Page 9 - GLNG Week 16

GLNG ASIA GLNG
QP picks Chinese yard to build LNG carrier fleet
PIPELINES & TRANSPORT
STATE-RUN China State Shipbuilding Corp. (CSSC) and state-owned Qatar Petroleum have signed a contract that will see the Chinese com- pany build a new fleet of LNG carriers for the Middle Eastern gas giant.
QP said on April 23 that the agreement, which it noted could be worth more than $3bn, allowed it to reserve a “significant portion” of CSSC Hudong-Zhonghua Shipbuilding’s LNG carrier construction capacity up until the end of 2027.
Qatari Energy Minister Saad Sherida Al-Kaabi, who is also QP’s president and CEO, said the agreement demonstrated the compa- ny’s confidence “that we are on the right track to ensuring that our future LNG fleet requirements will be met in due time to support our increasing LNG production capacity.”
QP said the agreement would meet the com- pany’s future LNG carrier fleet requirements, including those of its ongoing North Field expansion projects. The expansion will increase
the country’s LNG production capacity from 77mn tonnes per year to 126mn tpy.
Al-Kaabi added that the agreement could be worth “well in excess of QAR11bn [$3.02bn], depending on our requirements and the extent of China’s LNG shipbuilding capacity expansion.”
Hudong-Zhonghua was China’s first yard capable of building LNG carriers and has slowly been expanding its capacity for such projects. The company revealed in January that it had signed an agreement with Malaysia’s state- owned Petronas to build two 79,900 cubic metre LNG carriers capable of sailing in coastal areas and rivers.
Commenting on the deal with QP, CSSC chairman Lei Fanpei said his company would build 174,000 cubic metre capacity carriers that had been customised for Qatar.
QP originally launched a tender for the con- struction of 60 LNG carriers in 2019, with the potential for the number of newbuilds to surpass 100 over a 10-year period.™
AUSTRALASIA
Arrow Energy JV sanctions Surat gas project
INVESTMENT
The gas from the Surat project will flow to Shell’s QGC project, which supplies both the domestic and international markets.
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 PetroChina 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 inter- national markets. The venture includes an 8.5mn tonne per year (tpy) LNG terminal on Curtis Island, near Gladstone, 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 state- ment. “The Arrow joint venture partners’ deci- sion not to build another two trains on Curtis Island provided the opportunity to create this alternative 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 pro- duce around 5 trillion cubic feet (142 bcm) of gas over its lifetime.™
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