LNG

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.

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.

TotalEnergies, the operator of the Mozambique onshore liquefied natural gas project, is moving towards re-starting the joint venture once the recommendations of a commissioned humanitarian report are carried out during 2023.

Oil and Natural Gas Corp. (ONGC) of India has delivered a natural gas field in the Krishna-Godavari basin in the Bay of Bengal offshore India’s East Coast with the help of US engineering firm McDermott and the associated consortium.

French major TotalEnergies has pledged to restart the Mozambique LNG project construction in 2022 as it also expanded its Mozambican operations by completing the acquisition of BP’s retail fuel network, wholesale business and fuel import terminals at three of the southeast African nation's ports. 

Indian state company Oil and Natural Gas Corp. (ONGC), whose overseas arm holds a stake in the TotalEnergies-led Mozambique LNG export project, plans to raise by four-fold its domestic exploration and production acreage to find more natural gas and oil in India and cut the bill for imports.

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.

European energy major Total has formally resumed a full work schedule on the Mozambique LNG export project after the government in the southeast African nation improved security arrangements in Cabo Delgado province.

Woodside Petroleum, the Western Australian operator of two LNG export plants, posted a plunge of more than 33 percent in 2020 LNG sales revenues after the roller-coaster price movements in the year of Covid-19.

French major Total SA has changed its name to Total SE on global stock markets to identify as a European rather than a French company just after it confirmed that project financing was in place for the Mozambique LNG project using Area 1 feed-gas in the Rovuma Basin.

“Total has registered with the Trade and Companies Register of Nanterre (near Paris) as a European Company,” said Total.

The new SE addition means “Societas Europaea (SE)”, Latin for European company. The Total name was previously followed by the French term “Société anonyme (SA)” , meaning a public limited company, the equivalent of Plc in English.

“This follows negotiations with employees’ representatives in 25 countries of the European Economic Area,” added Total, which has a global workforce of around 100,000 people.

It noted that members of the Special Negotiating Body for management and unions had approved and signed an agreement relating to the procedures for the involvement of employees in this new European Company.

“The Company will now be listed as Total SE on stock markets trading its shares and American Depositary Shares,” explained Total.

However, its identifying ticker on the Paris Euronext exchange (FP) and New York Stock Exchange (TOT) will remain unchanged.

The shares were last trading at €33.83 per share, down 1.75 percent, and valuing the company at around €88.45 billion ($101Bln).

The change to Total's name was announced as the energy major's Chief Financial Officer Jean-Pierre Sbraire said that he was pleased with the signing of the $14.9-billion senior debt financing agreement for Mozambique LNG.

The joint venture includes the development of the Golfinho and Atum natural gas fields located in Offshore Area 1 concession and the construction of a two-Train liquefaction plant with a total capacity of 13.1 million tonnes per annum.

“The signing of this large-scale project financing, less than one year after Total assumed the role of operator of Mozambique LNG, represents a significant achievement and a major milestone for the project,” declared CFO Sbraire.

“It demonstrates the confidence placed by the financial institutions in the long-term future of LNG in Mozambique,” he added.

“This key milestone has been reached thanks to the dedication of the Mozambique authorities and the financial partners of the project,” stated the CFO.

Total said that the African venture represented a total post-financial investment decision outlay of $20Bln.

“The project financing amounts to $14.9Bln, the biggest ever in Africa, and includes direct and covered loans from eight Export Credit Agencies (ECAs), 19 commercial bank facilities and a loan from the African Development Bank,” Total explained.

The ECAs that participated in the financing included Export Import Bank of the United-States (US-Exim), Japan Bank for International Corporation (JBIC), Nippon Export and Investment Insurance (NEXI), UK Export Finance (UKEF), Servizi Assicurativi del Commercio Estero of Italy (SACE), Export Credit Insurance Corp. of South Africa (ECIC), Atradius Dutch State Business (Atradius) and Export-Import Bank of Thailand (EXIM Thailand).

The Area 1 shareholding has Total as operator with a 26.5 percent participating interest alongside Mozambican state energy company ENH (15 percent).

Japan’s Mitsui & Co. owns 20 percent, India’s ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each hold 10 percent and Thailand’s PTTEP 8.5 percent.