CS LNG News Update: 1st March 2019
By CS LNG, Mar 18 2019 10:50AM
1. RUSSIA BECOMES BIGGEST LNG SUPPLIER TO EUROPE IN FEBRUARY FOR FIRST TIME WITH LOWEST PRICES
Russia delivered a record amount of liquefied natural gas to Europe in February from the Yamal export plant in the Arctic region and became the biggest monthly supplier to the continent for the first time, overtaking Qatar, Nigeria and Algeria. According to shipping data a total of 19 cargoes, or 1.41 million tonnes, were delivered to European regasification terminals during the past month. They were unloaded at terminals such as Zeebrugge in Belgium, the Gate terminal in Rotterdam in the Netherlands, the Isle of Grain facility in the UK and the Montoir-de-Bretagne plant on the Atlantic coast of France. The next Russian cargo from Yamal is scheduled to be unloaded at Rotterdam on March 5 from the 172,000 cubic metres capacity carrier “Boris Vilkitsky”. The February Russian shipments were the largest monthly amount of LNG from Yamal to arrive in Europe since the first cargo departed from the plant in December 2017 in the presence of President Vladimir Putin. Russia’s deliveries to Europe were used by European customers instead of being trans-shipped to Asia as the additional cost of shipping would have made such trades uneconomic. No Yamal shipments were trans-shipped to Asia in February, though they had been for the previous eight months. In February, shipments from the US to Europe dropped to nine cargoes, or 0.64MT, the lowest level since November 2018. Qatar delivered 18 cargoes to Europe in February, or 1.33MT, Nigeria unloaded 16 shipments and Algeria 18 cargoes, mostly from Medmax vessels with 75,000 cubic metres capacity.
[Source: LNG Journal 01/03/2019]
CS LNG comment: This would tend to suggest that the EU policy of trying to move away from Russian pipeline gas could be a wasted political move unless it was a policy focused against Gazprom
2. SHELL, PETROCHINA JV ARROW WINS LEASES FOR BIG AUSTRALIAN GAS PROJECT
Royal Dutch Shell and PetroChina joint venture Arrow Energy on Thursday was granted leases for a A$10 billion ($7.2 billion) project to develop Australia’s biggest coal seam gas resource. The Queensland government said it had granted 14 leases to Arrow Energy for the Surat project, which holds 5 trillion cubic feet (140 billion cubic meters) of gas. Arrow agreed in December 2017 to a 27-year deal to sell output from Surat to the Queensland Curtis LNG (QCLNG) project run by Shell. As part of the deal, Arrow will be using QCLNG’s gas processing and pipeline infrastructure, helping to cut project costs and allowing Arrow to sell its gas both for export and into the domestic market. “This approach has two major benefits: it will get gas to the market faster and it significantly reduces the project footprint and the potential impact on local communities and the environment,” Queensland state Mines Minister Anthony Lynham said in a statement. Queensland and the federal government are eager to see the Surat project start up as Australia’s southeastern states face a looming gas shortage by the mid-2020s. While state Premier Annastacia Palaszczuk said the project is expected to start producing in 2020, Shell and PetroChina have yet to give the go-ahead for development amid a spat over gas sales pricing and technical issues. “The approval of these petroleum leases is a critical milestone in Arrow delivering 5 trillion cubic feet of gas into the market,” Arrow CEO Mingyang Qian said in a joint statement with the state government.
[Source: Reuters 28/02/2019]
CS LNG comment: The Gladstone projects desperately need sustainable feedgas but will domestic gas get the lion’s share of the supply?
3. CROATIAN LNG CONTRACTOR AGREES IN PRINCIPLE TO FSRU CONVERSION
Golar has entered agreements with Croatia’s LNG Hrvatska to convert the 2005-built Golar Viking vessel into a floating storage and regasification unit. Under the proposals Golar would sell the converted FSRU and then operate and maintain it for a minimum of 10 years. Go-ahead for the project remains subject to confirmation of project funding and receipt of a notice to proceed from LNG Hrvatska.
[Source: Offshore Magazine 28/02/2019]
CS LNG comment: If LNG Hrvatska pays a dollar more than $55m for this vessel any EU subsidy should be withdrawn but no doubt the contract figure will be nearer $110m!