This week’s top natural gas and LNG news included a hit to the Gorgon Project, increases in Norwegian production, pushes for natural gas in India, and an opportunity for Iran to fill Pakistan’s gas gap. Check out the highlights below.
Mechanical Problems Hold Up LNG Production at Gorgon Project, Exports to Resume Soon: Only a few weeks after shipping its first cargo off to Japan, production at the massive Gorgon LNG Project off the coast of Australia came to a stop due to technical issues with the propane refrigerant circuit on Train 1, Reuters cited a spokesman for Chevron. In an update, Reuters then reported that Chevron announced the export terminal will resume production within 30 to 60 days stating further that the “Train 1 ramp-up to full capacity is still expected to occur over 6 to 8 months from initial start-up of the facility.”
The hold-up places added pressure on Chevron for the Gorgon Project, the largest resource production project in Australia’s history. Nevertheless, the cessation has not yet impacted the market, with Platts reporting that no decision had been made by buyers to replace the cargoes to be supplied by Gorgon. The magnitude of the project and the attention it has received mean that any significant setbacks caused by the technical glitch are perhaps yet to be seen.
The Gorgon project seems to have weathered a series of challenges including extra costs, timing, and difficult market conditions. Does news of mechanical problems within the first month of production change your expectation for this milestone LNG project? Leave us a comment.
Norway to Expand Production at Troll Natural Gas Field: In the face of tough competition from Russia and a highly anticipated wave of US LNG expected to hit the European market in the future, Norway decided this week to increase production at their largest natural gas field, Troll, according to Bloomberg. The news source reported that Statoil announced the Norwegian Energy Ministry issued a production permit for Troll that would allow for a 10 percent increase in production, up to 33 bcm for the year 2016, starting on October 1st.
Bloomberg said two new compressors were installed at the field last year which will accommodate the production boost. In Norway’s favor, US LNG has not yet made its way to Europe as gas prices in the latter have remained low throughout a mild winter and demand has risen as power plants transition from coal to natural gas.
Is Norway anticipating that this tide will change and positioning itself ahead of the pack? Let us know what you think below.
India’s Natural Gas Sales Network to Grow, Targeting Transportation: India’s Oil Minister Dharmendra Pradhan said on Thursday that his country was looking to expand its network of retail stations for compressed natural gas (CNG) aimed at motorists, according to Reuters. As part of the announcement, Mr. Pradhan added that 60 stations selling CNG would open in Delhi and its surrounding area by mid-May.
India is struggling with pollution, largely exacerbated by heavy volumes of traffic and diesel-fueled transportation. In an effort to mitigate this, India’s high court has ordered private taxis operators to convert their diesel engines to ones that support CNG by the end of this month, Reuters reported.
Recently India has made significant efforts to attract natural gas investors to its country, providing pricing and exploration incentives to foreign companies. The country has also significantly increased its LNG imports, Reuters cited government data detailing a 13 percent rise in India’s consumption of imported LNG last year.
Is this good news for the natural gas industry? Do you think India will become one of the industry’s most important buyers? Let us know.
Pakistan’s Gas Shortages May Be Remedied by Iran: The Financial Times reported this week on the crippling gas crisis in Pakistan, and how an Iranian gas pipeline to the country could close the gap. The potential pipeline is likely to have centered in discussions late last month as Iranian President Hassan Rouhani visited Pakistan. The latter had planned to import gas from Iran’s South Pars field in the early 1990s, but was stopped by international sanctions, according to the FT. Now post-sanctions, Iran is poised to follow through with original plans and Pakistan’s petroleum minister Shahid Khaqan Abbasi says his country is ready to import up to 750m cu ft of gas from Iran by 2019, the FT cited Mr. Abbasi.
Gas shortages in Pakistan are putting immense pressure on Prime Minister Nawaz Sharif, who has begun importing LNG from Qatar to alleviate the strain. A gas pipeline from Iran might be just what Pakistan needs. Will the original plans for a pipeline come to fruition? Tell us your prediction below.
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