LNG

Italian energy company Eni has reached an agreement on the combination of substantially all of its upstream assets in the UK with Ithaca Energy to significantly strengthen its presence on the Continental Shelf of the UK, a significant LNG importer.

Eni is one of the most dynamic oil and gas exploration and production companies that has brought transformational energy resources through gas discoveries and development of existing fields offshore nation like Mozambique and Egypt and in others in Asia.

Under the terms of the business combination agreement Eni and Ithaca will combine the Eni UK Business with the existing Ithaca business.

The combination is being funded through the issue to Eni UK of a number of new ordinary shares that represents 38.5 percent of the enlarged issued share capital of Ithaca.

The economic effective date for the combination will be 30 June 2024, with completion expected in the third quarter.

Ithaca is one of the largest independent oil and gas companies on the UKCS, with a substantial resource base and playing a key role in energy supply security in the region, with stakes in six of the 10 largest fields and the top two largest development fields on the UKCS.

Stronger group

“The combination will immediately create an enlarged and stronger group with 2024 production greater than 100,000 barrels of oil equivalent per day and the underlying potential to organically grow to 150,000 boepd by the early 2030s,” said Eni.

“The combination is aimed at replicating the previous successful execution of upstream combinations that Eni has formed using its distinctive Satellite Model including Vår Energi in Norway and Azule Energy in Angola,” the Milan-based company explained.

“The Satellite Model is a strategic response to the challenges and opportunities of energy markets, creating focused and lean companies able to attract new capital to create value through operating and financial synergies and the acceleration of growth,” said Eni.

With this approach Eni said it would thereby strengthen its commitment to the UK after its previous acquisition Neptune Energy.

Eni concluded an agreed acquisition for $4.9 billion of UK-based Neptune in June 2023, gaining key global LNG stakes and gas field assets in Algeria, Indonesia, Norway, the UK, the Netherlands and Australia.

Under the terms of the takeover, Eni purchased Neptune for $2.6Bln and Eni’s Norwegian-listed subsidiary Vår Energi agreed to pay $2.3Bln to acquire Neptune’s operations in Norway.

Changing market

“This agreement represents a further example of Eni adapting to the demands of the changing energy market and in this case deploying our successful Satellite Model,” said Eni Chief Executive Claudio Descalzi.

“It affords the opportunity to build scale, realising efficient upstream growth and maximising value under a dedicated and focused management structure supported by Eni resources and expertise,” Descalzi added.

“We have moved quickly after the acquisition by Eni of Neptune Energy to transform our competitive position in the UK and we see the opportunity for Eni and Ithaca to realise material long-term value in helping to address the key challenges of security, affordability and sustainability of energy supply,” the CEO stated.

Norwegian major Equinor and its partners in the Snøhvit Future project and Hammerfest LNG have awarded a construction and installation contract to domestic company Leonhard Nilsen & Sønner.

The project partners of Equinor are Norway’s Petoro, Fance’s TotalEnergies, UK-listed Neptune Energy and Germany’s Wintershall Dea.

The Snøhvit Future project includes onshore compression and electrification of the Hammerfest LNG export plant.

The regulators postponed the start of electrification by two years until 2030 compared with the original schedule and in the interim the plant will continue to run on gas turbines.

The gas turbines will also be maintained for back-up power from 2030 to 2033.

Exports

Hammerfest exports around 4.70 million tonnes of LNG per annum and most of the volumes are delivered to European destinations like France, Spain, the Netherlands and Lithuania.

Most feed-gas for Hammerfest comes from a total of 20 wells in the Snøhvit and Albatross fields.

This output is transported to land through a 143-kilometre (90-mile) pipeline and the plant processes around 18.4 million cubic metres (mcm) of natural gas per day.

The Leonhard Nilsen company is headquartered in Andøy in Norway’s Nordland county and the work is worth 1.5 billion Norwegian crowns ($143 million) and will generate local spin-offs for other areas including Finnmark and Troms.

“We are pleased to award this contract to a company in Northern Norway. For Equinor, it has been important that the Snøhvit Future project should create ripple effects throughout the region,” said Trond Bokn, Equinor’s Senior Vice President for Project Development.

Reliable supplier

“The Snøhvit Future project will strengthen Norway’s position as a reliable long-term supplier of gas produced with very low greenhouse gas emissions,” Bokn added.

The project will secure jobs in the North of Norway and guarantee energy supply to Europe through 2050.

Three large modules will be installed at the Hammerfest plant including a compressor, a substation and electric steam boilers.

“Extensive modification work will also be carried out. In addition, there will be a lot of activity around Hammerfest, including the construction of a tunnel and transformer substation allowing power to be transmitted from Hyggevatn to Melkøya,” Equinor explained.

Hammerfest LNG is a key company in the region with approximately 350 permanent employees, plus about 150 contractors and apprentices.

The LNG plant also pays 170 million crowns in property taxes annually to the Hammerfest municipality.

As specialists in tunnelling, the Leonhard Nilsen company has delivered several large-scale projects both in Norway and abroad, and construction work will start once the necessary approvals and permits have been received. This is the company’s first assignment for Equinor.

“They submitted the best bid overall, and we look forward to working with a new supplier in the region. Leonhard Nilsen also has a number of sub-suppliers, including Viggo Eriksen in Hammerfest, Alta Anlegg and Hörmann Norway in Tromsø,” said Mette H. Ottøy, Equinor’s Chief Procurement Officer.

Nov 6 (LNGJ) - UK major BP said production had successfully started from the Seagull oil and natural gas field in the UK North Sea, boosting energy security and underpinning continued production from an offshore facility that’s been operating for 25 years while supplying more oil to Scotland and natural gas to England.

   The Seagull field has been developed by Neptune Energy, now being acquired by Italy’s Eni, as a subsea tieback to the BP-operated central processing facility of the Eastern Trough Area Project in the central North Sea, around 140 miles (225km) east of Aberdeen. “Oil from Seagull is exported through the Forties Pipeline System to Grangemouth in central Scotland and natural gas to Teesside via the Central Area Transmission System,” said BP. The new field is expected to produce around 50,000 barrels of oil equivalent gross per day at peak production.

Italian oil and gas company Eni has followed up its agreed $4.9 billion acquisition of UK-listed Neptune Energy by buying natural gas assets from Chevron Corp. in Indonesia with LNG production potential.

Eni has agreed to buy Chevron’s interests in the Kutei Basin offshore East Kalimantan in Indonesia for an undisclosed sum.

When the deal is completed Eni will take over the Chevron operatorships in the production sharing contracts in the Indonesian Blocks named the Ganal PSC (Chevron 62 percent), the Rapak PSC (Chevron 62 percent) and the Makassar Straits PSC (Chevron 72 percent).

Eni already has a 20 percent interest as non-operator in the Ganal and Rapak Blocks.

The acquired Neptune assets include PSCs operated with Eni producing feed gas for LNG exports from the Bontang LNG plant under long-term contracts, as well as gas for the Indonesian domestic market.

Expansion

Neptune’s main stakes are in the Jangkrik and Merakes gas fields and Eni is now further strengthening its operatorships in the region where there was still “significant exploration potential” in the Kutei Basin.

The Milan-based company explained that the acquisition of the Chevron assets was an important step, particularly for the opportunity to fast-track the development of the Gendalo and Gandang gas project, a part of the Indonesia Deepwater Development (IDD) in the Ganal PSC, close to the Jangkrik Floating Production unit, with estimated natural gas reserves of around 2 trillion cubic feet.

“This is in addition to the producing Bangka gas field, the Gehem and Ranggas discoveries and the significant exploration potential also included in the northern part of the asset, which therefore represent a further relevant consolidation for Eni operations in the East Kalimantan area,” Eni added.

“The acquisition of Chevron's assets in Indonesia will allow Eni to fast-track the development of the IDD project, leveraging its strong presence in East Kalimantan as well as the synergies with Eni-operated Jangkrik infrastructures, the existing Bontang LNG facility and the domestic gas market,” Eni stated.

Eni said the acquisitions were in line with the company’s aim of increasing its share of natural gas production to 60 percent of its overall hydrocarbon total by 2030.

Eni’s first exploration agreement in Indonesia dates back to 1968 and its current net production amounts to about 80,000 barrels of oil equivalent per day.

Global gas

The company’s agreed acquisition of Neptune includes assets far beyond Indonesia and includes key global LNG stakes and gas field assets in Algeria, Norway, the UK, the Netherlands and Australia.

Under the terms of the Neptune takeover Eni agreed to purchase Neptune for $2.6Bln and Eni’s Norwegian-listed subsidiary Vår Energi has agreed to pay $2.3Bln to acquire Neptune’s operations in Norway.

Eni also explained that many of Neptune's existing natural gas contracts would expire in the next 12 months, giving the company the opportunity to integrate these within its own pipeline gas and LNG portfolio.

Neptune was owned by equity finds with China Investment Corp. holding a 49 percent stake, the US Carlyle group owning 30.6 percent and the Luxembourg-based French asset management firm CVC Partners holding 20.4 percent. 

Italian energy company Eni has explained the strategy behind its agreed acquisition for $4.9 billion of UK-based Neptune Energy, which is controlled by equity funds and owns key global LNG stakes and gas field assets in Algeria, Indonesia, Norway, the UK, the Netherlands and Australia.

The Norwegian parliament, the Storting, has ordered the government to consider an alternative way to cut carbon emissions at Western Europe's largest liquefied natural gas export plant at Hammerfest and to consider the use of carbon capture instead of electrification.

Jan 10 (LNGJ) - While Northern Germany is dominating the nation’s LNG development, Southern Germany continues to make the headlines in German crude oil production. UK-based Neptune Energy has announced first oil output from its operated Rӧmerberg 6 well in the city of Speyer in the southwest state of Rhineland-Palatinate. Initial production tests indicate flow rates of up to 1,800 barrels of oil equivalent per day.

   “Römerberg 6 is the ninth production well on the field first discovered in 2003 and is expected to increase Neptune’s production in the Rhine Valley to around 3,700 barrels of oil equivalent per day,” said Neptune. “We are committed to further developing the Römerberg oil field and to increasing production capacity over the coming years,” said Andreas Scheck, Neptune’s Managing Director in Germany.

Equinor, the Norwegian oil and gas company, is boosting the feed-gas supplies from another field in the Barents Sea to produce more LNG from the Hammerfest plant on Melkøya Island in northern Norway.

TotalEnergies has approved the final investment decision for the Fénix gas development offshore LNG importer Argentina in partnership with Germany’s main oil and gas company Wintershall Dea.

Sonatrach, the Algerian oil and gas producer and exporter of LNG and pipeline gas to Europe, has reported progress on two natural gas projects in the country’s southwest Sahara desert region.