LNG

The Japan Bank for International Cooperation (JBIC) has signed an agreement with Abu Dhabi National Oil Co. (ADNOC) to proceed with further discussions for financing under the bank’s decarbonisation programme as ADNOC and a subsidiary have also pledged to continue supplying LNG to the Japanese along with long-term crude oil supplies.

“ADNOC is a leading energy company wholly owned by the Emirate of Abu Dhabi with a clear intent to decarbonise its operations,” said JBIC.

“It has ambitions of achieving net zero emissions by 2045, promoting renewable energy, hydrogen and ammonia, carbon capture and storage (CCS), and other green energy initiatives,” explained JBIC in regard to the leading energy company in the United Arab Emirates.

“The heads of agreement is intended to aim at building a consensus in which JBIC will provide a credit line to ADNOC under ‘green operations’ to support projects related to decarbonisation and the energy transition implemented by ADNOC or its subsidiaries,” the state-owned Japanese bank added.

Carbon-capture and storage (CCS) is a technology that separates and captures CO2 that would otherwise become a greenhouse-gas and stores it in deep-water caverns or other geological formations.

ADNOC spin-off

ADNOC Gas, which was spun-off in March 2023 to become a separate company, is estimated to have the seventh-largest gas reserves globally and has signed supply agreements with Japanese companies.

The latest was signed in October 2023 with the trading subsidiary of Japan's power generation company Jera Co. Inc.

The multi-year agreement with Jera Global Markets, a utility-backed energy trader specialising in LNG and other fuels, builds on the energy partnership between the UAE and Japan.

The ADNOC gas subsidiary also signed a five-year LNG supply agreement with Japan Petroleum Exploration (JAPEX) in August 2023.

JBIC noted that in addition to supplying LNG to Japanese import terminals the UAE emirate of Abu Dhabi was also key and long-term supplier of oil to Japan.

“As a stable and important supplier of crude oil to Japan for more than 40 years, Abu Dhabi is a strategic partner and a very important ally for Japan's energy resources strategy,” said JBIC.

High potential

“In addition, Abu Dhabi has high potential in the sector of decarbonisation and energy transition as it has abundant resources for renewable energy and subterranean structures suitable for CCS,” JBIC explained.

“The credit line under the HOA aims to support ADNOC’s initiatives for decarbonisation and to create opportunities for collaboration between Japanese companies and ADNOC, and it is expected to contribute towards realising the decarbonised societies that Japan and Abu Dhabi are aiming for,” JBIC declared.

As Japan's policy-based financial institution, JBIC said it would continue to provide financial support for sustainable development efforts, including those for global environmental preservation, by drawing on its various financial facilities for structuring projects financially and by “performing its risk-assuming” function.

The Australian LNG plant operator Santos welcomed a decision from the Federal Court of Australia to clear the way for pipe-laying to commence for the Barossa Gas Export Pipeline to help provide new feed-gas supplies to the Darwin LNG plant in Australia’s Northern Territory.

The decision in favour of Santos saw the Court dismissing and application and discharging an injunction that had prevented pipelay activities south of the 86 kilometres (53 miles) point offshore.

“As per the ruling and in accordance with the Environment Plan in force for the activity, Santos will continue pipe-laying activity for the Barossa Gas Project,” said Adelaide-based Santos.

Barossa plan

The Santos-operated Barossa Gas Project is an offshore gas and condensate venture that proposes to provide a new sources of gas to the existing Darwin LNG facility
for which the previous resources from the Bayu Undan gas field in the Timor Sea have depleted.

Barossa gas shareholders also include South Korean and Japanese investors, including the largest Japanese LNG importer JERA Co. Inc.

Under the renewed Barossa plan feed gas will come from the Barossa field, located in Australian waters about 285km offshore Darwin, from 2025.

Project infrastructure will comprise a floating production storage and offloading (FPSO) facility and the subsea production system and the pipelines.

Santos noted that up to eight subsea wells are planned to be drilled in the Barossa field with a contingency plan for an additional two wells.

Gas and condensate would be gathered from the wells through the subsea production system and then brought to the FPSO facility via a network of subsea infrastructure.

Initial processing would occur at the FPSO facility, to separate the natural gas, water and condensate extracted from the Barossa field.

The dry natural gas would then be transported through the gas pipeline for onshore processing and export from Darwin LNG.

The condensate would be transferred from the FPSO to specialised tankers for export.

Oman LNG, the expanding producer on the Arabian Peninsula, has signed two more supply agreements with TotalEnergies and Thailand’s oil and gas firm PTT for a combined 1.6 million tonnes per annum of cargoes after also signing similar deals recently with three Japanese companies and Shell.

The company said it signed separate deals to supply the Thais and TotalEnergies each with 800,000 tonnes of LNG from 2025.

A statement said the binding term-sheet deals were signed by the Chief Executive of Oman LNG, Hamed Al-Naamany, with the Managing Director of PTT Global LNG, Ratchada Lertwanichwatanam, and with the TotalEnergies Senior Vice President of LNG Thomas Maurisse.

“The signing of the term-sheet agreements with PTT Global LNG and TotalEnergies enhance our efforts to further grow and strengthen our market positions including new business opportunities,” said Oman LNG’s Al-Naamany.

“Such a step complements our mission to add value to the local economy through increasing capacity, and strengthening collaborations with international firms,” he added.

The 10-year supply deal with TotalEnergies is scheduled to begin in 2025, while Thailand’s shipments begin a year later in 2026.

Japan deals

Oman LNG last month signed similar deals with top Japanese electricity generator JERA, and trading houses Mitsui & Co and Itochu Corp, to supply a combined 2.35 million tonnes per year, starting in 2025, for up to 10 years.

JERA confirmed its deal on December 27 and it was in the form of a preliminary term sheet that could lead to a Sales and Purchase Agreement.

The deal for JERA is for up to 12 cargoes per year from 2025. JERA noted that LNG procurement competition had been intensifying and stable procurement of fuel in a timely manner was necessary to secure a stable supply of energy in Japan.

The Japanese deals were on a free-on-board (FOB) basis, using their own ships, which they would regard as more flexible.

Oman LNG signed a similar deal - making six in total in the past two months - with Shell International Trading for 800,000 tonnes per annum for 10 years from 2025. 

US export plant Freeport LNG in Texas plans to undertake a facility overhaul of work and safety methods as it prepared to return to full production ramp-up by March 2023 after the shut-down caused by the June 8 fire in 2022.

Petronas, the Malaysian state-control energy company, has finally confirmed reports of “force majeure” being declared on natural gas supply to part of its LNG onshore export plant at Bintulu in the state of Sarawak due to a pipeline leak caused by a landslide in the vicinity of the Sabah-Sarawak Gas Pipeline last month.

The Malaysian plant has three liquefaction project divisions at Bintulu called MLNG Satu, MLNG Dua and MLNG Tiga, using the Malay words for one, two and three.

“This has impacted the supply of gas to MLNG Dua’s production facility at the Petronas LNG complex,” stated Petronas.

Petronas said it wished to clarify that the “force majeure” affects the supply of gas to MLNG Dua’s production facility only, while the other LNG production Trains  within the complex continue to operate as usual.

The Bintulu LNG plant has nine production Trains with a combined nameplate capacity of around 25 million tonnes per annum.

Mindful

“Petronas is mindful that this incident has impacted its delivery commitments to some of its contracted LNG buyers and it is in discussions to identify suitable mitigation efforts,” explained the Kuala Lumpur-based company.

The main buyers of cargoes from the three MLNG Dua liquefaction Trains are Taiwan’s CPC Corp. and Japanese utilities such as JERA Co Inc., Tokyo Gas, Osaka Gas and Tohoku Electric.

Petronas added that it was also currently conducting a comprehensive evaluation to ensure the integrity and safety of the Sabah-Sarawak pipeline.

This is the second incident in a year to hit the Bintulu LNG export plant.

In September 2021 a fire broke out but was swiftly tackled and no production was lost at the facility whose main customers are also in China and South Korea as well as Japan.

Incident

That incident occurred at the sea-cooling water outfall channel located outside the process area and the plant’s emergency response team was immediately mobilised to the scene and successfully extinguished the fire.

Petronas said at the time that five contractor personnel sustained injuries in the incident and were immediately taken to hospital and later discharged from hospital after treatment.

Malaysia's overall LNG output increased by 4.5 percent last year to 24.94 MTPA, including all projects.

Japan is the main customer receiving around 10 MTPA from Petronas, followed by Chinese firms with around 6.5 MTPA and South Koreans with 5 MTPA.

This includes volumes from three floating LNG plants deployed in Malaysian waters producing over 4 MTPA.

A Greek-owned carrier departed the Calcasieu Pass LNG plant in Louisiana with the inaugural first cargo and headed for Japan as America’s seventh and newest large-scale export facility opened for business to meet growing demand for natural gas around the world.

Australian LNG plant operator Santos, which has plant and project stakes in Queensland and in the Northern Territory as well as in Papua New Guinea, said new proved plus probable reserves increased by 80 percent in the year due to the merger with Oil Search and the final investment decision on the Barossa gas field.

JERA Co. Inc., the largest Japanese LNG buyer and electricity generator, reported a nine-month jump in operating revenue and profits amid a setback in its foray into the wind sector in Taiwan while in the domestic market a larger percentage of coal was used for power.

Japanese liquefied natural gas imports plummeted by more than 22 percent as the nation opted for more than twice the amount of coal than LNG for thermal power generation and only imports from Australia and the US held up as cargo numbers from Asia, the Middle East and Russia dropped.

JERA Co. Inc. , the Japanese power giant and largest importer of LNG, has sold up its stakes in two companies that operate cogeneration and gas-fired power plants at two industrial estates in the suburbs of the Thai capital Bangkok as it reorganizes its portfolio.