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08 October 2018

Weekly news roundup (1-5 October)

Analysis

Shell has taken the landmark decision to commit to building the first phase of LNG Canada after economic and fiscal factors converged to improve the investment case for the long-delayed 14-mtpa project in British Columbia.

A final investment decision on LNG Canada project has prompted speculation about a new wave of large-scale greenfield liquefaction investment, but a closer look at the project’s commercial structure suggests that its investment case cannot easily be replicated elsewhere.

International

Bolivia’s hopes of diversifying gas exports through LNG now rest on coastal access in Peru after the International Court of Justice made a binding ruling that Chile has no obligation to negotiate over access to its Pacific coast.

Shell global downstream LNG has appointed Tahir Faruqui as its new general manager.

US & Canada

US – Woodfibre LNG has signed a preliminary LNG supply deal with CNOOC Gas and Power for 0.75 mtpa over 13 years, inching the western Canadian project a step closer to a final investment (FID) decision.

Canadian natural gas transportation company Encana has sold its San Juan assets in New Mexico for USD 480 million to Denver-based DJR Energy.

ExxonMobil is reportedly looking to sell assets in the US Gulf of Mexico to focus on other key areas of development, sources told Reuters.

The EQT-led Mountain Valley gas pipeline has been dealt another blow after a court withdrew a water permit, meaning construction must stop on half of the 300-mile line.

Asia Pacific

Vietnam – Hong Kong-based containerships outfit Seaspan Corporation has unveiled plans to invest in a new LNG-to-power plant in Vietnam – potentially the country’s ninth – after signing an agreement with Singapore-based construction contractor Swiber Holdings.

Australasia

Australia – National competition watchdog ACCC’s decision to publish LNG export prices in a bid to improve gas market transparency will not drive down domestic gas prices, market observers have said.

East Timor – The government of East Timor has reportedly signed a USD 350 million deal to buy ConocoPhillips’ 30% stake in the coveted Greater Sunrise prospect, in a move that could further complicate field development.

New Zealand – The country’s second largest oil and gas producer is taking the government to court, claiming its proposed ban on offshore exploration is unlawful and that New Zealand will become import dependent if the policy is enacted.

Europe

E– The European Commission has nearly maxed out one of its main funding pots for low-emissions transport after deciding to dole out some USD 800 million to 49 projects – 15 of which are gas-related.

Croatia – Croatia LNG has again extended the deadline of its open season for the Adriatic LNG terminal citing “additional requests from interested terminal users”.

Estonia – Energy company Eesti Gaas has placed an order with Dutch shipyard Damen Group for the first LNG bunkering vessel for the north-east Baltic Sea.

Netherlands – Shell and Sovcomflot carried out the first ship-to-ship LNG bunkering operation under the fuel supply agreement the pair signed in 2017.

Dutch dredging company Boskalis will use biofuel to power its fleet that is installing the export cable to the Borssele Alpha wind farm project, saying LNG is less effective as a marine fuel in terms of carbon savings.

Norway / Romania – Austrian energy firm OMV has moved to adjust its European portfolio, selling nine onshore deposits in Romania and agreeing to buy a roughly 25% interest in two phases of the Urengoy field in Norway.

UK – Equinor has returned to one of the largest undeveloped fields on the UK Continental Shelf by agreeing to take Chevron’s 40% operator stake in the Rosebank project – five years after selling its 30% stake to OMV.

Marathon Oil is reportedly looking to follow several US compatriots and withdraw from the UK North Sea by selling late-life assets, with market observers suggesting the sale could raise issues over decommissioning rights.

Latin America & Caribbean

Argentina – Argentina will not extend its lease on a floating storage regasification unit (FSRU) beyond December, energy minister Javier Iguacel has suggested, just weeks after vessel owner Excelerate began studying LNG exports from the current import site.

Brazil – Shell, BP, ExxonMobil and other heavy-hitters have restocked exploration portfolios with Brazilian pre-salt acreage during a highly successful auction ahead of the country’s most contentious general election in years.

Panama – The Panama Canal has celebrated the transit of four LNG carriers in one day, a first for the waterway.

Russia & CIS

Kazakhstan – A consortium led by Shell and ENI developing the 1.35 Tcm gas and condensate field in Kazakhstan has agreed to pay USD 1.1 billion to settle a profit-sharing dispute with the government.

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