Norwegian oil and natural gas supplier Equinor signs 15-year LNG accord for ‘food security’ cargoes delivered to India
Equinor, the Norwegian major that is now the leading pipeline natural gas supplier to Europe, has just signed a 15-year agreement to deliver LNG cargoes to India with shipments starting in 2026.
Equinor’s growing global LNG portfolio is based on output from the Equinor-operated Hammerfest liquefaction plant on Melkøya island in northern Norway and additional cargoes booked mainly from the US.
Equinor said that the new Indian partner, Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL), would use the regasified LNG mainly as feedstock for production of ammonia in its newly commissioned plant for manufacturing fertilisers and petrochemicals.
The Equinor-Deepak agreement covers an annual supply of around 650,000 tonnes per annum of LNG for 15 years starting from 2026.
Equinor said that it was delighted with the Deepak agreement as ammonia was a “key building block for the society, being crucial for agriculture and food security” in the Asian nation.
“The ammonia which Deepak will produce from the natural gas will be for domestic use,” added Equinor.
New plant
The Deepak fertilisers facility is located at Taloja in the West Coast state of Maharashtra.
“Deepak’s new ammonia plant has created new gas demand in the growing Indian market,” explained Helge Haugane, Equinor’s Senior Vice President for Gas and Power.
“I am very happy that we have landed this agreement with Deepak Fertilisers. The agreement is another proof of how we use our position in the Atlantic Basin to strengthen our relationship with key players in the growing Indian market,” he added.
“We look forward to developing our relationship with Deepak and to exploring avenues for further collaboration on petrochemicals feedstocks such as propane and ethane and on low-carbon ammonia in the future,” stated Hauge.
Sailesh C. Mehta, Chairman and Managing Director, of DFPCL, said he was delighted with the Norwegian LNG deal.
“The agreement will provide reliable supplies of feedstock which will further strengthen Deepak Fertilisers’ value-chain from gas to ammonia, the key ingredient in fertilisers,” Mehta explained.
“The agreement will help us absorb global volatility as well as enhance overall margins,” he added.
“We also look forward to exploring with Equinor further collaboration on feedstock and carbon footprint reduction initiatives,” stated Mehta.
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US DoE grants pipeline and re-export permits to Singapore-owned LNG project in Sonora in Mexico
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Norwegian-owned LNG carrier departs with first cargo from third Train at Cheniere's Texas plant
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Spanish utility Naturgy with US and Russian LNG volumes swings back to first-half net profits
Naturgy Energy Group, the Spanish utility with major US and Russian liquefied natural gas supply contracts as well as gas and power businesses in six Latin American countries, returned to a net profit in the first half of 2019 from a heavy loss in the year-ago period.
Naturgy posted a first-half net profit of 592 euros ($660M) compared with a loss of 3.28 billion euros reported in the same six months of 2018.
The utility had approved a new strategic plan in 2018 through to 2022 as well as a company overhaul. This meant that assets were impaired to the amount of 4.85Bln euros due to the re-measurement of the estimated future cash flows.
Naturgy is one of the companies that have signed 20-year agreements for US cargoes from Cheniere Energy’s Sabine Pass and Corpus Christi plants and is also a main contract holder for cargoes from the Yamal LNG plant in Arctic Russia operated by natural gas company Novatek.
The US and Russian volumes were booked under Naturgy's previous name, Gas Natural Fenosa.
The utility’s international LNG earnings in the first half dropped by 32.2 percent to 158M euros from 233M euros in the 2018 first-half.
European power generation earnings fell by 27.7 percent to 120M euros from 166M euros a year ago.
“In Gas & Power, the first half results have been driven by a notable improvement in services sales, which has experienced a strong margin recovery in power supply, more than offsetting a more challenging scenario in International LNG and Europe Power generation,” said Naturgy.
“The company’s new commercial policies and de-risking efforts, together with efficiencies, have also helped offset the global decline in gas prices during the period,” it added.
“The company has continued to work on improving the risk profile of its merchant activities. As such, in International LNG, for example, Naturgy has already secured approximately 90 percent of its LNG volumes for the year while in Power supply, it has continued to reduce its portfolio of fixed price sales contracts,” the company explained.
Overall gross earnings in the Gas & Power division rose 7.6 percent to 640M euros from 595M euros in the same six months of last year.
Natural gas sales in Spain declined by 8.3 percent in the first half to 116,131 gigawatt hours compared with 126,587 GWh in the first half of 2018.
“This was mainly as a result of lower sales in the Spanish residential and industrial segments (down 11.8 percent and down 14.4 percent respectively), partially compensated by higher sales to combined-cycle gas-fired power plants (up 14.0 percent) and third parties (+17.7 percent),” said Naturgy.
In its other divisions European, Middle East and Africa Infrastructure earned 919M euros, up 3.1 percent.
The Latin America South Infrastructure earnings rose 23.8 percent to 448M euros, while Latin America North Infrastructure, comprising Mexico gas and Panama electricity, came in at 189M euros, up 53.7 percent.
Latin America South includes, Chile electricity, Chile gas, Brazil gas, Argentina gas and electricity and Peru gas.
Therefore, Naturgy posted a 7.5 percent rise in first-half gross earnings of 2.15Bln euros versus 2.00Bln in the same period of 2018.
Naturgy’s net sales dropped 4.4 percent to 11.63Bln euros from 12.17Bln in the first half of last year.
The company’s diverse LNG supply portfolio also includes shipments from Algeria, Qatar and Nigeria. The company additionally owns a small fleet of LNG vessels.
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