Trinidad LNG output hits record monthly low

  • Spanish Market: Natural gas
  • 25/08/21

A deepening shortage of natural gas and soft global demand suppressed Trinidad and Tobago's LNG production to 1.1mn m³ in May, 19pc less than April, and the lowest monthly output in 18 years, according to the energy ministry.

The output reflected the impact of the indefinite shutdown since January of producer Atlantic's 3mn t/yr Train 1 -- its oldest unit that accounts for a fifth of the facility's capacity. LNG production in January-May totalled 7.17mn m³, 39pc down year on year, according to the ministry's figures.

Shell and BP are the main shareholders in the 14.8mn t/yr four-train Atlantic facility that is located at Point Fortin, in southwest Trinidad. Minority partners are Trinidad's state-owned gas company NGC and China's sovereign wealth fund CIC unit Summer Soca.

The country's January-May natural gas output fell by 20pc to 2.73Bcf/d from a year earlier.

Gas output in May of 1.06Bcf/d by the country's biggest producer BP was 15.5pc below April levels. Other major producers are Shell, BHP and EOG.

Gas allocated to LNG production in May was 910mn cf/d, 20pc less than April, according to the ministry's data

Trinidad's gas flow had been recovering since November 2017 following a long slide from a peak of 4.3 Bcf/d in 2010. The expansion has slowed since early 2020 when the Covid-19 pandemic prompted restrictions and closures that stalled the economy.

Atlantic's Train 1 was closed after BP, which supplies all the gas for the unit, said its infill drilling project failed to deliver at forecast levels.

"Although there are several projects that will deliver significant quantities of gas by the start of 2023, we cannot predict when there will be a significant reversal of the slide in LNG output," the energy ministry told Argus.

The gas shortage has also affected the country's petrochemical sector.

An additional 40mn cf/d of gas is projected by the end of 2022 from the offshore Zandolie field following a 1 August gas sales agreement between NGC and DeNovo Energy, a subsidiary of Swiss fertiliser producer Proman.

Trinidad and Tobago is aiming to restore natural gas production to pre-Covid-19 levels by the end of 2022, energy minister Stuart Young said in June.

More than 1 Bcf/d of production will come from offshore developments by BP, Shell, BHP and EOG, Young said.

LNG production, Trinidad and Tobago mn m³

Natural gas production, Trinidad and Tobago Bcf/d

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19/06/24

Gas necessary for Asia, unwise not to invest: Summit

Gas necessary for Asia, unwise not to invest: Summit

Singapore, 19 June (Argus) — Asia's LNG market faces many uncertainties, but not continuing to invest in it would be unwise as it is necessary for economic growth, said speakers at the Association of Energy Negotiators' International Energy Summit in Bangkok, Thailand last week. Many countries are increasingly focusing on batteries and renewables as part of their energy transition plans to move away from fossil fuels, but batteries are still far from being commercially attractive from a cost perspective, said Andrew Kirk, vice-president of origination, LNG at conglomerate B Grimm. Batteries may be able to provide a stable solution to the intermittency challenges posed by renewables in some regions, but wealthier countries are failing to acknowledge that developing countries cannot accept the higher costs involved, as well as the massively daunting task of building and installing the required capacity, he said. "We have to separate the aspirational from the unachievable," said Kirk. There is already instability resulting from gas shortages even in more developed economies such as Australia, where the Australian Energy Market Operator has projected a shortage in southern states. The federal government has confirmed the need for a pro-upstream approach in its future gas strategy , and intends to bring on line new gas supplies and make them affordable during the transition. "The timeline we have given ourselves is starting to look disorderly," said Kirk, with reference to net zero targets. Advancements and breakthroughs in battery technology will be made, but the timeframe for this cannot be defined. If policymakers do not consider reversing declining gas production, the next 10-15 years will create more geopolitical uncertainty, he said. Billions of dollars have been spent on current energy systems, said Steve Morrell, senior vice-president of ExxonMobil PNG LNG, adding that it would make more sense to put more gas into the system considering the higher cost of moving to renewables, he added. "Just by replacing coal [with gas], we'll see a 60pc decrease in emissions without any need for breakthrough technologies." said Morrell. If too much emphasis is placed on renewable energy, this will also lead to declining investment in finding new oil and gas resources, said the executive director of the Petroleum Institute of Thailand, Kurujit Nakornthap, which could lead to energy shortages and more volatile energy prices. "The stone age [ended] not because we ran out of stone, so the oil age is not going to [end] because we're running out of oil," said Nakornthap, paraphrasing a famous quote by ex-Saudi oil minister Sheikh Zaki Yamani. Challenges faced by buyers, sellers Gas projects are already at risk of not receiving funding because the current LNG market outlook is unclear, with short-term price volatility, rolling blackouts, power reduction, and uncertainty in supply affecting buyers and sellers, said Morrell. The whole system is very tight at the moment, added Morrell, and alleviating this is dependent on customers, suppliers and governments as LNG is fundamental to global prosperity. But as a buyer, it is difficult to commit to multi-billion dollar long-term sales and purchase agreements (SPAs) when it is uncertain what the regulatory framework is going to be for the next 5-15 years. The tightness in supply indicates a need for more LNG, which in turn implies there is a need for more projects requiring multi-million dollar investments and that are looking for 20-year offtakes. Gas projects need 4-5 years of construction time and can produce for about 20 years. With an uncertain demand outlook and no buyers to take the product, investment decisions cannot be made and projects cannot get off the ground, said Morrell. "Customers are searching for price signals and trying to plan ahead," said Morrell. But he questioned "if they can't plan six months ahead, how are they going to know 15-20 years ahead?" The changing LNG model Buyers also cannot commit to long-term projects if they cannot predict what the energy transition entails, if certain fuels or greenhouse gas (GHG) intensity reductions get mandated, and how that will change the LNG business model. "The [LNG] market is always changing," said Morrell, with the introduction of carbon pricing to encourage GHG reductions creating further uncertainty for buyers and sellers. There are three areas within the current LNG model that will evolve, said Kirk. There are going to be many new buyers in emerging markets as they turn to LNG as a transition fuel. Secondly, the affordability of low-emission LNG may be an issue because some markets are unable to afford the extra costs when they are struggling to even move from a coal to gas-based market. Thirdly, SPAs will evolve and contracts must change to become more flexible. So buyers and sellers need to "act in good faith", said Kirk. But governments and regulators can slow down developments, which can be frustrating for suppliers, said Morrell. There needs to be a realisation that the consumer is paying for incentives and subsidies that the government provides, he said, adding that discussions should move away from 3–5-year political cycles and look at 20 years in the future. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Tropical storm warning for South Texas coast: Update


18/06/24
18/06/24

Tropical storm warning for South Texas coast: Update

Updates with closure of Galveston, Texas City ports. New York, 18 June (Argus) — A tropical storm warning has been issued for parts of south Texas and northeastern Mexico, bringing with it the risk of heavy rainfall and flooding. The warning is in effect for the Texas coast from Port O'Connor south to the mouth of the Rio Grande, as well as the northeastern coast of Mexico, according to the National Hurricane Center. "The disturbance is very large with rainfall, coastal flooding, and wind impacts likely to occur far from the center along the coasts of Texas and northeastern Mexico," the center said overnight. Maximum sustained winds this morning remained near 40 mph and the disturbance is forecast to become a tropical storm by Wednesday. The system has been classified as a potential tropical cyclone by the center since it has not yet become better organized, but is expected to become the first named storm system of the year by early Wednesday. The port of Corpus Christi in South Texas and the Houston Ship Channel remained open as of Tuesday morning, but the nearby ports of Galveston and Texas City closed to inbound and outbound shipping traffic at 10pm ET Monday due to heavy weather, the US Coast Guard said. The system was expected to disrupt ship-to-ship transfer operations off the Texas coast as of Monday evening because of heavy seas. In the Gulf of Mexico, the transfer typically is from an Aframax or Suezmax onto a very large crude carrier (VLCC) at designated lightering zones near Corpus Christi, Galveston and Beaumont-Port Arthur. Prolonged lightering delays can prevent crude tanker tonnage from becoming available and exert upward pressure on freight rates, while also adding to demurrage fees. The storm is expected to turn towards the west-northwest and west tonight and Wednesday, with the system forecast to approach the western Gulf coast late Wednesday, the NHC said. Rainfall totals of 5 to 10 inches are seen across northeast Mexico into South Texas, with maximum totals of 15 inches possible. Flash and urban flooding are likely to follow with river flooding. By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Tropical storm warning for South Texas coast


18/06/24
18/06/24

Tropical storm warning for South Texas coast

New York, 18 June (Argus) — A tropical storm warning has been issued for parts of South Texas and northeastern Mexico, bringing with it the risk of heavy rainfall and flooding. The warning is in effect for the Texas coast from Port O'Connor south to the mouth of the Rio Grande, as well as the northeastern coast of Mexico, according to the National Hurricane Center. "The disturbance is very large with rainfall, coastal flooding, and wind impacts likely to occur far from the center along the coasts of Texas and northeastern Mexico," the center said overnight. Maximum sustained winds this morning remained near 40 mph and the disturbance is forecast to become a tropical storm by Wednesday. The system has been classified as a potential tropical cyclone by the center since it has not yet become better organized, but is expected to become the first named storm system of the year by early Wednesday. The system was expected to disrupt ship-to-ship transfer operations off the Texas coast as of Monday evening because of heavy seas. In the Gulf of Mexico, the transfer typically is from an Aframax or Suezmax onto a very large crude carrier (VLCC) at designated lightering zones near Corpus Christi, Galveston and Beaumont-Port Arthur. Prolonged lightering delays can prevent crude tanker tonnage from becoming available and exert upward pressure on freight rates, while also adding to demurrage fees. The storm is expected to turn towards the west-northwest and west tonight and Wednesday, with the system forecast to approach the western Gulf coast late Wednesday, the NHC said. Rainfall totals of 5 to 10 inches are seen across northeast Mexico into South Texas, with maximum totals of 15 inches possible. Flash and urban flooding are likely to follow with river flooding. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Shell buys Singapore LNG firm Pavilion Energy


18/06/24
18/06/24

Shell buys Singapore LNG firm Pavilion Energy

Singapore, 18 June (Argus) — Shell has bought from state-controlled investment firm Temasek the Singapore-based LNG firm Pavilion Energy, which currently has about 6.5mn t/yr of term contracted supplies. The deal is expected to be finalised by next year's first quarter, subject to regulatory approvals and fulfilment of other conditions, Shell said on 18 June. Financial details of the acquisition were undisclosed. Pavilion's term LNG supplies come from producers including Cheniere's 11.5mn t/yr Corpus Christi liquefaction facility in the US, the 22mn t/yr Bonny export terminal in Nigeria and Norway's 4.2mn t/yr Hammerfest export terminal. The firm also operates in the LNG bunker market, tracking the growing number of LNG bunker vessels operating in Singapore. It supplied over 16-17 February the dual-fuel bulk carrier Mount Api with LNG through the firm's 12,000m³ Brassavola LNG bunkering vessel. The Pavilion acquisition puts Shell in a position to capitalise on the growing LNG bunkering market. Demand for LNG as a bunker fuel in May at the port of Singapore touched a record high of 48,800t, on par with biofuels, according to the Maritime and Port Authority of Singapore. Pavilion Energy and Shell each hold one term LNG import licence for Singapore, granted by regulator the Energy Market Authority. The other two licence holders are ExxonMobil and Singapore's Sembcorp Fuels. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japex takes control of Norway-focused upstream venture


17/06/24
17/06/24

Japex takes control of Norway-focused upstream venture

Tokyo, 17 June (Argus) — Japanese upstream firm Japex has acquired a majority stake in Longboat Japex from London-listed independent Longboat Energy to take full control of the Norwegian oil and gas joint venture. Japex spent $2.5mn to buy the 50.1pc stake, which will completed during July-September this year, Japex said. It bought a 49.9pc stake in Longboat Japex from Longboat Energy in May last year, with the UK firm last year looking to raise extra funds through asset sales, farm-down deals or issuing new equity. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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