LNG

Temasek, the Singapore wealth fund that recently sold all liquefied natural gas interests to Shell, plans to focus on investing in Chinese companies with large domestic sales sales rather than those that depend on foreign markets.

UK major Shell has confirmed a deal as expected to acquire the liquefied natural gas assets of Pavilion Energy, the natural gas company set up by Singapore’s wealth fund Temasek to give the Asian island state energy security.

UK-based major Shell reported better-than-expected earnings to start 2024 despite lower prices and a decline in LNG sales as the natural gas, oil and chemicals trading units all  performed well.

Shell has joined with the other UK-based major BP to file a complaint with the US Federal Energy Regulatory Commission (FERC) against LNG developer Venture Global claiming the Arlington, Virginia-based company was “illegally withholding information” about delays in delivering LNG from its Calcasieu Pass export plant in Louisiana.

Woodside Energy, the Australian LNG plants operator with overseas assets in the US and Senegal, and UK major Shell are moving forward with separate oil and gas project, the Trion joint venture for Woodside and Shell’s Sparta deep-water development located in the Mexican and US portions of the Gulf of Mexico.

Woodside said it awarded a major contract to Mexican company Eseasa Offshore SA to supply shore base facilities and services for Woodside’s operations supporting the Trion oil and gas project offshore Mexico.

Woodside operates the Gulf of Mexico field, located in a water depth of 8,202 feet (2,500 metres), with a 60 percent stake while state-owned Petroleos Mexicanos (Pemex) holds the remaining 40 percent of the field discovered in 2012.

Support role

“The Mexican owned and operated company demonstrates the great capacity available in-country to support a world-class oil and gas project like Trion,” said Woodside Vice President for Trion Stephane Drouaud.

“It also reinforces Woodside’s commitment to investing locally and ensuring that the economic benefits of our investment in Trion are felt as broadly as possible across Mexican suppliers,” Drouaud stated.

“Eseasa will provide a broad range of services out of its shore base location on the Panuco River coastline The award of the contract is critical as we continue to progress the Trion project toward first oil in 2028,” he added.

Eseasa’s scope of includes shore base infrastructure, operations planning and management for vessel mooring, loading and discharge and freight and material management and dedicated laydown and staging areas.

Shell Offshore Inc., a subsidiary of London-headquartered Shell plc, said a final investment decision has been made the for Sparta field, a deep-water development in the US Gulf of Mexico that represents a “competitive approach” for Shell to simplifying and replicating projects.

Shell and Equinor

Shell Offshore owns 51 percent of Sparta and is the operator and Norway’s Equinor owns the remaining 49 percent.

Sparta is expected to reach a peak production of around 90,000 barrels of oil equivalent per day and currently has an estimated discovered recoverable resource volume of 244 million boe.

Sparta will be Shell’s 15th deep-water host in the Gulf of Mexico and is currently scheduled to begin production in 2028.

“Shell’s latest deep-water development demonstrates the power of replication, driving greater value from our advantaged positions,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.

“This investment decision is aligned with our commitment to pursue the most energy-efficient and competitive projects while supplying safe, secure energy supplies today and for decades to come,” she added.

Shell explained that Sparta was building on more than 40 years of deep-water expertise and marks Shell’s first development in the Gulf of Mexico to produce from reservoirs with pressures up to 20,000 pounds per square inch.

The Sparta development spans four Outer Continental Shelf blocks in the Garden Banks area of the US Gulf.

“Sparta will feature a semi-submersible production host in a depth of more than 1,400m/4,700ft of water, initially with eight oil and gas producing wells,” Shell said.

Shell signed two long-term LNG sale and purchase agreements for the supply of up to 3.5 million tonnes per annum of LNG from Qatar to the Netherlands while also completing the sale of its interests in the Masela block in Indonesia for an LNG project.

July 7 (LNGJ) - Shell Plc, Europe’s largest energy company, has issued a second-quarter 2023 earnings forecast update. The Integrated Gas unit, one of six Shell divisions and including LNG, is set to maintain steady production levels. However, trading and optimisation is expected to be significantly lower compared with a strong first quarter of 2023 “due to seasonality” and fewer optimisation opportunities.

   Shell added that overall Upstream oil and gas output is expected to fall to between 1.650 million barrels of oil equivalent per day and 1.750M boe per day, down from 1.877M boe per day in the first quarter because of “scheduled maintenance, including assets in the Gulf of Mexico, Norway, Malaysia and Brazil”. The company’s refinery utilisation has declined in the second quarter from 91 percent to between 85 percent and 89 percent. Shell publishes its next earnings on July 27.

McDermott, the US energy and liquefied natural gas project engineering company, was awarded an offshore pipeline and installation contract from Shell subsidiary Sarawak Shell for the Selasih natural gas fields pipelay and heavy-lift project off the coast of Sarawak in East Malaysia to help underpin LNG production.

Shell is the operator for the exploration acreage and new fields in the F22 and F27 Selasih area which are part of the Malaysia LNG extension and production sharing contract (PSC).

Nearly all the gas produced offshore Sarawak is supplied to Malaysia LNG and to the gas-to-liquids (GTL) plants in Bintulu.

Analysts note that Shell is still very active in Malaysia and is involved in oil and gas offshore Sabah and Sarawak under about 16 PSCs in which its interests range from 20 percent to 85 percent.

Offshore Sabah, the UK-based major’s local subsidiary operates two producing oil fields, including the Gumusut-Kakap deepwater field, with Shell’s interest 29 percent, and the Malikai deepwater field, Shell interest 35 percent.

However, Shell is even more active offshore Sarawak where it is the operator of eight producing gas fields with Shell’s interest 50 percent.

Among the projects were included the 2019 abandonment of depleted wells for the Serai field and the Saderi fields.

Shell then signed agreements for the extension of the Malaysia LNG PSC using other sources.

McDermott scope

Under the scope of the latest contract with Shell, McDermott said it would perform transportation and installation services for two pipeline segments and one section of flexible pipelay.

McDermott will also provide pre-commissioning works on all infield pipelines and perform the structural installation of three jackets and topsides.

“This is the fourth project we are executing for Shell under the Subsea and Floating Facilities project portfolio, demonstrating the strength of our long-standing relationship,” said Mahesh Swaminathan, McDermott's Senior Vice President for Subsea and Floating Facilities.

The project management and engineering will be executed in Malaysia, leveraging the local expertise.

Offshore installations will be performed using the “DLV2000”, McDermott's versatile heavy lift and pipelay vessel.

“To ensure efficient project delivery, we will draw upon the expertise from our Kuala Lumpur center, which supports the global execution of subsea and offshore projects,” stated Swaminathan.

June 14 (LNGJ) - Shell Chief Executive Wael Sawan told investors in New York in a presentation that Europe’s largest oil and gas company would expand the activities of its leading Integrated Gas division and maintain leadership in the global liquefied natural gas market. Shell also planned to maintain an advantaged position in Upstream to achieve cash flow longevity by stabilising liquids production through 2030.

   “Shell will continue to invest in providing secure supplies of energy while actively working to reduce carbon emissions,” said Sawan. “We are investing to provide the secure energy customers need today and for a long time to come, while transforming Shell to win in a low-carbon future. Performance, discipline and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions while enabling the energy transition,” the CEO stated.

UK major Shell plc reported an increase in net profits for the first three months of the year as liquefied natural gas sales volumes rose by 6 percent on the previous quarter, though were slightly less than the same quarter of 2022.