LNG

The UK-based Prax Group, a company whose business covers exploration and production to refining, has signed an agreement to acquire the interests of TotalEnergies in the UK North Sea Greater Laggan Area comprising mainly gas fieds and the Shetland Gas Plant.

Prax said it was buying the onshore Shetland Gas Plant as well as the French major’s interests in several nearby exploration licences.  The transaction whose value was not disclosed is subject to approval from the relevant authorities.

The Greater Laggan Area fields include the Laggan, Tormore, Glenlivet, Edradour and Glendronach fields and are located about 140 kilometres (87 miles) west of the Shetland Islands.

Current production for the TotalEnergies interests is around 7,500 barrels of oil equivalent per day, made up of about 90 percent natural gas.

Sullom Voe location

The Shetland Gas Plant is located at Sullom Voe and is the collection and gas processing facility for the offshore Laggan-Tormore projects, comprising two large gas and gas condensate fields.

The Laggan and Tormore gas fields are in sea depths of 600 metres (2,000 ft).

The Shetland Gas Plant is also connected to the Shetland Islands Regional Gas Export (SIRGE) pipeline, which is 234km in length with capacity of 665 million standard cubic feet per day.

The SIRGE pipeline provides transportation services for the export of gas from the West of Shetland fields to the UK mainland market.

Prax had previously acquired Hurricane Energy in 2023. This is a UK-based oil and gas exploration and production company with a 100 percent operated interest in the Lancaster offshore oil field in the West of Shetland basin.

“With a strong track record of integrating acquisitions and managing assets in the oil and gas value chain, the Prax Group is a long-standing and trusted partner of TotalEnergies,” explained Sanjeev Kumar Soosaipillai, Chairman and Chief Executive of the Prax Group.

“The announcement of the signing of this agreement is the culmination of many months of solid co-operation between our respective companies,” he added.

UK value chain

“Our strong balance sheet has enabled the Group to execute its growth strategy having successfully completed two major acquisitions last year, and with two other transactions in the pipeline, I am delighted that the Prax Group is able to announce its proposed expansion in West of Shetland, as part of our long-term plan to strengthen our position across the whole oil and gas value chain,” stated the Prax CEO.

Discussing the reasoning behind the sale by TotalEnergies, the company’s Jean-Luc Guiziou, Senior Vice President in Europe for Exploration and Production, said that the transaction was in line with the company’s strategy to continuously adapt its portfolio by divesting mature non-core assets.

“TotalEnergies remains committed to the UK through both its upstream portfolio in the North Sea (Elgin-Franklin, Culzean and Alwyn fields) and its Integrated Power and Renewables portfolio,” Guiziou stated.

The Prax Group is headquartered in the UK and describes itself as a British multinational and independent E&P company and with a distribution and sales unit dealing in petroleum products and bio-fuels.

The Prax Group also has US and Asian offices in Houston, Texas, and in Singapore. 

The European Commission, after many delays in imposing updated sanctions on Russia over the Ukraine invasion has now banned from its ports LNG tankers of the Russian Sovcomflot shipping line, while also convening on June 25 the first meeting of the Conference on Accession of Ukraine to the European Union.

The Royal Navy warship “HMS Duncan” has deployed from Portsmouth to the Red Sea as part of the mission to keep open international shipping routes amid renewed attacks on vessels by the Iranian-backed Houthi rebels of Yemen, ending hopes that shipping in the region could possibily return to near normal by the end of 2024.

The attacks have forced LNG carriers, oil tankers, containerships and other vessels to continue to be re-routed to longer and more expensive journeys around southern Africa amid renewed concerns that the Israel-Hamas war would further destabilise the Middle East now that Iran’s proxy, the Houthis, are back in action.

Shipping data shows that there has almost been a complete halt on LNG carriers entering the Red Sea area during the first five months of 2024.

In April 2024 a total of just 159 ships of all types used the Suez Canal, marking a sharp decline of 85 percent in the traffic from more normal times.

Re-routed

A total of 2,922 vessels used the Cape of Good Hope route in March, and the number was little changed in April at 2,873.

Maritime traffic at the Cape of Good Hope increased by 125 percent in the last six months, reflecting the diversions from both the Suez Canal and Bab-el-Mandeb Strait off Yemen.

The number of containerships and LNG carriers using the Cape was up by 260 percent and 180 percent respectively in April, according to shipping data.

All countries in the Eastern Mediterranean, including Turkey, have found themselves at the end of a dead-end for all trade from Asia, as ships no longer reach them through the Suez Canal and instead have to go round South Africa and enter the Med by the Strait of Gibraltar, adding to costs.

Meanwhile, the United States Navy and the Royal Navy have led the most strikes against Houthi targets in retaliation for their attacks on vessels.

The Houthis have launched repeated drone and missile strikes in the Red Sea region since November 2023, later expanding their attacks to the Indian Ocean.

The group has said it will attack any ships sailing towards Israeli ports, even in the Mediterranean Sea, though there have as yet been no attacks on vessels in the East Med area.

Shipping protection

The UK government said that the Type 45 destroyer just deployed will relieve its sister ship “HMS Diamond”, which has been protecting shipping lanes in the Red Sea from Houthi attacks since before Christmas.

The Royal Navy said that “HMS Duncan” was a like-for-like replacement as it is armed with the same Sea Viper missile system and equipped with the same radar systems, which are able to accurately detect faraway threats.

During her deployment, “HMS Diamond” has shot down nine drones and one missile, launched by Houthis from the coast of Yemen at cargo ships.

“The 200 men and women of ‘HMS Duncan’ have worked to ensure that their ship is ready to deploy, successfully completing trials and training last week in preparation for the deployment,” said a Ministry of Defence statement.

“This will see the ship work to ensure freedom of navigation and make international waters safer and more secure for merchant vessels,” the statement added.

“HMS Duncan” spent five months leading NATO’s premier task group in the Mediterranean Sea last year, until handing over flagship duties to the Italian Navy in December.

The ship is now ready for more operations, with over 60 new members joining the ship’s company. 

Air Products, the leader in supplying US liquefied natural gas technology and equipment to the world, has successfully passed the processing capacity test for the floating LNG plant offshore Mozambique that turned the southeast African nation into an energy exporter.

Marathon Oil Corp., the US company and main shareholder in Equatorial Guinea LNG in West Africa as well as a key operator in the major US shale basins, reported solid earnings amid the effects of lower prices offset by the further development of the Equatorial Guinea Regional Gas Mega Hub (GMH) project.

Flogas Britain Ltd, a leading provider of liquefied natural gas of liquefied petroleum gas to off-grid customers in the North of the UK has opened a new operational terminal in Teesside that will improve the supply chain.

Flogas, a unit of energy group DCC Plc, said the new facility would initially provide up to 90,000 tonnes of LPG each year to homes and businesses across the Northern England, Scotland and North Wales.

Commissioned by Flogas Britain, alongside partners North Sea Midstream Partners (NSMP) and Exolum Seal Sands Ltd (Exolum), the facility is set to improve the security of supply nationwide while also reducing the reliance on imports.

Offshore

“This facility delivers a significant, critical supply of LPG to the UK, and we’re delighted to see it now up and running,” said Paul Horton, Chief Operating Officer at Flogas.

“This has been a vital part of our plan to provide proper energy resilience for both our commercial and domestic customers, and in the short time it’s been live, we’ve already seen a huge step change in our supply capability in the North,” Horton added.

Previously LPG was extracted from North Sea gas reserves at the NSMP-owned Teesside Gas Processing Plant (TGPP) and was being exported to global markets.

Now, thanks to the deal between Flogas, NSMP and Exolum, it’s being turned inland instead, helping to improve the UK’s own supply.

LPG is fractionated at TGPP, then transported and stored in five 125-tonne storage bullets, owned by Exolum.

With its extensive delivery network, Flogas then delivers the LPG across Northern England, Scotland and Wales, reaching even the most remote locations.

“Alongside the new Teesside terminal, Flogas has invested heavily in developing the UK’s largest above-ground LPG storage facility in Avonmouth, Bristol, which went live last year,” added Horton.

Former Avonnouth LNG site

“Now Teesside is fully operational, any surplus LPG supply we have, will be transferred, and stored at Avonmouth to help prepare for peak heating season in Winter 2024,” he explained.   

The Flogas Avonmouth Storage facility is the largest of its kind in the UK, with the capacity to store 34,564 tonnes of LPG.

Formerly owned by National Grid Plc, operator of the Grain LNG import terminal on the Medeay River southeast of London, the Avonmouth facility was previously only able to store LNG. However, work was carried out to convert it to an LPG facility.

“With the two sites working in parallel, we’ll be able to provide a new level of energy security for the UK’s off-grid community - it’s a real game changer,” Horton stated.

Over the past 12 months, the team has been readying the Teesside facility for the new intake, constructing road loading racks and process infrastructure to receive the LPG.

It also has the capacity to be a gateway for renewable gases in the future with space for additional storage vessels to be installed.

This provides the opportunity to blend renewable fuels, such as bio-propane and renewable Di-Methyl Ether (RDME) with LPG in the future.

WaveCrest Energy has announced the start of a market consultation process for a proposed Teesside Flexible Regas Port as the UK’s third liquefied natural gas import destination in advance of a planned capacity auction to be launched in the third quarter of 2024.

Feb 27 (LNGJ) - The first March LNG cargoes are heading for the UK from Trinidad and the US. The vessel “Magdala” with 173,400 cubic metres capacity is scheduled to discharge a cargo on March 1 at the Dragon import terminal in Milford Haven, according to shipping data. The cargo was lifted on February 19 from the Point Fortin plant in Trinidad.

   The “Maran Gas Vergina” with 173,605 cubic metres capacity is due to berth with a US cargo on March 4 at the South Hook terminal at Milford Haven. The cargo was lifted from the Cameron plant near Lake Charles in Louisiana on February 21.

Nov 23 (LNGJ) - The UK and Germany are set for US LNG deliveries over the next few days. The vessel “MOL Hestia” with 170,800 cubic metres capacity is scheduled to discharge a US cargo on November 24 at the UK South Hook terminal in the Port of Milford Haven in Wales. The shipment was lifted on November 3 from the Sabine Pass export plant in Louisiana, according to shipping data.

   One other US cargo is heading for the German North Sea port of Wilhelmshaven and is due to berth on November 26. The carrier “Maran Gas Amorgos” with 170,800 cubic metres capacity loaded the cargo on November 12 at the Calcasieu Pass plant near Lake Charles in Louisiana.

The North Sea Transition Authority (NSTA), the UK regulator that is launching renewed oil and gas activities in British territorial waters that will affect future import needs for pipeline gas, LNG and oil has issued an Area Plan for cross-licence and cross-Hub collaborative frameworks to ensure maximum recovery of oil and gas in six areas.

The six areas where oil and gas activities will take place are the Central North Sea, the Northern North Sea, the Southern North Sea, West of Shetland, East of Shetland and the East Irish Sea.

The NSTA, formerly known as Oil and Gas Authority, had previously drawn up a “Maximising Economic Recovery of UK Petroleum (MER UK) Strategy” with added “behavioural Guidelines” written by the industry for the industry and aimed at helping all participants.

The report estimates that the effective use of Area Plans has the potential to unlock around 4 billion barrels of resources.

Working with operators

“The NSTA is working closely with operators, licence holders and other interested parties to develop Area Plans across the oil and gas life cycle,” said the report.

“These integrate exploration, development, production, and decommissioning to ensure operations ensure economic recovery with the optimum use of infrastructure to extend asset life,” the NSTA added.

The NSTA explained that Area Plans, like industry, are evolving with scopes of work now incorporating energy integration and net-zero considerations.

“Area Plans represent a shared view amongst industry participants of the optimal way to ensure economic resource recovery,’ said the report.

“For the majority of Area Plans, the NSTA will normally expect industry to lead on developing and delivering the plans,” it stated.

The NSTA has developed Guidance (revised in November 2023) to aid the industry’s understanding of their responsibilities for developing Area Plans and help improve collaboration across the UK Continental Shelf.

Updates

“As experience and practice develop, the NSTA will update and review this guidance,” it said.

Under the leadership of Steve Phimister, Industry Cultural Change Champion, the “Behavioural Guidelines” have been created to help those involved in Area Plans.

These Guidelines provide advice, share insights from existing Area Plans groups and signpost to relevant tools and resources.

The Guidelines are categorised into four “Area Plan Essentials”: 1.) Create the Right Environment; 2.) Secure the Right People at the Right Time; 3.) Clarify the Boundaries for Collaboration; and 4.) Agree an Appropriate Decision Process.

The full report is available on the NSTA Web site.