Total Share Discussion Threads

[waldron] 31/7/2020 07:40

Total: AlphaValue remains at accumulate with a price target reduced from EUR 40.30 to EUR 39.40.

[waldron] 30/7/2020 10:30

Total Gabon Divests its Portfolio of Mature Non-Operated Assets

30/07/2020

News

Paris – Total announces that its 58% owned affiliate Total Gabon has signed an agreement with Perenco to divest its interests in seven mature non-operated offshore fields, along with its interests and operatorship in the Cap Lopez oil terminal. The transaction remains subject to approval by the Gabonese authorities.

The price to be paid by Perenco will be between $290 million and $350 million, depending on future Brent prices. The production divested by Total Gabon amounted to approximately 8,000 SEC barrels of oil per day in 2019.

"This transaction demonstrates our ability to high grade Total E&P's portfolio by monetizing mature fields with high breakeven point," commented Arnaud Breuillac, President Exploration & Production at Total. “We remain fully committed to Gabon through our operated production clusters at Anguille-Mandji and Torpille-Baudroie-Mérou, where we continue to maximize value for all stakeholders.”
List of assets included in the transaction
Area Field Total Gabon’s Interests Total Gabon's interest after the transaction Operator





Grondin
Grondin 65,275 % 0 %








Perenco Oil & Gas Gabon
Gonelle 65,275 % 0 %
Barbier 65,275 % 0 %
Mandaros 65,275 % 0 %



Torpille
Girelle 65,275 % 0 %
Pageau 65,275 % 0 %
Hylia 37,5 % 0 %
Cap Lopez oil terminal 100 % 0 % Total Gabon

About Total Gabon
Total has been operating in Gabon for more than 90 years and is a major player in the country’s upstream and downstream businesses. In 2019, Total Gabon’s SEC production came to around 33,000 barrels of oil equivalent per day.

About Total
Total is a broad energy company that produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.

[ariane] 30/7/2020 09:55

Total maintains dividend despite net losses of £6.5bn, celebrates major oil discovery off Suriname

by Mark Lammey
30/07/2020, 7:54 am



French energy giant Total this morning announced first-half net losses of £6.5 billion, but provided some cheer by maintaining its dividend and celebrating a major discovery off Suriname.

Paris-headquartered Total had enjoyed net income of £4.5bn in the first six months of 2019.

But the firm’s first half 2020 figures were hit by a £6.3bn impairment on its assets, with most of that sum tied to its high-cost, high-carbon Canadian oil sands business.

ENERGYVOICE

[ariane] 30/7/2020 07:08

FOREXLIVE

French oil giant Total oi price outlook is for a rebound in price … from 2025

Thu 30 Jul 2020 01:54:49 GMT

Author: Eamonn Sheridan | Category: News

Total has revised its oil price assumptions for the next years given the drop in prices in 2020

Its new profile is for Brent price at

$35 per barrel in 2020
$40 in 2021
$50 in 2022
$60 in 2023

Said that the drop in investments in the oil sector since 2015 would result in insufficient global production capacities by 2025 and a rebound in prices.

"Beyond 2030, given technological developments, particularly in the transportation sector, Total anticipates oil demand will have reached its peak and Brent prices should tend toward the long-term price of $50 per barrel"

Total has revised its oil price assumptions for the next years given the drop in prices in 2020

[the grumpy old men] 29/7/2020 20:51

TOTAL: Short Term Price Revision and Climate Ambition: Total Announces Exceptional 8 B$ Asset Impairments Including 7 B$ in C...
29/07/2020 5:55pm
UK Regulatory (RNS & others)

Total (LSE:TTA)
Intraday Stock Chart


Wednesday 29 July 2020
Click Here for more Total Charts.

TIDMTTA



For the calculation of impairment tests of its assets, Total (Paris:FP) (LSE:TTA) (NYSE:TOT) set in 2019 a price scenario with a 2050 Brent price of 50$/b, in line with the "well below 2 degC" scenario of the IEA. This scenario is described in the Universal Registration Document (note 3 of Chapter 8).



Given the drop in the oil price in 2020, Total decided to revise the price assumptions over the next years and selected the following profile for the Brent price: 35$/b in 2020, 40$/b in 2021, 50$/b in 2022, 60$/b in 2023; gas prices have been adjusted accordingly.



For the longer term, Total maintains its analysis that the weakness of investments in the hydrocarbon sector since 2015 accentuated by the health and economic crisis of 2020 will result by 2025 in insufficient worldwide production capacities and a rebound in prices. Beyond 2030, given technological developments, particularly in the transportation sector, Total anticipates oil demand will have reached its peak and Brent prices should tend toward the long-term price of 50$/b, in line with the IEA SDS scenario.



The average Brent price over the period 2020-2050 thus stands at 56.8$(2020) /b.



As a result of this short-term price revision, Total recognizes in the 2(nd) quarter 2020 an exceptional asset impairment charge of 2.6 B$, mainly on Canadian oil sands assets for 1.5 B$ and LNG assets in Australia for 0.8 B$, both being giant projects with high construction costs. These limited impacts (less than 2% of Total's overall assets) reflect the strength of the Group's balance sheet.



In addition, in line with its new Climate Ambition announced on May 5, 2020, which aims at carbon neutrality, Total has reviewed its oil assets that can be qualified as "stranded", meaning with reserves beyond 20 years and high production costs, whose overall reserves may therefore not be produced by 2050. The only projects identified in this category are the Canadian oil sands projects Fort Hills and Surmont.



For impairment calculations, Total's Board of Directors has decided to take into account only proven reserves on these 2 assets -- unlike general practice which considers so-called proven and probable reserves. This leads to an additional exceptional asset impairment of 5.5 B$. Consequently, Total will only take into account for its proven and probable reserves in Canada the proved reserves. And the proved and probable reserves life of the Group is thus reduced from 19.0 to 18.5 years. In addition, Total will not approve any new project of capacity increase on these Canadian oil sands assets. Finally, still consistent with the Climate Ambition announced on May 5, 2020, Total decided to withdraw from the Canadian association CAPP considering the misalignment between their public positions and the Group's ones.



Overall, the exceptional asset impairments that will therefore be taken into account in the 2(nd) quarter of 2020 amount to 8.1 B$, including 7 B$ on Canadian oil sands assets alone, impacting the gearing ratio of the Group by 1.3%.



About Total



Total is a broad energy Group, which produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.



* * * * *

[waldron] 28/7/2020 16:28

France’s Total to sell Lindsey refinery to Prax Group

Oil & GasDownstreamRefinery

By NS Energy Staff Writer 28 Jul 2020

The transaction includes the sale of the facility’s associated logistic assets, all related rights as well as all of the related rights and obligation
refinery-3613522_640 (1)

The Lindsey refinery has an annual production capacity of 5.4 million tonnes. (Credit: SatyaPrem/Pixabay)

French oil major Total has agreed to sell the Lindsey refinery to a UK-based petroleum products company Prax Group.

The financial details of the transaction are not disclosed by the company.

The deal includes the sale of the facility’s associated logistic assets, all related rights as well as all of the related rights and obligation.

The refinery, which is located in Immingham (Lincolnshire) in England, has an annual production capacity of 5.4 million tonnes.

Total Refining and Chemicals president Bernard Pinatel said: “This transaction is in line with our forward-looking strategy for Total’s European refining base, which involves focusing our investments on integrated refining and petrochemical platforms.

“After considering several options for the future of the Lindsey site, Total chose the one that best protects local jobs.”

Once the conditions of the sale have been satisfied, the deal is expected to be concluded by the end of the year.
Total and IOC JV will set up manufacturing units across India

Additionally, the company has announced the formation of a 50:50 joint venture (JV) company with Indian Oil Corp (IOC) to provide bitumen derivatives.

The JV will set up manufacturing units across India and market bitumen derivatives as well as the specialty products for the road construction industry in India.

The specialty products include polymer-modified bitumen, crumb rubber modified bitumen, bitumen emulsions and other specialty products.

Total said that the new entity will also explore the possibilities to cater to other South Asian markets.

IndianOil chairman Shrikant Madhav Vaidya said: “This would cater to B2B customers involved in road infrastructure development, both in the government and private sectors and I am confident that this would start a revolution in road construction activities in the country by providing superior technology products at competitive prices.”

Recently, Total announced securing $14.9bn financing for the $20bn LNG project in northern Mozambique.

[waldron] 28/7/2020 16:19

Oil Majors Discover Significant Gas Field In Egyptian Waters
By Charles Kennedy - Jul 28, 2020, 10:00 AM CDT
Join Our Community

European majors Eni, BP, and Total have successfully tested a new natural gas discovery in Egypt’s shallow waters, the Italian company said on Tuesday, commenting on its find that adds to Egypt’s already sizeable natural gas resources.

Once in production, the well Bashrush is estimated to deliver at up to 100 MMscf of gas and 800 barrels of condensate per day, Eni said.

Eni is the operator of the North El Hammad concession, where Bashrush is located, with a 37.5-percent interest, BP holds another 37.5 percent, and Total owns 25 percent.

The companies will be looking to develop the area with tie-ins to existing infrastructure.

“These results support our strategy to allocate a significant share of our exploration budget to the search of hydrocarbons in the vicinity of existing infrastructures,R21; said Kevin McLachlan, Senior Vice President Exploration at Total.

“These resources have low development costs since they can rapidly be tie-in and put into production,” McLachlan added.

In recent years, Egypt has been at the center of a ‘natural gas rush’ in the Eastern Mediterranean after Eni discovered the vast Zohr field in 2015, saying it was the largest ever gas discovery in the Mediterranean.

Eni is the operator of Zohr and holds 50 percent, Rosneft has 30 percent, while BP and Mubadala Petroleum each have 10 percent in the Shorouk Block where Zohr is located.

Following the start-up of the giant Zohr field in early 2018, Egypt became an essential player in the Mediterranean. Zohr plays a crucial role in helping Egypt to avoid the need to import liquefied natural gas (LNG), according to the Italian energy major.

In one of the latest deals concerning the Eastern Mediterranean, U.S. supermajor Chevron will scoop up Noble Energy’s natural gas assets offshore Israel and Cyprus after it entered last week into a definitive agreement to buy Houston-based Noble Energy in an all-stock transaction valued at US$5 billion.

By Charles Kennedy for Oilprice.com

[waldron] 27/7/2020 17:10

Indian Oil Corporation, India's largest refiner and marketer of petroleum products, and Total (Paris:FP) (LSE:TTA) (NYSE:TOT), broad energy company with headquarters in Paris, France, announce the formation of a 50:50 Joint Venture (JV) company that will manufacture and market high-quality bitumen derivatives and specialty products for the growing road-building industry in India.



Total is the leading bitumen manufacturer and supplier in Europe, while Indian Oil is the largest player in the Indian bitumen market. The two companies have already an established business relationship in India, notably in LPG and fuel additives businesses.



The new JV will combine the R&D and marketing strengths of both Indian Oil and Total to manufacture and market innovative bitumen formulations and superior quality products such as polymer-modified bitumen, crumb rubber modified bitumen, bitumen emulsions and other specialty products. The JV will set up manufacturing units across the country with cost-effective logistics solutions, keeping innovation, safety and sustainability at the helm of its operations. The JV will also explore possibilities to cater to other South Asian markets.



"India is a strategic country for the future of Total and we are delighted by this partnership, yet another testimony of our commitment to this fast-growing market." highlighted Patrick Pouyanné, Chairman and CEO of Total. "Today, Total is further cementing its longstanding business cooperation with IndianOil, into a strong and sustainable new partnership. With this agreement, we are pursuing the growth of businesses with key Indian energy players, adding to our ongoing developments in renewables, gas and power."



Shrikant Madhav Vaidya, Chairman of IndianOil said: "The IndianOil-Total joint venture company would combine IndianOil's credentials as India's Flagship National Oil Company and the Total's strength as an International Energy Major. This would cater to B2B customers involved in road infrastructure development, both in the government and private sectors and I am confident that this would start a revolution in road construction activities in the country by providing superior technology products at competitive prices".



He added: "This joint venture company would bring in latest technologies and formulations for Polymer Modified Bitumen (PMB) and other fast-growing non-conventional derivatives such as Cold Mix & Micro Emulsion, Block Bitumen, etc. to the Indian market. The operations of this JV would commence by taking over an existing plant of Total at Jodhpur and subsequently set up new Greenfield plants".



The Government of India has a strong focus on developing the country's road infrastructure with mega projects like the 'Bharatmala project' which envisages development of 34,800 km of roads at an estimated investment of over Rs. 5 lakh crore in the first phase (equivalent to approximately 66 billion USD).



The demand for aggregate material and manufactured material for the highway construction and rehabilitation sector in India is very high, especially for good-quality bitumen derivatives. The IndianOil and Total JV will offer high-spec products using sustainable technologies.



About Total



Total is a broad energy company that produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is more affordable, more reliable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.



About Total in India



With over 900 employees, Total is present in India since 1993. Through its fully owned subsidiary, Total operates in the chemical business (Hutchinson) and is active in LPG for domestic and commercial applications, lubricants for automotive & industrial applications, modified bitumen products and special fluids (Total Oil India Private Limited). The Group has also a growing presence in energy storage (SAFT) and solar energy (Total Solar India Private Limited).



Total's Technical Center in Mumbai provides value added technical support in the areas of product development, product training and field-testing in Asian market. The Group has also established a Digital Innovation Center located in Pune, in partnership with Tata Consultancy Services (TCS) to develop revolutionary solutions and technologies for its refining activities.



More recently, as part of its strategy to further develop offers for the Indian market, Total has partnered from 2018 with the Adani Group through various joint ventures in Fuels, Gas and Renewables.



About Indian Oil



Indian Oil Corporation Ltd. is Ranked 117th among the world's largest corporates in Fortune's 'Global 500' listing. IndianOil's business interests encompass the entire hydrocarbon value chain - from refining, pipeline transportation & marketing, to exploration & production of crude oil & gas, petrochemicals, gas marketing, alternative energy sources and globalization of downstream operations. With over 80 MMTPA refining capacity and 14,670 KM, cross-country pipelines network IndianOil accounts for nearly half of India's petroleum products market share, with sales of about 89.696 MMT including export in the year 2019-20, through its network of over 55,000 customer touchpoints. IndianOil harbors global aspirations, with subsidiaries in Sri Lanka, Mauritius, the UAE, Singapore, Sweden, USA and The Netherlands. IndianOil has been actively pursuing diverse business interests, setting up over 20 joint ventures with reputed business partners from India and abroad to explore global opportunities.



* * * * *

[sarkasm] 26/7/2020 10:50

lets hope that next weeks news will make us all feel better

heres to health, wealth and happiness

cheers and take care

[sarkasm] 26/7/2020 10:44

Local oil and gas services providers should resume preparations to supply the industry

July 22, 2020
Written by MICHAEL MUHANGI



Tullow Oil sold its stake to Total E&P

The agreement announced on April 23 by Total E&P to purchase Tullow Oil’s entire stake in the jointly-held onshore fields in Uganda’s Albertine for $575 million came at a very unexpected time as global oil prices plummeted due to a supply glut and vanishing demand caused by the corona virus pandemic.

CNOOC, the third partner, then elected not to pre-empt Tullow Oil’s sale of its assets. The transaction is expected to be concluded in the second half of this year subject to a number of conditions including Tullow Oil shareholder approval.

This agreement should be ecstatically received by Ugandan stakeholders as it signals a strong vote of confidence in the project in the toughest of times. Since the agreement was announced, the global oil market has seen a slow but steady recovery as lockdowns ease and production cuts by OPEC+members come into effect.



The long-awaited Final Investment Decision (FID) now seems to be on track to be signed in the very near future as past hurdles are overcome.

A recent Express of Interest notice for Engineering, Procurement, Supply Construction & Commissioning Services (EPSCC) published by Total E&P in the press gives further confidence to these assumptions.

With that positive outlook in mind, Ugandan oil and gas service providers should resuscitate plans that seemed to flat-line at the end of last year.

Although the period of countrywide lockdown made it challenging for businesses to operate, the effects of which are still being felt even as the economy gradually re-opens, some key preparations can be made as we wait for the project to come online.

Leading this list is the acquisition of relevant standards and certifications to be able to supply the industry. Because of the high-risk nature of the sector, employers insist on an independent confirmation of competence.

Companies interested in participation should therefore take this time to familiarize themselves with the appropriate standards related to the services they provide and take the necessary steps to acquire them.

The second is to address the issue of capacity. The oil and gas industry is extremely capital-intensive, particularly the development phase that Uganda is embarking on.

This is problematic as limited capacity has been identified as a key challenge faced by local companies in Uganda. The formation of Joint Venture (JV) and strategic partnerships is a practical solution to this problem.

The COVID-19 pandemic, and related economic shutdown, has created a sea of dormant assets around the globe struggling to find projects to be deployed into, from lifting equipment, to civil engineering assets such as graders, excavators etc.

This provides an opportunity for Uganda businesses to research and proactively engage with foreign entities that might be experiencing this, with the goal of creating strategic partnerships.

The third is an honest, open and proactive discussion with one’s bankers. Access to finance, although commonly identified as a key stumbling block, is easily dealt once a service provider has a clear goal that is communicated to her bankers well in advance.

Taking advantage of already existing relationships with banks or actively working to create them, will go a long way to improving one’s access to the financial support required in the industry from performance and advance guarantees, to vehicle and asset financing, working capital etc.

Finally, a strong focus should be placed on improving one’s own corporate governance. Updating/refreshing work policies such as Health, Safety and Environment (HSE), proper book keeping, transparent reporting, all basic hygiene – will go a long way to ensuring readiness when the opportunity does come and through the Stanbic Business Incubator, we continue to work towards exactly this goal.

The author is a sector Head for Oil and Gas, Personal and Business banking at Stanbic Bank.

[waldron] 23/7/2020 18:11

Brent Crude Oil NYMEX 44.14 -0.29%
Gasoline NYMEX 1.26 +0.25%
Natural Gas NYMEX 1.79 +3.47%
WTI 42.025USD +0.82%

FTSE 100
6,211.44 +0.07%
Dow Jones
26,910.03 -0.35%
CAC 40
5,033.76 -0.07%
SBF 120
3,972.54 -0.02%
Euro STOXX 50
3,371.74 +0.08%
DAX
13,103.39 -0.01%
Ftse Mib
20,463.67 -0.66%

Eni
8.601 -1.22%


Total
32.53 -0.50%



Engie
11.105 -1.07%

Orange
10.825 -0.41

Bp
299.8 -1.33%

Vodafone
128.8 -0.91%

Royal Dutch Shell A
1,251.6 -0.89%


Royal Dutch Shell B
1,199.2 -0.74%


TULLOW OIL
Price (GBX)29.88 -1.35%







Due to health issues i will reduce my postings

[waldron] 23/7/2020 11:22

Oil and Gas

‘It is going to be brutal’: What to expect as oil and gas majors unveil their second-quarter results

Published Thu, Jul 23 20204:25 AM EDT

Updated 2 Hours Ago

Sam Meredith
@smeredith19

Key Points

“Big Oil” companies witnessed a historic fall in oil and gas prices during the second quarter as coronavirus lockdown restrictions coincided with an unprecedented demand shock.

“I think it is going to be brutal and ugly,” Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), told CNBC via telephone.

Dividend payouts to shareholders will also be an area of focus for energy market participants.

[waldron] 23/7/2020 06:35

Rough Q2 reports ahead for Big Oil names; BP dividend cut seen likely
Jul. 22, 2020 6:57 PM ET|About: BP PLC (BP)|By: Carl Surran, SA News Editor

For the first time since at least he early 2000s, all five Big Oil supermajors - BP, Chevron (NYSE:CVX), Exxon (NYSE:XOM), Shell (RDS.A, RDS.B) and Total (NYSE:TOT) - are poised to post a quarterly loss, analysts say.

"Worst-in-a-generation oil prices combined with OPEC production cuts, collapsing refining margins and millions of barrels of unsold crude mean no facet of Big Oil's business has emerged unscathed," Bloomberg writes.

For BP, several analysts anticipate a cut in the dividend payout of 30%-65%, a historic move for a company that has been a cornerstone dividend payer.

Exxon, Chevron and Total are not expected to follow suit, although Goldman analysts believe a cut at Exxon "could enable a financially healthier company."

Shell already cut its dividend for the first time since World War II earlier this year.

Exxon's borrowing is rising rapidly and eventually will become a cause for concern, according to Morgan Stanley and Goldman, which says the company's net debt increased $8.8B in Q2 and will surge to $78B by year-end 2022.

Chevron's agreement to acquire Noble Energy this week includes the assumption of $8B of additional debt, but CEO Mike Wirth says the company remains well-placed to pay its dividend.

"Our team has forecasted earnings for 72 quarters and Q2 2020 seems the most difficult of them," says Jefferies' Jason Gammel.

[waldron] 22/7/2020 17:28

Brent Crude Oil NYMEX 43.87 -0.18%
Gasoline NYMEX 1.26 -0.36%
Natural Gas NYMEX 1.70 -0.23%
WTI 41.425 USD -0.26%

FTSE 100
6,207.1 -1.00%
Dow Jones
26,907.36 +0.25%
CAC 40
5,037.12 -1.32%
SBF 120
3,973.19 -1.16%
Euro STOXX 50
3,370.76 -1.01%
DAX
13,104.25 -0.51%
Ftse Mib
20,586.09 -0.66%


Eni
8.707 -2.49%


Total
32.695 -3.14%



Engie
11.225 -0.75%

Orange
10.87 -0.59%


Bp
303.85 -3.83%

Vodafone
129.98 -0.28%

Royal Dutch Shell A
1,262.8 -3.60%



Royal Dutch Shell B
1,208.2 -3.44%


Tullow Oil (TLW)
30.29 -0.99 (-3.16%)

[waldron] 21/7/2020 18:26

waldron
21 Jul '20 - 17:54 - 2492 of 2492 Edit
0 0 0
Brent Crude Oil NYMEX 44.44 +2.82%
Gasoline NYMEX 1.26 +3.81%
Natural Gas NYMEX 1.70 +1.07%
WTI 41.885 USD +2.65%


FTSE 100
6,269.73 +0.13%
Dow Jones
26,973.88 +1.10%
CAC 40
5,104.28 +0.22%
SBF 120
4,019.95 +0.24%
Euro STOXX 50
3,405.35 +0.45%
DAX
13,171.83 +0.96%
Ftse Mib
20,708.66 +0.42%



Eni
8.929 +1.69%



Total
33.755 +1.66%



Engie
11.31 -0.79%

Orange
10.935 -1.58%

Bp
315.95 +4.21%

Vodafone
130.34 +0.82%

Royal Dutch Shell A
1,310 +2.92%


Royal Dutch Shell B
1,251.2 +2.78%


Tullow Oil (TLW)
31.28 +1.05 (+3.47%)

[waldron] 20/7/2020 18:10

Brent Crude Oil NYMEX 43.13 -0.02%
Gasoline NYMEX 1.21 +0.15%
Natural Gas NYMEX 1.67 -5.27%
WTI 40.57 USD -0.02%

FTSE 100
6,261.52 -0.46%
Dow Jones
26,630.45 -0.16%
CAC 40
5,093.18 +0.47%
SBF 120
4,010.46 +0.51%
Euro STOXX 50
3,388.34 +0.62%
DAX
13,046.92 +0.99%
Ftse Mib
20,647.79 +1.12%


Eni
8.781 -0.36%

Total
33.205 -1.83%



Engie
11.4 +2.29%

Orange
11.11 +0.95%



Bp
303.2 -1.97%

Vodafone
129.28 -0.40%

Royal Dutch Shell A
1,272.8 -2.33%



Royal Dutch Shell B
1,217.4 -1.87%


Tullow Oil (TLW)
: 30.03: -0.65 (-2.12%)

[ariane] 20/7/2020 09:55

not long to wait for news and fresh outlook

lets hope its not that bad

[grupo] 19/7/2020 16:55

07/30
2020
Second Quarter and First Half 2020 Results

[grupo] 19/7/2020 16:11

LNG Markets May Not Recover Until 2021
By Nick Cunningham - Jul 19, 2020, 10:00 AM CDT
Join Our Community

The cash margin for U.S. LNG exporters improved slightly in the second quarter, but will likely remain negative for the duration of 2020, according to a new report. The LNG glut is hurting both buyers and sellers. In Japan, the largest power generator, JERA, is losing tens of billions of yen because it has contracted to buy LNG at prices linked to crude oil, but because it cannot use all of the gas, it typically resells some cargoes. The problem is that JERA has to resell cargoes on the spot market, where prices are much lower than the oil-linked price. In effect, the group is buying high and selling low.

The worldwide glut has funneled more natural gas into storage around the world. With storage elevated in Europe, the market signaled that supply cuts were necessary. The U.S., which has the most flexible contracting terms (which the industry sold as a feature), is shouldering the burden of rebalancing.

The margin for exporting LNG is negative, and could remain negative for the duration of 2020, according to a new report from the Oxford Institute for Energy Studies (OIES). “This means that an average US LNG cargo would not cover its short-run marginal cash costs delivering to Europe or Asia at current prices,” OIES said.

U.S. LNG exporters have seen dozens of cancelled cargoes because of the glut, although for companies like Cheniere Energy, their finances are somewhat protected because buyers still have to pay fees even if they cancel the cargoes.

The markets are pricing in an improvement in 2021, which is based on “either a very significant surge in Asian gas demand in 2021 or another round of LNG shut-ins to support the gas price,” OIES said. The report forecasts margins remaining below levels that might signal new investment in new capacity through the end of 2023.

“It is therefore clearly relevant to ask whether we should expect to see any new US LNG investment decisions being taken in the foreseeable future, especially with buyers not rushing to sign new long-term contracts,” OIES wrote.

In the short run, cancelled LNG cargoes could divert more natural gas into inventories. U.S. gas storage levels are at the top end of the five-year average range, and Henry Hub prices averaged $1.81 in the first half of the year, a record low for that six-month period.

On the other side of the globe, buyers are growing anxious with an arrangement that has them locked into rigid agreements. The financial losses for JERA are accelerating a push to seek more flexible contract terms, a trend that was already growing in recent years as LNG markets became larger and more liquid (no pun intended).

Related: Shell’s Big Bet On Floating LNG May Be A Flop

“Long-term SPAs [sales and purchase agreements] with rigid terms are no longer suitable for a rapidly changing market,” Hitoshi Nishizawa, a senior executive officer at JERA, said at a recent energy conference in Japan, according to Asia Times Financial.

The change occurred earlier in Europe with the steady demise of oil-linked pricing. In Asia, the market evolution has been a bit slower, but now appears ready to accelerate with the oil-linked price so detached from JKM spot prices. “Although Covid-19 issues remain more important at present, there seems little doubt that if this trend persists we could see a real challenge to oil-linked pricing of LNG in Asia, with the JKM marker already becoming an increasingly important price benchmark,” OIES wrote in its report.

Japan – the largest LNG importer in the world – saw LNG imports decline by nearly 19 percent in May, year-on-year.

The pandemic-related downturn is hollowing out investment in both oil and gas. The number of projects receiving final investment decisions is expected to fall by 75 percent this year, according to Rystad Energy. The total amount of money funneled into new projects will drop to just $47 billion, a very low number that is actually inflated by a set of projects in Norway and Russia. In 2019, the amount of money invested in new oil and gas projects reached $197 billion.

By Nick Cunningham, Oilprice.com

[sarkasm] 18/7/2020 09:39

BESIX to build marine facilities of Mozambique LNG project

Oil & GasMidstreamContract

By NS Energy Staff Writer 17 Jul 2020

The contract includes delivery of engineering, procurement and construction services for the material offloading facility as well as the LNG load-out jetty
besix

BESIX and Mota-Engil will be responsible for the EPC of the material offloading facility. (Credit: BESIX)

Belgium-based construction company BESIX along with Mota-Engil have secured a contract for the construction of marine facilities of the Mozambique LNG gas development project.

CCS JV, which is contracted by Total for engineering, procurement and construction (EPC) of Mozambique LNG project, has awarded the contract.

The LNG project is located in the Cabo Delgado Province, near the coastal town of Palma on the Indian Ocean coastline of Mozambique.

It will include the development of the Golfinho-Atum gas field in the offshore Area 1 Block of the deep-water Rovuma Basin and the construction of a 12.88 million tonnes per annum (Mtpa) onshore liquefied natural gas (LNG) facility on the Cabo Delgado coast of Mozambique.

Under the contract, BESIX and Mota-Engil will be responsible for the EPC of the material offloading facility as well as the LNG load-out jetty.

BESIX said that the LNG load-out jetty and wharf includes a 2,700-meter-long access jetty, with a width varying between 34 and 90 metres that leads to a 1,900-meter-long wharf out at sea.

Additionally, the wharf will be equipped with 5 berths / platforms, of which four for LNG and the remaining one for condensate and berthing and mooring facilities for the large LNG carriers.

As a support marine base for the Mozambique LNG project development, the material offloading facility comprises quay wall structures and mooring and berthing facilities for cargo ships.
BESIX expects to commence work on the project in the mid of the year

BESIX International general manager Mathieu Dechamps said: “We are particularly proud to carry out this project and to equip our client CCS JV and the Republic of Mozambique with world-class marine facilities, while TOTAL is the operator for which the facilities are being built.

“BESIX has built over ten major jetty structures over the last 15 years in Europe, Africa, the Middle East and Canada. The infrastructure in Mozambique can rely on our renowned expertise in marine works. We look forward to developing them with our JV partner Mota-Engil.”

The firm expects to commence work on the project in the mid of the year.