LNG

Three leading liquefied natural gas market participants, Petronas of Malaysia, Mitsui & Co and Japan and French TotalEnergies have signed an agreement to develop a carbon-capture and storage (CCS) project in Southeast Asia as the region tries to keep pace with Europe, the US and Australian on such ventures.

The three partners said they would evaluate several carbon-dioxide storage sites in the Malay Basin, including both saline aquifers and depleted offshore fields.

“This partnership aims to develop a CO2 merchant storage service to decarbonize industrial customers in Asia,” they stated.

TotalEnergies is the most active among the three on carbon joint ventures and is already developing storage capacity of 10 million metric tons of CO2 per year by 2030 through significant industrial projects such as Northern Lights in Norway and Aramis in the Netherlands.

Existing technologies

Toru Matsui, a Senior Executive Managing Officer at Mitsui, said CCS is based on existing technologies and can be seen as an affordable solution to decarbonize the hard-to-abate emitters.

“Mitsui will utilize its expertise in the oil and gas upstream activities and extensive business networks to jointly work with Petronas and TotalEnergies to develop a CCS value chain project in Malaysia,” Matsui stated.

“In Asia, where countries such as South Korea and Japan are aiming to cut their emissions the development of a CCS value chain for hard-to-abate industrial emissions will require a specific regulatory framework and significant investment,” the companies noted.

Through this agreement, the partner said they would study several potential storage sites, determine the best technical means to deliver CO2 to Malaysia from industrial clusters in the region and develop the most appropriate business framework for commercialization of a carbon storage service in Malaysia.

“Petronas is proud to collaborate with forward-looking partners such as TotalEnergies and Mitsui in developing solutions through CCS to move us closer towards a lower-carbon future,” said Tengku Muhammad Taufik, President and Group Chief Executive of Petronas.

“The strategic partnership demonstrates Petronas’ commitment to position Malaysia as a regional CCS hub to capture opportunities in the energy transition with a focus on reducing the carbon footprint of our operations to continue delivering the energy needs of today,” he added.

TotalEnergies Chairman and CEO Patrick Pouyanné said the company was pleased to join forces with Petronas and Mitsui on the carbon storage hub project in Malaysia to support decarbonization in Asia.

“We will bring to the partnership our strong CCS expertise, anchored in Europe with a first integrated project in Norway due to start next year and several other projects,” Pouyanné added.

Shell plc is continuing with its pull-out from the Russian oil and gas industry as part of sanctions over Ukraine and has how divested its 50 percent stake in the large Salym project in Western Siberia after divesting its main Sakhalin LNG stake in 2022.

Abu Dhabi National Oil Company (ADNOC) is proceeding with its plans to offer a minority stake in new subsidiary ADNOC Gas, which consolidates the emirate’s gas processing and LNG operations, through an initial public offering on the Abu Dhabi Securities Exchange in 2023.

Novatek, the Russian energy company and developer of the Arctic LNG II project to double up on the existing Yamal LNG plant, said it was still on track for the first Train to come on stream by year-end 2023 and Japan and China would be key customers.

Clough Group, the Australian energy and civil construction company whose projects include the Waitsia LNG joint venture in Western Australia, has collapsed after a takeover deal fell through.

The modules constructed in China for the first liquefaction Train for the Novatek-led Arctic LNG II project have arrived at the Novatek-Murmansk assembly site in Northern Russian from the Wison shipyard.

Mineral Resources Ltd (MRL) of Australia said it had made a “significant” natural gas discovery in the onshore Perth Basin from where other gas producers are planning LNG production and exports.

Novatek, the Russian natural gas developer of the Arctic LNG II project, has concluded two important agreements on offtake from the facility coming on stream in 2023 while selling a stake to French major Total in its cargo trans-shipment subsidiary.

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.

Russian natural gas company and liquefied natural gas developer Novatek said it won an auction for exploration and production rights in the North-Gydanskiy licence area located in the Yamal-Nenets Autonomous Region of the Gydan Peninsula and partly in the shallow waters of Gydan Bay in the Kara Sea.

“The North-Gydanskiy licence area has estimated hydrocarbon resources of 9.8 billion barrels of oil equivalent according to the Russian resource classification system,” said Novatek.

The licence term is 30 years and the auction resulted in a one-time payment for the licence of 775.4 million Russian roubles ($10.3M) by Novatek.

“The new licence area borders Novatek’s existing assets on the Gydan Peninsula and expands the company’s resource base for implementing new LNG projects,” explained the company.

Novatek owns the existing Yamal LNG export plant and is constructing the Arctic LNG project on the Gydan Peninsula.

Arctic LNG II will produce 19.8 million tonnes per annum of LNG as well as gas concentrate from the principal feed-gas resources, the Utrenneye gas fields, adding to the existing Yamal facility’s annual output of 17.5 MTPA.

The Russian company holds 60 percent of the Arctic LNG II project and four other 10 percent stakes are shared between various shareholders.

The 10 percent holdings belong to French major Total, which is also a shareholder in the Novatek company, China National Petroleum Corp., China National Offshore Corp. and a Japanese investor group comprising Mitsui & Co. and the government institution, the Japan Oil, Gas and Metals National Corp.

In its most recent earnings Novatek reported declines in annual revenues and profits because of the adverse effects of Covid-19 for much of 2020 and the impact of a weaker Russian rouble.

Novatek said its total gross revenues in 2020, including stakes in joint ventures, dropped by 17.5 percent to 711.8 billion roubles ($9.6Bln), and its gross profits fell 15 percent to 392.0Bln roubles ($5.3Bln).

This was largely due to a decline in global commodity prices for hydrocarbons while Novatek also reported a fall in its own LNG sales volumes on international markets.

Profits attributable to Novatek shareholders came to 169Bln roubles ($2.28Bln), excluding the effects of foreign exchange losses, down from 245.0Bln roubles ($3.3Bln) in 2019.

When counting foreign exchange losses, Novatek’s annual net income came to 67.8Bln roubles ($907 million), even as its output of natural gas increased.

Novatek’s natural gas production including its proportionate share in the production of joint ventures increased by 3.6 percent compared with 2019.

The natural gas output in 2020 amounted to 77.36 billion cubic metres, up from 74.70 Bcm in 2019.

Novatek’s own equity sales on international markets as LNG declined to 8.92 Bcm from 12.79 Bcm in 2019.