ONGC to setup LNG import terminal in Karnataka

Oil and Natural Gas Corp (ONGC) to revive plans to set up a LNG import terminal near its Mangalore refinery in Karnataka.

“In next 10 to 15 days, ONGC and Bharat Petroleum Corp Ltd (BPCL) will sign an memorandum of understanding (MoU) for putting up a LNG terminal at Mangalore,” oil minister M. Veerappa Moily announced at the inauguration of state gas utility GAIL India Ltd’s Dabhol-Bengaluru gas pipeline.

The 5 million ton capacity LNG import facility will be set up through a joint venture of ONGC and BPCL and an international energy firm of repute. ONGC has already initiated talks with Mitsui Group of Japan of setting up LNG terminal at Mangalore and the two may also strengthen their partnership by further setting up a gas based power plant in India.

The Rs4,500 crore Dabhol-Bengaluru pipeline is to be extended to Mangalore by next year and gas imported at the facility can then be pumped into the line for consumption by industries in Karnataka and neighbouring Tamil Nadu.

In 2005, ONGC had plans to build an LNG terminal, which were then shelved in 2006 due to change in leadership. But now the company has again started looking actively at the plan of LNG import, with the clear idea that domestic gas availability at 160 mmscmd in 2015-16 will be way short of demand of 290 mmscmd.

Also, Moily, who hails from Karnataka, is pushing the companies to set up the facility.

BPCL owns an equity stake in a giant gas field off Mozambique and it can ship its share gas in LNG to Mangalore.

India has three operational LNG import facilities—a 10 MMT unit at Dahej in Gujarat operated by Petronet LNG Ltd; a 3.6 MMT terminal of Shell-Total at Hazira in Gujarat, and a just commissioned 5 MMT facility at Dabhol in Maharashtra.

The Dabhol LNG terminal, which has government-owned NTPC Ltd and GAIL as partners, was commissioned last month and a similar capacity import facility will come up at Kochi in Kerala this year. LNG imported at Dabhol and Kochi will feed the same market in Maharashtra, Karnataka, Tamil Nadu and Kerala.

Currently, both Petronet LNG Ltd’s terminal at Dahej, and Shell and Total’s terminal at Hazira in Gujarat are under expansion to 15 MMT and 5 million ton capacity respectively. Even Dabhol is proposed to be expanded to 10 MMT.

Gujarat State Petroleum Corporation invites bids for LNG terminal

Gujarat State Petroleum Corporation (GSPC) on Feb 19, 2013 invited global bids to select a Engineering Procurement and Construction (EPC) contractor for its 5 MMTPA LNG regasification terminal proposed at Mundra in Gujarat.

The proposed terminal to be set up by GSPC LNG Limited (GLL), a joint venture of GSPC and Adani group, will be set up with an estimated investment of Rs  4,000 crore. "The terminal capacity would be expandable upto 10 MMTPA," official sources said. "GSPC has 50% stake holding in the JV, while Adani group holds 25%, remaining 25% will come from a strategic investor," a GSPC official said.

GSPC has been scouting for a strategic investor for its LNG project, after Essar group — the third partner with a 25% stake in the venture exited from the proposed LNG (liquefied natural gas) terminal.

The LNG terminal is designed to have two LNG storage tanks. It will have LNG receiving, re-gasification and gas evacuation facilities. The LNG terminal proposed to come up at Mundra will be the third one in Gujarat, after Petronet LNG's (10 MMTPA capacity) in Dahej and Shell's Hazira LNG terminal (3.6 MMTPA). The terminal is expected to go on stream by first quarter of 2016, sources in GSPC said.

Reliance, BP to Invest US$5 Bn in India Gas Block

Reliance Industries said the company and its partner BP Plc plan to jointly invest more than US$5 Bn over the next three to five years to boost output at a key natural gas field off India's east coast.

The D6 block in Krishna Godavari basin is jointly operated by the two energy companies and was expected to contribute up to a quarter of the gas supply for Asia's third-largest economy, but output from the block has been declining.

The two companies are planning to invest in a series of projects to develop around 4 TCF of discovered natural gas resources from the block, Reliance said in a statement.

The current output from the field is about 19 million standard cubic meters a day, less than a fourth of the initial target.

A government panel last month recommended that New Delhi scrap the system of setting natural gas prices based on the fields from where it is produced in favor of a uniform pricing model. The government hasn't yet approved the recommendation which will lead to higher prices.

Reliance currently sells gas from the block at $4.2 per million British thermal unit. The price will come up for revision in April 2014.

CH-IV International to Serve as Owner’s Engineer to Gaz Métro to Provide FEED for LNG Facility

In Order to Meet Growing Vehicular LNG Demand, Gaz Métro is looking to Expand the Natural Gas Liquefaction Capacity of its Montreal LNG Plant.

HANOVER, MD February 7, 2013 – Jeffrey P. Beale, President of CH-IV International (CH-IV), is pleased to announce that CH-IV International has been selected as Owner’s Engineer to prepare the Front End Engineering Design (FEED) for the expansion of Gaz Métro’s liquefied natural gas (LNG) production facility in Montreal, Quebec.  Gaz Métro, the largest natural gas distribution company in Quebec, is currently looking into several solutions for improving the availability of LNG in Quebec and eastern Canada, including the expansion of its Montreal liquefaction, storage and regasification (LSR) plant.

Gaz Métro’s LNG development plan is to supply LNG by truck to the heavy transport industry in eastern Canada, via its indirect subsidiary Gaz Métro Transport Solutions, LP (GMTS), and subsequently to assess the possibility of hauling LNG by truck to service more remote areas from Gaz Métro's natural gas pipeline network.  The potential heavy transport industry includes heavy-duty LNG-powered trucks, LNG-powered ferries and a development program for LNG-powered locomotives.

The LSR plant, which supplies Gaz Métro customers during peak gas demand periods, is located in the east end of Montreal and has been operating for more than 40 years.  As the present storage capacity of the two existing LNG tanks easily meets current customer demand, Gaz Métro has retained CH-IV to provide the FEED for a project focusing solely on increasing liquefaction capacity.  The FEED and EPC bid package should be finalized by the end of March.  The current expectations of Gaz Métro are then move to issuance of a request for proposals (RFP) in April for the engineering, procurement and construction (EPC) of the additional liquefaction unit.

CH-IV International had previously prepared a feasibility study to Gaz Métro on various alternatives under consideration.  The expansion of LSR’s liquefaction capacity is most likely the first step in meeting an ever increasing demand for vehicular LNG.

Mr. Beale stated, “CH-IV is excited to participate in expanding eastern Canada’s access to clean-burning, economic LNG for both vehicular use as well as fuel oil replacement.  As an early promoter of vehicular LNG, I am particularly proud that CH-IV is able to support Gaz Métro’s trailblazing effort.”

Mr. James A. (“Jim”) Kelly, of CH-IV’s Hanover, MD Office, is managing this project.

# # # #

CH-IV [read C - H - 4] International (www.ch-iv.com) is a joint venture corporation between MPR Associates, Inc. (www.mpr.com) and CH-IV Cryogenics, LP.  CH-IV International provides engineering and consulting services in four overlapping areas involving LNG facilities: 1) Feasibility / Pre-FEED; 2) Front end engineering design (FEED); 3) Engineering oversight and consulting on all things LNG; and 4) Operational services relating to the training, commissioning, start-up and operations of LNG facilities.

The 17th International Conference and Exhibition on Liquefied Natural Gas LNG 17 attracts leading world experts and speakers

For Immediate Release

Over 5,000 industry professionals expected to gather and chart the course of LNG in the future

16 October 2012, Houston, Texas - The liquefied natural gas (LNG) industry’s top executives and senior decision-makers from major producing and importing countries are confirmed to speak at next year’s largest global gas event.

The 17th International Conference and Exhibition on Liquefied Natural Gas (LNG 17), will take place from April 16 – 19, 2013 in Houston, Texas. It is anticipated that LNG 17 will attract approximately 5,000 senior technical, commercial and strategic experts from over 80 countries. Attendees will have the opportunity to visit more than 300 exhibitors, hear from top-level speakers and attend a variety of networking events.

The scope of the program has expanded to cover strategic, commercial and regulatory issues for the first time, with hundreds of industry experts lined up to speak. For the first time, LNG 17 will feature a new Global Strategy Forum and six Spotlight Sessions addressing the most significant trends, challenges and opportunities facing the industry today and in the future.

The Global Strategy Forum has the confirmed participation of Chief Executives from each of the major gas-producing regions, including: Antoni Llardén, President, Enagás; Maria das Graças Silva Foster, CEO, Petrobras; Wang Dongjin, Vice-President, CNPC; Tom Walters, President, ExxonMobil Gas & Power Marketing; Joseph C. Geagea, Corporate Vice-President & President, Chevron Gas & Midstream; Hamad Rashid Al Mohannadi, Managing Director, RasGas; and Pat Roberts, Managing Director, LNG Worldwide Ltd.

In the Global Outlook for LNG, world-renowned, Pulitzer Prize-winning author, Daniel Yergin, will provide the most up-to-date analysis and forecast of trends in the global gas industry, with an emphasis on the role that LNG will play.

At a macro-economic level, Robert Lesnick, Oil and Gas Program Manager, The World Bank will cover The Opportunities for LNG to Stimulate Economic Development looking at how developing countries around the globe face an exciting opportunity to grow in a more carbon friendly manner. He will also address the role of government policy and natural gas-based industrial development and what the positive impacts are on local development.

The spotlight session on the North American LNG Market will cover the implications of North American LNG exports on global dynamics, with three speakers bringing insight and experience from very different parts of the US LNG market. Betsy Spomer, Head of Global LNG, BG Group will look at Gulf Coast imports and exports, Phil Ribbeck, President, Repsol Energy North America will concentrate on Atlantic Coast trade and Janine McArdle, Senior Vice President – Gas Monetisation, Apache Corporation will focus on Canadian West Coast exports.

Joining the line-up of industry luminaries addressing the conference is Alexander Medvedev, Deputy Chairman of the Management Committee, OAO Gazprom & Director-General, OOO Gazprom Export who is slated to deliver a session on The Role of Russia in the Global LNG Industry. The session will deal with issues surrounding Gazprom’s portfolio optimization and other exciting developments from one of the world’s largest gas producers.

Anders Ekvall, Vice-President LNG Americas, Shell will speak on Upcoming Trends in the Transportation Sector - one of the largest consumers of LNG - while Jean-Marie Dauger, Executive Vice President, GDF Suez will take the stage on Technological Innovation and Infrastructure in the LNG Industry. This includes a preview of new technological infrastructure advances, floating LNG projects and their impact in opening up new markets.

“We have received over 400 abstracts from leading industry professionals, which is the largest number ever submitted for this event. The exclusive conference sessions will consist of formal presentations, which have not been previously delivered, as well as highly focused workshops with topics on market, finance and technology issues related to the industry,” said David Carroll, President and CEO of Gas Technology Institute and President, IGU 2015 – 2018.

“LNG 17 will bring together all the major energy companies in the world to hear from industry experts on current developments, trends and opportunities for LNG in North America and around the world,” said said Larry Borgard, President and COO, Utilities, Integrys Energy Group; Chairman, AGA.

“Natural gas is helping to stimulate economic recovery in the United States and this conference will provide valuable information on potential growth markets like transportation, as well as an understanding of the global demand for natural gas and what that could mean for the United States in the future.”

To register for LNG 17, visit www.lng17.org or email: registration@lng17.org. Save $300 if you register by November 5, 2012.

About LNG 17

Hosted by The American Gas Association, LNG 17 is the only global industry event conducted by the gas industry – three industry organizations are responsible for the event: the International Gas Union, the Gas Technology Institute and the International Institute of Refrigeration

Liquefied natural gas industry faces skills crunch

Total has added its weight to the skills shortage debate, warning Julia Gillard of a looming crunch in the booming LNG industry.

Speaking at the World Gas Forum in Kuala Lumpur at the end of last week, Total chairman and chief executive Christophe de Margerie said he had raised the issue when he met the Prime Minister two weeks ago.

"It is true that in Australia, especially with a long-term view, it may become short of skills if you want to develop all of those LNG projects in the northwest (of Western Australia), Darwin and Brisbane," he said. "It's up to the government to see what they have to do. What we raised with the government is, 'Be careful'."

Total has a 24% stake in the $34 billion Ichthys development and a 27.5% interest in the under-construction $16Bn Gladstone LNG project in Queensland. Together, the projects will employ several thousand people while they are built.

With more than a dozen LNG projects representing about $200Bn in investment either under construction or planned for development here, competition for skills has already intensified and developers have looked overseas for labour.

Woodside Petroleum's Pluto LNG project relied on 457 visas to import skilled workers for specialised short-term jobs in the project's construction. A number of other LNG projects planned or being built are expected to use Enterprise Migration Agreements that allow the import of labour from overseas.

Companies such as Woodside and Royal Dutch Shell have also considered building plant components overseas to avoid higher labour costs in Australia.

Mr Margerie said labour issues were less significant in Darwin, where the Ichthys LNG plant would be built, as it was the only plant under construction there.

The issue was more apparent in Queensland given the number of competing projects, he said, with Total having sent expatriates from France and other nations to work on the development.

Mr Margerie confirmed Total would exercise its option to lift its interest in Ichthys from 24% to 30% in a matter of "days or weeks".

Separately, the head of integrated French energy company GDF Suez said Europe could meet its ambitious emissions targets at a significantly cheaper cost if it focused more on gas instead of renewable energy.

GDF Suez chairman and chief executive Jean-Marie Dauger said a greater focus on gas could shave E400Bn to E500Bn ($500Bn-$630Bn) off the estimated E1.2 trillion in costs by 2030 under Europe's emissions reduction plans. Using more gas to cut emissions could also protect 20-25 million jobs in Europe.

"Today this issue of economic optimisation of the energy mix simply cannot be ignored at a time of extreme financial and economic instability," Mr Dauger said.

"It is essential that the affordability of energy policies is seriously considered."

BPCL, Videocon Mozambique gas discoveries hold big reserves

Bharat Petroleum Corp Ltd (BPCL) and Videocon Industries' Mozambique gas discoveries may hold up to 100 trillion cubic feet of in-place reserves, the block operator said.

US energy major Anadarko Petroleum Corp said the total estimated recoverable natural gas resource in Offshore Area 1 was between "30 and 60 Tcf, and the current upside for total gas in place for the discovered reservoirs on the block is approaching 100 Tcf".

Bharat PetroResources Ltd, a wholly owned subsidiary of BPCL, and Videocon Hydrocarbon Holdings Ltd, a wholly owned subsidiary of Videocon Industries, hold 10% stake each in Area--1.

Anadarko, which holds 36.5% interest in the block, plans to put up plants to liquefy the gas (liquefied natural gas or LNG) so that it can be shipped to consumption centres in cyrogenic ships. The two LNG trains will have the capacity to produce 5 million tonnes of liquid fuel each.

First gas exports from an initial train is expected in 2018 and the second train in 2010. A final investment decision is scheduled for late 2013, it said.

Anadarko said in a statement that its "Atum exploration well discovered another significant natural gas accumulation within the Offshore Area 1".

The Atum discovery well, which encountered more than 300 net feet (92 meters) of natural gas pay, is connected to the recent Golfinho discovery located approximately 16.5-km to the northwest in the Offshore Area 1.

"We estimate this new complex, which is located entirely within the Offshore Area 1 block, holds 10 to 30-plus Tcf of incremental recoverable natural gas resources," said Bob Daniels, Senior Vice President at Worldwide Exploration. "We plan to immediately commence a four-well appraisal programme of this complex, which has the potential to underpin a large LNG development."

The reserves are more than the 11 Tcf of resources in Reliance Industries' eastern offshore KG--D6 fields. RIL had in 2010 produced over 61 million standard cubic metres per day of gas from its KG--D6 gas discoveries before technical problems led to a drop in output. The output is enough to produce about 15 million tonnes of LNG per annum.

Anadarko estimates that there is sufficient gas in place in Area-1 for up to 10 LNG trains for a total of 50 million tons ayear of LNG capacity.

Cove Energy Mozambique Rovuma Offshore Ltd holds 8.5% interest in the block and Mitsui E&P Miozambique another 20%. The balance 15% is with Empressa Nacional de Hidrocarbonetos (EIH), the national oil company of Mozambique.

Reliance Industries planning US$1.2 Bn LNG terminal

Reliance Industries Ltd (RIL) is considering putting up a US$ 1.2 Bn LNG import terminal on the east or west coast to meet demand at its refineries and petrochemical plants.

According to report, Reliance's requirement of the fuel is around 14 MMSCMD at its twin refineries at Jamnagar in Gujarat. It also needs gas at its petrochemical plants.

The company had first contemplated the facility back in 1997, but plans for a 5-MT per annum port terminal were later held back, the report said. The company had at that time envisaged receipt of LNG transported from overseas via cryogenic ships and a re-gasification of the liquid cargo. 

The company is now thinking of reviving the plan as it is not able to use the natural gas from the eastern offshore KG6-D6  field given that its twin refineries at Jamnagar have been allocated only 2.34 MMSCMD of the 60 MMSCMD of gas that the government has earmarked for various users.

Reliance is reported to be buying LNG from Royal Dutch Shell at prices that are in double digits as against a delivered price of US$7 per million Btu of KG-D6 gas.

The report said that Jamnagar was the natural choice, but Gujarat already has LNG terminals at Dahej, operated by Petronet LNG and another at Hazira owned by Shell India and Total of France.

According to the report, a third terminal was under planning stage at Mundra by the Adani Group and Gujarat government entity GSPC), and therefore a fourth one in the state looked unlikely.

One option is to set up the facility at Kakinada in Andhra Pradesh and transport the gas via the under-utilised East-West pipeline connecting the landfall point for gas from the eastern offshore KG-D6 field to Baruch in Gujarat.

The pipeline has the capacity to move 100 MMSCMD of gas. However only half the capacity is being used given the production constraints at KG-D6 field, which has an output of 54 MMSCMD at present.

Another option under consideration is using a floating LNG facility that would receive cryogenic ships at high sea and regasify the liquid cargo into natural gas before piping it to shore through a submarine pipeline.

According to the report Reliance's LNG terminal is expected to take 1 1/2 years as against 36-40 months for a normal LNG terminal.

It added that Reliance had also explored the possibility of picking up a stake in Adani's proposed LNG terminal at Mundra, but the two sides failed to reach an agreement.

In 2000 the company had also tied up LNG imports from Iran but then dropped the plan following the huge gas reserves it struck off the Andhra coast.

Meanwhile, the company has commissioned its business transformation plans for 2012 and has engaged AT Kearny, Booz & Co for the business transformation.

According to reports, Reliance would finalize its US$5 Bn investment plans at Jamnagar in 2011. The plans include new cracker and downstream expansion.

Also the assessment on building and LNG Terminal would only be taken in 2011.

RIL is also said to have revived its talks with British Petroleum to sell a stake in its E&P assets.

Approval for Masela LNG

Indonesia has approved a development plan for a LNG floating terminal project run by Japan's Inpex Corp.

The floating LNG project will have capacity of 2.5 MMTPA, lower than a previously proposed capacity of 4.5 MMT, said Evita Legowo, director general of oil and gas at the energy and mineral resources ministry.

The project will cost an estimated US$ 4.9 Bn.

Inpex has a majority stake in the Masela block in Maluku province while PT Energy Mega Persada , a unit of the Bakrie Group, has a 10% stake in the oil and gas block.

Former OPEC member Indonesia, which has far more gas than oil, has pushed companies to move faster in developing gas projects as the country badly needs the fuel for domestic industrial demand as well as for exports.