LNG

Technip Energies, the leading European energy and liquefied natural gas project engineers, reported solid profits and its backlog surged as it pledged to strengthen its leadership in 2024 in the low-carbon LNG sector.

The Mozambican Government is considering a project led by Italian energy company Eni for the deployment of a second floating liquefied natural gas plant called the Coral North project to match the Coral South plant that went on stream in November 2022.

Agência de Informação de Moçambique (AIM), the official Mozambique news agency, carried the report in its latest bulletin.

The project will be developed by a consortium headed by Italian oil and gas major Eni and was in the “pre-viability environmental study” stage for deployment in the Rovuma Basin offshore Mozambique.

The Eni study was cited by AIM as saying that the second FLNG plant would be “the most efficient way to maximise the recovery and profitability of the gas reserves” of the Coral natural gas field.

FLNG costs

“The investment envisaged in the second platform is US$7 billion and is still subject to approval by the Mozambican government,” said the official news agency.

“Under the current schedule, the new platform would begin to produce LNG in the second half of 2027,” it said.

“That means that the platform will be in production before the onshore LNG plant planned for the Afungi Peninsula in Palma district by French oil and gas company TotalEnergies,” added the report.

“The resumption of work by TotalEnergies will depend on whether the French company is satisfied with the recent improvements in the security situation,” said AIM.

The report said that the Mozambique Government expects the Coral North FLNG plant to be anchored about 10 kilometres (6.2 miles) from the existing Coral South facility which has been liquefying natural gas since October 2022.

“The platform has the capacity to produce 3.37 million tonnes of LNG a year and the Coral North platform would double that figure,” it said.

The first LNG cargo was lifted on the 13th of November 2022 from the “Coral Sul FLNG” vessel.

Upstream operator

Eni is the upstream operator of the Area 4 licence resources containing the Coral gas reservoir.

The “Coral-Sul FLNG” vessel was constructed at Samsung Heavy Industries shipyard in Geoje in South Korea and is the first floating LNG facility ever deployed in the deep waters of East Africa.

The other partners of Eni in the first FLNG project were US major ExxonMobil Corp., China National Petroleum Corp., Galp Energia of Portugal, Korea Gas Corp. and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), the state energy company.

BP of the UK has a long-term agreement spanning over 20 years to purchase 100 percent of LNG output from the Coral South FLNG venture.

The new Coral North project was first mentioned by the Coral gas field shareholders to Mozambique President Filipe Jacinto Nyusi when the President visited the “Coral-Sul FLNG” vessel for a ceremony on November 24, 2022.

“They discussed with the President the possibility of replicating the success of the Coral South project with further FLNG developments as well as other onshore projects,” said Eni at the time.

Air Products, the LNG equipment-maker and industrial gases company now branching out with mega-projects in the Middle East linked to the NOEM smart city project in Saudi Arabia and with a gasification business in China, reported a 6 percent increase in fiscal first-quarter net income.

The company reported net income of $584 million compared with $549.6M in the same three months last year.

Air Products, which is a leader in the industrial gases sector, reported fiscal first-quarter sales of $3.2 billion, up 6 percent over the prior year’s $2.99Bln on 7 percent higher pricing, 3 percent higher energy cost pass-through and 2 percent higher volumes.

The LeHigh Valley, Pennsylvania-based company, also achieved the financial close and transfer of the second group of assets for the $12 billion gasification and power joint venture with Saudi Aramco, ACWA Power and the US firm’s Saudi unit, Air Products Qudra, in the Jazan Economic City in Saudi Arabia.

“Higher pricing across the largest segments drove the results, complemented by favorable volume growth, primarily in Asia and the Americas, from higher on-site and merchant demand,” said the company.

LNG projects

The US company is also the leading supplier of LNG equipment for the majority of plants operating worldwide,

Air Products equipment is lined up for several LNG projects under development, including Qatar’s LNG production expansion, Sempra Energy’s Costa Azul LNG export terminal project in Mexico and the currently delayed TotalEnergies-led Mozambique onshore project in Cabo Delgado province.

The company increased its quarterly dividend on its common stock by 13 cents per share to $1.75 per share.

“We continued to advance mega-scale hydrogen energy projects globally, including the joint venture with AES Corp. to invest about $4 billion to build, own and operate the US's largest green hydrogen facility in Wilbarger County in Texas,” explained Air Products.

The Canadian federal and provincial governments also announced C$475 million (US$357M) in project funding for the Air Products multi-billion-dollar landmark net-zero hydrogen energy complex in the oil and gas province of Alberta.

“The committed team at Air Products worked hard to deliver strong results this quarter, overcoming significant economic weakness, currency challenges and other headwinds,” said Chairman, President and Chief Executive Seifi Ghasemi.

“We are proud to have reached significant project milestones, including completing the second phase of the $12Bln Jazan gasification and power project, continuing to make good progress on the project financing for the NEOM (smart city) green hydrogen project, and announcing plans for the largest green hydrogen project in the US to be located in Texas,” added Ghasemi.

“Importantly, we again increased the dividend, as we have done for more than 40 consecutive years and expect to pay out more than $1.5 billion to our shareholders in 2023,” stated Ghasemi. 

ExxonMobil said upstream earnings potential was expected to double by 2027 from three years ago with more than 70 percent of capital investments being deployed in strategic developments in LNG projects around the world and in the US Permian Basin as well as in the South American nations of Guyana and Brazil.

The Irving, Texas-based major said that by 2027, upstream production is expected to grow by 500,000 oil-equivalent barrels per day to 4.2 million oil-equivalent barrels per day with more than 50 percent of the total to come from these key growth areas.

“Around 90 percent of upstream investments that bring on new oil and flowing gas production are expected to have returns greater than 10 percent at prices less than or equal to $35 per barrel, while also reducing upstream operated greenhouse-gas emissions intensity by 40-50 percent through 2030, compared to 2016 levels,” said ExxonMobil.

Corporate plan

The details came in ExxonMobil’s just issued corporate plan for the next five years, with a sizeable increase in investments aimed at emission reductions.

ExxonMobil’s priority LNG production areas are at the Golden Pass project in Texas, in the southeast African nation of Mozambique, in Papua New Guinea and in Qatar where its main partner is QatarEnergy.

The corporate plan through 2027 maintains annual capital expenditures at $20 billion to $25 billion, while growing lower-emissions investments to about $17Bln.

ExxonMobil forecast that earnings and cash flow growth was expected to double by 2027 compared with 2019.

There would also be share-repurchase program expanded up to $50Bln through 2024, including $15Bln in 2022.

“Our five-year plan is expected to drive leading business outcomes and is a continuation of the path that has delivered industry-leading results in 2022,” said Darren Woods, Chairman and Chief Executive.

“We view our success as an ‘and’ equation, one in which we can produce the energy and products society needs - and - be a leader in reducing greenhouse-gas emissions from our own operations and also those from other companies,” added Woods.

The corporate plan we’re laying out today reflects that view, and the results we’ve seen to date demonstrate that we’re on the right course.”

The company also remained on track to deliver a total of about $9 billion in structural cost reductions by year-end 2023 versus 2019.

In the Permian, the company said it was on track with its goal to reach net-zero Scope 1 and 2 emissions from its operated unconventional assets by 2030.

“We’re aggressively working to reduce greenhouse gas emissions from our operations, and our 2030 emission-reduction plans are on track to achieve a 40-50 percent reduction in upstream greenhouse-gas intensity, compared to 2016 levels,” added Woods.

“We will continue to advocate for clear and consistent government policies that accelerate progress to a lower-emissions future. At the same time, we’ll continue to work to provide solutions that can help customers in other industries reduce their emissions, especially in higher-emitting sectors of the economy like manufacturing, transportation and power generation,” stated the CEO.

Italian energy engineering company Saipem has been awarded an additional $150 million Mozambique LNG contract relating to the “Coral-Sul FLNG” vessel, a production hull set to be onstream later in 2022 in the offshore Rovuma Basin.

JGC Holdings Corp., the Japanese energy and LNG projects engineer, with LNG contracts in Canada and Mozambique and elsewhere, reported a fall in nine-month profits amid engineering slowdowns in some areas caused by Covid-19 while sales increased in the period.

The East African nation of Tanzania has resumed talks with international oil and gas companies on developing substantial offshore natural gas resources for LNG production.

The Energy Minister of Tanzania, January Makamba, said talks had been held with various major oil and gas companies.

“I have started negotiations for the $30 billion Tanzania LNG project. The project will transform our economy,” stated Makamba.

Equinor of Norway, which has ownership of exploration and production licences, said talks with the Tanzanian government were expected to focus on conditions that would enable companies to invest.

“For the past two months, we've worked hard behind the scenes to get here. We're confident that a final investment decision will come sooner than is traditionally the case,” Minister Makamba declared.

The Norwegian company said it was pleased to be engaging and framing the commercial, fiscal, regulatory and legal priorities for any future project in the African country.

Tanzanian President Samia Suluhu Hassan held talks in October 2021 with Royal Dutch Shell Chief Executive Ben van Beurden and the long-planned LNG export project was discussed.

Equinor and Shell and several other companies, including Pavilion Energy, of Singapore, have stakes in the Tanzanian gas fields.

Shell became the operator of blocks 1, 3 and 4 in Tanzania in February 2016 after its takeover of BG Group and has also been working closely with the Tanzanians.

The Block 2 in the same Basin as Shell’s licence area is operated by Norway’s Equinor.

The Basin occupies an offshore area of some 75,000 square kilometres between the Tanzanian continental shelf edge and in water depths ranging from 500 metres to 3,300 metres.

Net contingent resources in the four Blocks are estimated to be at least 20 trillion cubic feet, sufficient to support a three-Train LNG development.

Equinor has a production-sharing agreement with Tanzania Petroleum Development Corp (TPDC) and is the operator with a 65 percent participating interest, while US major ExxonMobil has a working interest of 35 percent in the PSA.

TPDC has the right to participate in any project and would have a 10 percent interest.

Equinor made nine natural gas discoveries in Block 2, one of four explored blocks with proven resources offshore Tanzania.

The Norwegian company had previously said it aimed to work on the LNG project with Shell.

French energy major Total said resumption of a full work programme scheduled at the Mozambique LNG export project had been postponed after another attack by extremists in the north of Cabo Delgado province.

Centrica plc, the UK utility and energy company with a growing LNG market presence, reported a resilient financial performance in the second half of 2020 as the trading and optimisation performance continued to be strong, especially in LNG.

One of the world’s main liquefied natural gas projects, Mozambique LNG, is threatened with a long-term delay because of growing terrorist attacks by Islamist groups that have led to urgent travel warnings by nations like the US and the UK and with France now stating that a large-scale “humanitarian crisis” could develop.