Gas & LNG in Review: February 28 - March 04, 2016

Alexandra Marie Ferraro's picture
Alexandra Marie Ferraro, Energy Analyst, Guest Reporter
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This week saw a diverse collection of natural gas news. Headlines covered US LNG purchase agreements, an African pipeline, EU dynamics, and a fallen leader. Check them out below:

Tokyo Gas Signs HOA with Diamond Gas International for LNG from US Cameron Project. On Wednesday, Japan’s Tokyo Gas announced it had signed a Heads of Agreement with Diamond Gas International, which is a wholly owned subsidiary of Mitsubishi Corporation. The HOA is for the purchase and sale of LNG from the Cameron Project in the US, in which Mitsubishi has a stake. The agreement envisions a 19-year commitment post-2020.

Tokyo Gas will first purchase 200,000 tons of LNG per year from the 4 million tons per year handled by Diamond Gas International at the Cameron Terminal in Louisiana. Following 2020, Tokyo Gas plans to purchase around 2.12 million tons of LNG per year. The purchase price will be linked to the US Henry Hub. Platts reported that there will be no destination restrictions and deliveries will be done on an ex-ship basis.

This is not the first agreement Tokyo Gas has signed to procure US LNG. Platts says Tokyo Gas already has an agreement with Mitsui & Co. for LNG from the Cameron Project and plans to receive LNG from the Cove Point Project in Maryland. Will Japan continue to increase its LNG imports and will the US be its largest supplier? Leave us a comment.

Former Chesapeake Energy CEO Aubrey McClendon Dies One Day After Indictment for Bid-Rigging. The former CEO of US oil and natural gas company Chesapeake Energy, Aubrey McClendon, has died in a car crash following an indictment for rigging auctions for oil and natural gas drilling rights, several news sources reported this week.

On Tuesday, following an antitrust investigation, McClendon was charged by a federal grand jury for devising a plan to keep the price of leasing drilling rights artificially low in Oklahoma, according to BloombergReuters reported McClendon maintained his innocence.

The oil and gas industry is grieving one of its leaders; McClendon is being called a “visionary” by the industry for pushing forward hydraulic fracturing that revolutionized US oil and gas production. Condolences and tributes are pouring in from executives all over the world.

Chesapeake Energy shares rose 23 percent on Thursday after the company was granted immunity from prosecution in the antitrust case for having reported the violations, according to Bloomberg.

A visionary or a controversial figure? The media has shown several sides to Aubrey McClendon. Share with us what you know.

Cooperation Agreement Signed for Pipeline from Mozambique to South Africa. Partners including SacOil based in South Africa, Mozambique’s state-owned Empresa Nacional de Hidrocabonetos, private sector group Profin, and the China Petroleum Pipeline Bureau signed a cooperation agreement on Tuesday to build a pipeline from Mozambique to South Africa, Platts reported. The project will cost $6 billion, cover 2,600 km, and will aim to increase gas power generation in South Africa, as well as develop gas reserves in Mozambique’s Rovuma Basin.

According to Platts the basin is believed to hold more than 200 Tcf of gas. The pipeline could also deliver gas to countries surrounding South Africa, and contribute to the region’s development. Further, investment in the Rovuma Basin reserves is key for the development of Mozambique and its energy infrastructure.

This is the latest in a wave of investments in African gas fields. What do you expect to see next on the continent?

Norway Voices Concerns for Energy Market as UK Considers Exit from EU. On Tuesday in London Norwegian Petroleum and Energy Minister Tord Lien expressed a desire to see the UK continue its membership with the European Union, according to Bloomberg. The two countries are close allies on a variety of topics and especially share the UK’s stance for more open, competitive energy markets in the EU. Mr. Lien said in an interview, “Norway and the United Kingdom have had tremendous cooperation on a lot of issues – especially economic and industrial issues – for decades, and really commercially for hundreds of years.”

The UK is a key ally for Norway, a non-EU member, vis-à-vis the European Union, particularly in what regards the energy market. As Bloomberg reported, the UK imports 57% of its natural gas from Norway and 45% of its oil.

Would Norway have any political clout in the European Union following a ‘Brexit’? Let us know.

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