LNG

Chinese liquefied natural gas imports for the two-month January-February 2024 period soared by more than 23 percent from a year earlier as prices declined and demand grew during a time that encompassed the Lunar New Year holidays in China.

Japanese liquefied natural gas imports dropped by 10.5 percent amid milder winter weather and prices at almost 30 percent lower levels while thermal coal imports were steady and plans were revealed for another nuclear restart.

McDermott, the US energy and LNG engineering company, has been awarded an offshore contract from Malaysia Marine and Heavy Engineering for the Kasawari (Sarawak Gas Field) carbon-capture and storage (CCS) project located offshore Sarawak in East Malaysia.

Under the scope of the contract, McDermott will perform transportation and the structural installation of a 138-kilometre (85 miles) pipeline section, a 15,000 metric tonne (MT) CCS platform jacket and a bridge connecting to the existing central processing platform.

“Set to become one of the largest offshore CCS projects in the world, the Kasawari CCS award showcases the valuable role we have in supporting our clients through the energy transition,” explained Mahesh Swaminathan, McDermott's Senior Vice President, Subsea and Floating Facilities.

Houston-based McDermott said the installation activities would be performed by one of McDermott's heavy-lift and pipelay vessels.

Flaring reduced

Petronas Carigali, the exploration and production arm of state energy company Petronas, said the Kasawari CCS project when completed was expected to reduce carbon-dioxide volumes emitted via flaring by 3.3MT CO2e per annum.

JX Nippon Oil & Gas Exploration Corp., a participant in Asia-Pacific LNG projects in Malaysia, Indonesia and Papua New Guinea, has also been seeking to acquire interests in several natural gas fields offshore Malaysia with CCS attached.

JX Nippon has operated in Malaysia for over 20 years and hopes to focus on additional development initially of the Helang gas field.

The company is also continuing further study of the BIGST project, a large-scale venture that combines the development of high-CO2 gas fields and CCS, in collaboration with Petronas.

Various other Petronas gas fields are targeted for CCS including Bujang, Inas, Guling, Sepat and Tujoh.

The resources in these fields are in the order of several trillion cubic feet (Tcf) of natural gas.

The BIGST project study reflects the efforts towards a fast-paced development of new Malaysian gas fields using CCS and storage.

JX Nipppon said that adopting the CCS solution along with gas was in line with the strategy of the company, which is part of the Japanese ENEOS Group.

Inpex Corp., the operator of the Ichthys LNG plant in Australia and developer of the Abadi LNG project in Indonesia, said it received written approval on December 6 for the revised Plan of Development (POD) for the Indonesian Abadi joint venture and would be moving on to the front-end engineering and design phase.

Indonesia’s Minister of  Energy and Mineral Resources Arifin Tasrif said 68 of the country's 128 oil and gas basins remained entirely unexplored and that international energy companies would receive better terms for exploration and production in the country where the Abadi LNG project is advancing along with the Tangguh LNG expansion.

Russian natural gas company Novatek has plans to start commercial shipments from the Arctic LNG II project in mid-January 2024 and would likely send three to five cargoes per month eastwards to the Asian market, including China, while Russia’s Sakhalin LNG plant in the Far East has re-started after scheduled maintenance.

Japanese liquefied natural gas imports were still in sharp decline with more competition coming from thermal coal and nuclear and as storage levels increased under government energy security policies ahead of the Northern Hemisphere winter season.

The largest European energy major Shell posted a 47 percent drop in overall quarterly profits, reflecting lower LNG trading and optimisation results and a drop in oil and gas prices as well as refining margins.

Japan has formally retaken from China its position as the World No. 1 LNG importer with more volumes coming from Australia, Russia and its Asian neighbours even as overall deliveries to Japanese terminals fell in 2022 and slumped in December.

Indonesia has approved a revised plan of development costing $3.35 billion for the Merakes and Merakes East natural gas fields to serve the nation’s main LNG export plant through to at least 2032.

The project fields are operated by Italian energy company Eni and one is already a supplier since April 2021 for the onshore Indonesian Bontang LNG plant in East Kalimantan province.

The Bontang plant has a nameplate capacity of 11.5 million tonnes per annum.

“The development of this field will provide additional reserves to ensure supply to the East Kalimantan system so that the Bontang LNG facility can operate at an optimal level,” said Dwi Soetjipto, the Chairman of the nation’s Upstream Regulator SKK Migas.

Investment for the Merakes fields was initially set at $1.3 billion with peak production at 368 million standard cubic feet per day.

Indonesia has two other onshore LNG facilities, the Tangguh plant with 7.6 MTPA and the Donggi-Senoro plant with 2.0 MTPA of output.

The Tangguh plant is operated by UK major BP and is currently undergoing an expansion with the construction of a third Train.

Tangguh began operations in West Papua province in 2009 and has delivered about 1,500 LNG cargoes to global markets.

Another Indonesian LNG project is expected to move forward soon with Japanese energy company Inpex Corp. finalizing its revised development plan for the Abadi project.

Inpex is planning to build an Asia-focused LNG export plant on Yamdena Island in the Tanimbar chain in a joint venture with Shell Plc using feed-gas from the Abadi gas field in the Masela Block of Indonesia's Arafura Sea.

The liquefaction and export plant could be expected to be operational by around 2028.

Inpex has already completed preliminary front-end engineering and design for a facility with projected annual initial capacity of 10.5 MTPA.