Ground-breaking event was held for start of modernization of LNG ship construction as part of high-tech zone

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European oil and gas major Total said its liquefied natural gas sales would reach 50 million tonnes per annum by 2025 and would double between 2020-2030, creating value from scale, arbitrage and integration along the value chain.

The French company’s LNG and over strategy were outlined in a presentation to investors in Paris involving senior executives led by Patrick Pouyanné, Chairman and Chief Executive.

Spending cut

“Cash-flow from the integrated LNG business shall grow by 40 percent to more than $4 billion in 2025 based on a $50 a barrel crude price,” explained Pouyanné

The French group, which cut its annual spending to $12 billion from $15 billion to tackle the Covid-19 impacts, said its growth would be underpinned by natural gas production and LNG liquefaction in the coming years.

The French operator has stakes in the Russian Yamal LNG and Arctic LNG II projects as well as the Ichthys LNG and Gladstone LNG plants in Australia. It also has long-standing LNG shareholdings in nations such as Nigeria.

Total's priority project at present is the Mozambique onshore LNG project at Cabo Delgado acquired from Occidental Petroleum on its takeover of US peer Anadarko.

Total additionally has US volumes from the Cameron plant in Louisiana operated by Sempra Energy and from Sempra’s planned project at Costa Azul in Mexico.

The company outlined to analysts its policies in regard to supporting measures to slow climate change and carbon-dioxide emissions.

“Decarbonizing natural gas with biogas and hydrogen as well as continuing to reduce methane emissions will contribute to Total’s climate ambition,” said CEO Pouyanné.

“Total will also focus on low cost oil projects, privileging value over volume and develop its portfolio of oil projects, all with profitability above 15 percent at $50 a barrel, while ensuring consistency for Capex allocation with climate measures,” he added.

The company would focus in turn on adapting energy sales to market evolution and engaging in the mobility revolution.

Total is one of the main participants among oil majors in the development of LNG fuel for vehicles and bunkering for shipping.

It also intends to adapt its refining capacity and sales to demand, particularly in Europe.

“In the same time, we will further increase our biofuels production and sales as demand for such renewable products is supported by policies aiming to get to Net Zero. Renewable diesel production is expected to reach more than 2 million tonnes a year by 2025,” said the CEO.

The group is committing more than $1 billion over the next 10 years to the e-mobility revolution by investing in battery manufacturing and Electric Vehicle charging with a target of 150,000 charge points by 2025.

Total aims to have 35 gigawatts in gross renewable energy production capacity by 2025, up from a previous target of 25GW, and said 70 percent of that was already accounted for, including through projects under construction.

Royal Dutch Shell, one of the world’s leading liquefied natural gas providers, said in a third-quarter earnings outlook that its Integrated Gas division would be impacted by the effects of the oil price slump on long-term LNG contracts.

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Pieridae Energy, the Canadian LNG plant developer with plans to export cargoes to Germany, has engaged leading energy engineer Bechtel to replace another US firm KBR and to review its export project in Nova Scotia and come up with a construction price.

Tuesday, 06 October 2020 06:00

Petronas fuel unit to boost LNG off-grid use

The Petronas Dagangan Group, the fuels subsidiary of Malaysia’s state-controlled energy company Petronas, said it aimed to build a significant LNG truck delivery service for off-grid customers in Peninsular Malaysia.

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Turkish maritime infrastructure provider Karpowership has brought the world's first LNG-to-Power floating project into operation offshore Amurang in North Sulawesi in Indonesia as the vessel, the 125-megawatt “Powership Zeynep Sultan”, started generating electricity.

The “Powership Zeynep Sultan” was built to 1984 and originally operated on Marine Fuel Oil (MFO) but has recently been converted to have its engines and generators converted to dual-fuel with LNG capability.

“Our first LNG-to-power project is a success, the engines on ‘Powership Zeynep Sultan’ are beginning to run on LNG thanks to our supply from a partner’s floating storage and regasification unit,” said Karpowership.

“We aim to have 80 percent of our fleet running on LNG by 2025, providing more economic and environmental value to our partners,” said the Turkish company.

Karpowership is a subsidiary of the Turkish industrial group, Karadeniz Holding, whose Chief Executive is Orhan Remzi Karadeniz.

The Karpowership unit operates 25 floating power plants in about a dozen countries around the world and the Indonesian venture is the first in operating using LNG.

The LNG offshore Amurang is being converted via a small-scale floating storage and regasification unit (FSRU), the 14,000 cubic metres capacity vessel “Hua Xiang 8”, according to shipping data.

The small-scale FSRU was constructed in China in 2017 at the Qidong Fengshun yard for Zhejiang Huaxiang, a Chinese liquefied petroleum gas (LPG) market player with plans to build up a fleet of coastal LNG carriers of various sizes.

The FSRU is now working for PT Sulawesi Regas Satu, a joint venture comprising the government-owned utility company Perusahaan Listrik Negara (PLN) and Indonesian shipping company PT Humpuss, which said earlier in 2020 it was acquiring the Chinese FSRU.

The LNG-to-Power project has a gas supply agreement signed with Indonesian power company PLN and with volumes provided via Pertamina, the Indonesian stated-owned oil and natural gas company.

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Dominion Energy, the US utility and owner of the Cove Point LNG export plant in Maryland, expects its transaction with Berkshire Hathaway Energy to close around November 1, 2020 when control of the liquefaction facility on Chesapeake Bay will pass to the company owned by billionaire investor Warren Buffett.

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The largest cruise liner ever built for Carnival Cruise Corp. of the US, the LNG-powered liner “Mardi Gras”, has begun a series of sea trials from the Finnish Meyer Turku shipyard ahead of moving to its base in Florida to begin operations in February 2021 as the cruise industry continues to boost future demand for LNG maritime fuel.

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Baker Hughes, the US liquefied natural gas equipment supplier, has secured an order from Qatar Petroleum to supply multiple main refrigerant compressors and turbines for the LNG producer’s North Field East LNG expansion.

The total award is part of four LNG mega-Trains representing 33 million tonnes per annum of additional capacity, which will increase Qatar’s total LNG output from 77 MTPA to 110 MTPA.

Partnership

“This order is among the largest LNG deals secured by Baker Hughes in the past five years, for both MTPA and equipment awarded,” said the Houston, Texas-based company, without disclosing the actual value of the contract.

“The order reinforces more than two decades of trust and successful turbomachinery collaboration between Baker Hughes, Qatar Petroleum and Qatargas,” said Baker Hughes. Qatargas already operates six existing LNG mega-Trains driven by Frame 9E gas turbine refrigerant compressors provided by Baker Hughes.

“This deal illustrates the continued strength of Baker Hughes’ partnership with Qatar Petroleum, which began 25 years ago upon our delivery of the first LNG Train in Qatar,” explained Lorenzo Simonelli, Chairman and Chief Executive of Baker Hughes.

“As we look ahead to the next two decades, in almost any scenario natural gas will be a key transition fuel, and likely a destination fuel for a lower carbon future,” said the CEO.

“Building on our track record of delivering proven, reliable and highly efficient LNG technology, we remain committed to taking energy forward in Qatar for more years to come,” added Simonelli,

The company said each MRC train would consist of three Frame 9E DLN Ultra Low NOx gas turbines and six centrifugal compressors across four LNG mega-Trains for a total scope of supply of 12 gas turbines to drive 24 centrifugal compressors.

Russian natural gas pipeline giant Gazprom, a competitor in Europe and now China to LNG, has approved its four-year programme for the reconstruction and re-equiping of gas production and transmission facilities amid long-standing distribution problems such as ownerless gas facilities and non-payment for supplies in areas like the North Caucasus.