Most Australian LNG project operators have opted to delay their final investment decisions (FIDs), deciding to wait for the medium-term market reaction and then act accordingly.
This has limited the scope for future LNG growth in the country, claimed analytics company, GlobalData.
According to GlobalData, delays in LNG projects, such as Woodside’s Scarborough and Santos’ Barossa field, have resulted in a reduced forecast for future LNG growth.
The FIDs delays for backfill projects also raises the prospect of greater spare capacity than previously anticipated, as production from the existing Pluto and North West Shelf developments decline. The North West Shelf participants recently agreed to process third party gas from the onshore Waitsia field but this will not make up from the two-year delay to Browse, now not expected until 2028 at the earliest.
The delays bring into question the necessity for expansions at the Burrup Hub, at least to the extent currently announced. By the time the Scarborough field comes online, there may be enough spare capacity at the existing LNG facilities to accommodate its production, presenting an alternative to the $6.1 bill expansion at Pluto, GlobalData said.
In a look at Canada, GlobalData said significantly low gas prices and the global LNG supply glut caused by COVID-19 has led to a delay in upcoming LNG projects in the country.
Rising competition amid a supply overhang might make it challenging for Canadian LNG producers to remain cost competitive.
GlobalData’s Haseeb Ahmed, commented: “One victim of the sharp fall in gas prices and surplus supply of LNG is the Pieridae Energy’s Goldboro LNG export project, which saw delays to its financial investment decision (FID) in April - with its start year likely to be pushed to 2025. However, the company is upbeat about investing once the market conditions improve, which can allow it to analyse the situation better.”
Participants in Canadian LNG projects, such as Shell, Chevron Corp, Petroliam Nasional Bhd, and Woodside Petroleum, have revised their capex guidance. In February, 2020, Woodside wrote down $720 mill in the Kitimat LNG project in which the company owns a 50% stake.
Ahmed added: “Canada’s LNG sector needs to come up with strategies to thwart competition from the US, which is expected to become more self-sufficient in terms of natural gas production. The kind of unconventional gas reserves in the country and the technological advancement in drilling can propel growth prospects of the Canadian LNG sector.
“Strategic initiatives focusing more on exports, achieving economies of scale by increasing operational efficiency, and investing in disruptive technologies, such as analytics and robotics, can help the LNG sector to tide-over the current scenario.
“Although the LNG market faces similar challenges across the globe, it depends on how Canada’s LNG sector adapts to the current economic situation to sustain in the long-run,” he said.
On 28th October, 2020, SCF Group (SCF) and Arctic LNG 2 concluded 30-year time charter agreements for three new icebreaking LNGCs
UK’s National Grid Grain LNG and Qatar Petroleum’s (QP) Qatar Terminal Limited (QTL) have signed a 25-year agreement to provide the Qataris with storage and redelivery capacity from mid-2025.
EXMAR has reached a settlement with YPF over the dispute under the ‘Tango’ FLNG agreements.
Total has delivered its first carbon neutral LNG shipment to Chinese National Offshore Oil Corp (CNOOC).
The French enegy major said that the loading operation was carried out at the Ichthys liquefaction plant in Australia, and the shipment was delivered on 29th September to CNOOC’s Dapeng terminal.
“We are proud to have completed this first shipment of carbon neutral LNG with CNOOC, a long-standing partner of Total. This first LNG shipment, whose carbon emissions have been offset throughout the value chain, represents a new step as we seek to support our customers towards carbon neutrality,” explained Laurent Vivier, President for Gas at Total. “The development of LNG is essential to meet the growth in global demand for energy while reducing the carbon intensity of the energy products consumed.”
The LNG shipment’s carbon footprint was offset with Verified Carbon Standards (VCS) emissions certificates financing two projects:
• Hebei Guyuan Wind Power Project, which aims to reduce emissions from coal-based power generation in northern China.
• Kariba REDD+ Forest Protection Project, which aims to protect Zimbabwe's forests.
‘Carbon neutral’ indicates that Total and CNOOC have offset the amount of CO2 equivalent associated with the whole carbon footprint of the LNG cargo (including the production, liquefaction, shipping, regasification, and end-use) through VCS certified emission reduction projects, the company further explained.
Nakilat has revealed a net profit of QR900 mill for the third quarter of 2020, an increase of 23.6%, compared to QR728 mill recorded for the same period last year.
Australian-based Squadron Energy has bought 50% of a planned LNG import terminal project in New South Wales (NSW) from Japan's JERA and Marubeni Corp.
French energy giant Engie has delayed its decision on a $7 bill deal to import US LNG, following pressure from the government to seek cleaner fuel supplies.
Engie said it had postponed work on a contract to take LNG from NextDecade Corp’s facility, which is fed by shale gas fields using fracking technology.
The contract was due to run through 2045 and it was seen as key to the construction of the US firm’s Rio Grande LNG export terminal in Texas, according to the pressure group Les Amis de la Terre, reported Bloomberg.
Engie’s board will now consider a potential contract with NextDecade at a later date, as it needs a ‘deeper’ examination, said a spokesperson for the utility, declining to elaborate on the postponement to Bloomberg.
Natural gas is increasingly being targeted by environmental pressure groups and governments for its contribution to climate-damaging greenhouse gases.
Earlier this month, environmental group Les Amis de la Terre France urged Engie not to sign the contract with NextDecade, blaming US shale gas for environmental and sanitary disasters.
The French Government owns a 23.6% stake in Engie and has asked the company not to sign the contract due to pollution concerns, Bloomberg said, quoting local sources.
France is one of the first countries to adopt a law that aims to make its economy carbon neutral by 2050 to fight climate change amid growing concerns among voters.
President Macron was among European Union leaders who this month had called for a faster emissions cut by 2030 than already planned.
US President Trump had persuaded countries, including Germany and Poland, to take more LNG cargoes from America to counter the larger volumes of gas arriving in Europe from Russia.
It was also alleged that Trump’s administration put pressure on European companies to abandon the construction of the Nord Stream 2 gas pipeline from Russia, which is partly financed by Engie.
A NextDecade official said in a response to a request for comment from Bloomberg that the company is talking with a number of potential partners worldwide, without naming them.
NextDecade still needs to sign long-term contracts to underpin the final investment decision (FID) for Rio Grande LNG, Senior Vice President, James MacTaggart said late last month.
WE Tech Solutions has been awarded a contract for another six shipsets of its Solution One.
On 22nd October, NYK signed a Sales and Purchase Agreement with Total to acquire all the French company’s shares in the shipmanagement company, Gazocean.