Leisure & Gaming Share Discussion Threads

[waldron] 29/10/2018 17:26

$5 Billion Saudi LNG Investment Plays Into Russia’s Hands
By Tim Daiss - Oct 29, 2018, 12:00 PM CDT
Join Our Community
Putin MBS

Depending on who you ask, energy markets would likely be better off without more Saudi-Russia oil and gas cooperation, which will amount to greater clout in the Middle East as U.S. influence in the region wanes. After all, it’s been a cleverly orchestrated cohesive Saudi-Russian agreement, albeit the fledgling but increasingly powerful OPEC+ cartel, that reigned in an historic oil market overhang over the last two years, put a floor under global oil prices and returned OECD to five-year levels.

This well-timed oil production agreement saw prices rise from a dismal dip below $30 per barrel in January 2016 to breaching $85 per barrel earlier this month. Though some of those gains have been pared the last few weeks, Brent oil is still hovering in the mid-$70s level, allowing oil producers and oil companies to recoup years of profit losses.

This same oil production group, which could be formalized soon, is ushering in a new era of Saudi-Russian oil market domination, perhaps in ways even stronger than what OPEC did for decades as it largely dictated global oil supply and corresponding prices. Saudi-Russian oil production cooperation has removed or at least vied with U.S. shale oil production momentum as the top energy market story of the decade.

Now, that cooperation will extend to liquefied natural gas (LNG) markets. Saudi Energy Minister Khalid al-Falih told Ekhbariya TV on Thursday that Saudi Arabia wants to invest as much as 30 percent in Russia’s pivotal and capex intensive Arctic LNG project. He called it a “very ambitious project,” and the biggest example of cooperation between the Saudi private sector and Russian companies. The disclosure comes just two few days after the head of Russian Direct Investment Fund (RDIF), Kirill Dmitriev, said at the controversial Saudi Arabian investment forum that Riyadh is ready to invest $5 billion in LNG project in the Russian Arctic.

Pivotal LNG project

Arctic LNG 2 will be a massive project on the Gydan Peninsula in Northern Siberia with a production capacity of approximately 19.8 million tons per annum (mtpa), placing it as one of the larger LNG projects on a global scale. It is set to unlock over seven billion barrels of oil equivalent (boe) of hydrocarbon resources in Russia’s onshore Utrenneye gas and condensate field. A fleet of ice-class LNG carriers, which will be able to use Russia’s Northern Sea Route, will deliver LNG cargoes destined for Asian markets, which makes up more than 70 percent of global LNG demand with that amount to increase going forward amid insatiable Chinese gas demand.
Related: Is The Oil Supply Glut Set To Return?

The project, along with Russia’s Yamal LNG project that came on-stream a few months ago and the Sakhalin project which became operational in 2009, will help Russian President Vladimir Putin’s goal of the country becoming a major LNG player. There are several other large Russian LNG project proposals pending. However, with Qatar projected to have an annual liquefaction capacity of 110 mtpa within five or six years, it’s unlikely that Russian will be vying for the top LNG exporter spot any time soon.
Oilprice.com
The most vital industry information will soon be
right at your fingertips

Join the world's largest community dedicated entirely to energy professionals and enthusiasts
Join Today

Geopolitical consequences

Saudi-Russian gas cooperation is also a brilliant move for Riyadh on numerous fronts. First, it strengthens ongoing bilateral ties between Riyadh and Russia, while also helping the kingdom diversify its international investments. It will also help it move away from oil export revenue reliance.

If the Saudis intend to also sign long term off-take agreements with Arctic LNG, it will help the kingdom’s energy planners use gas to replace oil in its electric power generation sector. The de facto OPEC leader burns an average of 700,000 bpd of oil for electricity to keep the population cool in the hottest summer months from May to August, official figures showed. As more oil used for power generation is displaced with gas, it becomes available for export, albeit without the kingdom having to increase production or in times of a market crisis tapping into its questionable spare production capacity.

The move for Russia is also just as beneficial as Moscow seeks ways to offset restrictive U.S. sanctions on its energy sector. Also, stronger bilateral ties between Riyadh and Moscow could create a wedge between the U.S. and Saudi Arabia, particularly in times of crisis between the two sides, including the current roil over the killing of prominent Saudi journalist and U.S. resident Jamal Khashoggi in Turkey at the beginning of the month.

The danger for Washington is manifold. If the U.S., particularly a growing and assertive anti-Saudi sentiment in both the Senate and House, force President Trump’s hand over harsher rhetoric and possibly economic sanctions against the Saudis, this will give Moscow considerable leverage. Though Trump has insisted that he wants to safeguard billions of dollars of arms sales to Saudi Arabia, if indeed those arms sales were halted, Russian could easily fill the void with its own military hardware sales.

By Tim Daiss for Oilprice.com

[waldron] 29/10/2018 11:03

29/10/2018 | 11:50
Oddo BHF today announces an upward revision of its target price on the GTT stock, against the backdrop of strong order intake, confirmed 2018 targets and rising 2019 targets for the group specialized in the manufacturing of containment systems. for the storage and transport at sea of liquefied natural gas.

The target of the analyst and passes from 60 to 70 euros, with a recommendation 'purchase' reaffirmed.

'We expect a turnover of 247 ME (+ 2% vs 2018) and an EBITDA of 154.6 ME (+ 2.6% YoY), revised up 14%, an EBITDA margin of 62%. , 5% (+ 30pb). This dynamic will continue in 2020 with the full impact of orders, ie a turnover close to 270 ME (+ 8% YoY) and an EBITDA of 169 ME (+ 9.4% YoY, margin of 63.2%, + 70bp). , retains Oddo BHF.

[grupo] 26/10/2018 19:38

GTT: Revenues totalling €184 million for the first 9 months of 2018
Email Print Friendly Share
October 26, 2018 11:46 ET | Source: GTT
multilang-release

Revenues totalling €184 million for the first 9 months of 2018

Order book of 92 units at 30 September 2018
7.1% increase in consolidated revenues
2018 objectives confirmed

Paris, 26 October 2018 - GTT (Gaztransport & Technigaz) - an engineering company specialised in the design of membrane containment systems for the transport and storage of liquefied natural gas - announces its revenues for the first 9 months of 2018.

Consolidated key figures
(in thousands of euros) Proforma
9M 2017 9M 2018 Change
Revenue 171,476 183,653 +7.1%

New builds 161,512 173,031 +7.1%
LNG/Ethane carriers 143,525 149,931 +4.5%
FSRU[1] 13,671 19,621 +43.5%
FLNG[2] 2,890 1,970 -31.8%
Onshore storage 1,327 678 -48.9%
Barges 99 300 +205.0%
LNG fuel 0 530 ns
From services 9,964 10,622 +6.6%

Philippe Berterottière, Chairman and Chief Executive Officer of GTT, commented: "In Q3, business was marked by ongoing ship orders. With 34 orders of LNG carriers and FSRUs recorded to the end of September, 2018 is set to be a record year for our main business line. We were also successful in the promising field of LNG fuel. The order received in July to equip the LNG tanks of the Ponant Icebreaker is symbolic of shipping companies' growing interest in our LNG propulsion solutions. We are continuing our efforts to enter into industrial and commercial partnerships to step up our development in this field. We are continuing to prepare the future by constantly improving our technologies. We thus obtained a classification society's approval-in-principle for the development of NO96 Flex, a new, higher-performance version of our NO96 technology. On the strength of the particularly high number of orders received since the beginning of 2018 and the growth in our services business, we can confirm our objectives for our FY 2018 revenues, net margin and dividend".

Review of business activity for the first nine months

During the first nine months of 2018, GTT's sales activity was marked by a number of successes, in particular in the field of LNG carriers:

Main "vessel" activity

The 18 orders recorded in the 1st half for the design of tanks for LNG carriers were supplemented with 14 new orders in Q3, bringing the total to 32 orders for the first 9 months of 2018. All of these vessels will be equipped with recent GTT technologies (NO 96 GW, Mark III Flex and Mark III Flex+).

2 orders for the design of FSRU tanks were recorded over the first six months. The pace of these orders is consistent with the Group's medium-term forecasts.

Onshore storage activity

In September 2018, GTT received an order from the European Organization for Nuclear Research (CERN) for the design of a containment system for a 12,500 m3 onshore storage tank that will contain liquid argon for experimental purposes.

LNG fuel activity

1 order for a bunker ship with a capacity of 18,600 m3 was recorded at the beginning of the year. Operated by Mitsui OSK Lines Ltd. and chartered by Total Marine Fuels Global Solutions (TMFGS), this ship will be dedicated to the supply of LNG to the future CMA CGM container carriers.

In July 2018, GTT also recorded an order from the Vard shipyard to build LNG tanks for the PONANT Icebreaker, the first LNG-powered icebreaker cruise ship.

Services activity

During the first half of 2018, GTT was commissioned to conduct preliminary engineering studies for new GBS (Gravity Based System) terminal projects.



New Technical Assistance and License Agreements (TALAs)

In April 2018, with Sembcorp Marine (a company based in Singapore), to design and build FSRUs, medium-capacity LNG carriers and Sembcorp Marine's Gravifloat platforms using GTT's membrane containment systems.

In September 2018, with Keppel Offshore & Marine for the equipment of LNG carriers, bunker vessels, LNG-powered ships and Floating Storage and Regasification Units (FSRUs), with special focus on ships with a capacity of 30,000 to 80,000 m3.

In September 2018, with South Korea's Hyundai Mipo Dockyard for the equipment of gas tankers, in particular small and medium capacity vessels (up to around 50,000 m3), as well as LNG tanks for ship propulsion.

Technology

In Q3, GTT obtained Bureau Veritas' approval-in-principal for the development of a new NO96-type cargo containment system. Called NO96 Flex, this new system has the advantages of the proven NO96 technology, as well as those provided by the use of foam panels, thereby reducing the boil-off rate to 0.07%V per day, i.e. a level equivalent to that of GTT's most efficient technologies.

CSR performance

GTT was commended by GAIA for its CSR performance. GAIA is an agency specialised in the extra-financial rating (based on environmental, social and governance criteria) of listed SMEs and mid-caps. GTT ranked 21st out of the 230 companies rated, and 3rd out of 78 in its revenue category. GAIA also created an ESG index of the 70 best-rated companies, which includes GTT.

Moreover, following an audit conducted by Ethic Intelligence, GTT obtained the certification of its anti-corruption management system based on ISO 37001 requirements.

Change in consolidated revenues

Revenues for the first 9 months of 2018 totalled €184 million, up 7.1% compared to the first 9 months of 2017.

Revenues from new-builds amounted to €173.0 million, up 7.1%. Royalties from LNG carriers and ethane carriers increased 4.5% to €149.9 million, while FSRU royalties grew 43.5% to €19.6 million, thanks to the numerous orders recorded in 2017. Other royalties were as follows: €2.0 million for FLNGs, €0.7 million for Onshore storage, €0.5 million for LNG-powered ships, and €0.3 million for the barge.
Service-related revenues amounted to €10.6 million, up 6.6% compared to the first 9 months of 2017, due to an increase in engineering studies and the impact of Ascenz operations.

Changes in the order book

GTT's order book, which contained 89 units at January 1, 2018, has added the following orders since that date:

35 orders received: 32 LNG carriers, 2 FSRUs, 1 Onshore storage tank;
32 deliveries: 28 LNG carriers, 3 FSRUs, 1 barge.


At 30 September 2018, the order book comprised 92 units, of which:

76 LNG carriers[3];
11 FSRUs3;
2 FLNGs;
3 onshore storage tanks.

Moreover, in the first 9 months of 2018, in the field of LNG Fuel, GTT received an order to equip a bunker ship and an order to equip the Ponant Icebreaker cruise ship, bringing to 11 the number of units recorded in its LNG order book to 30 September 2018.

Outlook for 2018

The Company confirms its objectives for FY 2018, namely:

2018 consolidated revenues of 235 to 250 million euros[4];
2018 consolidated EBITDA[5] within a range of 145 to 155 million euros;
a 2018 dividend[6] amount at least equivalent to the ones paid in 2015, 2016 and 2017 and, for 2019, a dividend payout ratio of at least 80% of distributable net income.

Financial agenda

Publication of 2018 full-year results: 26 February 2019 (after the close of trading)
Annual General Meeting of Shareholders: 23 May 2019

Investor Relations Contact
[e-mail] / + 33 1 30 23 20 87

Media Relations Contact
[e-mail] / [phone] / [phone]

About GTT
GTT (Gaztransport & Technigaz) is an engineering company expert in containment systems with cryogenic membranes used to transport and store liquefied gas, in particular LNG (Liquefied Natural Gas). For over 50 years, GTT has been maintaining reliable relationships with all stakeholders of the gas industry (shipyards, ship-owners, gas companies, terminal operators, classification societies). The Company designs and provides technologies which combine operational efficiency and safety, to equip LNG carriers, floating terminals, and multi-gas carriers. GTT also develops solutions dedicated to land storage and to the use of LNG as fuel for vessel propulsion, as well as a full range of services.

GTT is listed on Euronext Paris, Compartment A (ISIN FR0011726835, Euronext Paris: GTT) and is notably included in the SBF 120 and MSCI Small Cap indexes.

For further information, please consult www.gtt.fr/en

Important notice
The figures presented here are those customarily used and communicated to the markets by GTT. This message includes forward-looking information and statements. Such statements include financial projections and estimates, the assumptions on which they are based, as well as statements about projects, objectives and expectations regarding future operations, profits, or services, or future performance. Although GTT management believes that these forward-looking statements are reasonable, investors and GTT shareholders should be aware that such forward-looking information and statements are subject to many risks and uncertainties that are generally difficult to predict and beyond the control of GTT, and may cause results and developments to differ significantly from those expressed, implied or predicted in the forward-looking statements or information. Such risks include those explained or identified in the public documents filed by GTT with the French Financial Markets Authority (AMF - Autorité des Marchés Financiers), including those listed in the "Risk Factors" section of the GTT Registration Document (in French) registered with the AMF on April 25, 2018 and the half-yearly financial report released on July 26, 2018. Investors and GTT shareholders should note that if some or all of these risks are realised they may have a significant unfavourable impact on GTT.




[1] Floating Storage and Regasification Unit: Floating LNG storage and regasification unit

[2] Floating Liquefied Natural Gas vessel: LNG liquefaction unit

[3] Including the conversion of a LNGC order in FSRU

[4] In the absence of any significant order delays or cancellations

[5] EBITDA: earnings before interest, taxes, depreciation and amortization, in accordance with IFRS.

[6] Subject to approval by the General Meeting


Attachment

PDF version.pdf

[waldron] 26/10/2018 11:31

Natural Gas 26 Oct 2018 | 09:07 UTC London

France's Total to expand its LNG exposure, boosted by oil prices

Author Lucie Roux Editor Maurice Geller Commodity Natural Gas Topic LNG Market Evolution

Highlights

Expand further LNG production and acquisition

Europe and Central Asia gas output up 20% in Q3 on year

LNG volume sold down 6% in Q3 on year

London — French energy major Total plans to increase further its exposure to the LNG market in the coming months while leveraging the current high oil price, the company said Friday in its third quarter earnings report.
Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.
Register Now

"At the start of the fourth quarter, Brent continues to trade at $80/b due to supply tensions and the geopolitical context," said the company. "The Upstream is well positioned to profit from the increase in the oil price," it added, notably for the start-up of the third train at Yamal LNG in Russia and the second train at Ichthys LNG in Australia.

The third train at Yamal LNG is expected for December while the Ichthys LNG second train is expected to start up in the coming weeks. Yamal LNG has a production capacity of 16.5 million mt/year, while Ichthys LNG intends to lift production volumes to around 8.9 million mt/year when it reaches its production plateau.

Total holds a 20% stake in Yamal LNG project and a 30% stake in Ichthys LNG.

Total also finalized the acquisition of France's Engie's LNG business, making the company the second largest LNG player globally, after Royal Dutch Shell.

Latest News

Request for a free trial of: LNG Daily

Platts LNG Daily is vital reading as LNG supply dynamics continue to evolve in major markets including Japan, China, the Middle East, India, Australia, South America and the US. Click the link below to see how this publication can help meet your business needs.
Free Trial

In mid-October, Total has also signed an agreement with India's Adani Group, which will see it jointly develop a fuel retail network and various LNG regasification terminals in India.

In August, the company sold its interest in the India's Hazira LNG terminal to Shell.

Gas production in Europe and Central Asia was 3,069 Mcf/d (86.9 million cu m/d) in the third quarter of 2018 or 20% up year on year and 12% up in the first nine months.

However, global production of gas was up only 2% year on year in Q3 to 6,557 Mcf/d (185.7 million cu m/d) while it was down 2% in first nine months of the year to 6,465 Mcf/d (183 million cu m/d).

LNG sales decreased 6% year on year in the Q3 to 2.78 mt. They also decreased by 9% in the nine first months of the year compared to 2017 to 7.75 mt.

--Lucie Roux, [e-mail]

--Edited by Maurice Geller, [e-mail]

[florenceorbis] 24/10/2018 15:45

Sovcomflot tanker Gagarin Prospect successfully completes first commercial voyage from Primorsk to Rotterdam on LNG fuel
October 24, 2018

Sovcomflot crude oil tanker Gagarin Prospect, operating on LNG fuel, successfully completed her voyage across the Baltic and North Seas from Primorsk to Rotterdam where she safely delivered a cargo of 104,815 tonnes of crude oil. For the pioneering vessel, it marked her first export delivery of Russian crude oil under a long-term time-charter contract between SCF and Shell.

Gagarin Prospect is the world’s first Aframax crude oil tanker designed to operate on LNG as the primary fuel. She is the lead ship of the next generation of tankers, which will set a new standard of navigation safety and quality. Switching to cleaner-burning LNG fuel allows Sovcomflot to significantly reduce its impact on the natural environment. This is particularly important for ships in high-traffic areas such as the Baltic and North Seas where these ‘Green Funnel’ tankers will primarily operate.

Sovcomflot is gradually switching its conventional tanker fleet from traditional heavy fuel oil to LNG. This is to reduce its environment footprint and to comply with tightening sulphur and nitrogen oxide emissions regulations, including the IMO’s global 0.5% sulphur cap, which takes effect in 2020.

Tankers fuelled with LNG emit zero sulphur oxide (SOx) and particulates. They emit 76% less nitrogen oxides (NOx) and 27 per cent less carbon dioxide (CO2), than similar vessels operating on heavy fuel oil.

In September 2018, Sovcomflot has placed with Zvezda Shipbuilding Complex orders for a series of two similar LNG-fueled Aframax tankers, both of which will then be time-chartered to Rosneft for 20 years each.

On 2nd October 2018, the inaugural LNG bunkering of Gagarin Prospect took place at the Port of Rotterdam, and on 15th October, the vessel loaded its first export cargo of Russian crude oil at the Port of Primorsk.

On 18 October 2018, an event was held in Rotterdam to mark the success of the ‘Green Funnel’ project and the start of the successful operation of the tanker. All companies that were involved in this project were represented at the event.

The second tanker in this series, Lomonosov Prospect, was delivered to Sovcomflot in October 2018. Sovcomflot expects to have six such LNG-fueled Aframax tankers in operation by the beginning of Q2 2019.

[florenceorbis] 24/10/2018 15:35

$40 Billion Ichthys LNG Project Begins Gas Exports
By Tsvetana Paraskova - Oct 24, 2018, 9:30 AM CDT LNG tanker

France’s oil and gas major Total said on Tuesday that the first cargo of liquefied natural gas (LNG) from the Ichthys LNG project offshore Western Australia had left the port of Darwin for the first export of the US$40-billion project that began producing gas in July this year.

The planned production volumes at Ichthys will be 8.9 million tons of LNG annually, 1.65 million tons of liquefied petroleum gas (LPG) a year, and around 100,000 bpd of condensate at peak production and full capacity, according to the French energy supermajor.

Total is a partner in the Ichthys LNG venture with a 30-percent stake, while the operator is Japan’s largest exploration and production company, Inpex.

Inpex also confirmed on Tuesday that the first LNG cargo departed from Australia en route to INPEX-operated Naoetsu LNG terminal in Niigata Prefecture in Japan.

Some 70 percent of LNG from the Ichthys project will be bound for Japan—the largest LNG importer in the world.

Production at the Ichthys LNG began in July this year, when Inpex expected first shipment of products from the project toward the end of the first half of its current fiscal year—April to September.

At the beginning of October, the first condensate cargo departed from the Ichthys LNG project for the Asian market, while the project is also scheduled to start the shipment of liquefied petroleum gas (LPG) later this year, Inpex said today.

The start of LNG exports from Ichthys marks the commercial operation of the most recent LNG project off Australia’s coasts over the past decade. LNG projects that began operations in Australia in recent years include Chevron-operated Gorgon and Wheatstone.

The last of the major projects is Shell’s Prelude, a floating liquefied natural gas (FLNG) facility in Browse Basin off the northwest coast of Western Australia. Shell’s CEO Ben van Beurden said on an earnings conference call in July that based on Shell’s current commissioning schedule, “we are on track to start production this year.”

By Tsvetana Paraskova for Oilprice.com

[waldron] 24/10/2018 09:27

Shell’s up next, and last, in $200bn Australia LNG bonanza

Written by Bloomberg - 24/10/2018 7:10 am

Shell news
MARLIES DEKKERS glamuse.com

glamuse.com
Learn more
Promoted by glamuse.com
[Opt out of Adyoulike ad targeting]
Sign up to our daily newsletter
Subscribe TodayPackages from £10 per monthPackages from £10 per month

And then there was one.

Australia’s nine-year, $200 billion boom in liquefied natural gas still has a final debut in the works: Royal Dutch Shell Plc’s Prelude, floating 200 kilometers (124 miles) off its northwest coast. It’s the last project in that investment cycle to start production after Japan’s Inpex Corp. shipped its maiden cargo from Ichthys LNG on Monday.

Shell’s Prelude is among seven export projects in gas-rich Australia sanctioned since 2009 by global energy giants including Chevron Corp. and Exxon Mobil Corp., as well as regional big hitters such as Australia’s Woodside Petroleum Ltd. and Malaysia’s Petroleum Nasional Bhd. The Pacific nation now rivals Qatar as the world’s biggest seller of LNG, a form of natural gas super-chilled into a liquid that can be shipped on tankers.

The market might not have to wait long before Prelude gets in the game. It received a second cool-down cargo two weeks ago, a possible indication that workers are preparing equipment for start-up. Korea Gas Corp., a minority owner in the venture, said in August the plant would be in full commercial production by the end of December. Shell, which said as recently as July that the project is on target to start this year, declined to comment as it’s in a quiet period before it reports third-quarter earnings.
Related Articles

Unlike other LNG projects during the Australian boom, Prelude wasn’t built on solid ground. Instead, all of the equipment — from power generation to gas processing to liquefaction — is housed on a floating platform the size of six aircraft carriers connected to wells 250 meters below the surface of the Indian Ocean.
Scale, Complexity

“The scale of this, and the complexity of this — there is no other comparable project,” said Neil Beveridge, an analyst with Sanford C. Bernstein & Co. in Hong Kong. “When you do it at this kind of scale, the difficulties just become so much greater.”

At one point, Prelude was seen as the first of a fleet of floating LNG plants in Australia. Building in a controlled environment like a shipyard in South Korea was seen as avoiding the sort of cost overruns that plagued projects fighting for labor and resources on land in Australia. But ventures such as Woodside’s Browse and Sunrise, as well as Scarborough, which once counted Exxon among its backers, have been re-imagined on land because of economic or political concerns. None of those are yet to take a final investment decision.

Shell owns 67.5 percent of Prelude while Inpex, which is also the operator of Ichthys LNG, holds 17.5 percent. (Beyond the Inpex connection, the Prelude and Ichthys project may also share gas at a reservoir called Brewster.) Korea Gas has 10 percent and Taiwan’s CPC Corp. owns the remaining 5 percent.

[maywillow] 21/10/2018 09:20

How The Trade War Could Benefit Australian Gas
By Tim Daiss - Oct 20, 2018, 2:00 PM CDT Australia

Australian oil and gas producer Santos, the operator of the GLNG project, could win any comeback kid awards in the global energy patch. From several years of turmoil during the recent roil in global oil and gas markets that made the company bleed red ink, making it a prime take-over target, it continues to come back swinging, posting stellar production and sales numbers.

On Thursday, the Adelaide-based company reported quarter-on-quarter increases in its oil and gas output and sales volumes. Production reached 15 million barrels of oil equivalent (mmboe), compared to 14.2 mmboe reported in the second quarter of the year, the company said. Sales revenue increased 10 percent to $973 million, including record quarterly LNG revenues of $405 million. Santos reports its financials in USD not Australian dollars.

Sales volumes for the third quarter were higher than the previous quarter primarily due to a full quarter of production from the PNG LNG project following the impact of the earthquake that hit Papua New Guinea (PNG) in the first half of the year and the planned one-month maintenance shutdown of the Bayu Undan/Darwin LNG facilities in May.

Riding the wave of higher oil/gas prices

Sales revenues also spiked on the back of higher commodity prices. Global oil prices have spiked nearly 60 percent in the past year, from around $55/barrel to now trading in the low $80s range. Earlier this month oil prices breached the mid $80s price point amid worries over more Iranian barrels being removed from the market as fresh U.S. sanctions are slated to hit Iran’s energy sector on November 4.

Santos also shows a strong balance sheet to support growth. The company’s net debt reduction target was achieved at quarter-end, more than a year ahead of plan. As at September 30, Santos had cash and cash equivalents of $1.8 billion and total debt of $3.8 billion, resulting in net debt of $2 billion, the company said in its third quarter financial disclosure.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said “Santos is now positioned for growth with a number of upstream brownfield development opportunities leveraging existing infrastructure positions across each of our five core assets and is targeting production of more than 100 mmboe by 2025, almost doubling current levels of production.”

Related: Carbon Pricing Won't Kill Big Oil
Oilprice.com
The most vital industry information will soon be
right at your fingertips

Join the world's largest community dedicated entirely to energy professionals and enthusiasts
Join Today

“Strong operating performance during the third quarter saw sales, production and sales revenues all higher than the previous quarter,” he added.

Going forward

Santos’ numbers were also boosted by increased LNG spot prices in Asia, which recently reached fresh four-year highs, also increasing some 21 percent on the quarter. Though spot prices are off slightly so far this month, they spiked in September in anticipation of winter demand after a hot summer depleted stockpile. China was seen as providing support to prices after the country got caught short last winter with its storage capacity still low as Beijing energy planners moved too quickly to replace coal usage in both industry and residential end users in northern China with cleaner burning natural gas.

Going forward, Santos should be able to maintain its healthy sales growth amid increased gas demand, especially from China and as the country continues to turn to the spot market to fill supply gaps.

A pending 10 percent retaliatory tariff by Beijing on U.S. sourced LNG that will increase to 20-25 percent at the start of the year will also help Santos’ financials. First, the company can offer spot cargoes to replace or compete with U.S. sourced LNG cargoes on the spot market. Second, Santos, as well as other producers and trading houses, will be able to price its spot LNG at a premium, likely raising prices to just below what U.S. sourced LNG will cost including the increased tariff.

Unfortunately for China, its LNG tariff will likely backfire and cause as much or more pain for itself than it does for the U.S. since costs will mostly be absorbed by China’s national oil companies (NOCs). On the flip side of the equation, China’s LNG tariff will make it more difficult for several U.S.-based LNG project proposals to secure funding and long term off-take supply deals putting the U.S.’ so-called second wave of LNG development in jeopardy.

By Tim Daiss for Oilprice.com

[maywillow] 16/10/2018 11:44

16 October 2018
News
Shell and Equinor reaffirm commitment to Tanzania LNG project
By Talal Husseini
Share

Shell and Equinor have confirmed their commitment to the $30bn Tanzania LNG project that will allow the African nation to export natural gas.

Both companies have planned to build a natural gas plant since 2014, but the project has been delayed by political uncertainty within Tanzania’s mining industry. The government reformed mining legislation, which came into effect on 3 March, giving them the power to renegotiate contracts, a move that has concerned investors.

However, the energy companies have said they are prepared to continue with the project.

Shell spokesperson Sally Donaldson told Bloomberg: “For now, the focus is on agreeing to the Host Government Agreement that is to set the legislative, regulatory and fiscal terms for the project.”

Donaldson added that before the investment decision can be completed, Shell will conduct a two-year, multi-million dollar engineering study, with the natural gas plant expected to take up to five years to construct. The project was originally due for completion by 2020.

NKC Africa Economics analyst Jacques Nel told the news agency: “The government’s hard-line approach to dealing with large foreign investors in the natural resources sector also puts a dampener on foreign investor sentiment, particularly when considering the magnitude and timelines of LNG investments.”

According to Tanzania Petroleum Development Corporation acting managing director Kapuulya Musomba, the government is working to push forward with the project, and has invited bids for a financial advisor to begin negotiating the terms of the project. Equinor has already invested $2bn in exploration for the Tanzania LNG project.

Equinor executive vice-president for development and production Torgrim Reitan said: “We would like to see this project happen. What we need now is clarity on the commercial framework. When that is settled then it will allow us to move forward.”

The company holds a majority 65% working interest in Block 2 offshore Tanzania, while ExxonMobil holds the remaining 35% stake.

In June, Equinor (formerly Statoil) and ExxonMobil found an additional two to three trillion cubic feet of natural gas in the Piri-1 well, increasing total discovered reserves to around 20 trillion cubic feet.

Shell and Ophir Energy hold interests in Blocks 1 and 4 offshore Tanzania.

[ariane] 10/10/2018 08:48

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 10, 2018).

Big oil companies are betting on natural gas as the fuel of the future -- and working hard to ensure new projects deliver profits of the future.

Royal Dutch Shell PLC last week announced a liquefied natural gas project in Canada that will cost $14 billion to build, while Exxon Mobil Corp. and partners are expected to approve a multibillion-dollar LNG project in Mozambique in 2019. That is a similar timeline to Russia's roughly $20 billion Arctic LNG-2 project, which is part-owned by France's Total SA.

Natural-gas projects historically have delivered lower returns than big oil projects, leading companies and shareholders to prioritize oil developments. That's something the companies are working hard to change.

Still, According to Edinburgh, Scotland-based consultancy Wood Mackenzie, the weighted average internal rate of return for liquefied natural gas projects currently in the pipeline is about 13%. That compares with 20% for deep water projects and 51% for unconventional oil developments like shale.

"The problem for oil companies is that gas is much more difficult to make profitable," said Eirik Wærness, chief economist at Norwegian oil company Equinor ASA, formerly known as Statoil.

The case for gas also becomes even more difficult, at least in the short term, when oil prices are high, as they have been recently., though oil companies invest on a long-term horizon

Yet big oil has little choice but to double down on gas. Companies have discovered fewer large new oil depositsthan natural gas opportunities over the past decade. Governments, including China and many in Europe, want to reduce pollution by burning cleaner fuels for transport and electricity. A new natural-gas power plant emits around half the carbon dioxide emitted by a new coal or fuel-oil plant.

Rising global demand also makes a compelling case for natural-gas investment. Oil consumption is expected to rise by just 0.5% a year out to 2040, according to Wood Mackenzie, substantially slower than in previous decades. Some forecasts say demand could stop growing altogether within the next decade.

Natural-gas consumption, though, is expected to rise to 24% of the world's energy mix by 2040, from 22% in 2016, according to the International Energy Agency. LNG's share of that market is set to rise to almost 40% in 2023, from around a third in 2017, the IEA forecast.

By 2025, both Shell and BP PLC will be producing more gas than oil. French giant Total SA's production is near 50-50 split. Exxon Mobil Corp. is also planning significant new investments in LNG.

"It's all a balancing act," said Brian Youngberg, senior energy analyst at brokerage Edward Jones. "At the end of the day, oil is the most profitable product they produce, but demand is going to slow so you need to start managing that transition."

At the same time, oil companies are eyeing efforts to curb global warming that could make lower-carbon natural gas more competitive. Policies like a substantial price on carbon "moves the dial on gas," Mr. Wærness said.

Oil companies are selling the strategic shift as a smart bet on a growing market.

"The good news is that the natural gas market will continue to grow, and this explains why we are aggressive, offensive and expanding," Total CEO Patrick Pouyanné told investors last month. "On the contrary, the oil market will stabilize and even decline."

Investors have embraced the strategy, with some reservations. Big gas projects generate lower returns, but they are profitable and provide much more stable long-term cash flow than most oil developments -- attractive characteristics for shareholders who want to know their dividends are secure. And internal rate of return is just one measure. Many big gas projects offer opportunities for profit-generation through trading and business integration.

The natural-gas projects provide "very stable and consistent cash flow and this is something oil-and-gas companies have never really had, and what has made them so cyclical," said Richard Hulf, a manager of the Global Energy Fund at Artemis Fund Managers.

Companies are continuing to make significant oil investments, providing a balance to higher risk, higher reward projects that many investors like.

Yet the dash for gas highlights broader risks for the sectorin an age of lower-carbon energy and an eventual shift away from fossil fuels altogether to more renewable energy.

"The pivot to gas the industry is engaging in will over time probably mean the industry is pursuing a dramatically smaller overall profit pool -- unless gas pricing moves to energy equivalence with oil, which is unlikely," said Nick Stansbury, head of commodities research at Legal & General Investment Management.

Investment in renewable energy for electricity generation is already outpacing fossil fuels globally, driven by falling costs of producing wind and solar power. More than half of power-generating capacity added in recent years has been in renewable sources, according to the IEA.

"Longer term it's the logical thing to be doing if you believe that the gas market has got more longevity and is going to continue growing," Wood Mackenzie analyst Tom Ellacott said.

Big oil companies are working to drive down costs, secure buyers and leverage their market clout to maximize returns. Shell pushed back the approval of its Canadian LNG project by two years and split it in half as it worked to bring down the costs. It expects the project to generate an internal rate of return of 13%.

The moves point to the potential for a more sober oil-and-gas industry, less prone to the dramatic slumps that come with oil-price cycles yet with equally less promise to reach heady peaks. "You will see lower return on investments for some of these [gas] projects," said Espen Erlingsen, a partner at Norwegian consultancy Rystad Energy. "I guess that's something they have to live with."

Write to Sarah Kent at [e-mail] and Sarah McFarlane at [e-mail]



(END) Dow Jones Newswires

October 10, 2018 02:47 ET (06:47 GMT)

[adrian j boris] 09/10/2018 14:43

09 Oct 2018 | 12:51 UTC London

Shell CEO says more LNG projects needed to fill demand gap after 2020

Author Robert Perkins Editor Alisdair Bowles Commodity Natural Gas Topic LNG Market Evolution

London — Shell sees the need for investment new LNG projects to meet the fast-growing demand for the fuel in the coming decades, the oil major's CEO Ben van Beurden said Tuesday, reiterating the risks of an LNG "supply crunch" by the mid-2020s.
Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.
Register Now

Shell expects natural gas demand to grow at an average rate of 2% a year, twice the rate of total worldwide energy demand, in the coming years with demand for LNG alone to grow at 4% a year until 2030, van Beurden told the Oil and Money conference in London.

"It's always hard to really see where the demand curve is. Demand is not really visible in LNG," he said. "I think, if you look into the 2020s with our investments with some other plans that we are aware of [the Qatari plans], I think that will simply also not be enough to close the gap. We will we need more things to continue to close that gap."

Shell, in its latest LNG outlook published in February, said the world risks a supply crunch for the fuel by the mid-2020s due to the collapse in LNG sector investment since the 2014 oil price slump.

Qatar, the world's largest LNG supplier and second-biggest gas exporter after Russia, is pushing ahead with plans to increase its LNG output by 30%, helped by an expansion of a fourth train at Qatar Petroleum's LNG plant.

Asked if Shell would be interested in becoming a partner in the expansion, van Beurden said, "I think we have a very compelling set of attributes that we can bring to the partnership... we will be putting forward a proposition when we are invited to do so."

While Shell expects to continue to grow its wider gas business in the coming years, van Beurden said he sees Shell's gas sector expansion becoming "a little less dramatic" than in recent years, given that gas already makes up half of Shell's upstream production volumes and absorbs one-third of its capital spending.
CANADA LNG

On Shell's recent FID for its Canada LNG plant, van Beurden said he is confident that the project will remain competitive on a capital spending and production cost basis, due to intensive work to bring down construction costs.

The use of modular construction methods, standard industry equipment and the fact that Canada will be built on a brownfield site mean the cost will come in at a "competitive" $1,000 per mt/year, van Beurden said.

He said the fiscal framework provided by the Canadian government also helped ensure the project could go ahead.

"We have spent more time on Canada LNG than other projects in terms of de-risking it. If you just look back over the last 4-5 years, the track record we have on delivering projects on budget and ahead of schedule is quite compelling," he said.

Van Beurden declined to confirm reports of headline capital costs of $20-$25 billion for the projects, saying the figures were the result of "someone doing the sums in a certain way."

"Let me be quite clear, LNG Canada would not have made it if it had not had such a compelling case on costs. So it should be. Even at a time of $70, $80 or even $90 oil," he said.

Canada LNG is expected to come on stream in the mid-2020s and will allow LNG from the project to reach Tokyo in half the time of a cargo from the Gulf of Mexico, he said.

--Robert Perkins, [e-mail]

--Edited by Alisdair Bowles, [e-mail]

[ariane] 07/10/2018 18:25

Is The U.S. Using Force To Sell Its LNG To The World?
By Robert Berke - Oct 07, 2018, 12:00 PM CDT Middle East

The Trump Administration trade policy is nowhere so clear as in the energy area. For years it was thought that the younger Bush Administration was one of the most energy industry friendly in history. But the Trump Administration has gone far beyond that.

Hiring Ray Tillerson, the former CEO of ExxonMobil, as U.S. Secretary of State, sent a strong signal to the entire industry, even though his tenure proved to be temporary.

Prior to that, the Administration withdrew from the Paris Climate Agreement, a long-held priority of Exxon and the entire oil industry. Following hard upon that, the Environmental Protection Agency (EPA) has reduced or eliminated regulations limiting carbon and other pollutants.

Exxon has for more than a decade underwritten the now discredited, right wing attack on climate change as a hoax. Although the energy industry has now publicly acknowledged climate change as a global threat, in practice the subject is still largely ignored.

Going further, the Trump Administration has removed and reduced regulations that hampered the industry expansion, including allowing drilling on both ocean coast, while easing safety regulations that were brought into effect after BP’s Gulf of Mexico disastrous spill, the worst in U.S. history.

Government protected nature preserves are being opened to exploration and drilling for the first time in generations. Added to that was the dropping of regulations that for many years prohibited export of U.S. crude. Since then, the U.S. has become a major player in the global energy industry.

The Administration currently plans to rescind and lower fuel efficiency standards for autos and trucks. That is likely to encourage increased purchase of larger SUVs, increased oil consumption, and rising gasoline prices.

The Administration corporate tax cut, one of the largest in U.S. history, also strongly benefitted the energy industry, as it did other industries.

From the moment he chose to run for President, Trump has embraced the new shale revolution in the U.S. as a major contributor to the country’s economic growth and energy independence.

Increasingly, Trump has become the top promoter for increasing exports of U.S. Liquid Natural Gas (LNG) to world markets. He openly threatened to place economic sanctions on Germany if it went ahead with the deal for Russia’s new Nordstream 2 pipeline, that would nearly double natural gas supplies from Russia, Germany’s largest supplier.

As most observers noted, the U.S. sanction threat was accompanied by the offer of U.S. LNG to Germany and Europe, as a replacement of Russian gas.

No doubt that Trump’s bullying offended European sensibility, but despite the German protest regarding outside interference in its domestic economic affairs, and its intention to complete the Russian pipeline, Germany is quietly building up LNG importing facilities, "as a gesture to American friends."

Most energy experts agree that it is inevitable that U.S. LNG will eventually become a component of European markets, despite its significantly higher price to Russian and Norwegian gas, if for no other reasons to keep the peace with America, Europe's largest ally, and assure Europe’s access to the U.S. market.

This will also serve to assuage the U.S. complaints about unfair trade. It matters little that the U.S. trade deficit with Germany centers on its auto industry rather than energy, if the sale of natural gas serves to reduce the U.S. trade deficit.

Related: U.S. Will Not Release Oil From SPR To Offset Iran Sanctions

The same could be said about the U.S./China trade deficit. China, the largest energy consumer, is the one country where solutions to the trade deficit is clearly at hand, involving increased U.S. LNG imports. China already has a long-term, 20-year deal to import LNG from the leading U.S. LNG company, Cheniere Energy.

China could easily reduce the amount of gas imports from variety of other suppliers (i.e., Qatar, Australia, New Guinea, Iran, Russia) and replace these with U.S. supplies. That would be a near costless transaction for China, as it is already paying other producers for natural gas and LNG supplies.

Consider the effects of a possible LNG deal could have on the trade dispute. In terms of the current deficit, China sales to the U.S. is estimated at around $350 billion, while U.S. sales to the China is around $150 billion.

Last May, the China signed a $25 billion deal for importing U.S. LNG. If we assumed that in current negotiations the two countries could strike a modest deal for another $25 billion in annual U.S. LNG sales to China, U.S. sales to China increases to $200 billion, reducing China’s surplus to $300 billion.

If that were to take place, the trade deficit would reduce to around $100 billion, and Trump would no doubt return to the election campaign trail to boast of the first U.S. trade victory over China.
Oilprice.com
The most vital industry information will soon be
right at your fingertips

Join the world's largest community dedicated entirely to energy professionals and enthusiasts
Join Today

The risk to this scenario is the presumption that everyone involved really wants a solution to the trade dispute, but there is widespread suspicions that U.S. tariffs on China may be less about fair trade and more about economic warfare to contain China’s growth.

George Friedman's "Geopolitical Futures" recently noted that "The U.S. is beginning to see it [tariffs] more as a strategic opportunity to contain Chinese assertiveness than as a play to invigorate U.S. manufacturing."

On various Asian websites, there remains a stalwart band of journalists, led by Pepe Escobar, who maintain that Europe, Russia, China, and Iran will band together to thwart U.S. sanctions on Iran, and that 'Iran's oil sales will be totally unaffected. They also hold strongly to the opinion that China will not yield to U.S. threats and ultimatum.

This despite the fact that major energy companies, like Royal Dutch Shell and Total have already fled Iran in fear of US sanctions, while major countries are severely cutting Iran imports.

Sanctions against Iran will certainly reduce its exports substantially, with the worst case estimates of a loss to the markets of 1.5 million barrels of oil per day. This will also open opportunities in under supplied markets that will almost certainly be exploited by U.S. and other competitors.

Currently, Japan and India have agreed to major reductions of energy imports from Iran. Recent news has it that Sinopec, China’s largest oil and gas refiner, under threats of US sanctions, also agreed to severely cut imports from Iran. It's no secret that nearly all of Iran’s competitors, it's OPEC 'partners', will go after those under supplied markets, as will the U.S.

Some observers believe that because the upcoming election is uppermost in the minds of both U.S. political parties, a trade victory with China is extremely important to the Republican election campaign. If so, their thinking goes, a deal will result in easing tariffs with China by November.

Trump himself recently stated that he's ready to talk trade with China, but continues to add the qualifier, "not now." Many Trump watchers interpret this to mean that 'getting tough with China' plays well to Trump's base, boosts the Republican election prospects, and afterwards a trade deal is likely to be struck.

Any trade deal with China could also be used by the U.S. as a template for deals with Japan, India, and South Korea, the next largest Asian importers of natural gas. It can hardly be coincidence that, as in Europe, these energy importing countries are threatened by US tariffs over unfair trade.

However, Geopolitical Futures states that "the broad impression in China appears to be that Trump isn’t actually interested in a deal – certainly not one that China could accept – and that this is just the first major salvo in an emerging Cold War and that instead ... the world needs to get ready for a new cold war with China.

Related: Gazprom's Bid To Maintain European Energy Dominance

In a recent speech, Richard Haas, president of New York-based think tank Council on Foreign Relations stated that "...the Trump administration initially focused just on trade, “but now it’s broadening, and it almost seems as if the administration wants to have something of a cold war with China.”

What about Venezuela, a country estimated to have the largest oil reserves in the world, also laboring under U.S. sanctions? It's also a country about which the Administration has made no secret of its plans for a possible U.S. military invasion to topple the Maduro government.

Why go public with that story now, with only a little more than a month towards U.S. Congressional elections?

There is widespread speculation that this announcement may be a trial balloon, as part of the preparation for laying the ground work for an invasion aimed at bolstering Republican election prospects. To date, there has been no sign of opposition to these threats from Democrats.

Conclusion:

It's no accident that sanctions are aimed at the U.S. largest energy competitors, Russia and Iran, nor is it coincidence that the largest energy importers, Europe, China, Japan, south Korea are also under threat of U.S. tariffs or sanctions.

Instead, it clearly shows that the U.S. is using the threat of economic warfare and possible military conflict as leverage to open markets to the newest player on the world's energy market, American LNG.

If the U.S. is successful in these deals, it's likely that in future, there will be a parallel attempt to make inroads for US crude export to the very same oil importing countries, relying upon the very same LNG game plan.

By Robert Berke for Oilprice.com

[sarkasm] 05/10/2018 13:07

Shell announces senior appointment

Published by David Rowlands, Deputy Editor
LNG Industry, Friday, 05 October 2018 11:00
Shell has announced that Tahir Faruqui, previously General Manager, Origination North & Central America Shell LNG Marketing & Trading, has been appointed as General Manager, Shell Global Downstream LNG.

Faruqui will be based in The Hague and takes over from Lauran Wetemans who is moving on to a new position. Faruqui originally joined Shell in 1997 as a Senior Analyst with Shell Services in the US. Shortly after that, he pursued commercial deal making in Shell Capital, focusing on investing in oil and gas opportunities.

Seizing the opportunity to broaden beyond energy, Faruqui completed an MBA from University of Chicago and then spent the next four years with Bain & Company in strategy consulting where he focused on transformational projects with mid-to-large corporations across multiple industries. With this broad commercial experience, Faruqui returned to Shell Trading & Supply in Gas & Power in their Structured Finance group. He was then appointed as Vice President for the Energy Retailer business in North America where he also co-led the South Power network team.

In 2014, Faruqui began running the conventional LNG Trading and Downstream LNG businesses for North & Central America. In his new role, he will utilise his commercial breadth and depth, established networks and understanding of the business to deliver Shell’s Global Downstream LNG strategy.