LNG

JERA Co. Inc., Japan’s biggest liquefied natural gas importer and utility company, has approved a deal to sell part of its stake in the Freeport LNG export plant in Texas to another Japanese company.

Japanese liquefied natural gas imports decreased for a third straight month and were also 8 percent lower for the whole fiscal year to the end of March as storage was still high amid falling spot prices.

MidOcean Energy, the LNG assets company formed and managed by global infrastructure investor EIG, said Japanese trading house Mitsubishi Corp. had made a strategic investment.

EIG is a leading institutional investor in the global energy and infrastructure sectors with around $23 billion under management and also announced on March 28 that it had completed the acquisition of the portfolio interests in Australia of Tokyo Gas.

Mitsubishi has been an active player in the LNG sector for over 50 years and is involved in 12 projects, including the LNG Canada venture that comes on stream soon in the province of British Columbia.

The Japanese company made the investment In MidOceam to develop its clean-energy portfolio while fulfilling its responsibility as a stable energy supplier to Japan.

EIG’s MidOcean said that Mitsubishi’s investment, the details of which were not disclosed, deepened MidOcean’s blue-chip base and builds on its “significant momentum” since launching in late 2022.

Blue-chip investors

“We are thrilled to have Mitsubishi join as an anchor investor,” said De la Rey Venter, Chief Executive of MidOcean.

“Mitsubishi has been a pioneer of the global LNG industry and has consistently demonstrated its expertise and foresight in identifying valuable opportunities,” Venter added.

“Their investment is a testament to the strong fundamentals of the LNG market and MidOcean’s strategy to create a competitive long-term growth platform in LNG,” stated the MidOcean CEO.

R. Blair Thomas, EIG’s Chairman and CEO, said he welcomed a strategic partnership with a company such as Mitsubishi.

“The world’s energy transition needs are contributing to rapid growth in global LNG demand, and we look forward to continuing to execute on this attractive and important opportunity,” added Thomas.

Tokyo Gas deal

MidOcean’s recent completion of the acquisition of the Tokyo Gas assets in Australia gives it stakes in the Chevron-operated Gorgon LNG, the Pluto LNG project run by Woodside Energy and the Shell-operated Queensland Curtis LNG venture.

As part of the transaction, MidOcean said it would open an office in Perth in Western Australia to support and oversee the projects.

EIG is headquartered in Washington DC and also has offices in Houston, Texas, London, Sydney, Rio de Janeiro, Hong Kong and Seoul.

For the completion of the MidOcean-Tokyo Gas deal Barrenjoey, Barclays and JP Morgan acted as financial advisors to EIG and MidOcean in connection with the transaction.

White & Case acted as legal advisor to EIG and MidOcean.

EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds around the world.

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.

Petronas, the Malaysian state-owned energy company with oil and gas projects and onshore and offshore LNG production plants, reported quarterly net profits down by a third while expecting its cargo portfolio to increase after LNG Canada comes on stream and overall cargo sales and prices to improve.

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.

Dec 20 (LNGJ) - Japan’s November LNG imports declined almost 4 percent to 5.33 million tonnes, or 79 cargoes, compared with 5.55MT, or 82 cargoes, in November 2022, the Finance Ministry said in its provisional trade statistic. Most of the deliveries came from Australia or the spot market and these amounted to 3.03 million tonnes.

   Imports from the US were down more than 50 percent year-on-year to 191,000 tonnes. Deliveries from the Middle East were also lower by more than half at 481,000 tonnes. LNG shipments from Asian export plants to Japanese terminals increased by 5 percent to 1.63MT while deliveries from Russia amounted to 446,000 tonnes, down by 14.4 percent from November 2022. Thermal coal imports fell 2.4 percent to 8.31MT.

Australia’s largest liquefied natural gas companies Woodside Energy and Santos said they were in discussions that could lead to a merger of the two companies valued at a combined A$88 billion (US$58Bln) and which would create a dominant LNG force in the Asia-Pacific region.

Chinese liquefied natural gas imports increased by over 28 percent last month, though the recovery in cargo deliveries may not be enough to recapture the No. 1 global LNG importer position in 2023 that was ceded to Japan in 2022.

JERA Global Markets, the trading arm of Japan’s largest LNG and energy buyer and utility JERA Co. Inc., and ADNOC Gas, the recently spun-off unit of Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates, have signed a multi-year LNG supply agreement.