LNG

Shell has joined with the other UK-based major BP to file a complaint with the US Federal Energy Regulatory Commission (FERC) against LNG developer Venture Global claiming the Arlington, Virginia-based company was “illegally withholding information” about delays in delivering LNG from its Calcasieu Pass export plant in Louisiana.

The Japan Organization for Metals and Energy Security (Jogmec), a Japanese government agency, has released the results of two annual surveys on the volumes of LNG handled by Japanese companies and the current status of the destination restrictions in LNG sales and purchase agreements.

Deliveries of liquefied natural gas cargoes increased to Europe this week while the differential between the benchmark European Union LNG price and spot cargoes for Asia narrowed because of seasonally milder weather and high storage across the EU.

Fitch Ratings, the New York-based credit ratings agency and financial services company, has just published a report analysing the European Union’s efforts to mitigate the worst effects on gas markets of a cut-off of Russian imports and for their replacement with LNG and other types of energy.

JERA Co. Inc., the largest Japanese LNG buyer and power assets holder, has stated it would not be renewing long-term supply contracts for volumes from projects at Ras Laffan in Qatar amounting to 5.5 million tonnes per annum.

The contracts with Qatar are expiring at the end of the year. The deals were originally signed in 1997 and 1998 for the Qatargas 1 project.

JERA had inherited most of its worldwide contracts from Tokyo Electric Power Co. and Chubu Electric when the JERA joint venture was set up.

“Currently we are not considering contracting because we find it extremely difficult to extend the existing large contracts timing-wise,” JERA President Satoshi Onoda said of the Qatari long-term deals during a virtual conference.

The JERA President emphasized that the Tokyo-based company did not have a plan to give up all of its long-term LNG supply contracts.

Long-term portfolio

These sale and purchases agreements span liquefaction plants in Australia such as Wheatstone LNG, Darwin LNG, the FLNG Prelude plant as well as projects in Indonesia, Malaysia, Brunei and Papua New Guinea.

The Japanese company also receives cargoes from the Freeport export plant in Texas and could focus on more US volumes, as well as in the short-term spot LNG when needed.

In mid-November 2021, JERA s purchased a significant stake in Freeport LNG at Quintana Island in Texas and will invest in expansions as part of a plan to be able to direct cargoes to Japan even when global supplies are tight.

The Japanese company’s US subsidiary JERA Americas Inc., concluded a securities purchase agreement with infrastructure fund Global Infrastructure Partners to acquire around a 25.7 percent interest in Freeport for $2.5 billion.

For this transaction, JERA appointed US investment bank Goldman Sachs as its exclusive financial advisor.

The Freeport plant is located in Brazoria County, south of Houston, and is run by Chief Executive Michael Smith, an energy entrepreneur who developed the plant with almost 15 million tonnes per annum of LNG capacity.

It has use-or-pay liquefaction tolling agreements for most of the output from the three Trains with customers including JERA as well as Japanese utility Osaka Gas and European-based companies, UK major BP and German utility Uniper.

JERA noted that, together with Freeport LNG, the Japanese company has already contributed to the stable operation of Train 1 of the Freeport liquefaction project through its participation in that subsidiary.

JERA plans to work with Freeport to advance new LNG projects including production capacity expansion and the development of Train 4.

Oil Search, the Papua New Guinea liquefied natural gas and oil player, posted impressive third-quarter results making the US$6.25-billion merger with Australian LNG plant operator Santos even more enticing as PNG LNG expansion plans also advanced.

July 2 (LNGJ) - Shipping charter rates for LNG carriers in the spot market were firm in the past week in the West of Suez market at between $82,000 per day and $78,000 per day for vessels of 155,000-165,000 cubic metres capacity.

   For vessels East of Suez spot charter levels declined by around $6,000 per day to between $60,000 per day and $56,000 per day, according to London brokers. One-year charter rates for the most modern vessels increased by $3,000 per day to around $85,000 per day.

June 22 (LNGJ) - LNG cargoes are pointing at North Asia with deliveries for July. The 155,300 cubic metres capacity carrier “LNG Jurojin” will deliver a cargo on July 1 to the Japanese Yokkaichi terminal, operated by Jera Co. Inc., from the US Sabine Pass plant in Louisiana, according to shipping data. The 174,100 cubic metres capacity vessel “Cesi Wenzhou” is scheduled to unload a cargo on July 4 at the Sinopec-owned onshore terminal in Tianjin in northeast China from the Australia-Pacific plant near Gladstone in Queensland.

   The 174,000 cubic metres capacity carrier “Pan Europe” is due to arrive on July 10 at the Ningbo terminal in China owned by China National Offshore Oil Corp. from the Shell-operated Queensland Curtis plant in eastern Australia. The 174,000 cubic metres capacity vessel “GasLog Hong Kong” is scheduled to deliver a cargo on July 14 to the port of Tianjin from the Bonny Island plant in Nigeria.

Vitol, the global commodities company, has signed a 10-year deal with Nigerian LNG to buy 500,000 tonnes per annum as the Swiss-based trader expands its portfolio in the medium-term and spot cargo markets.

Feb 13 (LNGJ) - Awilco LNG, the Norwegian operator of two modern carriers, the 156,000 cubic metres capacity “WilPride” and the “WilForce”, narrowed its fourth-quarter losses to $4.5 million, down from $6.8M in the previous three months. Awilco said freight income for the quarter was $9.6M, up from $5.7M in the third quarter “due to the improving market fundamentals” as both vessels operated in the spot market. Voyage related expenses amounted to $2.3M compared with $1.3M in the previous quarter. “After almost three years of depressed freight rates, the market finally returned to profitable territory in Q4 2017 on the back of increased production volumes, the open West-East arbitrage and low availability of vessels in the Atlantic,” Awilco noted.