September 12, 2022

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ENN Further Reduces Its Stake in Santos

Australian independent Santos said its single largest shareholder ENN has reduced its shareholding to less than 5%.

In a disclosure, Santos said the Chinese city-gas distributor has sold 2 million shares at A$8.25 (US$5.70) per share.

Santos is involved in three LNG-producing projects — Darwin LNG, Gladstone LNG and Papua LNG.

Strategic Relationship

The latest development marks another step in ENN’s gradual sell-down of its shareholding in Santos since it acquired an 11.7% stake for US$750 million in 2016. Together with Chinese equity firm Hony Capital, which is a strategic shareholder of ENN, ENN and Hony Capital held 15.1% of Santos shares in 2017.

Santos announced at that time it had formed a strategic relationship with ENN and Hony Capital, which would remain effective as long as both firms held at least 15% of Santos shares.

The substantial holding by the Chinese firms had led to speculation that Santos, which was embattled by low oil prices at that time, could become a target for takeover. Under the strategic relationship, ENN and Hony Capital would use Santos as the primary investment vehicle for investment in upstream gas and LNG production in Australia and Papua New Guinea (PNG). Santos also targeted forming an LNG trading joint-venture with ENN to sell LNG into China.

ENN operates China's first privately owned receiving terminal at Zhoushan in Zhejiang province.

Selling Down

But plans for future cooperation did not go as planned.

Last year, ENN sold 107.1 million shares in Santos at A$7.33 per share which reduced its stake to 9.97%. ENN remained the single largest shareholder of Santos after the sale, but it marked the end of a strategic relationship with Santos. An ENN director resigned from the Santos board following the sale. The 2021 sell-down came at a time when China-Australia relations became rocky.

Despite initial interest, ENN has not firmed up any LNG supply deals with Australian producers. Instead, it inked long-term supply deals with aspiring US LNG exporters Energy Transfer and NextDecade earlier this year.

ENN's further sell-down has come at a time when China is now experiencing very weak domestic gas consumption and a significant decline in LNG imports this year.
Clara Tan, Singapore

Eni Looks to Expedite Abu Dhabi Gas Projects

Italy's Eni said on Monday it has spoken to Abu Dhabi National Oil Co. (Adnoc) about accelerating gas projects in the Mideast Gulf emirate.

The discussions — between CEOs Claudi Descalzi and Sultan al-Jaber — come as Europe scrambles to find alternative sources of gas as quickly as possible to replace a sharp drop in imports from Russia following its invasion of Ukraine.

Meeting in Abu Dhabi, Descalzi and al-Jaber "discussed the acceleration of the multibillion-dollar Ghasha project," Eni said, without giving a specific time frame.

Adnoc holds a 55% stake in the Ghasha offshore concession to Eni’s 25%. It has previously said that it hopes to achieve first production from the sour gas project around 2025.

At its peak, Ghasha is expected to produce more than 1.5 billion cubic feet per day of raw gas, as well as 120,000 barrels per day of oil and condensate.

The other Ghasha shareholders are Germany’s Wintershall Dea on 10% as well as Austria's OMV and Russia's Lukoil on 5% each.

Carbon capture is integrated into the Ghasha project, which is intended to push the United Arab Emirates closer to its goal of becoming self-sufficient in gas by 2030.

Al-Jaber, who serves concurrently as the UAE's minister of industry and advanced technology, has also spoken about exporting surplus gas volumes as LNG.

Descalzi also presented al-Jaber with fast-track development options for Eni's recent gas discovery in Abu Dhabi's offshore Block 2.

Eni said in July that its first exploration well drilled on the block had found a total of 2.5 trillion to 3.5 trillion cubic feet of gas in place.

Development could utilize "existing Adnoc facilities with the aim to optimize costs and accelerate common production targets," said Eni, which has a 70% operated interest in Block 2. Thailand's PTT Exploration and Production (PTTEP) holds a 30% stake.

Descalzi and al-Jaber also discussed several initiatives to strengthen their energy transition partnership by deploying renewable energy and developing a carbon capture, utilization and storage project (CCUS), Eni said.
Tom Daly, London


Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India61.6962.2161.7062.2161.2361.0562.7960.5862.6861.7760.8660.5260.92
Sodegaura, Japan62.1463.8163.8263.9562.0657.9163.3360.7263.1864.3761.1860.1462.29
Zeebrugge, Belgium52.3150.4149.9350.5151.7252.1251.2949.9551.1349.9751.8550.7651.95
Huelva, Spain66.9364.9264.4165.0366.2665.9965.8464.3365.6964.4566.3265.0566.33
Isle of Grain, UK36.8135.0734.6535.1636.3036.6436.0034.6535.7434.6836.4035.4136.49
Everett, US6.434.955.285.016.135.990.015.725.514.606.62----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback11. Apr25. Apr9. May23. May6. Jun20. Jun4. Jul18. Jul1. Aug15. Aug29. Aug12. Sep10203040506070Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia65.0065.180.170.18
SW Europe48.4067.63-1.1619.23
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)0.258.258.00--
NBP, UK (futures)-3.5640.2943.8553.62
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF-1.3955.4656.8564.53
Zeebrugge (Belgium)0.6945.6644.9629.65
German NCG-2.4254.6457.0670.67
NBP (UK)-1.1637.6738.8329.67
US Markets
US Spot Prices
Sabine Pass, Louisiana-0.028.088.10--
Corpus Christi, Texas0.357.757.40--
Cove Point, Maryland0.307.407.10--
Elba Island, Georgia--8.08----
Nymex Henry Hub Futures
Near Month0.258.258.00--
Second Mth0.248.298.04--
Third Mth0.248.428.18--
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaOct '21Nov '21Dec '21Jan '22Feb '22Mar '22Apr '22May '22Jun '22Jul '22Aug '22Sep '220255075100125Energy Intelligence