LNG

Mitsubishi Corp., the Japanese trading house with widespread LNG assets from Canada, to the US Gulf Coast to the Asia-Pacific and Russia, said it was retaining its stake for now in the Sakhalin LNG export project in the Russian Far East.

This Mitsubishi Natural Gas division’s assets and volumes are concentrated in the Asia-Pacific region, Russia, the US, Canada and Oman.

“We are working on initiatives to strengthen our existing business platform and develop new projects in traditional LNG-producing countries such as Brunei, Malaysia, Indonesia, Australia and Oman,” said the company.

Mitsubishi’s project stakes in addition to Sakhalin LNG in Russia include Sempra’s Cameron LNG in Louisiana, Shell’s LNG Canada project, Brunei LNG, Malaysia LNG, Oman LNG, Tangguh LNG in Indonesia and the Donggi Senora LNG plant, also in Indonesia.

It also has volumes from the Chevron-operated Wheatstone LNG project in Western Australia and the North West Shelf plant operated by Woodside Energy.

“Earnings were increased in the LNG-related business, despite trading losses in the LNG sales business,” said Mitsubishi in its fiscal first-half earnings statement.

Price benefits

Like global energy companies, Japanese trading houses have benefited from skyrocketing oil, gas and coal prices in 2022.

For the April-September first half, Mitsubishi’s net profit nearly doubled to a record 720 billion yen ($4.90Bln), a rise of 97 percent from the 360.56Bln yen ($2.45Bln) logged in the fiscal first half of 2021.

Revenues for the six months came to 10.72 trillion yen ($73.05Bln) compared with 7.72 trillion yen ($57.63Bln) in the first half of 2021.

“This was mainly due to increased market prices and transaction volumes,” said Mitsubishi.

“In addition to Natural Gas and Mineral Resources, which were bolstered by market factors, Automotive & Mobility, Power Solution, Industrial Materials and other segments are forecast to see greater earnings than originally forecast,” said the company.

Mitsubishi is an investor and trader in LNG along with the other Japanese trading houses such as Mitsui & Co, Marubeni Corp and Sumitomo Corp.

Sakhalin situation

On Russia, Mitsubishi said the company’s main business in Russia consists of a financial service business in the Automotive and Mobility segment and investment in the LNG-related business as part of its Natural Gas division.

“As of September 30, 2022, the carrying amount of total assets related to the company’s business in Russia was 209.91Bln yen ($1.43Bln),” said Mitsubishi.

“The company holds a 10 percent ownership interest in Sakhalin Energy Investment Company (SEIC), which has been engaged in LNG-related business in Russia, and accounts for this investment as a financial asset,” explained Mitsubishi.

It said that based on the Russian Federation presidential decree issued on June 30, 2022 and a further resolution, a new company, Sakhalin Energy LLC (SELLC), was established to take over the operation of this LNG business, and the rights and obligations of SEIC were transferred to SELLC.

“Mitsubishi submitted its notice to continue ownership in the LNG-related business to the Russian government and received approval on August 31, 2022. As a result, the company continues to hold a 10 percent ownership interest in the LNG-related business,” it added.

“However, the details related to the operation of SELLC, including the terms of the LLC members agreement, will need to be discussed once the LLC members composition of SELLC will be determined,” said Mitsubishi.

“As such, there remains uncertainty surrounding this investment,” it declared.

TotalEnergies and Middle East partner QatarEnergy have inaugurated a huge solar energy project linked to Qatar’s LNG expansion and the various joint ventures set up for the North Field East and North Field South liquefaction and export projects.

Al Kharsaah solar power plant was developed by TotalEnergies and QatarEnergy along with a third partner, the Japanese trading house Marubeni Corp.

The inauguration ceremony was led by Sheikh Tamim bin Hamad Al Thani, the Emir of Qatar, as the project started up and was connected to the Qatari national electricity grid.

The Al Kharsaah facility is located 80 kilometres (50 miles) west of the Qatari capital Doha and is the first such renewable facility in the Arabian Gulf state..

The plant with capacity of 800 megawatts was built on a 1,000-hectare site, equivalent to an area of 1,400 soccer pitches and containing 2 million high-efficiency bifacial modules mounted on single-axis trackers.

Al Kharsaah can supply 10 percent of the country's peak power consumption and will avoid 26 million tons of carbon-dioxide emissions during its lifetime as Qatar itself expands its LNG output from just under 80 million tonnes per annum currently to 126 MTPA by 2027.

Analysts said the Qatari solar project underpins pledges made by leading global LNG producers and stakeholders to pursue renewables in a sensible way while keeping natural gas flowing to guarantee essential energy services.

Support role

“After our recent entry into the giant LNG projects NFE and NFS alongside QatarEnergy, we are proud to announce the start-up of the Al Kharsaah solar plant,” said the Paris-based oil and gas major.

“This giant project, which contributed to the sustainability roadmap of Qatar, demonstrates once again TotalEnergies' ability to support producing countries in their energy transition by combining natural gas production and solar energy to meet the growing demand for electricity,” declared Patrick Pouyanné, Chairman and Chief Executive of TotalEnergies.

“This is another milestone in our long-standing and trustful relationship with QatarEnergy, also bringing us closer to our goal of 35 gigawatts of production capacity by 2025,” added Pouyanné.

The power plant is operated by the Siraj 1 joint venture, which is jointly owned 40 percent by a consortium comprising TotalEnergies (49 percent) and Marubeni (51 percent) and with the 60 percent balance held by QatarEnergy Renewable Solutions.

Power purchase deal

The project includes a 25-year Power Purchase Agreement between Siraj 1 and the Qatari power grid operator Kahramaa.

The inauguration of the Al Kharsaah plant with capacity of 800 megawatts follows the recent selection of TotalEnergies as QatarEnergy's first international partner for the NFE liquefaction plant expansion after already signing up for the NFS venture.

Participation in these projects will enable TotalEnergies to add production to its global LNG portfolio by 2028, in line with the company's goal of increasing the share of natural gas in its sales mix to 50 percent by 2030,” explained TotalEnergies.

The Al Kharsaah start-up follows QatarEnergy's recent announcement of a second solar project for the Ras Laffan and Mesaieed industrial cities, also supported by TotalEnergies.

“With 900 MW of installed capacity, this second project would be another landmark venture in QatarEnergy's strategy to reduce the carbon footprint of its facilities by 2030 and to develop 5 gigawatts of renewable power generation capacity by 2035,” stated the French major.

Höegh LNG Holdings Ltd and Australian Industrial Energy have signed a final charter deal for the deployment of a floating storage and regasification unit at Port Kembla south of Sydney to help ease energy shortages in the state of New South Wales.

Italian energy company Eni has strengthened its presence in future LNG importer Vietnam through the acquisition of Block 115, located in the Song Hong basin and the nearby Ken Bau natural gas and condensate discovery.

Eni acquired a 100 percent interest in the Block from Krisenergy, an independent upstream company focused on the production and development of oil and gas in the basins of Southeast Asia.

“The acquired Block is adjacent to Block 114 where the operator Eni Vietnam and its partner Essar Exploration and Production Limited have recently announced the Ken Bau gas and condensate discovery currently under appraisal,” explained Eni.

Milan-based Eni said the new acreage also borders Block 116, operated by Eni Vietnam with a 100 percent participating interest.

The Block covers an area of 7,382 square kilometres with a water depth ranging from 90 metres to 1,000 metres.

“Eni's presence in the country is further strengthened with this acquisition, consolidating its position in the recently discovered Ken Bau play, in line with the strategy of expanding  its gas portfolio in the Far East,” said Eni.

Eni has been present in Vietnam since 2013, and currently operates five blocks all located in the under-explored Song Hong and Phu Khanh basins.

Vietnam is currently developing about half-a-dozen LNG and power projects with overseas partners to try and keep pace with future energy needs to enable its economic expansion.

The leading LNG import projects include the Quang Ninh LNG-for-power venture owned by a partnership comprising PetroVietnam, Tokyo Gas and Marubeni Corp.

Vietnam is also developing another terminal involving US major ExxonMobil Corp. at the port city of Haiphong.

Another Vietnamese LNG-for-power venture is being developed by Singapore-based company Delta Offshore Energy and partners in Bac Lieu province in the Mekong Delta of south Vietnam.

Other ventures are planned for Ninh Thuan province, south of Cam Ranh Bay, and at Long An, also on the Mekong Delta. 

The amount of feed-gas flowing to US liquefied natural gas export plants is expected to decline over the next two months as scheduled maintenance programmes begin at export facilities in Louisiana and Texas.

International commodities company Gunvor said it would enter an alliance to trade and ship liquefied natural gas to Vietnam, as part of a joint venture with Energy Capital Vietnam (ECV), a US-based development company.

Tokyo Gas, the Japanese utility and LNG importer, has joined with one of Japan’s main trading houses, Marubeni Corp., to develop a liquefied natural gas and power project in the northeast Vietnamese province of Quang Ninh.

Australian Industrial Energy, a company controlled by billionaire businessman Andrew Forrest, has signed a site lease for up to 25 years with New South Wales Ports for the Port Kembla Gas Terminal project to handle LNG shipments and resolve gas shortages in the region.

Cooper Energy, the Australian oil and gas exploration company, is continuing the commissioning of the Orbost gas plant in the southeast state of Victoria from offshore supplies in the Sole gas field of the Gippsland Basin that may limit the needs for future LNG imports to the region.

Australian Industrial Energy and two Japanese partners have advanced with plans for the first Australian liquefied natural gas import terminal at Port Kembla to bring in shipments of LNG for the state of New South Wales by 2020.