LNG

The Oman LNG bunkering project for the Port of Sohar has advanced with the signing of a series of agreements for an Omani onshore gas field known as Block 10 and involving French major TotalEnergies, the Oman National Oil Company and Shell.

The East African nation of Tanzania has resumed talks with international oil and gas companies on developing substantial offshore natural gas resources for LNG production.

The Energy Minister of Tanzania, January Makamba, said talks had been held with various major oil and gas companies.

“I have started negotiations for the $30 billion Tanzania LNG project. The project will transform our economy,” stated Makamba.

Equinor of Norway, which has ownership of exploration and production licences, said talks with the Tanzanian government were expected to focus on conditions that would enable companies to invest.

“For the past two months, we've worked hard behind the scenes to get here. We're confident that a final investment decision will come sooner than is traditionally the case,” Minister Makamba declared.

The Norwegian company said it was pleased to be engaging and framing the commercial, fiscal, regulatory and legal priorities for any future project in the African country.

Tanzanian President Samia Suluhu Hassan held talks in October 2021 with Royal Dutch Shell Chief Executive Ben van Beurden and the long-planned LNG export project was discussed.

Equinor and Shell and several other companies, including Pavilion Energy, of Singapore, have stakes in the Tanzanian gas fields.

Shell became the operator of blocks 1, 3 and 4 in Tanzania in February 2016 after its takeover of BG Group and has also been working closely with the Tanzanians.

The Block 2 in the same Basin as Shell’s licence area is operated by Norway’s Equinor.

The Basin occupies an offshore area of some 75,000 square kilometres between the Tanzanian continental shelf edge and in water depths ranging from 500 metres to 3,300 metres.

Net contingent resources in the four Blocks are estimated to be at least 20 trillion cubic feet, sufficient to support a three-Train LNG development.

Equinor has a production-sharing agreement with Tanzania Petroleum Development Corp (TPDC) and is the operator with a 65 percent participating interest, while US major ExxonMobil has a working interest of 35 percent in the PSA.

TPDC has the right to participate in any project and would have a 10 percent interest.

Equinor made nine natural gas discoveries in Block 2, one of four explored blocks with proven resources offshore Tanzania.

The Norwegian company had previously said it aimed to work on the LNG project with Shell.

The Peru LNG export plant at Pampa Melchorita on the Pacific Coast has just re-started shipping cargoes in September after a two-and-a-half month shutdown for technical issues and now has been targeted by the Marxist Prime Minister Guido Bellido for possible nationalization.

Tellurian Inc. has finalized yet another liquefied natural gas sale and purchase agreement with Royal Dutch Shell after two previous sealed deals with global commodities firms Gunvor and Vitol.

The Shell SPAs are on a free-on-board (FOB) basis at Driftwood LNG for a combination of 3 million tonnes per annum for a 10-year period, indexed with two indices, the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), each netted back for transportation charges.

The agreements mark the third deal that Tellurian has finalized in 10 weeks, totalling 9 MTPA and nearly all of the capacity of Driftwood LNG’s first two liquefaction Trains.

“Tellurian welcomes Shell to the Driftwood project,” said Tellurian President and Chief Executive Octávio Simões.

“Shell manages one of the largest and most diverse portfolios of LNG in the world,” he added.

Steve Hill, Executive Vice President of Shell Energy said the deal suited the Anglo-Dutch company as LNG demand was expected to nearly double by 2040.

“This deal secures additional competitive volumes for our portfolio by the mid-2020s, enabling us to continue providing diverse and flexible LNG supply to our customers. We look forward to working with Tellurian,” stated Hill.

The Houston, Texas-based company is moving ahead after signing firm deals in late May and early June 2021 with Gunvor and Vitol for a combined 6 MTPA from the Driftwood plant.

Each of the firm agreements is also for a period of 10 years with the supply indexed to the JKM and Dutch TTF.

Simões said that Tellurian would now focus on financing Driftwood to give US engineering contractor Bechtel notice to proceed with construction in early 2022.

The Driftwood project has permits for production capacity of around 27 MTPA. The plant will be sited on the west bank of the Calcasieu River, just south of Lake Charles.

Tellurian has also filed a formal application with the US Federal Energy Regulatory Commission to build a new 37-mile pipeline in Louisiana that will originate near Ragley in Beauregard Parish and end near Carlyss in Calcasieu Parish, close to where the Driftwood facility will be located.

Chevron Corp., operator of the Gorgon and Wheatstone LNG export plants in Western Australia, said it would proceed with other shareholders on the Gorgon joint venture's US$4 billion Jansz-Io compression project.

Qatar Petroleum has received offers for double the equity available to potential partners in the bidding process for the North Field East liquefued natural gas export plant expansion project in the Gulf.

Tourmaline Oil Corp., the Canadian oil and gas company, has agreed a C$1.1 billion (US$904.4 million) deal to purchase Black Swan Energy and boost its assets in the Montney Shale basin, where producers in northeast British Columbia have been heartened by two LNG export projects advancing to ship cargoes to Asia from the Kitimat area.

Pembina Pipeline Corp., the Canadian company that planned the Jordan Cove export project in the US northwest state of Oregon and rejected by the Biden Administration, has teamed up with the Haisla First Nation of native North Americans to pursue the Cedar LNG export venture in British Columbia.

Sakhalin Energy, the operator of the Sakhalin II LNG plant in the Russian Far East supplying four North Asian nations, has started scheduled maintenance at infrastructure facilities and is hopeful of having minimum disruption to exports despite changing loading arms.

“Around 2,500 technical staff from various regions of Russia will be engaged in operations at the facilities,” explained Roman Dashkov, Chief Executive of Sakhalin Energy.

“As part of the shutdown, for the first time in Russia, there will be a replacement of loading arms performed at the LNG jetty of the liquefaction plant,” said the CEO.

The Sakhalin plant has been on stream since 2009 and last year prodcued 10.8 million tonnes of lNG.

However, the joint venture run by Russian natural gas company Gazprom has yet to progress on construction of a long-promised third liquefaction Train at Prigorodnoye on Sakhalin Island.

The main shareholders in the plant are Gazprom with 50 percent, Royal Dutch Shell with 27.5 percent and Japanese company Mitsui & Co. and Mitsubishi with 12.5 percent and 10 percent respectively.

In the past year the Japanese have taken delivery of 51.6 percent of Sakhalin volumes, a further 17.4 percent was shipped to Taiwan, 16.3 percent to South Korea and 14.1 percent to China.

Since the start-up of the plant, Sakhalin Energy has produced and shipped about 130 million tonnes of LNG as of early May 2021 and more than 2,000 cargoes.

The company said that the Russian plant had already begun the maintenance campaign on the PA-B plant, the largest oil and gas production platform of the Sakhalin project.

The PA-B platform is located about 12 kilometres offshore the northeast of the island in waters depths of 32 metres.

“At the platform, it is intended to perform an annual purging of the hydrocarbon multiphase flow separation vessels, a repair of the produced water filters, maintenance of two gas compressors, including a gearbox inspection at one of them, and a number of other maintenance tasks,” explained the company.

The workers would then proceed with the scheduled shutdown of the facilities in the integrated gas chain, including the LUN-A platform.

The Sakhalin maintenance programme is expected to be completed by the start of July.

JGC Holdings Corp., the Japanese energy and LNG engineering group whose current work includes the LNG Canada project and the Coral South floating LNG venture offshore Mozambique, posted lower net sales in the past fiscal year, though adjusted profits increased as it forecast a sector upsurge.