LNG

Woodside is considering using its pre-emptive rights to veto Inpex’s farm-in to the Browse joint venture, as this move threatens to undermine feedgas supply for its North-West Shelf LNG export terminal. The deal is seen as a catalyst to shift Browse gas production away from the NWS LNG hub towards Inpex’s Ichthys LNG train in Darwin.

Beach Energy increased sales in the fiscal first half and was on scheduled to have first natural gas from an LNG feed-gas project in Western Australia and first gas from an East Coast venture while the company painted a gloomy picture of the energy business in New Zealand.

Beach Energy of Australia, the company destined to be the nation’s newest liquefied natural gas exporter from Western Australia, has solved some of the natural gas shortages in southeast Australia with a double gas discovery in the offshore Otway Basin in the state of Victoria.

Woodside Petroleum said its Singapore-based trading unit signed a a sale and purchase agreement (SPA) with Germany utility and energy company RWE Supply & Trading GmbH for the supply of LNG from Woodside’s global portfolio for a term of seven years starting in 2025.

UK energy consultants Wood Mackenzie said that the North West Shelf LNG export project in Western Australia, operated by Woodside Petroleum, could have up to 7 million tonnes per annum of spare capacity available by 2027.

Anglo-Australian global commodities and energy company BHP with long-standing stakes in Western Australian LNG, natural gas and mining and with LNG-powered shipping plans said it planned to hire 1,500 additional people to support its workforce operating across Australia.

Western Australian LNG operator Woodside and Anglo-Australia commodities company BHP have decided to align their interests in the offshore Scarborough gas field to ease the path to expansion of the Pluto LNG plant on the Burrup Peninsula.

Woodside Petroleum, the Australian operator of two liquefied natural gas plants, said its next earnings statement would recognise a non-cash impairment of $720 million in relation to the Kitimat LNG project and assets in the Canadian Pacific province of British Columbia.

The earnings will be released on February 13 by the company based in Perth, Western Australia. Woodside is operator of the Australian North West Shelf plant and Pluto LNG.

“Kitimat remains a world-class project and Woodside will continue to evaluate actively future development opportunities, including optimisation of gas supply into processing facilities,” said the Australian company.

“However, the impairment reflects increased uncertainty, particularly in the timing of the development of the upstream Liard resource, following sustained depressed gas market conditions in Western Canada,” it added.

Woodside became a shareholder in the Kitimat project in BC after buying a stake from US company Apache Corp. and joining lead developer and operator Chevron Corp. as a shareholder.

However, Woodside Chief Executive Peter Coleman said in 2019 that his company would be willing to reduce its current stake of 50 percent.

Chevron holds the other 50 percent stake in Kitimat LNG and the operatorship of the associated feed-gas reserves.

Coleman said at the time that Woodside did not like holding such a large share in any project when it was not the operator.

He explained that from a capital management and risk management point of view we would rather hold less equity.

The CEO said that in a major project where you are operating, you would like your stake to be between 40 percent and 60 percent equity. 

When you’re a non-operator, anywhere between 20 percent and 40 percent is the right number.

Chevron and Woodside have cooperated for the Kitimat project with the Haisla First Nation on whose traditional land the project at Bish Cove would be constructed.

Feed-gas for the Kitimat liquefaction plant will come from the large upstream shale-gas resources in the 322,000 net acres it has in the Horn River and Liard Basins of northeast BC.

Another nearby project is the Royal Dutch Shell-led LNG Canada joint venture.

Both project sites are almost adjacent and are located about 650 kilometres north of the province’s largest city, Vancouver.

Australian energy company Santos, operator of the Gladstone LNG plant and a stakeholder in two other regional liquefaction and export facilities, confirmed a significant natural gas discovery after a successful appraisal of the Corvus field in the Carnarvon Basin offshore Western Australia.

BHP Billiton, the Australian commodities and energy company, said its prices from the North West Shelf LNG export project in Western Australia increased by more than 36 percent as its shareholders also benefited from the sale of US shale assets in the Fayetteville, Eagle Ford, Haynesville and Permian basins.

The company’s overall LNG prices rose to US$10.19 per million British thermal units in the second half of 2018 compared with US$7.48 per MMBtu in the second half of 2017.

The sales process for BHP’s offloading of its US shale assets was completed at the end of October 2018 with the net proceeds of US$10.4 billion being returned to shareholders.

A US$5.2 billion off-market buy-back of BHP Group Limited shares was successfully completed in December 2018.

“The balance of the net proceeds will be paid on 30 January 2019 as a special dividend of US$1.02 per share,” said BHP in its first-half operational review.

“Production in the first half was broadly in line with the prior period despite planned maintenance and outages,” said BHP Chief Executive Andrew Mackenzie.

“In petroleum, our first appraisal well at Trion in Mexico encountered oil and we added to our exploration options with successful bids for two licences offshore Eastern Canada,” added Mackenzie.

BHP will report its financial results on February 19 and expects several exceptional one-off charges to be made against earnings.

BHP’s natural gas production in countries like Trinidad & Tobago was broadly flat at 206 billion cubic feet.

“This was partially offset by planned maintenance in Trinidad in the December 2018 quarter and natural field decline across the portfolio,” stated BHP.

BHP’s total oil and gas output was little changed year-on-year and amounted to 62,951million barrels of oil equivalent in 2018 versus 63,859 mboe in 2017.

The company’s oil and gas operations include fields in Australia, the Gulf of Mexico, Trinidad & Algeria.

The company also noted that during the previous quarter the Australia Bass Strait West Barracouta gas project was approved.

BHP will contribute an investment of A$200 million (US$143M) and first gas is expected in 2021 to help offset Bass Strait production decline, and to deliver competitive returns.

Its share in the North West Shelf Greater Western Flank-B project in Western Australia to prolong production at the North West Shelf LNG plant amounts to 16.67 percent.