December 2023, Vol. 250, No. 12
Global News
Global News December 2023
Restructuring Trinidad-Atlantic LNG Boosts Gas Processing
A deal to overhaul Trinidad and Tobago’s flagship LNG project should simplify the ownership structure of the Atlantic LNG project.
The Trinidad and Tobago said this arrangement will allow it to earn more revenue from LNG exports, while simplifying the project’s structure.
Under the new arrangement, BP and Shell will each hold 45% of the project, and Trinidad’s state-run National Gas Company (NGC) will hold the remaining 10%, said people familiar with the matter.
Following years of negotiation, NGC boosted its ownership by taking shares in all four of the facility’s liquefaction trains, rather than the current two. Chinese Investment Co. will no longer have an active stake.
The agreement may boost processing, by permitting gas from non-shareholders to ship to the LNG facility, and it suggests use of a liquification train that has been inactive due to a gas supply shortage will go back online.
Trinidad and Tobago have the capacity to process 4.2 Bcfd of natural gas into LNG, petrochemicals and power, the government said, but production stands at about 55% of that level.
The country is also negotiating with Venezuela, to import gas from at least two fields near the maritime border between the two nations, according to Reuters.
Kimmeridge Signs Eagle Ford Deal with Kinder Morgan
An affiliate of Kimmeridge — an investment firm focused on the energy sector — has signed a definitive agreement to acquire certain upstream assets from a private seller, as it expands its footprint in the Eagle Ford shale play.
Kimmeridge signed a definitive multi-year transportation agreement with Kinder Morgan Texas Pipeline LLC (KMTP), to secure midstream takeaway for its Eagle Ford natural gas, enabling KTG to deliver natural gas across multiple LNG facilities along the Gulf Coast.
These assets, which include 30,000 acres and current production of 65 MMcfged, have a strong degree of overlap with Kimmeridge Texas Gas’ (KTG) existing 75,000-acre position in the play, offering significant scale and operational synergies.
KTG anticipates continuing its multi-rig program focused on the Eagle Ford and Austin Chalk, with a target of delivering over 500 MMcfged net on a pro forma basis in 2026.
Combined with Kimmeridge’s previously announced investment in Commonwealth, an LNG export terminal project strategically located on the Calcasieu River at the Gulf of Mexico near Cameron, Louisiana, these investments deepen Kimmeridge’s South Texas foothold, and will position KTG to deliver natural gas/LNG from the wellhead to the water.
“Our acquisition of these upstream assets and agreement with KMTP will meaningfully advance KTG’s ambitions of becoming fully integrated from source to sink, providing reliable, secure and clean energy to global markets,” said Ben Dell, co-founder and managing partner of Kimmeridge. “Through our investments in South Texas, we believe we will be able to deliver net zero LNG, where all Scope 1 and 2 emissions will be offset by a combination of mitigation, sequestration and carbon removal.”
The Trinidad and Tobago government has said this arrangement will allow it to earn more revenue from LNG exports, while simplifying the project’s structure.
Chesapeake Considers Buying Producer Southwestern Energy
Gas producer Chesapeake Energy has talked with Southwestern Energy about possibly acquiring its rival, which is valued at $12 billion, Reuters said, citing people familiar with the situation.
The talks are said to be “preliminary,” according to the sources, which added that Chesapeake may consider other possible acquisitions instead.
As a combined entity, the two would surpass EQT Corp. as the biggest natural gas-focused E&P company in the United States, based on market value.
The two companies operate in close proximity, with Southwestern producing in Appalachia’s shale formations and the Haynesville basin in Louisiana, where Chesapeake also operates.
Southwestern acquired a portion of its acreage in West Virginia and Pennsylvania from Chesapeake for $5.4 billion in 2014.
Port of Corpus Christi Breaks Crude Shipments Record
Largely on the strength of crude oil shipments, customers have moved more than 50 million tons of goods through the Port of Corpus Christi, Texas, ship channel in a single quarter — for the first time in its history.
The 52 million tons transported in the third quarter were a 7.7% increase from shipments in the same period in 2022.
“This milestone is a testament to the strength of our customers in meeting the continued strong demands of the global energy market,” Kent Britton, CEO for the Port of Corpus Christi, said.
For the quarter, the Port of Corpus Christi saw a 4.4% increase in crude oil shipments (to 32.4 million tons) compared to the second quarter, as well as slightly higher volumes of LNG, petroleum products and agricultural commodities.
Port of Corpus Christi customers have moved 151.3 million tons through the gateway during the first nine months of 2023 — a 9.4% increase from the same period in 2022. The leading commodities during this period were crude oil, refined products and LNG.
Abu Dhabi’s ADNOC Gas and Japan's JERA Global Markets signed an LNG agreement valued between $500–700 million, the companies said.
DOE Picks Williams to Take Part in Clean Hydrogen Hubs
The U.S. Department of Energy’s (DOE) has selected Williams as a participant in two hydrogen hubs to continue to advance the commercialization of a clean hydrogen economy.
“Williams is excited to play a key part in these hydrogen hubs and I congratulate our teams for their ingenuity and expertise in leveraging natural gas infrastructure to advance the emerging hydrogen energy space,” said Chad Zamarin, executive vice president for corporate strategic development at Williams.
The DOE received over 79 applications for the Regional Clean Hydrogen Hubs Program, 33 of which were encouraged to make full applications, and seven of which were chosen to receive $7 billion in funding. Williams is proud to be part of two of the seven hubs selected: the Pacific Northwest Hydrogen Hub and the Appalachian Regional Clean Hydrogen Hub.
The hubs — one in the Pacific Northwest and the other in Appalachia — were selected to begin award negotiations with the DOE’s Office of Clean Energy Demonstrations.
The Pacific Northwest Hydrogen Hub is focused on reducing the emissions of hard-to-abate sectors, such as transportation, energy storage, ports, agriculture and industrial operations. Williams was named as a sub-recipient of DOE funding and plans to build hydrogen pipelines to safely and reliably transport clean hydrogen to advance the decarbonization of key energy consumers.
The Appalachian Clean Hydrogen Hub intends to leverage the region’s ample access to low-cost natural gas to produce low-cost clean hydrogen and permanently and safely store associated carbon emissions.
The hub will include the development of hydrogen pipelines, multiple hydrogen fueling stations and permanent CO2 storage, to drive down the cost of hydrogen distribution and storage.
ADNOC Gas Agrees to Supply LNG to Japan’s JERA
Abu Dhabi’s ADNOC Gas will be selling LNG valued between $500–700 million to Japan’s JERA Global Markets beginning next year, the companies announced.
The contract for the volumes will run for two years, with ADNOC Gas shipping six cargoes per year, totaling about 400,000 metric tons — on a delivered-ex-ship (DES) basis to Japan, according to a JERA spokesman.
JERA said the volumes will be supplied from ADNOC Gas’ Das Project and will be delivered to JERA Global Markets’ global supply portfolio.
ADNOC Gas recently signed other delivery contracts in Asia, including with PetroChina International in September, Japan Petroleum Exploration (Japex) in August, as well as contracts with India Oil Corp., TotalEnergies Gas and Power.
Israel Awards Offshore Exploration Licenses to 6 Companies
Israel’s Energy Ministry awarded 12 licenses to six companies to explore for natural gas along the country’s Mediterranean coast, aiming to create more competition and diversify suppliers.
The license period is for an initial three years, with the option to extend up to seven years, depending on progress. This, the ministry said, will allow licensees to study the area before deciding whether to continue development.
One group, which includes ENI, Dana Petroleum and Ratio Energies, will explore west of the massive Leviathan field, which supplies Israel with gas and is also used for exports, according to Reuters.
Another group, comprised of BP, Socar and NewMed, will explore north of the Leviathan, the ministry said.
“The winning companies have committed to unprecedented investment in natural gas exploration over the next three years, which would hopefully result in the discovery of new natural gas reservoirs,” said Energy Minister Israel Katz.
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