Vol. 54, n° 2, January 27, 2015 Main news - cedigaz.org · LNG: Use as Marine Fuel ... •...

Vol. 54, n° 2, January 27, 2015

Main news LNG: Transport - Distribution

• Daewoo Shipbuilding wins $800 mln worth of orders for LNG carriers. LNG: Supplies- Imports – Exports

• GDF SUEZ reaches milestone in LNG truck loading. • Qatar Could Help Italy Build its Second LNG Terminal. • Talks on LNG from Qatar under way. • Egypt awards $2.2 bln LNG tender to 4 foreign firms-state gas board. • Egypt to Get 35 LNG Shipments from Gazprom.

LNG: Use as Marine Fuel

• EU to promote LNG as maritime fuel in North Sea. • Finland's Wartsila to provide LNG systems to four carriers.

Natural Gas: Exploration

• Egypt signs gas exploration deal with France's Total.

Natural Gas: Production

• Norway's gas production hit by massive outages. Natural Gas: Transport - Distribution

• Russia: Gas to Europe should go via Turkey, not Ukraine. Natural Gas: Supplies- Imports – Exports

• Poland Seeks to Free Region From Gazprom Yoke With Gas Pipelines. Natural Gas: Storage

• Ukraine actively uses gas from underground storage facilities. Natural Gas: General Information

• UK to launch review of its oil and gas industry.

Cedigaz News report - CNR54-2

LNG

TRANSPORT - DISTRIBUTION

KOREA:

Daewoo Shipbuilding wins $800 mln worth of orders for LNG carriers

Daewoo Shipbuilding & Marine Engineering Co., the world's second-biggest shipyard, has signed deals worth a combined $800 million to build four liquefied natural gas carriers.

Under the deals signed Wednesday with Korea Line Corp. and Hyundai LNG Shipping Co., the shipbuilder will deliver the LNG carriers by May 2017. The latest orders are the first for Daewoo Shipbuilding in 2015. The state-run Korea Gas Corp. had placed orders in October for six LNG carriers to bring in shale gas from the United States. Four of the orders went to the two local shippers. Daewoo Shipbuilding had obtained orders for 37 LNG carriers in 2014. (January 22, 2015)

01/22/2015

RUSSIA:

Successful delivery of LNG carrier to Sovcomflot

The LNG carrier SCF Melampus was delivered to its owner, Sovcomflot, at the beginning of January. This ship is the third in a series of ultra-modern LNG carriers designed to perform regular, year-round shipments of LNG. Two ships in the series, the Velikiy Novgorod and Pskov, are already successfully operating under long-term contracts with Gazprom.

The fourth ship in the series, the SCF Mitre, will be handed over to Sovcomflot in 2Q15.

Innovative engineering solutions were used in the construction of the new Atlanticmax LNG tanker, which has a load capacity of 170 200 m3, to ensure its effective operation in Arctic conditions, including triple-fuel diesel electric propulsion plant. In addition to their reinforced Ice2 class, ships in this series are equipped to work in low temperatures and in harsh climatic conditions, and are able to ship gas from most existing export terminals year-round. The SCF Melampus also has the highest class of environmental protection. (January 19, 2015)

01/19/2015


GERMANY:

VTG developing LNG tank wagons for railway

VTG, one of Europe’s most prominent railcar hire and logistics companies, and Brunsbüttel Ports GmbH, owner and operator of the Brunsbüttel group of ports, recently signed an agreement concerning the development of LNG transport. The two German companies have been actively involved with the energy source LNG for some time. Brunsbüttel Ports is planning to build an LNG terminal in Brunsbüttel in Schleswig-Holstein, while VTG and its Czech partner Chart Ferox are developing two tank wagon prototypes for transporting LNG by rail. VTG is responsible for the development and completion of the wagons and Chart Ferox is constructing the tank. (January 21, 2015)

01/21/2015

SUPPLIES - IMPORTS - EXPORTS

AUSTRALIA:

Australia's North West Shelf Project Offers Tender to Sell Five LNG Cargoes

Australia's North West Shelf liquefied natural gas (LNG) export plant on Monday launched a tender to sell at least five cargoes from April, a source with direct knowledge told news agency Reuters.

Woodside-operated North West Shelf (NWS) project is a joint venture between six major international companies. It is one of the world’s largest liquefied natural gas (LNG) producers, supplying oil and gas to Australian and international markets from huge offshore gas and condensate fields in the Carnarvon Basin off the north-west coast of Australia.

According to Reuters the plant expects to sell the supply in two tranches with final bids for the cargoes due by Jan. 26.

The unexpected tender signals a delay of around three months to reforms of how NWS will market supply, which will see the plant's six stakeholders be allowed to market their equity share of spot cargoes directly, the news agency added.

Apart from Woodside other stakeholders are BHP Billiton, BP, Chevron, Japan Australia LNG and Shell. (January 12, 2105)

01/13/2015


EUROPE:

GDF SUEZ REACHES MILESTONE IN LNG TRUCK LOADING

GDF SUEZ LNG recorded on January 12th its 1000th LNG truck loading in Europe at the Elengy terminal of Montoir-de-Bretagne on the western coast of France. The GDF SUEZ LNG truck loading activity started in 2013 in Europe and ramped up

progressively to reach this 1000th loading.

GDF SUEZ is operating LNG truck loadings in Europe from three terminals (Montoir-de-Bretagne and Fos Tonkin in France and Zeebrugge in Belgium) and from the Everett terminal in Boston, USA. The Group intends to extend its loading activity to the Isle of Grain terminal in the UK, starting in the summer 2015.

In Europe, more than 10 companies are currently using the GDF SUEZ loading services, among which LNGeneration and LNG Solutions, subsidiaries of the Group. LNGeneration sells LNG to off-grid customers in Europe and LNG Solutions markets LNG as a fuel and develops LNG filling stations infrastructures for trucks and bunkering facilities for ships in the Netherlands. (January 21, 2015)

01/22/2015

NIGERIA - BERMUDA:

Golar LNG Signs Nigeria LNG Contract

Golar LNG last week announced that it has been awarded two time charters by Nigeria LNG Ltd (NLNG) to employ the recently delivered Golar Frost and Golar Crystal.

Employment of both vessels under these contracts will commence in January 2015 and will continue for a duration of approximately 12 months for each vessel, Golar said.

NLNG has elected to retire earlier than planned three of its smaller and less efficient LNG carriers and to replace these with Golar's more modern and technically advanced ships, while NLNG awaits the delivery of its own recently ordered new vessels.

Golar's CEO Doug Arnell commented, "Golar is delighted to be selected by NLNG for these charters. This new business opportunity provides the clearest possible demonstration of the significant benefits available from the vessels delivered under Golar's existing new-building program. Significant reduction in boil-off and a material improvement in fuel efficiency have contributed to the decision to replace the older vessels with Golar's new buildings". (January 19, 2015)

01/20/2015

meters. The lower LNG production is due to the expiration of some LNG export contracts last year after the government did not want to extend them.

Indonesia's domestic LNG demand is expected to remain limited due to incomplete floating storage regasification units. (January 17, 2015)

01/19/2015

INDONESIA:

Indonesia's 2015 LNG Output to Fall to 258 Cargoes, Fewer Exports Expected

Indonesia's LNG output will fall to 258 cargoes this year, from 298 cargoes in 2014, with fewer cargoes allocated for export but more expected for the domestic market. Indonesia will export 200 LNG cargoes this year, down from 267 cargoes last year.

The 2015 domestic allocation will rise to 58 cargoes, from 31 in 2014. One cargo typically contains 125,000 cubic



INDIA:

Kakinada floating LNG terminal: GAIL, GDF Suez, Shell, sign MoU

Andhra Pradesh Gas Distribution Corporation (APGDC), GDF Suez, Shell and GAIL have announced that they have signed two separate MoUs for a floating LNG terminal in Kakinada Deep Water Seaport in Kakinada, Andhra Pradesh.

Both MoUs were signed in the presence of N Chandrababu Naidu, Andhra Pradesh Chief Minister of Andhra Pradesh, P Ashok Gajapathi Raju, Union Minister of Civil Aviation, Dharmendra Pradhan, Union Minister of State (Independent Charge) for Petroleum and Natural Gas and YS Chowdary, Union Minister of State for Science & Technology and Earth Sciences.

The first MoU is between APGDC, GDF SUEZ and Shell and supports the development of the terminal. APGDC, a joint venture company between the Government of AP and GAIL, GDF SUEZ and Shell will have 48 per cent, 26 per cent and 26 per cent equity in the project, respectively.

The second MOU is between GAIL, GDF SUEZ and Shell and covers both the sourcing of LNG and the marketing of the regassified LNG from the terminal. GAIL, GDF SUEZ and Shell will have 48 per cent, 26 per cent and 26 per cent equity in the project respectively.

The Kakinada LNG terminal will use a Floating Storage and Regassification Unit (FSRU) with a peak capacity of 5 million tonnes per annum (mtpa) with the provision to double the capacity. The proposed terminal will use high-end technology and will be one of the first of its kind in India.

The Kakinada port was found suitable for a project of this nature owing to its availability of a natural break-water in the Hope Island, a barrier that protects against the impact of high seas. (January 16, 2015)

01/16/2015

UNITED STATES:

Magnolia LNG signs MOU for fourth train

Magnolia LNG LLC signed a memorandum of understanding with Kellogg Brown & Root LLC, whereby KBR and SKEC, form a 70-30 joint venture to deliver the 8mtpa four train Magnolia LNG project. MLNG expects the JV agreement to be finalized next month, paving the way for an EPC contract signing in April. The company does not expect any material changes to the EPC contract on the way to first LNG fourth-quarter 2018. (January 19, 2015)

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MEXICO:

Mexico’s CFE issues tender for 13 LNG cargoes

Mexico's state-owned utility CFE has issued a tender for 13 LNG cargoes to be delivered between February and November.

The tender requests cargoes of around 138,000m³ to be delivered to the 3.8mn t/yr Manzanillo LNG import terminal on the Pacific coast. The deliveries are broken down to one cargo per month, with two summertime cargoes delivered in August and three in September.

CFE will assess any further demand throughout the year which means that the new tender is expected to be the first of several to be issued this year.

Bids must be linked to an Asian LNG price. (January 12, 2105)

01/13/2015

ITALY:

Qatar Could Help Italy Build its Second LNG Terminal

Qatar could help Italy build its second LNG terminal, Guido De Sanctis, Italian Ambassador to Doha was quoted as saying. We have been trying to diversify our sources of energy since the 1950s. This is why in 2010 we started importing LNG from Qatar. The existing terminal in Italy, which has been built with financial support from Qatar, is almost running at full capacity. So we are looking forward to build another terminal to receive more LNG from Qatar.

The new terminal could also help Qatar in catering to the whole of Europe, he added. The Adriatic LNG terminal, located offshore Porto Viro, in Porto Levante, is the world's first offshore gravity-based structure LNG regasification terminal. The terminal is operated by Qatar Terminal Ltd., a subsidiary of Qatar Petroleum, ExxonMobil Italiana Gas, and Edison SpA. (January 26, 2015)

01/27/2015

RUSSIA:

Russia's Gazprom to build LNG plant on the Baltic Sea

Russia's Gazprom said on Thursday it would build a liquefied natural gas plant with an annual capacity of up to 15 million tonnes on the Baltic Sea.

Gazprom, the world's biggest conventional gas producer, said in a statement the plant would be built near the port of Ust-Luga. (January 22, 2015)

01/23/2015


EGYPT:

Shell Could Supply LNG to Egypt

Shell is expected to start supplying LNG to Egypt this year, a senior company official said Wednesday.

Platts quoted Shell's Middle East and North Africa region vice president, Mounir Bouaziz, as saying that the company will supply the North Africa nation with 1 million mt/year of LNG, starting this year.

Speaking at the Gas Arabia Summit in Dubai, Bouaziz, said the agreement was an indication that LNG is becoming the solution of choice.

The regional LNG market was evolving rapidly due to flexible contract terms and because floating LNG receiving technology made possible the comparatively rapid "plug in" of gas supplies where needed, and in situations involving unforeseen changes in demand, Platts quoted Bouaziz as saying.

Egypt has been looking to source LNG from various sources as country’s domestic demand for gas rises amid declining supplies. (January 15, 2015)

01/16/2015

SPAIN:

Spain LNG Loadings Halt for First Time Since 2012 as Prices Drop

Spain’s liquefied natural gas exports will halt for the first month in two years after the premium of fuel in Asia fell to its lowest level since 2011.

No reloads are planned in February from the southern European nation’s six regasification plants, according to a monthly schedule published by network operator Enagas SA. The premium of LNG cargoes for delivery within two months to northeast Asia over those in southwest Europe dropped to about 5% on Dec. 1, the lowest level in almost four years, according to data from World Gas Intelligence.

Spain, which doesn’t produce any LNG, benefited from regional price differences following the Fukushima disaster in Japan in March 2011, re-selling contracted fuel that it didn’t need to markets such as Latin America and Asia. The price gap began to close at the end of last year as milder weather and full inventories damped Asian demand.

With spot LNG “so depressed,” there will be no reloading from European regas facilities this year, Thierry Bros, an analyst at Societe Generale SA in Paris, said in an e-mailed note on Monday.

Spain is the largest supplier of reloaded LNG, according to the International Group of LNG Importers. Terminals in Belgium, the Netherlands, France and Portugal have also resold imported cargoes.

The first casualty will be the cargo reload market from Europe to Asia because there’s no arbitrage margin anymore, so we’re going to see that disappear to a large extent. (January 27, 2015)

01/27/2015


NIGERIA:

Brass LNG Shareholders Eye Preferred Bidder for Onshore Works

As a step ahead of the Final Investment Decision (FID) of the multibillion dollar Brass Liquefied Natural Gas (LNG) project in Bayelsa State, the shareholders now eye a preferred bidder for the onshore works. After the visitors and other shareholders had undertaken a tour of the project site at Brass Island in Bayelsa State, the Chairman of Brass LNG, Dr. Jackson Gaius-Obaseki, told the visitors that what was between the shareholders and the FID was the choice of preferred bidder for the onshore works.

“The government is very much in support; the shareholders have demonstrated their commitments; the communities have their expectations. Therefore, we should not behave as if nothing has been done. After spending over $1 billion, we cannot throw the baby and the bath water away”. (January 27, 2015)

01/27/2015

PAKISTAN:

Talks on LNG from Qatar under way

Qatar has offered sustainable supply of LNG to Pakistan for 15 years at 14.5 percent of Brent, but Pakistan wants to ink the agreement for 10-12 years. Pakistan is currently in talks with the Qatar authorities in Doha on SPA for LNG and federal minister of petroleum and natural resources will leave for Doha today.

The two countries are close to finalising the HoA, However, both countries are yet to resolve the issues such as price of LNG, terms of the agreement, volume of gas and mode of payment to Qatari authorities. Qatar wants to supply LNG to Pakistan for 15 years, but Pakistan wants the agreement to last for 10 years. Pakistan will look to lock in the price of LNG at 14.5 percent of Brent but talks on LNG price have not yet been initiated as both sides are discussing other parts of the agreement. (January 22, 2015)

01/22/2015

commitments received from several financial institutions in December 2014. (January 19, 2015)

01/19/2015

UNITED STATES:

Cheniere, EIG finalise equity investment for Corpus Christi LNG

Cheniere Energy, Inc. has entered into a note purchase agreement with EIG Management Company, LLC (EIG) finalising the definitive documentation for the previously announced financing for the Corpus Christi Liquefaction Project.

As part of the agreement, investment funds managed by EIG will purchase US$1.5 billion of convertible notes. Proceeds from the financing will be used as equity to fund a portion of the costs of developing, constructing and placing into service the Corpus Christi project, which is being designed for up to three liquefaction trains with an expected aggregate annual production capacity of approximately 13.5mtpa.

The financing is scheduled to close once Cheniere reaches a positive final investment decision on the liquefaction project, expected in the first half of 2015. All financing commitments have been obtained for the project, including a portion of the proceeds from US$1 billion of convertible notes issued by Cheniere in November 2014 and the recently announced approximately US$11.5 billion of debt



AUSTRALIA:

Chevron, SK LNG Trading sign Gorgon LNG supply agreement

Chevron Corporation’s Australian subsidiaries have signed an SPA with SK LNG Trading Pte Ltd, for the supply of LNG from the Gorgon project in Australia.

Under the agreement, SK LNG Trading will receive 4.15mtpa of LNG over a five-year period, starting in 2017. During the time of this agreement, over 75% of Chevron's equity LNG from Gorgon will be sold to customers in Asia. (January 21, 2015)

01/21/2015

EGYPT:

Egypt awards $2.2 bln LNG tender to 4 foreign firms-state gas board

Egypt's state gas board has awarded a $2.2 billion tender to import 75 cargoes of LNG to four international firms, its chairman said on Sunday, as the country seeks new energy sources.

Declining production and increasing consumption has turned the Arab world's most populous country from an energy exporter to a net importer, prompting a flurry of activity in past months to boost foreign supplies. The four companies will supply four cargoes a month over about two years, but did not identify the four companies. Seven firms, including London-based energy major BP, bid for the tender in October.

The country of about 90 million relies heavily on gas to generate power for households and industry, but has had difficulty securing imports because it lacks a terminal to process LNG, which is natural gas chilled into a liquid state.

But after two years of delays, Egypt contracted Norway's Hoegh LNG for a floating storage and regasification unit, opening the door to LNG imports once the terminal is operational by the end of March. Since the deal with Hoegh was finalised, Egypt has signed a deal with Algeria for six LNG cargoes and expects to complete an agreement with Russia's Gazprom later this month. (January 26, 2015)

01/26/2015

EGYPT:

Egypt to Get 35 LNG Shipments from Gazprom

Egypt is likely to buy 35 shipments of liquefied natural gas (LNG) over the next five years from Russia’s Gazprom.

This information was provided by country’s Petroleum Minister Sherif Ismail who further said that that an initial agreement has been made with the Russian company, reported Daily News Egypt newspaper.

The two parties are set to formally close the deal later this month which would allow Gazprom to ship seven shipments of LNG annually from 2015-2020, the newspaper added.

Ismail said that he hopes all procedures for the import to be completed by the end of January, including awarding the tender and forming an agreement with the companies. (January 13, 2015)

01/14/2015

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UNITED STATES - EUROPE:

Europe Pushes for American Gas

LNG Allies, which is bankrolled by governments in Europe, has hired Franklin-Hamilton of Wilmington to a $20M monthly fee pact to push for the "free, fair and expedited trade of natural gas and other resources between the US and its global allies."

The Washington embassies of Lithuania, Croatia and Czech Republic are members of the coalition's "council of embassies," which acts as an advisor to the LNG coalition.

Current laws ban the export of liquefied natural gas to countries that don't have a free trade agreement with the US.

Exemptions are granted only after a lengthy review to determine that the gas export is in the best interests of the US.

The coalition wants to either accelerate the review process or allow gas exports to NATO countries.

The coalition believes a successful lobbying effort will create a more liquid natural gas market, expand fuel diversity and enhance energy security.

F-H's work covers data collection, embassy liaison, advocacy, editorial contents, and organizational management. (January 14, 2015)

01/16/2015

PAPUA NEW GUINEA:

ExxonMobil Papua New Guinea gas deal could help expand LNG project

ExxonMobil Corp has signed a memorandum of understanding to supply natural gas to power plants in Papua New Guinea in a deal that would give it licences to develop a new gas field that may help expand the company's PNG liquefied natural gas plant.

LNG from Papua New Guinea is seen as the most profitable to develop for supplying Asia compared with rival projects in Australia and North America.

ExxonMobil said on Friday it would begin preparations this year to drill an appraisal well at the P'nyang gas field, co-owned by Oil Search Ltd.

Reserves from P'nyang could "enable expansion of the PNG LNG project, which could include the development of a possible additional train," it said in a statement. The $19-billion PNG LNG project began exporting last year from its first two units.

Under the plan, part of the gas due to go for domestic use will fuel up to 25 megawatts of electricity, or about a fifth of the electricity required to power Port Moresby, the capital of Papua New Guinea, while the government looks for longer-term power generation sources.

The rest of the gas will be used to fuel a new state-owned gas-fired power plant near the PNG LNG plant. (January 16, 2015)

01/16/2015


INDIA:

Gazprom M&T, Yamal sign LNG supply contract

Gazprom Marketing & Trading Singapore and Yamal Trade have signed a long-term sales and purchase contract for LNG from the Yamal LNG project. The contract will be effective for over 20 years, and provides for the annual supply of 2.9mtpa of LNG that will be delivered to the Asia-Pacific markets, primarily to India. The contract price will be determined against oil-indexed prices.

Yamal LNG is the operator of an LNG plant construction project with an annual capacity of 16.5mtpa, with gas resources to be supplied from the Yuzhno-Tambeyskoye field. The start of LNG production is scheduled for 2017. (January 26, 2015)

01/26/2015

USE AS MARINE FUEL

EUROPE:

EU to promote LNG as maritime fuel in North Sea

The European Union's TEN-T Programme will co-fund with over €5 million the deployment of LNG as a greener and cheaper alternative to heavy fuel oil for maritime transport in the North Sea.

The project, which is to be completed by the end of 2015, will also help to meet European requirements on cutting air pollution in the North and Baltic Seas.

European Regulations require the shipping sector to reduce marine sulfur emissions in the North Sea to 0.1% as of 1 January 2015. One of the ways for the sector to reach this goal is to use cleaner fuels, such as LNG.

This project is part of a larger project aiming to promote the use of LNG in North Sea maritime traffic. It will cover the following three main objectives:

● Installation of small scale equipment for LNG bunkering in the Zeebrugge terminal (Belgium) to break down large quantities of LNG into smaller ones for further distribution in the North Sea and the Channel region.

● Equipment of three ferry berths with automatic quick release mooring hooks, two at the ports of Portsmouth (UK) and one in Caen/Ouistreham (France).

● Establishment of an optimal logistic chain to LNG in order to deliver LNG to ports and ships remote from the main European gas import terminals and therefore encourage the rapid growth in the number of vessels using LNG. (January 15, 2015)

01/16/2015


FINLAND:

Finland's Wartsila to provide LNG systems to four carriers

Wartsila, a power and equipment provider to the marine and energy sectors, said on Wednesday it would supply reliquefaction and gas handling systems for four LNG carriers being built in China.

The carriers, being built by the Hudong-Zhongua Shipbuilding yard, will be delivered between September 2017 and January 2019, Wartsila said in a statement without giving financial details of the deal that was struck in the fourth quarter of 2014.

The ships will be owned by Bermuda-based Teekay Corporation , China LNG Shipping, China's CNOOC Energy Technology Co and Norway's BW Gas.

"The award of these contracts is a significant breakthrough into the Chinese market for Wartsila LNG reliquefaction plants and gas handling systems for LNG carriers," the Finnish company said. (January 21, 2015)

01/21/2015

GENERAL INFORMATION

NIGERIA:

Gas Tanker Runs Aground off Nigerian Coast

A Liquefied Natural Gas (LNG) tanker has run aground off Nigerian coast after taking on a cargo at the Bonny Island export plant, two trading sources said.

The 165,000-cubic-metre-capacity Magellan Spirit tanker, owned by Teekay LNG Partners, ran aground trying to leave the port bound for South Korea, traders said.

Teekay could not be reached for immediate comment.

A trader, according to Reuters, said the tanker was not expected to disrupt inbound or outbound tanker traffic from Bonny Island as it was not blocking the shipping channel.

But it remains to be seen how the cargo’s owner, trading house Vitol (VITOLV.UL), will be affected. Traders said that Vitol might have to seek a replacement cargo on the open market. (January 13, 2105)

01/13/2015


NATURAL GAS

EXPLORATION

EGYPT:

Egypt inks $97m oil and gas investments

Egypt has signed two new agreements to search for natural gas and oil in the Nile Delta region with UAE’s Dana Gas and a UK firm with investments estimated at a minimum of about $ 97 million. The first agreement with Dana Gas is in the north of the floor area of fitness Nile Delta, with an investment $ 22 million. It also involves a $5 million deal to conduct seismic survey and drill five new wells.

The second agreement with two British firms and Dana Gas will see an investment of $75 million in the ground rainfed area of Nile Delta. It also includes three-dimensional seismic surveys and the drilling of three new wells. (January 18, 2015)

01/19/2015

EGYPT:

Egypt signs gas exploration deal with France's Total

Egypt has signed a gas exploration contract with French energy company Total worth $20 million, the oil ministry said on Thursday.

Egypt's state-owned gas company, EGAS, signed the deal with Total for gas exploration in the Nile Delta, a ministry statement said.

The government is keen to develop untapped finds to reduce its reliance on imports but has struggled to persuade companies to invest in the biggest finds, which are offshore, because the amount it pays them barely covers the investment costs.

Economic turmoil has also caused the government to fall into arrears with existing producers. (January 22, 2015)

01/23/2015


PRODUCTION

NORWAY:

Norway's gas production hit by massive outages

Gas output from Norway, Western Europe's main natural gas supplier, will be hit by a massive outage at the country's biggest gas field Troll, the country's gas system operator Gassco said.

The Troll's production capacity will be reduced by 117 million cubic metres (mcm) per day on Wednesday, and the outage could last for one to two days, Gassco said on its website.

In addition, production capacity at Kvitebjoern gas field will be cut by 22.4 mcm/day on Wednesday, up from 10 mcm/day on Tuesday, the system operator said in a separate message.

Gassco did not provide explanation for the outages, but Kollsnes processing plant, which takes gas from Troll and Kvitebjoern, was shut due to external power supply loss on Tuesday evening, data from the Nordic power exchange shows.

Troll A gas platform also gets power from onshore grid.

The volume of the outages indicate that both the Troll and the Kvitebjoern will be completely shut, reducing Norway's total gas production capacity by more than a third.

Gas flows via the Langeled pipeline, Britain's main subsea gas import route, were down to 25 mcm/day compared to its full transportation capacity of 72 mcm/day. (January 14, 2015)

01/14/2015

OMAN:

Oman opens new $1.3bn gas plant

Oman Oil Company Exploration and Production recently opened a $1.3 billion gas field and a state-of-the-art processing plant in Abu Butabul, a report said.

The plant has a capacity for commercial export of 27mcf per day of natural gas and 2,500 barrels per day of condensates.

The total investment in the present phase will reach $2.5 billion once the remaining work is completed, the Times of Oman report said. Salem bin Zahir Al Sibani, chief executive officer of OOCEP, was quoted as saying that natural gas and condensate production would gradually reach 70MMscfd and 6,000bpd, respectively, by the middle of this year. (January 18, 2015)

01/19/2015


IRAN:

South Pars output rises

Over the past 19 months, gas production from South Pars gas field rose by 105 mcm/d. This amount of additional production took place from South Pars gas field phases 12, 15&16 and 17&18. National Iranian Oil Company’s reports show that additional gas extraction from South Pars gas field will go up further, reaching 120 mcm/d before the year-end on March 20 2015. Realization of this amount of gas extraction during the period has been unprecedented in Iran’s oil history.

NIOC intends to raise gas extraction from the giant gas field by another 100 mcm in next Iranian calendar year, as of March 21 2015. (January 25, 2015)

01/26/2015

KAZAKHSTAN:

Tethys more than doubles gas production in Kazakhstan

Tethys Petroleum said that gas production at its Kazakhstan assets has more than doubled after a new phase of shallow gas output came on stream.

The new production was achieved on schedule, the Central Asia-focused oil and gas producer said, with a 10-day average of 559 Mm3/d.

A further increase in production is planned for the second quarter as two more previously tested wells are brought online, it added.

The news follows a new one-year gas sales contract announced in December, which increased the price of gas by 42 percent to $75/mcm.

The 2015 shallow gas programme officially began on January 1st as planned, Tethys said.

The statement today comes about a month after Tethys decided to overhaul its board following the requisition of an EGM by shareholder Pope Asset Management that called for the removal of most of the company's previous directors. (January 14, 2015)

01/14/2015


TRANSPORT - DISTRIBUTION

IRAN:

IRAN LEAPS TO COMPLETE POTENTIAL GAS EXPORT ROUTES

The Iranian government has announced construction plans for four pipelines at a cost of $12 billion. Of the four planned natural gas pipelines, three will be designed for export and one is aimed at cutting gas imports.

The information portal of Iran’s Oil Ministry reported on January 12th that the government plans to facilitate the construction of the 6th, 9th, and 11th cross-country gas pipelines.

The 11th cross-country pipeline will pump gas from the South Pars gas field towards the northwestern province, Khorasan, to make this region self-sufficient instead of relying on Turkmen gas imports.

Iran's plans for the 7th cross-country pipeline include delivery of gas to Pakistan.

The 6th, 7th, 9th, and 11th cross-country gas pipelines, respectively, will require $2, $2, $6, and $4 billion dollars worth of investments to come on stream.

6th cross-country pipeline

The first and second sections of this pipeline totaling 611 km in length have been completed and 600 km of piping is to reach Iraqi borders.

The capacity of 6th cross-country pipeline is transferring 110 mcm/d of gas to Iraq, Syria, Lebanon and Europe.

Iran boosted dry gas production in the South Pars gas field, which shares 30 percent of the country’s 33.6-trillion total gas reserves during 2014 by 80 mcm/d and planed to increase the current level of production in this field by 40 mcm/d until March 2015.

With completion of South Pars, Iran’s total produced dry gas would double by 2020 compared to the current level, reaching 1.1 billion cubic meters per day.

9th cross-country pipeline

The 9th cross-country gas pipeline is projected to transfer 100 mcm/d of gas towards the north-western borders. The 1,863-kilometers long pipeline has 17 pressure booster stations.

Iran has a contract with Turkey to supply 27 mcm/d of gas, but transferring the country’s gas through Turkey to Europe is the final goal of 9th cross-country pipeline.

Construction of 300 km pipeline will cost approximately $700 million and take about two years.

Iran also has a 27 mcm/d gas MoU with Oman, planned to be developed by 2016.

Despite an increase in dry gas production by 16 bcm during last nine months, Iran has only been able to increase gas export by 1 bcm due to a sharp rise in domestic consumption. (January 13, 2105)

01/13/2015


IRAN - PAKISTAN:

Iran-Pakistan pipeline: Work to start as soon as sanctions go

Pakistan and Iran have reached an understanding that they will start implementing the gas pipeline project soon after sanctions imposed by the United States are lifted. “We have agreed with them (Iran) that we will execute the Iran-Pakistan (IP) gas pipeline project once the curbs are removed,” Petroleum Secretary Arshad Mirza told the Senate standing committee on petroleum and natural resources in a meeting chaired by Muhammad Yousaf on Thursday.

“The agreement is between two nations under the umbrella of the United Nations, which bars us from implementation because of the embargo,” he said.

State Minister for Petroleum and Natural Resources Jam Kamal told the panel that Pakistan could not afford sanctions while pushing ahead with the pipeline.

“The current petrol crisis has paralysed the country and you can imagine how we can face sanctions,” he said. “Gas imports from Iran are subject to the lifting of sanctions, it’s in the national interest.” (January 23, 2015)

01/23/2015

RUSSIA:

Russia: Gas to Europe should go via Turkey, not Ukraine

Russia's state natural gas company wants its exports to Europe to bypass Ukraine entirely and go via a proposed new pipeline to Turkey.

Gazprom head Alexei Miller made the statement Wednesday. He said European countries that want Russian gas will have to scramble to build pipelines to connect with Turkey.

Russia last month abandoned its South Stream pipeline project, which would have run under the Black Sea to southern Europe, citing European Union opposition. South Stream would also have bypassed Ukraine.

EU Energy Commissioner Maros Sefcovic, who met with Miller in Moscow, expressed reservations about the latest plan, saying "maybe we can find some better solution."

Russia has long sought to either get control over Ukraine's pipelines to Europe or get around them. (January 15, 2015)

01/15/2015


SUPPLIES - IMPORTS - EXPORTS

AFGHANISTAN - IRAN:

Afghanistan Interested in Importing Iranian Gas

Afghanistan has shown interest in importing natural gas from Iran, some senior Afghan officials have told Iranian energy officials.

"The two countries' officials have held talks on export of Iran's gas to Afghanistan, but it has not been finalized yet," International Affairs Director of the National Iranian Gas Company (NIGC) Azizollah Ramezani said on Tuesday, reported Fars News Agency.

Iran plans to export 80bcm of its natural gas annually to the Asian and European countries by 2025. The country exported over 10bcm of gas in 2014.

Earlier this month, Iranian and Afghan officials called for enhancement of all-out ties, especially in the energy sector. (January 20, 2015)

01/21/2015

UNITED ARAB EMIRATES - QATAR:

UAE seeks more natural gas from Qatar via Dolphin pipeline

The UAE, which needs natural gas to meet surging domestic demand, wants to import more fuel from Qatar through the Dolphin pipeline, the Energy Minister Suhail Al Mazrouei said.

The UAE also will boost imports of liquefied natural gas and develop its own deposits of high-sulfur, or sour, gas, he said yesterday at an industry presentation in Abu Dhabi. The country’s energy subsidies will become unsustainable because these sources of fuel are more expensive than gas produced from conventional fields, Mr Mazrouei said.

“We expect to see a significant shift in the supply dynamics of gas” within the next 10 years, he said.

The UAE needs gas to generate electricity for a growing population and expanding energy-intensive industries such as aluminum and steel. The country is the fifth-biggest producer in Opec, according to data compiled by Bloomberg, and Abu Dhabi holds most of the nation’s oil.

Development of new fields in Qatar would make more gas available for the UAE to import, Mr Mazrouei said. He didn’t say if the UAE has agreed to buy additional Qatari gas.

Dolphin Energy supplies gas to the UAE from neighboring Qatar through an undersea pipeline. The company, 51 per cent owned by Abu Dhabi’s Mubadala Development, started bringing gas to the UAE in 2007 from Qatar’s North Field, the world’s largest known gas deposit. (January 13, 2105)

01/13/2015

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EU - RUSSIA:

Ukraine Lurches to Full Scale War as Russia Drastically Reduces Gas Supply to EU

Vladimir Putin has ordered the Russian state energy giant Gazprom to cut natural gas supplies to and through Ukraine to the EU in a little reported move. It took place late on Wednesday and was overshadowed by the Swiss National Bank market turmoil.

Russia has shut off gas supplies through Ukraine to six EU states, ostensibly due to Ukraine’s alleged illegal siphoning gas from the pipeline. The European Union warned that the sudden cut-off to some of its member countries was ‘completely unacceptable’. The move comes just as winter begins to bite across Europe. The pipeline crossing Ukraine supplies over 60% of the entire EU’s natural gas. Six countries – Greece, Bulgaria, Macedonia, Croatia, Romania and Turkey – report a complete halt of gas coming in from Russia.

Yesterday, Ukraine confirmed that Russia had completely cut off their supply. Croatia said it was temporarily reducing supplies to industrial customers while Bulgaria said it had enough gas only ‘for a few days’ and was already in a ‘crisis situation’. (January 20, 2015)

01/20/2015

EGYPT:

Egypt may import gas from Israel

Egypt may import natural gas from Israel “if it will help overcome the energy crisis,” Minister of Petroleum Sherif Ismail told state-owned Al-Mussawar magazine in an interview published Wednesday.

Ismail’s remarks mean that Egypt’s government may have to depend on this controversial solution to provide gas supplies amid efforts to tackle the worst energy crisis that the country has faced over the past few years.

Rolling power cuts in the summer have become routine since the January 25 Revolution in 2011, caused by fuel shortfalls at power plants, and increasing demand as many households run air conditioners.

“Whatever achieves the best interests of Egypt in the region politically and economically… will determine the decision of importing gas from Israel,” Ismail told Al-Mussawar. (January 14, 2015)

01/15/2015


HUNGARY - UKRAINE:

HUNGARY RESUMES NATURAL GAS TRANSMISSIONS TO UKRAINE

Following a three-month suspension, Hungary’s gas transport system operator FGSZ has resumed reverse-mode gas transmission of gas supplies to Ukraine as of Saturday January 10th, 2015, Ukrainian TSO Ukrtransgaz announced.

The company said 2.7 million cubic metres of gas per day will be imported from Hungary.

On September 25th of last year, gas flows from Hungary to Ukraine were halted “until further notice” as a result of "technical reasons." The deliveries to Ukraine were halted in order to receive significant quantities of western bound Gazprom gas to be stored in Hungary for the winter.

However, the unexpected disruption came a few days after a meeting between Gazprom CEO Alexei Miller and Hungarian Prime Minister Viktor Orban, further tightening gas supply to Ukraine in advance of trilateral Ukraine-Russia-EC negotiations which were upcoming at that time. (January 12, 2105)

01/13/2015

IRAN - IRAK:

Iran Could Begin Supplying Gas to Iraq by May

Iran could begin supplying natural gas to Iraq by May this year according to Azizollah Ramezani, director of the National Iranian Gas Company (NIGC). Around six to seven kilometers of the pipeline is yet to be laid on the Iraqi side of the border, and security challenges facing the strategic pipeline on the Iraqi side of the border are to be overcome. Iraqi officials have already pledged to take necessary measures to secure the gas exports to the Arab country by May 2015.

Iranian and Iraqi oil ministers in July last year signed the first deal to transfer Iran’s natural gas to two Iraqi power plants. The project is aimed at supplying Al-Baghdad and Al-Mansouriyah power plants in Iraq with 25mcm per day of natural gas. (January 19, 2015)

01/20/2015

IRAN:

Iran seeks ways to export gas to Europe within cooperation with Turkmenistan and Azerbaijan

Iran may export natural gas in the volume of 25 bcm-35 bcm to 12 European countries, said the Chairman at Iranian National Gas Company. Iran is seeking ways to export gas to Europe within cooperation with Turkmenistan and Azerbaijan. Iran controls 1.5% of world gas trade and this figure will make 10% by 2025. Iran’s gas export balance in 2014 made 3.4 bcm: “Iran exported 9.75 bcm of gas in 2014, while the gas import made 6.32 bcm in the same year. (January 19, 2015)

01/19/2015


GHANA - NIGERIA:

Nigeria Pays Ghana $10m In Default Of Energy Agreement

Nigeria has paid the sum of $10m to Ghana in breach of contract for failing to supply gas as spelt out in the West African Gas Pipeline project agreement. Nigeria was expected to supply at least 120mcf of gas daily to power some of Ghana’s plants but the OPEC giant has consistently failed to come up with its end of the bargain. Ghana is currently undergoing a major energy crisis and Nigeria’s failure to meet its obligations has been attributed to a major part of this.

Officials of the Ghana Grid Company earlier this week indicated that they have had to shed between 400 and 600 megawatts of power due to the inconsistent and reduced supply of power from the local power generators, which mainly get their supply from Nigeria through the West African Gas pipeline agreement.

President John Mahama said the country is looking at developing its own gas reserves.

"Potentially we can get 150mcf from the Jubilee field, we are developing the TEIN field which will come on stream in 2016 and that again can provide us with between 50-80mcf. So going forward we are looking at about between 300-350mcf which will be very important in generating power and ensuring energy security for us. (January 21, 2015)

01/22/2015

RUSSIA - UKRAINE:

Risks persist for Russia’s Europe-bound gas supplies via Ukraine

Risks persist this winter for Russian natural gas supplies to Europe via Ukraine, Gazprom CEO Alexey Miller said on Wednesday.

“Transit risks persist this winter on the territory of Ukraine because Ukraine failed in November-December last year to purchase required volumes of Russian gas over financial difficulties and considerably reduced gas reserves in underground storage facilities,” the Gazprom head said.

Miller also said Gazprom is currently working on a development strategy with view to EU’s plans for Energy Union.

“Our strategy and our further action will depend on the plans for the EU Energy Union. For us, it will entail new challenges and opportunities. We hope that the establishment of the Energy Union will in no way reduce the reliability and safety of energy supply,” said Miller. (January 14, 2015)

01/15/2015


POLAND:

Poland Seeks to Free Region From Gazprom Yoke With Gas Pipelines

Poland seeks to help eastern Europe cut its reliance on natural gas from Russia’s OAO Gazprom by allowing its neighbors to use its pipelines and a sea terminal to access alternative supplies. Poland for the first time got more gas from western Europe than from Gazprom for two days this month, proving that it can already diversify its own supplies.

New infrastructure by 2018 will allow the Warsaw-based pipeline operator Gaz-System SA to transport gas to a region that uses almost a quarter of the European Union’s total.

Europe is seeking to diversify gas supplies away from Russia after they became more expensive than traded gas in western Europe. Flows from the east were threatened for a third winter since 2006 because of the conflict in Ukraine, which transports about 40% of Gazprom’s exports to Europe. While Poland’s coal reserves make it one of Europe’s smallest gas users, it is the only country to border both Ukraine and Germany, two of the region’s biggest consumers.

Poland will this year complete its first liquefied natural gas terminal, with pipelines planned to Lithuania, the Czech Republic, Slovakia and Ukraine by 2018. That will allow Gaz-System to transit gas to markets with annual use of about 100bcm of mainly Russian fuel.

Poland can currently meet 95% of its import needs with pipeline fuel from EU suppliers. Gaz-System has since 2011, when the nation could get less than 10% of its foreign gas from sources other than Gazprom, built 1,200 kilometers (745 miles) of pipelines. It also began so-called reverse flows on the Yamal link between Russia and western Europe and was the first EU nation to start supplying Ukraine by pumping gas through pipes originally planned to flow only from east to west.

Under a 2010 agreement with Gazprom, Gaz-System took over the management of the Polish section of the Yamal pipeline. The Polish company last year paid “a few million euros” to install measuring equipment on the German side of the link that allow it to get 5.5bcm from its western neighbor.

In 2018, Poland will be able to import nearly 40bcm of gas, four times current imports, according to Chadam. The nation is still bound by a gas supply contract with Gazprom that was renewed in 2010 and runs to 2022. Gaz-System declined to specify on which days western European supplies were higher than those from Gazprom. (January 22, 2015)

01/22/2015

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TURKEY - IRAQ:

Turkey and Iraq Agree on Natural Gas Pipeline Project

Turkey and Iraq agreed on a new natural gas pipeline project. Energy Minister Taner Yildiz visited Iraq on Sunday to attend 17th Turkey-Iraq Joint Economic Commission meeting, which is held again after 9 years break, and hold official talks about ongoing energy partnerships. After Iraqi oil, Turkey will sell natural gas of Iraq to the world. Works of technical analysis on a new natural gas pipeline will start soon. According to economist Cemil Ertem, this natural gas corridor will be developed in the scope of the Southern Gas Corridor Project. Turkey also plans to build an industrial zone in Iraq. An MOU was signed between Turkey and Iraq in Baghdad, which contains five new agreements to determine the areas of cooperation between two countries. (January 19, 2015)

01/20/2015

STORAGE

UKRAINE:

Ukraine actively uses gas from underground storage facilities

Ukraine is actively using gas from underground storage facilities, with its volume falling 0.56% by January 24 to 9.709bcm. The data of the Association of European Underground Gas Storage Operators show that the Ukrainian underground gas storage facilities are only 30.39% filled with natural gas.

The largest gas volume is kept in the Bilche-Volytsko-Uherske underground gas storage facility, which is 30.51% filled with natural gas. As of January 22, Ukraine’s underground gas storage facilities kept 9.826bcm of natural gas.

There are 12 underground gas storage facilities in Ukraine with an active capacity of 31bcm. (January 26, 2015)

01/26/2015


USE FOR POWER GENERATION

MEXICO:

Foreign Involvement Furthers Mexico Energy

Mexico plans to add more than a gigawatt of power with a natural gas and hydroelectric plant as part of recent overhaul of the country’s energy sector.

Mexico’s Federal Electricity Commission selected Abengoa to build a 924 megawatt combined cycle natural gas plant in Ciudad Juárez for $1.55 billion including 25 years of operation and maintenance.

Sinohydro, which built China’s Three Gorges dam, is part of a group that won a $386.4 million contract to build a 240 megawatt hydroelectric plant in southern Mexico. The project is expected to take more than three years to construct.

The projects follow moves by Mexico to open its offshore drilling to foreign companies and increase imports of natural gas from the United States. (January 13, 2015)

01/14/2015

GENERAL INFORMATION

RUSSIA:

DOES THE CANCELLATION OF SOUTH STREAM SIGNAL A FUNDAMENTAL REORIENTATION OF RUSSIAN GAS EXPORT POLICY

The Oxford Institute for Energy Studies has published Does the Cancellation of South Stream Signal a Fundamental Reorientation of Russian Gas Export Policy.

The cancellation of the South Stream gas pipeline across the Black Sea may signal a fundamental reorientation of Russian gas export policy. Its replacement by similar pipelines direct to Turkey, and the abandonment of Gazprom’s long time strategy of supplying gas directly to European customers, comes in the wake of financial sanctions and an inability to negotiate the construction of new pipelines within the EU due to Third Energy Package regulation. The signing a first major pipeline export contract with China in 2014, and the possibility of a second contract in 2015, is shifting the emphasis of future Russian gas exports away from Europe and towards Asia. The irony of this change, which has largely been forced on Russia following US and EU measures taken in response to the Ukraine crisis, is that it has pushed Gazprom into a much more logical commercial export strategy and one which it should have adopted some years previously. The principal problem is that financial sanctions may prevent the company from being able to simultaneously finance a number of very large pipeline export projects. (January 22, 2015)

The full report can be downloaded here: http://www.oxfordenergy.org/wpcms/wp-content/uploads/2015/01/Does-cancellation-of-South-Stream-signal-a-fundamental-reorientation-of-Russian-gas-export-policy-GPC-5.pdf

01/23/2015


BULGARIA:

John Kerry to visit Bulgaria for talks on Ukraine, prospects for gas cooperation

US Secretary of State John Kerry will visit Bulgaria on Thursday for talks with Bulgarian leaders on Russia’s refusal to build the South Stream gas pipeline and the situation in eastern Ukraine.

Local mass media said referring to diplomatic and government sources that the Ukrainian crisis and the terrorist acts in Paris, prospects for developing shale gas in Bulgaria and the fate of the South Stream pipeline would be touched upon at the talks.

Sofia does not consider Russia’s refusal from the South Stream project final because no official notification has been received yet. Experts believe that American diplomats will do their best to lift the moratorium on extracting shale gas through fracking and to support trans-Atlantic trade and investment partnership between the EU and the US. (January 15, 2015)

01/15/2015

UNITED KINGDOM:

UK to launch review of its oil and gas industry

Britain will launch a review to identify key risks to oil and gas production in response to the collapse in oil prices, after oil majors BP and ConocoPhillips said they were cutting more than 500 jobs in their North Sea operations.

Britain's North Sea oil and gas sector employs more than 400 000 people and has generated in excess of $200bn in tax revenue for the government.

But there are growing pressures on the sector after oil prices slumped almost 60% over the past month, leading to job cuts at BP, ConocoPhillips and other majors.

"The oil and gas industry is used to volatile prices in world markets and will get through the latest downturn as it has in the past," said Energy Secretary Edward Davey in a statement on Thursday.

"Given the huge value of the UKCS (UK Continental Shelf) to the nation and the relatively high cost base that it has, I am concerned to make sure that it does so in the best possible shape for the future," Davey added.

Davey said the head of Britain's Oil and Gas Authority, Andy Samuel, would lead the review and would present his findings to the government by the end of February. (January 16, 2015)

01/16/2015

Vol. 54, n° 2, January 27, 2015 Main news - cedigaz.org · LNG: Use as Marine Fuel ... •...

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