Gazprom to develop Shtokman field independently

Gazprom OJSC will develop the Shtokman gas condensate field on its own, without foreign partners, Gazprom announced, October 9.

In addition, Gazprom's Management Committee has taken a decision on the priority of gas deliveries from Shtokman to the European market. The field will become a resource base for Russian gas exports to Europe via gas pipeline Nord Stream that is under construction. The Concern had said earlier it was planning to deliver LNG from Shtokman to the USA market.

"Gazprom will own 100% of the Shtokman field. It has been considering to give 49% in the Shtokman project to foreign companies for a long time. But foreign companies were not able to give assets corresponding to the volume and quality of the Shtokman field reserves. Up-to-date technologies will be used to develop this field. For these purposes, competent international companies will be attracted as contractors," said Gazprom's CEO Alexey Miller.

Gazprom and BP sign natural gas deal to supply Atlantic basin

Russia's state-controlled natural gas giant Gazprom and Britain's BP have signed a deal to supply LNG to Atlantic basin countries, according to sources.

Under the deal, BP will supply LNG to Gazprom's Britain-based branch, Gazprom Marketing & Trading Ltd., which will market it across the Atlantic basin, Gazprom said in a statement.

Total acquires interest in Nigeria's Brass LNG project

Total has acquired Chevron's interest in the Brass LNG project in the Niger Delta, 90 km west of Bonny Island, Nigeria. Its current partners are NNPC, Eni and ConocoPhillips.

Project sanction for the first two trains of Brass LNG is expected by year-end, with production scheduled to start up in 2011. Initially, two trains will be built, with a capacity of 5 MMTPA each, with most of the LNG intended for export to Europe and the U.S. The feed gas will be supplied from the partners' productions, with Total accounting for a third, or 570 MMCFD, over a period of at least 20 years.

The interest is in addition to Total's 15% stake in NLNG, whose capacity was recently expanded to nearly 18 MMTPA with the commissioning of Trains 4 and 5 earlier this year. Train 6, with a capacity of 4 MMTPA, is under construction and scheduled to come on stream in 2007.

Gazprom establishes Houston subsidiary to supply LNG domestically

Russian gas monopoly OAO Gazprom has set up a U.S. subsidiary based in Houston to supply LNG to U.S. markets.

Gazprom Marketing & Trading USA will be headed by John Hattenberger, who has been LNG director for London-based Gazprom Marketing & Trading Ltd. since mid-2005.

LNG marketing "is not the kind of business where we could operate on our own. We are establishing partnerships with a number of major players in this field," Hattenberger told a Russian trade publication.

In August 2005, Gazprom inked a supply agreement with Shell Western BV and BG Group, a UK-based natural gas company, to supply LNG to the U.S. market. Gazprom's first LNG carrier arrived at a Cove Point, Md,. LNG terminal last September.

Liquefied natural gas output to soar worldwide

The number of countries exporting LNG will grow 30% by the end of the decade, the US Department of Energy said.
Guy Caruso, head of the Energy Information Administration, the statistical arm of the DOE, said: "We do see the emergence of a robust LNG trade, leading to perhaps a real global gas market."

By 2010, 17 countries will export LNG, with Norway, Russia, Equatorial Guinea and Peru joining the group. In the US, LNG will become more important than piped gas from Canada, the US's top foreign supplier, the EIA said.

The growth is being driven by demand and shrinking supply from fields whose gas lies close to Europe and the US and can therefore be transported by pipeline. But the rapid rise of LNG is also proving to be a lifeline for the world's biggest international energy companies, who are losing the battle to grow their oil production.

Liquefied natural gas will make up 19% of the energy majors' total production by 2020, up from only 6% today, according to a report from Sanford Bernstein, a financial services company.

The energy majors are investing billions of dollars in LNG projects in Africa, Australia, Qatar, Iran and Asia. As their oilfields age and oil-rich countries such as Saudi Arabia and Mexico keep their doors shut to foreign investment in their oilfields, international oil companies arebecoming international gas companies.

ExxonMobil, for example, last year managed to replace its used reserves only because it was able to book with the US Securities and Exchange Commission large gas reserves in Qatar, analysts said.

By 2020, the energy majors' share of gas versus oil will rise from 37% to 43%, Bernstein estimates.

However, LNG has been prone to massive cost overruns, delays and challenges over environmental concerns.

Shell's Sakhalin LNG project in eastern Siberia has suffered the greatest cost overrun, ballooning from a US$ 10 Bn project to one costing US$ 20 Bn. But the pressures are industry wide and several projects around the world have already seen delays.

For consuming countries LNG is critical, especially in Asia, which is relying on Australia's gas to supplement the waning volumes from Indonesia, historically the major provider. Japan is set to double its imports from Australia in the next decade. In Europe, Algerian, Nigerian and Qatari LNG is seen as critical to reducing the region's dependence on Russia, which is being seen as an increasingly untrustworthy supplier.

Bolivia Gas Nationalization

Bolivia's Evo Morales got elected on promises to nationalize the country's resources and is carrying them out, to the applause of his voters.

Bolivia has the second-largest natural gas reserves in South America after Venezuela, and disputes over how the impoverished country should manage those riches have sparked several popular revolts since 2003.

Bolivia proceeds on gas nationalization

Leaders Back Bolivia Gas Nationalization

Bolivia: Gas nationalization just the start

Bolivia gas nationalization plan has risks

Indonesia not to stop LNG export, President says

Indonesia will consider extending its contract to supply LNG from Central Kalimantan Province to Japan after its end in 2010 and allocate more gas production to satisfy domestic needs, President Susilo Bambang Yudhoyono said.

Indonesia will not completely stop gas sales to foreign countries, "We must see case by case about extension and sales volume of the contract," said Susilo. So far, Indonesia exports an average of 12 million tons of gas each year to Japan. Meanwhile, the president said that more gas production will be used to meet the demand of domestic fertilizer and electricity companies.

Indonesia, the world's top exporter of LNG, has about 182 trillion cubic feet of natural gas reserves, sufficient to last 60 years at the current production rate.

China: Pumping an Iranian LNG deal for oil

Industry officials announced March 22 that a US$ 100 Bn LNG deal between China's Sinopec and Iran will be delayed until at least mid-2006 due to price disagreements.

Despite the effect of high prices, the real dilemma facing the two parties is that Iran has no facilities capable of exporting LNG. The agreement's strategic importance lies in Sinopec's development of the Yadavaran field and the oil reserves held there.

LNG Deals/Contracts

Centurion Energy, Shell sign LNG accord for Nile Delta blocks

Centurion Energy International Inc. has signed an agreement with Royal Dutch Shell Plc's Egyptian units under which the companies will explore for natural gas and develop liquefied gas ``opportunities.''
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Petro-Canada and Gazprom sign agreement on LNG plant in Russia

Canadian energy major Petro-Canada has signed an agreement with Russian energy giant Gazprom on initial engineering design of a LNG plant in St. Petersburg.
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Keltic signs gas terminal deals

Maple LNG, the Canadian affiliate of Dutch company 4Gas and Russia's Suntera, said they had signed agreements with Keltic to develop a proposed LNG project on the Nova Scotia coast northeast of Halifax. The project's regasification terminal would be located beside the Maritimes and Northeast Pipeline, which carries gas from Sable Island offshore fields to American customers via Canadian and U.S. pipelines.

Qatar plans to invest in key global energy projects

Qatar has plans to invest in key energy projects worldwide. The job of identifying viable ventures has been assigned to Qatar Petroleum International (QPI), a newly formed arm of state-controlled Qatar Petroleum (QP).

The QPI has been set up to exclusively manage Qatar's investments overseas. It is already in the process of identifying best investment opportunities available globally in the energy industry.

Among the prospective projects the QPI is looking at are refineries in India and China and LNG terminals in the UK, Italy and the US.

Nigeria, Libya, Others To Supply 30% Of World’s LNG

Nigeria, Libya and other African countries will supply 30% of the world’s of LNG by 2010, as against the present level of 12%, which the continent’s gas producers have been supplying.

The President of HIS Energy, Mr. Ron Mobed, who disclosed this recently, stated that Africa had 50 MMTPA of LNG capacity at the end of 2005, with most of it in Algeria and Nigeria.

Mobed noted: “Egypt opened a new train that will accommodate 3.6 MMTPA of LNG, while Equatorial Guinea and Angola have announced their first LNG projects.”

Aside from that, African finds, he said, totalled nearly 25% of world liquids reserves discovered between 2000 and 2004 and 12% of world gas reserves discovered in the same period excluding the United States of American onshore and Canada. Companies in the region discovered 300 billion barrels oil equivalent. Two thirds of it liquids, in Africa, were discovered in 2004. Of that, 85% has been found in 10 basins, and 22% is in Libya's Sirte basin alone.

EIA releases annual energy outlook 2006

In preparing projections for the AEO 2006, EIA evaluated a wide range of trends and issues that could have major implications for U.S. energy markets between now and 2030.

While focusing primarily on the reference case, lower and higher economic growth cases, and lower and higher energy price cases, the full AEO2006 report presents information on over thirty alternative cases. Examples include cases that examine the impact of greater and slower improvement in energy technologies (end-use, electric generation, renewable, exploration and production), cases with more rapid reductions in nuclear costs, cases with the more rapid or slower introduction of liquefied natural gas supplies, and cases that open the coastal plain of the Arctic National Wildlife Refuge to exploration and development. These cases provide the user of the AEO2006 with a better appreciation of the full range of uncertainty that surrounds long-term energy projections.

The full AEO2006 report is available at http://www.eia.doe.gov/oiaf/aeo/index.html

Energy Challenges

2006 represents a very challenging year for the international energy industry. Demand for natural gas is far-outstripping supply. LNG still remains as a viable or “bridge” solution to meet both short-term and long-term fuel and feedstock requirements for both wholesale and retail consumers. Policy & Regulatory framework must support commercial market mechanisms in order to ensure timely production, transportation and delivery of LNG to both developed and developing countries.

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