Gas & LNG in Review: September 11-16, 2016

Alexandra Marie Ferraro's picture
Alexandra Marie Ferraro, Energy Analyst, Guest Reporter
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Natural gas news this week saw that oil firms are focusing more heavily on natural gas, Tokyo Gas received LNG from the massive Gorgon project, a US firm is set to acquire a high-value stake in Spain’s Gas Natural, and India prepares to ramp up LNG. Check out our highlights below.

Natural Gas Represents Priority Shift for Oil Giants. The Wall Street Journal published evidence this week that natural gas is now a priority for the world’s biggest oil companies, writing that the commodity makes up almost half of these oil majors’ production. Citing Shell, Total, BP, and Eni production statistics and plans, the WSJ contends that oil giants are building robust natural gas portfolios, vying for market shares, and betting on its expected rapid growth. Nasdaq had a similar analysis this week explaining the global LNG market has grown at about 6 percent per year for the past 15 years and that LNG demand is predicted at nearly 500 million tonnes per annum by 2030. Furthermore, big oil companies are actively pursuing strategies to take advantage of this growth potential, Nasdaq reports.

In support of this analysis, Reuters reported on Monday that Qatar Petroleum is in discussions with Exxon and Eni as it seeks joint involvement in a Mozambique project which holds 85 trillion cubic feet of natural gas. Reuters writes Exxon has already been a close partner of Qatar Petroleum on previous natural gas projects. These are signs that the natural gas market is definitely on the rise. Do you know of any oil companies that are shifting their sights toward natural gas? Give us your insight.

US Firm to Buy Significant Stake in Spain’s Gas Natural. US-based Global Infrastructure Partners will become a 20% shareholder of Spanish natural gas utility Gas Natural after striking a deal with Repsol and Criteria, the Financial Times reports. The two latter companies will each sell 10 percent of their existing share to the US firm for a total of 3.8 billion euros, the FT details.

The decision demonstrates a keen interest on behalf of GIP to add valuable natural gas assets to its portfolio, while both Repsol and Criteria are likely to benefit from the capital gain thanks to the deal, according to Bloomberg. The FT quoted a spokesman for Repsol affirming the deal would allow the company to “crystallise value in Gas Natural while retaining influence.”

Gas Natural is a big player in European natural gas utilities; how do you think this stake sale will further strengthen this utility’s position in the market? Leave us a comment below.

Tokyo Gas Unloads First LNG Cargo from Australia’s Gorgon Project. Tokyo Gas announced on Monday that it had received its first shipment of LNG from Chevron’s Gorgon LNG project in Western Australia. Reuters reports the cargo of 70,000 tonnes of LNG which arrived over the weekend is the first delivery as part of Tokyo Gas’ 25-year contract for 1.1 million tonnes of LNG per year from Gorgon.

Platts also cited Tokyo Gas’ statement explaining this is the fourth cargo Tokyo Gas has received from LNG projects in which it has a stake—it is a 1 percent shareholder in Gorgon—and it already receives LNG from 12 projects in total around the world. How does Japan’s demand for LNG stimulate the market? Can we expect it to be a driving force in production well into the future? Let us know below.

Indian Government Makes Moves Toward Gas-Driven Economy. Indian Oil Corp plans to increase its natural gas revenue from less than 5 percent to 15 percent by 2021 and the Indian shipping ministry announced a new LNG facility will be operating on the Ganges by 2018, according to Reuters and Platts, respectively. The two announcements materialise recent statements by the Indian government seeking to make India a gas-driven economy.

Indian Oil’s director of planning and business development G. K. Satish told Reuters his company has concrete plans for an LNG regasification capacity of 13 million tonnes in the country’s terminals and has invested heavily in gas distribution infrastructure. The shipping ministry’s announcement this week also indicates a strong intent to transition transportation fuel from diesel to LNG, Platts details. India’s Petronet will be in charge of conducting the necessary surveys for four LNG barges along the Ganges, including the one expected online by 2018 at Haldia.

Do you think India will succeed in fuelling a majority of its economy with gas? What would be necessary to accomplish such a feat? Share with us your opinion.

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