LNG

Santos, the Australian LNG operator and owner of assets in Papua New Guinea, said it would continue to work through land access, native title, pipeline licensing and the environmental approvals processes to get Narrabri Gas volumes and the Hunter Gas Pipeline ready for a final investment decision and to provide supplies for the East Coast of Australia.

The Narrabri Gas Project is 100 percent committed to the domestic market and could supply up to 50 percent of the natural gas needs of New South Wales.

Santos has maintained that gas produced close to market will always have a cost advantage over gas imported from Western Australia or from overseas and would help to put downward pressure on domestic gas and energy prices for NSW customers.

Gladstone LNG plant operator Santos, based in Adelaide, is developing its own domestic gas volumes called the Narrabri project in NSW and which would supply the largest Australian city Sydney.

The Narrabri project is a coal-seam gas venture located near the state border between Queensland and NSW.

The venture is based on developing the CSG in the northwest of NSW with up to 850 wells and which Santos has always pointed out would be much less expensive than gas from anywhere else.

LNG interests

Santos also operates the Darwin LNG in the Northern Territory of Australia. It additionally has stakes in the Papua New Guinea LNG export plant operated by US major ExxonMobil Corp. and in the expansion project called Papua LNG.

“Santos notes the decision by the Full Federal Court to allow the appeal against the determination by the National Native Title Tribunal that proposed future acts, being the grants of Petroleum Production Lease Application Numbers 13, 14, 15 and 16 for the Narrabri Gas Project, may be done,” said Santos.

“The Court has determined the National Native Title Tribunal erred at law by declining to have regard to evidence on climate impacts that was tendered on behalf of the Gomeroi applicant,” it added.

“The Court did not make any findings in relation to Santos’ conduct. Santos has at all times negotiated with the Gomeroi people in good faith,” it stated.

Santos the attempted to explain that the Court’s orders regarding next steps are yet to be made.

“Santos will continue to engage constructively with the Gomeroi people and work closely with them to ensure their heritage is protected,” the company said.

Santos also hopes that they benefit from the project development, including through training and employment, and involvement in all aspects of cultural heritage protection and management.

While gas is going to be required for decades to come in Europe, the Asia-Pacific region and North Asia, corporate investment in more supply is the only way to ensure reliability and affordability of energy while making the system cleaner. 

China Petroleum and Chemical Corp. (Sinopec), a leading importer of LNG from Australia, the US and Qatar and with expanding import facilities and storage infrastructure, has announced sizeable natural gas and oil flows from a strategic shale project in southwest China.

The Chinese government said the nation had taken formally brought the pipeline and storage assets of the largest energy majors under the newly formed China Oil & Gas Pipeline Network Corp. while paying for the assets and giving the majors stakes in the company.

China National Petroleum Corp. (CNPC), the largest of the majors, said it would sell most of its oil and gas pipelines and storage facilities to China Oil and Gas Pipeline for 268.7 billion yuan ($38.30 billion) and hold a 29.9 percent stake in the new national pipeline and storage company.

CNPC will be the largest shareholder of the Chinese majors in China Oil & Gas Pipeline.

“By interconnecting the country's oil and gas pipelines, the new company will help raise the allocation efficiency of oil and gas resources and ensure safe and stable energy supply,” said a government statement.

The new centrally administered China Oil & Gas Pipeline, also known as PipeChina, was established in December 2019 to be responsible for the investment, construction and interconnection of oil and natural gas pipelines, as well as third-party access to LNG terminals and storage facilities.

China has around 64,000 kilometres (about 40,000 miles) of pipelines carrying natural gas, 27,000km carrying oil and 21,000km carrying petroleum products such as gasoline and jet fuel, according to the most recent figures from China’s main economic planning agency.

Most of the pipelines were owned under the name of CNPC’s Hong Kong-listed affiliate PetroChina.

PetroChina’s dominance of the oil and gas distribution network was seen as having a negative impact on domestic exploration and production as other companies could be blocked or have to pay expensive fees to get their oil and gas to market.

Under its statutes, China Oil and Gas Pipeline is set to offer open access to pipeline networks to approved companies.

Another stake in China Oil & Gas Pipeline will be held by the country's largest oil refiner, China Petroleum and Chemical Corp. (Sinopec) in return for the sale of some of its oil and gas pipeline assets

Sinopec’s transferred pipeline assets are valued at 122.7Bln yuan ($17.48Bln). It will receive a 14 percent stake in China Oil & Gas Pipeline and 52.7Bln yuan ($7.51Bln) in cash.

“Sinopec Natural Gas entered into the agreement on additional issuance of equity and cash payments to purchase assets with PipeChina, pursuant to which Sinopec Natural Gas proposed to transfer equity interests in the relevant oil and gas pipeline companies to PipeChina,” explained Sinopec.

The government statement made no mention of asset transfers from China National Offshore Oil Corp., the nation’s biggest LNG importer, but whose pipeline network delivery assets are much less than those of CNPC and Sinopec.

Analysts said the start of operations by China Oil & Gas Pipeline will have an impact over time on the access of LNG imports to the domestic natural gas network and market, which is still separated into North and South because of still inadequate infrastructure between provinces.

One of its tasks in addition to enabling third-party access to LNG terminals is to improve pipeline flows nationwide and to be an investment vehicle for more natural gas and storage facilities.

That’s as Chinese LNG imports in June jumped 27.8 percent to 5.79 million tonnes, or around 84 cargoes, compared with 4.53MT in June 2019, according to data from the General Administration of Customs.

In the January-June period, the LNG shipments to China increased by 9.9 percent percent to 31.18MT versus 28.37MT in the first half of 2019.

The data also showed that China’s pipeline natural gas imports dropped 15 percent to 2.54MT and fell in the first half by 7.4 percent to 17.18MT.
China imports its pipeline gas from Myanmar, Turkmenistan, Kazakhstan, Uzbekistan and Russia.
China’s main LNG suppliers are Australia, Qatar, Malaysia and Indonesia, while the US has just resumed LNG shipments.