LNG

Strike threats at Inpex-operated Ichthys LNG terminal from May 27 leave Japan most vulnerable, given its heavy reliance on contracted Australian supply. Around 70% of the LNG from the 9.3 mtpa Ichthys facility in Darwin is sold to Japanese offtakers, notably JERA, Kansai Electric, Kyushu Electric, Osaka Gas, Toho Gas, and Tokyo Gas.

Numerous Japanese utilities have withheld full-year earnings guidance as the Middle East conflict drives up LNG costs and clouds fuel supply. Bloomberg reported that Asian LNG prices have surged 70%, exemplifying how exposed Japan’s power sector remains to the global gas market.

Japanese largest city gas supplier Tokyo Gas has agreed to procure 1 mtpa of LNG from Venture Global for a 20-year tenure, starting 2030. The deal brings Venture Global’s new long-term commitments signed this year to nearly 8 mtpa, CEO Mike Sabel said in a statement.  

First gas received at Santos’ BW Opal floating production storage and offloading (FPSO) vessel puts the Australian major on track with the Darwin LNG project, CEO Kevin Gallagher said. Situated off Darwin, Northern Territories, the FSPO receives gas from the Barossa gas wells.

First Gen is divesting 60 percent of its Philippine gas business to Prime Infra in a deal worth 500 billion Pesos (US$890m), covering controlling interests in BW Batangas FSRU, the proposed 1.2 GW Santa Maria power plant as well as the Santa Rita, San Sorenzo and Avion power plants (1,597 MW combined).

Santa Maria, a 1,200 MW combined-cycle power plant, will be fuelled via an interim offshore LNG terminal which is also part of the divested assets. Tokyo Gas had been contracted to supply an LNG cargo to First Gen in July 2024 which had been unloaded at the BW Batangas floating storage and regas unit (FSRU).

First Gen confirmed at the time it closed a tender for a cargo by awarding a contract to Tokyo Gas. Similar contracts were signed earlier with Shell Eastern LNG, Trafigura, TotalEnergies Gas and Power Asia and CNOOC Gas and Power Trading. The regasified LNG is designated for the First Gen Clean Energy Complex, comprising the Santa Rita, Avion and San Gabriel power plants.

The 1 GW Santa Maria CCGT used to supply baseload and mid-merit power to the Luzon grid. The Sta. Maria CCGT was initially meant to enter operations by the end of this year or early 2025, but the timeline slipped and First Gen now decided to divest its gas power assets altogether.

Following the sale, Prime Infra will hold the lion’s share of 60% in the Batangas-based gas power plants, with First Gen retaining the remaining 40%. The same equity split will apply to the LNG terminal, while Tokyo Gas of Japan will continue to hold a 20% stake.

Prime Infra already owns Prime Energy, the operator of the vast but depleting Malampaya gas field, which used to be a critical source of fuel for Luzon’s power generation.

First Gen Chairman and CEO Federico Lopez haled the deal as a “major step in our mission to forge collaborative pathways toward a decarbonized and regenerative future.” The partnership is meant to provide First Gen with more financial leeway to pursue its renewable energy projects.

As the largest renewable energy producer of the Philippines, First Gen covers about 18% pf the country’s electricity supply. Both First Gen and the media company ABS-CBN belong to the Lopez group of companies.

Chevron has sold a 70% stake in its East Texas gas assets to an affiliate of TG Natural Resources (TGNR), owned by Tokyo Gas and Castellon Commodities International for $525 million, with $75 million paid in cash and $450 million as capital carry to fund Chevron’s Haynesville development.

The transaction is anticipated to generate over $1.2 billion in value to Chevron at current Henry Hub prices, to US oil major said in a statement.

“This transaction supports Chevron’s previously announced plans to divest $10-15 billion of assets by 2028 in order to optimize its global energy portfolio,” the US oil major said in a statement.

Upon closure of the deal, Chevron will retain a 30% non-operated working interest in a joint venture with TGNR and an overriding royalty interest in the assets.

June 14 (LNGJ) - TotalEnergies has agreed to sell its wholly-owned subsidiary in LNG producing nation Brunei to the Hibiscus Petroleum group, a Malaysian independent oil and gas player, for $259 million. The transaction is expected to close in the fourth quarter of 2024. The Sultanate of Brunei on the island of Borneo has been an LNG exporter since 1973 and the shareholders are the Brunei Government, Shell and Japan’s Mitsubishi Corp.

   Present in Brunei since 1986, TotalEnergies operated the Maharaja Lela-Jamalulalam field, located in the offshore Block B. The field’s average production of natural gas and condensate was more than 28,000 barrels of oil equivalent per day in 2009, though only 9,000 boe in 2023, and was delivered to the Brunei LNG export plant.

Hanwha Ocean, the South Korean shipbuilding company formerly known as Daewoo Shipbuilding & Marine Engineering, is said to be considering a move into the offshore platforms and drilling sector while continuing to increase its LNG carrier newbuild backlog.

Korean regulatory information shows that Hanwha Ocean has registered two new trademarks, suggesting expansion into the maritime energy drilling sector as the nation’s companies seek more profitability.

The registrations concern “Hanwha Drilling” and “Hanwha shipping”, though the Group has yet to disclose its intentions.

Hanwha Ocean, formerly DSME, was acquired by the Korean conglomerate, the Hanwha Group, in 2022 and was rebranded as Hanwha Ocean in May 2023.

Two Japanese companies have just filed an order for an LNG carrier to be built at Hanwha Ocean’s Geoje Shipyard in South Korea.

Tokyo Gas, the utility company and LNG importer, said its Tokyo LNG Tanker Company concluded a long-term charter contract with Mitsui OSK Lines (MOL) for this newbuild vessel ordered by MOL.  

MOL LNG fleet

MOL has a growing energy shipping business with a fleet including over 150 tankers for oil and other products and about 90 LNG carriers.

Tokyo Gas said that the charter agreement meant that the company had 11 LNG carriers fixed under a long-term charter.

The utility said that the MOL-owned newbuild would have 174,000 cubic metres capacity and be delivered in 2026.

The carrier will have a service speed of 1.5 knots and would be 295 metres in length and a beam of 46.4M.

“The Hanwha Ocean-built vessel will be equipped with the state-of-the-art MAN Energy Solutions engine (ME-GA) with improved fuel consumption efficiency and is expected to significantly reduce greenhouse-gas emissions compared to conventional LNG carriers,” said the utility.

“From 2026, the vessel will be utilised for TG Group’s LNG procurement and LNG trading,” it added.

“With this charter contract, the TG Group will continue to promote stable energy procurement while giving further consideration to the environment amid the changing surroundings of the global LNG market,” it added.

Australia’s largest liquefied natural gas companies Woodside Energy and Santos have ended their merger discussions after failing to agree terms for creating a A$88 billion (US$58Bln) LNG mega-company in the Southern Hemisphere.

Tokyo Gas, one of the largest and longest-standing liquefied natural gas importers, has formed a joint stock company to proceed with an LNG import and power project in Vietnam at Thai Binh in the north.