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[la forge] 22/3/2018 21:11

Shell wooed by British Columbia with tax cuts for LNG project
By Natalie Obiko Pearson on 3/22/2018

VANCOUVER (Bloomberg) -- British Columbia Premier John Horgan lightened the tax burden on proposed liquefied natural gas projects as his government seeks to convince Royal Dutch Shell Plc to move ahead with a C$40 billion ($31 billion) development in the western Canadian province.

The province will eliminate an extra tax ranging from 3.5% to 5% of net income that the previous government imposed on LNG projects, Horgan told reporters in Victoria on Thursday. New projects will also pay lower electricity rates in line with other industrial users, he said.

In B.C., manufacturers are exempt from sales taxes on production machinery and equipment. The new framework will extend that exemption to LNG projects, but the lost revenue will be subject to repayment once the project is up and running, according to a government statement.

Horgan said the new terms were justified because under the existing framework, not a single project was likely to get built.

“After five years of talking about one, two, three, five LNG facilities, there are zero,” Horgan said. With the changes, “we may get one.”

Shell and its partners Mitsubishi Corp., PetroChina Co. and Korea Gas Corp. are expected to make a final investment decision this year on whether to build an export facility in Kitimat in northern B.C. The project would allow Canadian gas to be shipped to Asian markets and could eventually reach 26 million tons a year in capacity.

Horgan set a Nov. 30 deadline for Shell and its partners to formally greenlight the project.

The previous Liberal government under former Premier Christy Clark had set up a C$100-billion “prosperity fund” to collect taxes from an LNG industry it expected would grow to more than 20 developments. Not a single major one has moved forward and five have been canceled since then amid a global supply glut of LNG.

[sarkasm] 22/3/2018 11:03

BLOOMBERG


Shell Mulls 15-Year Deal for Israeli, Cypriot Gas, Partner Says
By Yaacov Benmeleh
21 mars 2018 à 14:36 UTC+1

Gas would be sent to Shell’s LNG plant on Egyptian coast
Deal could help promote eastern Mediterranean as new gas hub

Royal Dutch Shell Plc is weighing a 15-year contract to buy natural gas for its liquefied natural gas plant in Egypt from offshore fields in Cyprus and Israel.

Shell is in talks to purchase 6 billion cubic meters of natural gas a year from the Aphrodite field, located in Cypriot waters, according to Delek Drilling LP’s annual report Wednesday. A potential deal also could include gas from the neighboring Leviathan reservoir, Israel’s largest pool, which is expected to start production by the end of 2019.

The Hague-based Shell would earmark the Israeli and Cypriot gas for its LNG plant in Idku, Egypt. The Egyptian facility has a maximum annual capacity of 12 billion cubic meters, Delek said. Representatives for Shell did not immediately respond to a request for comment.

A deal with Shell would bolster the case made by Israel and its neighbors that the eastern Mediterranean can be an energy hub. Partners in the Israeli fields Leviathan and Tamar have already signed export deals with Jordan and Egypt worth more than $25 billion.

The Tel Aviv Oil & Gas Index rose as much as 1.1 percent on the news. The gauge traded 0.8 percent higher to 1,012.13 at 2:52 p.m. local time.

Houston-based Noble Energy Inc. owns 35 percent of Aphrodite and Delek 30 percent; Shell owns the rest. The cost to develop the Aphrodite field will be $2.5 billion to $3.5 billion, though that doesn’t include the cost of building a pipeline to transport the gas, Delek said in the report.

Delek also holds a 45.3 percent stake in Leviathan, while Noble holds 39.7 percent. Ratio Oil Exploration 1992 LP owns the remainder. The two sites lie just 20 miles apart.

— With assistance by Kelly Gilblom

[ariane] 21/3/2018 14:14

First cargo of US LNG from new Cove Point facility arrives in UK

London (Platts)--21 Mar 2018 950 am EDT/1350 GMT

The first LNG cargo from the newly operational Cove Point terminal on the US East Coast arrived Wednesday into the UK's Dragon terminal, according to S&P Global Platts trade flow software cFlow, only the second cargo of US LNG to land in the UK since US shale-gas based LNG exports began in February 2016.

* Cargo diverted to UK to replenish LNG stocks at Dragon

* NW Europe still not destination of choice for US LNG

* Deliveries could pick up this summer on low stocks

The cargo was delivered aboard the Gemmata, which was diverted from its original route toward the Pacific basin, and landed in the UK at a time when LNG stocks are severely depleted following two periods of extreme cold weather.

Despite northwest Europe suffering from the late winter cold blasts, US LNG has still been a rare visitor to the region.

Excluding Wednesday's arrival into Dragon, only two cargoes of US LNG have landed in northwest Europe -- one in June 2017 to the Gate terminal in the Netherlands and one in July 2017 to the UK's Isle of Grain plant.

It had been expected that the liquid UK and Dutch gas hubs would attract US LNG given a perception of an oversupplied global LNG market that would have seen US LNG cargoes taken into the NBP and TTF hubs as "markets of last resort."

However, the LNG market has remained relatively tight, with most destination-free US LNG volumes able to find homes either in the more premium northeast Asian LNG markets or those closer to home in Latin America -- especially Mexico.

Even the delivery of US LNG into Gate last summer was not a signal of increased supplies from Sabine Pass to the Netherlands -- in fact the Gate delivery was a contractual substitute for supply by Statoil from its Snohvit plant which was undergoing maintenance at the time.

US LNG supplies into Gate are set to increase, though, after Austria's OMV in December signed up for a term supply of US LNG from the Cheniere Energy-operated Sabine Pass terminal in the Gulf of Mexico.

EUROPEAN IMPORTS

Elsewhere in Europe, US LNG from Sabine Pass -- which before the start-up of Cove Point was the only LNG export facility in the US lower 48 -- has found homes in a number of countries.

Since the first exports in February 2016, Turkey has taken 12 cargoes, Spain 10, Portugal eight, Italy three, Lithuania two, Poland one and Malta one.

US LNG export capacity is set to increase to some 100 Bcm/year by 2020 as other new projects come on stream.

Europe may attract more US LNG this summer as European hub prices are expected to remain high on significant demand from gas storage sites, which have been heavily drawn down after the cold European winter.

The Dominion Cove Point LNG terminal has a nameplate capacity of 5.25 million mt/year, with 20-year export contracts with India's GAIL and Japan's Sumitomo and Tokyo Gas. Most recently, GAIL has been actively reselling its offtake from both Cove Point and Sabine Pass.

--Stuart Elliott, [e-mail]

--Edited by Jonathan Loades-Carter, [e-mail]

[waldron] 16/3/2018 08:35

BP To Sell Oilfields In Egypt To Shift Focus To Natural Gas
By Zainab Calcuttawala - Mar 16, 2018, 3:00 AM CDT BP

British Petroleum has begun to sell off its mature oil fields in Egypt to shift its focus to developing the country’s large natural gas reserves, according to a new report by Bloomberg.

The Gulf of Suez assets have been available to purchase for a few months, it has now been disclosed, and British Petroleum is hoping to raise roughly $1 billion from a deal, sources close to the matter said.

BP has an overall goal to sell between $2 billion and $3 billion in assets this year, which is a less ambitious liquidation goal than last year when it sold $4.3 billion in properties, leases, and projects. The company has been on the road to recovery since the oil spill in the Gulf of Mexico in 2010.

Last year, British Petroleum CEO Bob Dudley said he saw 2017 as a recovery year after a period of crisis that devastated the company’s bottom line, according to a report by The Financial Times in December.

“This year has felt like a turning point,” says Dudley. “We’re never going to feel complacent. But it feels like we are now dealing with the same problems that everyone else has.”

BP brought a total of seven oil and gas production projects online in 2017, almost breaking the company’s record for maximum inaugurations in a year. The multinational oil major is also trying to increase the share of its gas production as part of its effort to become friendlier to the environment, while still producing fuels that will power civilization.

“There will be a need for oil well into the second half of the century,” Dudley says. “There are going to be 2bn more people in the world by 2035... Every kind of energy is going to be needed.”

By Zainab Calcuttawala for Oilprice.com

[sarkasm] 15/3/2018 22:33

Two LNG Giants Race For The Same Gas
By Irina Slav - Mar 15, 2018, 4:00 PM CDT LNG

Two of the biggest LNG projects in the world are due to start production this year, both offshore Australia: Japanese Inpex’s US$34-billion Ichthys development, and Shell’s US$14-billion Prelude FLNG project. The projects are adjacent to each other, and according to Wood Mackenzie analysts, the Ichthys and Prelude may actually draw gas from the very same reservoir—turning the two into rivals in what is now a race to see who can get to the LNG first.

According to one analyst, this winner of this race could have huge implications for the loser. “The difference between Prelude starting six months before versus six months after Ichthys could be a few percent of their reservoir stake. That is a material amount,” Wood Mac’s Saul Kavonic told Bloomberg.

For now, Ichthys is scheduled to begin production before Prelude, so LNG analysts and traders are keeping a close eye on developments. What makes the situation even more interesting, however, is that the two companies have taken different approaches to LNG extraction. Shell has built the biggest floating structure in the world, the Prelude FLNG facility, to save on pipeline transportation costs. Inpex, on the other hand, has approached production from a more traditional angle, building an almost 900-km pipeline to the coast and liquefaction trains.

Ichthys has an annual production capacity of 8.9 million tons. Prelude will pump some 3.6 million tons of gas, adding to Shell’s already operational Australian LNG capacity of 9.5 million tons annually. So, should the Anglo-Dutch company really worry about Inpex drawing gas from the same reservoir?

Well, despite Wood Mackenzie’s analysis, there is actually an agreement that the two projects actually do share the Brewster reservoir. Geoscience Australia, a government agency, says they do. Shell Australia’s chairman, Zoe Yujnovich, said a few months ago that “they are connected reservoirs.” Inpex’s Senior Managing Executive Officer, Masahiro Murayama, said in February that the Ichthys and the Prelude fields are not connected. So the jury is out.

This disagreement is interesting because whether or not the fields are part of the same reservoir would determine drilling schedules and locations, one oil and gas exploration consultant told Bloomberg. In other words, their connection or lack thereof is potentially significant, said John Davidson, because “Gas at the top of the Ichthys field may be in direct contact with Shell’s Prelude block.” This means that taking gas off the top of the Ichthys field may take gas away from Shell’s Prelude block.
Related: Is Another Oil Price War Looming?

It’s worth noting that the two are in fact partners in the Prelude block, so Inpex is just as interested in that project doing well as Shell is. What’s more important is that the Brewster reservoir has enough gas for both. Ichthys alone has estimated reserves of 12 trillion cubic feet of gas and 500 million barrels of condensate—enough for 40 years of production. Prelude holds three trillion cubic feet of gas, also a rather impressive amount, with the field’s productive life estimated at 20-25 years. But here’s more: the two fields may be bigger than initially estimated, so there could be even more gas there than was originally thought.

So, Shell and Inpex don’t really have an axe to grind. They are partners in Prelude and their neighbors with regard to Ichthys and Prelude. They have worked together on a joint response system for spills. And there seems to be enough gas for both.

By Irina Slav for Oilprice.com

[the grumpy old men] 14/3/2018 11:33

The 4th International LNG Congress

BGS Group is organizing a series of closed-door events in energy segment. The 4th International LNG Congress is dedicated to the LNG market outlook, new projects overview and a number of case-studies will be presented.


[UKPRwire, Wed Mar 14 2018] The 4th International LNG Congress takes place in Berlin, Germany on the 4-5th of June 2018. The Congress comprises a business program and a focus exhibition area for Gas Majors, EPCs, Ports/Port Authorities/Canals and Fleet Owners to be presented.

The business program starts with the plenary session dedicated to the LNG market outlook, new projects overview and German LNG network outlook. Large and small scale LNG conducted as parallel sessions will be divided into technical and business streams. Issues of pricing and trading; shipping and transportation; distribution will also be covered by leading companies.

Among already confirmed speakers and topics there are such as:
Rob Stassen (Business Development Manager at Shell) - Making Marine LNG available on a global scale
Guillaume Gelin (Head of Product Development (LNG as Fuel Division) at GTT) - From Large to Small Scale mastering the operations
Naoko Kato (Deputy Director for Oil and Gas Division at Ministry of Economy, Trade and Industry (METI)) - Global LNG market outlook from the Japan's perspective.
Patrick Dugas (Head of LNG Trading at Total)
Giuseppe Bernardelli (LNG & Power Business Development Director Flow Europe at Emerson)
To cover the latest situation in Asian Pacific and Americas’ Markets there will be Round-tables organized. Only 30 people will have an opportunity to listen to the reports form LNG importers & exporters and take part in the discussions. All the seats are available according to the invitations.
The exhibition area consists of 30 stands. The exhibition package requires that the exhibitor company only sends a draft and the organisers print and install the banner at the venue of the Congress.

One notable feature of the Congress is pre-scheduled B2B meetings: speakers and sponsors choose (before the Congress) a set of other companies with whom they want to talk. These meetings are further organized by a personal manager during the Congress. According to testimonials, it’s far more fruitful in comparison with usual networking in corridors.

[sarkasm] 13/3/2018 22:15

Gas Exporters Want Oil-Linked Pricing
Gas Exporters Want Oil-Linked Pricing

Energy

Wednesday, March 14, 2018
Gas Exporters Want Oil-Linked Pricing

T he debate over how to price natural gas has been settled, at least for exporters, and oil-indexing should prevail.

Prices have to be linked to crude oil to keep expected revenue predictable, with some $8 trillion of investments in the fuel needed by 2040, according to Yury Sentyurin, the new head of the Gas Exporting Countries Forum, an industry group representing gas sellers, Bloomberg reported.

Many consumers are opting for different formulas used by the US and Australia, which are emerging as top exporters.

"Consumers should understand the peculiarities which producers face," Sentyurin said in an interview.

"Security of investment and supply can only be on the basis of long-term contracts closely connected to oil prices so we could plan further investments into crucial infrastructure."

Continued expansion of supply is needed to meet demand that’s forecast to grow at an average of 1.6% per year until 2040, Sentyurin said at the GECF headquarters in Doha.

GECF members include Russia, Iran, Algeria and Qatar, the world’s largest producer and exporter of liquefied natural gas.

Instead of oil, some consumers use tolling to pay for liquefaction and price the gas based on Henry Hub on the Nymex and other benchmarks.

[sarkasm] 13/3/2018 10:51

Summit Power, Mitsubishi to develop $3 billion LNG-to-power project in Bangladesh

Singapore (Platts)--13 Mar 2018 620 am EDT/1020 GMT

Summit Power International has signed a memorandum of understanding with Japan's Mitsubishi and Diamond Gas International to develop a $3 billion LNG-to-power project at Matarbari, Moheskhali, in Bangladesh, which includes an 11 million mt/year terminal, the company said in a statement Tuesday.

Under the agreement, the parties agreed to develop an integrated LNG onshore receiving terminal with a regasification capacity of up to 1.5 Bcf/d, two units of 1,200 MW gas turbine combined cycle power projects, relevant high voltage transmission lines and the imported LNG.

"This MOU will help SPI support Bangladesh's fast-growing energy, power and technology needs. It will be a strategic fit for SPI to leverage Mitsubishi's LNG, and LNG-to-Power expertise as well as understanding of Moheskhali and Bangladesh's power needs," SPI chairman Muhammed Aziz Khan said.

"The two groups are well positioned to uniquely benefit from opportunities arising from the Bangladesh Government's move to raise LNG imports to meet the country's domestic natural gas shortfall and expand the country's power generation capacity," Khan added.

Summit Power International is the largest independent power producer in Bangladesh, representing approximately 21% of the country's private power market in 2017.

Diamond Gas International is a wholly-owned subsidiary of Mitsubishi Corporation established in 1990 to handle the company's LNG trading business. --Abache Abreu, [e-mail]

--Edited by Jeremy Lovell, [e-mail]