LNG

June 13 (LNGJ) - Beach Energy, the Australian exploration and production company and recent LNG player, has successfully connected the Enterprise natural gas field located just offshore Port Campbell in the state of Victoria to the Otway Gas Plant, with first sales gas delivered on June 12, 2024.

   Beach signed a Gas Sales Agreement (GSA) to supply utility company Origin Energy with gas from the Enterprise field until the end of 2026. “First gas from the Enterprise field is a significant milestone in Beach’s target of delivering a material increase in production and free cash flow over the next 12 months,” said Chief Executive Brett Woods, whose company also has a stake in the gas and LNG project onshore the Perth Basin in Western Australia.

Beach Energy Ltd, the Australian company involved in the Waitsia LNG export project in the onshore Perth Basin of Western Australia and in other natural gas ventures in South Australia and New Zealand, posted a fiscal first-half loss as it awaited major project completions.

Australia's Origin Energy, whose shareholders in December 2023 rejected a takeover by North American private equity firms, reported solid quarterly revenues from Australia-Pacific LNG in Queensland as domestic electricity and gas sales also rose in power markets.

Australian regulators and constantly shifting government energy policies are causing extensive delays that endanger the completion of the A$18.7 billion (US$12.25Bln) takeover of Origin Energy by a North American consortium of investment funds and with a resultant side-deal also giving Saudi Aramco access for the first time to the liquefied natural gas sector.

Saudi Energy Minister Prince Abdulaziz bin Salman said Saudi Arabian Oil Co., known as Saudi Aramco, has made two large natural gas field discoveries after recently also entering the LNG sector while additionally starting output in a Saudi shale gas basin called South Ghawar.

Saudi Arabia, which is buying LNG assets for the first time through Saudi Aramco, said that recent multi-billion dollar agreed acquisitions during October by US oil majors ExxonMobil Corp. and Chevron Corp. for Pioneer Natural Resources and Hess Corp. respectively for combined sums of more than $112 billion in stock proved that hydrocarbons were “here to stay” in the global energy future.

“Exxon and Chevron didn't buy because they want to have stranded assets,” said Saudi Energy Minister Prince Abdulaziz bin Salman at Riyadh's annual Future Investment Initiative (FII) conference and added that the US combinations for oil and gas could not have come at a “better time” for the industry.

The US takeover deals have drawn criticism from environmentalist activists who regard the merger and acquisition activities as undermining ambitious climate change aims that are increasingly costly and are beginning to affect energy security requirements of nations.

Aramco LNG

Saudi Aramco, the world’s largest oil production group, has signed definitive agreements to acquire a strategic minority stake in a company called MidOcean, a unit of Washington DC-based equity fund EIG for $500 million and thus entering the LNG sector initially in Australia.

Prince Abdulaziz said in the Riyadh's speech that the energy transition would require hydrocarbons including petrochemicals which are vital for sectors such as pharmaceuticals and industry manufacturing.

The International Energy Agency (IEA) argued in its World Energy Outlook issued on October 24 that world fossil fuel demand was set to peak by 2030 as more electric cars were being purchased and China's economy was forced to grow more slowly amid changes centred on renewable energy.

The IEA's forecasts run counter to those of the Organization of the Petroleum Exporting Countries (OPEC), which sees oil demand rising long after 2030 and which would require trillions in new oil sector investment.

Saudi Arabia is the world's biggest oil exporter and intends to increase its oil production capacity by 1 million barrels per day to 13 million barrels per day by 2027 to meet increasing global demand.

Future oil demand

“We are investing not to create a stranded asset. Saudi Arabia would not be investing in raising its capacity if there was not sufficient demand for additional production,” he added.

Analysts noted that the US takeovers by ExxonMobil and Chevron have also focused on US shale oil and natural gas assets and have re-evaluated them upwards.

The Chevron and ExxonMobil deals have increased portfolio assets in premier US shale basins like the Bakken in North Dakota and the Permian in Texas

Other assets that will be acquired when the deals are approved include oil and gas blocks in South America and the Gulf of Mexico.

Hess’s Bakken assets added another leading US shale position to Chevron’s DJ basin and Permian basin operations and will further strengthen US domestic energy security.

In ExxonMobil’s case it agreed to pay an 18 percent premium for Pioneer’s prized assets relative to its share price.

The acquisition of Permian acreage by ExxonMobil provides shale oil, natural gas and liquids for the global and US markets as well as growing LNG feed-gas volumes from associated gas.

The Australian regulatory and competition watchdog has waved through the A$18.7 billion (US$11.9Bln) buyout of Origin Energy by a North American consortium and with a resultant side-deal also giving Saudi Aramco access for the first time to the liquefied natural gas sector.

Saudi Arabian Oil Company (Saudi Aramco), the world’s largest oil production group, has signed definitive agreements to acquire a strategic minority stake in MidOcean Energy for $500 million and thus enter the liquefied natural gas sector initially in Australia.

Australia is considering extending the life of the country’s largest coal-fired power plant located in the state of New South Wales and owned by Australia-Pacific LNG stakeholder Origin Energy because of concerns over energy security.

Origin Energy, the Australian upstream supplier to the Australia-Pacific LNG export plant in Queensland facing a A$18.4 billion (US$12.3 billion) buyout offer from a two-firm consortium led by Canada's Brookfield Asset Management, said the due diligence on the deal was largely completed.

Origin said in a statement to the Australian Securities Exchange that it was continuing its “active engagement” with Brookfield and consortium partner MidOcean Energy, an LNG company formed and managed by US-based energy investor EIG.

“Origin advises that the Consortium has substantially completed due diligence and active engagement continues on a non-exclusive basis in relation to the submission of a binding proposal,” said Origin.

The Sydney-based company noted that any binding proposal would be subject to a number of conditions, including approval by Australian regulators.

“At this stage, shareholders do not need to take any action and Origin will continue to keep shareholders updated in accordance with its continuous disclosure obligations,” said the company.

Origin’s business comprises Integrated Gas with its feed-gas sales to Australia-Pacific LNG and a utilities and domestic power markets unit, the Energy Markets division.

This is made up of retail and wholesale electricity sales and natural gas supplies to the states of Queensland, New South Wales, Victoria and South Australia.

Targeted

The bid for Origin from Brookfield comes after its offer in 2022 to buy Australia's leading utility, AGL Energy, was rejected.

The Origin buy-out proposal was made through the Brookfield Global Transition Fund, which is co-run by Mark Carney, the former Governor of the Bank of England.

Under the proposal to acquire Origin, Brookfield would take over the company’s Energy Markets business, while MidOcean Energy, in the form of EIG, would take control of Origin's Integrated Gas business, including its 27.5 percent stake in APLNG.

The APLNG plant stake that would go to EIG’s MidOcean under the Origin buy-out is a supplier to China and one of its shareholders is China Petroleum & Chemical Corp, known as Sinopec.

Origin is the main upstream operator for coal-seam gas supply to the facility while US major ConocoPhillips is the plant operator.

APLNG came on stream in 2016 and has two liquefaction Trains with total nameplate capacity of around 9 million tonnes per annum with about 7 MTPA going to China.

The plant sits alongside two other CSG-to-LNG facilities on Curtis Island, the Shell-run Queensland Curtis LNG plant and the Gladstone plant, operated by Santos.