Page 8 - NorthAmOil Week 08 2022

NorthAmOil PERFORMANCE NorthAmOil

Shell warns of tight LNG market in 2022

GLOBAL SHELL said on February 21 it expected the integrated gas, renewables and energy solutions,
global LNG market to remain tight in 2022, after Wael Sawan, commented. “As countries develop
a 6% climb in demand last year. lower-carbon energy systems and pursue net-
In its latest LNG outlook, the oil major said zero emissions goals, focusing on cleaner forms
that growing demand in China and South Korea of gas and decarbonisation measures will help
had driven the increase in consumption last year, LNG to remain a reliable and flexible energy
with China raising its imports by 12mn tonnes source for decades to come.”
to 79mn tonnes, surpassing Japan as the world’s To avoid future price spikes, Shell said a more
largest buyer. Chinese LNG buyers signed long- strategic approach was needed to ensure that gas
term contracts for more than 20mn tonnes per supply remains reliable and flexible in the future.
year (tpy) of supply during 2021. It forecast that an LNG supply-demand gap was
Exports grew last year in spite of various out- expected to emerge in the mid-2020s, stressing
ages, including in Australia and Norway, thanks the need for extra investment to meet rising
to a surge in US deliveries of 24mn tonnes. This demand, particularly in Asia.
means the US is on track to become the world’s Global LNG demand is set to exceed 700mn
largest exporter this year. tpy by 2040, Shell said, representing a 90%
“Last year showed just how crucial gas and increase on the level in 2021. The majority of this
LNG are in providing communities around the growth – 70% – will originate in Asia, as indig-
world with energy they need as they strived to enous production in the area declines, regional
get back on track following the difficulties caused economies grow and LNG replaces higher-emis-
by the COVID-19 pandemic,” Shell’s director for sions energy sources.™

PROJECTS & COMPANIES

BP starts up Herschel expansion

GULF OF MEXICO BP announced the start-up of the Herschel
expansion project in the US Gulf of Mexico
on February 22. The first phase of the project
involves a new subsea production system and
the first of up to three wells tied back to the Na
Kika platform.
The first well is located in Mississippi Can-
yon Block 520, around 140 miles (225 km) off the
coast of New Orleans, Louisiana. It was drilled
to a depth of roughly 19,000 feet (5,791 metres),
in water depths of 6,700 feet (2,042 metres). BP
operates the project with a 50% interest, while
Shell holds the other 50%.
At its peak, the well is expected to increase the
gross production at Na Kika by around 10,600
barrels of oil equivalent per day (boepd). BP
said in its statement that the Herschel project
provides infrastructure for future well tie-in vice-president for the Gulf of Mexico and Can- Herschel is tied back to
opportunities. ada, Starlee Sykes. “Focusing our hydrocarbons the Na Kika platform.
“Herschel is a great example of the type of business on the highest quality resources such as
fast-payback, high-return tie-back opportuni- these sits at the heart of BP’s strategy.”
ties we continue to deliver as we focus and high- According to the statement, Herschel is
grade our hydrocarbons portfolio,” stated BP’s the first of four major projects that BP expects
senior vice-president of projects, production and to bring online globally in 2022. Indeed, the
operations, Ewan Drummond. super-major is currently set to bring a new plat-
“Like other recent start-ups in the Gulf of form, Argos, online in the Gulf this year as part
Mexico, with Herschel we are tying into existing of the Mad Dog 2 development. By the mid-
infrastructure to produce some of the most effi- 2020s, BP anticipates raising its Gulf production
cient barrels in the world,” said BP’s senior to about 400,000 boepd on a net basis.™

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