producer and exporter from its Punta Europa plant on Bioko Island.

The GECF ministers issued a statement declaring that it was “ill advised” to call for any halt in natural gas investments.

“Halting gas investment would curb supplies, lead to an excessive rise in prices and a potential return to coal, as happened in 2022, undermining emissions reduction targets,” said the GECF final communiqué.

Arkab noted that participants at the Malabo meeting highlighted the need for “unrestricted investment” while “strengthening transcontinental financial cooperation in this matter”.

The GECF also advocated more “equitable access” to all technologies related to the exploration, extraction and exploitation of natural gas.

Greece, the leading nation in liquefied natural gas shipping, has held a ceremony attended by the Greek and Bulgarian prime ministers marking the advancement of the Alexandroupolis floating storage and regasification unit (FSRU) and revealing that a second FSRU was planned.

GasLog Ltd, the LNG carrier fleet owner with 36 ships split with its US affiliate GasLog Partners, has held a private share placement “par excellence” with the participation of Greek and Chinese shipping dynasties, including the Tung family of China, the Onassis Foundation and the Greek Livanos family.

“I’m pleased to welcome the Tung family, with their long maritime history and roots in Asia, as shareholders,” said Paul Wogan, Chief Executive of GasLog.

“We look forward to working with them to deliver the value inherent in the GasLog fleet and our leading operating and commercial platform,” he added.

In 2017, the Tung family sold its controlling block of shares in Orient Overseas (International), the shipping company led by Tung Chee-hwa to China’s Cosco Shipping and Shanghai International Port Group.

The family received HK$34 billion (US$4.4Bln) from the transaction.

Orient Overseas was founded by Tung Chee-hwa's father, Tung Chao-yung, in 1969 and became the seventh-largest container shipping company in the world.

Clarksons Platou Securities AS acted as financial advisor to GasLog during the placement.

A special committee of the board of directors of GasLog, comprised entirely of independent members, reviewed the transaction.

Evercore served as financial advisor to the special committee.

In the placement, GasLog sold 14.40 million common shares at a price of $2.50 per share for total gross proceeds of $36.0M. The net proceeds of the placement are expected to be used for general corporate purposes.

About 75 percent of shares issued in the placement were purchased by GasLog’s directors and affiliates, including 6.50M shares purchased by Blenheim Holdings, wholly owned by the Livanos family and 4.0M common shares were purchased by an affiliate of the Onassis Foundation.

GasLog had posted a first-quarter 2020 loss as LNG demand faced multiple headwinds.

GasLog reported a quarterly net loss of $39.43 million versus a profit of $5.89M in the same three months a year ago.

In between the two earnings statements, GasLog brought in cost-cutting measures and among them was moving its headquarters from Monaco to the Greek port of Piraeus.

In the share placement, Blenheim Holdings also agreed not to sell the shares purchased for a period of 180 days.

“Our first-quarter results announcement set out a series of management actions to address the unprecedented market disruption caused by the Covid 19 pandemic,” said GasLog.

“We also updated the market on the progress of the refinancing of our 2021 debt maturities and the status of our interest rate and foreign exchange swap exposures,” it added.

In order to further supplement the management actions announced on May 6, 2020, the board has decided to raise $36M, or 17.8 percent percent of shares outstanding of the company prior to the private placement, to increase liquidity and further strengthen the capital structure of GasLog.

The board decided to execute the financing on a private placement basis with its core shareholders to provide both certainty and minimise any disruption against a volatile market backdrop.

CEO Wogan explained that he was delighted two of the major shareholders had provided this level of support to the company at this time and as they had done since GasLog’s initial public offering in 2012.

LNG deliveries were heading for the largest importers Japan, China and South Korea as well as the European destinations like the UK amid a two-year deal concluded by oil producers to cut output by 9.7 million barrels per day.

Chinese LNG terminals on the coast have returned to normal working and shipments will rise in the weeks ahead.

There was also a continuing flow of Australian long-term contract shipments heading for Japan and Middle East cargoes for South Korea.

Current suppliers to the Atlantic market in the days ahead include Qatar and all the main US export plants as well as Trinidad in the Caribbean.

North Sea Brent crude prices were still lacklustre at around $32 per barrel on April 13 after falling to 20-year lows of just over $20 per barrel in mid-March from $70 per barrel in January 2020.

The Organization of Petroleum Exporting Countries plus Russia held a series of video-conferences over four days during the Easter holiday to secure a deal to reduce production by almost 10 million barrels per day.

However, analysts said the lack of an oil price jump in early Asian crude markets suggested the oil output cuts were not enough in the current crisis.

OPEC was forced into action after the near month-long price war between OPEC's leading member Saudi Arabia and production rival Russia had failed to envisage the huge impact of the coronavirus on the global economy.

The OPEC production cuts by 23 oil nations are expected to be for about two years, though more may still be needed.

Four Qatargas LNG carriers are, meanwhile, heading for the UK with shipments and arrivals are scheduled for, April 15, April 18 and April 19.

The 216,000 cubic metres capacity carrier “Al Ghashamiya” is scheduled to arrive at the UK South Hook terminal in the port of Milford Haven on April 18 from Ras Laffan, the UK port authorities said.

Another Q-Flex vessel, the “Al Utouriya”, is expected to berth on April 19 at Milford Haven’s Dragon LNG terminal to discharge a Qatargas cargo.

The 210,100 cubic metres capacity carrier “Murwab” is expected at South Hook on the same day with more Ras Laffan volumes for the UK. The  Q-Flex “Al Khattiya”, will deliver to South Hook on April 15.

LNG carriers also continuing to load in the Atlantic Basin at Cheniere Energy’s Sabine Pass plant in Louisiana.

They included the 155,000 cubic metres capacity carrier “Golar Seal”, now headed for the Revithoussa terminal in Greece with arrival by around April 21.

The 155,000 cubic metres capacity vessel “British Emerald” is scheduled to discharge a shipment on April 22 at the Turkish Aliaga terminal.

The 162,000 cubic metres capacity vessel “Adam LNG” loaded a cargo at the Cove Point plant in Maryland and is scheduled to deliver on April 17 to the Sines terminal in Portugal.

The “Diamond Gas Orchid”, with 150,000 cubic metres capacity, is scheduled to arrive on April 18 at the US Cameron LNG plant near Lake Charles to lift a cargo.

Atlantic Basin LNG price indicators were still flat and under $2.50 per million British thermal units. The UK National Balancing Point natural gas price was at the equivalent of $2.10 per MMBtu.

The main Continental European price, the Dutch Title Transfer Facility (TTF), was at the equivalent of $2.35 per MMBtu.

The New York Mercantile Exchange front-month US Henry Hub futures price lower at around $1.77 per MMBtu.

There were about 98 LNG cargo liftings at global plants in the past week, amounting to 6.84 million tonnes compared with 101 cargoes in the previous week.

Total LNG cargo volumes in transit amount to more than 16MT, according to shipping data.

The 150,000 cubic metres capacity vessel “Energy Confidence” is due at Darwin in Australia's Northern Territory on April 15 after delivering to the PetroChina-operated Tangshan terminal in northeast Hebei province.

“Flex Endeavour”, with 173,400 cubic metres capacity, is scheduled to arrive on April 15 at Chevron’s Wheatstone export plant in Western Australia after delivering to Taiwan.

That’s as Japan-Korea Marker (Platts) spot values were also still low.

Shipments for southeast Asia and North Asia were quoted at $2.805 per MMBtu for May compared with $2.970 per MMBtu last week and $5.25 per MMBtu in November 2019.

The spot price for June was quoted at $2.650 per MMBtu versus $2.810 per MMBtu a week ago.

The pace of deliveries is picking up for East of Suez, particularly from the Middle East.

The vessels heading for Asia are carrying shipments from nations such as Qatar and Oman as well as US and West African plants.

In the spot shipping charter market, LNG carrier spot rates are firm.

Rates were quoted at an average of between $56,000 per day and $50,000 per day West of Suez and $48,000 per day and $42,000 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers.

One-year time charters have dropped for vessels of between 155,000-160,000 cubic metres capacity and are now seen at around $52,000 per day.

Oct 19 (LNGJ) - The 75,000 cubic metres capacity vessel “Cheikh El Mokrani” will deliver a cargo on October 22 to the Greek Revithoussa import terminal from the Skikda plant in Algeria, operated by Sonatrach, according to shipping data. The 174,000 cubic metres capacity carrier “Gaslog Greece” will deliver a shipment on November 3 to the Mexican Altamira terminal in the Gulf of Mexico from the Bonny Island plant in Nigeria.

Wood Group of the UK has secured a front-end engineering and design contract from Gastrade for the Alexandroupolis LNG import project planned for offshore Greece and involving shipping company GasLog.

Dec 16 (LNGJ) - The 75,000 cubic metres capacity vessel “Cheikh Bouamama” will deliver a cargo on December 17 to the Revithoussa import terminal in Greece after earlier calling at the Spanish Huelva terminal from its previous port of Arzew in Algeria, according to shipping data. The 145,700 cubic metres capacity “LNG Benue” is scheduled to deliver a cargo on December 27 to the Turkish Aliaga import terminal, near Izmir, operated by EgeGaz. The shipment for Turkey was lifted at Nigeria’s Bonny Island plant on December 13. The 210,000 cubic metres capacity Q-Flex carrier “Al Nuaman” is scheduled to deliver a cargo from Qatar on December 22 to the Polish import terminal, located at Swinoujscie on the Baltic coast.