Talisman Energy Inc and Mitsubishi Corporation (MC) said that they have reached agreement on MC’s entry into nine of Talisman’s licences in Papua New Guinea’s onshore Western Province, via a farmout from Talisman.

The deal is valued at approximately US$280 million and will be paid in the form of a capital carry. Following the farmout, Talisman and MC licensed equity positions will average 40% and 20%, in these nine licences.

Talisman and MC have agreed to work together closely to aggregate natural gas in the Western Province of PNG with a view to potential LNG export of approximately 3 million metric tonnes per annum.

“Talisman is delighted to have MC as a strategic partner in our onshore licences in PNG,” said Paul Blakeley, Executive Vice-President, International Operations East. “MC brings extensive experience in LNG development and marketing and I am confident they will be a key success factor in helping us unlock the value of our Papua New Guinea assets.”

Talisman has been working in PNG since 2001. The company entered the onshore licences of the Papuan Foreland in 2009 and now has a portfolio comprising interests in nine petroleum prospecting licences (PPLs) and five petroleum retention licences (PRLs), covering 13.7 million acres. Talisman has participated in the acquisition of over 1,550 kilometres of 2D seismic and the drilling of eight wells in the PNG Foreland Basin to date. As one of the most active explorers in PNG over the past two years, Talisman has participated in a new gas discovery at Ubuntu in PRL 28 and the successful appraisal of the Stanley and Elevala gas discoveries in PRL 4 and PRL 21, respectively.

Talisman said it intends to commence a four-well drilling program on PPLs 235 and 261 during 2012, as well as ongoing appraisal in PRL 21.

MC has held interests in LNG operations since 1969 and currently participates in nine major LNG projects. Most recently, MC has commenced construction of the Donggi-Senoro LNG project in Indonesia in its capacity as project lead in planning and operation. MC also has an extensive downstream marketing and LNG tanker business.

Seeing PNG as a vast and under-explored country with huge LNG supply potential within the Asia Pacific region, MC said it aims to maximize its contribution by leveraging its experience, not only to promote economic growth for PNG, but also potentially linking this with securing a stable energy supply for Japan. MC will participate in five PPLs and four PRLs, including discovered resources in PRLs 4, 8, 21, 28 and PPL 235.

Talisman and MC said they have an aligned vision for the aggregation and monetization of gas and condensate liquids in the Western Province and intend to leverage their respective skills in upstream exploration, production and LNG project development to deliver development success for the benefit of all stakeholders, including the people and government of PNG and the Western Province.

LNG World News Staff, February 22, 2012

Nigeria’s Bonny LNG terminal shipped another liquefied natural gas cargo yesterday, according to port data.

The cargo is being hauled by the Muscat LNG, a 145,000 m3 cubic-meter tanker.

The destination of the cargo is unknown at this moment.

Bonny terminal has an overall capacity of some 22 million tonnes a year of LNG and it accounts for approximately 11% of the world’s total LNG capacity.

LNG World News Staff, February 22, 2012; Image: KHI

British High Commissioner to Australia, Paul Madden, and Peter Collier, WA Energy Minister, today announced the new Northern Australia Gas High Value Opportunity Programme.

The Programme will see the start of a new era of cooperation between the UK Government and the Australian State and Territory Governments to encourage more British companies to do business in Australia’s rapidly expanding liquid natural gas (LNG) industry. The UK Government already works closely with the Governments of Western Australia, Queensland and the Northern Territory to develop closer trade and economic links, but this Programme is a new initiative which it is predicted will increase British investment in Australia.

At the launch, on the first morning of the Australasian Oil & Gas Exhibition & Conference in Perth, Mr Madden spoke confidently about the future of the UK’s involvement in LNG in Australia:

“This year we have around 60 British companies at AOG which I think is the largest foreign delegation here and the largest ever group of companies to represent the UK at this event. The UK is already the second largest foreign direct investor in Australia and UK goods exports to Australia increased 32% year on year in 2011.

“The Prime Minister, David Cameron, saw the scale of the opportunities in Australia and Western Australia when he visited for CHOGM late last year and I think I can safely say that the British commitment to oil and gas in Australia will continue to strengthen.”

In his address Mr Collier was enthusiastic about the opportunities for British companies in Western Australia saying:

“Last year Western Australia contributed around 75% of all of Australia’s merchandise exports and there is A$267 billion dollars worth of projects ongoing and a plethora of opportunities to get involved in, especially in mining and exploration…But there is one major risk to Western Australia, and the whole of Australia and that is our serious skills shortage…We need to act collectively to overcome this risk and we must be bold, innovative and resourceful…I say to England and to other countries, your skilled workers are needed and welcome. ”

When speaking of the programme, Brian O’Gallagher, Executive Director, Major Projects, Department of the Chief Minister of the Northern Territory said:

“The Northern Territory Government is happy to work with UK businesses looking to expand their operations into the dynamic Northern Australian Oil & Gas industry.  Just this week the Scottish based ASCO Holdings was announced as the successful bidder to build and operate the new $110 million world-class Darwin Marine Supply Base and opportunities exist for other experienced British companies to partner with local companies to capture this exciting market.”

LNG World News Staff, February 22, 2012; Image: Conoco

Malaysia’s MISC Berhad today announced its full financial year results for the 9-month period ended 31 December 2011.

The Group recorded pre-tax loss of RM1,222.0 million for the 9- month period as compared to profit of RM2,466.2 million in the corresponding period of the last financial year. The results were achieved on the back of a decrease in Group revenue to RM8,505.9 million from RM9,401.3 million.

The Group also announced a pre-tax loss of RM1,651.9 million for the quarter ended 31 December 2011 from pre-tax earnings of RM1,579.3 million in the previous corresponding quarter. The Group revenue of RM2,878.8 million was 5.5% lower from RM3,045.6 million in the previous corresponding quarter.

The full financial year’s pre-tax loss of RM1,222.0 million was mainly due to recognition of one off provision amounting to RM1,436.6 million consequent to the Group’s planned exit of Liner business. The provision includes impairment of assets, termination of leases and contractual obligations and employees related costs. The Group has also recognised assets impairment provisions of RM293.4 million during the year.

The Group reported a full 9-month operating profit of RM599.4 million, a 54.9% decline when compared to RM1,329.2 million operating profit reported in the corresponding 9-month period of the last financial year.

Depressed freight rates in petroleum, lower liftings in liner business and higher operating costs, particularly bunker, has contributed to the decline in the Group performance.

The demand outlook for shipping remains weak. The supply-demand imbalance will continue to further depress and add volatility to petroleum and chemical freight rates. However, the Group’s recent decision to cease its loss making liner business operations is expected to benefit the Group in the medium to long term. Meanwhile, LNG, Offshore and Heavy Engineering businesses will continue to provide stability to the Group’s earnings.

1 Malaysian ringgit = 0.330469 U.S. dollars

LNG World News Staff, February 22, 2012; Image: MISC

Belgium’s Zeebrugge liquefied natural gas terminal is expected to receive a cargo of LNG on March 8, according to port data.

The Al Utouriya LNG tanker, with a capacity of 216,203 cbm, is sailing from Ras Laffan, Qatar.

The Zeebrugge terminal is operated by Fluxys LNG and has an annual throughput capacity of nine billion cubic meters (bcm) of natural gas.

LNG World News Staff, February 22, 2012; Image: Port of Zeebrugge

BAE Systems said it has been awarded the contract by Daewoo Shipbuilding and Marine Engineering (DSME) for the telecommunications integration package associated with the Wheatstone Project’s offshore gas processing platform.

The contract is forecast to include 59% Australian content and is expected to create 12 West Australian jobs and four other Australian jobs.

The Wheatstone Project is one of Australia’s largest resource projects and involves the construction of two liquefied natural gas (LNG) trains and a domestic gas plant 12 km west of Onslow on the Pilbara coast. Gas will be transported via a pipeline from an offshore processing platform 225 km off the coast to the onshore facilities.

BAE Systems Australia’s contract includes the detailed design, supply and test of integrated data, voice, satellite, radio, public address/alarm, radar, meteorological, entertainment and video conferencing systems.

The contract is valued at over US $10 million.

Chief Executive David Allott said today, “This is a very important project for BAE Systems Australia.

“The contract award reflects our capability to deliver complex telecommunications systems to the Oil & Gas sector using our Australian engineering team for an internationally competitive cost.”

“We are very pleased that Chevron, Technip and DSME have recognised our capabilities and experience in the offshore telecommunications domain and we look forward to working with them to deliver a successful project.”

BAE Systems contract commenced in January 2012 with equipment delivery to DSME due in the second half of 2013.

LNG World News Staff, February 22, 2012; Image: Chevron

TAP said in a statement that it  has been selected by Shah Deniz as the pipeline route to Italy.

“TAP will now enter into exclusive negotiations with Shah Deniz on progressing the project,” TAP said.

The company firmly believes that TAP remains a strong contender to win the bid to transport Shah Deniz II gas to Europe, it added.

TAP is also confident that the TAP route to Italy offers the Shah Deniz consortium the most attractive market and the most advanced gas evacuation route.

LNG World News Staff, February 22, 2012

Anadarko Petroleum said it has promoted Al Walker, the company’s President and Chief Operating Officer, to the position of President and CEO.

Jim Hackett, who was named Anadarko’s CEO in December of 2003, will continue serving the company in the newly created position of Executive Chairman.

The leadership changes will be effective May 15, 2012, in conjunction with the company’s Annual Meeting. In addition, Walker will stand for election to the company’s Board of Directors at that time.

“Anadarko is blessed with tremendous talent and depth among its senior management team, and we are pleased and excited to announce this next step in the growth of the company,” said John Gordon, Anadarko Lead Director. “Succession planning is an essential component of any sustainable enterprise, and today’s announcement of Al Walker as the next CEO of Anadarko is the culmination of a multi-year phased process. The Board believes that Al has demonstrated the leadership skills and intellectual depth to ensure the long-term growth and stability of the company. Anadarko’s stakeholders will continue to be well served with Jim and Al in their new leadership roles.”

“Throughout his time with the company, Al has demonstrated an exceptional ability to create value for Anadarko, resulting in some of the company’s most noteworthy accomplishments,” said Hackett. “Al has been a member of the company’s executive management team since joining Anadarko in 2005, and has been integral to the company’s major strategic and tactical decisions over that period. He is a talented and ethical leader with proven abilities to identify and capture opportunities to build shareholder value, as well as to attract, retain and develop intellectual capital — a key competitive advantage for Anadarko. This is a good time for the transition to a long-planned succession, given the company’s strong exploration and operational success, and robust portfolio for long-term growth. After 13 years as a public company CEO, it’s time for me to consider other avenues for personal and professional growth. It’s been my privilege to serve as CEO for over eight years, and I look forward to serving Anadarko as Executive Chairman.”

As Executive Chairman, Hackett will continue to play an important role in the company’s strategic direction, while being a spokesperson for the company and industry, as our nation works to develop a long-term, effective energy policy. Hackett will serve as Executive Chairman through the company’s Annual Meeting of Stockholders in 2013, and will retire from Anadarko in June 2013.

Walker, age 55, has more than 30 years of experience in the energy industry, with a focus on exploration and production. In more than six years with Anadarko, he has served in positions of increasing responsibility, including Sr. Vice President, Finance, Chief Financial Officer, Chief Operating Officer and President. Walker currently is a director of Centerpoint Energy, Inc. and Western Gas Holdings, LLC, a subsidiary of Anadarko and general partner to Western Gas Partners, LP.

“I am grateful to the Board and Jim for this opportunity to serve Anadarko’s employees and stakeholders,” said Walker. “Anadarko has built a strong organization that is committed to being an industry-leading, global exploration and production company. Under Jim’s direction we achieved many record successes, and building upon that momentum will continue to be a primary focus. Our accomplishments have been a direct result of the commitment of our employees, the assets we developed and the strategic vision Jim had for Anadarko. I look forward to growing the worldwide achievements of our company with the strong leadership team and exceptional employees we have at Anadarko.”

LNG World News Staff, February 22, 2012

Shell Exploration & Production said it has made an offer of £992.4  million ($1.6 billion) for UK-based Cove Energy.

The offer follows the decision announced by Cove in January to conduct a formal sale process for the company.

Cove has an 8.5 percent stake in the Rovuma Offshore Area 1, in Mozambique, where several gas discoveries were made by the Rovuma Offshore Area 1 partnership from 2010-2012.

These discoveries will underpin a large LNG project planned by the partnership.

Shell is one of the world’s largest LNG producers, with one of the most diverse LNG portfolios and access to strategic global markets with equity sales volumes of 18.83 mtpa of LNG in 2011.

Shell holds the largest equity share of LNG capacity among IOCs – currently holding some 20.5 mtpa of equity LNG capacity on-stream.

Adding Cove’s assets to Shell’s portfolio would strengthen and further diversify Shell’s existing global LNG portfolio of production and development projects.

LNG World News Staff, February 22, 2012; Image: Cove

Shell announced today that Malcolm Brinded has agreed to step down as an Executive Director of the Company with effect from 1 April 2012.

Mr Brinded is currently Executive Director Upstream International. He first joined Shell in October 1974 and has served the company in Brunei, the Netherlands, Oman and the United Kingdom. In 1998 he became Managing Director of Shell UK Exploration and Production and from 1999 until 2002 he was Shell Country Chairman in the UK. He has been a member of the Royal Dutch Shell plc Board (and its predecessors) since 2002. Prior to his current role, he was Executive Director in charge of Exploration & Production.

Royal Dutch Shell Chief Executive Peter Voser commented “Malcolm Brinded has had a most distinguished career over many years and has made an important contribution to Shell’s success during that time. He leaves the Upstream International business in a strong position, well-placed to deliver on its targets and pursue the next stage of Shell’s growth.”

At the same time the Board of Royal Dutch Shell plc announced the appointment of Mr Andrew Brown as Upstream International Director. He will be a member of the Executive Committee and will be based in the Netherlands.

Mr Brown has worked for Shell for over 27 years in various upstream leadership roles. Currently he is Executive Vice-President Qatar. Mr Brown holds a degree in Engineering Science from Cambridge University.

LNG World News Staff, February 22, 2012

Centrica plc said it has reached an agreement with Total E&P UK Limited to acquire their non-operated portfolio of producing oil and gas assets and associated infrastructure in the Central North Sea (CNS) for a total cash consideration of $388 million (£246 million).

Around 20% of the consideration is allocated to UK tax allowances.

The portfolio includes seven producing fields in three major areas: Greater Armada, the Alba field and the Mungo and Monan cluster. Centrica’s share in these fields has an estimated 22 million barrels of oil equivalent (mmboe) of 2P reserves (36% gas, 64% oil), increasing its reserves by approximately 5%, and is expected to produce 9,300 boe per day in 2012. The oil and gas is mostly un-contracted and linked directly to the UK market.

The acquisition is expected to add immediate strong cash flow and increase Centrica’s scale in the CNS region. The transaction will also help to maintain the mix of oil in its upstream portfolio.

Mark Hanafin, Managing Director of Centrica Energy, said:

“Today’s announcement marks another step in the growth of our upstream oil and gas business. This acquisition in the North Sea provides a good fit with our existing portfolio and strategy, bringing strong cash flow and adding value for Centrica. It underlines our commitment to invest where we see attractive opportunities, securing future energy supplies for the UK.”

LNG World News Staff, February 22, 2012

Santos said it is finalising a thorough review of all of Eastern Star Gas (Eastern Star) facilities and practices following its acquisition of the Company in November and announced today a commitment to invest $20 million in upgrading Eastern Star’s sites, equipment and processes to ensure the operations in the Pilliga State Forest meet best practice standards.

Today Santos submitted a detailed report arising from its review of Eastern Star, including external scientific tests and analysis, to the NSW Government which is also conducting an investigation of sites previously operated by Eastern Star. The Santos report has identified an unacceptable culture in Eastern Star of accepting minor spills, failures in reporting and the possibility of unapproved land clearing on some sites.

The report includes the results of detailed investigations into soil conditions surrounding Eastern Star’s Bibblewindi water treatment plant in the Pilliga.

Extensive soil tests undertaken by external scientific consultants demonstrate that the levels of elements and compounds in soil near the site, with the exception of salt, do not represent health or ecological risks. In fact, the tests show that the soil is below the most sensitive health-based land use soil criteria under the National Environment Protection Measure guidelines.

The soil analysis also indicates the small area of vegetation die-back adjacent to the Bibblewindi plant has been caused by the elevated salt levels. This is as a result of accidental water releases at the site which should not have occurred and would have been preventable if Eastern Star had appropriate processes in place. The impacted area will be remediated.

Santos Vice President Eastern Australia, James Baulderstone, said: “I want to make two things clear to the community. First, none of the process failures or impacted vegetation that we have identified in our review of Eastern Star are acceptable to Santos and we can appreciate why some local residents have been critical. Secondly, the key point arising from our detailed review is that despite these process failures, the impacts are limited and will be remediated.”

“The extensive testing and analysis released today shows recent claims about dangerous toxicity levels in the Pilliga were misleading and have caused unnecessary concern in the community about CSG. The claims ignored the fact that the trace elements highlighted are naturally occurring in the Pilliga. In the impacted area around the Bibblewindi plant the trace elements remain at levels well within health and safety guidelines.

“Nevertheless, Eastern Star’s practices were not up to the standards the community is entitled to expect and Santos is taking action to ensure much higher standards of operation and reliability are maintained from here on.

“The NSW Government is conducting its own investigations and we are cooperating fully with that process,” Mr Baulderstone said.

Santos is preparing a detailed rehabilitation plan for this land which will be submitted to the NSW Government, and the company will commence rehabilitation of the land as soon as the plan is approved by the various responsible NSW Government agencies.

Santos is in the process of redesigning Eastern Star’s operational facilities. The overall upgrade requires an initial investment of $20 million and includes:

• A complete design review of the Bibblewindi plant.

• Upgrade of the plant’s tanks, pumps and machines.

• Installation of new concrete bunds to prevent future water releases.

• A new water and brine management system.

• Replacement of pipework as required.

Santos has scaled back operational activities in the Pilliga while it completes the Eastern Star upgrade and remediation plans.

LNG World News Staff, February 22, 2012

Woodside said it has appointed Mr Robert Cole to its Board as Executive Director.

Mr Cole joined Woodside in the role of General Counsel in April 2006. He has more than 21 years experience in corporate, energy and resources law, including three years as partner in charge of the Perth office of a national law firm, Woodside said.

Woodside also announced that Mr Michael Abbott has been appointed to the role of General Counsel, reporting to Mr Cole.

LNG World News Staff, February 22, 2012

Chesapeake Energy reported 2011 fourth quarter net income of $429 million, ebitda of $1.375 billion and operating cash flow of $1.311 billion on revenue of $2.727 billion and production of 331 billion cubic feet of natural gas equivalent (bcfe).

For the 2011 full year, Chesapeake reported net income of $1.570 billion , ebitda of $4.847 billion and operating cash flow of $5.309 billion on revenue of $11.635 billion and production of 1.194 trillion cubic feet of natural gas equivalent.

The company’s 2011 fourth quarter and full year results include realized natural gas and liquids hedging gains of $315 million and $1.554 billion.

Chesapeake also reported adjusted net income of $394 million and adjusted ebitda of $1.308 billion, and for the 2011 full year, Chesapeake reported adjusted net income of $1.936 billion and adjusted ebitda of $5.406 billion.

The primary excluded items and their effects on the 2011 fourth quarter and full year reported results are detailed as follows:

• a net unrealized after-tax mark-to-market loss of $207 million for the fourth quarter and $486 million for the full year resulting from the company’s natural gas, liquids and interest rate hedging programs;
• a net after-tax gain of $242 million for the fourth quarter and $238 million for the full year related to sales and impairments of certain of the company’s fixed assets; and
• a net after-tax loss of $118 million for the full year related to the purchase or exchange of certain of the company’s senior notes and a related loss on foreign currency derivatives.

LNG World News Staff, February 22, 2012

China paid about $601.67 per ton for the 1,303,252 mt of LNG imported in the country in January, customs data showed.

The country imported 814,186 mt of LNG in January 2011.

Most of the LNG supplies in January were shipped from Qatar and Australia.

LNG World News Staff, February 22, 2012; Image: CNOOC

London-based Gasol said it has appointed Alan Buxton as its Chief Operating Officer.

Mr. Buxton joins the Board of Gasol from Standard Bank plc where he was a Managing Director and Global Head of its Power and Infrastructure Group, with responsibility for building the bank‟s franchise into several territories, including Africa, advising clients on a number of domestic and cross-border transactions, the company said in a statement.

Prior to working with Standard Bank plc he was a core member of Royal Bank of Canada‟s Infrastructure Finance Group, having joined in 2000, and over the following eight years built it into a significant business with gross revenues of C$250 million.

Mr. Buxton joined Royal Bank of Canada from National Power plc where for three years he led the evaluation and acquisition of generating assets in Europe, the Middle East and India; and was responsible for all aspects of project management, including construction, operations, power offtake, financing, risk assessment and shareholder returns.

Ewen Wigley, Gasol’s former Chief Operating Officer, will remain a Director of the company and work on a part time basis with Mr. Buxton to assist with the delivery of Gasol‟s strategy.

For the remainder of his time Mr. Wigley will return to Gasol‟s major shareholder, African Gas Development Corporation Ltd, where he will serve as its Head of Corporate Development.

Commenting on the appointment Mr. Wigley said: “Having refocused the Company‟s strategy and set it on its development path, I am pleased to welcome Alan to Gasol. I am sure that he will prove instrumental in delivering Gasol‟s strategy, which aims to monetise stranded gas assets in the Gulf of Guinea particularly focusing on the developing West African gas-to-power sector.”

“Alan brings with him a 25 year track record of highly relevant sector experience and corporate finance expertise with a particular specialism in highly regulated international environments.”

Commenting on his appointment Mr. Buxton said: “I am delighted to be joining Gasol at an exciting and pivotal time in its development. Stranded gas assets in West Africa offer huge opportunities for the region to take more control of its future and I am looking forward to delivering Gasol‟s strategy for growth over the coming months and years.”

LNG World News Staff, February 22, 2012

Australia’s Woodside today reported a full-year profit of $1,507 million, underpinned by continued strong performance from the North West Shelf (NWS) Project and higher revenues.

Key Points

- Revenue of $4,802 million up 14.5% (2010: $4,193 million) underpinned by strong performance from the NWS Project and higher commodity prices.

- Reported net profit after tax of $1,507 million (2010: $1,575 million), down 4.3%, largely due to nonrecurring costs.

- Underlying net profit after tax $1,655 million, up 16.7% (2010: $1,418 million) due to strong revenues.

- Operating cash flow of $2,242 million, up 6.6% (2010: $2,104 million).

- A fully franked final dividend of US 55 cents per share (cps) was declared (2010: US 55 cps). The 2011 dividend total of US 110 cps fully franked (2010: US 105 cps) represents a record US cps annual dividend.

- 2011 full-year production of 64.6 million barrels of oil equivalent (MMboe) was above mid-year guidance due to lower than expected Q4 cyclone activity and better than forecast facility reliability. Although 11.1% lower than last year’s production, less than one-third of this change was due to natural field decline from Woodside operated fields with the remainder due to higher than normal cyclone activity in Q1 2011 as well as divestments, contract expiry, project redevelopment shut-ins and higher maintenance throughout 2011.

- 2012 production outlook of 73 to 81 MMboe includes 56 to 60 MMboe from the foundation business (ex- Pluto) and an additional 17 to 21 MMboe from the Pluto LNG Project.

- Contingent resources up 17.8% to 2,136.5 MMboe (2010: 1,813.8 MMboe) primarily due to positive revisions in the Browse fields. Three year organic reserves replacement ratio remains above 100%.

- Robust balance sheet to fund growth with $2.2 billion in cash and undrawn debt facilities. Debt and gearing remain at conservative levels near the completion of a major development campaign.

- Pluto LNG Project nearing completion with no material change anticipated to previously advised first cargo target date.

- Browse LNG milestones met, amendments to retention lease requirements submitted to Joint Authority.

Woodside CEO Peter Coleman said the financial result highlighted the ongoing strength of the company’s base business and its focus on operational excellence was continuing to deliver outstanding results.

“The strong increase in underlying profit demonstrates our ability to continue to maximise value from our premium asset base. In addition, the successful execution of our funding plan for the Pluto LNG Project amidst the global financial downturn, illustrates our effective capital management and sound financial discipline.

“With more than $2 billion in cash and undrawn facilities and strong cash flows, which will be further boosted when Pluto comes online, we are well placed to fund our LNG growth plans and consider other opportunities
which will bring value to shareholders.”

LNG World News Staff, February 22, 2012

The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Dusan Bajatovic, Director General of Srbijagas.

Russian-Serbian cooperation in the energy sector was discussed during the meeting.

In addition, Alexey Miller and Dusan Bajatovic reviewed the progress with South Stream. As part of the project, a contract for designing the Serbian part of the gas pipeline is expected to be signed in the nearest future.

The parties paid special attention to the first South Stream facility, the Banatski Dvor underground gas storage, commissioned by Gazprom and Srbijagas at the end of the previous year. Dusan Bajatovic noted that gas consumption peaks had been smoothed out in Serbia during abnormally cold snaps – thanks largely to the UGS facility reserves.

Alexey Miller and Dusan Bajatovic also confirmed their intentions to sign a long-term purchase and sale agreement for Russian gas in the amount of some 2 billion cubic meters per year.

LNG World News Staff, February 22, 2012

As regulations curbing atmospheric pollution and greenhouse gas emissions grow stricter amid stronger calls for a greener shipping industry, attention is turning to the potential of natural gas as a cleaner alternative to liquid fuel oil.

Liquefied natural gas is widely used on vessels designed to transport the commodity and has started to be introduced on other types of ships. Around 30 vessels, including many Norwegian ferries and offshore support ships in the North Sea, are powered by LNG with takeup of the fuel expected to increase in the near future.

The International Maritime Organization (IMO) has developed the International Code of Safety for ships using gases or other low flash-point fuels (IGF Code) to govern safety aspects of the application of natural gas for propulsion and auxiliary purposes.

In these new ClassNK guidelines, requirements for the design of natural gas fueled ships have been specified based on the current draft of the IGF Code. The guidelines provide comprehensive information on key design features including bunkering, hull structure, fire safety, and explosion prevention measures.

“One of our most important missions as a classification society is to help ensure the safety of shipping as the industry looks to ways in which it can reduce its carbon footprint,” says ClassNK Chairman & President Noboru Ueda, adding: “These new guidelines have been compiled based on our vast array of technical expertise and experience. By releasing these guidelines today, we hope to provide practical guidance for shipyards, manufacturers, owners, managers, and operators looking to prepare their fleets for a safer, greener future”.

LNG World News Staff, February 21, 2012; Image: Trinity Offshore

Intergraph, the leading global provider of enterprise engineering software, and its partner, Skire, have entered into an agreement with INPEX for the purchase of Skire’s Unifier solution for the Ichthys LNG project.

INPEX selected Unifier as the mega-project’s cost control system after a formal call for tender based upon its powerful purpose-built capabilities, proven track record in the global oil and gas industry, and ability to integrate with SAP.

The Ichthys LNG project will need to develop, negotiate, award and subsequently administer a significant number of very large contracts during its execution phases. Major EPC contracts and work packages require a robust system for contracts and procurement planning and milestone management, contracts administration and contractual document management, claims management, variations and change control, project controls for cost and schedule management, and performance reporting. Given the scale of the operation, the Ichthys LNG project identified the need for a robust and “fit-for-purpose” software solution to contribute to effective project management, project controls, and procurement and contracting to support proactive decision-making.

Greg Rohde, Intergraph Process, Power & Marine vice president of Australia and New Zealand, said, “Intergraph and Skire will work together to support INPEX on this large-scale, world-class project, enabling increased safety, quality and productivity of the Ichthys project.”

“We are thrilled to be part of this major energy effort in the booming Australian region,” said Sateez Kadivar, vice president, business operations and corporate development at Skire. “The sheer size and volume of the engineering, procurement, and construction (EPC) contracts on this type of project make project controls virtually impossible without a centralized system driving standardization, proactive management and visibility. Skire Unifier fills the gap between CAD and ERP systems, and the INPEX contract award is further validation of the Skire-Intergraph-SAP combination as the industry standard for the global oil and gas industry.”

LNG World News Staff, February 21, 2012; Image: Inpex

Cummins Westport Inc., announced the ISX12 G, a 12 litre heavy-duty, factory built dedicated natural gas engine for regional haul truck / tractor, vocational and refuse applications.

The new ISX12 G is currently in field trials with full production expected to commence in early 2013.

The ISX12 G natural gas engine is based on the Cummins ISX12 diesel engine platform,the newest member of Cummins heavy duty engine family. The ISX12 G will operate exclusively on natural gas (CNG or LNG) utilizing Cummins Westport’s proprietary spark-ignited, stoichiometric combustion with cooled exhaust gas recirculation (SEGR) technology, first introduced with the 8.9 litre ISL G.

The ISX12 G features three-way catalyst aftertreatment, which is packaged as a muffler and is maintenance free. No diesel particulate filter or selective catalytic reduction aftertreatment will be required. Preliminary specifications include a range of ratings to 400 hp and 1,450 lb-ft torque, optional engine brake, and manual and automatic transmission capability to meet customer and original equipment manufacturer requirements. The ISX12 G will be manufactured in Cummins’ heavy-duty engine plant in Jamestown, New York.

“This is an important product development for Cummins Westport given the increasing demand for natural gas vehicles in the heavy-duty market,” said Roe East, President of Cummins Westport. “The ISX12 G will offer customers heavy-duty performance, reliability, and durability and a choice of either compressed natural gas or liquefied natural gas as a fuel.”

The ISX12 G target markets at launch are North American regional haul and vocational truck/tractor, and refuse applications, where demand for natural gas vehicles is growing. Anticipated end-use applications in the regional haul market segment include intermodal and distribution operation, pickup and delivery. Potential post-launch market opportunities include motor coach and specialty vocational applications.

The ISX12 G is expected to be certified at launch to meet the U.S. Environmental Protection Agency and California Air Resources Board emission standards of 0.20 g/bhp-hr NOx and 0.01 g/bhp-hr PM. The engine is additionally expected to be capable of meeting EURO VI and pending U.S. greenhouse gas and fuel economy regulations.

Partial funding in support of the ISX12 G engine development has been received from the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) and the California Energy Commission in conjunction with the Gas Technology Institute.

LNG World News Staff, February 21, 2012

The latest LNG cargo to be loaded at Nigeria’s Bonny liquefied natural gas terminal has been dispatched to Japan, according to shipping data.

The 137,231 m3 LNG Sokoto departed Bonny Monday, and is expected to arrive in Japan on March 20.

With the completion of a sixth production train in December 2007, the Nigeria LNG Plant at Bonny Island has an overall capacity of some 22 million tonnes a year of LNG and 4 million tonnes per annum of LPG.

LNG World News Staff, February 21, 2012; Image: NLNG

Russia’s gas giant Gazprom and Kogas of South Korea, plan to hold the next round of talks for Russia-Korea gas pipeline in March, Gazprom said in a statement.

Yesterday, Gazprom’s Deputy Chairman Alexander Medvedev and Kogas Executive Vice President Park Yong Sung met in Seoul.

“The parties discussed the terms of Russian natural gas supply to the Republic of Korea via the Democratic People’s Republic of Korea.

The delegations of Gazprom and Kogas submitted updated proposals on the major terms and conditions of the contract, and conciliated their approaches to a number of crucial issues,” Gazprom said in a statement.

Gazprom and Kogas in September inked the Roadmap on natural gas supplies from the Russian Federation to the Republic of Korea.

“Summing up the meeting results, the parties confirmed their interest in the project and highlighted the importance of reaching an agreement as soon as possible to secure efficient Russian gas supplies to South Korea,” Gazprom added.

LNG World News Staff, February 21, 2012

Total SA of France is in negotiations to raise its stake in Ichthys LNG Project, according to several media reports.

“Total is in discussions to increase its participation from to 30%” in Ichthys LNG project,” Yves-Louis Darricarrere, Total’s president of exploration and production, gas and power said.

Japan’s Inpex and Total made the Final Investment Decision (FID) on the US$34 billion Ichthys LNG Project in January.

The Ichthys Project is expected to produce more than 8 million tonnes of LNG, approximately 1.6 million tonnes of LPG per annum and 100,000 barrels of condensate per day.

LNG World News Staff, February 21, 2012; Image: Inpex

Polskie Górnictwo Naftowe i Gazownictwo SA (PGNiG) said that it has yesterday filed a suit against OAO Gazprom and OOO Gazprom Export with the Arbitration Tribunal in Stockholm.

“The subject of the suit is an amendment of the price terms of the long-term gas supply contract of September 25th 1996 executed by PGNiG SA with Gazprom and Gazprom Export,” the company said in a statement.

“Due to the nature of the arbitration proceedings, and in particular their confidentiality, PGNiG is not in a position to provide any further details regarding the suit,” the company added.

LNG World News Staff, February 21, 2012

Belgium’s Zeebrugge liquefied natural gas terminal is set to re-export a cargo of LNG on March 20, according to the Zeebrugge Port Authority.

The cargo will be shipped by the British Sapphire, a 151,945 m3 tanker.

The Zeebrugge terminal is operated by Fluxys LNG and has an annual throughput capacity of nine billion cubic meters (bcm) of natural gas.

LNG World News Staff, February 21, 2012; Image: Port of Zeebrugge

The Gazprom headquarters hosted a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Ichiro Takahara, Director General of the Agency for Natural Resources and Energy under the Japanese Ministry of Economy, Trade and Industry.

The parties discussed the current issues and prospects for deepening the Russian-Japanese partnership in the energy sector. Special attention was paid to the interaction within the Eastern Gas Program.

The meeting summed up the results of the feasibility study on the options for natural gas use near Vladivostok. It was agreed that Gazprom and the consortium of Japanese companies JAPAN FAR EAST GAS Co., Ltd were to move over to the investment rationale for the LNG plant.

LNG World News Staff, February 21, 2012

The U.S. Sabine Pass liquefied natural gas terminal received an LNG cargo yesterday, according to shipping data.

The Arctic Spirit, owned by Teekay LNG, has a capacity of 87.305 cbm.

Cheniere’s Sabine Pass LNG terminal  is located on 853 acres of land along the Sabine Pass River on the border between Texas and Louisiana, in Cameron Parish.

It  has regasification and send-out capacity of 4.0 billion cubic feet per day (Bcf/d) and storage capacity of 16.9 billion cubic feet equivalent (Bcfe).

LNG World News Staff, February 21, 2012; Image: Cheniere

Norway’s Hammerfest LNG terminal shipped an liquefied natural gas cargo today, according to shipping data.

The cargo is being hauled by the Arctic Princess, a 147208 m3 cubic-meter tanker.

The destination of the cargo is Gibraltar at this moment.

The Statoil-operated Hammerfest terminal has a capacity to produce 4.3 million mt/year of LNG.

LNG World News Staff, February 20, 2012; Image: Höegh LNG

Oil Search of Papua New Guinea said today that it has lifted its full year net profit by 9% to US$202.5 million.

The profit increase reflected a 45% rise in the average realised oil price, which more than offset 10.6% lower sales volumes. NPAT excluding significant items rose 64%, from US$144.1 million to US$235.7 million, the company said.

Highlights

• During 2011, good progress was made on all aspects of the PNG LNG Project, which is now two years into a four year construction schedule. In early December, the Operator, Esso Highlands Limited, a subsidiary of Exxon Mobil Corporation, confirmed that the Project remains on track to achieve first LNG sales in 2014.

• Preparations were made during the year for the largest drilling programme in the Company’s history. This campaign is targeting significant gas and oil reserves, which have the potential to underwrite further LNG growth and continued strength in oil production. Drilling is now underway and will extend for the next 18 months.

• 2011 total oil and gas production was 6.69 mmboe, 12.7% lower than in 2010 but at the upper end of the Company’s guidance range. This reflected a continued strong operational performance from the Company’s mature oil fields, with successful well optimisation and drilling substantially mitigating the impact of natural field decline and the planned facilities shutdown for PNG LNG Project-related construction work.

• Oil Search continues to have a strong balance sheet and is well placed to fund significant investment in the PNG LNG Project, as well as further growth initiatives. At the end of December 2011, the Company had cash reserves of US$1,047.5 million (including its share of joint venture balances) and an undrawn revolving oil facility of US$246.5 million, taking total liquidity to US$1,294.0 million. The net debt position at the end of the year, including PNG LNG project finance draw-downs, was US$700.1 million.

• The Board has approved the payment of a final dividend of two US cents per share for the 2011 financial year, payable on 10 April 2012. Together with the interim dividend of two US cents per share, paid to shareholders in October 2011, the total dividend for the year is four US cents per share, the same as in 2010. The dividend payment will be funded by a fully underwritten dividend reinvestment plan.

• 2012 will be a year of major investment by Oil Search in PNG. The Company will spend an estimated US$2.2 billion in-country, on PNG LNG Project-related activities and on an extensive gas and oil exploration, appraisal and development programme. This is likely to make Oil Search the largest single investor in PNG this year, attesting to the Company’s confidence in the Government and continued operating stability in the country, as well as its ability to manage in-country challenges, including the forthcoming election. Oil Search will continue to work closely with Government, bureaucracy and local communities to ensure the safety of its people and stability of the operating environment.

PNG LNG Project

Oil Search said that PNG LNG Project activities ramped up significantly during the year, as early works and infrastructure development progressively reached completion and full scale construction commenced.

By the end of 2011, more than 14,300 people were employed on Project activities, of which 60% were PNG citizens. In line with the Project’s commitment to provide opportunities to PNG women, more than 1,000 people in the workforce were females, 94% from PNG.

Project activities in 2011 were focused on the following areas:

• LNG Plant: Commencement of construction of foundations, structural steelwork, pipe racks, jetty works and tank foundations, with work starting on the outer LNG tank shells towards the end of the year.

• Offshore Pipeline: Commencement of laying the offshore pipeline, including clearing of the landfall site at the LNG Plant site (Caution Bay), trenching, shore pull and trench backfilling. 130 kilometres of the 400 kilometre offshore pipeline had been laid by the end of the year.

• Onshore Pipeline: Continued procurement, coating and mobilisation of line pipe, with all line pipe received in PNG by year end. Route clearance and pipe laying continued, with over 100 kilometres of the onshore pipeline welded in 2011 and a number of sections trenched and complete. Pre-construction surveys for the entire 292 kilometre onshore pipeline route were completed.

• Associated Gas and PL 2 Life Extension Projects: Successful completion of the first phase of tie-ins and major equipment installation at the Kutubu Central Processing Facility (CPF) and the construction of a new control room at the CPF. Laying of a new subsea loading pipeline and the installation of a new Catenary Anchor Leg Mooring (CALM) buoy.

• Hides Gas Conditioning Plant (HGCP) and Komo Airfield: Continued earthworks, foundations and commencement of construction activity, including the commencement of piling work at the HGCP.

• Drilling: Mobilisation of the first of two new drilling rigs to PNG.

LNG World News Staff, February 21, 2012; Image: Santos