LNG

MidOcean Energy, the LNG assets company formed and managed by global infrastructure investor EIG, said Japanese trading house Mitsubishi Corp. had made a strategic investment.

EIG is a leading institutional investor in the global energy and infrastructure sectors with around $23 billion under management and also announced on March 28 that it had completed the acquisition of the portfolio interests in Australia of Tokyo Gas.

Mitsubishi has been an active player in the LNG sector for over 50 years and is involved in 12 projects, including the LNG Canada venture that comes on stream soon in the province of British Columbia.

The Japanese company made the investment In MidOceam to develop its clean-energy portfolio while fulfilling its responsibility as a stable energy supplier to Japan.

EIG’s MidOcean said that Mitsubishi’s investment, the details of which were not disclosed, deepened MidOcean’s blue-chip base and builds on its “significant momentum” since launching in late 2022.

Blue-chip investors

“We are thrilled to have Mitsubishi join as an anchor investor,” said De la Rey Venter, Chief Executive of MidOcean.

“Mitsubishi has been a pioneer of the global LNG industry and has consistently demonstrated its expertise and foresight in identifying valuable opportunities,” Venter added.

“Their investment is a testament to the strong fundamentals of the LNG market and MidOcean’s strategy to create a competitive long-term growth platform in LNG,” stated the MidOcean CEO.

R. Blair Thomas, EIG’s Chairman and CEO, said he welcomed a strategic partnership with a company such as Mitsubishi.

“The world’s energy transition needs are contributing to rapid growth in global LNG demand, and we look forward to continuing to execute on this attractive and important opportunity,” added Thomas.

Tokyo Gas deal

MidOcean’s recent completion of the acquisition of the Tokyo Gas assets in Australia gives it stakes in the Chevron-operated Gorgon LNG, the Pluto LNG project run by Woodside Energy and the Shell-operated Queensland Curtis LNG venture.

As part of the transaction, MidOcean said it would open an office in Perth in Western Australia to support and oversee the projects.

EIG is headquartered in Washington DC and also has offices in Houston, Texas, London, Sydney, Rio de Janeiro, Hong Kong and Seoul.

For the completion of the MidOcean-Tokyo Gas deal Barrenjoey, Barclays and JP Morgan acted as financial advisors to EIG and MidOcean in connection with the transaction.

White & Case acted as legal advisor to EIG and MidOcean.

EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds around the world.

Elixir Energy Ltd, the Australian-listed exploration and production company, has provided an update on the extended pilot production project underway in its 100-percent owned Nomgon coalbed methane (CBM) production sharing contract in the South Gobi Basin of south Mongolia near the Chinese border.

Elixir said that the Bluebill-1S exploration well has been the first drilled in the 2023 exploration drilling campaign.

The well is situated 18 kilometres (11 miles) East of the Nomgon Pilot Production Plant.

“Operations at the Nomgon extended pilot test continue. Water flow-rates at Nomgon remain steady at 130 barrels per day,” Elixir explained in its report filed with the Australian Securities Exchange.

“Gas flow rates are currently variable as we experiment with choke size, casing pressure and fluid level to optimise coal depressurisation,” added Adelaide-based Elixir.

“A location for an additional pilot well has been identified and the relevant environmental and other approvals are being pursued,” it said.

The company also owns gas assets in Queensland which pioneered LNG production from CBM, known in Australia as coal-seam gas (CSG).

Fuel potential

Analysts note that the Elixir project could at some stage add small-scale liquefaction for future production of LNG fuel with a nearby customer base of a major road for fleets of heavy-duty trucks delivering Mongolian coal to China.

“The appraisal drilling campaign planned at Big Slope and Yangir is due to commence shortly, with both Major Drilling and Erdenes Drilling assisting Elixir in this program,” Elixir said.

“The company’s previously announced nine-well CBM drilling campaign for 2023 and accordingly remains on track,” it added.

“At Elixir’s direction, drilling contractors have significantly improved their drilling capability for the 2023 program, with all rigs now incorporating enclosed mud systems which should assist in increasing penetration rates and stabilising the holes,” Elixir stated.

Elixir’s Managing Director, Neil Young, said he was pleased to commence the exploration drilling campaign in what are now “excellent” weather conditions and appraisal drilling would also start soon.

“Later this year we aim to also see the company’s operations add drilling in Australia for the first time. We are very much looking forward to the multiple sources of potentially very positive news flowing from all of these activities,” stated Young.

Elixir also has contingent resources booked in the Grandis Gas Project in Queensland.

Australian LNG exports reached a new record of 81.4 million tonnes in 2022 and the export revenue increased by 86 percent year-on-year to A$92.8 billion (US$63.4Bln) in the 12 months to the end of December because of much higher prices and Australia appeared to tie in volume terms as World No. 1 exporter along with Qatar and the US.

Origin Energy, the Australian upstream supplier to the Australia-Pacific LNG export plant in Queensland, saw its shares up 35 percent higher on November 14 as investors considered Origin’s backing for an A$18.4 billion (US$12.3 billion) buyout offer from a two-firm consortium led by Canada's Brookfield Asset Management.

Export earnings from Australia’s 10 liquefied natural gas export facilities with nameplate capacity of 88 million tonnes per annum are expected to surge to A$50 billion (US$36Bln) in the current fiscal year from A$30Bln last year as oil-linked contract prices surge.

TotalEnergies has completed a transaction in Australia with the US equity fund Global Infrastructure Partners in relation to the downstream facilities of the Gladstone LNG project in Queensland for a sum of more than US$750 million.

The downstream assets are owned by TotalEnergies subsidiary Total GLNG Australia (TGA).

“As part of this transaction, GIP will receive a throughput-based tolling fee calculated on TGA’s share of gas processed through the downstream facilities over a period of 15 years,” explained TotalEnergies.

TGA retains full control and ownership of its 27.5 percent interest in the Gladstone LNG downstream joint venture.

“We have worked closely with GIP to achieve this infrastructure transaction and are happy of this first collaboration with such an experienced infrastructure partner,” said Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies.

Monetization

“This monetization of infrastructure assets contributes to focusing further TotalEnergies’ capital on core producing assets,” he added.

The Gladstone LNG plant, operated by Adelaide-based Santos, is one of three coal-seam-gas to-LNG ventures on Curtis Island near the port of Gladstone.

The other GLNG project partners are Malaysian oil and gas company Petronas and Korea Gas Corp

The integrated LNG project consists of CSG gas wells producing feed gas from the Fairview, Arcadia, Roma and Scotia fields, located in the onshore Bowen-Surat Basin in Queensland.

The GLNG plant and the neighbouring Shell-operated Queensland Curtis facility and the ConocoPhillips-run Australia-Pacific plant ship cargoes to Asia, mainly China, South Korea and Japan.

The GLNG project includes pipeline transportation of the CSG over a distance of around 400 kilometres to the liquefaction plant.

The plant, which has been on stream since 2015, consists of two Trains with a total nameplate capacity in excess of 7.8 million tonnes per annum. 

Australian LNG plant operator Santos and Italian oil and gas company Eni have signed an accord to cooperate on liquefied natural gas and other opportunities in northern Australia and in and around the former Portuguese colony of East Timor, now known as Timor-Leste.

“The areas of cooperation include assessing the synergies of sharing possible infrastructures associated with gas field developments around Barossa and Evans Shoal, the pipeline to Darwin and onshore associated gas processing leading to LNG expansion developments,” said a joint statement.

Other areas of Eni-Santos cooperation include the possible development of the Petrel and Tern gas fields through Blacktip-Yelcherr gas plant facilities.

“As I said when I was in Darwin to announce our FID decision for Barossa, we have approval for two more Trains at Darwin LNG and we are open to third-party gas opportunities,” said Santos Chief Executive Kevin Gallagher.

Their memorandum of understanding (MOU) includes investigating options to re-purpose the Bayu-Undan gas field facilities in the Timor Sea to extend the life of the project, including a carbon-capture and storage venture, subject to the agreement of the Timor-Leste government.

Gallagher said the MOU built on the momentum for the development plans for northern Australia following the final investment decision taken by Santos on the Barossa gas and condensate project to give a life extension to the Darwin LNG for the next 20 years.

Santos now operates the Darwin plant, as well as the Gladstone LNG facility in Queensland, after acquiring the North Australian assets of US major ConocoPhillips.

“Eni are already a highly valued partner in the Bayu-Undan project and this MOU strengthens our collaboration and cooperation,” added Gallagher.

“CCS opportunities at Bayu-Undan are extremely exciting for Santos and Eni and today we are saying, we would like to be open for business to take your CO2,” declared the Santos CEO.

“In 2019 the London Convention was amended to allow CO2 to be transported across jurisdictions to enable the establishment of storage hubs,” Gallagher explained.

“The CCS project at Bayu-Undan could provide a new job-creating and revenue-generating industry for Timor-Leste with quality carbon credits increasing in both demand and value internationally,” added the statement.

The CCS facility could capture and store CO2 from industries in Australia’s Northern Territory and help it meet its net-zero emissions by the 2050 target date.

“That’s good for the environment, good for local jobs, good for local investment and good for regional development,” stated Gallagher

A Trans-Australia natural gas pipeline is back on the agenda with supplies being transported from Western Australia to the East Coast instead of, or in addition to, developing LNG import infrastructure and has renewed talk about the undeveloped onshore Australian resources rivalling the US Permian Basin.

Origin Energy, the Australian utility and shareholder with China’s Sinopec and ConocoPhillips in the Australia-Pacific LNG plant in Queensland, said revenues dropped during the quarter, driven by lower realised prices for long-term LNG and it was cutting back on coal-seam feed-gas output because of subdued demand.

Origin Energy, the Australian utility and shareholder with China’s Sinopec and ConocoPhillips in the Australia-Pacific LNG plant in Queensland, will log asset impairments of about US$840 million, including on a US contract with Cameron LNG in Louisiana.