LNG

April 17 (LNGJ) - Woodside Energy, the Australian LNG plant operator, said energy engineering company Wood Plc of the UK, the winner of a tender, would conduct a study on the proposed Greater Sunrise LNG project involving Australia and the nation of Timor-Este. The Timorese would have a more than 56 percent share in the Sunrise LNG venture if it goes ahead while Woodside would hold 33.4 percent and Japanese utility Osaka Gas would have a 10 percent stake.

   “The study will consider the key issues for developing, processing, and marketing gas with a strong focus on delivery of gas to Timor-Leste for processing and LNG sales or the alternative of delivery of the gas to Australia,” Woodside said. The study is scheduled to be completed by no later than the fourth quarter of 2024. The Greater Sunrise gas fields are located 450 kilometres (280 miles) northwest of Darwin and 150km south of Timor-Leste.

McDermott, the US engineering and construction company, and energy and LNG technology company Baker Hughes, have completed the installation of subsea infrastructure at the Ichthys gas field in northern Australia linked to the liquefaction plant operated by Japan’s Inpex Corp.

The contract was awarded to a McDermott and Baker Hughes consortium in 2019 by Inpex, the operator of the Ichthys project at Badin Point near Darwin in Australia’s Northern Territory.

Ichthys LNG has as additional shareholders French major TotalEnergies and the Australian subsidiaries of CPC Corp. of Taiwan, and Japanese utilities an importers Tokyo Gas, Osaka Gas, Kansai Electric Power, JERA and Toho Gas.

Key LNG producer

Ichthys LNG has nameplate capacity of 9.3 million tonnes per annum LNG and 1.65 million tonnes of liquefied petroleum gas per annum along with more than 100,000 barrels of condensate per day at peak output.

The McDermott-Baker Hughes subsea infrastructure development project included engineering, procurement, construction and installation (EPCI) of umbilicals, risers and flowlines (URF), a subsea production system comprised of a new 7-inch (approximately 18 centimetres) vertical Ichthys LNG planthristmas tree (VXT) system.

McDermotts said this is all part of forming a subsea well gathering system (GS4) tied back to the existing the “Ichthys Explorer “central processing facility.

The consortium’s scope of work also included an in-fill URF EPCI involving the development of new subsea wells tied-in to the existing gathering systems.

“The McDermott and Baker Hughes partnership has been marked by resilience and adaptability, guided by our firm commitment to deliver for the INPEX-operated Ichthys LNG and Australia,” said Mahesh Swaminathan, McDermott’s Senior Vice President, Subsea and Floating Facilities.

Engineering capabilities

“Together, leveraging McDermott’s unique end-to-end EPCI capabilities and Baker Hughes’s subsea development solutions, we navigated project complexities and overcame the unique challenges posed by the pandemic,” Swaminathan explained.

“Our hard work paid off, and I would like to thank our teams in Perth (Australia), Batam (Indonesia), and beyond, whose collective efforts enabled the safe completion of this important work scope,” Swaminathan added.

Romain Chambault, Baker Hughes Senior Vice President, Subsea Projects and Services, said the completion was achieved through the successful partnership between Baker Hughes and McDermott to execute the project for Inpex.

“The amount of collaboration shown between the consortium has been truly unique and serves as an industry benchmark for the successful execution of large, complex EPCI subsea projects,” Chambault stated.

Japanese liquefied natural gas imports dropped almost 19 percent in April even as cargo numbers remained stable from Australia but declined from other regions as milder weather and higher energy storage curbed demand for LNG cargoes as well as thermal coal.

Japan, which formally took back the World No. 1 LNG importer spot from China in 2022, reported a small rise in LNG shipments in January though at a much higher cost than in the prior-year period.

Imports for January amounted to 6.82 million tonnes, or about 100 cargoes, and an increase of 0.5 percent from the 6.78MT received in January 2022, according to Japan's Finance Ministry.

The imports cost 873.8 billion yen ($6.54Bln), which was 57 percent more than the 556.6Bln ($4.16Bln) cost of shipments in January 2022.

While China’s LNG imports dropped by 18.8 percent to 64.15MT, the official Japanese LNG import volumes for 2022 came to 71.99MT compared with 74.31MT in 2021, showing a fall of 3.1 percent but still enough to essily maintain the lead over China.

China had overtaken Japan in 2021 to become the world’s largest LNG importer with 78.93MT of imports, though then slipped back because of the economic slowdown and Covid-19 restrictions affecting energy demand.

Japan’s annual LNG costs jumped by 97.5 percent to 8.55 trillion yen ($64.34Bln) in 2022.

Monthly LNG imports for December 2022 to Japan’s network of 37 terminals had fallen by 13.8 percent to 6.06MT from 7.03MT in the same month of 2021.

Coal imports

Japan continued to use an increased proportion of thermal coal for electricity generation and the January coal imports rose by 1.3 percent from January 2022 to 10.68MT.

LNG cargo deliveries from Asian countries like Malaysia and Indonesia increased in January by 17.8 percent to 1.88MT.

Middle East cargo imports rose by 24.1 percent to 787,000 tonnes during the month.

LNG imports from the US tumbled by 73.9 percent year-on-year to 90,000 tonnes as cargoes from American export plants were pointed at Europe.

Imports from Russia declined on the month by 9.7 percent to 704,000 tonnes and cost 78.6Bln yen ($589M) for what amounted to 11 cargoes.

The cost to Japan of Russian deliveries for all of 2022 was 82.4 percent higher than in the previous year with the bill from the Russians coming to 677.5Bln yen ($5.24Bln).

Japan continues its deliveries of LNG from the Russian Far East plant at Sakhalin Island even after the invasion of Ukraine in February 2022 as energy security outweighed the Western-led imposition of sanctions against Russia on the energy and financial fronts.

The balance of Japan's LNG imports in January amounted to 3.86MT in the form of deliveries from the country’s largest supplier Australia, some spot cargoes and small volumes from Africa.

In its energy mix in 2022, Japan has continued to delay more nuclear power re-starts meaning that volumes of LNG and coal purchases remain high.

Since the Fukushima disaster, only 10 reactors have been given the go-ahead to go back into operation compared with the 54 that were online in 2011 and which supplied around 30 percent of Japan’s energy needs.

A further 21 reactors have been decommissioned since 2011 and will never be re-started.

Osaka Gas, the Japanese utility and liquefied natural gas buyer, reported increased net sales for the first nine months of the fiscal year, though posted losses blamed on the June 2022 fire at the US Freeport LNG export plant.

The company, which is part of the Daigas Group, said nine-month 2022 sales to the end of December increased to 1.59 trillion yen ($12.16Bln), a rise of 536.4Bln yen ($4.8Bln) over the same period of the previous fiscal year.

“This was primarily due to an increase in sales from a rise in the LNG selling prices and the higher unit selling price of city gas under the fuel-cost adjustment system in the domestic energy business and an increase in sales from the upstream project in the USA and Australia in the International Energy Business,” said Osaka Gas.

However, Osaka Gas whose President is Masataka Fujiwara, said ordinary profits decreased by 78.5Bln ($597 million) to a year-on-year nine-month loss of 6.8 billion yen ($51.8M).

Profit attributable to owners of parent company fell by 56.5Bln yen ($430M) to a net loss of 1.3Bln yen ($9.9M).

“A fire broke out at the liquefaction plant of the Freeport LNG project, one of the Daigas Group’s investments and LNG sources and the project’s operations at the plant have been suspended since,” said Osaka Gas in its earnings report.

Replacement cargoes

“In response to the shutdown, we have been preparing to secure replacement LNG for the volumes the Group originally planned to procure from the project during the shutdown period and has been arranging modification regarding the contracts related to its LNG procurement from the project,” added Osaka Gas.

The utility said that considering recent trends in its performance and other factors, the company has increased its full-year sales forecast to the end of March 2023 but will forecast a loss on the problems at Freeport.

“Net sales are expected to exceed the previous forecasts mainly due to the rise in the unit selling price of city gas under the fuel cost adjustment system,” it added.

It additionally expects operating profits and ordinary profits to remain unchanged from the previous forecasts.

“This means they will feel the negative impact, including increases in costs and losses associated with the fire at the liquefaction plant of Freeport LNG, but offset by positive impacts, including an increase in profits from city gas caused by the improvement of our long-term LNG contract competitiveness,” explained Osaka Gas.

Osaka Gas said the revised full-year earnings forecast to March 2023 includes the estimated negative impact of around 149.5 billion yen ($1.14Bln) due to costs, losses and a  revenue decrease associated with the Freeport fire.

Freeport LNG has provided an update on its re-start plants stretching into the first quarter of 2023  because of repairs and production and operational changes.

Osaka Gas, the Japanese utility and LNG importer, has reached an agreement with trading house and LNG sector participant Marubeni Corp. and Peru LNG for a feasibility study on the production of synthetic methane (syngas) in the South American nation.

The US Freeport LNG plant in Texas now estimates that the resumption of partial liquefaction operations following the June 8 fire will be early October 2022 and with a year-end target for the resumption of full production.

An investigation is under way into the explosion at the Freeport liquefied natural gas export plant at Quintana Island in Texas that could reduce US Gulf Coast cargo shipments for up to three weeks, though the overall damage was now said to be limited.

Osaka Gas, the Japanese utility and one of the nation’s top six LNG importers, said its engineering subsidiary was awarded a contract for the large expansion project at the Tai-Chung LNG import terminal in Taiwan.