LNG

Moody’s Investors Service, the US ratings agency, said in a report into liquefied natural gas that Chinese demand in 2024 will be similar to last year and while European gas markets remained resilient the region’s reliance on LNG could increase price volatility.

The North Sea Transition Authority (NSTA), the UK Government agency for oil and natural gas, has expressed concern about the slow pace of North Sea development plans that may mean more future demand for liquefied national gas, pipeline gas and oil imports for the UK to avert an energy crisis.

Denmark, the pipeline natural gas and power market player involved in LNG trading and a bridge supplier of gas to Poland on the Baltic Pipe, has opened a “mini tender round” for interested oil and gas companies who can apply for a licence for a concession in the North Sea.

European Union liquefied natural gas prices dropped again as EU storage builds hit their highest level of the season so far as milder weather swept across the continent and gas demand declined along with pipeline gas flows from Norway, while LNG cargo deliveries toNorth Asia were steady.

Asian spot liquefied natural gas prices fell and European wholesale values declined by a bigger margin as the early European Union gas storage build continued at a steady pace, while German import volumes dropped off and China’s deliveries increased.

The UK said that flaring during offshore production of oil and gas in the North Sea has been cut in half following four consecutive years of reductions aimed at cleaner production methods even as the nation has become a higher net importer of natural gas as LNG and pipeline deliveries from Norway.

TechnipFMC, the US oil and gas services company based in Houston, was awarded an engineering, procurement, construction and installation contract by UK major Shell plc for the Jackdaw gas development in the UK North Sea to help offset rising LNG imports.

The company said the contract, whose value was not disclosed, covered pipelay for a 30 kilometres tieback from the new Jackdaw platform to Shell’s Shearwater platform, as well as an associated riser, spool-pieces, subsea structures and umbilicals.

The tieback will use pipe-in-pipe technology, which is designed for high-pressure, high-temperature usage.

“We’re excited to embark on this significant project together in the UK North Sea,” said Jonathan Landes, President, of Subsea at TechnipFMC.

“Our strong technical record and our ability to design, engineer, construct and install were key to our success in winning this award,” stated Landes.

Shell in the UK took the final investment decision in July 2022 to develop the Jackdaw gas field following regulatory approvals granted earlier in the year as European countries tried to underpin their domestic supplies hit by the Russian war in Ukraine that led to sanctions.

Development plan

The Jackdaw field is located about 250 kilometres (155 miles) east of Aberdeen, Scotland, and is adjacent to the UK-Norway median line.

The field is 100 percent owned and operated by an affiliate of Shell UK which became part of the Shell group of companies in 2016 after BG Group was taken over.

The Jackdaw development consists of a new Wellhead Platform (WHP), four production wells and the 30km pipeline from the Jackdaw WHP to the Shearwater gas hub.
Peak production from the field is estimated at 40,000 barrels of oil equivalent per day.

Shell said that the UK North Sea remained one of Shell’s core Upstream positions, attracting capital to high margin hydrocarbon projects that can be resilient to commodity price cycles.

The gas from the Jackdaw field will come ashore at the St Fergus gas terminal in Scotland.

The project is expected to come on stream by 2025 and at peak production rates could represent over 6 percent of projected UK North Sea gas production in the middle of this decade.

Shell has said that the Jackdaw gas field was part the company’s broader intent to invest up to £25 billion ($30Bln) in the UK energy system in the next decade.

The company added at the time that the St Fergus terminal that will handle the Jackdaw gas will also be part of the development of the Acorn Carbon Capture and Storage project, which will aim to sequester carbon dioxide from industrial clusters in Scotland, the UK and northern Europe.

While imports of liquefied natural gas to the European Union and the UK are increasing in January, none of the natural gas is ending up in Germany because there is no LNG infrastructure even amid various plans spanning almost 10 years.

Liquefied natural gas spot demand for North Asia showed little signs of declining much through the North Hemisphere winter into 2022 as overall cargo liftings rose and European gas benchmarks lost further ground compared with the Pacific Basin amid a more than 5 percent drop in crude oil prices.

European natural gas prices fell back from record highs of the past week while North Asian spot cargo values moved higher as spot shipping charter rates soared, while crude oil increased every day this week to boost long-term LNG contract prices.