September 15, 2022

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Gazprom Mulls Doubling Portovaya LNG Capacity

Russia’s Gazprom is considering expanding the newly launched 1.5 million ton per year Portovaya LNG export plant in northwestern Russia by another 2 million tons/yr.

The state-controlled gas giant on Thursday signed a cooperation agreement with its affiliates RusKhimAlyans and Gazprom Linde Engineering to jointly assess the possibility of building an extra train with capacity of up to 2 million tons/yr using domestic technology and equipment.

The deal was signed on the sidelines of the St. Petersburg International Gas Forum.

Portovaya LNG expansion is in line with Russia’s plans to build up LNG export capacity despite EU sanctions that close its access to Western liquefaction equipment.

Unlike large-train technology, which Russia has yet to develop, Moscow has technology for small-scale and medium-sized facilities.

The long-delayed Portovaya LNG loaded its first cargo earlier this week.

Gazprom said on Thursday the facility is still in commissioning stage, although earlier in September the facility completed the crucial 72-hour tests intended to make sure all systems work properly.

Partners

RusKhimAlyans, a joint venture between Gazprom and compatriot RusGasDobycha, is developing a 13 million ton/yr LNG facility as part of their larger 45 billion cubic meter per year Ust-Luga gas processing complex, also in northwestern Russia.

Gazprom Linde Engineering is a subsidiary of RusKhimAlyans. The latter took control of the former after German engineering company Linde withdrew from its Russian joint ventures due to the war in Ukraine.

Russian business daily Kommersant reported earlier this month that RusKhimAlyans wanted to join Portovaya LNG to gain experience for the Ust-Luga project, scheduled for 2024. RusKhimAlyans did not take part in construction of the first two 750,000 ton/yr trains at Portovaya.

Small-Scale LNG

The gas giant’s Gazprom Helium Service subsidiary on Thursday signed deals to produce small-scale LNG as well as containers for transportation of LNG.

The company agreed to build a small-scale LNG complex in the Astrakhan region in southern Russia, mainly for the mobility sector, including sea/river vessels, and potentially off-grid consumers. The project’s capacity was not provided.
Staff Reports

CCS Proves Challenging for Browse

Incorporating carbon capture and storage (CCS) to the stalled US$20.5 billion Browse project offshore Western Australia is proving to be a challenging task, according to Woodside Energy's final environmental report for the proposed Browse to North West Shelf (NWS) project.

Woodside CEO Meg O'Neil has said several times in recent months that the 8%-12% CO2 contained in the Browse fields needed to be managed for the project to move forward.

The Project

The Browse project consists of drilling up to 50 wells to extract the 13.9 trillion cubic feet of dry gas, and approximately 390 million barrels of condensate contained in the Brecknock, Calliance, and Torosa reservoirs.

The gas and condensate would be extracted to two 1.1 billion cubic feet per day FPSO vessels that would be connected via a pipeline to the existing 16.9 million ton per year North West Shelf LNG plant.

Browse is targeted to commence in the mid-2020s with operations expected for up to 44 years. This means NWS would be in operation until around 2070.

High Risk, High-Cost

“Geo-sequestration was assessed as presently being a high risk, high-cost mitigation option for Browse reservoir CO2 [carbon dioxide],” Woodside said in its environmental report, repeating almost word for word what it concluded back in 2019 in its draft environmental report.

Woodside also said, “CCS for an offshore floating facility remains technically challenging,” adding that CCS technology will improve.

The generation and use of Australian Carbon Credit Units through carbon farming methodologies is a significantly lower risk and more cost-effective option that achieves an equivalent climate outcome, it said.

However, Woodside is not entirely dropping its CCS project.

Two-Phase CCS Plan

The current concept provides space on board the floating production, storage and offloading (FPSO) vessels to install facilities to reinject reservoir greenhouse gas emissions.

Woodside envisages that in an initial phase Browse would be allowed to release GHG emissions offshore into the atmosphere on the condition that a Pilbara CCS hub is established.

In a second phase, CCS would be used once the Calliance field, or another field in the Browse basin, such as Prelude or Icthys, is depleted.

Although the report does not mention it, Woodside recently won a GHG storage permit in the Browse Basin that could be used to store CO2 from the Browse fields.

Whichever field is used, the creation of a CCS hub would offer an option to decarbonize operations at Woodside’s Pluto LNG plant and other industries in Western Australia.

Woodside estimates that with Pluto emissions, a 9.2 million ton/yr CO2e CCS hub could be established.

Woodside seems to have ruled out injecting CO2 in the Calliance filed while production is happening as it would likely be “too risky,” it said.

Woodside also said that collecting the offshore emissions and piping them to NWS “might also be infeasible.”

Browse Forecast Scope 1 Greenhouse Gas Emissions Summary
CO2e million tonsAvg. YearPeak Production YearTotal Expected Field Life (30 years)Total Extended Field Life (44 years)
Reservoir Emissions2.3 (2.6)*4.0 (4.6)*70 (81)*93 (107)*
Fuel Gas1.22.13850
Flaring0.140.1446
Fugitives0.010.020.30.4
Upstream Total3.6 (4.0)*6.2 (6.8)*112 (123)*149 (163)*

Marc Roussot, Singapore

India Gas Exchange Seeks to Launch Truck-Loaded LNG Contract

India Gas Exchange (IGX), which offers a trading platform for physical gas delivery, is now seeking to launch a contract for supplying LNG via trucks to help ensure supplies to consumers not connected with the national gas grid.

IGX currently offers a contract for regasified LNG.

Supplies will be from LNG regasification terminals at Dahej, Hazira, Mundra and Kochi on the Arabian Sea and from Ennore on the Bay of Bengal.

State refiner Indian Oil, explorer Oil and Natural Gas Corp, gas pipeline utility Gail India and private players Torrent Gas and Adani Total, each hold a 5% stake in IGX which began operations end-2020 in the world's fourth largest LNG importer.

Price Hurdle

But the contract will face spot LNG prices that remain unaffordable for the majority of consumers. Northeast Asia’s spot LNG prices dropped by $23 week-on-week to $42 per million Btu, according to Energy Intelligence assessments for deliveries four to eight weeks ahead.

“Currently, the price of gas has gone up and we see there is resistance (in buyers) because the spot market needs lower prices,” IGX Chief Executive Officer Rajesh Mediratta told analysts during a recent conference call.

Demand Rising

Mediratta added that over the next year and beyond there will be “much better conditions” for the gas sector as consecutive bidding rounds for city gas distribution (CGD) projects have ensured that 95% of the population will be covered by gas pipeline networks which will become operational in the next two to three years. CGD projects supply gas to household, industrial and automobile consumers via pipelines.

Mediratta sees India’s gas demand rising to 500 million cubic meters a day by 2030 from 160 MMcm/d currently.

India is in the process of expanding its LNG import capacity to 72 million tons a year over the next three years and expanding its gas pipeline transmission infrastructure to 35,000 kilometers from 20,000 kilometers in coming years, he noted.
Rakesh Sharma, New Delhi


Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India38.3438.8038.3838.7937.9537.7939.3037.3939.2138.4237.6137.3237.69
Sodegaura, Japan38.9440.4040.4240.5238.8835.2139.9937.7139.8640.8938.1037.1739.07
Zeebrugge, Belgium42.5440.7540.3140.8441.9942.3741.5840.3141.4440.3442.1241.0942.22
Huelva, Spain27.8126.2225.8526.3027.2927.0926.9525.7426.8325.8527.3426.3527.36
Isle of Grain, UK34.7133.0032.5833.0834.2134.5433.9132.5833.6532.6034.3033.3334.40
Everett, US6.284.815.134.875.995.850.015.585.374.466.48----
Created with Highcharts 9.0.0($/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 Asia42.0041.65-0.49-0.35
SW Europe37.7528.47-6.57-9.28
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)-0.798.329.117.92
NBP, UK (futures)-2.4844.3346.8147.12
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF-5.2755.6660.9461.70
Zeebrugge (Belgium)-11.5040.0251.52--
German NCG-4.5955.9460.5361.87
NBP (UK)-6.3135.5541.8638.99
US Markets
US Spot Prices
Sabine Pass, Louisiana-0.098.568.658.08
Corpus Christi, Texas-0.427.848.267.61
Cove Point, Maryland7.277.270.007.31
Elba Island, Georgia0.418.568.15--
Nymex Henry Hub Futures
Near Month-0.798.329.117.92
Second Mth-0.808.379.177.97
Third Mth-0.798.529.318.10
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaOct '21Nov '21Dec '21Jan '22Feb '22Mar '22Apr '22May '22Jun '22Jul '22Aug '22Sep '220255075100125Energy Intelligence