LNG JOURNAL PUBLICATION 20 February 2018

LNG Unlimited

The US Administration of PresidentDonald Trump has put forward a$1.5 trillion infrastructure planthat would accelerate the regula-tory time-scale for natural gaspipeline approvals, essential forfull development of the LNG ex-port industry.

President Trump has made theenvironmental permit process re-forms a key part of his infrastruc-ture plan.

FrameworkThe proposals provide a frame-work for legislators to enact theinfrastructure package that wouldfocus on public-private partner-ships and funding from state andlocal governments.

The plan is structured aroundfour main goals: generating $1.5trillion for a federal infrastructureproposal, streamlining the permit-ting process down to two years,investing in rural infrastructureprojects and advancing workforcetraining.

“My Administration’s plan ad-dresses more than traditional in-frastructure - like roads, bridges,and airports - but addresses otherneeds like drinking and wastewa-ter systems, waterways, water re-sources, energy and ruralinfrastructure,” said the WhiteHouse document.

“The reforms set forth in myplan will strengthen the economy,make our country more competi-tive, reduce the costs of goods andservices for American families, andenable Americans to build their

lives on top of the best infrastruc-ture in the world,” he stated.

The federal government wouldcontribute $200 billion to thepackage.

The infrastructure plan saysenvironmental reviews forpipelines must be conducted in nomore than 21 months.

It calls for changes in how thegovernment conducts environmen-tal reviews, including streamliningthe National Environmental PolicyAct’s requirements and potentialreforms to the Clean Water andClean Air acts.

It also gives the Interior Secre-tary the authority to approve nat-ural gas pipelines that cross thecountry’s national parks, changingthe requirement that Congress au-thorises such projects.

Analysts said the proposals arein line with President Trump’sbroader plan to boost US oil andnatural gas development and toboost LNG exports to America’s allies, particularly in Asia.

The changes would deliver“projects in a less costly and moretime effective manner by creatinga new, expedited structure for en-vironmental reviews and delegatingmore decision-making to States andenhancing coordination between

State and Federal reviews,” according to the Trump plan.

The plan is facing oppositionfrom Democrats and environmentalactivists who are concerned thatefforts to streamline the energypermit process would in most casesundermine environmental protec-tion, despite opposing argumentsabout creating jobs, contributingto the economic wellbeing of citi-zens and energy security.

The legislation will help thedevelopment of US LNG plants onthe Gulf coast and elsewhere inthe US.

US LNG exports currently num-ber between five and seven car-goes a week and this is expectedto increase about 10-fold by 2024.

The total amount of natural gasexported as LNG on seven ships isabout 26.1 billion cubic feet to ahuge feed-gas pipeline inter-con-nection network will be need forfuture shipments from the shale-gas basins.

Imports will rise in 2018 withthe Cove Point plant in Maryland,owned by Dominion Energy, enterscommercial operations in Marchand other plants starting up duringthe next year at Freeport LNG inTexas and Elba Island in Georgia.

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Pipeline expansion work in the southern US state of Georgia

Package will accelerate

regulatory time-scale

for natural gas pipeline

and project approvals

LNG Journal editor

UNLIMITEDAGENDA

Senegal-Mauritania accord signedto keep FLNG planson fast track

3

PROJECTS

SUPPLIES

EXPORTS

Peru LNG cargoessuspended by pipeline fracture in Cusco region

6

Cheniere closestwo of five storage tanks after leak at Sabine Pass plant

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Chinese firm topursue West-EastLNG plan even if bid for AWE fails

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CORPORATE

STRATEGY

ACQUISITIONS

Woodside focuses on more feed-gas for rise in demandfrom Asian buyers

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US infrastructure plan to help permitprocess for LNG and shale projects

Qatar charts wayforward withLNG plans and E&P programme

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Qatar Petroleum, owner of thelargest global liquefied naturalgas producer Qatargas, haslaunched its latest corporatestrategy aimed at increasing out-put from the current 77 milliontonnes per annum to 100 MTPA of LNG in its Arab Gulf operationsas it also expands its global en-ergy exploration and productionactivities.

The company said it was enter-ing a new era of growth, led bythe planned production expansionin offshore North Field naturalgas, as it aims to improve as a na-tional oil and gas company withroots in Qatar and a strong inter-national presence.

QP's strategy launch comesamid its increasing internationalupstream activity, which saw ex-pansion into promising offshoreareas spanning Latin America,

Africa, the Mediterranean and theMiddle East.

A three-day strategy eventbrought together staff in the capi-tal Doha, located 80 kilometressouth of the main LNG productionplants at Ras Laffan.

“The strategy is designed tostrengthen QP's technical capabil-ity and operating model, maximizeupstream value to the State of

Qatar, create a large-scale value-adding international portfolio andre-inforce Qatar's LNG and globalgas position,” said QP.

QP President and Chief Execu-tive Saad Sherida Al-Kaabi toldemployees that the companyaimed to win back its position asglobal LNG leader after 2020 whenit will have been overtaken byAustralia.

“The new strategy and valuescome at a critical time in our ex-pansion and will ensure that wecontinue to be a global LNGleader,” said Al-Kaabi.

“Therefore, we should all bewilling and prepared to embraceand lead change to ensure suc-cess,” he added.

Al-Kaabi stated that SheikhTamim bin Hamad Al Thani, theEmir of Qatar, fully backed his message and the new QPstrategy.

Qatar Petroleum’s core valueswere also shared and discussedduring the special event. Theyare: integrity, safety, excellence,collaboration, responsibility andrespect.

“These values describe thestandards of behavior that willshape the desired corporate cul-ture and will be key in QatarPetroleum achieving its vision,”the company said.

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Qatar Petroleum holds three-day strategy eventto underpin LNG and exploration ambitions

l NEWS LNG Unlimited 20 February 20182

Egyptian natural gas field comes on stream amid hopes of LNG output to replace importsBP of the UK started natural gasproduction from the Atoll PhaseOne project in the East Nile Deltaoffshore Egypt as the country drewcloser to ending LNG shipments tomeet shortfalls in demand.

The Atoll project is an earlyproduction venture involving al-most $1 billion of investment.

The UK major said Atoll wasnow producing 350 million cubicfeet of gas a day and 10,000 bar-rels a day of condensate.

Gas production from the fieldis directed to Egypt’s nationalgrid, adding to output from theZohr field of Italy’s Eni, in whichBP has a stake and further reduc-ing Egyptian dependence on LNGto meet domestic demand.

A year ago, BP acquired fromEni a 10 percent stake in theShorouk Concession which containsthe giant Zohr gas field. Zohr

began production in December2017.

Egypt is now on its way to end-ing LNG imports and possiblyrestarting exports from two plantsnear the port of Alexandria afterthe start-up of Atoll following theZhor gas field company on stream.

Egyptian Minister of PetroleumTarek El Molla said in January 2018that the increasing productionfrom the Zhor field meant Egyptwould have no need of LNG im-ports by the start of 2019.

El Molla said that because of itsown growing gas resources the Arabcountry would save $250M a monthby no longer having to import LNGto its two floating terminals at AinSokhna port on the Gulf of Suez.

The Egyptian Zohr field hasestimated resources of 30 trillioncubic feet (Tcf) and has helpedend the nation’s natural gas short-

ages that turned it from an LNGexporter into an importer.

BP announced the Atoll discov-ery in March 2015. The mainreservoir in the field contains an estimated 1.5 Tcf of gas and 31 million barrels of condensatesand further segments are underevaluation.

Atoll is the first new project tocome into production for BP in2018, adding to the series ofhigher-margin projects success-fully brought online over the pastfew years.

BP also operates the West NileDelta project which involves thedevelopment of 5 trillion cubicfeet of gas resources and 55 mil-lion barrels of condensates.

BP has made a series of discoveries in Egypt in recentyears including Taurt North, Seth South, Salmon, Rahamat,

Satis, Hodoa and Atoll. The 13 projects that started-upthrough 2016 and 2017 providedmore than 500,000 barrels of oilequivalent a day (boed) of newnet production capacity and totalnet production.

“BP is focused on deliveringgrowth with discipline, carefullychoosing and efficiently executinghigh-quality projects,” said BobDudley, BP Group Chief Executive.

“The longstanding partnershipswe have in Egypt allowed us tofast-track Atoll’s development anddeliver first gas only 33 monthsafter discovery.

“This is a further demonstra-tion of our commitment to helprealise Egypt’s oil and gas poten-tial and meet the increasing de-mand from its growingpopulation.” stated the CEO.

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QP President and Chief Executive Saad Sherida Al-Kaabi

LNG Journal editor

Petronet LNG of India andJapanese trading houses MitsubishiCorp. and Sojitz Corp. are movingahead with their FLNG import ter-minal plans for the island nationof Sri Lanka.

Petronet LNG Chief ExecutivePrabhat Singh said the joint ven-ture is proposing an offshore ter-minal using a Floating Storage andRegasification Unit with relatedinfrastructure off the port of Ker-awalapitiya on Sri Lanka’s WestCoast.

Singh said in a statement fromthe Indian-Japanese investorgroup that the terminal wouldcost around $300 million andwould have capacity of up to 2.7million tonnes per annum of LNG.

Kerawalapitiya is the site of a

300-megawatt, gas-fired powerplant project, adjoining an exist-ing oil-fueled power station.

Sri Lanka expects the FSRU andthe associated infrastructure tosupply the power plants in Ker-awalapitiya from around 2021.

Under the Sri Lankan govern-ment-approved project Petronetwill hold a 47.5 percent stake,while joint venture partners Mit-subishi and Sojitz will take a com-bined 37.5 percent and with 15percent going to the Sri Lankanpartners.

"We are in the process of signinga memorandum of understandingwith the Sri Lankan government forthe setting up of the LNG termi-nal,” said Petronet CEO Singh.

“Once the MoU is signed this

month, some project related stud-ies will be done before beginningwork on the terminal,” he added.

The Sri Lankan venture is partof Petronet's strategy to own 30MTPA of import and regasificationcapacity in the region from 2020.

Petronet operates India’s Dahejterminal, north of Mumbai, andanother facility at Kochi in thesouthwest state of Kerala, whichis still awaiting pipeline connec-tions to major customers.

The Indian company has alsosigned a preliminary agreement tojoin an LNG terminal project inBangladesh and is looking at set-ting up a small-scale import facil-ity in the Indian Ocean islandnation of Mauritius.

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20 February 2018 LNG Unlimited NEWS l 3Senegal-Mauritania accord signedto keep FLNG projects on fast track

Kosmos Energy, the US companydeveloping floating LNG projectsoffshore West Africa with BP ofthe UK, said the governments ofMauritania and Senegal had signedan inter-governmental coopera-tion agreement to enable thecross-border Tortue natural gasfield to continue moving forward.

Kosmos said that with thisagreement in place, it expects afinal investment decision for theGreater Tortue project around theend of 2018 and is aiming for firstgas in 2021.

The agreement was signed inthe Mauritanian capital Nouakchottbetween Mauritania’s Minister ofEnergy, Petroleum and Mines Mo-hamed Abdel Vetah and Senegalesecounterpart Mansour Elimane Kane.

The Kosmos-BP LNG plans forthe Tortue discoveries are to de-ploy two FLNG production hulls.

Kosmos, based in Dallas, Texas,and BP have estimated that theGreater Tortue Complex has re-sources for LNG production ofaround 25 trillion cubic feet of

feed-gas. The first gas from theKosmos-BP FLNG Train 1 is sched-uled for 2021 and the start of thesecond FLNG Train is set for 2023.

“Kosmos congratulates Mauri-tania, Senegal, and their respec-tive ministries and national oilcompanies for working together soeffectively to reach an agreementthat enables their shared gas re-sources to be developed quicklyand efficiently for the benefit ofboth countries,” said KosmosChairman and Chief Executive Andrew G. Inglis.

“The innovative near-shoreLNG concept being used for Tortuepositions the development as oneof the lowest cost, green-field

LNG projects in the world,” addedInglis. “We look forward to work-ing with BP and our national oilcompany partners to continue thefront-end engineering design pro-cess that will enable a final in-vestment decision around the endof 2018,” stated the Kosmos CEO.

The agreement between Mauri-tania and Senegal provides for development of the Tortue fieldthrough cross-border unitization,with a 50-50 initial split of re-sources and revenues.

There is also a mechanism forfuture equity redeterminationsbased on actual production andother technical data.

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One of the multiple gas discoveries off Senegal

Japanese say the price of spot cargoes grew in yearJapanese spot LNG cargo pricescontracted in January surged 31percent to an average $11.00per million British thermal units,an increase of $2.60 MMBtu foreach shipment compared withthe $8.40 per MMBtu paid in thesame month of 2017.

The government said the priceof spot LNG cargoes that actuallyarrived in January 2018 cost anaverage $10.10 per MMBtu ver-sus $7.30 per MMBtu in the samemonth of 2017, an increase of$2.80 per MMBtu, or 38 percent.

The price of LNG cargoesthat arrived in December werepriced at $8.10 per MMBtu, com-pared with $6.80 per MMBtu inthe year-ago period.

The spot cargo numbers comefrom the commerce division ofthe Japanese Ministry of Econ-omy, Trade and Industry and areonly issued if a minimum numberof two trades are recorded.

The Ministry emphasizes that“spot LNG” refers to fuel tradedon a cargo-to-cargo basis anddoes not mean shipments undercontracts on a short-term,medium-term or long-termbasis. The statistical accountingof the spot prices started inMarch 2014.

Preliminary overall JapaneseLNG imports figures for Januarywill be released on February 19.

Overall Japanese LNG importshad ended the year with a rallyafter falling for four months asthe world’s largest importer tookdelivery of 83.63 million tonnesof LNG in 2017. Annual importsto Japan were just 0.4 percenthigher than the 2016 total butwith a reversal in costs.

Japan paid 19.3 percentmore in 2017 for its LNG with3,915 billion yen ($35.58 Bln) ofexpenditure versus 3,281 Blnyen ($29.81 Bln) in 2016 for its83.34MT.

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LNG Journal editor

Japanese and Indian group confirms proposals for Sri Lanka FLNG terminal

25 - 26 APRIL 2018 I BEIJING, CHINA

20 February 2018 LNG Unlimited NEWS l 5

Cheniere Energy has closed two of the five storage tanks at theSabine Pass plant in Louisianaafter fuel leaked into a space between inner and outer walls.

The closure was ordered by thefederal agency, the Pipeline andHazardous Materials Safety Admin-istration (PHMSA), because ofsafety concerns.

CapacityCheniere said that LNG productionand exports would not be affectedby the shutdown of the two tanks.

“The PHMSA issued a Correc-tive Action Order (CAO) to SabinePass Liquefaction, LLC, a liquefiednatural gas (LNG) export facility inCameron Parish, Louisiana,” aPHMSA statement said.

“The CAO is the result of safetyconcerns identified by PHMSA’s Ac-cident and Investigations team aspart of their preliminary investiga-tion findings following the reportand discovery of a release of LNG

from a Sabine Pass storage tank onJanuary 22, 2018.

“The findings included inPHMSA’s CAO are preliminary andPHMSA’s investigation is still ongo-ing,” it stated.

While investigating the leak inthe tank, federal investigatorswere told 11 similar incidents mayhave occurred at that tank and asecond one on the site between2008 and 2016.

Other storage tanks at the facil-ity must also be inspected to de-termine if they have experiencedsimilar problems in the past.

“Safety is Cheniere's numberone priority, and we want to stressthat there was and is no immedi-ate danger to our community,workforce, or our facility from thisincident, nor is there any impacton LNG production,” said Che-niere, whose plant was the first toopen in the Lower 48 States.

“Cheniere has initiated anevent investigation and is currentlyworking with experts on a repairplan. We will continue to workwith PHMSA to quickly address thisincident,” stated Cheniere.

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Cheniere closes two of its five storagetanks after leak at Sabine Pass plant

NEWSNUDGES

LNG Journal editorExxonMobil LNG boostExxon Mobil Corp., one of theworld’s largest LNG players,said it added 2.7 billion oil-equivalent barrels of proved oiland gas reserves in 2017, re-placing 183 percent of produc-tion. ExxonMobil's provedreserves totaled 21.2 billionoil-equivalent barrels at year-end. “Significant new provedreserve additions were made inGuyana, where the companyfunded the first phase of de-velopment last year, and inMozambique, associated withthe project funding of theCoral FLNG project in the gas-rich deepwater Area 4,” saidthe US major.

Awilco lossesnarrowedAwilco LNG, the Norwegian operator of two modern carri-ers, the 156,000 cubic metrescapacity “WilPride” and the“WilForce”, narrowed itsfourth-quarter losses to $4.5million, down from $6.8M inthe previous three months. Awilco said freight income forthe quarter was $9.6M, upfrom $5.7M in the third quarter“due to the improving marketfundamentals” as both vesselsoperated in the spot market.Voyage related expensesamounted to $2.3M comparedwith $1.3M in the previousquarter.

Kogas LNGarbitrationSouth Korean LNG importerKorea Gas Corp. (Kogas) said ithad entered an arbitration pro-cess with the Australian NorthWest Shelf LNG plant in West-ern Australia, operated byWoodside Petroleum, to settlean LNG contract dispute datingback to 2016. The arbitrationrelates to differences over aprice renegotiation.

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Jetties at Sabine Pass with storage tanks in background

PetroChina signs sales agreementsfor cargoes from Cheniere plants Cheniere Energy, owner of the USSabine Pass export plant inLouisiana and the Corpus Christiliquefaction facility being built inTexas, said it had entered intotwo liquefied natural gas sale andpurchase agreements with Chinesemajor China National PetroleumCorp. through its PetroChina unit.

Under the SPAs with Cheniere'ssubsidiaries, Corpus Christi Lique-faction and Cheniere Marketing,CNPC through its subsidiaryPetroChina would purchase around1.2 million tonnes per annum ofLNG.

The Houston, Texas-based Che-niere said a portion of the supplywould begin in 2018 and the bal-ance in 2023.

Both companies said the termof each SPA continued through

2043. The purchase price for theLNG would be indexed to theBenchmark US Henry Hub priceplus a fixed component.

"We are pleased to announcethese LNG contracts with ChinaNational Petroleum Corp., an im-portant global energy player inone of the largest and fastestgrowing LNG markets worldwide,"said Jack Fusco, Cheniere's Presi-dent and Chief Executive.

"These long-term SPAs buildupon the memorandum of under-standing we signed in November,and we look forward to a success-ful long-term partnership withCNPC," added Fusco.

"We expect these agreementsto support the development ofCorpus Christi Train 3, and we arenow focused on completing the

remaining necessary steps toreach a final investment decisionlater this year," said Fusco.

CNPC is also a shareholder inthe recently opened Russian LNGexport plant on the Yamal Penin-sula, whose other major share-holders are Novatek and France'sTotal.

The Corpus Christi project inTexas has told regulators that thefirst liquefaction Train wouldachieve substantial completion inMarch 2019 and the second pro-cessing Train would be finished bySeptember 2019.

Cheniere has already broughtfour Trains on stream at its SabinePass plant in Louisiana with 18million tonnes per annum of out-put and two more to complete.

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l NEWS LNG Unlimited 20 February 20186

Peru LNG, the sole liquefactionand export plant in South America,suspended operations because of afracture on the feed-gas pipeline,whose biggest shareholder is Span-ish transmission operator Enagas.

The single-Train facility atPampa Melchorita, located about170 kilometres south of the capi-tal Lima, is operated by Hunt Oilof the US and produces about 4.5million tonnes per annum of LNGfrom gas provided from theCamisea gas fields.

BuyersThe Peruvian plant supplies LNGimport terminals such as the Man-zanillo facility on the Pacific Coastof Mexico as well as other termi-nals in Japan and Europe.

Peru LNG receives the gas via a408-kilometre pipeline owned byTransportadora de Gas de Peru SA.and built across the inland Cuscoregion to the Pacific Coast facility.

Officials said the fracture onthe pipeline was apparently

caused on February 3 by a land-slide that followed heavy rainsand flooding in the Cusco region inthe lower Andes.

They said work was continuingto repair the pipeline and therestoration of gas transportationservices was expected soon.

Peru LNG publishes data of itsshipments and the prices receivedand the last LNG carrier to leavethe loading terminal was the173,400 cubic metres capacityvessel "Barcelona Knutsen" onFebruary 5.

The carrier was bound forSpain with a shipment priced onthe UK National Balancing Point(NBP) benchmark of $7.05 per mil-lion British thermal units.

The other LNG plant sharehold-ers in addition to Hunt Oil areJapanese trading house MarubeniCorp., SK Group of South Koreaand Royal Dutch Shell, which pur-chased the stake previously heldby Spain's Repsol in 2013.

Hunt Oil is also a shareholderin the Yemen LNG plant at Balhafon the Gulf of Aden that has been

closed because of the conflict. Pipeline company Transportadora

de Gas de Peru (TgP) counts Spain'sEnagas as its biggest shareholdersand has a 28.9 percent stake.

Peru's government awarded a34-year concession to Enagas anda Brazilian company Odebrecht tobuild and operate the pipeline,though the Brazilian company wasforced to pull out to be replacedby Peruvian stakeholders.

The pipeline company also sup-plies natural gas to southern partsof Peru, including the cities ofCusco, Apurimac, Puno, Arequipa,Moquegua and Tacna from theCamisea gas fields that also supplythe feed-gas for the LNG exports.

The Camisea gas fields startedto operate in 2004 and have sup-plied the Peru LNG plant since itbegan production in 2010.

In addition to the LNG plant,the TgP company supplies indus-trial users such as mining firms,electricity generators for 3,000megawatts of power and the gasdistributors Calidda and Contugas.

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Peru LNG shipments suspended by pipeline fracture caused by landslide in Cusco region

Plant at Pampa Melchorita receives feed-gas from interior

LNG Journal editor

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20 February 2018 LNG Unlimited NEWS l 7Chinese firm plans to pursue West-EastLNG proposal as it misses out in AWE bid

Chinese company China Energy Re-serve and Chemical Group (CERCG)said it would push ahead with itsplans to transport Australian LNGfrom the West Coast to the EastCoast even as its bid for local ex-ploration and production companyAWE was likely to be rejected infavour of a higher offer.

Japanese trading house Mitsui& Co. entered the bidding battlefor Australian company AWE inJanuary 2018 with an improvedoffer that bettered those put for-ward by CERCG and Australia’sMineral Resources Ltd.

Mitsui highestThe Mitsui bid of A$0.97 per sharevalues the Australian company atover A$600 million (US$485M) andbetters that of Australia’s MineralResources Ltd., (A$.0.83 pershare) and CERCG (A$0.73 pershare).

AWE’s most valuable asset is its50-percent joint venture stake inthe Waitsia natural gas field, one

of the largest onshore gas discov-eries in Western Australia. Theother Waitsia field shareholder isAustralian firm Beach Energy.

Chinese company CERCG wasthe first bidder and at the timeput forward its LNG plan for Aus-tralia, similar to its business backin China.

CERCG made a supplementarybidder’s statement on February 13as a final pitch to AWE shareholdersand in which it pledged to continuewith its Australian LNG plans.

“CERCG Australia, a subsidiaryof CERCG, was incorporated in Oc-tober 2016 for the purpose of con-sidering opportunities in Western

Australia to provide virtual gaspipeline and energy solutions toremote mine sites, power plantsand regional communities,” thecompany said.

“CERCG Australia is also cog-nisant of the potential opportuni-ties to supply LNG and gas to theAustralian East Coast market, andthe possibility of exporting LNGand gas to potentially South EastAsian countries.

“CERCG Australia intends topursue these business opportuni-ties in Australia regardless ofwhether the Offer is successful ornot,” it stated.

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Chinese natural gas imports lower than year-endChinese natural gas importsin the form of pipeline sup-plies from Central Asian re-publics and LNG shipmentsamounted to a combined7.70 million tonnes lastmonth, about 33 percenthigher than a year ago.

The natural gas importswere less than the record7.90MT recorded in Decem-ber 2017.

A government pro-gramme to heat millions ofhomes with natural gas anduse gas-fired power for fac-tories in northern Chinaover the winter to avoid airpollution from coal andcoke fuel has led to soaringdemand.

China imported a recordvolume of crude oil in January.

Crude imports rose 20percent from the same timea year ago to a record40.64MT, or 9.57 million bar-rels per day, according to theGeneral Administration ofCustoms.

Chinese LNG imports inDecember rose by 34.8 per-cent to a monthly record of5.03MT compared with the3.73MT logged in December2016.

Natural gas imports forthe whole of 2017 increased27 percent from 2016 to arecord of 68.57MT. Therewas no separate break-downas yet between LNG andpipeline gas imports.

China also importspipeline natural gas from thecountries of the former So-viet Central Asian republicsof Turkmenistan. Kazakhstanand Uzbekistan.

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Plan stands for CERCG to transport LNG supplies in tanks

LNG Journal editor

Malaysian LNG fleet owner forecasts sector challenges as revenues rise Malaysia International ShippingCorp. (MISC), whose LNG fleet com-prises more than 30 vessels, saidthe LNG shipping sector faced on-going tonnage oversupply and a dif-ficult market in 2018 as it postedhigher revenues and lower profitsbefore tax in its annual earnings.

“Lack of short-term positive in-dicators suggests another chal-lenging year,” said MISC.

“The Group continues to relyon its present portfolio of long-term time charters to provide itwith the stability of profits andcashflow during the year.

“On a positive note, two addi-tional new LNG carriers will jointhe fleet in 2018, providing asource of income growth for thesegment,” it added.

The MISC fleet is largely em-ployed by the company’s strategyof fixing most of its tonnage onlong-term charters to state energycompany Petronas.

Petronas is a large-scale ex-porter to Asian LNG markets fromits Bintulu plant consisting ofseven liquefaction Trains inSarawak, as well as a floating LNGproduction hull over the Kanowitgas field offshore Sarawak.

MISC’s overall fleet consists of more than 120 owned and in-charter LNG, crude oil and prod-ucts vessels as well as 14 floatingfacilities.

The Malaysian company saidgroup revenue for the year was10.03 billion Malaysian ringgit(US$2.54Bln), 4.6 percent higher

than the previous year when itwas 9.58Bln ringgit.

MISC said that two new LNGcarriers contributed to the in-crease in revenue.

The company has been increas-ing its LNG fleet because of moredelivery demands from thePetronas stake in the Gladstoneexport plant in Queensland, Australia.

MISC added that group profitbefore tax in 2017 was 28.8 per-cent lower at 2.00 Bln ringgit(US$509 million) versus 2.81Blnringgit the previous year, mainlydue to impairment losses on ships,property, plant and equipmentand other investment of RM687.5million (US$155M).

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l NEWS LNG Unlimited 20 February 20188

Woodside Petroleum, the Aus-tralian liquefied natural gas plantoperator, launched a fully under-written share offer to raise aroundA$2.5 billion (US$1.96Bln) to buymore offshore feed-gas for LNGand to proceed with a West Africaexploration and production pro-gramme off Senegal.

“The funding will provide for theacquisition of up to an additional 50percent interest in the Scarboroughgas field,” said Woodside.

ExxonMobil Woodside has agreed to acquirethe stake of ExxonMobil in theScarborough gas field located inthe Carnarvon Basin, offshoreWestern Australia.

Woodside Chief Executive PeterColeman said that the share offerwas an important component ofWoodside's strategy.

“The acquisition of the addi-tional interest in Scarborough pro-vides greater alignment, controland certainty over a low-cost, highvalue opportunity ahead of a globalLNG supply gap,” said Coleman.

Woodside said the Scarborough

deal would give Woodside accessto 6.4 trillion cubic feet of contin-gent resources (Woodside share) inthe Greater Scarborough complexupon completion.

That’s as Woodside recorded afull-year net profit after tax ofUS$1.02 billion with production of84.4 million barrels of oil equiva-lent and sales revenue ofUS$3.62Bln.

Woodside said in its earningspresentation that there was aready market in Asia for more LNGvolumes, with a compound annualgrowth rate of 7 percent in de-mand from China through to 2025.

“Economic growth and publicpolicy changes are underpinning

Asian LNG demand growth,” theAustralian company said.

Coleman said that 2017 hadbeen a good year for the company,with strong financial results andprogress on projects and activities.

“Our net profit after tax has in-creased by 18 percent year-on-year, driven by higher prices forour products and sustained lowproduction costs,” he said.

“The safe start-up of Wheat-stone LNG Train 1 was a significantmilestone for the company and welook forward to the delivery ofLNG Train 2 and the domestic gasfacility this year while supportingthe operator (Chevron) to opti-mise lifting costs and maximise

production rates,” he added.Coleman said the company's

Burrup Hub concept for an expan-sion of Woodside's Pluto LNG plantin Western Australia was advancedby the increased stake in the Scar-borough gas field.

“The development concept in-volves maximising existing infras-tructure at the Pluto LNG plant tomeet a market gap we expect willemerge from the early 2020s,” ex-plained Coleman.

“We concluded feasibility stud-ies on Pluto LNG expansion andmade considerable progress oncommercial discussions betweenthe North West Shelf and Browsejoint ventures for processingBrowse gas through the KarrathaGas Plant,” the CEO stated.

In Senegal, Coleman saidWoodside achieved a concept se-lection for the first phase of theSNE Development, located in theRufisque, Sangomar and Sangomardeepwater blocks.

He added that Woodside wouldbe the operator in 2018 and aimsto enter the front-end engineeringand design phase for the SNE pro-ject targeting oil.

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Woodside of Australia in US$1.96Bln share offerto back more LNG production for Asian demand

Asia-Pacific LNG stakeholder Santos wins tender to supply natural gas to Australian mineSantos, the Australian energy com-pany and stakeholder in threeAsia-Pacific LNG export plants,said it has followed its supplypledge to the domestic market bysigning a natural gas agreementwith a Queensland mining com-pany for its power plant.

Santos and other AustralianLNG plant stakeholders have beenblamed by politicians and othergroups for taking too much feed-gas for exports, leading to supplyshortages and higher prices in theEast Coast market.

The Adelaide-based companyhas stakes in the ExxonMobil-ledPapua New Guinea LNG project,the Darwin LNG plant operated by

ConocoPhillips in Australia’s NorthTerritory and the Gladstone coal-seam-gas-to-LNG plant in Queens-land, operated by Santos itself.

Santos said it had entered into along-term agreement to supplynatural gas to New Century Re-sources Ltd. and its zinc mining op-erations in northwest Queensland.

Under the gas supply agree-ment, Santos will provide over thenext four years around 9 peta-joules of portfolio gas worth in theorder of A$100 million (US$80M) togenerate electricity for New Cen-tury’s zinc mine near Mount Isa.

“The use of gas to generateelectricity for the mine is not onlythe best economic outcome, it is

the best environmental solution todeliver the high reliability re-quired,” said Santos.

Santos noted that the NewCentury zinc mine is set to be-come one of the top 10 zinc pro-ducers in the world.

According to New Century Re-sources, there was strong partici-pation from gas suppliers andtraders in what was a highly-com-petitive tender process.

Santos Executive Vice PresidentMarketing and Trading, Phil Byrne,said Santos was delighted to havebeen selected to supply gas forNew Century’s mine.

“The gas sales agreementwe’ve reached is innovative in

both its flexibility and pricing,making it commercially attractivefor both parties,” said Byrne.

“Santos is absolutely commit-ted to working in partnership withAustralian industry to deliver com-petitively-priced domestic gas andthis is a great example of thatcommitment,” he stated.

“Access to new and existingsupply sources in Queensland aswell as new sources in New SouthWales and the Northern Territory iscritically important to enable us tocontinue to deliver competitive gasfor Australian industry on the EastCoast as mature fields decline,”added the Santos executive.

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CEO Peter Coleman explained Scarborough gas deal

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