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LNG Unlimited is the only weekly publication that offers an exclusive insight right across the LNG supply chain. From exploration and liquefaction through to shipping and regasification, LNG Unlimited's team of dedicated global reporters provide quality and comprehensive LNG news. If LNG is your business then LNG Unlimited is your vital link in the value chain.
LNG Unlimited is the only weekly publication that offers an exclusive insight right across the LNG supply chain. From exploration and liquefaction through to shipping and regasification, LNG Unlimited's team of dedicated global reporters provide quality and comprehensive LNG news. If LNG is your business then LNG Unlimited is your vital link in the value chain.
LNGUnlimited A JOINT TRADEWINDS AND UPSTREAM PUBLICATION 27 November 2009 • No. 152 INSIDE Petronas fires gun on imports gambit Malaysia set to Waiting on Tel Aviv launch trading Israel breaks bread hub to take on with contenders for FSRU terminal Singapore rival 3 CHRIS MEYER and Chubu at front of LUCY HINE London Japanese queue for Q-Max cargo Malaysian state energy company Petronas has 4 kicked off tendering for Supply side: how the partners see the Gladstone LNG plant in Queensland shaping up Seven line up for what will be the country’s Illustration: SANTOS new Nigeria gas first LNG import terminal. processing plants A number of international LNG scheme in Australia, contracts from its Malaysia on the project is scheduled contractors are understood could be linked to existing LNG complex in Bintulu on for early to mid-2010. 5 to be bidding for a oil refinery infrastructure in Borneo island. Malaysia remains, however, Drilling campaign pre-front-end engineering the area. The source said the some way behind neighbour gets off to flying and design contract with an One source suggested it import project would also Singapore in developing an start at Woodside award expected early next would be able to handle up be designed for use as an import facility. PRODUCTION 8 year. to 5 million tonnes per LNG trading hub. The Singapore Energy Planners have already annum of LNG with the Petronas signed up to the Market Authority is already Clever money on plumped for an onshore start-up five or six years 3 million tonnes per annum evaluating bids for two duo to win charter solution. away. Gladstone liquefaction plant engineering contracts with prize at PNG LNG While the location has Despite being one of the in Queensland with the awards for the project SHIPPING 9 not yet been formally world’s largest LNG explicit intention to direct at management consultancy decided one contractor exporters, Petronas has least some of the product to and the main engineering, Falcione selects a pointed to Port Dickson on long been planning an the Malaysian market. procurement and new crew member the shore of the Malacca import terminal of its own The company has a 40% construction packages due for Albania project Straits some 90 kilometres to help meet domestic gas stake in GLNG, giving it a later this year or early next. TERMINALS 10 from Kuala Lumpur. and power requirements, secured off-take of 2 million BG Group will supply up The terminal, which particularly on the west tpa for 20 years from 2014 to 3 million tpa of LNG, Profitable calculus would be supplied by the coast. with an option for a further starting with 1.2 million tpa in Latin America... Petronas/Santos coalbed It would continue to 1 million tpa. when the terminal begins MARKETS 11 methane-backed Gladstone meet long-term export A final investment decision operations in 2012. 2 • NEWS LNG Unlimited 27 November 2009 Leader EDF cargo to help China fight big chill • Growing LNG Briefs Electricite de France looks (built 2005), currently grip of an exceptionally cold imports are likely to limit US natural gas set to ship a spot cargo to named Golar Maria while winter. This week PetroChina prices over the next the newly opened Shanghai under its present revealed it has leased capacity Gas glut LNG terminal as China fights a cold snap. management, will lift an export cargo from the at Shanghai and intends to import up to 10 spot LNG two years, according to Wood Mackenzie. A step-up in working Chartering sources said the 140,000-cbm Gracilis Zeebrugge LNG terminal. Parts of China are in the shipments to relieve fuel shortages (see page 10). volumes from new liquefaction projects for the in the near term will push more supply to the country, the LNG Chinese market of last resort, the consultancy said. Like Michael Corleone in Downward the Godfather Part III, pressure will also they wanted out but were come from shale gas dragged back in. and a move towards Chinese buyers had coal-fuelled power production, it added. forsworn involvement in Gas prices are the global spot market expected to average but this week a blistering $4.50 per million drop in temperature in British thermal units parts of the country sent in 2010, edging up PetroChina racing to snag to $5 in 2011. prompt volumes. It is in the market for • Greek companies Motor Oil and 10 spot cargoes that it Mytilineos have will direct to the new unveiled a 50:50 Shanghai LNG terminal. joint venture to carry At least one has already out natural gas been secured, a re-export trading activities and cargo from Belgium’s have lined up a first Zeebrugge terminal. LNG import cargo, according to the The timing is fortuitous ANA-MPA news for the Chinese. There is agency. an abundance of LNG in The venture, the the spot market and Photo: FREEPORT LNG first aside from European importers are state-run Depa to Citigroup to open already well supplied. handle LNG imports, Gas demand is still very will seek gas supplies for the two low in the continent and companies’ own re-export account prices are similarly weak. plants and also European players are potentially for third likely to be grateful for parties. the chance to offload Additionally, the some of their volumes and, potentially, at juicier prices than might have at Freeport LNG partners will take delivery of and jointly sell a 65,000 cubic-metre LNG been expected. US investment brokers. The shipment, players currently bidding for cargo that is due to The over-supply which is due to be loaded at a Trinidad cargo lifting on situation in Europe has bank said to be the terminal next week, is 21 December. arrive at the Revythoussa import reached significant levels as LNG pours in to avoid in for long haul understood to be destined for South Korea. This is Citigroup’s second foray into the LNG sector. terminal west of Athens on 2 even lower US prices. on LNG trading Macquarie Bank is also In August the company December. Sources talk of at least reported to be in talks for fixed the 140,000-cbm one re-export cargo a LUCY HINE London the export of a cargo in Golar Arctic (built 2003) for • Gazprom Global LNG is rumoured to month being offered from storage at Freeport, which 135 days at a rate in the be the buyer of a Zeebrugge while there Citigroup is preparing to lift was originally designed as mid-$30,000s per day spot cargo offered by have been suggestions the first re-export cargo an imports-only facility. range to lift a Trinidad Abu Dhabi Gas that Spanish and from the Freeport LNG A deal is expected to be cargo. Liquefaction Portugese buyers could terminal (above) in the US. concluded in December. The LNG was stored on Company. expect to re-export The investment bank has Industry sources said Citi, the vessel for several GGL is said to be around 30% of their LNG which has around four months before Citi sold it using its chartered fixed the 149,700-cbm 149,700-cbm vessel next year with a wedge Clean Force (built 2007) for traders working on LNG, is and passed on the charter Clean Power (built going to Asia. a period until mid-February making an aggressive play to GDF Suez. 2007) for the This is not a situation at a rate of around $45,000 for more cargoes and hopes The French company is shipment, which many had envisaged and per day to ship the to tie up three to four deals due to import the cargo into traders said they once again shows the ConocoPhillips-owned by the year-end. its Everett LNG terminal expect to head for flexibility of this industry. product, according to Citi is among the myriad near Boston next week. Japan. 3 • NEWS LNG Unlimited 27 November 2009 Oman back round table Israel breaking bread with for Kish gas FSRU terminal contenders Oman has held fresh talks Pre-qualification to help to finalise these with Iran about tapping the details. $12 billion Kish Island gas now under way The build, operate and field to feed its Qalhat LNG to build and run transfer contract will cover plant, according to Iranian the planning, financing, officials. import project operation and maintenance The sultanate said earlier of a 4 billion cubic metres this year that it was CHRIS MEYER London per annum facility. postponing by at least 12 The tender winner will months its plan to finance Six groups are throwing receive a concession to the project while Iran their hats in the ring to operate the installation for claimed it would proceed develop Israel’s maiden LNG 20 to 30 years, at the end anyway. import project. of which the infrastructure Oman signed a preliminary Pre-qualification is now Leisurely pace: planners are waiting for a formal project will be transferred to the pact in 2008 effectively to under way with all the sanction from ministries in Tel Aviv (above) state. finance the development of teams, which include Photo: BLOOMBERG NEWS Customers of the facility the estimated 50 trillion big-name players such as will be expected to arrange cubic feet of gas reserves at BG Group, Hoegh LNG, infrastructure, a process import LNG. Although the LNG volumes themselves Kish. Excelerate Energy and Golar that has already taken precise project configuration and there is no gas In exchange it would pipe LNG Energy, likely to be months. remains to be decided, distribution aspect. some of the eventual 3 passed, said a source. “The tender had been possible sites for the facility BG Group has had an billion cubic feet per day of A full tender is scheduled planned for around March have been sifted down to on-off relationship with output to the Qalhat LNG to be launched by the but because of delays with Ashkelon or Hadera, and a Israel over the past four plant. middle of next year. the national permit it will final decision will be taken years or so. The two parties The resumed talks are However, planners are probably be pushed back,” next year. held numerous discussions said to have been held still waiting on a formal the source said. Zeus Consulting has been over gas supply deals using during a visit by Oman’s Oil sanction for the project The project will use an working on the project for reserves from the Minister Mohammed from the ministries of offshore floating storage Israel’s Natural Gas Palestinian-owned Gaza al-Rumhy to Tehran. finance and national and regasification unit to Authority and is expected Marine field. EXPERTS IN SMALL AND MEDIUM SCALE LNG LIQUEFACTION PLANTS • Natural Gas Liquefaction Plants • Biogas liquefaction plants • Natural gas and biogas pre-treatment systems • LNG Satellite Plants • LNG re-gasification Cryonorm Projects B.V. Koperweg 3 • CNG / LNG Fuelling Stations 2401 LH Alphen aan den Rijn • Cryogenic Storage and Transfer systems The Netherlands • Cryogenic Engineering Phone : +31 172 418 080 • Air Separation plants E-mail : firstname.lastname@example.org • Oxygen, Nitrogen & Argon Plants Web : www.cryonormprojects.com 4 • NEWS LNG Unlimited 27 November 2009 Ample LNG supply driving regas interest, says GLE Interest in floating storage on the Australian floating and regasification projects is LNG project it is pursuing firming, according to new with Thailand’s PTTEP. midstream spin-off Golar On its shipping LNG Energy. operations, GLE and its In a third-quarter results parent Golar LNG said spot briefing on Friday, GLE said business will continue to developers are seeing the face some challenges in the availability of near to short term due to the mid-term LNG supply as a oversupply of vessels. “window of opportunity” in However, while the rates which to launch new import and utilisation of its own projects. ships is still unsatisfactory Along with formal tenders overall, the companies from countries including reported an improved Q-Flex first for Chita: inside the engine-room on the Al Ruwais Photo: LUCY HINE Israel, Indonesia, Uruguay trading performance over Chubu at front of and Jamaica, GLE said it is the quarter. “discussing numerous other While short to medium projects directly with term LNG demand remains Japanese queue interested parties”. under pressure, the “Asia continues to company said: “There are represent areas of increasing clear signs that an improved activity,” the company said. supply demand balance in Upstream, Australia’s Gladstone LNG project, where GLE is a shareholder the years to come will lead to a much needed improvement in charter for Q-Max cargo and the primary off-taker, is on target to ship its first rates.” Company’s Chita mid-December after Chubu upgraded the No.2 berth at been modified to accept the Q-Flex vessels. Tohoku cargo in 2012. • Chief financial officer terminal is being Chita to be able to accept Electric Power received the The company also said it Graham Robjohns is taking upgraded to take Qatar’s larger-sized vessels. first Q-Flex cargo at its will complete conceptual over the role of chief Work on the berth was Higashi Niigata terminal in work by the end of this year executive at GLE. the Qatari giants completed in early September December 2007. Tokyo Gas and the shipment will be and Tokyo Electric have also GDF Suez off mark in Yemen LUCY HINE London used to check if there are upgraded their facilities. GDF Suez has lifted its first of YLNG’s output over a any issues that need to be However, Japan has been cargo under its long-term 20-year period. Qatar’s foundation addressed. unable to accept Qatar’s contract with new start-up The company said the customer Chubu Electric Once the upgrade has largest vessels, which so far Yemen LNG. new source of LNG, Power is gearing up to be been given final approval are very limited in the areas The 145,700-cbm Maran strategically located to the the first Japanese buyer to by inspectors, the terminal to which they can trade. Gas Coronis (built 2007) east of the Suez Canal, will take in a Q-Max cargo. will move on to bigger To date 11 out of the 14 loaded a cargo from YLNG’s enable it to serve US, The utility has been things. Q-Max vessels ordered Balhaf plant for shipment to European and Asia- Pacific upgrading its Chita LNG Preparations for the first have been delivered. Apart the company’s capacity at markets. terminal, which is due to 266,000-cbm Q-Max are from sorties to the new the UK’s Isle of Grain GDF Suez said “a accept its first Q-Flex sized expected to be completed South Hook terminal in the receiving terminal. significant part” of the shipment within weeks. within the first quarter of UK and a part-cargo to GDF Suez has contracted volumes would be sent to The 210,100-cbm Al 2010. Spain, however, the fleet to buy 2.55 million tonnes its Everett receiving terminal Ruwais (built 2008) is Chita will be the sixth has largely idled off per annum of LNG or 40% near Boston in the US. scheduled to call in Japanese terminal that has Fujairah. Economic Uncertainty & Emerging LNG Outlook in Asia: Surplus and Deficit Scenarios 8 – 11 February 2010 * Singapore REGISTRATION NOW OPEN!! Organised by: Supported by: email@example.com Agenda & Speakers Details, Please visit: www.cconnection.org/LNGAHome.htm 5 • NEWS LNG Unlimited 27 November 2009 US launches extradition Seven up for new Nigeria bid as bribe gas processing facilities net spreads Big names head E.ON Ruhrgas, the UK’s BG Group, Norway’s Statoil commit to carrying out significant gas exploration output within five years to meet a domestic A British lawyer is fighting up teams set to with Centrica of the UK, activities that will help to requirement forecast to rise extradition to the US over France’s Total with PTT of support the country’s from just over 1 billion cubic accusations of funnelling bid on a trio of Thailand, Korea Gas domestic sector as well as, feet per day this year to millions of dollars in bribes major projects Corporation, and local in the longer run, provide nearly 5 Bcfd in 2013. from contractors to Nigerian player Oando with Canada- feedstock for exports. Uncertainty over authorities. based Sahara Energy. More than 30 other domestic needs and Jeffrey Tesler faces jail in CHRIS MEYER London Some of the teams, companies that last year available supply remain the the US if sent there and however, remain tight- expressed an interest in most significant factors convicted. Seven consortia are lining lipped on whether they will investing in the schemes holding up the sanction of He is accused of being up to submit proposals for actually submit proposals have also qualified as new liquefaction projects the London connection in a new Nigerian gas while others, such as E.ON possible minor investors and such as the SevenPlus bribery chain that linked US processing facilities next and Centrica have seen could join larger alliances. expansion at Bonny Island contractor Halliburton, its month. earlier formal agreements The projects will be sited and the greenfield Brass subsidiary MW Kellogg and The bidders have been with their nominal partners at Warri in Delta State, LNG. other companies to projects asked to offer their lapse. Obiafu in Rivers State, and such as the Nigeria LNG proposals on 18 December Nevertheless, market in the Cross River/Akwa • Nigeria LNG has named production plant on Bonny for three plants that will sources suggested most are Ibom area. Basheer Koko as its new Island. initially direct gas for likely to offer in their plans. The gas gathering and deputy managing director. Halliburton and domestic use but which Nigeria expects the processing projects, based Koko’s career spans sales associated companies have could be advanced to LNG so-called core investors to in so-called franchise clusters, and marketing in the already paid out $579 liquefaction export projects back the proposals for will be located within shipping, refining and million in fines for breaching in due course. central processing facilities acreage already under petrochemicals sectors. He anti-corruption legislation. According to Nigerian with investments worth at exploration by companies has also worked in the LNG Another Briton, Wojcieh National Petroleum least $2.5 billion, eventually such as ExxonMobil, Shell, division at NNPC and held Chodan, will face similar Corporation, the groups are increasing to around $30 Chevron and Total. various assistant ministerial extradition charges in the being led by Russia’s billion. NNPC has ambitions to roles. He replaces Engineer New Year. Gazprom, ExxonMobil with The companies must double the country’s gas Faithful Abbi Abbiye Suku. LNG Trade Report Gas on the water A brand new monthly report highlighting international LNG supply and demand, designed to help you make sense of global trading patterns • Find out who’s supplying the new markets • Discover who the largest spot exporters are • Learn what percentage of global trade each country represents www.lloydsmiu.com/lngtrade For more information on the LNG Trade Report contact us on: Email: firstname.lastname@example.org Tel: +44 (0)20 7017 4482 In association with Lloyd's is the registered trademark of the Society incorporated by the Lloyd's Act 1871 by the name of Lloyd's 6 • NEWS LNG Unlimited 27 November 2009 DVB calling bottom of the Regas market for utilisation rates vessels ‘set to Bank sees light at end of tunnel run out for LNG shipping, if from low base of road’ DVB’s researchers declare themselves “not very LUCY HINE London optimistic” about the LNG regasification vessel sector Fleet utilisation for LNG as they see challenges to carriers is expected to these specialised vessels improve in 2010, according sustaining their competitive to analysts at Germany’s advantage. DVB Bank. They explain that the cost A market outlook report of onshore regas terminals from the research and is expected to reduce. strategic planning In addition, regasification department titled capacity far exceeds total ‘Pessimism will take flight import demand, especially with market bottom in in Asia and Europe. sight’ puts the current The analysts acknowledge, figure at 63%. however, that LNGRVs “While the increase in STUNNER IN DUBAI: debut in the LNG contractor on the could fill the gap in new utilisation year-on-year post Drydocks World shipyard conversion arena. Its conversion. When areas where current regas 2010 is expected to be has begun work on the state-owned parent DP completed in mid-2010 the capacity is non-existent. impressive, it will be from a conversion of the five-year- World stunned the credit FSRU will be capable of They are more optimistic very low base,” the report old Golar Frost (above) into markets on Wednesday, storing 137,000 cbm of about the floating LNG cautions. an LNG floating storage however, by asking for a LNG and delivering 3.75 production sector. Capex The analysts say and regasification unit for standstill on its debts while billion cubic metres per costs for an FLNG plant of utilisation is not expected to Italy’s Livorno import project. it restructures. annum of gas. about 1.9 million tonnes per reach the 86% levels seen This is the Dubai yard’s Saipem is acting as main Photo: Drydocks World, Dubai annum stand at $1.3 billion, in 2003-2004 “any time which compares well with soon”. expansion, we may begin to 2011. DVB forecasts that until at least mid-2011. The the $3.5 billion price tag on However, they do expect see a supply squeeze in the LNG newbuilding prices will analysts reason that the lack a 4 million tpa onshore LNG vessels to “do better” LNG market as early as slide in the next 18 months. of new LNG carrier orders liquefaction plant. over the next four years. mid-2011,” the report states. The analysts expect prices will put downward pressure Equally, setting up an DVB’s optimism is based As a result, DVB reckons for a 140,000-cbm vessel to on yard prices. onshore plant can take up on IMF projections for the LNG carrier freight rates drop from a current $213 As charter and utilisation to five years compared with world economy and should improve by million to about $177 rates will be improving from the conversion of an LNG forward natural gas prices. mid-2010. million in mid-2011. very low bases this will also tanker to a floater, which The bank’s team sees gas It also expects demand However, they say that be reflected in asset values. could take less than two demand increasing by 4.8% for spot cargoes to increase this should mark the “Second-hand values are years. in 2010 and continuing to in the short term but says bottom of the asset price expected to follow the “Theoretically, this niche rise into 2014. significant barriers exist that cycle. curve for NB (newbuilding) sub-sector in the LNG value ad-4_print.pdf “Despite planned 20/05/2009 11:43:03 can hinder the long-term The bank believes asset prices during the subsequent chain looks attractive,” the (liquefaction) capacity growth of this sector after values will remain subdued recovery,” DVB adds. analysts conclude. C M J CM MJ CJ CMJ N 7 • NEWS LNG Unlimited 27 November 2009 Shell charts easterly course for extra Qatargas 4 sales Latest mega-train Photo: QATARGAS • Ann Pickard, currently running 10 months Shell’s boss in Africa, will take charge of the late due to delays supermajor’s operations in with earlier plants Australia early next year. It is a busy time in the country with the company MARK HILLIER London and participating in the NASSIR SHIRKHANI Beirut Chevron-operated Gorgon LNG development while Shell is hoping to tie up putting together its own additional sales of LNG to 3.5 million tonnes per Asian customers from its annum Prelude floating Qatargas 4 mega-train liquefaction project. project (right). The supermajor’s Qatar during the analysts’ trip that country manager Andy completion of the train will Brown told analysts on a be delayed by about 10 visit this week that sales months to the end of 2010. opportunities are being Production is then expected pursued in markets such as to ramp up during the China and Pakistan, “where course of 2011. Brown we see significant LNG blamed the knock-on demand based on replacing impact of delays to earlier higher priced fuels in the was originally taken back in 3 million tonnes per annum long-term take or pay trains being built in Qatar. power sector”. late 2005, Shell’s Elba Island to PetroChina and 650,000 basis.” He added that There are other niche regasification terminal in tpa to Dubai have since Qatargas as a whole has construction is now markets in its sights such as the eastern US, which is been lined up. been an aggressive seller of reaching an “advanced Bahrain and Cyprus, he being expanded, was While capacity is still LNG to Asia in recent stage” with the first systems added. viewed as the prime available to Qatargas 4 at months, notably signing starting to be commissioned. When the decision to destination for its output. Elba, “there is potential for memorandums of Shell has a 30% stake in proceed with Qatargas 4 However, sales totalling further long-term diversions understanding covering an the project and pegs its to the east of Suez extra 7 million tpa to China share of capital costs at Chubu buys Gorgon stake markets”, Brown explained. during a recent visit by about $2 billion. Chubu Electric Power additional 60,000 tpa based “We have been senior officials to Beijing. Qatargas 4 is the last in expects to acquire a on its stake in the project. marketing this LNG away For Shell, Brinded said the chain of six mega 0.417% interest in Gorgon Chubu declined to from the US to lock into that the start-up of liquefaction trains that will LNG and sign up to buy comment on the cost of the long-term oil price Qatargas 4, together with push Qatar’s LNG 1.44 million tonnes per acquired interest. linkages,” said Shell the recently sanctioned production to 77 million annum of its output by the The company will be the Exploration and Production Gorgon LNG, will help tonnes per annum by 2011. end of this year. third Japanese utility to take boss Malcolm Brinded. boost the supermajor’s LNG It will receive 1.4 billion The Japanese utility said a stake in the project after “So far, about half of the production by 40% to 26 cubic feet of gas per day the supplies will kick off in Tokyo Gas, which is buying Qatargas 4 LNG has been million tpa by 2015. from the giant North Field 2014 and run for 25 years. 1%, and Osaka Gas with sold to Middle East and Asia On Qatargas 4, Shell to produce 7.8 million tpa It is also entitled to an 1.25%. Pacific customers on a executives acknowledged of LNG. 8 • PRODUCTION LNG Unlimited 27 November 2009 Drilling campaign gets off Statoil eyes to flying start at Woodside December for restart Second well hits start of what will be the operator’s biggest ever • The Woodside-led North phase but do not have feedstock gas. at Snohvit West Shelf LNG venture chunky gas pay exploration campaign in expects to produce record Moore said the objective Statoil’s Snohvit LNG as operator seeks Australia. volumes this year, according of the big exploration production plant in northern Eris-1 was drilled close to campaign is “to find Norway will remain shut LNG feedstock the edge of the block to Eve Howell, the operator’s senior vice president for enough gas for a couple of well into December, the adjacent to Chevron’s large the project. Howell told an trains of LNG.” company admitted this RUSSELL SERANCKE Wheatstone field. investor briefing this week Chevron recently beat week. Wellington and Woodside did not reveal that the company is “well Woodside to sign up The outage is due to MARK HILLIER London if Eris might spill over into on track” to resolve Apache’s Julimar gas field as faults that became apparent the Wheatstone acreage, teething problems with a feedstock supply for the when a restart was Woodside Petroleum has saying that there is trains 4 and 5. rival Wheatstone LNG attempted early this month found more gas as it drills insufficient drilling development. after lengthy repair work. for reserves to feed information as yet. Pluto is Noblige-1 in block Woodside this month The first problem lay in expansion of its Pluto LNG The well was the second WA-404-P, which will be awarded dual FEED contracts one of the plant’s utility development in Western in a 20-strong campaign drilled by the semi- for the two-train Pluto systems and has now been Australia. that launched recently by submersible Jack Bates. expansion to KBR and Foster fixed, while the second The Australian company Woodside. Noblige-1 is a follow-up Wheeler-WorleyParsons. concerns an electric motor said it intersected 60 metres The first, Pelion-1, was to this year’s Martell-1 Trains two and three will in the cooling system. Work of natural gas pay in well unsuccessful in its deeper discovery and Moore said each be sized to produce to replace the motor is developed sands during exploration target. Woodside plans to put 3.4 million tonnes per under way, Statoil said. drilling of its Eris-1 However, it did prove up down as many as eight annum. The Melkoya plant was exploration well on block the south extension of Pluto exploration wells in this The two FEED studies are closed from 15 August for WA-34-L, which is also where the top of the area. expected to be completed major upgrades and home to the main Pluto reservoir was higher than The company is hungry in the second half of 2010 maintenance, including the field. prognosis, which the for gas reserves to feed its with a final investment replacement of 15 heat Exploration boss Peter operator said could add to planned second and third decision to follow. The first exchangers. Moore said Woodside is the field’s reserves. LNG trains at Pluto, which train is 82% complete and It was restarted on 7 “very pleased” with the Eris The next well on are in the front-end is due to start LNG exports November before shutting result, which comes at the Woodside’s agenda near engineering and design early in 2011. down the following day. Snohvit struggled with Australian climate change pill equipment failures and reduced capacity for more easier to swallow for industry than a year after its 2007 start-up. Gas producers have given a Australian Petroleum electricity, up to nine tonnes It is expected to reach full cautious welcome to Production & Exploration of emissions are saved for capacity after the recent Australia’s proposed Association (APPEA) every tonne produced in upgrades. amendments to its climate acknowledged the Australia during the LNG change legislation, writes legislation is now less of a production process. Iranian gas Amanda Battersby. headache for the LNG The revised package does The new proposals sector. not yet resolve all the flows flatline agreed by the government “It makes no sense to industry’s issues but a Iran’s natural gas and the opposition offer constrain the very industry number have been production will remain at A$7 billion (US$6.48 billion) that has the most to addressed, according to 2008 levels for the medium worth of compensation to contribute to the world APPEA. term, according to the LNG producers, electricity addressing climate change,” Robinson pointed out National Iranian Gas generators and mining said APPEA chief executive there is a great deal in the Company. companies. Belinda Robinson (right). package that has been “It is predicted there will Australia is planning a “A well-designed scheme deferred, delegated or be no output increase in the market-based carbon would encourage the made subject to review. next three years,” NIGC trading programme that will expansion of Australia’s This “continuing head Javad Owji was force greenhouse gas LNG sector as more natural ambiguity and uncertainty” quoted as saying by local producers to pay for their gas, producing between makes it “so critical that the media. emissions from 1 July 2011. 50% and 70% fewer good faith demonstrated in The comments are A A$610 million package greenhouse gas emissions, these negotiations is upheld roughly in line with recent for the LNG industry will is substituted for coal in while the detail is settled”, progress on various gas ensure all announced generating China and she said. National negotiators. The projects, particularly at the projects receive at least India’s electricity,” she Prime Minister Kevin ruling Labor Party needs the giant South Pars gas field. 50% effective assistance, added. Rudd unveiled the revised support of at least seven They are an effective said opposition leader APPEA claimed that plan after weeks of talks opposition senators in the acknowledgment that Iran’s Malcolm Turnbull. when LNG is used in place between the government upper house to pass LNG production aspirations Industry body the of coal to generate and opposition Liberal- legislation. remain over the horizon. 9 • SHIPPING LNG Unlimited 27 November 2009 Clever money on DSME goes to Russia with love as it eyes up duo to win charter construction bonanza prize at PNG LNG South Korea’s Daewoo Shipbuilding & Marine Engineering has signed a stake. DSME is one of a number of big-hitting shipbuilders that have Chinese shipyard and purchase deal that they and AP Moller is due to take delivery of the memorandum of formed partnerships with sign as they try to drive understanding with Russia’s Russia. seen as a sure bet forward their domestic unemployed 165,000-cbm United Shipbuilding Compatriots Hyundai to build required expertise in LNG carrier newbuilding Maersk Corporation to upgrade a Heavy Industries and shipbuilding. Meridian early in the New repair yard for LNG carrier Samsung Heavy Industries LNG newbuildings Earlier this month China Year. construction. and Japan’s Mitsubishi Petroleum & Chemical ExxonMobil received A DSME official Heavy Industries have also LUCY HINE London Corporation (Sinopec) shipowners’ bids for vessels confirmed his company will signed pacts with USC. signed a heads of this summer. be co-operating with USC Last week top brass from Two shipowners are being agreement to buy 2 million Overseas Shipholding to modernise Zvezda Russia including a tipped to walk off with tonnes per annum from Group, AP Moller-Maersk, Shipyard at the former Gazprom-led delegation long-term charters from PNG LNG over a 20-year Maran Gas Maritime, BW naval base of Bolshoy with chiefs from subsidiary ExxonMobil’s soon-to-be period to supply its Gas, Knutsen OAS Shipping Kamen in the Primorsky Gazflot and the Shtokman sanctioned PNG LNG Qingdao receiving terminal and Japan’s K-Line, NYK Krai region in the Russian Development Company project. in eastern China. and MOL were among far east. paid a visit to Primorsky Danish giant AP Moller- If confirmed the ships those believed to have The yard will be able to Krai for a ceremony to mark Maersk and Japan’s Mitsui would be the first and shown an interest. build LNG ships; floating the deal with DSME and OSK Lines (MOL) are seen perhaps only LNG The energy supermajor production, storage and another with Singapore’s as front-runners to provide newbuildings of 2009 and requested offers on both offloading units; and Yantai Raffles Shipyard on a a mix of new and existing would come as a huge newbuildings and existing drillships required for the new facility in Vladivostok. vessels for the Papua New disappointment to South vessels in its tender for four Shtokman gas and LNG During the visit Gazflot, Guinea project in what is Korean shipbuilders, which to five ships of between development. which has traditionally been one of the few pieces of have previously led the 150,000 cbm and 180,000 DSME said basic concepts the drilling subsidiary of new LNG carrier business pack in construction for the cbm. for the yard’s overhaul have Gazprom, and USC signed a this year. sector. The shareholders in the been drawn up. However, co-operation deal on the Market players said up to Industry sources said 6.3 million tpa, two-train the exact details including a construction of supply three of the ships required MOL and AP Moller- PNG LNG, which is due for completion date still have to vessels, floating drilling rigs for the project would be Maersk would also supply start-up in early 2014, plan be finalised. and LNG carriers, according newbuildings built in China, one existing vessel each to to take a final investment It added that Zvezda to reports. most likely at Hudong- complete the PNG project decision on the project in currently repairs small Russia is keen to grab a Zhonghua Shipbuilding fleet. December. commercial vessels and that share of the 10 drilling rigs Group near Shanghai. Both have constructed Asian buyers Tokyo it has “a lot of space that and platforms, 60-plus The Chinese authorities uncommitted tonnage in Electric Power, Osaka Gas can be used for expansion vessels and various floating have been insistent that the past few years. and Taiwan’s CPC have and upgrading”. and technical facilities and they will control an element MOL has two delivered pencilled in long-term sales The South Korean up to 23 LNG carriers it of the transportation for newbuildings laid up at deals covering 4.3 million shipbuilder did not disclose estimates will be needed to each long-term LNG sale Hyundai Heavy Industries tpa. how much money it will develop its offshore oil and invest in the facility but said gas resources over the next Global trade squeeze pinches at MISC it will hold only a minority 10 years. Higher losses from its containership business hurt containerships, plus lower player said net earnings to earnings of 900 million from 30 September were 400 Latest giants join QGTC Malaysian giant MISC in its tankers and LNG vessels. million ringgits ($118.5 Qatar Gas Transport Rasheeda are due to be the first nine months of this Looking ahead, the million) against 1.25 billion Company has taken delivery delivered by SHI during year, but bottom-line company said the in the same period of 2008. of two more large LNG 2010 with the entire fleet improvements are expected “contraction of global trade Revenues fell to 7.42 billion carriers as the handover of handover to be completed from now on. continues to pose from 8.1 billion ringgits. vessels in its massive fleet by July. The state-controlled LNG challenges to the shipping It blamed a loss of 640 draw to a close. Nakilat also took delivery carrier, tanker and liner industry as reflected by million ringgits by its The 266,000-cbm Shagra of the 210,100-cbm Al falling rates in petroleum, was delivered by Samsung Nuaman from Daewoo LNG CARRIeR FLeet By tyPe chemical and container Heavy Industries (SHI). It is Shipbuilding & Marine Type Delivered On order Total shipping”. the 11th of 14 Q-Max sized Engineering. The Q-Flex Ship 329 42 371 Earnings from long-term vessels to be handed over ship will also be assigned FSRU 2 2 4 charters in the LNG and to QGTC, or Nakilat as the long-term to Qatargas 4. offshore businesses will also company likes to be known. The last of the 31-ship FPSO 0 4 4 help to cushion the group Shagra is chartered Q-Flex fleet, the 210,100- RV 6 4 10 from the downward long-term to the now cbm Al Bahiya, is due to be TOTAL 337 52 389 pressure on rates, the delayed Qatargas 4 project. delivered before the Source: LNG Shipping Solutions company said. Sisters Zarga, Aamira, and year-end. 10 • TERMINALS LNG Unlimited 27 November 2009 Falcione picks latest crew • Phase one of Briefs Thailand’s maiden import terminal is member for Albania project now 45% complete, according to state company PTT. It told an analysts Bologna company geological factors along the expected until next month LNG volumes while it builds briefing that the 5.5 route of the sub-Adriatic or early 2010. its onshore facility. to conduct survey pipeline that will take gas Local company SPS is the There has been no million tonnes per annum facility’s over the pipeline from the terminal to Brindisi owner’s engineer while decision yet as to whether storage tanks are now finished and route to Brindisi in Italy. Technip completed detailed this would be a floating fabrication of the jetty The company will use its design for the two-tank, 8 storage and regasification and regasification unit Odin Finder survey vessel billion cubic metres per unit or an Excelerate is under way. CHRIS MEYER London and is expected to start annum project last year. Energy-style pure Start-up is still work shortly. Costs have been regasification vessel. scheduled for the Italy’s Falcione Energia has Falcione has already estimated at €800 million The company is pushing third quarter of 2011, although earlier ticked off another contract picked Golder Associates for ($1.2 billion) for the LNG one of three projects reports indicated this award for its proposed LNG a desktop environmental terminal and €200 million proposed for Albania. could be delayed on import project to be sited in study on the Italian end of to build the 125-kilometre The others, being the back of weak gas Albania. the proposed scheme. pipeline. developed separately by demand. PTT and Qatargas Geological Assistance & An award for the dual The facility is scheduled Switzerland-based ASG have yet to confirm a Services, based near basic design and front-end to start up in 2014. Power and Norway’s Statoil, preliminary sales deal Bologna, will carry out a engineering and design Falcione has already said remain further behind both for 1 million tpa over reconnaissance survey package for the approach it could use a temporary in terms of engineering and 10 years beginning looking at land and to the Albanian coast is not floating solution to receive permitting. from 2011 as they continue to wrestle over price. • French designer Gaztransport & Technigaz has finalised a licence agreement with Energy World Corporation for the construction of a membrane containment system for land-based LNG storage tanks. EWC is currently planning a number of small-scale LNG production and import projects in the Towering demand: Shanghai’s ever-growing real estate Photo: PER STAALE BUGJERDE Asia-Pacific region. The deal, first PetroChina to import spot cargoes sketched out in May 2008, is something of a landmark for via rival’s plant to plug supply gap GTT, which has been pushing to diversify from its main PetroChina is leasing cubic metres of gas to cargoes. The shipments, • Wuhan city is to build an business of designing capacity at China National eastern and southern China, both from the Chinese LNG tank capable of containment systems Offshore Oil Corporation’s citing comments from company’s long-term storing the equivalent of 20 for LNG carriers in Shanghai LNG import Zhang Guobao, director of contract with Malaysia LNG million cubic metres of gas the current quiet terminal as part of the the National Energy Tiga, arrived in October and to mitigate against future shipbuilding market. countrywide strategy to Administration. November respectively. supply shortfalls. • Sempra LNG’s new meet gas shortages. The start-up phase at the During the test period the City planners said this Cameron terminal on The company is looking 3 million tonnes per annum teminal will receive one week they would invest the US Gulf Coast to snag between eight and Shanghai plant is already cargo a month from MLNG. 200 million yuan ($30 was due to see its first Q-Flex LNG shipment 10 spot cargoes in the short well under way. CNOOC expects to launch million) to build the this week. term. It plans to direct the CNOOC has unloaded full commercial operations in Anshan LNG storage and The 210,100-cbm Al equivalent of 700 million the first two of six test the second quarter of 2010.regasification facility. Oraiq (built 2008) The mayor has requested was scheduled to PGN does sums on twin island facilities a fast-track approvals process arrive at the Louisiana-based Indonesia’s state gas reporters. PGN still needs to terminal, which is being to allow construction to facility on Thursday, distributor Perusahaan Gas arrange project finance to developed in tandem with start as soon as February. according to electronic Negara plans to allocate $1 cover around 70% of the state power player PLN and Anshan would be able to ship tracking data. billion for two LNG cost, however. Pertamina, and up to 150 supply 10 days’ worth of The cargo is the first received under a receiving terminals in West The company is targeting MMcfd from North Sumatra revaporised LNG to the short-term supply deal Java and North Sumatra, an extra 400 million cubic The projects are local area while a second signed with Qatari company president director feet per day of gas supply scheduled to kick-off phase already on the table producer RasGas this Hendi P Santoso told from the West Java LNG operations in 2012. could double capacity. summer. 11 • MARKETS LNG Unlimited 27 November 2009 Profitable calculus NATURAL GAS MARKET EIA WEEKLY NATURAL GAS STORAGE REPORT in Latin America... 20 Nov 13 Nov Net week 1 year 5-year Change vs Stocks (Bcf) 2009 2009 change (Bcf) ago average* 5-year avg** East 2099 2101 -2 1997 1954 7.4% Load of arbitrage respectively, by the Johnson at Waterborne West 525 524 1 468 456 15.1% year-end. reckons a handful of spot opportunities on There are more cargoes could make their Producing 1211 1208 3 966 982 23.3% offer in region’s terminals and expansions way into Argentina’s Total Lower 48 3835 3833 2 3431 3393 13.0% to come, although gas floating facility this disparate sector Note: This report tracks US natural gas inventories held in underground storage facilities. Changes in reported stock levels reflect all events affecting working gas in storage, including injections, withdrawals, and reclassifications between base and working gas. The weekly stocks generally are the volumes of working gas as of the report date. demand and the season. *Average levels 2004-2008, **Difference from 5-year average (percent). Source: EIA underlying drivers for LNG Argentine utility Enarsa NYMEX/HENRY HUB NATURAL GAS FUTURES PRICE CURVE CHRIS MEYER London demand vary significantly has already extended the 5.40 across the region. stay of Excelerate Energy’s Latin American LNG is not Mexico’s Altamira 138,000-cbm a new story; well, not terminal, Puerto Rico and regasification vessel 5.30 altogether new. Puerto the Dominican Republic all Excelsior (built 2005). Rico has been importing use LNG as a base-load A UK-based LNG 5.163 US$/MMBtu base-load volumes for fuel for power generation. analyst argues, however, 5.20 power generation since From next year, the that even with relatively 5.253 5.266 US$/MMBtu US$/MMBtu 2004. Mejillones terminal in cheap LNG on offer Brazil However, it is true that Chile will also direct is unlikely to bring any 5.10 January contract February contract March contract a wave of new terminals is significant volumes to the more in as healthy Source: Bloomberg giving the region a fresh mining industry probably hydropower levels and UK NATURAL GAS FUTURES PRICE CURVE prominence and creating on a base-load basis. increased Bolivian 33.0 an interesting trading For Brazil, and especially shipments have kept it dynamic. for its terminal near Rio, well supplied. Mexico is by far the meanwhile, LNG is Chile is talking up the 31.0 biggest of the region’s six conspicuously a top-up possibility of piping its 27.50 32.50 importers. option, used for peak own imported LNG across 29.0 GBp/therm GBp/therm According to US-based demand periods when the continent to Argentina 30.50 Waterborne LNG, the hydropower output and in another reversal of GBp/therm country will bring in LNG volumes from more traditional flows. 27.0 equivalent to just over neighbouring pipeline To complicate matters December contract January contract February contract Source: Bloomberg 130 billion cubic feet of exporter Bolivia are low. yet again, Peru LNG will Argentina uses LNG come on stream next year. • US natural gas futures rallied on Wednesday amid short gas in 2009 compared seasonally for heating but Operator Repsol is likely covering ahead of this week’s Thanksgiving holiday break with 34 Bcf for Argentina and expectations that the weather could turn colder. and 24 Bcf for Brazil. also to augment Bolivian to send cargoes up to January has now become the front-month contract. The latter two countries shortfalls and its own Canaport in Canada but December expired on Tuesday at just below $4.50 per have now chalked up at declining domestic some could stay in the million British thermal units. January closed on least one full year of production. region, possibly going into Wednesday before the holiday at $5.163, up nearly 40 operational activity. As always, though, the Sempra’s Costa Azul. cents on the day and about 45 cents from the same time BG Group’s Quintero most important factor This is still an adolescent last week. LNG terminal in Chile will driving the trade is pricing and developing sector, but Inventory data from the US Energy Information have done around 20 Bcf margin. arbitrage opportunities Administration showed a modest increase of 2 billion of business by the New Argentina, Brazil and leveraging price disparities cubic feet in the latest week to 3.833 trillion cubic feet, Year, although it only the DR pay a premium to between the US and the about 12% above the five-year average for the time of kicked off operations in Henry Hub, which is so Latin American importers year and 13% above the same time last year. July. low now that LNG has are already evident. Looking ahead, it remains to be seen how the US will Puerto Rico and the become cheaper than its The region’s volatile react to big stock market falls internationally after Dubai Dominican Republic are local competitor Bolivian netback differentials will sought a six-month delay in debt repayments by expected to have sucked pipeline gas. keep market watchers state-owned Dubai World and development company in 22 Bcf and 20 Bcf, For this reason, Steve intrigued for a while yet. Nakheel. LNGUnlimited Editors: MARK HILLIER and LUCY HINE SUBSCRIPTIONS & ADVERTISEMENTS A joint publication from email@example.com and LNG Unlimited is published Reporter: CHRIS MEYER Business development manager: NEIL BESTER weekly by Norges Handels og Design and production: RICHARD CROCKETT Phone Fax Sjofartstidende, PO Box 1182 e-mail: firstname.lastname@example.org Sentrum, 0107 Oslo, Norway. London (+44) 207 842 2700 (+47) 207 842 2705 Editorial head office: Oslo (+47) 22001200/1300 (+47) 22001260/1310 All material published in International Press Centre, 4th Floor, Stavanger (+47) 51859150 (+47) 51859160 LNG Unlimited is covered by 76 Shoe Lane, London EC4A 3JB, UK. Houston (+1) 713 6263113 (+1) 713 6268125 copyright. Redistribution of Tel: (+44) 207 842 2730 Stamford, CT (+1) 203 3242994 (+1) 203 3243368 any kind (including by e-mail Fax: (+44) 207 842 2735 Singapore (+65) 6557 0555/0600 (+65) 6557 0444/0900 and via Intranet or Internet) ISSN 1890-6893 Shanghai (+86) 21 6329 6301 (+86) 21 6329 6307 is prohibited by law. The natural way to bring gas to Europe A n t i f e r L n G t e r m i n A L w i L L G i v e Acc e s s f r o m t h e At L A n t i c bA s i n to the french network And other mAjor europeAn GAs mArkets Firm capacity of 315 GWh/day Deep-water harbour of Le Havre-Antifer corresponding to an annual capacity dedicated to hydrocarbon traffic North Sea of some 7 mtpa (existing oil terminal on site) Strong support of the French State: Optimised layout on 30 hectares Antifer is the only planned LNG terminal with very short unloading lines Rotterdam in France to be declared a “Project of Public London LNG vessels up to Q-Max (265,000 cu.m) Zeebrugge Interest” by the French government Direct access from open sea without Le Havre Antifer Ideally located on the French network, channelling or tide restrictions Paris close to Paris urban area Up to 3 LNG storage tanks of 170,000 cu.m each Permits application early November 2009 Atlantic Ocean Wide range of gas qualities without Commissioning 2014 adjustment Antifer LNG Terminal 44 rue Washington 75008 Paris France T: +33 170 60 73 81 F: +33 170 60 74 74 email@example.com • www.gazdenormandie.com 21www AP GDN.indd 1 24/11/09 17:52
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