LNG

UK major Shell has confirmed a deal as expected to acquire the liquefied natural gas assets of Pavilion Energy, the natural gas company set up by Singapore’s wealth fund Temasek to give the Asian island state energy security.

UK major Shell is said to be finalizing the acquisition of liquefied natural gas assets of Pavilion Energy, the natural gas company set up by Singapore’s wealth fund Temasek, to give the Asian island state energy security.

Empyrean Energy, the UK-listed oil and gas company with interests in Indonesia, China and the United States, reported that an accord containing key terms has been signed for the Indonesian Mako gas field to supply Singapore by pipeline and domestic gas to the Indonesians.

Coro Energy Plc, the London-listed South East Asian energy company with a natural gas portfolio, said a term sheet had been signed with Sembcorp Gas of Singapore for a long-term gas sales agreement for the Mako gas field in Indonesia to supply the Asian city state.

The operator of the Duyung production sharing contract, West Natuna Exploration, a subsidiary of Conrad Asia Energy with a 76.5 percent interest in the Duyung resources, had signed the term sheet with Sembcorp Gas. Coro and another UK-listed company, Empyrean plc, hold 15 percent and 8.5 percent respectively of the Duyung PSC.

“Critically, the term sheet has been endorsed by the Indonesian petroleum upstream regulator (SKK Migas),” said Coro in a statement to the London Stock Exchange.

Analysts noted that gas would supply Singapore through an existing pipeline in competition to the LNG cargoes delivered to the Jurong Island LNG import terminal.

Indonesian plans

The development of the Mako gas project has been in line with Indonesia's stated objective of doubling gas production by 2030.

The Mako gas field was discovered in 2016, and since that time the resource has been delineated through successful appraisal drilling.

It received formal approval from the Government of Indonesia for the revised Plan of Development in late 2022.

Coro noted that it has a 15 percent participating interest in the Duyung PSC.

“The term sheet relates to the sale of Mako gas from start of production until 2037 for a total sales gas volume (100 percent) of 293 billion cubic feet with the potential to increase to 392 Bcf. Gas sales will be priced against Brent oil,” explained Coro.

“Further details of the gas sales agreement will be released to the market once the agreement is executed,” explained Coro.

Endorsed

The company added that the parties were now focused on finalising a definitive gas sales agreement.

“I am delighted to have now secured the GSA Heads at the Duyung PSC, approved by the buyer and, critically, endorsed by the Indonesian authorities,” stated James Parsons, Chairman of Coro.

“This is a critical step in the commercial de-risking of our project, positioning us perfectly for bids from the operator's farm-out process, which we expect to play out shortly,” Parsons added.

Pavilion Energy, the Singapore-based LNG market participant, shipped its first termed small-scale LNG cargo to China under an agreement signed with Zhejiang Hangjiaxin Clean Energy.

Empyrean Energy, the London Stock Exchange-listed oil and gas development company with interests in China, Indonesia and the US, said the plan of development for an Indonesian project has been approved and will supply pipeline gas to Singapore in competition to LNG.

The Indonesian Ministry of Energy and Mineral Resources has approved the updated plan of development for the Mako gas project within the Duyung production sharing contract (PSC).

The Mako development is based on contingent Duyung PSC resources of 384 billion cubic feet gross and with 297 Bcf net attributable to the Duyung joint venture.

“The Indonesian government also approved the export of up to 100 percent of the gas production to Singapore,” said the Empyrean statement.

The operator is targeting production from the Mako gas project to commence in 2025 with up to 120 million cubic feet of gas per day.

The gas will supply Singapore through an existing pipeline in competition to the LNG cargoes delivered to the Jurong Island LNG import terminal in the Asian city state.

Empyrean holds an 8.5 percent interest in the Duyung PSC in which the Mako gas project is part.

Production plan

“Development of the Mako gas project will be in line with Indonesia's stated objective of doubling domestic gas production by 2030,” said Empyrean.

“The award of the revised plan represents a material event in progressing the Mako gas project which is currently the largest undeveloped gas field in South Natuna Sea,” added Empyrean, whose regional headquarters are in Australia,

The operator of the Duyung PSC is West Natuna Exploration Ltd, a subsidiary of Conrad Asia Energy with a 76.5 percent interest in the Duyung resources. Another 15 percent interest is held by Coro Energy Plc and the balance by Empyrean.

The company explained that at present, there was no infrastructure to transmit gas from the Mako field to domestic markets in Indonesia, and hence the plan for exports of production to Singapore, which is already connected to the West Natuna Gas Transportation System.

“The existing under-utilised gas pipeline to Singapore expedites the development of the Mako gas field from which gas is expected to be produced from 2025,” explained  Empyrean.

Empyrean Chief Executive Tom Kelly said he was pleased with the approval of the updated development plan.

“It now allows the operator to re-focus resources on its stated objective of working with the Government of Indonesia to complete Gas Sales Agreement negotiations at the earliest opportunity,” added Kelly.

Global Energy Storage (GES) of Singapore, a developer and operator of energy storage terminals, has announced a strategic partnership with a liquefied natural gas unit of Swedish shipping group Stena AB to identify and advance LNG logistics and storage solutions.

GES and Stena Power and LNG Solutions hope to combine their logistics expertise comprising floating storage and regasification units (FSRUs), onshore terminals and storage.

“Stena owns three LNG carriers which it can deploy as FSRUs or floating storage, potentially together with innovative jetty-less and/or offshore power solutions that do not require onshore facilities,” said a joint statement.

GES is planning to build a global network of first-class energy storage assets from its base in the Asian city state.

Part of its strategy is to invest around $250 million in brown and greenfield assets, initially in Europe and Asia, in the next five years.

“Our development efforts are focused on establishing expandable platforms located at key crossroads of energy flows,” said GES, started up in May 2021 by private equity firm Bluewater.

Leadership

GES is led by Peter Vucins and Eric Arnold, the team behind the growth of leading hydrocarbon storage company, Global Petro Storage (GPS).

The Singapore firm plans to concentrate on low-carbon commodities, energy transition fuels like LNG, as well as potentially renewable energy sources in the future.

GES said its strategic deal with Stena Power and LNG would enable developing economies and emerging markets to access LNG and clean power.

“This is an exciting and important partnership for GES. We regard LNG as an important transition fuel, especially in emerging markets where there is a strong demand for gas and power and a structural need to switch from coal to lower carbon solutions such as LNG,” said Peter Vucins, Chief Executive of GES.

“We are also interested in exploring opportunities with regard to blue hydrogen production where LNG is combined with carbon capture to make low carbon hydrogen,” added Vucins.

“The possibility to deploy existing LNG carriers with onshore terminal solutions means that we can move quickly to provide our customers with a full range of solutions,” stated the GES CEO.

Göran Hermansson, Chairman of Stena Power and LNG, said Stena’s offering was wide-ranging and provided operational and commercial advantages as well as increased safety.

“Our work is underpinned by our values of care, performance and innovation,” added Hermansson,

“By working with Global Energy Storage, we can share our wide-ranging, industry-specific knowledge to better achieve our mutual objective of delivering more sustainable energy infrastructure solutions to communities across the world,” declared the Stena unit’s Chairman.

Stena Power and LNG is already active in southeast Asian LNG through its involvement with an LNG import project in Vietnam.

Stena has been contracted to supply its jetty-less LNG transfer and regasification system for a terminal project in Bac Lieu province in Vietnam’s Mekong Delta being developed by Delta Offshore Energy and the regional authorities.

The London-based Baltic Exchange, the main independent global source of maritime market information for the trading and settlement of physical and derivative shipping contracts, has named LNG Hub Singapore as the leading global shipping centre.

The Singapore Energy Market Authority is seeking to appoint two new official liquefied natural gas importers for the Asian city state as future natural gas use is set to expand along with its activities as a regional LNG Hub.

The first Singapore LNG bunkering vessel owned by Shell Eastern Petroleum and Keppel Offshore and Marine Ltd has been launched at the Keppel Nantong Shipyard in China.