Southwestern Energy Company announced that it has closed its recently announced acquisition of approximately 162,000 net acres in the Marcellus Shale in Pennsylvania.

The properties were acquired from Chesapeake Energy Corporation and its partner for approximately $93 million, excluding purchase price adjustments. Southwestern has financed the acquisition with its revolving credit facility.

Southwestern Energy Company is an independent energy company whose wholly-owned subsidiaries are engaged in oil and gas exploration and production, natural gas gathering and marketing.

LNG World News Staff, May 17, 2013; Image: National Fuel

API President and CEO Jack Gerard congratulated Ernest Moniz on his Senate confirmation to become Secretary of the Department of Energy and urged Secretary Moniz to quickly approve LNG export projects that will create American jobs and help lower our national debt.

“We congratulate Secretary Moniz on his confirmation. His vast energy experience in oil and natural gas has prepared him well to lead the department at this historic time. We look forward to working with the secretary and urge him to quickly approve LNG export applications that would mean more jobs and growth and an improved balance of trade. If we allow natural gas producers to export natural gas, American workers and our nation’s economy will be better off.

“Secretary Moniz understands the energy revolution underway in the United States. New technology and the use of that technology are showing we have vastly more energy potential than we thought we had even just a short time ago. The U.S. is awash in natural gas with huge additional productive capacity that can fully supply domestic markets with affordable and clean-burning natural gas, enhance our energy security and allow for exports well into the future.”

U.S. LNG exports could create tens of thousands of domestic jobs while having only minimal impacts on domestic U.S. natural gas prices, a new report for API by ICF International finds.

LNG World News Staff, May 17, 2013

The Aamira LNG carrier, with a capacity of 266,000 cubic metres, is due to arrive in the UK’s South Hook terminal on May 23, according to the Milford Haven Port Authority website.

This is the second cargo that is scheduled to arrive at the South Hook terminal in the next seven days and they are both sailing from Ras Laffan in Qatar.

Qatar Petroleum owns 67.5 per cent of South Hook LNG Terminal Co, Exxon Mobil Corp 24.15 per cent and Total SA owns the rest.

LNG World News Staff, May 17, 2013; Image: Nakilat

Mexico imported a record volume of natural gas in 2012, about 2.1 billion cubic feet per day (Bcf/d), which was up 21% from 2011. Natural gas flows from U.S. pipelines accounted for about 80% of Mexico’s overall natural gas imports in 2012; U.S. natural gas exports to Mexico in 2012 were almost 1.7 Bcf/d, more than 24% higher than in 2011. Since 2006, imports of liquefied natural gas (LNG) have made up the remainder of Mexico’s imported natural gas needs. Mexico’s LNG imports averaged about 0.4 Bcf/d in 2012, representing about 20% of its overall natural gas imports.

Imports of LNG became a part of Mexico’s gas supply starting in 2006. Mexico imports most of the LNG from Nigeria, Qatar, and Peru. LNG imports accounted for 38% of Mexico’s total natural gas imports in 2010, or more than 0.5 Bcf/d. LNG’s share of Mexico’s imports has declined since then because of growing natural gas imports via pipelines from the United States, which have been more economically attractive given the recent decline in U.S. natural gas prices.

The future role LNG imports may play in meeting Mexico’s need to provide natural gas reliability depends mostly on the relative economics and constraints of importing natural gas from the United States by pipeline versus the price and availability of importing LNG; production trends in Mexico; and the development of additional natural gas infrastructure in Mexico. Mexico’s LNG import capabilities are as follows:

• Altamira. Altamira, Mexico’s first LNG regasification facility, has a capacity of 0.6 Bcf/d and began commercial operations in 2006. In its first year of operation, Altamira imported on average 0.1 Bcf/d of LNG from Trinidad and Tobago, Qatar, Egypt, and Nigeria.
• Energia Costa Azul. Starting in 2008, Sempra placed into service the Energia Costa Azul LNG terminal with a capacity of 1 Bcf/d on Mexico’s west coast in Ensenada, Baja California. The Costa Azul terminal, however, has been underused because expected shipments of LNG were diverted to Asian markets with higher prices. In addition, potential demand for shipments of regasified LNG from Mexico to the western United States has decreased because expansions of the Kern River and Ruby pipelines now flow U.S.-sourced gas into that area.
• Manzanillo. The 0.5 Bcf/d Manzanillo LNG regasification terminal was placed into service in 2012.
• Potential new projects. Construction of up to five LNG regasification projects over the next several years could add more than 4 Bcf/d of incremental regasification capacity.

Source: EIA, May 17, 2013

Ukraine imported over 120 million cubic meters of natural gas in April 2013 from Poland alone, reported the press service of the public gas transporting company Ukrtransgaz. This number exceeds the volumes of gas imported in March by 4.2 times (24.3 million cubic meters). Additionally, last month Ukraine imported over 18 million cubic meters of gas from Hungary.

Starting November 2012, until May 1, 2013, a total of 291 million cubic meters of gas flowed into Ukrainian gas transporting system through the territories of Poland and Hungary. Notably, on April 1, 2013, Ukraine launched reverse gas supplies from Hungary.

Earlier, Vice Prime Minister of Ukraine Yuriy Boyko said that the increase in reverse gas supplies from the European Union was one of the strategic challenges Ukrainian government was facing. The government was investing extra efforts into diversifying Ukraine’s energy sources. Reportedly, such efforts may prove effective in gaining independence from expensive Russian gas.

In December 2012 Ukraine’s Naftogaz paid UDS 407.5 per 1,000 of cubic meters of gas imported from Germany, while still paying USD 429.3 for Russian gas. In April 2013 the Eastern European country imported 800.8 million of cubic meters of Russian gas, however, Ukraine plans to further decrease the volumes.

Notably, Ukraine is also planning to arrange reverse gas supply of up to seven billion cubic meters from Germany through Hungary and Slovakia. Ukraine and the German company RWE signed the contract to supply approximately one million cubic meters of natural gas per day during November-December 2012.

Currently Ukrainian and Slovak parties are negotiating the Interconnection Agreement. Today Ukraine launched gas import from Slovakia in the test mode, as announced by Ukraine’s Minister of Energy and Coal Industry Eduard Stavytskyi. Reverse supplies through Slovakia could provide 10 billion cubic meters of natural gas annually. Slovakia is believed to be the main gas transporting corridor from the EU to Ukraine.

Ukrtransgaz has also signed a memorandum with the Romanian SNTGN Transgaz regarding daily supplies of up to five million cubic meters of gas from Romania.

LNG World News Staff, May 17, 2013

Governor Tom Corbett awarded more than $6.7 million in Act 13 funding to 18 companies and organizations making the switch to natural gas for their heavy-duty fleet vehicles.

“Act 13 was a leap forward in strengthening oversight of the drilling industry,” Corbett said. “The law was also a leap forward in helping to continue to grow jobs and clean the air at the same time as demand in the transportation sector develops. Natural gas, particularly from the shale formations here in Pennsylvania, is an abundant, affordable, domestic fuel that is putting this country on a path to energy independence.”

Act 13 of 2012 was the single biggest step in modernizing the state’s Oil and Gas Law in nearly three decades. It increased protections of private water supplies, empowered the Department of Environmental Protection to issue larger fines and included one of the most progressive hydraulic fracturing fluid disclosure laws in the nation.

The Act also authorized DEP to develop and implement the Natural Gas Energy Development program, which distributes up to $20 million in grants over three years to help pay for the incremental purchase and conversion costs of heavy-duty natural gas fleet vehicles.

In this first round, $5 million was reserved for local transportation organizations, as obligated by the Act. DEP received applications from 49 applicants requesting nearly $13 million in grants. An additional $11 million will be available in August, with 50 percent slated for local transportation organizations. The third and final grant round is slated to open in 2014.

Eligible vehicles for all three rounds of the Natural Gas Energy Development program include those fueled with compressed natural gas (CNG), liquefied natural gas (LNG) or bi-fuel vehicles weighing 14,000 pounds or more.

Grant requests cannot exceed 50 percent of the incremental purchase or retrofit cost per vehicle or a maximum total of $25,000 per vehicle.

Governor Corbett also announced today a May 25 opening for the Alternative Fuel Incentive Grant (AFIG) program, providing an estimated $10 million to help companies and organizations purchase or convert CNG, LNG or bi-fuel vehicles weighing less than 14,000 pounds, as well as electric, propane or other alternative fuel vehicles of any weight. Applications will also be accepted for innovation in alternative fuel transportation, including non-road vehicles, such as natural gas-powered trains or marine vessels. The AFIG program is funded by a gross receipts tax on utilities.

LNG World News Staff, May 17, 2013; Image: governor.state.pa.us

The Institute of the North, an Anchorage-based nonprofit that promotes understanding of Arctic and natural resource management issues, has prepared a six-minute video on federal laws governing export of Alaska North Slope natural gas.

Interest has been renewed in liquefying Alaska gas and shipping it aboard tankers to buyers in Japan, China, India and other Asian markets. The video explains the roles that 1938, 1975 and 1976 federal laws play in the process for approving such Alaska natural gas exports.

Alaska is one of several potential LNG suppliers to Asian gas and electric utilities that are increasingly relying on the cleaner-burning fuel to meet their customers’ needs.

The Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects assisted with the video project.

LNG World News Staff, May 17, 2013; Image: Institute of the North

The ten regional electric power companies in Japan consumed 4.37 million tonnes of LNG in April, down 4.2 percent compared with the same month a year earlier, according to the Federation of Electric Power Companies of Japan (FEPC).

The power companies bought 4.74 million tonnes of LNG in April, up 0.4 percent on year.

The companies consumed a record 55.79 million tonnes equivalent of LNG in the previous fiscal year that ended in March.

Power companies account for two-thirds of total Japanese LNG imports.

LNG World News Staff, May 17, 2013; Image: TEPCO

Golden Pass Products LLC (GPP) announced it has submitted a formal request to the Federal Energy Regulatory Commission (FERC) to initiate pre-filing for the proposed liquefaction project at the world-class Golden Pass LNG terminal facility in Sabine Pass, Texas.

This milestone sets the stage for the necessary permitting activity associated with the design, environment, and construction of the proposed project.

“This is an important new phase for Golden Pass Products and we are looking forward to working with FERC and other key agencies while leveraging the extensive project management strengths of our sponsors Qatar Petroleum International and ExxonMobil,” said Eric Pletcher, president of Golden Pass Products. “We are also pleased to be working once again with the Southeast Texas community to fully realize this new opportunity.”

If developed, the project would represent an investment of approximately $10 billion, and is expected to create about 45,000 direct and indirect jobs in the U.S. during the construction phase. A final investment decision will be made following government and regulatory approvals.

Golden Pass Products’ shareholders and their joint ventures are world leaders in the LNG business with operational LNG expertise, financial capabilities, access to shipping fleets, large-scale regasification facilities and a diverse global customer portfolio.

Earlier this month, Golden Pass Products announced the signing of a Commercial Framework Agreement to sell up to the full 15.6 million metric tons annual output, and provide shipping and sales opportunities to existing and new markets, including leveraging the sponsors’ long-term arrangements for international imports via the United Kingdom’s South Hook facility.

Golden Pass Products has received U.S. Department of Energy (DOE) authorization for exports to Free-Trade Agreement (FTA) countries, and is awaiting DOE approval to export to non-FTA nations.

LNG World News Staff, May 17, 2013; Image: Golden Pass

Chantier Davie Canada Inc. (Davie) announced the conclusion of a two ship order from La Société des traversiers du Québec (STQ).

The two dual-fuel LNG Ro-Pax ferries will operate on the St. Lawrence River on the Tadoussac-Baie-Sainte-Catherine route and shall enter service in 2015. At 92 m long, each vessel will have over 625 lane meters across two decks, allowing the transport of over 115 vehicles and 10 heavy goods vehicles.

Alan Bowen, CEO of Davie commented: “This project has been a long time in the planning and we are very excited to now begin construction. The dual-fuel LNG engines are a perfect fit with Davie’s specialization in advanced propulsion and vessel maneuvering systems. The ferries will provide an environmentally friendly solution for the province of Quebec for many years to come”.

LNG World News Staff, May 17, 2013; Image: Davie

Tennessee Gas Pipeline Company, L.L.C. (TGP), a unit of Kinder Morgan Energy Partners, has signed a binding, 20-year firm transportation precedent agreement with Mitsubishi Corporation (MC) of Japan to ship 600,000 dekatherms per day of natural gas earmarked for the proposed Cameron LNG liquefaction facility in Hackberry, La., which is slated to begin LNG exports in the second half of 2017.

MC will serve as the foundation shipper for TGP’s Southwest Louisiana Supply Project, which is designed to provide transportation from various supply basins in Ohio, Pennsylvania, Texas and Louisiana to Cameron Interstate Pipeline, which connects directly to the Cameron LNG Terminal. Kinder Morgan does not own Cameron Interstate Pipeline or the Cameron LNG facility.

“TGP is pleased to partner with Mitsubishi Corporation, a world class organization and leader in the energy industry, on this strategic project,” said Kimberly Watson, TGP president. “TGP’s unique footprint, connecting key conventional and shale supply areas from the South Texas Eagle Ford to the Utica and Marcellus in Ohio and Pennsylvania, and access to the Haynesville shale supply area and the Perryville Hub in Louisiana, makes our Southwest Louisiana Supply Project an ideal fit to serve the future supply needs of Mitsubishi Corporation and the planned Cameron LNG complex. TGP’s diverse supply footprint continues to provide opportunities in the growing southwest Louisiana market.”

The Southwest Louisiana Supply Project is designed to provide transportation to the growing southwest Louisiana market. The project includes additional interconnections with shale supply, new pipeline laterals and enhancements to TGP’s existing pipeline system to allow for bi-directional flow to the region. TGP will hold a binding open season for additional interest in its project at a later date.

LNG World News Staff, May 17, 2013; Image: Sempra

Total gas sales volume by Tokyo Gas Co., Ltd. for the month of April 2013 came to about 1,213.348 million m3, almost equal (down 1.0%) to that in April 2012.

In the residential sector, volume totaled 329.16 million m3, down 11.5% from April 2012, due to higher two-month average temperature in March and April than that of last year.

In the business sector (consisting of commercial, public, and medical use), volume totaled 200.609 million m3, down 7.5% from April 2012, due to higher two-month average temperature in March and April than that of last year.

In the industrial sector, volume totaled 495.186 million m3, up 10.0% from last year, due to the development of new demands following the commencement of the new trunk lines and the increased demand for power generation.

Volume for wholesale supply to other gas companies totaled 188.392 million m3, up 1.2% from April 2012 due to increased demand of wholesale gas suppliers.

LNG World News Staff, May 17, 2013

AWE Limited has been advised by the Operator, Origin Energy, that the Yolla-A platform has achieved significant production improvement as a result of successful well interventions and is currently producing gas at rates of approximately 57 Tj/day, up from 42 Tj/d that was achieved prior to the well intervention program.

Following the successful completion of a workover at Yolla-3 and wireline logging at Yolla-4, the Yolla-A platform is producing increased quantities of gas, condensate and LPG within the overall limitations of the platform’s fluid handling capacity.

The Managing Director of AWE, Mr Bruce Clement, said that the successful well workover at Yolla-3, completed in mid-April, was a positive step towards achieving this improved production performance.

“The Yolla-3 well was shut-in in late January 2013 after testing of the upper EVCM oil bearing zone was completed. The Joint Venture will have the opportunity to produce the upper EVCM oil and gas zone in Yolla-3 later in field life once gas compression and condensate pumping is installed on the Yolla-A platform,” he said.

“The Yolla-3 workover achieved its objective of removing an obstruction in the well bore that had prevented access to the well’s main gas bearing interval, the 2809 Sand. In addition, wireline logging at Yolla-4 identified opportunities for further production improvement that the Joint Venture is currently evaluating,” Mr Clement said.

Mr Clement added, “We remain confident in the long-term production potential of the BassGas asset. AWE will continue to work with the Operator of the project to maximise the potential of the asset and deliver value to our shareholders.”

LNG World News Staff, May 17, 2013; Image: AWE Ltd

The Gazprom headquarters hosted a working meeting between Alexey Miller Chairman of the Management Committee and Henning Voscherau, Chairman of South Stream Transport Board of Directors.

The meeting participants discussed topics of the South Stream gas pipeline offshore section realization. In particular, the parties considered the current activities status and the procedures schedule stipulating the gas pipeline commissioning in the year 2015.

For the purpose of diversifying natural gas export routes Gazprom is constructing a gas pipeline across the Black Sea to Southern and Central Europe – the South Stream project. Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia and Croatia in order to implement the onshore gas pipeline section.

On September 16, 2011 the South Stream Transport Shareholders Agreement was signed to implement the offshore gas pipeline section. As a result, Gazprom acquired a 50 per cent stake in the project, Eni – a 20 per cent stake, Wintershall Holding and EDF – 15 per cent stakes each.

In the third quarter of 2011, the Consolidated Feasibility Study of South Stream was finalized and included the feasibility study of the offshore section and feasibility studies of the respective gas pipelines in the host countries of Southern and Central Europe.

On December 7, 2012 the South Stream gas pipeline construction was launched near Anapa (Krasnodar Territory).

First gas supplies via the gas pipeline are scheduled for late 2015.

LNG World News Staff, May 17, 2013; Image: Gazprom

Sempra Energy, GDF SUEZ S.A., Mitsubishi Corporation and Mitsui & Co., announced that they have signed 20-year tolling capacity and joint-venture agreements to support the development, financing and construction of a liquefied natural gas (LNG) export facility at the site of the Cameron LNG receipt terminal in Hackberry, La.

The tolling agreements subscribe the full nameplate capacity of the three-train, 13.5- million-tonnes-per-annum (Mtpa) facility that will provide an export capability of 12 Mtpa of LNG, or approximately 1.7 billion cubic feet per day (Bcfd), and the full regasification capacity of 1.5 Bcfd.  Each tolling agreement is for 4 Mtpa.

The joint-venture agreement calls for affiliates of GDF SUEZ, Mitsubishi (through a related company jointly established with Nippon Yusen Kabushiki Kaisha) and Mitsui each to acquire 16.6-percent equity in the existing facilities and the liquefaction project. A Sempra Energy affiliate will retain 50.2 percent.

The tolling capacity and the joint-venture agreements are subject to a final investment decision to proceed by each party, finalization of permit authorizations, securing financing commitments that are expected to occur by early 2014, as well as other customary conditions.

“These agreements represent a major step forward in the development of our LNG export project at the site of the Cameron LNG facility,” said Mark A. Snell, president of Sempra Energy. “This project, one of the largest in Sempra Energy’s history, provides benefits to the local Louisiana economy, promotes a favorable balance of trade for the national economy, and supports national and international energy security by assuring reliable long-term gas supplies to U.S. allies and trading partners.”

The anticipated incremental investment, the majority of which will be project-financed, is estimated to be approximately $6 billion to $7 billion, excluding capitalized interest and other financing costs. The total cost of the facility, including the cost of the existing facilities plus interest during construction, financing costs and required reserves, is estimated to be approximately $9 billion to $10 billion. Construction is expected to start in 2014 with the first phase of liquefaction operations to commence in the second half of 2017.  Full commercial operation of all three trains is expected in 2018.

“The Cameron LNG project has strong local and regional support, experienced, world-class commercial partners in GDF SUEZ, Mitsubishi and Mitsui and a track record of safe and reliable operations,” said Octavio M. C. Simoes, president of Sempra LNG. “We look forward to working with our partners to achieve a final investment decision and commence construction in early 2014.”

“By being a shareholder of the Cameron LNG project, alongside strong and experienced partners, GDF SUEZ — one of the world LNG leaders — will contribute to the emergence in the U.S. of a new source of LNG,” said Jean-Marie Dauger, executive vice president in charge of the Global Gas & LNG business line for GDF SUEZ. “The Cameron LNG project will add growth, diversity and flexibility to the group’s LNG portfolio, in order to supply its existing or future markets in high growth regions.”

“By participating in this LNG export project, we are proud to be able to contribute not only to the development of stable energy trade between the U.S. and countries around the world, including Japan, but also to the growth of the U.S. economy,” said Jun Nishizawa, vice president of the Global Gas Business Department for Mitsubishi. “With the experience Mitsubishi has accumulated from more than a dozen LNG projects over the last half-century, we are committed to exert all our efforts for the success of this project.”

“We are pleased to have the opportunity to participate in a stable source of energy supply to meet the increasing global demand, including Japan,” said Hirotatsu Fujiwara, general manager of the Natural Gas Division I for Mitsui. “We are confident that our over 40 years’ experience in the LNG industry will contribute to the success of this project.”

Last year, Cameron LNG obtained approval from the U.S. Department of Energy (DOE) to export up to 12 Mtpa of domestically produced LNG to all current and future Free Trade Agreement countries; the authorization to export LNG to countries with which the U.S. does not have a Free Trade Agreement is pending review by the DOE.

Cameron LNG initiated the pre-filing process with the Federal Energy Regulatory Commission (FERC) in April 2012 and filed its permit application with the FERC Dec. 7, 2012, requesting approval to construct and operate the project.  On April 4, 2013, the FERC issued a “Notice of Schedule for Environmental Review of the Cameron Liquefaction Project” that calls for the final Environmental Impact Statement to be issued in November 2013.  Cameron LNG is the first LNG export facility application pending before the FERC to have reached this important milestone in the permitting process and is expected to receive the FERC authorization in early 2014.

In January 2013, Cameron LNG initiated a tender process for the engineering, procurement and construction contract for the project and launched its financing process with the Japan Bank for International Cooperation, Nippon Export and Investment Insurance, and commercial banks. Cameron LNG expects to secure financing commitments for the project by late 2013 or early 2014 and award the engineering, procurement and construction contract in late 2013.

LNG World News Staff, May 17, 2013; Image: Cameron LNG

ATCO Structures & Logistics Pty. Ltd (ATCO) said that it has entered into an agreement with Bechtel to design, manufacture, transport and install 357 modular units for the Chevron-operated Wheatstone Project in Western Australia.  The contract, valued at an estimated A$100 million, commenced with the design phase in mid April 2013.

As a result of the agreement, ATCO expects to create 137 new jobs, including 42 manufacturing jobs in Perth and Brisbane and 95 jobs based onsite at Ashburton North, 12 kilometres west of Onslow in Western Australia.  The new roles created onsite include engineering, plumbing, carpentry, electrical trades, general laboring and administrative positions. The agreement also supports 70 existing manufacturing, in-house subcontractor and support staff positions.

The units supplied will be used to form a variety of office complexes and free standing modular buildings on site including training centres, IT buildings, guardhouses and medical centres. “Our proven track record providing large scale turnkey projects in Australia was a key element in winning this contract,” said Adam Beattie, Managing Director, ATCO Structures & Logistics Pty Ltd.

“We are very pleased to have the opportunity to work with Bechtel and Chevron and will ensure our component of the project is executed to the high standards of quality and safety already evident across the Wheatstone Project”.

The units will be built at ATCO’s manufacturing facilities in Brisbane and Perth. The 150,000 sqft facility in Perth is the newest addition to ATCO’s construction operations in Australia. The plant is expected to be fully operational in September 2013 and will supply approximately 60 per cent of the required units for the Wheatstone Project. ATCO’s portion of the manufacturing works is expected to begin in July 2013 and completion is scheduled for the end of Q2 2014.

This is ATCO’s fourth major contract win supporting LNG projects in Australia. In 2011 and 2012, ATCO delivered three large workforce housing projects for LNG facilities on Curtis Island, providing more than 6,000 beds for workers constructing LNG terminals.

LNG World News Staff, May 17, 2013; Image: Chevron

Shell Petroleum Development Company Limited (SPDC) has declared force majeure on gas supplies to Nigeria LNG, effective 09:00 hrs (Nigerian time) on Wednesday, May 15 2013.

“This action is due to production deferment following a reported leak along the Eastern Gas Gathering System (EGGS-1) right-of-way (RoW) near Awoba in Rivers State. In line with safety precautions, we have shut down our Soku and Gbaran Ubie gas export via the EGGS1 pipeline,” Shell said in a statement.

Some 1.5 billion standard cubic feet of gas per day is currently impacted. For a limited time and subject to capacity limitations, Shell Nigeria is able to export about 100-200MMscf/d from Soku via the GTS1, the company added.

LNG World News Staff, May 17, 2013; Image: NLNG

INTL FCStone Inc. announced that its investment banking division, INTL FCStone Securities Inc. advised LNG Group Panama, S.A. and its project-level vehicle, Panama NG Power S.A., in support of the their successful bid for a 20 year power purchase agreement and the construction and operation of a 550 MW combined cycle gas turbine (CCGT) power plant that will consume natural gas as its fuel.

INTL FCStone Securities Inc. assisted in developing financial models used to determine a competitive final bid price for capacity and energy payments, analyzing the benefits, issues and constraints relating to various capital structures, and advising on the structure and final pricing of the overall bid, all of which resulted in a successful tender process.

INTL FCStone Securities Inc. is also advising the company on its negotiations for long-term liquefied natural gas supply contracts and advising the company on strategic partnerships with leading engineering and technology procurement firms, in advance of its Project Finance Advisory role.

Jose Dapelo, CEO of LNG Group Panama, S.A., said, “The project is expected to yield important benefits for Panama by attracting significant foreign institutional capital, reducing Panama’s cost of capital, providing a source of direct and indirect employment opportunities and greatly diversify Panama’s electricity matrix, securing the country’s long-term energy supply and reducing local industrial and residential energy costs.”

Steve Carlson, President of INTL FCStone Securities Inc., commented, “We are thrilled that our hard work with Panama NG Power S.A. has resulted in a successful bid and we now look forward to helping them raise the estimated US$1,100 million in project costs as the project finance advisor.”

LNG World News Staff, May 16, 2013; Image:

Delek Drilling and Avner Oil Exploration announced the discovery of indicators of petroleum at “Karish 1″ in the license area of Alon C/366 off Haifa, Israel.

The companies said in a statement that the Karish 1 Well has reached a final depth of 4,790 meters below sea level (including the depth of the water).

“The Partnership has concluded that significant signs of petroleum (natural gas) have been discovered, based upon reports from the Operator, which in turn are based on tests carried out during the drilling,” the companies added.

LNG World News Staff, May 16, 2013

Recent analysis by energy research firm Zeus Development Corporation has identified International Organization of Standardization (ISO) intermodal tanks as an important enabling technology for marine operators to switch from petroleum fuels to natural gas.

The marine industry is accustomed to transporting and storing ISO containers for general freight and bulk liquids. Specialized insulated containers increasingly are being filled with liquefied natural gas (LNG) to be transported to port for use as onboard fuel tanks.

“The containers can be used as fuel tanks themselves,” said Zeus lead analyst Tom Campbell, “allowing some ships to convert to LNG without having to retrofit the vessel for new onboard fuel storage.”

By using intermodal containers the marine fleets also can save on the amount of infrastructure needed to bunker LNG, Campbell noted.

“The containers allow fleets to transport LNG without having to pump and transfer the liquid along the supply chain,” he said. “The LNG stays cold in the double-walled container for up to 60 days without boiloff.”

New LNG fuel plants increasingly plan to fill containers as a means to transport the fuel to market. With marine fleets, the containers can serve both as a transport medium and an onboard storage medium. Many ports are equipped for intermodal container operations. Thus, container ship fleets may find them especially cost effective.

To discuss the growth of LNG intermodal container trade, Zeus will host a one-day workshop in Houston on June 26. The meeting will include a visit to WesMor Cryogenic Company’s LaPorte Manufacturing facility where ISO LNG containers are built as well as equipment displays of containment and fueling systems.

LNG World News Staff, May 16, 2013; Image: Chart LNG

Mr Christoph Vitzthum, President of Services, Executive Vice President and member of the Board of Management has announced he will leave Wärtsilä to become the President and CEO of Fazer Group at the latest 15 November 2013.

Wärtsilä has started the process to appoint a successor for Mr Vitzthum to lead the Services business.

“I want to thank Christoph for his achievements in various leading positions during the past 18 years, and most recently for developing the Services into an increasingly stable and profitable business. I wish him the best of success with his new challenges,” President and CEO Björn Rosengren says.

LNG World News Staff, May 16, 2013

Mr. Chris Graham, Head of Australasia Upstream Research for Wood Mackenzie, says, “On the upstream side, the unprecedented level of investment over the last few years is set to continue, reaching A$48 bn in 2013 and peaking at A$50 bn in 2014. Gas expenditure will be around 50% of the total through these two years.”

After gas, spending is highest in iron ore and coal. In 2013, iron ore investments will comprise just over 25% of the total, reaching a record high of A$22 bn. Coal currently ranks third, with approximately 10%of 2013 spending.

Mr. Gero Farruggio, Head of Global Metals and Mining Supply Research, says, “The Australian iron ore sector has invested heavily over the past five years, lifting Australia’s share of global seaborne trade from 35% in 2007 to 44% in 2012. Capital investment in the Australian iron ore sector will reach a peak in 2013 as infrastructure construction and mine expansions are completed by the majors, and Chinese steel production growth moderates. Australia’s dominance will increase further, taking its share of global seaborne trade to over 50% by 2016, as major Pilbara-based mine and infrastructure investments come to fruition.”

“Coal will remain subdued over the next few years due to the tough price environment but the resumption of deferred projects, and development of new producing areas, will keep capital spending strong through to 2017. This will drive an increase in coal’s proportion of overall capital spend in Australia, taking over iron ore’s position as the commodity with the second highest investment.”  

Looking regionally, Western Australia (WA) and Queensland (QLD) dominate, making up 83% (A$24 bn) of total capital expenditure in 2013. This is driven by large gas and iron ore projects. Investments in iron ore will push resource sector investment in WA to record levels. Committed capital spend for the seven LNG projects that are under construction will ensure that investment remains high for the next three years at least, particularly in WA and QLD. Investment in Northern Territory will also peak over this period, primarily due to construction of the Ichthys project.

Mr. Graham summarises, “The outlook for the next three years confirms the strength of the  Australian resource sector, as we see investments being made based on decisions taken during the boom years. Today’s decision makers are faced with different challenges in a changing environment. A new wave of major gas and iron ore projects are needed to maintain these levels of investment in the longer-term.”

LNG World News Staff, May 16, 2013

Burckhardt Compression received the first order for the fuel gas compressor system Laby® -GI for two LNG carriers.

This marks a major milestone for Burckhardt Compression in setting up a compressor business for energy-efficient, environmentally friendly propulsion systems for gas-operated marine diesel engines. The compressor system will inject boil-off gas into the ME-GI dual-fuel two-stroke engine from MAN Diesel & Turbo.

The customer has chosen the most fuel-efficient and low-emission propulsion solution available in the market today for their two recently ordered LNG (liquefied natural gas) carriers. It consists of the ME-GI engine from MAN Diesel & Turbo and the fuel gas compressor system Laby® -GI from Burckhardt Compression. The two gas carriers have each a capacity of 170’000 cubic meters.

The fully balanced compressor system will inject boil-off gas into the ME-GI dual-fuel two-stroke engine. The ME-GI system can alternatively be operated with ecological natural gas or heavy fuel oil. Thanks to the reliquefaction option, it is the most flexible propulsion solution in the LNG carrier market and operates with a minimum of emissions. Stricter environmental regulations and increasing fuel oil prices demand such new propulsion solutions.

Marcel Pawlicek, CEO at Burckhardt Compression states: “With this first order we have achieved a major milestone. It reinforces our aim to achieve together with MAN Diesel & Turbo a significant market share for the ME-GI propulsion system for LNG carriers.”

MAN Diesel & Turbo has built up a strong relationship with the Swiss reciprocating compressor manufacturer Burckhardt Compression over the past years to fine-tune the engine and fuel gascompressor system. This has produced a noncomplex compressor system with a sophisticated control system and lowest demands on the crew for operating and maintenance. Based on proventechnology, the Laby®-GI Compressor provides fuel gas to the propulsion system with highest efficiency at lowest operating cost. The fully balanced design, resulting in the elimination of unbalanced moments and forces, makes this type of compressor the perfect solution in marine environments.

LNG World News Staff, May 16, 2013; Image: Burckhardt Compression

IEV Holdings Limited announced that the Group and Gas Malaysia have completed the LNG Feasibility Study.

IEV Group and Gas Malaysia have agreed to pursue further business cooperation initiatives.

The Company had, on 15 October 2012, through its wholly-owned subsidiary, IEV Energy, entered into a MOU with Gas Malaysia to conduct a feasibility study to review the prospects of cooperating and successfully undertaking projects for the processing, transporting and marketing of LNG to industrial consumers in the Peninsular Malaysia who are not connected to Gas Malaysia’s natural gas pipeline system.

LNG World News Staff, May 16, 2013; Image: IEV

DNV’s continued focus on safety and service quality and the ability to provide leading-edge technology advice and solutions contributed to the company’s strong market and financial performance in 2012. Revenues increased by 27% compared to 2011 and DNV strengthened its global position in all its key areas: maritime, oil & gas, energy & sustainability and business assurance.

DNV Group CEO Henrik O. Madsen says 2012 can be characterised as “a year of financial uncertainty and rapid technological change” which has led to an increasing complex risk environment for customers and, in turn, a continued demand for DNV’s technology and risk management services.

“The need to manage technical, societal and business risks is more urgent than ever,” says Madsen. “We will continue our focus on safety and service quality and the ability to provide innovative services to help position us for the future and better serve our customers. Our financial strength is crucial in maintaining DNV’s independent role as one of the world’s leading and trusted technology and risk management service providers.”

DNV achieved operating revenue of NOK 12,850 million in 2012, an increase of NOK 2,693 million from 2011. Of the 27% revenue growth, 9% is organic growth within DNV units and 18% is the result of the KEMA acquisition in March 2012. Both the Maritime and Oil & Gas and the Business Assurance business showed robust organic growth rates, primarily from DNV’s traditional classification and certification services.

“The net profit for 2012 is NOK 719 million, compared to NOK 730 million for 2011 and NOK 613 million for 2010. The cash flow from operations was positive at NOK 619 million in 2012, but the net cash flow was negative since the acquisition of KEMA was entirely financed by equity. DNV has a strong balance sheet with no interest-bearing debt and total equity of NOK 7,236 million or 60% of its total assets,” says Thomas Vogth-Eriksen, DNV Group Chief Financial Officer.

In 2012 DNV secured 316 new-building classification contracts for ships and mobile offshore units, corresponding to 8.8million gross tonnes. This gives an estimated share of 17% of newbuilding classification in numbers and 22.5% in gross tonnes. The total DNV-classed fleet of ships and mobile offshore units fell from 6,134 at the end of 2011 to 6,115 at the end of 2012, mainly due to a high level of scrapping. This gives DNV a 9% share of the classed world fleet in number of ships/units and a 14.5% share in gross tonnage.

“Currently, the shipping industry is not experiencing overall growth. It is still suffering from tonnage overcapacity and weak developments in the global economy and trade. These will affect the shipping market for another one to two years,” predicts Madsen and adds that “DNV continues to invest in research and development and to provide innovative solutions for more fuel-efficient and environmental friendly shipping. This is currently the top priority for shipping companies, which are facing high fuel prices and lower freight rates at the same time as IMO implements new and far reaching environmental requirements.”

The oil and gas industry is, contrary to shipping, experiencing strong growth and record investments. “DNV’s direct revenue from oil and gas activities is now almost the same as the revenue we generate from maritime-related services,” Madsen points out and adds, “the activity level in the oil and gas industry also made the offshore and LNG shipping segments stand out as two of the few shipping segments that performed well in the past year. This contributed to our maritime business producing good results despite the overall weak developments in shipping in 2012.”

As highlighted in the DNV Annual Report for 2012, the demand for energy continues to grow. “The supply will continue to rely heavily on fossil fuels during the next few decades. However, a major energy transition towards cleaner energy is needed to meet tomorrow’s energy demand while addressing climate change, energy security, the depletion of resources and the ageing infrastructure,” emphasises Madsen and adds, the creation of DNV KEMA Energy and Sustainability business area, following the acquisition of the majority shareholding in KEMA, was in response to that.

While DNV’s target industries experience cyclical markets and are sensitive to global economic developments, its business assurance entity has shown “remarkable resilience to the financial crisis” comments Madsen. “Increasing demand for companies to demonstrate sustainable business practices beyond compliance has contributed to this positive development. DNV now certifies management systems for more than 80,000 customers worldwide”

CEO Madsen firmly believes that DNV has the “global positions, expertise and resources required to provide guidance and support in a business environment where the need for independent technical skills and risk management is evident,” he says and concludes, “We have demonstrated strong performance, and this coupled with the DNV GL merger agreement, which we announced in December 2012 and is subject to approval from competition authorities, forms an excellent foundation for the future. I really look forward to lead the new company and show customers, employees and society at large how we add more value, offer more opportunities and contribute to a safer and more sustainable future.”

LNG World News Staff, May 16, 2013

Corporate Highlights:

• End April 2013 cash balance of $891.0MM
• Significantly strengthened the company’s financial position by raising proceeds of $832.7 million via a Placing and Rights Issue to further progress the Group’s strategy
• Material operational progress across the portfolio with increase of Jodari and Mzia field recoverable resources and the completion of Mzia-2 appraisal programme
• Appointment of three new Board directors

Key Operational Events:

Tanzania

• Extended contract with Odfell Drilling for Deepsea Metro I drillship with partner BG Group plc for a period of at least 18 months for the continuation of the 2013-2014 East African offshore drilling programme
• Carried out successful Mzia-2 Drill Stem Test on Block 1 Tanzania confirming flow rate at upper limit of the expected range at 57mmscf/d; Completion of the Mzia-2 appraisal programme has validated the field’s resource potential and confirmed expectation of excellent development well productivity
• Increased Jodari field mean recoverable resource estimate by 700 BCF to 4.1 TCF following successful appraisal programme and Drill Stem Test
• Increased Mzia field mean recoverable resource estimate by 1.0 TCF to 4.5 TCF following successful appraisal and testing programme
• Spudded the Ngisi-1 exploration well in Block 4 with the aim of increasing the mean in-place resource of the Chewa-Pweza-Ngisi hub to 5.8TCF in place (4.1 TCF mean recoverable)
• Commenced new 3D seismic acquisition programme inboard Block 1. Continued evaluation of the Block 1 outboard exploration potential

Ghana

• Awarded contract for Stana DrillMAX, Dual Derrick Drillship (Stena) to drill the Starfish-1 well in the Offshore Accra Block in Ghana
• Well spud expected in June on the Starfish prospect with Ophir management estimated mean prospective resources of 292 MMBBL with a 20% chance of success

Nick Cooper, CEO of Ophir Energy plc commented: “We have seen considerable operational and financial progress in the first half of 2013, both via the drill bit and through the support for the successful March 2013 Placing and Rights Issue.

“The results of the Mzia-2 appraisal programme represented a key step towards achieving Tanzania’s first LNG development project and we await the results of the Ngisi-1 exploration well in June. We are looking forward to an exciting second half of 2013, with further drilling of up to five wells across Blocks 1, 4, and 7 in Tanzania and in the Offshore Accra Block in Ghana.”

LNG World News Staff, May 16, 2013; Image: Ophir

After eight months of operation, Karamay Xinjie Liquefied Natural Gas Co., Ltd., under Xinjiang Xinjie Co., Ltd., of which Kunlun Energy Company Limited is the holding company, has made major breakthroughs in the oil-to-gas project for oilfield special operations vehicles. The product has been well received by oilfield customers.

On 3 October 2012, upon transformation, the first batch of four LNG well flushing-wax removal vehicles entered the oilfield operations area of second oil production plant of PetroChina Xinjiang Oilfield Company for pilot operation. LNG well flushing-wax removal vehicles are formed by replacing the diesel boilers on the original well flushing-wax removal vehicles with gas boilers, thereby transforming the original combustion system into fully automated gas burner. After transformation, the vehicle can be installed with four 450-liter cylinders, and can be filled with LNG liquid of 680kg each time, which enables the vehicle to run 12 consecutive hours.

Compared with diesel well flushing-wax removal vehicles, LNG well flushing-wax removal vehicles boast obvious competitive edges:

1. Quick heating up and short preheating period. The preheating period for diesel vehicles is 15 minutes, while that for LNG vehicles is only 3 minutes. In addition, the operating temperature of cleaning solution completely meets the customers’ construction requirements, and the operating time for a single well is significantly shortened, with more advantageous operating efficiency in winter;
2. cost-effectiveness. Pilot operations on wells show that the boilers after transformation have good heating performance, so fuel costs can be greatly reduced—the monthly LNG consumption is only 41% of diesel consumption, meaning that the transformation cost can be recovered in a year;
3. energy saving and environmental protection. The burning of LNG entails no smoke and the pollutant emissions are substantially reduced; and
4. low vehicle management risks.

Test data shows that, after using LNG on well flushing-wax removal vehicles, the boilers feature good heating performance, low fuel costs and sound environmental effects, so it is worth wide application. Given that the oil-to-gas vehicles have achieved remarkable effects, Karamay Xinkeao Petroleum Technological Co., Ltd., a partner of Karamay Xinjie Liquefied Natural Gas Co., Ltd., is planning to equip another 23 well flushing-wax removal vehicles with LNG in 2013. Karamay Xinjie will gradually launch LNG well flushing-wax removal vehicles in Huaidong, Fengcheng, Shixi, Luliang, Cainan and other oilfields, and promote the oil-to-gas transformation projects for special oilfield operations vehicles, thereby contributing to significant cost savings and improved energy efficiency.

LNG World News Staff, May 16, 2013; Image:

Mitsubishi Heavy Industries, Ltd. (MHI)  said it will sign an agreement on Friday with Mitsui O.S.K. Lines, Ltd. to build a “Sayaendo” series new-generation liquefied natural gas (LNG) carrier. Sayaendo series ships feature a unique structure that integrates the LNG tank cover with the ship hull, resulting in significantly improved fuel consumption and maintainability. From 2020 the new ship will be used mainly for transportation of LNG produced by the Ichthys LNG Project in Australia for Osaka Gas Co., Ltd. and Kyushu Electric Power Co., Inc.

The new LNG carrier will measure 288.0m in length overall (LOA), 48.94m in width, and 11.55m in draft. The 138,000 gross tonnage (75,000 deadweight tonnage) ship will be capable of carrying up to 153,000 m3 of LNG (cargo tank total volume: 155,000m3) in four Moss-type tanks at a service speed of 19.5 knots per hour. The ship will be built at the MHI Nagasaki Shipyard and Machinery Works.

To protect its four Moss spherical tanks, the Sayaendo features a peapod-shaped continuous cover integrated with the ship’s hull in lieu of conventional hemispherical covers. This innovative configuration enables reductions in size and weight while maintaining the ship’s overall structural rigidity. The continuous cover over the tanks also improves aerodynamics by substantially reducing air resistance that acts as a drag on ship propulsion. For its main power plant the Sayaendo adopts MHI’s “Ultra Steam Turbine Plant” (UST), a new turbine that provides higher thermal efficiency through effective use of thermal energy by reheating steam. Through downsizing, weight reduction and hull line improvement, Sayaendo ships achieve a substantial 20% reduction in fuel consumption compared to conventional ships.

With a conventional cover configuration, pipes, wires and catwalks atop the tanks are supported by complex structures. By covering the tanks with an integrated cover and making those supporting structures unnecessary, the new design also improves maintainability. In addition, CO2 emissions are reduced as a result of decreased fuel consumption, and response to environmental issues is further enhanced with installation of a ballast water treatment system, which addresses impact on the marine ecosystem.

In April of this year MHI and Imabari Shipbuilding Co., Ltd. jointly established MI LNG Company, Limited, to handle the design and marketing of LNG carriers. Although this joint venture company handles LNG carrier orders, negotiations for the current Sayaendo LNG carrier predate the establishment of MI LNG, therefore it was directly contracted with MHI.

After receiving an order for two ships in October 2011, to date MHI has received orders for six Sayaendo series carriers in total, including the current order. The Sayaendo has been drawing great attention in the marine transport industry and is quickly becoming a leading force in the movement to develop energy-saving “eco-ships” offering enhanced environmental performance – an area in which the Japanese shipbuilding industry is actively engaged.

Owing to the suspended operation of nuclear power plants in Japan in the wake of the Great East Japan Earthquake, as well as a expanded shale gas production in the U.S., demand for LNG and LNG carriers has been expanding not only in Japan but globally. As such, MHI will continue to expand its efforts to secure new orders for Sayaendo and other types of LNG carriers.

LNG World News Staff, May 16, 2013; Image: MHI

Oil & Gas IQ has just released a summary report of the results from an industry survey conducted earlier in the year. In the survey Oil & Gas IQ addressed what the small-mid scale LNG industry deemed to be some of the innovations and pain points in 2013 and beyond.

The survey was conducted in association with the 2013 Small-Mid Scale LNG Summit where the oil and gas industry’s key players in small-mid scale LNG will be gathering in Amsterdam this June. At the annual Summit, senior LNG professionals will discuss the commercial and business case for smaller LNG projects and the technologies needed to make these happen. One of the agenda highlights include a hands-on ‘Project Feasibility’ day, focusing on the commercial value of a small-mid scale LNG project and how to get a successful project up and running.

Some of the experts addressing the delegates at the Summit include;

• Edgar Kuipers, Senior Business Development Manager, Broadview Holding BV
• Aksel Skjervheim, Head of Fuel Markets, Gasnor
• Daniela Rosca Head of Sustainable urban mobility unit, European Commission
• Máté Gerebenics, CFA Strategy Specialist / Executive Assistant to the Director for Strategy Development, MOL Plc,
• Okan Yardımcı, Energy Expert, EMRA,VK Sethi, Chief of Projects, Petronet LNG
• Karen Sund, Founder and Partner, Sund Energy

LNG World News Staff, May 16, 2013

China Natural Gas, Inc., a leading provider of compressed natural gas (CNG) and LNG for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi’an, China, said its revenue in the first quarter of 2013 increased by 10.0% to $35.5 million from $32.3 million in the first quarter of 2012, driven by increased capacity of LNG plant.

Sales revenue of natural gas grew by 9.5% year-over-year to $32.2 million, from $29.4 million in the first quarter of 2012. Gasoline revenue in the first quarter of 2013 decreased by 42.5% to $0.5 million, from $0.8 million in the same period of the prior year, mainly because the closure of one gasoline fueling stations during the fourth quarter of 2012. Installation and automobile conversion services revenue increased by 38.6% year-over-year to $2.8 million, from $2.1 million a year ago. In the first quarter of 2013, sales of natural gas, gasoline, and installation and automobile conversion services contributed 90.7%, 1.3%, and 8.0% of total revenue, respectively.

Gross profit in the first quarter of 2013 increased 13.8% to $12.9 million from $11.4 million in the same period of the prior year. Gross margin in the first quarter of 2013 was 36.4%, compared to 35.2% a year ago. Gross margin increased primarily due to the increase in gross margin for LNG business.

Operating income in the first quarter of 2013 was $5.8 million, an increase of 57.9% year-over-year from $3.7 million, primarily attributable to the increase in gross profit of LNG and decrease in general and administrative expenses.

Income tax expense was $0.9 million at an effective tax rate of 15.9%, as compared to $0.8 million at an effective tax rate of 28.9% in the first quarter of 2012. The decrease of effective income tax rate was primarily attributable to the reduced income tax rate of 15% enjoyed by JBLNG beginning on January 1, 2013.

Net income in the first quarter of 2013 increased by 139.6% to $4.7million or $0.22 per diluted share from $1.9 million or $0.10 per diluted share in the first quarter of 2012.

As of March 31, 2013, the Company had $10.7 million of cash and cash equivalents on hand, compared to $10.9 million of cash and cash equivalents as of December 31, 2012. The decrease was primarily attributable to the construction of the LNG plant and other projects, and the repayment of the loans from Shanghai Pudong Development Bank.

Net cash provided by operating activities was $5.0 million for the first quarter of 2013, as compared to net cash provided by operations of $7.4 million for the first quarter of 2012. The decrease was primarily due to the increase in advances to suppliers, accounts receivable and other receivable, and adjustments for non-cash expense items.

LNG World News Staff, May 16, 2013; Image: China Natural Gas