LNG

TotalEnergies has requested a 10-year extension to its Mozambique LNG concession, citing a $4.5 billion rise in project costs. The French energy giant now estimates the project’s total cost at $24.5 billion, up from $20 billion, as it prepares to restart operations suspended in 2021 after militant attacks in Cabo Delgado province. CEO Patrick Pouyanné said the four-year delay under force majeure significantly affected cost and timelines.

GALP Energia, the Portuguese oil and gas company which recently agreed to sell its 10 percent stake in the Mozambique LNG project, posted higher adjusted second-quarter net profits.

Japanese trading house Mitsui and Company Ltd, has purchased more shale-gas assets in Texas and plans to bring them to full-scale development and production as possible feed-gas supplies for LNG output.

Two Indian state-backed oil and gas companies have signed an accord to develop the Hatta natural gas field in the Vindhyan basin of Madhya Pradesh in Central India, including building an LNG liquefaction plant to supply the off-grid and transportation fuel markets.

The two companies involved are Oil and Natural Gas Corp. (ONGC), a company owned by India’s Ministry of Petroleum and Natural Gas as is its partner in the venture, Indian Oil Corp. Ltd (IOCL) whose activities are focused on refining petroleum products and producing petrochemicals, though both are already involved in the LNG sector.

ONGC and IOCL have signed a memorandum of understanding to establish a medium-sized LNG plant as part of the Hatta gas field development plan.

“The establishment of the Hatta LNG plant will significantly enhance the Vindhyan Basin's status,”  explained ONGC.

“The plant will utilize cutting-edge technology to produce LNG, a cleaner alternative to traditional fossil fuels, significantly reducing carbon emissions and aligning with India's climate change mitigation goals,” ONGC added.

LNG sector

ONGC has subsidiaries already involved in LNG including Hindustan Petroleum Corp., the owner of India’s newest LNG import facility, the Chhara terminal located in the state of Gujarat and with 5 million tonnes per annum of capacity.

Another unit, ONGC Videsh, is one of three Indian companies who share a 20 percent stake in the TotalEnergies-operated Mozambique LNG project Area 1 licence in the Rovuma Basin of the southeast African nation.  

IOCL is also involved in LNG through its ownership of the LNG import terminal at Kamarajar Port in the East Coast state of Tamil Naidu with 5 MTPA of regasification capacity.

Both ONGC and IOCL are additionally associated and founding companies of Indian’s largest LNG importer, Petronet LNG which has West Coast import terminals at Dahej and Kochi.

ONGC said that the gas discovery at Hatta “represented the culmination of five decades of sustained exploration” efforts.

“ONGC has already submitted its Field Development Plan (FDP) to the Directorate General of Hydrocarbons to monetize its assets in the Hatta area,” stated the company.

The establishment of the Hatta gas field and the LNG plant will enhance the Vindhyan Basin’s status, upgrading it from a Category II to a Category I Basin.

India's sedimentary basins, covering a total area of 3.4 million square kilometres, are divided into three categories.

Category I is for basins with hydrocarbon reserves that are already producing; Category II is for resources with commercial production pending; and Category III are prospective areas where resources may be discovered.

Earnings

The submission of the Hatta gas development plan follows ONGC’s record fiscal-year net profits reported in May 2024 and amounting to 40,526 crore Indian rupees (US$4.85 billion).

However, gross annual revenues fell by over 6 percent to 643,037 crore rupees ($76.94Bln) as prices tumbled.

ONGC’s annual realised natural gas price dropped by 10.8 percent for the year to US$6.55 per million British thermal units from US$7.34 per MMBtu in the previous fiscal year.

The average crude oil price declined by 18.4 percent to US$75.91 a barrel from $93.02 per barrel in the 2022-2023 fiscal year.

May 29 (LNG) – Long-standing LNG exporter Algeria has held talks with one of the newest LNG nations Mozambique on future cooperation. Mozambique’s Minister of Economy and Finance, Ernesto Max Tonela, met in Algiers with Algerian Energy Minister Mohamed Arkab and both countries have agreed to cooperate on natural gas exploration and production issues and on LNG markets.

   “Algeria offered to share its experience in terms of the natural gas sector in addition to the development of gas fields and the production and transportation of LNG,” said Arkab. “Algeria also wishes to provide support to Mozambique from state energy company Sonatrach through training in the hydrocarbon professions as well as the transfer of Sonatrach’s know-how in international energy trading markets,” the Algerian minister added.

ARA Petroleum, part of the Zubair Corporation based in the Sultanate of Oman in the Arabian peninsula, has been granted a 25-year development licence for the Ntorya gas discovery area onshore the far south of Tanzania.

The licence was awarded to the operator of the existing Ruvuma joint venture, ARA Petroleum Tanzania Limited (APT), a wholly owned subsidiary of ARA Petroleum.

APT took over operatorship of the onshore Ruvuma JV in 2020 and now owns a 75 percent working interest.

The Ntorya gas field lies within the Tanzanian onshore Ruvuma JV licence area and is adjacent to a region containing the world-class offshore natural gas resources with the same name in the Rovuma Basin underpinning LNG projects in Mozambique waters to the south.

ARA Petroleum is based in Muscat, Oman, and has affiliated offices in London, Dar es Salaam in Tanzania and Trondheim in Norway.

Onshore resources

The award of the development licence allows ARA Petroleum’s APT unit to proceed with Tanzania’s largest onshore gas development with the goal of producing gas for the growing domestic market in the next year.

“We are delighted to receive this licence from the Ministry of Energy and thank all the Tanzanian agencies involved,” said Erhan Saygi, General Manager of APT.

“We are ready to launch work immediately to bring this onshore development project into production,” he stated.

APT explained that it had prepared a field development plan that includes, but is not limited to, converting an existing well into a producing well, building in-field gas processing facilities and contracting a rig operator to drill a third well to appraise the field further.

APT expects to produce 40 million standard cubic feet a day in the first year of production and to increase that to 140 million standard cubic feet a day within a few years, according to a gas sales agreement signed with the Tanzanian Petroleum Development Corporation (TPDC) earlier in 2024.

Such volumes would increase significantly current Tanzanian gas production.

Additionally, APT believes the potential for gas production from the field is far larger having commissioned, acquired and interpretated 338 square kilometres of 3D seismic data over the Ruvuma JV licence area.

Gas potential

Following the interpretation of the seismic data, APT said it considered the area to yield a matured unaudited Contingent Resource estimate of 3.45 trillion cubic feet of Gas Initially In Place (GIIP), with an mean unrisked GIIP potential of 16.4 Tcf and a risked mean potential of 6.9 Tcf for the wider Ruvuma JV area.

“Acknowledging this wider potential, the development licence divides the original ‘Mtwara Exploration Licence’ area into nine blocks: five blocks containing the Ntorya discovery and four blocks labelled as ‘adjoining’ blocks,” the company explained.

The Ruvuma JV parties are required to undertake geological, geophysical and geochemical studies in the area and drill at least one additional exploration well within five years while spending a minimum of $10 million.

“We are excited about further exploration and appraisal work in this area as we consider it to hold truly enormous volumes of gas,” said APT’s Saygi.

“We believe the Ntorya gas field and wider area could be game-changing for Tanzania’s efforts to alleviate energy poverty, spur further economic development and potentially transform the country into a regional energy hub,” he added.

China National Offshore Oil Corp. (CNOOC), the Chinese energy major with international and domestic LNG interests, has signed independent exploration and production agreement with the southeast African nation of Mozambique near where another Chinese major holds LNG project stakes.

Oil India Limited, the state-owned oil and natural gas company and a stakeholder in Mozambique LNG, posted 13.5 percent higher quarterly net profits while revenues also rose, helped by higher crude prices offsetting lower natural gas values.

The company, which traces its roots to the first discovery of the crude oil in India at Digboi in Assam in 1889, is the nation’s second-largest exploration and production company after Oil and National Gas Corp. (ONGC) and the net profits in the quarter to the end of March 2024 were its highest ever.

Oil India said fourth-quarter net profits came to 2,029 crore Indian rupees ($243.5M) compared with 1,788 crore rupees ($214.6M) in the prior-year quarter.

The company said quarterly earnings per share increased to 18.71 rupees from 14.61 rupees per share.

Mozambique plans

Serious moves had recently been underway to resume the TotalEnergies-led project development.

Oil India’s stake in Mozambican LNG is in the Area 1 Rovuma Basin licence operated by TotalEnergies and centred on the long delayed liquefaction plant construction on the Afungi Peninsula in Cabo Delgado province.

Other overseas stakes are held by Japan's Mitsui with 20 percent stake and three Indian companies, ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each have a 10 percent and Thailand's PTTEP owns 8.5 percent.

Oil India is involved in the Area 1 Block through its 40 percent shareholding in Beas Rovuma Energy.

In its earnings statement, Oil India said revenues for the quarter increased to 5,757 crore rupees ($691M), up from the 5,646 crore rupees ($677M) earned in the fourth quarter of 2023.

The company reported annual fiscal-year revenues of 22,129 crore rupees ($2.65 billion) versus 23,259 crore rupees ($2.79Bln) in the previous 2022-2023 fiscal year.

Annual fiscal-year net profits dropped to 5,551 crore rupees ($666M) from 6,810 crore rupees ($817M) in the previous year.

Earnings per share for the year declined to 51.20 rupees per share from 62.80 rupees per share.

Crude prices

The company, whose headquarters are in Noida in the state of Uttar Pradesh, said that global crude oil prices jumped during March, benefiting the company's bottom line.

Oil India's crude oil division accounts for more than 70 percent of total revenue and natural gas for much of the rest.

“We achieved a growth in our natural gas production during the fourth quarter by 3.21 percent over the corresponding quarter of FY23 and the company achieved the highest ever domestic natural gas production of 3.182 billion cubic metres,” India Oil said.

Annual crude oil revenues declined to 16,123 crore rupees ($1.93Bln) compared with 16,787 crore rupees in the previous fiscal year.

Natural gas revenues for the year came to 5,189 crore ($623M), down from 5489 crore rupees ($659M) in the previous year.

Mozambican President Filipe Nyusi confirmed that Islamist terrorists had occupied the town of Macomia in a northern part of Cabo Delgado, Mozambique’s province where an onshore LNG plant is being constructed further south and may now face more delays.

The Turkish Petroleum Pipeline Corporation (BOTAŞ), the nation's main natural gas wholesaler and assets operator, and US energy major ExxonMobil Corp have signed a cooperation deal on liquefied natural gas trading.

The Turkish Minister of Energy and Natural Resources, Alparslan Bayraktar, who was in the US for talks, confirmed the accord in a statement after several months of negotiations.

“With this agreement, which is planned to be long-term, we will take another step in diversifying our resources,” stated Bayraktar.

“We are among the few countries in the world with ample LNG regasification capacity and we will continue to contribute to the energy supply security of both our country and our region,” the minister declared.

Value of deal

Minister Bayraktar had also mentioned last month in an interview that Turkey was in talks with ExxonMobil on a supply agreement worth more than $1 billion.

Bayraktar had said at the time that negotiations were ongoing with ExxonMobil for 2.5 million tonnes of LNG, valued at around $1.1Bln and lasting up to 10 years.

Turkey has varied LNG supply sources and has half a dozen natural gas pipelines bringing in Turkish supplies and traversing its territory to deliver volumes to other nations.

Russia is a big supplier of pipeline gas to Turkey, accounting for more than 40 percent of its consumption in 2023.

The Gazprom BlueStream gas pipeline to Turkey is 1,213 kilometres (754 miles) in length and with design capacity of 16 billion cubic metre per annum, while the Russian TurkStream gas pipeline is about 930km long and with capacity of 31.5 Bcm.

Turkey is additionally the main transit nation for the Trans-Adriatic Pipeline, the final leg of the 3,500km Southern Gas Corridor pipeline network for Azerbaijan gas, which came on stream in 2020 and supplies primarily Greece, the Balkans and Italy.

Main LNG suppliers

Turkey’s main LNG suppliers over the past years have included the US, Algeria and Egypt.

US LNG data shows that the Turks are currently the eighth-largest recipients of US LNG cargoes since 2016 and receive at least six shipments per month.

BOTAŞ, the signatory of the accord with ExxonMobil, builds and operates natural gas pipelines in Turkey and accounts for most of the nation’s wholesale market.

The company runs the Marmara Eregesli LNG import terminal as its main source of cargoes while several floating facilities also operate.

Turkey has received LNG since 1994, first from Algeria and later from countries like Qatar and Nigeria and then from the US as well.

ExxonMobil’s LNG portfolio is wide and varied from Qatar itself to Papua New Guinea.

It is additionally an upstream partner of QatarEnergy worldwide in addition to having supplies from Ras Laffan.

QatarEnergy is also the lead developer of the Golden Pass LNG export project in Texas that will come on stream in 2025 and in which ExxonMobil has a 30 percent stake.