LNG

Japanese liquefied natural gas imports rose by over 16 percent in April even at higher prices while thermal coal deliveries also increased as the nation additionally  prepared for more nuclear plant re-starts in competition to LNG.

Mozambican President Filipe Nyusi confirmed that Islamist terrorists had occupied the town of Macomia in a northern part of Cabo Delgado, Mozambique’s province where an onshore LNG plant is being constructed further south and may now face more delays.

Japanese shipping company Mitsui OSK Lines (MOL), whose energy fleet includes over 150 tankers for oil and other products and around 90 LNG carriers, reported stable LNG profits while the containership business was badly hit by a “tidal wave” of new vessels in the sector.

JERA Co. Inc., Japan’s biggest liquefied natural gas importer and utility company, reported an increase in fiscal full-year profits while revenues plunged nearly 22 percent because of a decrease in electric power sales.

April 24 (LNGJ) - Beach Energy, a partner of Japan’s Mitsui in the delayed Waitsia LNG project in the onshore Perth Basin of Western Australia, reported an increase in sales revenue from a year ago to A$392 million (US$254M) from A$353M in the 2023 quarter. “Our results were overshadowed by the delay to construction of the Waitsia Gas Plant and weather-related impacts to production,” said Beach’s Chief Executive Brett Wood. “The ongoing emergence of quality issues at Waitsia during the pre-commissioning phase is disappointing,” stated the CEO.

   Beach added that in the Perth Basin drilling campaign there were “pleasing results” including a gas discovery at Redback Deep. “Three gas discoveries and one gas development well from our operated campaign is an encouraging outcome which will provide valuable backfill volumes,” Wood said. Beach’s Enterprise well in the Otway Basin of south Australia is also on track to provide a valuable new gas supply source for the East Coast.

Woodside Energy, the operator of the Northwest Shelf LNG project and Pluto LNG in Western Australia, has completed the sale of a 10 percent non-operating participating interest in the Scarborough Gas joint venture for US$910 million to the LNG Japan group.

The completion follows Woodside’s announcement in August 2023 that it had established a strategic relationship with LNG Japan that involved equity in the Scarborough project, potential LNG offtake and collaboration on opportunities in new energy.

“The sale proceeds received by Woodside of US$910M for equity in the Scarborough Joint Venture comprise the purchase price, reimbursed expenditure and escalation,” said Woodside in a statement.

Trading houses

Woodside’s sale and purchase agreement is with a jointly owned subsidiary of LNG Japan, which is a 50-50 joint venture between two Japanese trading houses, Sumitomo Corp. and Sojitz Corp., and a Japanese state-owned agency called the Japan Organization for Metals and Energy Security (Jogmec).

The Scarborough gas field project comprises the Pluto Train 2 joint venture and modifications to Pluto Train 1 to process Scarborough gas.

The venture includes the Scarborough field itself and associated offshore and subsea infrastructure.

The Scarborough field is located 375 kilometres (233 miles) off the coast of Western Australia and the reservoir contains less than 0.1 percent carbon dioxide.

Scarborough gas will be processed at the Pluto LNG facility, where Woodside is currently constructing a second liquefaction Train .

In addition to the sale of a 10 percent non-operating participating interest to Japan LNG, Woodside additionally stated in February 2024 that it had entered into an SPA with the largest Japanese LNG importer and power company, JERA Co. Inc. for a 15.1 percent non-operating participating interest in Scarborough.

Commitment

“LNG Japan’s commitment to the Scarborough Joint Venture is a demonstration of the value our customers place on gas as a long-term source of energy as they navigate the energy transition,” said Woodside Chief Executive Meg O’Neill.

“Completion of the sale to LNG Japan is a significant milestone as we progress toward first LNG cargo from Scarborough targeted in 2026,” O’Neill stated.

“We are also pleased to welcome Japan Organization for Metals and Energy Security’s equity investment,” the CEO added.

“Jogmec’s support reflects the contribution Scarborough gas will make to Japan’s energy security,” she added.

Woodside still holds a 90 percent interest in the Scarborough venture and will remain as operator.

Following completion of the transaction with JERA Woodside’s interest will be 74.9 percent in the Scarborough venture.

After completion of the JERA deal, Woodside estimated that as of 26 March 2024, the Perth-based company’s Scarborough field proved (1P) undeveloped reserves are reduced by 128.7 million barrels of oil equivalent to 1,158.3 million barrels of oil equivalent.

Japanese liquefied natural gas imports decreased for a second month in 2024 by almost 6 percent as milder winter weather and higher storage levels reduced cargo needs especially of more expensive spot shipments even at much lower prices.

Inpex Corp., the Japanese operator of the Ichthys LNG plant in Australia and developer of the Abadi LNG project in Indonesia, has signed a natural gas and decarbonisation deal with Ashikaga City north of Tokyo known for its historic trees, flower beds and pristine water to supply gas from the next phase of cleaner LNG projects.

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.

The US Department of Energy published its latest liquefied natural gas export data with the Netherlands as the leading destination for the first 11 months of 2023 while the leadership in highest prices remained with the Calcasieu Pass export plant in Louisiana.