LNG

French major TotalEnergies reported a decline in second-quarter earnings led by the company’s liquefied natural gas and the refining and chemicals divisions, while exploration and production performed well.

Two Indian state-backed oil and gas companies have signed an accord to develop the Hatta natural gas field in the Vindhyan basin of Madhya Pradesh in Central India, including building an LNG liquefaction plant to supply the off-grid and transportation fuel markets.

The two companies involved are Oil and Natural Gas Corp. (ONGC), a company owned by India’s Ministry of Petroleum and Natural Gas as is its partner in the venture, Indian Oil Corp. Ltd (IOCL) whose activities are focused on refining petroleum products and producing petrochemicals, though both are already involved in the LNG sector.

ONGC and IOCL have signed a memorandum of understanding to establish a medium-sized LNG plant as part of the Hatta gas field development plan.

“The establishment of the Hatta LNG plant will significantly enhance the Vindhyan Basin's status,”  explained ONGC.

“The plant will utilize cutting-edge technology to produce LNG, a cleaner alternative to traditional fossil fuels, significantly reducing carbon emissions and aligning with India's climate change mitigation goals,” ONGC added.

LNG sector

ONGC has subsidiaries already involved in LNG including Hindustan Petroleum Corp., the owner of India’s newest LNG import facility, the Chhara terminal located in the state of Gujarat and with 5 million tonnes per annum of capacity.

Another unit, ONGC Videsh, is one of three Indian companies who share a 20 percent stake in the TotalEnergies-operated Mozambique LNG project Area 1 licence in the Rovuma Basin of the southeast African nation.  

IOCL is also involved in LNG through its ownership of the LNG import terminal at Kamarajar Port in the East Coast state of Tamil Naidu with 5 MTPA of regasification capacity.

Both ONGC and IOCL are additionally associated and founding companies of Indian’s largest LNG importer, Petronet LNG which has West Coast import terminals at Dahej and Kochi.

ONGC said that the gas discovery at Hatta “represented the culmination of five decades of sustained exploration” efforts.

“ONGC has already submitted its Field Development Plan (FDP) to the Directorate General of Hydrocarbons to monetize its assets in the Hatta area,” stated the company.

The establishment of the Hatta gas field and the LNG plant will enhance the Vindhyan Basin’s status, upgrading it from a Category II to a Category I Basin.

India's sedimentary basins, covering a total area of 3.4 million square kilometres, are divided into three categories.

Category I is for basins with hydrocarbon reserves that are already producing; Category II is for resources with commercial production pending; and Category III are prospective areas where resources may be discovered.

Earnings

The submission of the Hatta gas development plan follows ONGC’s record fiscal-year net profits reported in May 2024 and amounting to 40,526 crore Indian rupees (US$4.85 billion).

However, gross annual revenues fell by over 6 percent to 643,037 crore rupees ($76.94Bln) as prices tumbled.

ONGC’s annual realised natural gas price dropped by 10.8 percent for the year to US$6.55 per million British thermal units from US$7.34 per MMBtu in the previous fiscal year.

The average crude oil price declined by 18.4 percent to US$75.91 a barrel from $93.02 per barrel in the 2022-2023 fiscal year.

TotalEnergies, the French major with a world-class LNG portfolio of 44 million tonnes per annum, is increasing its natural gas infrastructure investments by paying £450 million ($575M) for a gas-fired power plant in the UK to help mitigate its large holdings of intermittent renewables in the British energy markets.

TotalEnergies has signed an agreement with the North American institutional investor EIG for the acquisition of all the shares of West Burton Energy in the UK Midlands.

West Burton Energy owns and operates the West Burton B gas-fired power plant in the English county of Nottinghamshire.

West Burton B comprises three combined-cycle gas turbines (CCGT) with total output of 1.3 gigawatts.

Commissioned in 2013, it is one of the UK’s most advanced power plants and supplies some 1.8 million homes. A 49 MW battery storage system was added in 2018.

“This acquisition rounds out TotalEnergies’ renewable power generation capacity in the UK with a flexible asset that mitigates intermittency to enable the supply of firm power to customers,” explained the French company.

Capacity needs

“Given the size of the company’s renewable portfolio in the country, which currently stands at 1.1 GW of gross installed capacity and 4.5 GW under development, TotalEnergies assesses its need for gas-based power generation capacity at 700 MW, so the company therefore plans to divest 50 percent of the acquired assets,” TotalEnergies added.

“The deal will also allow TotalEnergies to strengthen its trading capabilities in the country’s electricity and gas markets,” said the company.

TotalEnergies plans to supply the gas-fired power plant from its natural gas production in the UK where it operates 30 percent of the projects.

Earlier in June, TotalEnergies also signed two new LNG medium-term and long-term LNG accords in Asia.

These comprised a sales and purchase agreement (SPA) with Indian Oil Corp. (IOCL) for the delivery to India of up to 800,000 tonnes per annum of LNG for 10 years from 2026.

Korean LNG

The second accord was a heads of agreement with Korea South-East Power for the delivery to South Korea of up to around 500,000 tonnes per annum of LNG for five years from 2027.

The company said that these agreements allow TotalEnergies to secure medium-term outlets for its global LNG supply portfolio.

They also strengthen the company's footprint in Asian markets, where it is particularly committed to supporting its customers with their decarbonization strategies.