Issue 454

02February2017 Week 04

Mexicos gas needs
Mexicos rising demand for US LNG means that it must tread carefully in
trade talks with the US

Strong growth forecasts
BPs Energy Outlook forecasts strong LNG supply growth between 2015 and
2035, led by the US and Australia

Australian surge
Australias massive drive to invest in LNG infrastructure finally appears to be
paying off with a big surge in exports of the fuel in recent months

Japanese decline
Japans LNG imports declined 2% in 2016, the second year in a row
GLNG GLNG

WITH OFFICIAL SUPPPORT

PRODUCED BY WITH OFFICIAL SUPPPORT

The Official Meeting Place for the Iranian LNG & Gas Industry

H.E. Dr Amir Hossein
Zamaninia
Deputy Minister for Trade and
International Affairs
Ministry of Petroleum
H.E. Dr. Gholamreza
Manouchehri
Vice President, Engineering
and Development
NIOC
H.E. Araqhi Hamid Reza Mr. Hamid Bovard Dr. Ali Vakili
Deputy Petroleum Minister & Managing Director Managing Director
Managing Director Iranian Offshore Oil Company Iran Fuel Conservation Company
NIGC (IOOC) (IFCO)

David Carroll Ali Amirani Mostafa Sharif Eric Festa Hans Nijkamp
President 2015-2018 Acting Head of the Gas Export General Manager Market Research Managing Director Vice President - Iran
International Gas Union Division & Economic Appraisal TOTAL Exploration & Production Shell
NIOC NIOCs Gas Export Division Iran

Jiang Mingjun Kunio Nohata Ian Nash Victor Alessandrini Rajesh Agarwal
Vice President Executive Director Managing Director Business Development Manager Senior Vice President, Project
CNPC Middle East Tokyo Gas Co., Ltd. Peritus International GTT Advisory & Structured Finance, Senior
and Project Director Vice President, Project Advisory &
South Asia Gas Enterprise Pvt. Ltd. Structured Finance
(SAGE) SBI Capital Markets

SPONSORS INCLUDE

For more inform ation on the e vent, please contact

Mohamad Kantar on iranlngas@thecwcgroup.com or call +44 20 7978 0781

iranlngandgas.com

P2 w w w. N E W S B A S E . c o m Week 04 02February2017
GLNG CONTENTS GLNG

w w w. N E W S B A S E . c o m

GLNG
Global LNG Monitor
COMMENTARY
Mexicos gas needs give Trump upper hand in row with Mexico 4
LNG prices remain healthy as US hints at a pro-oil and gas policy 6
FORECASTS
BP forecasts strong growth for LNG 8
AFRICA
Skikda LNG restarts after technical problems 8
Cameroon partner still in FLNG scheme, says Golar LNG 9
AMERICAS
Eagle LNG files with FERC 9
AUSTRALASIA
Australian LNG exports reach record high 10
ASIA
Japans LNG imports tumble in 2016 10
Worlds first barge-based FSRU undocks 11
Indonesia to limit new LNG importers to PLN, IPPs 11
Tokyo Gas sees more change in Japanese LNG sector 12
EUROPE
Closure threat for European gas storage facilities 12
GRTgaz consolidates position in French gas market 13
Croatia postpones LNG terminal until 2019 14
MIDDLE EAST
Bahrains NOGA closes financing for LNG Terminal 14
NEWS IN BRIEF 15

Have a question or comment? Contact the editor Richard Lockhart (richardl@newsbase.com)

Copyright 2015 NewsBase Ltd. All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes
internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents

Week 04 02February2017 w w w. N E W S B A S E . c o m P3
GLNG C O M M E N TA R Y
Mexicos gas needs give
Trump upper hand in row
with Mexican president
Mexicos rising demand for US LNG means that it must tread
carefully in trade talks with the US, writes Tim Daiss
US LAST week, President Donald Trump and Mex-
ican President Enrique Pena Nieto faced off over
W H AT: a number of issues, mostly related to Trumps
Mexico is set to remain campaign pledge of building a wall along the
a growing buyer of US US-Mexican border.
LNG despite political Trump said that Mexico should pay for the
disputes between the two wall and that the US could impose a punitive
countries 20% tariff on all products entering the US from
Mexico to cover the price of construction.
W H Y: The US has a US$60 billion dollar trade
Rising Mexican demand deficit with Mexico. It has been a one-sided deal
and cheap prices are from the beginning of NAFTA [North American
keeping the relationship Free Trade Agreement] with massive numbers of
close jobs and companies lost. If Mexico is unwilling
to pay for the badly needed wall, then it would be
W H AT N E X T:
As the US is a major
better to cancel the upcoming meeting, Trump
tweeted on January 26.
buyer of Mexican oil, In response, Pena Nieto cancelled the
the neighbours trading planned trip to meet Trump in Washington.
relations will remain The next day, the rhetoric died down. Media
close and will not be reported that the two presidents had held a long
damaged in the long phone conversation.
run by political rhetoric.
Yet the US will keep the
Following the call, which was scheduled to
last ten minutes but continued for over an hour,
upper hand a joint statement was issued stating that future
negotiations about the wall, and other concerns
about drug and arms trafficking across the
southern border, would be held privately.
However, the diplomatic tiff has both Amer-
icans and Mexicans worried over the economic
implications of an increase in tariffs on Mexican
goods.
This also concerns those in the oil and gas
industry, since Mexico has ramped up US nat-
ural gas imports as it works to offset its own
declining oil and natural gas production.
Mexico needs cheap US gas & LNG
Mexicos pipeline gas deliveries from the US have
more than doubled in the last two years, while
the country has now tied Chile as the biggest
buyer of US LNG.
Mexico imports around half of its gas needs,
P4 w w w. N E W S B A S E . c o m
GLNG
including growing pipeline supply, around 80%
of total imports, from the US.
In addition to imports from the US, Mexico
also imports the fuel from Peru, Nigeria and
Trinidad and Tobago, according to the Mexican
energy ministry.
In the last five months, 10 LNG cargoes from
Cheniere Energys Sabine Pass terminal on the
US Gulf Coast have unloaded at Mexicos Man-
zanillo LNG terminal on the countrys west
coast, sailing via the Panama Canal.
In January, Manzanillo received three Amer-
ican cargoes, the same number as in December,
but reached a new high of 214,378 tonnes.
According to the latest analysis of Mexicos Mexicos gas
energy sector by the US Energy Information
Administration (EIA), updated in December,
import needs
Mexicos gas import needs are rising as domes- are rising
tic production stagnates and demand increases,
particularly in the electricity sector. as domestic
In 2015, Mexico imported an average of 2.9
bcf (82.1 mcm) per day of natural gas from the production
US, an increase of more than 200% on 2010, the
EIA stated. Meanwhile, Mexicos gas consump-
stagnates
tion is projected to climb by 31% from 2015 to and demand
2029.
In other words, given Mexicos lack of natu- increases,
ral gas production to meet both its current and
future needs, it needs US gas, both pipeline gas particularly in the
and LNG. US natural gas and LNG based on
Henry Hub prices offers the country cheap fuel
electricity sector
and a secure regulatory environment to receive
that fuel.
Future gas needs
Mexicos reliance on US gas, notwithstanding
Trumps and Pena Nietos recent disagreements,
will continue to increase since US natural gas
production will also rise, averaging about 4%
annually up to the year 2020, according to EIA
reference case projections which assumes no reg-
ulatory changes. If Trump removes over-regula-
tion put in place by the Obama administration
Week 04 02February2017
GLNG C O M M E N TA R Y
that 4% figure will likely be higher affecting both
pipeline gas exports and also LNG exports.
Mexico also has pipeline capacity expansions
under way that will utilise that gas. In 2015, Mex-
icos energy ministry unveiled a five-year plan to
expand the countrys natural gas pipeline net-
work significantly to accommodate higher levels
of natural gas imports from the US.
By 2020, the US will have five LNG projects in
operation Sabine Pass, Corpus Christi, Cam-
eron, Freeport and Cove Point for a total lique-
faction capacity of 64.7 million tonnes per year.
This would make it the worlds third largest LNG
exporter behind Australia and Qatar.
Owing to the relative cheapness of US LNG
and its proximity to Mexican LNG import facil-
ities, US LNG will likely make up the bulk of
Mexicos LNG future imports.
Indeed, Amsterdam-based ING Groep
and New York-based energy consultancy Pira
Energy Group said that gas exports, seen as sup-
porting jobs in the US while handing Mexico
cheap fuel, could end up being one trade that
bucks the political maelstrom.
Trump holds the upper hand
Meanwhile, it seems that preserving this integral
Week 04 02February2017 w w w. N E W S B A S E . c o m
GLNG
gas relationship between the US and Mexico Mexicos Manzanillo
could give the US an upper hand. LNG import terminal
This all boils down to exactly how protec-
tionist Trump decides to be, said Rob Carnell,
chief international economist at ING in London.
My guess is this will be targeted, not blan-
ket, and any retaliation is then down to Mexico,
and I imagine they would rather have the gas at
a decent price than deter it by putting up tariffs.
Not only does Mexico need cheap gas, it Not only does
also needs US markets for much of its crude oil
production.
Mexico need
In 2015, the US represented 60% of Mexican cheap gas, it
crude exports, before dropping to 48% last year,
according to energy data provider ClipperData. also needs US
Around 575,000 bpd of Mexican crude was
imported to the US last year, about 97% of it markets for much
being heavy crude.
Needless to say, a 20% tariff on Mexican
of its crude oil
imported goods to the US would also have a neg- production
ative impact on Mexicos beleaguered oil and gas
sector, while the US could replace much of these
crude imports with other suppliers, including
nearby heavy Canadian crude. This is another
dynamic that gives Trump the upper hand in
any kind of disagreement with his Mexican
counterpart.v
P5
GLNG C O M M E N TA R Y
LNG prices remain healthy as US
hints at a pro-oil and gas policy
LNG exports are climbing in the US, while European prices are healthy given LNG
shortages and cold weather. In Asia, China and Pakistan are driving LNG demand
growth, writes David Flanagan
GLOBAL US market
US gas prices remained roughly static in Janu-
ary, with the front-month contract quoted on
CME trading within a range of US$3.10-3.60
per mmBtu.
US exports of LNG to Asia continue to grow,
with the US Energy Information Administration
(EIA) noting that LNG output at the Sabine Pass
export complex was close to its maximum capac-
ity in early January.
While demand from the export sector has
been strong, the EIA noted this had been bal-
anced by somewhat weaker domestic demand
from power generation and industrial end-users.
Exports to Mexico, an important and grow-
ing component of US gas sales over the last year
or more, fell in early January, but recovered by
the end of the month.
So the demand side of the market has been
affected by a range of counteracting forces, and
given the generally healthy supply, with produc-
tion around 1% higher in early January, prices
have been kept in check.
As has been widely expected, Donald Trumps
US presidency looks like it will adopt a generally
hands-off attitude towards the evolution of
fossil fuel industries within the US.
This will probably translate into swift
approval of oil and gas exploration and produc-
tion projects, development of new oil and gas
pipelines, as we have already seen, and other
infrastructure.
Such an approach is suggestive of good avail-
ability of oil and gas, and hence impressions of
stability of supply of gas are enhanced.
However, it is not necessarily all good news
for gas market operators.
Trump may also look more favourably upon
coal production, which has up to now been
expected to decline in its contribution to the US
power generation sector.
If the US policy of coal-fired power plant
retirement comes to a halt, this will take away
one clear driver of gas demand growth in the US.
Another source of uncertainty may lie in
Trumps policy to create a more solid boundary
with Mexico.
P6 w w w. N E W S B A S E . c o m
GLNG
If this creates tension between the US and PROJECTION
Mexico, it is not impossible that this will have an FOR CME
impact on the gas trading relationship. How it HENRY HUB
could affect the relationship is not clear. FUTURES
But if gas supply becomes a political bargain- Week of
ing counter, or subject to some kind of surcharge, February 2-February 8
we should expect sales to decline, as the appetite US$3.10-3.40
to trade any goods or services could wane in such per mmBtu
a scenario.
Gas prices should remain stable in early Feb-
ruary, as supply appears stable to meet immedi-
ate demand expectations.
European market
European gas prices rallied in January driven
by an LNG supply squeeze and strong heat and
power demand owing to freezing weather.
Supply of LNG from Algerias Skikda LNG
complex was interrupted in late December and
early January, leading key offtakers in France,
Spain, Greece and others to seek alternative
sources.
This loss of supply from Algeria owing to
maintenance came at a time when gas demand
from the heat and power sector in Southern
Europe rose because of an unusually cold spell.
Downturn in LNG output over recent months
of Atlantic LNG in Trinidad and Tobago which
would normally have been bought by European
end-users also added to a sense of shortage.
As well as that, storage sector problems con-
tributed to concerns over availability.
The UKs Rough storage facility remains at
below-capacity operational status, although
some progress in restoring capacity is being
made.
LNG buyers compensated for supply diffi-
culties, and responded to higher gas demand by
importing LNG from alternative sources, most
notably Qatar, with France taking its first cargo.
Leaving aside seasonal features, there is still
underlying growth in demand for gas in Europe,
and this is driving LNG imports.
This is particularly evident in Spain, which
saw a dramatic rise in cargoes landed in
December.
New import capacity at French terminal
Week 04 02February2017
GLNG C O M M E N TA R Y
Dunkirk LNG and other features such as sharply
higher imports at Klaipeda LNG in the Baltic
Sea all add to a sense of brisk demand across the
continent.
Hence gas prices should remain somewhat
firm over the coming month, as this demand has
a basis in the real economy.
On the Leipzig-based European Energy
Exchange (EEX), the EGIX index for January
rose steadily from 18.8 euros (US$20.27) per
MWh on January 10 to 19.48 euros (US$21) on
January 25, closing at 21.62 euros (US$23.3) on
January 30.
Moving forward, the surge in European gas
prices in January was driven by an unusual com-
bination of circumstances, elements of which
will subside in February.
Moderation of temperatures is already occur-
ring and efforts to meet gas demand from diverse
sources continue.
Qatar, Norway, Nigeria and Peru are all eager
to sell LNG into Europe.
So while there has been a shortage of sorts
owing to maintenance at Skikda, there is no
serious LNG supply crunch and the market
has responded to the situation in a fully effective
manner.
Prices look likely to stabilise in February.
Asian market
LNG prices in Asia remained stable during early
January, with the CME JKM LNG futures price
for March 2017 trading around the US$8 per
mmBtu mark.
This is well up on prices seen in October and
November, and reflects a general recovery of
LNG demand in the region, particularly from
China.
Additionally, there was rising demand from
new importers such as Pakistan, which con-
cluded new term agreements in January.
The rise in coal prices in Q4 2016 also placed
coal at a competitive disadvantage against gas
and LNG, and this probably sparked a recovery
of demand for gas and LNG in power and indus-
trial sectors.
However, the upward trend in Asian LNG
Week 04 02February2017 w w w. N E W S B A S E . c o m
GLNG
prices came to a halt in late January, and the PROJECTION
March contract on CME lost some ground in FOR EEX
recent days. EGIX
This is largely because of seasonal factors Week of
and confidence in supply, and these features will February 2-February 8
most likely drag the CME March contract down 19.50-20.50 euros
in February. (US$21-22.1) per MWh
But while most market observers are confi-
dent of stability of supply of LNG in the years
ahead, especially from the US and Australia,
a modest note of concern was sounded over
the progress of Australias Ichthys LNG export
project.
A power supplier to the project pulled out
of its construction agreement with Ichthys, and
while the project still looks secure, there may be
delays and higher costs attached to this project.
The development has reminded the market
that the wave of new LNG export projects may
not necessarily proceed entirely free of the occa-
sional obstacle.
Moving forward, Chinese demand for gas
will undoubtedly rise in 2017.
Its new strategy to promote domestic use of
gas through the encouragement of new gas pipe-
line and storage facilities, as well as development
of gas contracts on a new trading exchange, will
encourage confidence among LNG importers to
expect a higher need for imported cargoes.
The extent to which domestic Chinese gas
production can meet rising gas demand is the
next big question.
China has relaxed rules for inward invest-
ment of its shale gas resources, in a bid to encour-
age overseas groups to take part in the industry.
But even allowing for this, given rising under-
lying demand for gas and a switch away from
coal to gas from existing end-users, the impres-
sion is that China is still anticipating higher LNG
imports in the years ahead.
Overall Asian demand is recovering, driven
by Chinese demand growth and demand from
new importers, such as Pakistan.
Japan may also see some disadvantage from
higher coal prices, if they continue, and reverse
its declining LNG import position in the months
ahead.v
P7
GLNG FORECASTS
BP forecasts strong growth for LNG
THE recently released 2017 edition of BPs
GLOBAL
Energy Outlook forecasts strong LNG supply
growth between 2015 and 2035, led by the US
and Australia.
The US, which BP expects to produce 70% of
the worlds shale gas by 2035, will contribute 19
bcf (538 mcm) per day to global supply, while
Australia will contribute 13 bcf (368 mcm) per
day.
Almost a third of the growth is predicted to
happen before 2020, with a second wave of sup-
ply growth not too far behind, but there are some
concerns.
There is a risk that this second wave of LNG
supply growth is slow to materialise, causing a
temporary period of tightness within LNG sup-
plies, the report said.
Australian LNG exports, according to the
report, will most likely be shipped to Asia. US
LNG exports, meanwhile, are likely to be more
diversified, providing the marginal source of gas
for markets in Europe, Asia and South and Cen-
tral America.
AFRICA
Skikda LNG restarts after
technical problems
ALGERIA ALGERIAS Skikda LNG export facility restarted
operations last week following a shutdown.
The 4.7 million tonne per year plant, which
is operated by state-owned oil and gas company
Sonatrach, shut down at the end of December
owing to a heat exchanger issue, just as winter
demand for heating in Europe intensified.
During the outage, Sonatrach met its contrac-
tual supply obligations by shipping LNG from
the smaller Arzew export plant.
Sonatrach CEO Amine Mazouzi criticised
comments from French gas grid operator GRT-
gaz, which said that the force majeure at Skikda
was contributing to the shortage in southern
France.
Algeria is a reliable supplier of gas, Mazouzi
said in a statement. We have fulfilled all our
commitments and responded to all requests
agreed upon particularly in January and even
during the technical shutdown of the liquefac-
tion unit at Skikda.
P8 w w w. N E W S B A S E . c o m
GLNG
In contrast, BP forecasts LNG exports from
the Middle East to remain flat at 12 bcf (340
mcm) per day, decreasing the regions share from
37% of global exports today to 16% by 2035.
While Asia will remain the primary destina-
tion for LNG during the outlook period, Europe
will also increasingly look to LNG to help meet The report also
the growing gap caused by the decline in domes-
tic gas production. That is predicted to help expects gas
LNG grow seven times faster than pipeline gas
trade from 32% of all globally traded gas today
markets to
to around half in 2017.
The report also expects gas markets to
become more
become more integrated, likely causing long- integrated, likely
term gas contracts to be increasingly indexed to
spot LNG prices. causing long-term
Still, BP warns that the strength of natural gas
demand could be challenged.
gas contracts to
Demand growth could be slower if less
priority is attached to moving away from coal,
be increasingly
the report said. In our alternative slower gas indexed to spot
case, the growth of natural gas is a third slower
between now and 2035.v LNG prices
A Sonatrach source had told Reuters earlier
in January that while the quantities delivered had
decreased, the minimum had been delivered to
GRTgaz.
While European countries receive the Sonatrach met
majority of Algerias LNG exports, Sonatrach
announced in October it was discussing ship- its contractual
ping natural gas to Middle Eastern countries
including Egypt, Jordan and Turkey.
supply
Algerias share of the LNG export market has obligations by
decreased significantly owing to increased LNG
production in Australia and the US. shipping LNG
Algerias gas output in 2016 was 132.2 bcm, an
increase on 128.3 bcm in 2015. from the smaller
Despite the fact that foreign firms remain
wary of Algerias contract terms, the country
Arzew export
expects to bring on a number of new gas fields in plant
2017, including new projects at the ageing Hassi
RMel field. Most of Sonatrachs current long-
term gas contracts with European customers
begin expiring in 2019 and 2020.v
Week 04 02February2017
GLNG AFRICA
Cameroon partner still in FLNG
scheme, says Golar LNG
CAMEROON REPORTS that Cameroons state-owned Societe
Nationale de Hydrocarbures has pulled out of the
Cameroon floating LNG (FLNG) project have
been denied by Golar LNG, which is converting
the vessel to be used for the project.
I can confirm that there is absolutely no
truth to the rumour that SNH have pulled out
of the FLNG Hilli project in Cameroon, Stuart
Buchanan, executive vice president business
development at Golar LNG, told NewsBase on
January 31.
Golar LNGs denial followed a January 25
report by ICIS that the project 25% stakeholder
SNH was pulling out from what would be the
worlds first ever LNG carrier-to-FLNG unit
conversion, which would in turn delay its first
LNG exports.
According to another Golar LNG executive,
the projects 75% shareholder Perenco is on
schedule with the construction work at Kribi in
Cameroon.
Golars role in the project is to convert its LNG
AMERICAS
Eagle LNG files with FERC
US EAGLE LNG has filed its application with the US
Federal Energy Regulatory Commission (FERC)
for a 1 million tonne per year export facility in
Jacksonville, Florida.
Announcing the filing on January 31, Eagle
LNG said it intended to transport the LNG to
markets in the Caribbean and Latin America for
power generation.
LNG is a competitively priced fuel alter-
native to diesel and heavy fuel oil. In addition,
natural gas fuel has significant environmental
benefits, reducing air pollution and carbon emis-
sions, said Eagle LNG CEO Dick Brown.
If Eagle LNG receives permission from
FERC to begin construction by the first quarter
of 2018, we anticipate completion of the project
in 2019.
The statement went on to say the Jacksonville
project, at a site on St Johns River, was intended
to provide a reliable supply to meet this power
demand, at a predictable cost.
Supplies may also go to marine bunkering,
Week 04 02February2017 w w w. N E W S B A S E . c o m
GLNG
carrier Golar Hilli into a 1 million tonne per year
FLNG production unit at the Keppel Shipyard in
Singapore. A final investment decision (FID) on
the project was arrived at in October 2015.
After its conversion, the vessel is scheduled to
start an eight-year contract to export LNG from
Cameroon from September 2017. Gazprom Golar LNGs
Marketing & Trading is contracted as the sole
offtaker for the projects 1.2 million tonnes per
denial followed
year of output over eight years. a January 25
The intended production is only 50% of the
vessels nameplate capacity, according to Golar report by ICIS that
LNG. The International Energy Agency (IEA)
has predicted that the Cameroonian FLNG the project 25%
scheme will reach first production in 2019, a
much more cautious estimate than Perencos
stakeholder SNH
expectation. was pulling out
There are other FLNG projects in planning
stages in Africa, most notably Ophir Energys
Fortuna project in Equatorial Guinea, and Enis
Coral South in Mozambique. FIDs have not been
taken on either of these schemes. v
with the company noting the importance of the
International Maritime Organisations (IMO)
0.5% cap on sulphur in marine fuels, as of 2020.
If Eagle LNG
A draft report was filed with FERC in August receives
2016. In addition to the Jacksonville plant, Eagle
LNG is also working on the Maxville LNG pro- permission from
ject, also in Jacksonville, and a marine bunkering
terminal, at Talleyrand. Both of these projects FERC to begin
should be operational in the summer of 2017.
The roof for the Maxvilles storage tank was put
construction
in place on January 10. by Q1 2018,
A deal was announced at the end of 2015
under which Crowley Puerto Rico Services we anticipate
selected Eagle LNG to provide LNG for new
ships, which will run from the US to Puerto Rico. completion in
Gas for this deal will come from the smaller-scale
Maxville project.
2019
Eagle LNG is a subsidiary of Ferus Natural Dick Brown
Gas Fuels and privately owned The Energy & CEO
Minerals Group (EMG). The latter manages Eagle LNG
private equity funds and has around US$14.7
billion of assets under management.v
P9
GLNG AUSTRALASIA
Australian LNG exports
reach record high
AUSTRALIA AUSTRALIAS massive drive to invest in LNG
infrastructure finally appears to be paying off
with a big surge in exports of the fuel in recent
months.
Supply from the US, however, remains a com-
petitive threat that could yet drag global LNG
prices and Australian export revenues down.
In November, Australias LNG exports
by value hit a record A$1.9 billion (US$ bil-
lion), despite persistent weakness in crude
prices, against which LNG prices are typically
benchmarked.
The second of three trains at the Gorgon LNG
plant is now almost at full capacity, while Origin
and ConocoPhillips have also almost achieved
full output at their Pacific LNG plant. The
APLNG plant has nearly doubled its gas intake
since September, just before the second of the
plants two trains started, data showed last week.
By the end of the decade, Australia looks set to
become the worlds biggest LNG exporter, with
around 80 million tonnes per year of capacity
ASIA
Japans LNG imports tumble in 2016
JAPAN JAPANS LNG imports declined in 2016 in
terms of both volume and value, according to fig-
ures released by the Finance Ministry last week.
In terms of volume, imports dropped 2% to
83.34 million tonnes in 2016. In terms of value,
imports slumped by 40.4% to 3.28 trillion yen
(US$28.5 billion) in 2016.
Japan posted a trade surplus with the rest of
the world for the first time in six years in 2016,
as overall imports shrank at a much faster pace
than overall exports in terms of value. Imports
slid 15.9%, led by oil and LNG, while exports
contracted by 7.4%.
Japan imported 26.46 million tonnes of LNG
from the 10-member Association of Southeast
Asian Nations (ASEAN), which includes Indo-
nesia and Malaysia, in 2016, up 2.9% year on
year. LNG imports from the Middle East, which
includes Qatar, fell by 13.0% to 19.63 million
tonnes.
The Finance Ministry figures do not show
the specific volume of LNG imports from each
P10 w w w. N E W S B A S E . c o m
GLNG
slated to come online by 2020.
Australia could, however, find itself overtaken
by the US just 15 years later, with BP predicting By the end of
late last month that the US will be the worlds big-
gest LNG producer by 2035. the decade,
By that date, it will be producing 18 bcf (144
million tonnes) of LNG per day, the energy Australia looks
major estimates. This compares with its forecast
for Australia of 17 bcf (130 million tonnes) per
set to become the
year, by 2035. worlds biggest
Australias big push to export LNG is also
causing complications at home, with the issue LNG exporter, with
becoming a hot potato politically. Residential
and industrial users on the countrys east coast around 80 million
in particular have seen their gas bills surge as
Australian gas is liquefied for export, creating
tonnes per year
pockets of shortages domestically. of capacity slated
This has triggered a call for restrictions on
the export of any future gas discoveries in some to come online by
states and, depending on the governments will-
ingness to bend to the public mood, this could 2020
dampen LNG exports in the future. v
of Indonesia, Malaysia, Qatar and Australia,
another major supplier of the fuel to Japan.
They do show that Japans LNG imports from
Russia, which has emerged as a new major sup-
plier of the fuel in recent years, slid by 3.4% in
2016 from a year earlier to 7.32 million tonnes.
Japanese LNG demand rose sharply as an
alternative fuel to atomic power in the wake of
the 2011 disaster at Tokyo Electric Power Co.s
(TEPCO) Fukushima No. 1 nuclear power plant
In terms of
(NPP).
But the government-affiliated Institute of
volume, imports
Energy Economics, Japan (IEE Japan) predicted dropped 2% to
in a recent report that the countrys LNG imports
would decline for the third straight year in fiscal 83.34 million
2017, which starts on April 1.
According to IEE Japan, LNG imports tum-
tonnes in 2016
bled 6.2% in fiscal 2015. They are predicted to
decline by 2.3% to 81.6 million tonnes in fiscal
2016 and then by 5.3% to 77.3 million tonnes in
fiscal 2017 as more nuclear reactors are expected
to come back online. v
Week 04 02February2017
GLNG ASIA
Worlds first barge-based
FSRU undocks
CHINA THE worlds first barge-based floating storage
and regasification unit (FSRU) has undocked
from its drydock at Nantong, China, where
Wison Offshore & Marine provided engineering,
procurement and construction (EPC) services
for Exmar of Belgium.
The undocking, topside installation has been
completed, paving the way for successful deliv-
ery, Wison Offshore & Marine said on January
25. The FSRU is the first to be built in China and
will become the worlds first FSRU with small-
scale storage capacity, Wison said.
The non-propelled FSRU barge has a regas-
ification capacity of 17 mcm per day. Two SPB
(self-supporting, prismatic IMO Type B) cargo
tanks, each with a capacity of 12,500 cubic
metres, are installed in the hull for LNG storage.
The FSRU is the second project on which
Wison and Exmar have been co-operating fol-
lowing the Caribbean FLNG. Wison noted in its
statement that it had adopted a modularisation
strategy, so that the hull and the topside modules
of the FSRU had been fabricated simultaneously.
Indonesia to limit new LNG
importers to PLN, IPPs
INDONESIA THE Indonesian Energy and Mineral Resources
Ministry is reportedly set to issue a decree allow-
ing only state-owned electric utility PLN and
independent power producers (IPPs) to become
new LNG importers.
Indonesian state-owned oil and gas company
Pertamina has already signed some LNG import
agreements with foreign suppliers, including its
first one with US-based Cheniere Energy, which
was signed in December 2013.
Under the new decree, only PLN and IPPs
will be allowed to import LNG, but they will
have to use the fuel themselves and cannot resell
it to others, Indonesian Energy and Mineral
Resources Minister Ignasius Jonan was quoted
as saying by local media outlets on January 27.
Despite being one of the worlds largest LNG
exporters, Indonesia has been constructing LNG
receiving terminals to meet sharply growing
domestic demand for natural gas amid a decline
in domestic production of the fuel.
Week 04 02February2017 w w w. N E W S B A S E . c o m
GLNG
This not only reduced the safety risks and
improved construction quality but also helped
to shorten the delivery schedule, Wison said.
It added that it had made a few technological
breakthroughs, including development of its
own cargo containment system and cargo-han-
dling system for the IHI SPB tanks. The FSRU is the
Meanwhile, the regasification module has
been successfully applied in the final perfor- first to be built
mance test of Caribbean FLNG project as its
temporary regasification skid, Wison noted.
in China and
The successful undocking of the FSRU once will become the
again verifies Wisons strong competence in the
lump sum turnkey projects for floating LNG worlds first FSRU
facilities, said An Wenxin, senior vice president
of Wison Offshore & Marine. with small-scale
It further proves that we are capable of pro-
viding the market with the most cost-effective
storage capacity
EPC solutions that are applicable in other LNG
developments, such as the new W-FSRP (Wison
Floating Storage, Regasification and Power
generation) series we launched recently, he
said.v
A significant portion of LNG produced at
Indonesias LNG plants, including the Bontang
plant in East Kalimantan and the Tangguh plant
in West Papua, is shipped to foreign countries
under long-term contracts. The Arun LNG plant
in Aceh, the Southeast Asian countrys first such
plant, has already been converted into an LNG
Only PLN and
receiving and regasification terminal.
The Indonesian governments move to allow
IPPs will be
PLN and IPPs to import LNG is also part of allowed to import
efforts to push down domestic gas prices.
To push [the] gas price to below US$6 per LNG, but they will
mmBtu, then room is given to industries to
import gas directly at certainly lower price,
have to use the
Cabinet Secretary Pramono Anung was quoted fuel themselves
as saying on January 24 by local media.
The Energy and Mineral Resources Ministry and cannot resell
issued a regulation in December stipulating the
reduced gas rate of around US$6 per mmBtu for it to others
the petrochemical, fertiliser and steel industries
starting on January 1.v
P11
GLNG ASIA
Tokyo Gas sees more change
in Japanese LNG sector
JAPAN JAPANS LNG industry could be undergo-
ing even more changes as the worlds top LNG
importer seeks to take advantage of the ongoing
supply glut and lower prices that oversupply has
brought.
Tokyo Gas president Michiaki Hirose said
that there should be at least two Japanese compa-
nies that can compete internationally, according
to a report last week in The Japan Times.
The company already in operation that
Hirose is referring to is JERA, a joint venture
formed in 2015 between Tokyo Electric Power
Co. (TEPCO) and Chubu Electric Power, whose
aim is to secure more favourable terms and pric-
ing for LNG as well as developing and operat-
ing thermal power plants (TPPs) and energy
infrastructure.
JERA is now the worlds largest buyer of LNG
and is creating fundamental changes in how the
super cooled fuel is procured and even resold.
Tokyo Gas will take the central role in form-
ing a pillar with other companies, Hirose said,
referring to JERA as the other pillar. He said that
EUROPE
Closure threat for European
gas storage facilities
EUROPE WEAKER margins for operating gas storage
facilities could see several sites in Europe close
over the next few years, industry leaders told a
conference last week.
The summer-winter spread the price differ-
ential for injecting and withdrawing gas in the
two seasons has narrowed sharply in recent
years, according to storage operators in Ger-
many and Austria.
The spread has historically been wide to
incentivise the injection of gas into storage in
summer when demand is lower and the with-
drawal of gas in winter when demand picks up.
Im surprised we havent seen more closures, added. That said, gas storage facilities are better
Erich Holzer, managing director of gas storage at
Austrias OMV, told the European Gas Confer-
ence in Vienna. There will be more closures in
the future summer-winter margins are too low
to keep these storage facilities [operating].
The economics say that you have to close
your storage sites that do not cover their costs,
agreed Michael Schmoltzer, head of energy stor-
age for Austria at Uniper. The summer-winter
P12 w w w. N E W S B A S E . c o m
GLNG
prices of LNG would be more strongly affected
by the size of buyers. He also stressed the need
to improve his companys competitiveness by
expanding.
Hirose named Kansai Electric Power and
Osaka Gas as a possible business integration
partners, but added that no concrete talks had There should
started. He also said Tokyo Gas would look
at the possibility of a tie-up with other Asian be at least
companies.
The Japan Times report said that since the two Japanese
liberalisation of the Japanese retail electricity
market in April 2016, Tokyo Gas had won more
companies that
than 600,000 power supply contracts the larg- can compete
est number among new entrants in the market.
However, the challenge is to now protect its internationally
own customer base from being eroded by new
competitors entering the retail gas market.
Hirose said that he would take it [competi-
tion] as an opportunity for internal reform. He
added that TEPCO was emerging as a major rival
to Tokyo Gas, as its potential is huge since it is an
overwhelming buyer of LNG.v
spread is putting us under pressure.
Around 3 bcm of gas storage capacity has
been closed in Europe over the past five years,
but another 12 bcm has been added, produc-
ing a net gain of 9 bcm, according to Michael
Kohl, commercial managing director at Innogy
Gas Storage. This has exacerbated competition Around 3 bcm
between storage operators across the continent,
putting individual companies under pressure. of gas storage
An expansion in the capacity of pipelines
running from Russia and Norway, plus increased
capacity has
supplies of LNG, also threaten the economics been closed in
of operating gas storage facilities in Europe, he
Europe over the
able to respond quickly to sudden supply short-
ages because withdrawals can be made quickly.
past five years,
In contrast, diverting LNG supplies from other
regions to Europe takes time, Kohl noted.
but another 12
Looking ahead, one upside of a raft of clo- bcm has been
sures at gas storage facilities across Europe
would be the prospects for improved economic added
performance amongst those that remained
operational.v
Week 04 02February2017
GLNG EUROPE
GRTgaz consolidates position
in French gas market
FRANCE FRENCH gas grid operator GRTgaz has agreed
to take over LNG importer Elengy as part of a
structural reorganisation by the latters parent
company Engie. The move involves no change of
ultimate ownership, given that both companies
are partly state-run, but has the effect of inte-
grating LNG procurement more closely with the
French gas transmission system.
The role of gas transmission system oper-
ators (TSOs) has become more important as
cross-border trade has grown and new intercon-
nectors are built to support the single EU energy
market. Gas TSOs have greater responsibilities
in terms of balancing trade, complying with EU
regulations and delivering more complex ser-
vices along the gas value chain.
GRTgazs position in the French and north-
west European gas market is expanding, as
demand surges on the back of power sector evo-
lution and clean air initiatives. It saw a 9.9% rise
in gas consumption in its distribution network to
463 TWh during 2016. Colder weather late last
year, as well as more favourable economic condi-
tions in France, were among the reasons for the
increase.
Market fundamentals were also strong,
including a rise in gas demand from the power
sector, with all 13 gas-fired thermal power plants
(TPPs) in operation during the year. This drove
power sector consumption up from 8 TWh in
2014 to 21 TWh in 2015, and higher still to 46
TWh in 2016.
The implementation of power capacity mar-
kets in France, which are designed to ensure the
availability of reliable generating capacity in the
event of low wind or solar rates, has stimulated
activity in Frances gas-fired power sector.
In addition, Paris pledge to eliminate coal
from its energy mix has fired up gas demand,
Week 04 02February2017 w w w. N E W S B A S E . c o m
GLNG
with recent outages at French nuclear power
plants (NPPs) also identifying the need for
increased contribution from TPPs.
As well as rising consumption in the power
sector, GRTgaz said that conversions from fuel
oil-fired industrial processes to gas-fired pro-
cesses, for example for boilers and furnaces,
added 4.2 TWh of consumption during 2016.
This means the prospects for higher gas usage
from industry is also favourable. The move to bring
The move to bring the transmission system
closer to LNG procurement will be expedited the transmission
by GRTgazs takeover of Elengy, which has three
LNG import terminals at Fos-sur-Mer, Fos
system closer to
Cavaou and Montoir de Bretagne. The deal will LNG procurement
help to ensure that gas purchasing is more closely
aligned with projected gas demand and day-to- will be expedited
day gas transmission requirements.
Among GRTgazs first challenges will be to by GRTgazs
manage the changing direction of French LNG
imports. Like most western European states,
takeover of Elengy
France has seen LNG procurement surge over
the last year or so, as low prices and tighter regu-
lation have spurred demand.
The 2016-17 winter cold snap saw France
buy LNG from Qatar for the first time. The
cargo was delivered to the new Dunkirk LNG
terminal, having been purchased by EDF Trad-
ing, and partly compensated for a lack of avail-
ability in December of Algerian LNG. Algeria
declared force majeure because of maintenance
at Sonatrachs liquefaction plants, leaving France
to scour the market for new LNG supply.
Another challenge for GRTgaz will be to
evaluate the overall trend of French gas demand
in relation to external conditions in order to
match the development of procurement and
new infrastructure with long-term LNG supply
contracts.v
P13
GLNG EUROPE
Croatia postpones LNG terminal until 2019
THE proposed LNG on the Croatian island of
CROATIA
Krk in the northern Adriatic is due to be com-
pleted a year later than originally planned, the
countrys government has said.
Croatian Energy Minister Slaven Dobrovic
said Zagreb was now seeking to complete the
project in 2019, without specifying why there
was a delay.
The floating LNG (FLNG) facility will have
capacity to handle around 2 bcm per year of gas.
It is seen as a strategic EU energy project that is
vital for the diversification of gas supply routes in
Southeastern Europe (SEE) and for reducing the
regions dependence on Russian gas. The cost of
the FLNG unit is still under wraps.
Croatia originally intended to build a land-
based LNG terminal with a capacity of up to 6
bcm per year of gas. Construction was due to
begin in mid-2016 and was targeted for comple-
tion by the end of 2019.
The onshore facility was estimated to cost
around 600 million euros (US$649 million),
with the price tag of the entire project (including
MIDDLE EAST
Bahrains NOGA closes
financing for LNG terminal
BAHRAIN BAHRAINS NOGA Holding, the investment
arm of the Bahrain National Oil and Gas Author-
ity, announced last week that it had finalised
US$741 million in financing for a LNG regasifi-
cation terminal on the island. A syndicate of nine
international and regional banks are involved in
the 20-year loan.
The terminal is located northeast of Khalifa
Bin Salman Port and construction began in Jan-
uary 2017. Work is under way by engineering,
procurement and construction (EPC) contrac-
tor GS Engineering and Construction and sub-
contractor Six Construct.
The scope of work involves dredging, creat-
ing a breakwater and driving piles for a receiving
jetty. The facility will include a floating storage
unit (FSU), a regasification platform and a sub-
sea pipeline from platform to shore, plus an
onshore receiving facility and nitrogen produc-
tion facility.
A Teekay LNG-Gulf Investment-Samsung
consortium is in charge of the project, which is
P14 w w w. N E W S B A S E . c o m
GLNG
pipelines and gas compressor stations) topping
1 billion euros (US$1.08 billion). The European
Investment Bank (EIB) earlier said it was consid-
ering supporting construction with loans total-
ling 339 million euros (US$366 million).
The Krk terminal was declared a project of Construction was
strategic importance for the Croatias energy
security in the long run, while the European due to begin in
Commission included the facility in its EU LNG
and gas storage strategy. The project also received
mid-2016 and
support from the US. was targeted for
However, the new Croatian government said
in March 2016 it would build a floating rather completion by the
than an onshore facility in a bid to slash project
cost and speed up its implementation. Economy end of 2019
Minister Tomislav Panenic said at the time that
the project would be finished in 2018.
In the meantime, Ukraine expressed interest
in joining forces with Croatia for the construc-
tion of the FLNG facility. According to Ukrain-
ian Prime Minister Volodymyr Groysman, the
country was ready to take part in the project in
order to diversify its gas supply routes.v
the first LNG regasification terminal developed
on a public-private partnership (PPP) basis in
the Middle East.
The terminal will be operated by Bahrain
LNG under a 20-year agreement and is sched-
uled to come into operation in 2019 with a
capacity to process 800 mmcf (22.6 mcm) per
The terminal
day of natural gas.
The LNG imports will enable Bahrain to
will be operated
address seasonal peak demand and fuel indus- by Bahrain LNG
trial growth. Bahrain LNG is a jointly owned
partnership between NOGA Holding, Teekay under a 20-year
LNG, GIC and Samsung C&T.
K-SURE will provide commercial and polit-
agreement and
ical risk cover for the project for some 80% of is scheduled
the financing, while Standard Chartered Bank,
Arab Petroleum Investments Corp. (Apicorp) to come into
and the Korea Development Bank are lead
arrangers. Other banks involved in funding are operation in 2019
Ahli United Bank BSC, Banco Santander, Credit
Agricole Corporate and Investment Bank, ING
Bank, Natixis and Societe Generale.v
Week 04 02February2017
GLNG
AFRICA
Algeria top gas supplier to
Spain in 2016, eyes more EU
exports
Algeria expects to increase exports of natural
gas in 2017 as it looks to build on its top spot
in sales to Spain last year and strong sales to
Italy and Portugal, a source at state energy
firm Sonatrach said. Gas exports are expected
to grow to 57 bcm after sales of 54 bcm last
year, the source said.
Algeria sold 20 bcm of gas to Spain last
year, covering 55% of Spains needs. It supplied
16% of Italys demand and 15% of Portugals,
the source said. Long a top supplier to Europe
through pipelines and more recently though
LNG, Algeria has seen its oil and gas output
stagnate in recent years. Last year, however, it
made progress in bolstering output.Algerias
gas output in 2016 was 132.2 bcm, a rise from
128.3 bcm in 2015. It had fallen to 127.3 bcm
in 2013, from 145.8 billion in 2010. Sonatrach
now expects to produce 141 bcm in 2017, the
source said.
Last year the EU and Algerian energy
officials held a summit where EU officials
and energy companies urged Algeria to
adapt to more competitive energy markets to
allow more gas to flow north. Sonatrach has
taken a more flexible approach with foreign
companies after several bidding rounds failed
to attract new investment. The focus has
shifted to improving existing field output and
bringing online delayed projects.
Boosting existing fields and new fields
coming online this year will push output up,
Sonatrachs CEO Amine Mazouzi said on
Thursday on the sidelines of a conference.
Foreign energy firms remain wary of Algerias
contract terms and most shied away from the
countrys last two bidding rounds for new
Week 04 02February2017
NEWS IN BRIEF
fields. Lower global oil prices since mid-
2014 have also slowed development. Algeria,
competing with US LNG production and
others, is boosting output to defend its market
share in Europe. Most of Sonatrachs current
long-term gas contracts with European
customers begin expiring in 2019 and 2020.
REUTERS, January 27, 2017
AMERICAS
Canadian indigenous
groups concerned about
LNG pipeline project
The Canadian federal cabinet has approved
an C$11.4-billion pipeline project that would
transport natural gas over 900 km from
northern British Columbia to the Prince
Rupert area. The Pacific Northwest LNG
project is backed by the giant Malaysian
company Petronas. Environmentalists and
First Nations have expressed their concern
regarding the environmental damages that
could be caused by the pipeline. Indeed, the
Canadian Environmental Assessment Agency
concluded that the project would provoke
a significant increase in greenhouse gas
emissions and contribute to climate change.
The terminal could also threaten wildlife,
especially harbour porpoises and the salmon
in the Skeena river estuary.
Pacific Northwest LNG responded that
the pipeline and terminal would reduce
greenhouse emissions from Asian coal-fired
plants. Moreover, the projects approval
has been submitted to an array of 190
conditions meant to reduce its environmental
consequences, including a cap on greenhouse
gas emissions that would cut them to 4.3
millions tonnes per year, 900,000 tonnes less
than what had initially been proposed by the
w w w. N E W S B A S E . c o m
GLNG
proponent, according to The Globe and Mail.
Environmentalists argue that despite
this measure, the project is inconsistent
with Canadas climate commitments. First
Nations and experts warn that the terminal
would likely harm the salmon population.
Jonathan Moore, associate professor at Simon
Fraser Universitys School of Resource and
Environmental Management and department
of biological sciences, and his graduate
students conducted collaborative research
with First Nations fisheries programs.
THE PEAK (CANADA), January 30, 2017
First Nations granted role
overseeing proposed
Pacific Northwest LNG
facility
The BC and federal governments say they
have secured a deal to give First Nations a role
in environmental monitoring of the proposed
C$11.4-billion Pacific Northwest LNG facility
and export terminal. The pact with the Lax
Kwalaams Band and the Metlakatla First
Nation is designed to address indigenous
opposition to the project on Lelu Island in
northwestern British Columbia, by providing
the two communities with an oversight role
in the development and operation of the LNG
facility.
This is historic in nature, typically its
not a role we share with First Nations,
said BC Minister of Aboriginal Relations
and Reconciliation John Rustad. The two
indigenous communities, which hold the
strongest aboriginal title claims to the territory
where the facility is proposed, will each have
a seat on an environmental-monitoring
committee that will oversee compliance
with the regulations set down in the projects
environmental certificate.
The proposed LNG terminal received
environmental approval from Ottawa last fall,
but has not yet received a green light from the
financial backers, led by Malaysias state oil
company Petronas. The Petronas project was
touted to become the first major Canadian
exporter of LNG, which would have been a
political coup for Premier Christy Clark, who
campaigned in the 2013 provincial election on
the promise of a lucrative new LNG industry.
But a final investment decision has been
delayed due to weak energy prices, and that
verdict is now not expected until after the next
provincial election this May.
THE GLOBE AND MAIL (CANADA), January 31,
2017
P15
GLNG
Company plans LNG plant at
Port Fourchon, Louisiana
An US$800-million LNG plant and export
terminal is being planned at Port Fourchon,
officials said. The Greater Lafourche Port
Commission says and one of the ports
tenants, Energy World USA, announced the
proposed development. Energy World USAs
proposed plant will eventually produce up to
2 mtpa of LNG for export, officials said in a
news release. A separate, smaller plant would
produce LNG to fuel the next generation of
offshore supply boats.
While it is still very early in the planning
and regulatory process, we are excited to be
able to tell the community and our tenants
about this potential opportunity to continue
to keep Port Fourchon at the very cutting edge
of the oil-and-gas services industry, said the
ports executive director, Chett Chiasson.
We feel that this is a great addition to the
suite of vessel services that are offered by our
tenants and greatly enhances our capability
and versatility as the premier services hub for
the oil and gas industry, Chaisson said.
HOUMA TODAY (US), January 31, 2017
ASIA
AG&P signs MoU with
Hindustan LNG to build new
terminal
AG&P (Atlantic, Gulf and Pacific) of the
Philippines, and Hindustan (India) LNG have
signed a memorandum of understanding
(MoU) to supply tolled gas to power stations
in the East Godavari region of Andhra
Pradesh, on Indias southeast coast. Under the
agreement, AG&P will provide a solution to
deliver re-gasified LNG via a new LNG import
terminal AG&P will design and build at the
port in Andhra Pradesh, Kallanish Energy
reports. Andhra Pradesh is the ideal place for
developing an LNG import facility to serve the
P16
NEWS IN BRIEF
growing energy demands of the east coast of
India where existing gas-fired power projects
urgently need a reliable supply of LNG, said
chairman of HLNG C R Prasad.
AG&P will be responsible for designing
and building all the required facilities for the
import terminal, including a floating storage
and mooring system, regasification terminal,
related utilities and the provision of tolled
gas to power plants and other users. AG&P
will also carry out any necessary conversion
works and, upon commissioning, ongoing
operations and maintenance activities.
It is a great privilege for AG&P to help
implement Indias vision for clean, low-cost,
flexible and reliable power, said AG&P
chairman Jose P Leviste Jr. We see the
provision of tolled gas to supply power and
fuel to factories, homes and even transport
in an environmentally clean way as crucial
elements of Andhra Pradeshs future.
KALLENISH ENERGY (UK), January 31, 2017
Indias Arun Jaitley halves
import duty on LNG to 2.5%
In a bid to promote a gas-based economy,
Indian Finance Minister Arun Jaitley has
halved the import duty on LNG to 2.5%, a
move that will help cut cost of power and
fertiliser production. Considering the wide
range of use of LNG as fuel as well as feed
stock for petro-chemicals sector, I propose to
reduce the basic customs duty on LNG from
5% to 2.5%, he said presenting the budget for
2017-18.
The move will result in cheaper import
of fuel, which makes up for roughly 40% of
the gas consumed in the country, resulting
in a lower cost of power generation, urea
and petrochemical production. Oil Minister
Dharmendra Pradhan said the move is in line
with the vision of the government to make
India a gas-based economy by cutting reliance
on polluting liquid fuels and increasing use of
cleaner fuel.
Essar Oil managing director and CEO
Lalit Kumar Gupta said: The reduction in
LNG duty is welcome as it will reduce the
w w w. N E W S B A S E . c o m
GLNG
cost of energy in the system. Partner and
KPMG head of energy and natural resources
in India Manish Aggarwal said halving of
basic customs duty on LNG would support
stranded gas power plants. It would also
encourage mid-stream infrastructure creation
from LNG terminals to gas pipelines and city
gas distribution networks.
THE HANS INDIA (INDIA), February 2, 2017
Pakistan plans more LNG
supply tenders after Gunvor
wins bid
Pakistan plans to launch at least two LNG
supply tenders in the coming months, a
senior Pakistani energy industry official said,
confirming that trading house Gunvor has
won a tender to supply 60 LNG shipments
to Pakistan over the next five years. Pakistan
has become a major buyer in the global LNG
markets in recent years, with the government
frantically building pipelines and port
terminals to speed up imports to alleviate
chronic energy shortages.
About a third of Pakistans energy supply
comes from expensive furnace oil, and the
South Asian nation of 180 million people can
currently only meet two thirds of its demand
for gas. The emergence of Pakistan as a large-
scale buyer is a welcome boost in the market
for LNG as demand slows in traditional big
buyers like Japan. Pakistans second LNG
terminal will become operational in the
middle of 2017, with an import capacity of
600 mcf of gas per day. That equates to about
six cargo shipments per month.
A senior Pakistani government official
said Pakistan LNG, a new state-owned
company set up to import gas, was working
on fresh deals before the terminal becomes
operational.
REUTERS, January 31, 2017
Excelerate Energy to install
second FSRU in Port Qasim,
Pakistan
Following negotiations with the consortium
of Engro, Fatima, and Shell over the last few
months, Texas-headquartered Excelerate
Energy is helping the consortium deliver a
proposed floating LNG terminal and second
FSRU to the Pakistan market. The fast track
floating storage regasification unit (FSRU)
project will supply much-needed natural
gas to Pakistan to help mitigate the supply
shortfalls the country is currently facing.
Week 04 02February2017
GLNG NEWS IN BRIEF GLNG

Excelerate has a proven track record of

delivering fast-track floating regasification
projects around the world and will use its
experience to help the consortium meet
the aggressive delivery schedule required
for the terminal. Most recently, Excelerate
successfully commissioned GASCOs Ruwais
floating LNG terminal in the UAE, which was
implemented in less than 12 months.
The consortiums project site is located
just across the Port Qasim channel and the
countrys first LNG import terminal that
Elengy installed early last year utilising
Excelerates floating regas technology. When
the consortiums project comes on line in
2018, the total regasification capacity from
Excelerates two FSRUs at Port Qasim will be
significantly over 1 billion cubic feet per day,
which is enough natural gas to support over 6
GW of power generation.
Excelerate is extremely excited to work
with this strong partnership of Engro,
Fatima, and Shell to implement this project
in what we view as one of the largest markets
for natural gas in the world, stated chief
development officer Daniel Bustos. Our
project development and operations teams
are aggressively reviewing implementation
plans for this project. We have been very
pleased to be involved with the countrys first
floating LNG terminal developed by Engros
subsidiary Elengy over the past 18 months.
EXCELERATE ENERGY (US), January 31, 2017
AUSTRALASIA
Major delays for Australian
to several sources with knowledge of the
matter. Chevron, Shell, and Inpex would not
comment on potential delays.
REUTERS, January 26, 2017
TechnipFMC to carry out
well intervention work in
the Ichthys field
TechnipFMC has announced that its
subsidiary has signed an agreement with
INPEX Operations Australia for riserless
light well intervention (RLWI) services in
the Ichthys field for the Ichthys LNG Project.
The field is located approximately 220 km
offshore Western Australia. Under the terms
of the agreement, TechnipFMC will deploy its
deepwater RLWI stack, as well as two Schilling
Robotics ROVs, from the Island Performer
vessel, to carry out riserless well access
services on up to 20 wells in the field. Work
will commence in 2017.
President of Subsea Services for
TechnipFMC Barry Glickman said:
This project represents the next step in
TechnipFMCs strategy for geographic
expansion of RLWI services. Our RLWI stacks
have been used to complete more than 400
RLWI operations over the last 10 years. RLWI
helps operators improve well productivity and
equipment uptime, and reduce cost by shifting
intervention work from rigs to lower-cost
vessels. We are proud to be selected by the
Ichthys LNG Project to support well access
services work in the Ichthys field.
LNG INDUSTRY, January 26, 2017
Inpex, Shell in race for
Browse LNG start-up
Two huge LNG export projects being
developed off the far northwest coast are
in a race to start up production because
whoever starts up first will get more gas,
according to consultancy Wood Mackenzie.
Inpex Corporations US$37-billion Ichthys
venture and Shells Prelude floating venture
are tapping offshore gas fields that are
connected, allowing gas to flow between the
two reservoirs, said Wood Mackenzie analyst
Saul Kavonic. As a result, the first to start
production will benefit.
Its a case of whoever sucks gas first, will
suck most, Kavonic said.
The two projects are also in competition
for construction resources in a South Korean
shipyard where they each have large offshore
equipment being built. Both the Prelude
floating LNG vessel and the central processing
platform for Ichthys are under construction
in the Samsung Heavy Industries shipyard
in Geoje, while a production ship for
Ichthys is being built in the nearby Daewoo
Shipbuilding & Marine Engineering yard.
Both are suffering from cost and schedule
setbacks.
Construction challenges, competition
for resources between the two projects in
the yards, and financial challenges facing the
yard contractor, have all contributed to the
delay, Kavonic said, adding that the start-up
of production at the ventures could be delayed
well into 2018.
Inpex has yet to comment directly on the

LNG output increase

Australias plans for a huge increase in its
production of LNG are being dealt a big blow
by a series of production delays, as energy
companies struggle with technical problems
and cost overruns, Reuters reported. The
country is still likely to become the worlds
biggest LNG exporter, dispatching about
85 mtpa by the end of the decade, up from
30.7 million tonnes in 2015 and 45.1 million
tonnes last year. But the pace of growth is
much slower than expected because of snafus
and higher-than-expected costs that have
delayed plans to start or increase LNG exports
from four megaprojects, Gorgon, Ichthys,
Prelude and Wheatstone, all along or off the
coast of northwest Australia.
Now at least three of them, Shells
Prelude floating LNG production vessel,
Inpexs Ichtys project, and the expansion of
Chevrons Gorgon operation, will not begin
exporting until 2018 or even later, rather
than 2017 as previously planned, according

Week 04 02February2017 w w w. N E W S B A S E . c o m P17

GLNG
Wood Mackenzie analysis but it said earlier
this week after the collapse of a sub-contract
for a power plant at the onshore Ichthys site
at Darwin that it was still targeting start-up in
the September quarter this year. The company,
partly owned by the Japanese government,
also has a stake in Prelude.
AUSTRALIAN FINANCIAL REVIEW (AUSTRALIA),
January 27, 2017
Commissioning of final
Gorgon LNG train under way
The first two processing facilities at the
Gorgon LNG project are operating near
capacity and commissioning of the final
train is under way, with production expected
early in the second quarter, according to
Chevron chief executive John Watson, the
West Australian reported. Watson told
analysts at the weekend that after a difficult
2016 Chevron saw a great year for production
from their terrific Gorgon and Wheatstone
projects, as the company spends US$2 billion
(A$2.6 billion) more on construction.
The only remaining thing to do is to
bring on the Gorgon offshore field, weve been
running on the Jansz field, Watson said of
the two giant gas sources underpinning the
US$54-billion project. Gorgon shipped its
first LNG cargo in March but the first train
had many shut downs throughout the year.
Watson said that lessons learnt from train one
allowed train two to achieve more than 90%
capacity within a week of its October start up.
THE WEST AUSTRALIAN (AUSTRALIA), January
30, 2017
Senex lines up US partner to
fund gas project
Senex Energy has lined up private equity firm
EIG Global Energy Partners to provide up
to US$300 million to back a coal seam gas
project in Australia, which could help ease
a pending gas shortage in the countrys east.
Australias eastern states face a gas crunch
from 2018 as demand is set to triple to feed
LNG exports, while supply growth has been
curbed by states opposed to some onshore
drilling.
Senex said it had raised A$55 million
(US$41.67 million) in a share sale to funds
managed by EIG and other institutional
investors at 31.5 cents per share, and was
seeking to raise a further A$40 million
from shareholders. Funds raised will help
the company advance its Western Surat gas
project in Queensland, boost oil and gas
output in the Cooper Basin and look for
opportunities to deliver gas into the east coast
P18
NEWS IN BRIEF
market, Senex said.
EIG has also committed to provide up
to US$300 million for Senexs Western
Surat gas project in Queensland on terms
yet to be agreed. The Western Surat Gas
Project is in prime position to supply gas
into the structurally short east coast gas
market, EIG chief executive Blair Thomas
said in a statement, adding that now was the
opportune time to develop Senexs assets.
EIG has made a number of investments
in Australian coal seam gas over the past two
decades, including backing Tipperary Corp.,
which was taken over by Santos in 2005. It
also backed Arrow Energy, whose Australian
assets were bought by Shell and PetroChina
for A$3.4 billion in 2010. EIG already owns
about 2.7% of Senex and agreed to buy about
A$46 million in new shares, which would give
it a 12% stake in Senex following the capital
raising.
REUTERS, February 1, 2017
EUROPE
CMA CGM, Total to lower
shipping emissions
Container shipping group CMA CGM
has signed an agreement with Total under
which the oil and gas major will supply
lower emission fuels in line with stricter
environmental regulations in the shipping
sector. Under a three-year memorandum of
understanding, Total will become a multi-
fuel supplier to CMA CGM, providing fuel
oil with 0.5% sulphur content and LNG, the
French companies said.
The United Nations shipping agency last
year set global regulations to cut the amount
of sulphur emissions from vessels to 0.5% of
fuel content as of 2020 compared with 3.5%
currently. Total would also supply fuel with
3.5% sulphur content to CMA CGM for ships
equipped with exhaust gas cleaning systems,
or scrubbers, the companies said.
Privately owned CMA CGM, the worlds
third-largest container line, also signed a MoU
with French energy group Engie last year to
develop LNG for ships
REUTERS, February 1, 2017
MAN Cryo to deliver LNG
fuel system
MAN Diesel & Turbos marine LNG fuel-
gas-system manufacturer, MAN Cryo, has
announced that it has signed a contract with
Sefine Shipyard to deliver a marine LNG
fuel-gas supply system (FGSS) to an Italian
w w w. N E W S B A S E . c o m
GLNG
ferry. The LNG supply system consists of a
150-cubic-metre vacuum-insulated storage
tank, with auxiliary equipment, including an
LNG vaporiser, pressure build-up unit, bunker
station and heat exchanger.
The system, which is scheduled for delivery
in November 2017, will supply gas to the
ferrys three dual-fuel propulsion engines.
The vessel will be the first of its kind with
LNG propulsion. The ferry, which will be
owned by Caronte & Tourist, will primarily
operate on the strait of Messina between Villa
San Giovanni and the city of Messina.
HYDROCARBON ENGINEERING, January 31,
2017
Baltic regional LNG terminal
should be built at Muuga
Muuga continues to be the most suitable
location for the regional terminal for LNG,
the fuel transit company Vopak EOS said.
When the governments of the Baltic countries
and Finland start again to look for a new
location for the regional LNG terminal that
is necessary for ensuring the regions energy
security, the Tallinn LNG terminal to be built
in Muuga harbour has several advantages,
Vopak, which has been leading the Muuga
project, said.
Vopak EOS finds that it makes sense that
the Baltic countries are ready to evaluate the
situation on the level of governments and
think what location and solution would be
the best for the regional terminal. Just as
Prime Minister [Juri] Ratas said yesterday, the
solution that is the most sensible economically
and the most long-term should be identified
when it comes to the regional LNG terminal,
Vopak EOS CEO Arnout Lugtmeijer
said. Lithuanian Prime Minister Saulius
Skvernelis said at a meeting of Baltic heads of
government in Tallinn that in his opinion the
LNG terminal in Klaipeda, Lithuania, meets
the needs of the whole region. Estonian Prime
Minister Juri Ratas meanwhile said after the
press conference that things are not certain
yet.
THE BALTIC COURSE (LATVIA), February 1,
2017
MIDDLE EAST
NIOC in talks to revive LNG
projects
In line with policies to expand liquefied
natural gas exports, negotiations are
underway with European and Asian gas giants
to restart incomplete LNG projects, deputy
Week 04 02February2017
GLNG
for engineering and development affairs at
the National Iranian Oil Company said. Iran
should turn to LNG exports as shipment
of liquefied gas is less risky compared to
piped exports and is more cost-effective for
long-distance consignments, Gholamreza
Manouchehri was quoted as saying by IRNA.
According to the official, Russia, France,
Romania, Lithuania and China have already
shown interest in the LNG projects.
Asked about the countrys largest LNG
project, known as Iran LNG, he said that the
plan has made a 60% progress with US$1.85
billion in investment before international
sanctions were imposed. Talks are underway
to complete it in two years at a total cost of
US$3-4 billion. Manouchehri believes that
Iran has the potential to break into the global
LNG market, despite years of stalemate
in such projects and a significant gap in
production compared to rival producers in
the region.
Manouchehri added that establishing
small-scale and floating LNG (FLNG) units
with 10 mtpa of production capacity is
another plausible scenario. An FLNG facility
is a seaborne structure that would produce,
liquefy, store and transfer LNG at sea before
carriers ship it directly to markets.
FINANCIAL TRIBUNE (IRAN), January 30, 2017
Qatar Petroleum bows to
changing times with merger
of LNG units
Qatars state oil company aims to merge a
pair of massive LNG subsidiaries by the end
of this year, hoping to improve efficiency and
withstand tougher international competition.
Qatar Petroleums decision to integrate
Qatargas and RasGas, the two units, follows
moves by Australian and US rivals to increase
production, aggravating a persistent global
LNG glut. With the prolonged oil price slump
Week 04 02February2017
NEWS IN BRIEF
having also affected the market, LNG spot
prices are hovering around US$7 per million
Btu, roughly half the peak of over US$15 in
2014.
With annual production reaching 41
million tonnes, Qatargas is the worlds biggest
LNG producer, followed by RasGas, which
turns out 36 million tonnes. To say the new
company will have a formidable global
footprint would be putting it mildly. Late last
year, Qatar Petroleum said it wanted to form
a united front in the international market.
The merged company will inherit the name
Qatargas.
There is little reason to think the
headwinds will die down anytime soon. The
European economy remains sluggish, while
Chinas slowdown is limiting its thirst for
energy. These and other factors mean demand
is unlikely to grow as steadily as it once did.
The emergence of Australia and the US as
major LNG exporters has also changed the
game. Australia, in particular, is expected
to soon overtake Qatar as the worlds No. 1
exporter of the fuel.
Other countries, including Russia
and Indonesia, are also expanding their
production facilities. Qatar, with its
annual production capacity of 77 million
tonnes, has maintained a strong position
thanks to long-term supply contracts with
overseas customers. But with key contracts
approaching expiry, the outlook is growing
murky.
NIKKEI ASIAN REVIEW (JAPAN), February 2,
2017
LNG stations to be
established in Turkey
Turkeys Energy Market Regulatory Authority
(EPDK) has taken an important step after
Turkeys first floating LNG plant, a visionary
project headed by Energy and Natural
Resources Minister Berat Albayrak, was put
w w w. N E W S B A S E . c o m
GLNG
into use in Izmirs Aliaga district. The EPDK
decided to establish LNG stations following
a regulatory amendment. Particularly in
trucks and buses, the use of LNG, which is the
application area, is being promoted to reduce
carbon dioxide emissions and encourage
environmentally friendly transportation.
In line with the board decision taken by
the EPDK, the natural gas market licence
regulation will be amended. Wholesale
licence holders with LNG stations will be
able to carry out the sale of LNG for use
as fuel in road vehicles at the facilities they
establish at a certain addresses. In this way,
only licence holders will be able to sell LNG at
the facilities that are subject to their licences.
Other wholesale companies selling natural gas
throughout the country are obliged to take
separate licences if they want to sell LNG used
as fuel for road vehicles.
The LNG, which is a field of application
primarily in vehicles such as trucks and
buses, is not used for small vehicles since
it is not suitable for storage. With the new
regulation, the use of natural gas will be
extended and the emission of carbon dioxide
will be reduced to promote environmentally
friendly transportation. Turkeys first floating
liquefied natural gas unit under Etki Liman
Isletmeleri Dogal Gaz Ithalat ve Ticaret AS
(Etki Port Operations Natural Gas Import
and Trade, Inc.) with a total investment of 330
million Turkish lira (US$86.15 million), was
completed in just six months.
DAILY SABAH (TURKEY), January 30, 2017
MAN Cryo to deliver LNG
fuel system to Turkey
Equipment manufacturer MAN Cryo is to
deliver a marine LNG fuel-gas supply system
and auxiliary equipment to Sefine Shipyard
in Turkey. The system comprises a vacuum-
insulated storage tank with capacity of 150
cubic metres along with an LNG vaporiser,
pressure build-up unit, bunker station and
heat exchanger. The system will be used in the
construction of a ferry for Italian ship owner
Caronte & Tourist.
The MAN Cryo system will supply gas to
the ferrys three dual-fuel propulsion engines
and is scheduled for delivery in November
2017. The vessel will be the first of its kind
with LNG propulsion, a spokesperson for
MAN Cyro said. The equipment will be
installed aboard a double-ended RoPax ferry,
designed by LMG Marin, which will primarily
operate on the strait of Messina between Villa
San Giovanni.
BREAK BULK, February 2, 2017
P19
GLNG GLNG

Following demand from our customers, NewsBase has

acquired ProjectsOGP - a global online project tracking
database, covering the lifecycle of over 5,000 oil, gas and
petrochemical projects.
presents
Premium project
tracking solution

Over 5,000 projects

tracked worth
US $7.2 Trillion

ProjectsOGP is a global online project tracking database, which tracks the lifecycle of oil, gas and
petrochemical projects. The tracker is a valuable tool for business development, project managers and key
decision makers to keep up-to-date with market developments and competitor activity.

FEATurES AND BENEFITS OF PROJECTSOGP

A Z
New decommissioning section Create business opportunities
and keep an eye on competitors

Full project breakdown: Extract information by Excel or PDF

Value Completion date - from projects, including operators,
Location Oil reserves
Ownership Operators contractors, values and dates
Start date Contractors

Saves time and money on resources Tailored to you - receive email

alerts on your projects of interest

NewsBase Ltd. For more information or to arrange a

Tel: +44 (0)131 478 7000 demonstration, contact news@newsbase.com

P20 w w w. N E W S B A S E . c o m Week 04 02February2017

GLNG GLNG

An extrapolation of those numbers

would reassure the short-term horizon
observer that all is well informed
strategists would see a more threatening
picture, with another large Negative
Disequilibrium [oversupply] brewing.

NEWSBASE RESEARCH
GLOBAL OIL FORECASTING SERVICE
LONG-TERM OUTLOOK
email nbr@newsbase.com for more details

Week 04 02February2017 w w w. N E W S B A S E . c o m P21

 v
NEWSBASE
Our customers include...

If you are interested in your companys logo appearing on this page, please contact your Customer
Accounts Manager on +44 131 478 7000.