LNG

Feb 28 (LNGJ) - Strike Energy, the Australian exploration and production company in the onshore Perth Basin of Western Australia, noted in its latest earnings that energy players were awaiting a decision on whether the state would be banning the export of onshore gas as LNG amid forecasts of a shortage of domestic gas in the coming years.

   Strike Energy said that the natural gas warnings came as 2023 was deemed the worst year for gas exploration activities in the state of WA for the last 25 years. Strike said that its Walyering gas field in the Perth Basin started production in the fiscal first quarter with gas and condensate generating A$8.13 million (US$5.32M) in revenue for the company. WA state spot natural gas prices were relatively stable at an average of the equivalent of around US$6.20 per million British thermal units during the period.

Dec 30 (LNGJ) - Royal Dutch Shell has confirmed a significant natural gas and condensate discovery within the Shell-owned title AC-P64 in the Browse Basin off the northwest coast of Western Australia with feed-gas potential for the Prelude floating LNG hull deployed in the basin.

   “This discovery is located 160 kilometres northeast of the Shell operated Prelude FLNG facility and presents an opportunity for a future tie-back to Prelude,” said Shell. “It supports Shell’s growth plans for more and cleaner energy, with LNG being the predominant focus for Shell in Australia,” said the Anglo-Dutch major.

Woodside Petroleum, operator of two LNG plants in Western Australia and a shareholder in a third facility, posted a 4.4 percent increase in first-quarter sales revenue of US$1.22 billion as higher prices made up for lower volumes caused by cyclone disruptions.

Woodside’s quarterly share of one-sixth of production at the North West Shelf plant it operates amounted to 617,164 tonnes and sold for US$318 million, a decline compared with the 667,332 tonnes marketed in the same three months of 2018.

The NWS cargoes were sold at an average price of US$9.4 per million British thermal units versus US$7.8 per MMBtu in the same quarter of 2018.

The Woodside-run Pluto LNG plant achieved output during the quarter of 1.08 million tonnes, slightly lower than 1.10MT logged in the year-ago quarter, and returned revenues of US$591M.

The Pluto cargoes were sold at an average price of US$10.0 per MMBtu compared with US$9.0 per MMBtu in the same quarter of 2018.

The Perth-based company additionally received 271,826 tonnes of LNG from its share of the Wheatstone plant near Onslow in Western Australia. The Wheatstone LNG revenue came to US$108M.

The Wheatstone cargoes were sold at an average price of US$11.9 per million British thermal units compared with US$8.9 per MMBtu in the same quarter of 2018.

Woodside Chief Executive Peter Coleman said there had been significant progress on plans to develop the Burrup Hub, including a supply accord signed with ENN Group of China that further demonstrated market support for the development of the Scarborough gas resource through an expansion of Pluto LNG.

“Woodside’s revenue increased compared with the corresponding period in 2018 due to higher realised prices. Despite disruption to operations from cyclone activity, our cyclone preparedness ensured safety was maintained and the impact on production was minimised,” explained Coleman.

“The ten-year Heads of Agreement signed in Shanghai with ENN Group is expected to start in 2025 and is evidence of global demand for long-term LNG supply from our proposed Burrup Hub,” said the CEO.

“We are pioneering the development of new domestic markets for LNG in Western Australia. Our new truck loading facility at Pluto LNG was completed in March and will supply LNG for use in remote power generation and transport in the Pilbara and beyond, reducing regional emissions through the replacement of diesel fuel,” he added.

“We also reached a significant milestone in March with the start of domestic gas production at Wheatstone,” stated Coleman.

Australian energy company Santos, operator of the Gladstone LNG plant and a stakeholder in two other regional liquefaction and export facilities, confirmed a significant natural gas discovery after a successful appraisal of the Corvus field in the Carnarvon Basin offshore Western Australia.

Woodside Petroleum Chief Executive Peter Coleman told the LNG2019 conference in Shanghai that international energy majors needed to do more to demonstrate as China has already done that a lower-carbon world needs LNG.

BHP Billiton, the Australian commodities and energy company, said its prices from the North West Shelf LNG export project in Western Australia increased by more than 36 percent as its shareholders also benefited from the sale of US shale assets in the Fayetteville, Eagle Ford, Haynesville and Permian basins.

The company’s overall LNG prices rose to US$10.19 per million British thermal units in the second half of 2018 compared with US$7.48 per MMBtu in the second half of 2017.

The sales process for BHP’s offloading of its US shale assets was completed at the end of October 2018 with the net proceeds of US$10.4 billion being returned to shareholders.

A US$5.2 billion off-market buy-back of BHP Group Limited shares was successfully completed in December 2018.

“The balance of the net proceeds will be paid on 30 January 2019 as a special dividend of US$1.02 per share,” said BHP in its first-half operational review.

“Production in the first half was broadly in line with the prior period despite planned maintenance and outages,” said BHP Chief Executive Andrew Mackenzie.

“In petroleum, our first appraisal well at Trion in Mexico encountered oil and we added to our exploration options with successful bids for two licences offshore Eastern Canada,” added Mackenzie.

BHP will report its financial results on February 19 and expects several exceptional one-off charges to be made against earnings.

BHP’s natural gas production in countries like Trinidad & Tobago was broadly flat at 206 billion cubic feet.

“This was partially offset by planned maintenance in Trinidad in the December 2018 quarter and natural field decline across the portfolio,” stated BHP.

BHP’s total oil and gas output was little changed year-on-year and amounted to 62,951million barrels of oil equivalent in 2018 versus 63,859 mboe in 2017.

The company’s oil and gas operations include fields in Australia, the Gulf of Mexico, Trinidad & Algeria.

The company also noted that during the previous quarter the Australia Bass Strait West Barracouta gas project was approved.

BHP will contribute an investment of A$200 million (US$143M) and first gas is expected in 2021 to help offset Bass Strait production decline, and to deliver competitive returns.

Its share in the North West Shelf Greater Western Flank-B project in Western Australia to prolong production at the North West Shelf LNG plant amounts to 16.67 percent.

The Royal Dutch Shell-led Prelude floating liquefied natural gas project offshore northwest Australia has begun production and will add 3.6 million tonnes per annum of LNG to output that will help make the nation the world’s largest producer in 2019.

Woodside Petroleum has awarded a contract to US engineering company Bechtel to carry out front-end engineering design work for the expansion of the Pluto LNG export plant in Western Australia.

Bechtel is best known in Australia for leading the engineering and construction of three coal-seam-gas-to LNG plants on Curtis Island in Queensland.

Woodside said the FEED work for the Pluto facility on the Burrup Peninsula includes final costings and technical definition for the proposed second LNG Train at the plant.

The Pluto plant was started up in 2012 and currently has one Train operating with nameplate capacity of 4.8 million tonnes per annum of capacity and 240,000 cubic metres of storage.

The Australian company said the award also included an option for Woodside to progress to a lump-sum engineering, procurement and construction contract.

“This option is subject to, among other conditions, a positive final investment decision being taken on the project,” the Woodside.

Woodside Chief Executive Peter Coleman said the decision to enter the FEED phase for the Pluto Train 2 project was a significant step towards progressing with the Burrup Hub, a regional LNG production centre in the northern part of Western Australia.

“Our Burrup Hub vision is taking shape as we work with Bechtel to progress the Pluto Train 2 Project, which will create a pathway for the globally cost-competitive development of Western Australian gas resources,” said Coleman.

The Pluto Train 2 Project will underpin Woodside’s preferred concept for the development of the offshore Scarborough gas field with 7.3 trillion cubic feet of gas in place.

Woodside is operator of the Scarborough field with a 75 percent stake after acquiring a 50 percent shareholding in 2018 from ExxonMobil. The minority shareholder in the field licence is Australian commodities company BHP Billiton.

Woodside added that the second LNG Train at the Pluto site would have a targeted capacity of 5 MTPA and the project would also involve installation of domestic gas infrastructure.

Woodside is targeting its investment decision for 2020 and is scheduling the start-up for 2024.

Australian energy operator Woodside Petroleum said its Pluto liquefied natural gas plant has supplied its first gas to the Dampier-to-Bunbury natural gas pipeline in Western Australia after its successful commissioning.

US LNG and energy engineering company McDermott International and Baker Hughes-GE have signed an accord with Western Gas Corp. in Western Australia for its Equus natural gas project to provide volumes for LNG production and the domestic market.