Page 11 - GLNG Week 18

GLNG MIDDLE EAST GLNG
Qatar’s QP to axe jobs, cut costs
INVESTMENT
Qatar plans to ramp up its liquefaction capacity to 126mn tonnes
per year by 2027 by expanding its North Field.
STATE-OWNED Qatar Petroleum (QP) plans to axe jobs and cut spending in response to the collapse in oil and gas demand, sources told Reu- ters on April 30.
In an internal memo, QP CEO Saad al-Kaabi told company employees that the planned staff cuts would be finalised after the Eid-al-Fitr reli- gious holiday for Muslims in late May.
“Like all oil and gas companies, QP is look- ing at reducing expenditure due to the market downturn which ... will be weak for some time,” a source told Reuters, noting that the cuts would not affect the company’s ambitious energy devel- opment plans.
Qatar, already one of the world’s biggest LNG producers, plans to ramp up its liquefaction capacity to 126mn tonnes per year by 2027, up from 77mn tpy at present. It has postponed the launch of the first phase of its North Field LNG expansion until 2025, Reuters reported in early April, but has no plans to downsize the project’s scope.
The first phase, estimated by Rystad Energy to cost $35bn, will add four more trains to the offshore North field, raising Qatar’s capacity to 110mn tpy. QP began production drilling last month. The second phase, costing $15bn, will
comprise a further two trains.
QP is yet to sanction either stage officially.
But bearish market conditions are unlikely to deter the company from moving ahead with the project, which boasts the lowest breake- ven costs out of all the major LNG plants due to come on stream in the next decade, Rystad estimates.
The first phase of North Field’s expansion will need a gas price of only $4.50 per mmBtu to break even, according to the Norwegian consul- tancy, whereas its second will require only $4.10. LNG spot prices are currently at less than half this level, but are expected to pick up from record lows as coronavirus (COVID-19) lockdowns are eased.
QP recently signed a contract with a Chinese shipyard potentially worth over $3bn for con- struction of a new fleet of LNG carriers for the expansion.
The latest spending cuts planned at QP will mark the third wave of restructuring by QP in the last six years. In 2015 the company slashed spending and reduced its workforce in response to the previous market downturn. In 2018 it also merged state-owned LNG producers Qatargas and RasGas to cut costs further.™
AMERICAS
Pieridae and Uniper agree to extend key deadlines in their long-term LNG agreement
Pieridae Energy today announced it has negotiated extensions of the key deadlines under its 20-year agreement with German energy company Uniper Global Commodities. These include expected commercial deliveries of gas to Uniper to start between August
31, 2025 and February 28, 2026; and the extension to June 30, 2021 of the deadline
to make a positive final investment decision (FID) for the company’s proposed Goldboro LNG facility. The 20-year agreement with Uniper is for the liquefied natural gas produced at Goldboro Train 1 or 4.8 mmtpa (million tonnes per annum).
A redacted copy of the agreement and a copy of the recent amendment are available on SEDAR which have been filed as “other
NEWS IN BRIEF
material contracts”.
“We recently expressed confidence we
would sign key deadline extensions with Uniper related to FID for our Goldboro LNG facility and Pieridae is pleased to announce those extensions today. Our relationship with Uniper remains strong and we very much appreciate their on-going support,” said Pieridae CEO Alfred Sorensen.
“We remain focused on progressing work with KBR to deliver a fixed price contract to build the gas liquefaction facility. Pieridae has begun to contract for services outside
the primary engineering, procurement and construction contract with the intent to begin the site preparation work as soon as possible. Some of these activities include building the wharf and jetty, road reconstruction, and constructing the work camp.
“Over the last several weeks we have seen projects in Australia, Africa and the Gulf Coast either cancelled or delayed indefinitely due to the challenging energy market. We believe this is an opportunity for Canada
to enter into this industry at a time when others are exiting. Our Goldboro LNG Project is fundamentally sound? and with
fewer competing projects, now is the time to proceed,” concluded Sorensen.
PIERIDAE ENERGY, May 05, 2020
US gas becomes world’s most expensive
US natural gas prices have risen above benchmarks in both Europe and Asia for the first time ever, potentially giving buyers of US LNG another reason to cancel contracted cargoes.
Citing data from Refinitiv Eikon, Reuters reported that front-month gas futures for June delivery at the Henry Hub benchmark in Louisiana settled over both the Japan/Korea Marker (JKM) and the Title Transfer Facility (TTF) in the Netherlands for the first time on May 5.
Henry Hub futures for June settled about $0.11 per million British thermal units (mmBtu) over JKM on May 5, marking the first time the US benchmark topped the Asian one. Henry Hub has settled above TTF every day since April 30 – which was the first time it closed above the European benchmark in 10
Week 18 08•May•2020
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