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[waldron] 09/7/2020 08:35

Shell said to seek exit from giant Indonesian LNG project
Jul. 8, 2020 2:54 PM ET|About: Royal Dutch Shell plc (RDS.A)|By: Carl Surran, SA News Editor

Royal Dutch Shell (RDS.A -0.3%) reportedly plans to sell its 35% interest in the Inpex-operated Abadi liquefied natural gas project offshore Indonesia.

The field contains an estimated 10.7T cf of gas and is marked for construction of a multibillion-dollar plant with the capacity to produce 9.5M metric tons/year of LNG following recently signed agreements between the companies and the Indonesian government.

Shell has not commented on matters involving portfolio activity, but recently said it would take as much as $22B in impairment charges, about half of it related to its integrated gas business.

[waldron] 08/7/2020 15:23

Shell’s shipping study confirms LNG as transition fuel

Research & Development

July 8, 2020, by Mirza Duran

A Shell study released on Tuesday exploring how the shipping industry is working to slash its emissions has confirmed LNG as one of the main transition fuels.
Shell's shipping study confirms LNG as transition fuel
For illustration only (Image: Shell)

The report named “Decarbonizing Shipping: All Hands on Deck” is a joint research by Shell and Deloitte.

Shell says the report lays a “roadmap of solutions to help the industry meet the International Maritime Organization’s ambition to reduce carbon emissions”.

Deloitte interviewed 82 senior shipping executives from 22 countries across Europe, Asia and North America for this research project.

The report identifies lack of a global regulatory framework and limited customer demand to pay for lower emission solutions as one of key barriers towards decarbonization.

The report prioritises five out of twelve solutions to be implemented over the next two to three years that could speed up progress.

These include creating scale in customer demand for zero-emission shipping through charterer’s commitments but also leveling the playing field by aligning decarbonisation targets between the IMO and major local regulatory bodies.

Solutions also include boosting cross-sector R&D to develop a zero or low-emission fuel through joint research and development across shipping.

In addition, operational efficiency is identified as the foundation for the transition process, enabling reduced emissions from the current fleet.

This includes fuel and lubricant quality, digitalisation, and the use of data and smart navigation strategies.
“Too many alternatives and not one viable solution”

The shiping industry is currently exploring several alternative fuels to meet IMO’s targets.

These include hydrogen, ammonia, methanol and biofuels – but shipping leaders say that they “all have commercial and technical limitations”.

The report says that electric vessels may be an option for inland and short-sea routes but there is a problem with deep-sea shipping which accounts 85% of emissions.

There is currently no viable alternative fuel for deep-sea shipping that makes it possible to reach the IMO’s 2050 ambition, the report said.

However, there is a growing view that now is the time to act if the
industry is to meet the IMO’s ambition.

To reach it, many shipping leaders believe that the first net-zero ships will need to start entering the global fleet by around 2030, the report said.
LNG as transition fuel

The report also touched upon LNG as fuel that has become increasingly available over the years.

“The prevailing view among interviewees is that LNG will have a role to play as a transition fuel in the next decade,” the report said.

As an executive at a global bulk ship owner and operator said: “It took
many years for LNG to become viable, it is the only alternative we have today, and it will get us under the 2030 IMO target.”

The report points out that LNG adoption is increasing, and some ship owners are in the process of taking on LNG-powered ships to reduce emissions.

On the other hand, some of the interviewees were more reserved about the role of LNG, pointing out that it will be insufficient to meet the 2050 ambition.

They also said that LNG carries the risk of methane emissions in the supply chain and it “may distract the industry from investments in zero-emission fuels,” the report said.

[florenceorbis] 29/6/2020 06:29

Natural Gas Price Plunge Could Soon Lead To Shut-Ins
By Nick Cunningham - Jun 28, 2020, 6:00 PM CDT
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Natural gas prices plunged to new lows this week, falling below $1.50/MMBtu, a catastrophically low price for U.S. gas drillers. The factors afflicting the gas market are multiple. Prices had already fallen below $2/MMBtu at the start of 2020, weighed down by oversupply. But it wasn’t a problem confined to the U.S. There was also a global glut of LNG due to a wave of capacity additions in 2019.

That was the situation heading into 2020. But just as the Covid-19 pandemic tore apart the oil market, natural gas also went into a tailspin. Global gas demand is expected to fall by 4 percent this year, “largest recorded demand shock” in history, according to the International Energy Agency.

Buyers of U.S. LNG are now cancelling shipments at a rapid clip. U.S. LNG exports have declined by more than half compared to pre-pandemic levels.

“There would have been too much LNG in the world even without Covid-19,” Ben Chu, a director at Wood Mackenzie’s Genscape service, said in a statement. “Covid-19 has made it worse.”

Buyers abroad are willing to pay a cancellation fee instead of receiving shipment from U.S. exporters, a sign of how badly the market has deteriorated. For August delivery, between 40 and 45 cargoes have been cancelled, nearly double the rate of cancellation in June.

Typically, cheaper gas can stimulate demand, particularly in the electric power sector. But that outlet is not as large as it may have been in the past, not least because gas has already been cheap for quite some time. Thus, the coal-to-gas option is limited. Without an export route, and without larger uptake from utilities, the gas glut has deepened.

“As a result, we see US gas production shut-ins, which we had been discussing as a risk, as now part of our base case for this summer,” Goldman Sachs warned in its report. The bank sees roughly 2 Bcf/d of shut in gas supply for about two months in order to head off storage congestion.

The shut-in process can be thought of as “the last shoe to drop in a global gas rebalancing process,” Goldman added. The logic goes something like this: the LNG market was oversupplied, Asian LNG prices fell, more LNG was routed to Europe, that pushed European gas prices down, which then led to the closure of the economic window for sending American gas abroad.

Related: China’s Oil Imports From Saudi Arabia Jump To Record High

Worse, for American shale gas drillers, backed up LNG cargoes will exacerbate the glut within the United States. By the end of the summer, the volume of cancelled gas could add more than 760 billion cubic feet of gas to storage, according to Goldman Sachs.

As a result, Goldman Sachs slashed its pricing forecast for natural gas prices to $1.40/MMBtu for October, down from $1.75/MMBtu previously. However, the investment bank reiterated the tightening of the market in 2021, in large part because of this year’s supply declines. Goldman stuck with its price forecast of $3.25/MMBtu for next summer, and U.S. LNG exports are also expected to rebound as the market gradually tightens.

Looking forward, the business case for U.S. LNG may not suffer permanent scars. The U.S. tends to shoulder the worst of the rebalancing burden, as contract terms are the most flexible. When the market sours, like it has, U.S. LNG bears the brunt of the cancellations. But that flexibility can be sold as an advantage to would-be buyers, Wood Mackenzie says, reducing their risk. That works in favor of potential U.S. LNG projects.

Still, others say the outlook is more negative, even in the medium-term. The pandemic, weaker demand and the shock to capital budgets make it unlikely that any additional North American LNG project goes forward in the next five years, according to S&P Global Platts Analytics.

Either way, upstream, there is little sign that the shale gas industry can turn things around. The industry succeeded in dramatically ratcheting up supply over the past decade, “[y]et in financial terms, the gas production boom has been an unmitigated financial bust,” according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).

Many companies weren’t earning positive cash flow even when prices were higher. But gas priced below $1.50/MMBtu is a disaster.

By Nick Cunningham of Oilprice.com

[florenceorbis] 29/6/2020 06:01

UK LNG imports jump 51% in Q1 2020

June 29, 2020 News 0

Imports of liquefied natural gas (LNG) to the UK rose by 51% during the first quarter of 2020 compared to the previous year, Kallanish Energy reports.

The UK Department for Business, Energy & Industrial Strategy’s Energy Trends report for Q1 2020 details the LNG imported during first quarter this year was 6.49 billion cubic meters (Bcm),a year-over-year increase of 51% compared to same period in 2019 (4.3 Bcm).

Despite the sharp rise of LNG imports, total natural gas imports to the UK fell by 27% y-o-y during Q1 2020, from 15.29 Bcm to 11.23 Bcm. The decrease was attributed to lower demand, which fell by 4.6% y-o-y during the quarter, despite an increase in gas consumption.

LNG imports accounted for 49% of total UK gas imports during the first quarter, attributed to an increased diversification of gas import sources from other nations. UK gas imports are still primarily derived from Norway, while there was a decrease in imports from the Netherlands and Belgium, “due to the Bacton Zeebrugge Interconnector long term capacity contract terminating at the beginning of October 2018.”

The UK’s natural gas exports increased by 14% y-o-y, totalling 3.7 Bcm, primarily driven by greater levels of export to Ireland during the first quarter.

Natural gas production rose marginally by 3.6% during Q1 2020, reversing the downward trend recorded throughout 2019.

UK’s energy operator, National Grid, recorded LNG imports of 13.4 Bcm during the winter 2019/20 period, a 70% year-on-year increase, within its 2020 Winter Review and Consultation report, published on Wednesday. [See related article].

[sarkasm] 28/6/2020 18:41

Sonatrach, Total sign LNG deal extension
Jun 28, 2020

Algerian national energy company Sonatrach has extended its liquefied natural gas (LNG) partnership with the French major Total.

The Algerian company noted in its statement the deal has been extended by a further three years.

Under the agreement, 2 million tons of Algerian LNG will land in France over the course of each contract year.

The statement reads that the Fos Cavaou LNG import terminal is the priority destination.

Sonatrach CEO Toufik Hakkar noted the deal extension reinforces the relationship between the two companies.

Additionally, Total noted in its statement that the agreement includes the sub-charter of an LNG tanker of Total by Sonatrach.

It was noted that the prior relationship was key in concluding the agreement in the volatile market context.

It also enables the two companies to expand cooperation in various fields of mutual interest.



Source: Offshore Energy

[waldron] 26/6/2020 17:14

GTT to design two LNG storage tanks in China

Oil & GasMidstreamStorage

By NS Energy Staff Writer 26 Jun 2020

The storage tanks form part of Beijing Gas Group’s Tianjin Nangang LNG terminal, which is considered as the country’s national emergency LNG project
tanks-406908_640

GTT will design the two Membrane Full Containment LNG storage tanks in China. (Credit: LEEROY Agency from Pixabay)

China Huanqiu Contracting & Engineering (HQC) has awarded a contract to engineering firm Gaztransport & Technigaz (GTT) to design two Membrane Full Containment LNG storage tanks.

The storage tanks form part of Chinese major state-owned company Beijing Enterprises Group (BEG) subsidiary Beijing Gas Group’s Tianjin Nangang LNG terminal, which is considered as the country’s national emergency LNG project.

Each with a net capacity of 220,000m3, the two tanks are expected to be the largest land storage tanks in China upon completion.

Under the contract, GTT will be responsible for designing the onshore storage tanks membrane Full Containment tanks featuring its GST technology.
New LNG tanks to be commissioned by the end of 2022

Planned to be commissioned during the last quarter of 2022, the membrane Full Containment tanks will be located in the Tianjin south port Industrial Zone.

The contract follows the signing of an agreement in November 2019 between GTT and the Chinese major state-owned company Beijing Enterprises Group (BEG).

HQC chairwoman Wang Xinge said: “With the support of GTT, HQC had deeply prepared the company on building the first Membrane Full Containment tank in China.”

BGG board chairwoman Li Yalan said that BGG conducted a comprehensive evaluation of the application of Membrane technology onshore, with national and international experts.

Yalan added: “Besides the high level of safety and the intrinsic technical merits of the Membrane system for onshore application, this technology is more cost effective and requires less material than other available technologies, which leads to a significant reduction of the impact on the environment.

“Going forward, BGG is proud to take the leading role towards more environmental friendly infrastructure together with HQC and GTT for this national emergency project.”

In April 2020, State-owned oil and gas company Qatar Petroleum has signed QAR11bn ($2.99bn) deal with Hudong-Zhonghua Shipbuilding Group to reserve LNG ship construction capacity.

[waldron] 25/6/2020 15:11

LNG floating storage set to reach record high

Top LNG exporter Qatar has opted to keep up production levels and deployed tankers to store cargoes with no ready buyers. That has contributed to rising LNG floating storage volume, which looks set to surge this autumn past recent highs seen last October, Poten & Partners suggests


25 Jun 2020
News

Hwee Hwee Tan, Lloyd's List senior reporter, Asia
Hwee Hwee Tan [e-mail]

A build-up in LNG floating storage would dampen the prospect of significantly improved prices for the commodity in the coming winter months

[waldron] 25/6/2020 14:43

Sonatrach and Total have agreed to extend their LNG supply deal for another three years.

The Algerian state-owned company said it would supply up to 2 million tonnes per year of LNG, to the Fos Cavaou terminal.

“Sonatrach confirms its status as a reliable partner, respecting its contractual commitments and enjoying a certain credibility on the international energy market,” said Sonatrach’s CEO Toufik Hakkar.

[the grumpy old men] 25/6/2020 05:41

GTT nets China LNG tanks gig

Business developments & projects

June 25, 2020, by Mirza Duran

France’s GTT has secured an order to design two storage tanks for Beijing Gas Group’s Tianjin Nangang LNG terminal in China.
GTT
Image: GTT

The LNG containment specialist won the contract from China Huanqiu Contracting & Engineering.

GTT said that the 220,000-cbm tanks will be the largest land storage tanks in China.

The membrane full containment tanks will feature the GST technology developed by the French company.

This order follows the deal signed in November last year between GTT and the Chinese state-owned company Beijing Enterprises Group (BEG).

City gas distributor Beijing Gas, a unit of BEG, is building a 5 million tonnes per year LNG import terminal in the Tianjin south port Industrial Zone.

The LNG receiving terminal will be an emergency peak-shaving reserve project.

Beijing Gas plans to launch the tanks and the project in the fourth quarter of 2022.

[grupo] 23/6/2020 06:43

forbes


Jun 23, 2020,12:13am EDT
Shell’s $12 Billion LNG Experiment Becomes A Big Headache
Tim Treadgold
Tim TreadgoldContributor
Asia

The world’s biggest ship is on the way to becoming one of the oil industry’s biggest bloopers.

Prelude, a 600,000-ton monster which is five-times the size of the largest U.S. aircraft carrier, is designed to produce liquefied natural gas (LNG), and other petroleum liquids.
SKOREA SHIPYARD

Royal Dutch Shell's Prelude floating liquefied natural gas (FLNG) vessel in a Korean shipyard before ... [+] © 2017 Bloomberg Finance LP

Installed atop a remote gasfield 300 miles off the north-west Australian coast, the 535-yard long Prelude is a bold experiment by the oil major, Royal Dutch Shell.

Unfortunately, the hugely expensive Floating LNG (FLNG) vessel, which is technically a barge because it cannot propel itself, is not performing as designed and hasn’t produced any LNG since early this year.

Safety Shutdown And Cost Blowout

Safety problems forced the closure of Prelude in January and a re-start date has not been set for the vessel which is estimated to have cost between $12-and-$17 billion — with the exact price never revealed by Shell.
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The theory behind FLNG technology is that remote and relatively small offshore gasfields might never be developed using a conventional offshore platform and pipeline to an onshore processing plant.
JAPAN LNG

LNG is the world's fastest-growing fossil fuel. Photographer: Tomohiro Ohsumi/Bloomberg © 2018 Bloomberg Finance LP

So, rather than take the offshore gas to the onshore plant FLNG flips the business model by taking the plant to the gas with the bonus being that the FLNG vessel can be re-used once moved to new gasfields as old ones dry up.

It sounds good, except for the technical challenges of squeezing a big LNG facility into a relatively small space, and Prelude’s prospects might be brighter if prices for oil and gas had not plummeted since Shell started work on the project more than 10 years ago.

A series of recent events highlight the challenge Shell has ahead of it with Prelude, and plans for sister vessels which are supposed to follow.

Australian Safety Regulators Taking A Close Look

The immediate issue is for Prelude to satisfy Australia’s offshore oil and gas safety regulator, the National Offshore Petroleum Safety and Environmental Authority (Nopsema) that problems such as the failure of a back-up diesel power unit have been fixed and LNG production can restart.

But even if Prelude starts another challenge for Shell, and almost everyone else producing LNG, is that the price of the liquefied fuel has fallen sharply, in line with this year’s oil-price crash.

And then there’s the question of costs and while Shell has not revealed the capital cost of the vessel it has also never revealed the operational cost.

Goldman Sachs Puts Prelude High On Its Cost Estimates

Shell’s understandable secrecy with an experimental LNG system has not stopped outsiders from estimating Prelude’s costs, including an attempt last month by Goldman Sachs, an investment bank.

According to analysts at the bank Prelude is, when operational, the world’s most expensive new LNG project with a “commercial break even” cost of almost $20 per thousand cubic feet.
Overseas car carrier ″Siem Confucius

Ships powered by LNG are becoming increasingly popular thanks to their reduced levels of pollution). ... [+] dpa/picture alliance via Getty Images

If correct that Goldman Sachs estimate means Prelude material costs more than double LNG from other new projects and four-times the cost of LNG produced in Qatar, the world’s LNG leader.

Despite Shell’s reluctance to discuss the cost of building and operating Prelude it is creeping back into the news, starting with comments earlier this month by an analyst with Credit Suisse, an investment bank, that no-one was rushing to restore production at high-cost LNG projects.

Saul Kavonic told The Australian Financial Review newspaper that record low prices for LNG made it a struggle “to simply cover operating costs.”

That was followed earlier today with news of an internal management shuffle at Shell, including the appointment of a new executive in charge of Prelude, and the first public comments in months from a senior executive about the floating LNG project.

Shell’s In No Hurry

Shell Australia’s chairman, Tony Nunan, was reported by The Australian newspaper to have said that it was still very early in the life of Prelude and Shell was not working to any specific timeline to resume production.

“"When we identify an issue or challenge we work through it methodically,” Nunan is quoted to have said. “We don’t just solve it for the short term, but we get it up an running for the long term.”

Nunan said Shell was pleased with the the progress being made at Prelude.

Tim Treadgold

[waldron] 22/6/2020 14:24

China buys two carbon-neutral LNG cargoes from Shell
Jun. 22, 2020 8:01 AM ET|About: CNOOC Limited (CEO)|By: Carl Surran, SA News Editor

Cnooc (NYSE:CEO) agrees to buy two "carbon neutral" liquefied natural gas cargoes from Royal Dutch Shell (NYSE:RDS.A) for delivery to China, marking the country's first such gas imports.

Cnooc plans to auction the cargoes on the Shanghai petroleum and natural gas exchange to provide downstream gas users with the opportunity to decarbonize their use of LNG.

Carbon credits from various projects including Shell-supported projects in China's Qinghai and Xinjiang provinces will fully offset carbon dioxide emissions from producing the gas up to the final consumption of the two cargoes, Shell says.

[adrian j boris] 21/6/2020 06:02

Energy Giants To Bring Greener LNG To The Market
By Jon LeSage - Jun 16, 2020, 12:00 PM CDT
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As global LNG demand continues to grow into the foreseeable future, supplying ‘green LNG’ could give producers an edge in this burgeoning market. French oil and gas giant Total and Siemens Gas and Power division are conducting studies that could greatly benefit each company.

Reducing greenhouse gas emissions at LNG liquefaction facilities, and improving plant reliability, maintainability, regulatory compliance and development costs, are targets for the study. Decarbonizing LNG production can feed into more demand for the fuel with stringent government regulations and corporate mandates kicking in. Being considered the cleanest fossil fuel, the European Commission sees it as an excellent alternative energy to reduce emissions and combat climate change.

As we’re seeing with green hydrogen, several countries have started committing billions of dollars in a bid to combat climate change. The US has been particularly fond of LNG to meet these targets — and as the domestic gas supply is ample enough to grow exports.

McKinsey & Co. forecasts that the global gas and LNG market will continue to expand 3.6 percent each year through 2035.

Total has been expanding its energy portfolio in recent years, with LNG being prioritized. Last month, Total was able to round up $15 billion for an LNG-project in Mozambique for a signing scheduled in June. It will be expanding to $23 billion and make up Africa’s largest private investment yet, binding in about 20 banks. The project will chill natural gas into a liquid for export.

Siemens sees great potential in LNG, having taken on another major alliance. The company found equity investment partners for a new combined cycle power plant for the integrated LNG-to-Power project in Rio de Janeiro, Brazil. Siemens owns one-third of project company Gás Natural Açu (GNA) with Brazil logistics company Prumo Logística S.A. and oil major BP.

Siemens will benefit from the new study’s exploration of gas turbine compression trains in rolling systems. Its Houston-based Gas and Power unit produces products for power generation, such as gas and steam turbines, generators, turbine packages, and tailored OEM power plant solutions.

The new study will look into using gas turbine- and electric-driven compression trains in conjunction with proven single-mixed refrigerant and double-mixed refrigerant technologies for the coolant function in drivetrain and power systems. Another method being explored is developing techniques to improve the efficiency of onsite power generation facilities; that might include heat recovery systems, inlet air chilling, supplementary firing, renewables integration, and battery storage.
Related: The End Of The OPEC Deal Could Be The Start Of A New Oil Price War

“Siemens Gas and Power is committed to supporting the LNG industry’s efforts to reduce carbon emissions through the application of proven equipment solutions and by providing financial, technical development, and strategic support to customers in the early concept development and pre-front-end engineering design (FEED) stages of projects,” said Thorbjoern Fors, CEO for Siemens Energy Oil & Gas Division. “We are proud to continue these efforts by partnering with Total to drive towards the lowest possible plant emissions profile and attain the highest degree of sustainability in LNG production.”

As part of the agreement, Siemens in conducting studies to explore possible liquefaction and power generation in plant designs. The endgame here will be hitting targets for decarbonizing LNG production. But other efficiencies are part of the overall goals, according to the two companies. That will include leveraging digitalization and automation platforms to optimize plant design and achieve seamless project execution.

Siemens thinks that application of digital technologies, such as artificial intelligence, digital twins, and predictive analytics, offer substantial gains for LNG developers and operators to improve the economic viability of their facilities. Participating in the Hammerfest LNG plant above the Arctic Circle, Siemens has been able to divert unplanned downtime in the plant. Siemens developed an advanced digital system that monitors and rapidly responds to the entire system to keep it operating efficiently.

By Jon LeSage for Oilprice.com

[florenceorbis] 15/6/2020 06:47

Siemens partners with Total to advance concepts for low-emissions LNG production

MidstreamContract

By NS Energy Staff Writer 12 Jun 2020

Concepts to be explored include the use of gas turbine- and electric-driven compression trains in conjunction with proven single-mixed refrigerant and double-mixed refrigerant technologies
vessel-2650704_640

Siemens partners with Total. (Credit: djedj from Pixabay.)

Siemens Gas and Power has entered into an agreement with Total, a broad energy group, to advance new concepts for green liquified natural gas (LNG) production. As part of the contract, Siemens Gas and Power is conducting studies to explore a variety of possible liquefaction and power generation plant designs, with the ultimate goal of decarbonizing the production of LNG.

The studies are targeting key areas, such as reducing the environmental footprint of LNG liquefaction facilities and the associated greenhouse gas emissions, plant reliability, maintainability, regulatory compliance, and development costs. Concepts to be explored include the use of gas turbine- and electric-driven compression trains in conjunction with proven single-mixed refrigerant and double-mixed refrigerant technologies; selecting equipment that can minimize or eliminate process flaring; and developing techniques to improve the efficiency of onsite power generation facilities (heat recovery systems, inlet air chilling, supplementary firing, renewables integration, battery storage, etc.).

The studies are also exploring how to leverage digitalization and automation platforms to optimize plant design and achieve seamless project execution.
“Siemens Gas and Power is committed to supporting the LNG industry’s efforts to reduce carbon emissions through the application of proven equipment solutions and by providing financial, technical development, and strategic support to customers in the early concept development and pre-FEED stages of projects,” said Thorbjoern Fors, CEO for Siemens Energy Oil & Gas Division. “We are proud to continue these efforts by partnering with Total to drive towards the lowest possible plant emissions profile and attain the highest degree of sustainability in LNG production.”

[waldron] 10/6/2020 17:04

Shell CEO sees LNG market recovering to pre-virus levels
Jun. 10, 2020 12:28 PM ET|About: Royal Dutch Shell plc (RDS.A)|By: Carl Surran, SA News Editor

Royal Dutch Shell (RDS.A -1.4%) CEO Ben van Beurden expects buying and selling of liquefied natural gas to recover to levels seen before the coronavirus pandemic.

"We still very much believe that with the current supply-demand outlook, this is a fundamentally strong sector that will grow at a rate that is close to 4% per year," the CEO tells Bloomberg in comments that show Shell is maintaining the optimism showed in its annual LNG Outlook in February, before COVID-19 started to ravage markets.

Shell had forecast annual LNG demand to double to 700M tons by 2040, after consumption rose by a record 13% to 359M tons in 2019.

"We will obviously flex our investment program to be aligned with where we believe the sector will go, but the profitability of the business and the outlook of this business is going to be as good as what you saw before the pandemic," van Beurden says.

[ariane] 14/5/2020 10:43

Shell invests in new NLNG processing unit

Published by Will Owen, Assistant Editor
LNG Industry, Thursday, 14 May 2020 09:00

Shell Gas B.V., a subsidiary of Royal Dutch Shell plc, has announced that all conditions for its final investment decision (FID) on a new LNG processing unit at Nigeria LNG (NLNG) have now been met.

These conditions included formal commitment from the organisations providing financing for the project. Subsequent to the FID, NLNG has announced awards of engineering, procurement and construction (EPC) contracts.

Once operational, the new unit, known as Train 7, will add approximately 8 million tpy of capacity to the Bonny Island facility, taking the total to approximately 30 million tpy.

Currently operating six processing units, or trains, the decision to build a seventh will bolster NLNG’s contribution to the development of the country through generating revenues for the Nigerian government and delivering key natural gas products for domestic use.

NLNG is a joint venture owned by the Nigerian National Petroleum Corporation (NNPC – 49%), Shell (25.6%), Total (15%) and ENI (10.4%). All shareholders have supported the EPC awards and construction schedules will be finalised once the situation with COVID-19 has stabilised.

“While remaining mindful of prevailing macro-economic challenges, Shell continues to see NLNG as a great resource that can deliver value to the people of Nigeria and investors alike. This decision is consistent with our long-term strategy and our disciplined approach to capital investment,” said Maarten Wetselaar, Shell’s Integrated Gas and New Energies Director. “Natural gas is a core component of our strategy to provide more and cleaner energy solutions. With global LNG demand expected to double by 2040, the expansion of the NLNG Bonny Island facility is crucial in helping Shell meet the world’s growing energy needs.”

"We are happy with the progress NLNG has made over the years and its enormous contributions to the Nigerian economy. The EPC awards for Train 7 is good news for Nigeria with the potential to bring more export revenues, unlock new projects, and attract foreign direct investments, in addition to transforming the economy of the Niger Delta and Nigeria as whole,” said Osagie Okunbor, Country Chair, Shell Companies in Nigeria and Managing Director, The Shell Petroleum Development Company of Nigeria Ltd. “Shell is positioned to support NLNG’s expansion by working with our government and other partners to develop new gas resources to sustain this growth and enhance both domestic and export gas supplies.”

[waldron] 15/4/2020 12:43

15 Apr 2020 | 09:23 UTC London

France's Total sees Q1 equity LNG sales price dip to $6.32/MMBtu

Author Stuart Elliott Editor Felix Fernandez Commodity LNG, Natural Gas

Highlights

Price up on average spot JKM price of $3.62/MMBtu

Long-term LNG supplies traditionally oil-linked

Total's Q1 global gas price averages $3.35/MMBtu

London — France's Total said Wednesday its average realized sales price for equity LNG in the first quarter of 2020 was $6.32/MMBtu, down by 20 cents/MMBtu from the previous quarter.
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It is the first time Total has published an average sales price for its LNG, with the major saying it introduced the price to allow for a "better understanding" of the company's integrated gas business unit performance.

"It represents the selling price of LNG equity production," Total said in a note.

The Q1 average sales price of $6.32/MMBtu was 12% lower than the price in Q1 2019 -- the first quarter of published prices.

However, its Q1 2020 average LNG sales price was well up on the average JKM spot LNG price in the period, as assessed by S&P Global Platts, of $3.62/MMBtu.

A large amount of long-term LNG supply globally is contracted on an oil-indexed basis, meaning term LNG has been able to secure a better price than spot LNG, which has been under significant pressure due to the oversupplied global market.

However, with the recent oil price collapse, oil-indexed LNG will become cheaper for term buyers in the coming months.

In 2019, Total's equity LNG sales amounted to 16.3 million mt, up 47% from the previous year.

Overall, LNG sales were up 57% on the year in 2019 at 34.3 million mt.

The increase was due to the ramp-up of the Yamal LNG facility in Russia and Australia's Ichthys plant, as well as the startup of the first Cameron LNG train in the US.

Total also published Wednesday its average global gas price of $3.35/MMBtu, which was down by 26% year on year and by 11% quarter on quarter.