Here is what is going on in the natural gas industry around the world:
The latest floating terminal technology could be the key to unlocking gas exports from Israel’s Tamar fieldand the larger related gas riches of the eastern Mediterranean.
Russian energy group Gazprom said on Tuesday it is in exclusive talks to buy liquefied natural gas (LNG) from Tamar, located about 90 km off Israel’s coast.
To do so, it plans to use a massive, floating LNG vessel (FLNG) that will receive, liquefy and then ship the gas on site.
If it works for Tamar, which has estimated reserves of 9.7 trillion cubic feet (tcf), a second could be brought to the nearby Leviathan field, which is more than twice the size and was the world’s largest offshore discovery of the past decade.
“We hope it will put us in a better position to help with Leviathan,” said Kathleen Eisbrenner, chief executive of Pangea LNG, the vessel’s developer, who helped develop the Gazprom deal.
Gazprom is the world’s biggest gas producer and relies heavily on pipeline supplies to Europe, which make up around 80 percent of its revenues. It is keen to expand in the LNG sector to grow in the booming Asian market.
Two of the main partners in Tamar, Texas-based Noble Energy and Israel’s Delek Energy, are also part of the consortium developing Leviathan.
The Tamar and Leviathan finds sparked an exploration frenzy in the area. The U.S. Geological Survey has said the eastern Mediterranean’s Levant basin could hold up to 122 tcf of recoverable gas, making it one of the world’s richest deposits.
The first FLNG facility is being built for Royal Dutch Shell , the world’s top LNG trading company, for use off the coast of Australia, where natural gas fields are being tapped for future export to Asia.
Shell’s Prelude FLNG project is expected to become operational by the end of the decade.
Prelude, which will be the world’s biggest offshore structure ever built, is being built in South Korea by Daewoo Shipbuilding & Marine Engineering Co..
Each floating LNG vessel costs $3 to $4 billion to construct, Eisbrenner told Reuters, adding that Tamar’s FLNG vessel would be the third to become operational.
Tanzania is such a hot place for gas these days that even oil-focused major BP Plc (NYSE: BP) is being lured to the East African country to invest in natural gas exploration.
In late February, BP execs descended on Tanzania with a request to pursue natural gas investments and try their luck in a venue that has become one of the biggest gems in the region.
Tanzania is open to the request, of course, but made it clear that the competition is pretty high. Total SA of France is also in line for Tanzanian gas exploration license. Norway’s Statoil is also shopping in Tanzania.
Recent offshore discoveries of some 33 trillion cubic feet of gas put Tanzania on the map, and the risk is relatively low. Tanzania has a natural gas processing plant on Songo Songo Island, with a 70 million cubic feet/day capacity. It is also planning an LNG terminal.
Egypt exported $22 billion worth of natural gas last year, 4 percent more than in 2011, according to a report on Economic and Social Indicators released in February by the state-run Information and Decision Support Centre (IDSC).
The country exports dry and liquefied natural gas (LNG) to Europe, the US and South Korea. It also continues to supply a handful of Arab countries through the Arab Gas Pipeline, completed in 2004, despite a series of attacks on the pipeline since Egypt’s January 25 Revolution, which disrupted the natural gas exports.
Egypt produced 45.8 million tonnes of natural gas in 2012, a 0.85 percent drop from the previous years’ 46.1 million tonnes, according to the report.
Domestic consumption of natural gas, however, rose to 39.2 million tonnes in 2012, exceeding the previous years’ figure by a significant 5.8 percent.
Egypt has two liquefied natural gas plants and a gas export pipeline, but industry sources say the government has diverted some gas contracted for export to meet the growing demands of the domestic market.
57 percent of domestic consumption gas was geared to electricity generation, compared to 56 percent in 2011.
The country has experienced increasingly frequent power cuts since the summer of 2012 due in part to a shortage in natural gas.
In January 2013, Egypt issued an international tender to import liquefied natural gas to meet its domestic needs; the results will be announced by the Egyptian Natural Gas Holding Company (EGAS), according to Hamdi Abdel- Aziz, the spokesperson of the Ministry of Petroleum.
Norway, western Europe’s biggest oil and gas producer, raised its estimate for undiscovered resources in the Barents Sea by 31 percent to 8 billion barrels of oil equivalent as it seeks to open new areas to exploration.
Seismic surveys in waters previously disputed with Russia indicate that about 85 percent of the additional resources could be natural gas and the rest oil, the Norwegian Petroleum Directorate said today in a statement. The new resources are estimated at 1.9 billion barrels of oil equivalent, with a range spanning from 350 million to 3.6 billion barrels.
This is the first assessment published for the south-eastern Barents Sea, which the government plans to open for exploration this year after Norway and Russia struck a delimitation accord in 2010. Producers such as Statoil ASA (STL) are expanding into the sea off Norway’s northern tip as production falls from maturing fields in the North Sea. The country’s oil output is estimated to drop for a 13th consecutive year in 2013, to less than half the 2000 peak, according to the NPD.
The new estimates “strengthen the Barents Sea’s significance for Norway’s petroleum industry,” the directorate said in the statement.
The Skrugard and Havis oil discoveries in 2011 and 2012, the first commercial finds in the Barents Sea in a decade, have boosted interest in the region, which holds 72 of 86 new licenses that Norway will award in its 22nd round over the next few months. The twin finds in the western part of the Norwegian Barents Sea may hold as much as 600 million barrels of oil and will start production in 2018 thanks to a new oil terminal at Cape North that will also be able to handle volumes from additional discoveries in the area.
Poland’s market could absorb more imported liquefied natural gas than the amount that was planned for a new terminal under construction on the Baltic coast, the terminal’s owner said Wednesday after surveying 22 potential customers.
Polskie LNG, a subsidiary of Poland’s state-owned natural gas pipeline operator, will now calculate the commercial viability of increasing the regasification capacity of the incomplete LNG terminal to 7.5 billion cubic meters a year from 5 bcm.
Polish households and businesses currently consume about 14 bcm of natural gas per year.
Potential buyers of LNG include power utilities with plans to build gas-fired power plants, chemical and petrochemical makers like Grupa Azoty SA and PKN Orlen SA, and state-controlled gas utility PGNiG SA.
Poland plans to complete the terminal, located near the city and seaport of Swinoujscie close to the German border, in mid-2014.
The government considers the project to be strategic because it will give the central European country the option to import gas from all over the world, a contrast to its current dependence on Russia. The two countries have historically had strained relations.
Poland also produces about 4 billion cubic meters of gas domestically, enough to cover slightly under a third of annual consumption.
The rules of Polskie LNG’s market “screening” don’t allow it to disclose the names of the 22 companies it surveyed, its spokesman Maciej Mazur said in an email. “They include some of the largest power companies in Poland.”
Mr. Mazur added they have received responses from companies in Norway, Ukraine, and the Netherlands, but not from the Czech Republic or Slovakia to date.
“Other foreign companies, including some from Germany and Sweden, didn’t take a formal part in the survey, but expressed interest in using the Swinoujscie terminal’s capacity,” Polskie LNG said.