March 13, 2023


Venture Global Claims First FID of 2023

Venture Global has taken a final investment decision (FID) on phase two of its Plaquemines LNG export terminal, becoming the first company to pull the trigger on new liquefaction capacity in 2023.

Venture Global announced the FID and closing of the $7.8 billion project financing for the second phase on Monday. Venture Global issued the KZJV joint venture between KBR and Zachry Group a full notice to proceed with construction.

Combined with the 13.33 million ton per year capacity first phase, which saw FID in May last year, the two phases represent $21 billion of investment, marking the largest project financing ever done, according to the US LNG player. Construction financing was provided by 23 banks — many of which also featured in the $13.2 billion first phase.

Venture Global did not disclose the capacity of the second phase, however the company has previously said the terminal will produce 20 million tons of LNG, suggesting the latest phase will add around 6.7 million tons of liquefaction capacity.

Sanctioning of the second phase comes nearly three weeks after Venture Global announced a 20-year sales and purchase agreement with compatriot Excelerate Energy, which agreed to buy 0.7 million tons of LNG from the Plaquemines facility. The Excelerate deal means Venture Global has signed long-term deals for 19.7 million tons of LNG from the Louisiana export terminal, according to Kpler data.


Venture Global has won the race for first FID of the year and several of its compatriots are also expected to cross the finish line in the coming weeks after a spree of supply deals sparked by the war in Ukraine.

Sempra has said it is looking to greenlight the first phase of its Port Arthur LNG project before the end of the first quarter. NextDecade has also said it expects to pull the trigger on the first three trains of its Rio Grande LNG project this quarter.
Eric Thorp, London

India to Briefly Facilitate Gas-Fired Generation

For a one month period this spring, Indian state-run generator NTPC will buy power, produced via imported spot LNG, to help get India past a looming power crisis this summer.

India may experience peak electricity demand of 230 gigawatts this summer because of heatwaves and record temperatures, the Central Electricity Authority said.

The month-long NTPC tender enables independent gas-fired generators — from Apr. 10 to May. 16 — to buy expensive spot LNG and pass on the costs, via higher power tariffs, to consumers.

Independent gas-fired power plants represent a combined 4 GW of capacity.

NTPC will sell the gas-fired power, procured via an auction, in the spot market on the power exchange to secure the higher tariffs, according to the tender document seen by Energy Intelligence.

Generators have an option to source LNG directly or import the fuel via state gas distributor Gail.

A Brief Revival

The government’s decision to link spot LNG rates to the electricity tariff will allow India’s gas-fired generation to revive, albeit for a brief period.

Most of India's 25 GW of grid-based, gas-fired power capacity is unaffordable, thus either shut or operating at low levels.

Indian gas-fired generators can only be competitive if LNG is available at around $6 per million Btu because coal and solar power is much cheaper, an industry official told Energy Intelligence. Yet tariffs for gas-fired generators must be higher to afford spot LNG, he said.

Only 11% of gas used for generating power in January was imported LNG.

The gas-fired revival will have competition in that the government has also asked utilities to import coal and offered higher tariffs for that sector.

Domestic gas is not likely to contribute to a gas-fired power revival as it is prioritized for city gas and fertilizer units, not power generation.

Tariff Formula

The highly complex tariff formula assumes LNG delivered ex ship at a base rate of $13/MMBtu, and at an exchange rate of 82.7 rupees to the US dollar. At these base values, the seller of gas-fired power will get 8.80 rupees per kilowatt hour (11¢/kWh) in tariff.

The government has appointed NTPC, India's biggest generator, as a nodal agency to facilitate supply of 4 GW from gas-based power plants to the Indian Energy Exchange (IEX)

The tariff payable will be on a Rs/kWh basis with two components - one called variable charges linked to gas price (VCG) and the other called variable charges not linked to gas price (VCNG). The seller shall be entitled to receive variable charges toward energy scheduled in IEX at the rate of 8.80 rupees per kilowatt hour, which shall be linked to the price of gas in rupees/MMBtu and the exchange rate, NTPC said.
Dinakar Sethuraman, New Delhi

Private Russian Firm Seeks LNG Upstream Block in Arctic

A private Russian company seeks to acquire an upstream block in the Arctic which might be a potential resource base for LNG production in the region, business daily Kommersant reported on Monday.

A company called Yamalshelf, led by former energy minister Igor Yusufov, has applied for the East Tassiysky block, now held by the government and located close to the license areas of Novatek, Russia’s LNG export champion, with plans to significantly expand LNG production in the Arctic.

Yusufov’s Fund Energy teams up with Novatek in the Yargeo joint venture developing the Yarudeiskoye oil field in West Siberia.

The block will qualify for LNG export rights under a bill submitted by the government to the Russian parliament last week, as it is located to the north of the 67th parallel.

Russia seeks to reserve more resource base for LNG expansion as it seeks to produce 100 million tons per year in seven years, up from 32.5 million tons in 2022, to diversify its gas exports amid the loss of the European market for pipeline gas. The 100 million ton expansion target contrasts with the pre-war 140 million ton target.

Located in the shallow-water Ob Bay, the East Tassiysky block is also near the giant Tambei field of state-run giant Gazprom that harbors more than 7 trillion cubic meters in gas reserves. Novatek has long sought to get access to Tambei gas which it believes is crucial for Russia’s LNG expansion plans, while Gazprom wants Tambei to feed its own petrochemical ambitions.

Yamalshelf initially applied for East Tassiysky in 2021, after application rules for offshore blocks in inland waters were eased in 2020, but had to change the block’s borders in the application so that it doesn’t overlap with a nature reserve, according to a Yamalshelf letter sent to the Russian government last month and quoted by Kommersant.
Staff Reports

Taiwan Turns to LNG as Another Nuclear Reactor Closes

State-owned Taiwan Power will make use of diverse power supply and deployment methods, including additional LNG capacity, to compensate for the retirement of the second of two 985 megawatt boiling water reactors at its Kuosheng nuclear power plant at Taiwan's northern tip.

Economic Affairs Minister Wang Mei-hua said that there was wide public concern over the possible impact on power supply stability after the Kuosheng 2 reactor retires Mar. 14 after fulfilling its 40-year licensed term of operation.

Wang said that Taipower had made extensive preparations to face summer peak time loads, which last year often reached over 42 gigawatts without the Kuosheng 2 unit.

Taipower spokesman Wu Chin-chung stated that the average operating reserve ratio for the grid would be maintained at over 10% during daytime peak periods and over 7% during the evening peak period this summer.

Build Out

The economics minister noted that construction of large scale power facilities, especially of LNG-fired units, had far exceeded power plant retirements.

Wang said 7.8 GW of capacity in large scale power generators had been added during 2016-22, while 5.27 GW had been retired, a calculation that she said did not include the addition of renewable power capacity.

Wang said that the Kuosheng 2 retirement would not cause any shortage in power generation capacity due to a program of advance maintenance and repair outages facilitated by the regular supply of 1 GW this winter from wind power as well as more frequent maintenance reviews.

Wang said that 3.25 MW of capacity would return to service in March, including the 800 MW Dalin 2 coal fired unit, and 3.86 GW in April, including the 800 MW Linkow 1 coal-fired generator.

In addition, Wang said Kuosheng 2's 985 MW capacity will be exceeded by the entry into Taipower's grid this summer of the 1,120 MW LNG-fueled eighth unit of the Datan power plant in Taoyuan City and the 180 MW small scale set of turbines at its Tongsiao facility in Miaoli County, which began operation in January.

Deployment Speed

The economic minister related that the influx of solar, offshore wind and other renewable power capacity has led to a change in power deployment strategies in which power supply resiliency is based on fast response and the degree of power supply margin.

Wang related that the fastest deploying power sources are storage batteries, which require only seconds; hydropower, which needs 5-10 minutes; and LNG-fueled power, which needs 30-60 minutes from warm up to full capacity.

Less flexible options are coal, which requires at least 3-5 hours, and nuclear power, which needs over a full day.

Getting Thru the Day

Wang said that solar power output, which now regularly supplies 5 GW-6 GW at peak times, should supply as much as 7 GW of power during daylight peak hours of 10 am through 3 pm this summer.

Moreover, Wang said the evening peak periods from 6 pm through 9 pm will be covered by increased use of LNG and coal fueled capacity of Taipower and independent power producers in addition to approximately 4.4 gigawattsGW in hydropower and pumped storage.

Wang described the cyclic pumped storage facility at Sun Moon Lake in mountainous central Taiwan as "the country`s biggest battery" for its capability of providing 2.6 GW of power in the late afternoon and early evening.

Wang said another 1 GW of power deployment will be gained from demand management, specifically through the use of favorable rates for large users who shift power use from the evening to daytime peak periods when solar power is strongest.

Kuosheng's Undoing

Taipower President Wang Yao-ting told Energy Intelligence that the Kuosheng plant's operation could not extend beyond its licensed period according to law as Taipower had not applied for an extension, a procedure which requires a five-year advanced notice.

Wang added that besides the legal requirement, the spent fuel pools of both Kuosheng units are full, preventing any refueling of either unit. Taipower's plans to construct an indoor dry storage facility have thus far been blocked by the New Taipei City government.
Dennis Engbarth, Taipei

Petronas Eyes Indonesia's Abadi Gas Project

Malaysia's national oil company Petronas says it is interested in investing in the stalled Abadi gas project offshore Indonesia as part of its expansion plans.

During an earnings presentation on Monday, Petronas CEO Tengku Muhammad Taufik confirmed that the company had started talks about possibly joining the project.

Shell opened a data room in 2020 with a view to selling its 35% interest in the Masela Block, which holds the Abadi gas field. The block is operated by Japan's Inpex which holds 65%.

The Masela Block holds an estimated 10.7 trillion cubic feet of gas, that was supposed to feed the long-delayed 9.5 million ton/yr Abadi LNG project.

Taufik did not say how large a stake Petronas might acquire in the Masela Block, but it is unlikely to take Shell's entire 35% interest.

Indonesian authorities have said in the past that the country's state-owned Pertamina could form a consortium with Petronas and other partners to acquire Shell's stake.

Taufik emphasized that Petronas would have to carefully weigh the terms on offer before making a decision about participating in the development of Abadi.

Full Steam Ahead on Gas

"Our ambitions in LNG are well known," Taufik said when asked how Abadi would fit into Petronas' portfolio.

"Petronas is one of the top five global LNG producers and we want to preserve our market share with the longer-term aspiration of reaching 55 million tons per year," Taufik said.

Petronas sold 448 LNG cargoes last year, representing over 34 million tons of LNG.

Taufik said Petronas expects natural gas to be the only hydrocarbon to benefit from continuous growth in demand over the next two decades.

"And we expect that Petronas will play a role to service not only our core markets but also new emerging markets, as many nations transition away from coal," he added.


As part of its growth plans, Petronas will ramp up exploration over the next five years with a focus on domestic basins offshore Sarawak, Sabah and Peninsular Malaysia.

The company expects to drill 25 to 30 wells per year in Malaysia to replenish its resources, said Petronas Upstream CEO Adif Zulkifli.

The presence of existing infrastructure in domestic basins allows projects to be developed as tie-backs, which can lower costs and shorten timelines.

But Zulkifli said Petronas will also help to open up new areas for exploration.

Energy Intelligence understands that the company is interested in the Orange Basin offshore South Africa and Namibia, where Shell and TotalEnergies have made large discoveries.

To fund its growth plans, Petronas intends to spend around 60 billion ringgit ($13.3 billion) per year in 2023-27, 43% more than the annual average of 41.7 billion ringgit spent in 2018-22.

Petronas will allocate about 20% of its capital spending to decarbonization and energy transition projects over the next five years.
Petronas 2022 Earnings Results
(billion ringgit)20222021%Chg.
Total Revenue375.324851%
Profit After Tax101.650.9100
Gross LNG Sales (million tons)32.734.24.6
Production (000' boe/d)2,4342,2757%

The delayed Limbayong oil and gas project offshore Sabah is one of the key projects that Petronas is progressing after revising the development plan.

The company is considering a tie-back development to facilities at nearby fields to lower costs, said Taufik.

Options include Bestari, Kikeh and Gumusut-Kakap, which are operated by Petronas, PTTEP and Shell, respectively.

"One of the preferred tie-back options is to the Kikeh floater which is around 25-30 kilometers away, although that is quite long for a deepwater tie back," Rystad Energy analyst Prateek Pandey told Energy Intelligence.

Gumusut-Kakap is closer than Kikeh, but it might not have enough spare capacity after Shell sanctioned a new phase of development last year, Pandey said.

Limbayong was sanctioned back in 2021, but was soon sent back to the drawing board because inflation pushed up the cost of a planned floating production storage and offloading (FPSO) vessel.

Under the original tender specifications, the Limbayong FPSO was to have had a production capacity of 60,000 b/d for liquids (including 40,000 b/d of oil) and 180 million cubic feet per day of gas.
Marc Roussot, Kuala Lumpur

In Brief

EU Moves to Counter Offshore Sabotage

The EU will step up naval and aerial surveillance of critical offshore energy infrastructure as part of plans to counter sabotage attacks at a time of heightened tensions in Europe caused by Russia's war in Ukraine.

Under an updated maritime security strategy adopted on Friday, the EU plans to hold an annual joint naval exercise from 2024, expand coastal patrols and surveillance of subsea and surface infrastructure.

The aim is to protect critical assets, including gas pipelines, subsea data cables, offshore oil, gas and wind installations, LNG terminals and floating storage and regasification units.

The vulnerability of critical energy infrastructure was highlighted by attacks in September that caused serious damage to the Nord Stream pipelines that were built to carry Russian gas to Germany.

"The 2022 attacks on the Nord Stream pipelines in the Baltic Sea, the presence of unauthorized unmanned vehicles around offshore installations in the North Sea and the recurrent hybrid and cyber-attacks targeting maritime infrastructure require the EU to bolster its action and protect its critical infrastructure more effectively," the European Commission said.

Officials from Germany, Denmark and Sweden are still investigating who was responsible for the Nord Stream explosions.

"Malicious actors are increasingly likely to use hybrid and cyber means to target maritime infrastructure, including undersea cables and pipelines, as well as ports and ships," the commission said.

The updated strategy also calls for an action plan to tackle the problem of unexploded mines and other ordnance in the Black Sea and elsewhere as a result of the war between Russian and Ukraine and previous conflicts.
Deb Kelly, London

Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India9.7710.159.8510.149.509.3610.539.0910.469.879.239.009.30
Sodegaura, Japan10.6111.7611.7811.8310.597.7111.469.7011.3512.129.979.2310.72
Zeebrugge, Belgium15.7314.3213.9914.3815.2915.6014.9713.9614.8513.9915.4114.6115.49
Huelva, Spain11.7910.4610.1510.5111.3511.1911.0710.0410.9610.1511.4110.5911.42
Isle of Grain, UK14.7413.3313.0113.3814.3214.6014.0712.9813.8613.0114.4113.6314.49
Everett, US1.820.480.780.541.551.430.011.170.990.181.99----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback10. Oct24. Oct7. Nov21. Nov5. Dec19. Dec2. Jan16. Jan30. Jan13. Feb27. Feb13. Mar10203040Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia13.2012.82-0.30-0.38
SW Europe11.1012.42-0.361.32
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)0.182.612.432.57
NBP, UK (futures)-1.0215.0516.0712.71
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF-1.4315.5516.9813.77
Zeebrugge (Belgium)0.5112.6312.12--
German NCG1.4314.3212.8912.21
NBP (UK)-0.3615.5215.8813.84
US Markets
US Spot Prices
Sabine Pass, Louisiana0.062.432.372.46
Corpus Christi, Texas0.202.362.162.40
Cove Point, Maryland0.422.712.292.63
Elba Island, Georgia------2.35
Nymex Henry Hub Futures
Near Month0.182.612.432.57
Second Mth0.172.732.562.73
Third Mth0.172.972.802.93
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaApr '22May '22Jun '22Jul '22Aug '22Sep '22Oct '22Nov '22Dec '22Jan '23Feb '23Mar '230255075100125Energy Intelligence