• Natural Gas News

    Daily Digest: April 2nd, 2020

Summary

Daily digest of the latest natural gas news and LNG news by Natural Gas World.

by: NGW

Posted in:

Complimentary, Covid-19, Daily Digest

Daily Digest: April 2nd, 2020

Oil Indexation Feeds through into LNG: IEA

The longer that oil costs around $25/barrel, the harder international gas suppliers will struggle to cover their operating costs, and the depressed spot market for gas will not provide any relief, the International Energy Agency said April 1.

 

The Big Picture:

  • Oil indexation has provided protection to LNG producers, as it covers the majority of the LNG sold on long-term contracts, while the oversupply has hammered spot prices.

  • If oil falls to $15/b, a sixth of global supplies could become uneconomic, and much of that is produced in North America, IEA says.

 


 

Woodside Gets Regulatory Approval for Scarborough

Woodside said that the Australian offshore regulator has accepted the Scarborough project proposal.

 

The Big Picture:

  • Last week, Woodside deferred targeted final investment decisions (FID) on Scarborough, Pluto Train 2 and Browse and slashed approximately 50% in forecast 2020 total expenditure in response to uncertain market conditions created by low oil prices and Covid-19 outbreak.
  • Both Scarborough and Browse projects are key to Woodside’s plan to triple its oil and gas reserves in less than a decade.

 


 

Qatar Delivers 1st Q-Flex Cargo to China's Zhoushan Terminal 

Qatargas said it has delivered the first cargo of LNG on a Q-Flex vessel to the Chinese private sector gas distributior ENN’s Zhoushan LNG receiving terminal.

 

The Big Picture:

  • The delivery – and of a very large cargo size – suggests that China might be turning the corner: it has been in the headlines recently for invoking force majeure clauses and rejecting contractual deliveries. The Q-Flex class can hold about 215,000 m³.

  • The Zhoushan LNG receiving terminal is the first large-scale privately-owned terminal approved by China's National Energy Administration. The terminal received its first cargo in August 2018.

 


 

Venture Global Completes Calcasieu String Test

US LNG developer Venture Global said the first string test on its Calcasieu Pass mixed refrigerant compression system had been successfully completed at Baker Hughes’ testing facility in Massa, Italy.

 

The Big Picture:

  • The string test proves the engineering, functionality and performance of the process system just seven months after the Venture Global made a final investment decision (FID) on the 10mn mt/yr Calcasieu Pass LNG project - “a major achievement and step-change for the industry,” the company said.

 


 

Equinor Raises $5bn in Crisis Response

Norway's Equinor has raised $5bn in debt to help it weather the market turbulence, it announced on April 1.

 

 

The Big Picture:

  • The company said earlier it had slashed its capital spending plan for 2020 to $8.5bn from $10-11bn, and it is also targeting a $700mn reduction in operating costs.

  • Equinor can generate positive cash flow at just $25/b oil, and the company will also gain this year from rising production at its flagship Johan Sverdrup oil project in the North Sea, which needs only $20/b oil to break even.

 


 

Canadian Firm Breaks Ground on Northern LNG Plant 

Cryopeak LNG Solutions said it had broken ground on a new natural gas liquefaction facility in the northern BC community of Fort Nelson.

 

The Big Picture:

  • The facility is capable of producing 90,000 gallons/day of LNG.
  • Fort Nelson is about 165 km south of the BC-Yukon border, which Cryopeak says makes the new facility the closest LNG production point to northern Canada and portions of Alaska.

 


 

Bulgaria Cuts Gas Tariffs

Bulgaria's energy and water regulator has cut regulated gas tariffs by 42.8% to levs 25.20 ($14.00)/MWh, effective immediately, it said.

 

The Big Picture:

  • The reduction reflects the 40% cut Bulgaria secured in the price it pays for Russian gas imports last month, which was achieved thanks to an EU antitrust settlement with Russia's Gazprom.

 


 

PTTEP Could Delay Some Projects

Thai state-run PTTEP is ready to be flexible with its investment plan and could delay some projects to cope with the current global oil price crisis and the spread of coronavirus (Covid-19), it said in a statement.

 

The Big Picture:

 


 

TechnipFMC Cuts 2020 Capex by 30%

UK-registered TechnipFMC will cut its 2020 capital expenditure plan by 30% to $300mn, it said April 1.

 

The Big Picture:

  • Last month, the company deferred plans to separate into two independent and publicly traded companies due to uncertain market conditions linked to Covid-19 outbreak.
  • The decision to split was announced in August last year, three years after the merger of Technip and FMC Technologies, which established TechnipFMC as the only fully-integrated subsea provider.