LNG

Empyrean Energy, the UK-listed oil and gas company with interests in Indonesia, China and the United States, reported that an accord containing key terms has been signed for the Indonesian Mako gas field to supply Singapore by pipeline and domestic gas to the Indonesians.

Coro Energy Plc, the London-listed South East Asian energy company with a natural gas portfolio, said a term sheet had been signed with Sembcorp Gas of Singapore for a long-term gas sales agreement for the Mako gas field in Indonesia to supply the Asian city state.

The operator of the Duyung production sharing contract, West Natuna Exploration, a subsidiary of Conrad Asia Energy with a 76.5 percent interest in the Duyung resources, had signed the term sheet with Sembcorp Gas. Coro and another UK-listed company, Empyrean plc, hold 15 percent and 8.5 percent respectively of the Duyung PSC.

“Critically, the term sheet has been endorsed by the Indonesian petroleum upstream regulator (SKK Migas),” said Coro in a statement to the London Stock Exchange.

Analysts noted that gas would supply Singapore through an existing pipeline in competition to the LNG cargoes delivered to the Jurong Island LNG import terminal.

Indonesian plans

The development of the Mako gas project has been in line with Indonesia's stated objective of doubling gas production by 2030.

The Mako gas field was discovered in 2016, and since that time the resource has been delineated through successful appraisal drilling.

It received formal approval from the Government of Indonesia for the revised Plan of Development in late 2022.

Coro noted that it has a 15 percent participating interest in the Duyung PSC.

“The term sheet relates to the sale of Mako gas from start of production until 2037 for a total sales gas volume (100 percent) of 293 billion cubic feet with the potential to increase to 392 Bcf. Gas sales will be priced against Brent oil,” explained Coro.

“Further details of the gas sales agreement will be released to the market once the agreement is executed,” explained Coro.

Endorsed

The company added that the parties were now focused on finalising a definitive gas sales agreement.

“I am delighted to have now secured the GSA Heads at the Duyung PSC, approved by the buyer and, critically, endorsed by the Indonesian authorities,” stated James Parsons, Chairman of Coro.

“This is a critical step in the commercial de-risking of our project, positioning us perfectly for bids from the operator's farm-out process, which we expect to play out shortly,” Parsons added.

May 2 (LNGJ) - Empyrean Energy, the London Stock Exchange-listed oil and gas development company with interests in China, Indonesia and the US, reported progress on a gas sales agreement with a Singaporean buyer for Indonesian gas and the UK company has told the gas field operator and majority stake holder, Conrad Asia Energy, that it would entertain bids for its own 8.5 percent stake.

   “Negotiation of key terms of the Mako gas sales agreement between a Singaporean buyer and the Indonesian upstream regulator, SKKMigas, are expected to be finalised during the second quarter, with Mako being a key strategic gas asset for both countries,” said Empyrean. The Mako gas field is part of the Duyung production sharing contract and is the largest undeveloped gas field in the West Natuna Basin from where gas is exported by pipeline to Singapore.

Pavilion Energy of Singapore has signed a supply agreement with a Chinese joint venture to send small-scale shipments to the eastern Zhejiang province south of Shanghai.

Feb 24 (LNGJ) - Kawasaki Kisen Kaisha (K-Line), the Japanese shipping company, said it was pleased to be the operator of the first Singapore-owned LNG bunkering vessel, the 7,500 cubic metres capacity “FueLNG Bellina”, as it entered service in the Asian port city. The vessel is owned by the FueLNG joint venture comprising Keppel Offshore and Marine and Shell Eastern Petroleum. “We are proud to get involved in this meaningful event through our technical expertise on ship management of liquefied gas carriers,” explained K- Line.

   “Singapore is one of the busiest bunkering locations on the globe. The vessel’s debut is part of the maritime industry’s efforts to reduce emissions of greenhouse-gas,” added K-Line. “LNG enables vessels to emit less GHG when used as marine fuel compared to conventional heavy fuel oils, and having the ‘FueLNG Bellina’ provide LNG bunkering on a ship-to-ship basis in Singapore offers more opportunities to various ship operators to choose a greener marine fuel,” stated K-Line.

Indonesia’s energy regulator has approved the development plan presented by Spanish energy company Repsol to develop one of the Asian nation’s largest onshore natural gas fields that would enable more LNG to be exported instead of being held back for domestic use.

Singapore LNG spot cargo prices dropped by an average of 2.4 percent from last week for Southeast Asia and the Middle East and India, with only North Asian cargoes maintaining values over US$5.000 per million British thermal units for November amid continued over supply.

The Singapore average index for October declined to US$4.192 per MMBtu from last week’s October average of US$4.239 per MMBtu, a drop of 2.6 percent.

Singapore’s latest LNG indices released on August 29 included a price of US$4.070 per MMBtu for southeast Asia for the second half of September, edging up to US$4.090 per MMBtu for the first half of October.

Prices fell as the market remained oversupplied while North Sea Brent crude was still steady at around $61 per barrel.

Southeast Asia cargo prices for the second half of October moved higher to US$4.293 per MMBtu and were highest for the first half of November at US$4.880 per MMBtu.

The Sling is an index series for LNG developed by the Singapore Exchange and its subsidiary Energy Market Company.

It is a spot index for cargoes “on the waters in the vicinity of Singapore which could go into any port” and based on cargo sizes of 135,000 cubic metres capacity to 175,000 cubic metres capacity.

The North Asian price fell by about 2.3 percent to an October average of US$4.425 per MMBtu.

North Asia cargoes for the second half of September were at an average of US$4.288 per MMBtu and were only slightly up for the first half of October at US$4.325 per MMBtu, before increasing again to US$4.525 for the second half of October.

The first half of November price for the North Asia market was down 1.4 percent compared with last week and was quoted at US$5.125 per MMBtu.

The North Asia prices are for delivery ex-ship (DES) to all ports in Japan, Korea, Taiwan and China.

The Dubai-Kuwait-India Sling index for regional cargoes shipped to India and the Middle East averaged US$4.219 per MMBtu for October, down 2.4 percent from last week.

The DKI index, based on a cargo of between 138,000 cubic metres capacity and 170,000 cubic metres, was at US$4.112 per MMBtu for the second half of September and was only slightly up at US$4.114 for the first half of October.

The second half of October DKI price gathered pace to US$4.324 per MMBtu and for the first half of November was short of US$5.00 per MMBtu at US$4.913.

The SGX LNG Index Group (Sling) is an initiative by SGX and EMC for spot LNG price discovery.

It is a benchmark based on assessments of LNG cargo value by market participants. They provide assessments based on the value of an LNG cargo at a specific location for delivery.

The Sling is based on participants submitting assessments to determine an index value.

“The participant pool consists of a broad group of market players to ensure that any Sling Assessment is as representative of actual market conditions as possible,” says the SGX, while pointing out that the participant is kept confidential at all times.

The SGX-EMC LNG prices include both lean and rich cargoes.

However, the Singapore Exchange and the EMC plan to cease publishing LNG prices soon.

The Singapore EMC explained that it would “endeavor to continue publishing the Sling for three months” after the end of July.

The SGX LNG Index Group (Sling) was launched in 2015 in response to expressions of need for a trusted price formation process for Asian LNG.

“However, usage of the Sling indices has remained low,” the SGX and EMC explained.

“Subscribers with linked financial contracts are advised to migrate such contracts to an alternative benchmark or to otherwise account for the Sling’s cessation,” they added.