LNG

Norway’s Equinor, the LNG exporter and main supplier of pipeline natural gas to Europe, posted a slight rise in second-quarter net income as new fields came on stream on the Norwegian Continental Shelf amid continued high grading of the company’s oil and gas portfolio.

Equinor, the Norwegian energy major, LNG plant owner and pipeline natural gas supplier to Europe, is increasing gas output on the Norwegian Continental Shelf with a gas field joint venture.

July 8 (LNGJ) - Equinor, the Norwegian oil, gas and LNG producer and the main supplier of pipeline gas to Europe, said ahead of second-quarter earnings on July 24 that the company’s internal natural gas price for the three months rose to $8.47 per million British thermal units, up from $7.76 per MMBtu in the first quarter of 2024.

   Equinor’s internal transfer price for natural gas is a volume weighted average price calculated at the end of every quarter after deducting costs relating to bringing the gas from the processing plants to market and a marketing fee element. The price components include values of the Dutch Title Transfer Facility (TTF) amounting to 22.5 percent of the total, the UK National Balancing Point (NBP) with 30 percent input, Germany’s Trading Hub Europe (THE) price at 22.5 percent and the French Point d’Echange de Gaz (PEG) 25 percent.

Denmark, one of the largest energy traders in LNG and gas and power in the Nordic market, has brought pipeline natural gas supplies to two of the nation’s isolated areas.

The Danish Energy Agency has issued permits for Energinet and Evida to put the Lolland-Falster pipeline into operation on Danish maritime territory in Storstrømmen and Guldborg Sund.

“The Danish Energy Agency has granted a license to Energinet for the commissioning and operation of the Lolland-Falster gas pipeline on Danish lake territory in Storstrømmen and a licence to Evida for commissioning and operation of the pipeline on Danish territory in Guldborg Sund,” said the Agency.

The Lolland-Falster pipeline in Danish waters is part of a larger gas pipeline project between Everdrup on Zealand and Nakskov on Lolland.

Capacity

The gas pipeline runs as an underwater pipeline at the water crossings at Storstrømmen and Guldborg Sund.

The total length of the pipeline route is around 115 kilometres (72 miles) long and the pipeline can transport up to 290 million cubic metres of natural gas per year.

According to the timetables of both companies commissioning is planned for 30 August 2024.

The Agency said the nation’s consumption of natural gas fell by more than 10 percent in 2023 while the share of bio-natural gas made from waste increased its share of the energy mix.

Denmark is part of the changing Nordic regional energy market where Norway is an LNG exporter and Sweden and Finland are LNG importers, while the Norwegians and Swedes additionally supply power to Denmark.

Additionally the Danes are a conduit for pipeline gas supplies to the Baltic region.

Natural gas consumption in Denmark amounted to around 1.7 billion cubic metres for all of last year, a decrease compared with the previous year.

Natural gas use by the Danes peaked in 2006 at 5.3 Bcm per annum.

The United Kingdom by comparison has much larger natural gas consumption.

UK gas use averaged around 7.4 Bcm per month during the past winter and 72 Bcm for the year, down from almost 79 Bcm in the previous year.

July 3 (LNGJ) - Supplies of regasified LNG delivered from the European network of import terminals to the European Union’s gas pipelines system declined by 14.2 percent in the first six months of 2024 compared with the same period last year to around 58.5 billion cubic metres.

   The delivered volumes also dropped by 32 percent in June compared with May 2024. According to gas industry data LNG imports have provided 36 percent of Europe’s natural gas needs this year so far up until the end of June.

June 20 (LNGJ) - The Netherlands was receiving two LNG cargoes, one from Norway and one from the United States. The “BW Pavilion Aranthera” with 173,400 cubic metres capacity is scheduled to deliver a US LNG cargo on June 21 to the Dutch Eemshaven import terminal in Groningen, according to shipping data.

   The cargo was loaded on June 7 at the Freeport export facility in Texas. The “Arctic Discoverer” with 139,760 cubic metres capacity has berthed at the Gate terminal in Rotterdam with a shipment from Hammerfest in Norway lifted on June 14.

Equinor, the Norwegian LNG exporter and main supplier of pipeline natural gas to Europe, reported a 46 percent drop in net income as oil and gas prices declined, with pipeline gas values falling to under $9.50 per million British thermal units.

Equinor, the Norwegian supplier of pipeline natural gas to Europe and LNG cargoes, has agreed a US deal with shale-gas giant EQT Corp. to swap Equinor’s operated position in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interest in the Northern Marcellus shale formation.

Under the transaction, Equinor will sell 100 percent interest in and operatorship of its onshore asset in the Appalachian Basin, located in southeast Ohio, in exchange for 40 percent of EQT’s non-operated working interest in the North Marcellus shale in Pennsylvania.

Equinor said it would pay a cash consideration of $500 million to EQT to balance the overall transaction, swapping for resources that contribute to growing cashflows and further reducing carbon-dioxide emissions intensity in the international portfolio.

Shale Gas No. 1

EQT is the largest producer of natural gas in the US with operations in Pennsylvania, West Virginia and Ohio.

Equinor is also the owner of the Hammerfest LNG export plant in northern Norway that came on stream in 2007 and it was initially developed to export LNG to the US before the extent of America’s shale-gas resources became clear and the US later became the world’s No. 1 LNG exporter.

Following the shale swap transaction, Equinor said it would increase its average working interest from 15.7 percent to 25.7 percent in certain Chesapeake Energy-operated Northern Marcellus gas units.

However, the strategy of the Norwegian company also involves moving out of all operated shale-gas interests in the main US basins.

“To cover pre-existing gas sales commitments, Equinor will enter a gas buy-back agreement with EQT,” the Norwegian company explained.

Philippe Mathieu, executive vice president for Exploration and Production International at Equinor, said this transaction means the company will continue to “high-grade the US portfolio and improve profitability by strengthening our gas position” in the most robust part of the Appalachian Basin.

“These assets are well positioned to leverage anticipated positive developments in the US gas market,” stated Mathieu.

“The proposed swap improves portfolio robustness with an expected reduction in well break-evens and upstream carbon intensity. This also means that we have now fully exited all operated positions onshore US,” he explained.

Equinor US strategy

“The US is a core area for Equinor where we’re building a broad energy business within offshore and onshore oil and gas, offshore wind, and new low-carbon value chains,” Mathieu added.

EQT President and Chief Executive Toby Z. Rice stated said he was very pleased with the Equinor swap deal.

“This transaction marks an extremely positive start to our divestiture program, bringing in over $1.1 billion of value, including synergies and development plan optimization, for 40 percent of our non-operated assets, while retaining gas price upside,” stated Rice.

“We plan to opportunistically divest the remaining portion of our non-operated assets in Northeast Pennsylvania and have tremendous confidence in being able to achieve our de-leveraging goals,” he added.

Equinor said its US business had recorded $11 billion in earnings since 2020.

“Prior to this transaction, the Appalachian Basin operated position was the last remaining operatorship held by Equinor in the US onshore,” the company added.

Equinor noted that final completion will, among other things, be dependent on approval by relevant authorities. 

TotalEnergies has signed a liquefied natural gas sale and purchase agreement to supply Sembcorp Fuels, a wholly owned subsidiary of Singapore-based Sembcorp Industries.

The deal entails the delivery of up to 800,000 tonnes of LNG for a duration of 16 years, commencing in 2027.

“The LNG will be sourced from TotalEnergies’ global portfolio. This new agreement adds to the companies’ current SPA, which runs until 2029,” the French major explained.

“By supplying this additional LNG supply to Singapore, TotalEnergies is contributing to the country’s energy security and to its decarbonization goals,” said TotalEnergies.

“This deal also reflects TotalEnergies’ commitment to supporting its customers in their transition to greater sustainability,” it added.

TotalEnergies is the world’s third-largest LNG player with a market share of around 12 percent and a global portfolio of about 50 MTPA with interests in export facilities from Africa to Australia.

Qatar deals

QatarEnergy is also a key supplier to TotalEnergies and in 2023 two long-term LNG SPAs were signed to supply of up to 3.5 MTPA of LNG from Qatar to France.

Under the Qatar agreements, LNG will be delivered ex-ship to the Fos Cavaou LNG receiving terminal located west of Marseilles.

Those deliveries are expected to start in 2026 for a term of 27 years.

TotalEnergies has gas interests in two of Qatar’s expansion joint ventures, the North Field East (NFE) and the North Field South (NFS) projects.

TotalEnergies recently reported declines in annual and quarterly net profits as commodity prices plummeted compared with the previous year while the French major sold over 44 million tonnes of LNG and opened the Le Havre floating LNG regasification terminal in France while being further boosted by progress in other oil and gas projects.

TotalEnergies posted a 35 percent drop in adjusted net operating income for all of 2023 to $25.10 billion from $38.47Bln in 2022.

For full-year 2023, hydrocarbon production for LNG was up 9 percent compared with 2022 due to increased supply to Nigeria LNG in West Africa, higher availability of Ichthys LNG in the Northern Territory of Australia and from the Hammerfest LNG plant in Norway.

Equinor, the Norwegian major that is now the leading pipeline natural gas supplier to Europe, has just signed a 15-year agreement to deliver LNG cargoes to India with shipments starting in 2026.

Equinor’s growing global LNG portfolio is based on output from the Equinor-operated Hammerfest liquefaction plant on Melkøya island in northern Norway and additional cargoes booked mainly from the US.

Equinor said that the new Indian partner, Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL), would use the regasified LNG mainly as feedstock for production of ammonia in its newly commissioned plant for manufacturing fertilisers and petrochemicals.

The Equinor-Deepak agreement covers an annual supply of around 650,000 tonnes per annum of LNG for 15 years starting from 2026.

Equinor said that it was delighted with the Deepak agreement as ammonia was a “key building block for the society, being crucial for agriculture and food security” in the Asian nation.

“The ammonia which Deepak will produce from the natural gas will be for domestic use,” added Equinor.

New plant

The Deepak fertilisers facility is located at Taloja in the West Coast state of Maharashtra.

“Deepak’s new ammonia plant has created new gas demand in the growing Indian market,” explained Helge Haugane, Equinor’s Senior Vice President for Gas and Power.

“I am very happy that we have landed this agreement with Deepak Fertilisers. The agreement is another proof of how we use our position in the Atlantic Basin to strengthen our relationship with key players in the growing Indian market,” he added.

“We look forward to developing our relationship with Deepak and to exploring avenues for further collaboration on petrochemicals feedstocks such as propane and ethane and on low-carbon ammonia in the future,” stated Hauge.

Sailesh C. Mehta, Chairman and Managing Director, of DFPCL, said he was delighted with the Norwegian LNG deal.

“The agreement will provide reliable supplies of feedstock which will further strengthen Deepak Fertilisers’ value-chain from gas to ammonia, the key ingredient in fertilisers,” Mehta explained.

“The agreement will help us absorb global volatility as well as enhance overall margins,” he added.

“We also look forward to exploring with Equinor further collaboration on feedstock and carbon footprint reduction initiatives,” stated Mehta.