Page 8 - AsiaElec Week 17

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Arrow Energy JV sanctions Surat gas project
AUSTRALIA
THE Arrow Energy joint venture, comprising Royal Dutch Shell and PetroChina on a 50:50 basis, has sanctioned the first phase of the Surat gas project in Queensland, Australia.
The green light for the project was given on April 17, the same day that both Shell and Pet- roChina announced a final investment decision (FID) on the venture. The move comes as many other projects are being delayed as a result of global oversupply and the coronavirus (COVID- 19) pandemic.
The Surat gas project will target coal-bed methane (CBM) resources – known locally in Australia as coal-seam gas (CSG) – to produce up to 90bn cubic feet (2.5bn cubic metres) per year. The gas will flow to Shell’s QGC project, which supplies both the domestic and interna- tional markets.
The venture includes an 8.5mn tonne per year (tpy) LNG terminal on Curtis Island, near Glad- stone, as well as gas production and processing facilities in the Surat Basin.
The Surat gas project is underpinned by a 27-year gas sales agreement that Arrow signed with Shell in 2017. Construction of the project is
set to begin this year on over 600 wells that will be part of the first phase, while first gas sales are expected in 2021.
“The utilisation of QGC’s existing upstream pipelines and treatment facilities enables Arrow to significantly reduce development costs, mak- ing the project competitive and economically attractive,” Shell’s director of integrated gas and new energies, Maarten Wetselaar, said in a statement.
“The Arrow joint venture partners’ decision not to build another two trains on Curtis Island provided the opportunity to create this alter- native pathway to market for the resource. The approach we have taken to this investment is aligned with Shell’s focus on actively managing all operational and financial levers to deliver sus- tainable cash flow generation. It reflects our dis- ciplined approach to capital spend, which takes a long-term view of the fundamentals of supply and demand.”
The Surat gas project is anticipated to produce around 5 trillion cubic feet (142 bcm) of gas over its lifetime.™
Sempra introduces feed gas to third Cameron LNG train
AUSTRALIA
SEMPRA LNG, a subsidiary of US-based Sem- pra Energy, announced on April 22 that
it had started introducing pipeline feed gas to the third liquefaction train at its Cameron LNG project on the Louisiana Gulf Coast. This marks the start of the final commissioning stage for Phase 1 of the three-train project, the company noted.
Feed gas deliveries to the third train are being ramped up after Sempra received authorisation from the US Federal Energy Regulatory Com- mission (FERC) to introduce the gas. Commer- cial operation of Train 3 remains on track to begin in the third quarter of 2020, the company said.
The three trains that comprise Phase 1 of the project have a combined capacity of 12mn tonnes per year (tpy) of LNG, or around 1.7bn cubic feet (48mn cubic metres) per day. Sempra experienced some delays in initially bringing the facility online, partly in relation to Hurricane Harvey, which hit the Gulf Coast in 2017. Train 1 entered commercial service in August 2019, with Train 2 following in March 2020.
A second phase of development at Cameron LNG has been proposed, comprising two addi- tional trains, but given collapsing demand and global oversupply, it appears unlikely that Sem- pra will pursue the second phase anytime soon. The company recently announced that it was
delaying a final investment decision (FID) on its proposed Costa Azul LNG project in Mexico by a quarter, to the second quarter of 2020. The firm is also no longer committing to a third-quarter FID on its Port Arthur LNG pro- ject in Texas, having previously been targeting that quarter for a decision.
“The current economic environment may impact the schedule,” Sempra LNG’s president, Justin Bird, said on a conference call in late March. However, he added that the company remained confident in long-term demand for LNG and had commitments for about 70% of Port Arthur’s output.
Sempra Energy indirectly owns 50.2% of Cameron LNG. The company’s share of full-year run-rate earnings from Phase 1 is anticipated to be $400-450mn per year starting in 2021.™
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w w w . N E W S B A S E . c o m Week 17 29•April•2020