Page 7 - AsianOil Week 03

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Petronas signs LNG supply contract with Shenergy
PROJECTS & COMPANIES
MALAYSIA’S state-run Petronas has signed a long-term liquefied natural gas (LNG) supply agreement with China’s Shenergy Group.
The agreement will see wholly owned sub- sidiary Petronas LNG Ltd (PLL) supply the Chi- nese state-owned company with around 1.5mn tonnes per year (tpy) of LNG for 12 years from 2022, the Malaysian company said January 20. Petronas said the agreement would also involve a collaboration to build and charter new mid- sized LNG vessels.
Petronas has been supplying LNG to Shen- ergy, which is owned by the Shanghai municipal government, since 2006.
Petronas’s Malaysia LNG Tiga signed sale and purchase agreements (SPAs) with Shanghai LNG to supply up to 3.03mn tpy of LNG for 25 years in July 2006. The deal was Petronas’ first such supply agreement with China. Shenergy owns 55% of Shanghai LNG, while China National Offshore Oil Corp. (CNOOC) holds the remaining 45%.
The supply deal comes as Chinese demand for LNG continues to expand on the back of government efforts to increase consumption
of natural gas. Chinese imports of LNG in the first eleven months of 2019 climbed by 13.32% to 53.85mn tonnes of LNG.
China also began importing its first Russian piped gas last month, with the 3,000-km Power of Siberia pipeline opening on December 2. State-owned China National Petroleum Corp. (CNPC) said on January 17 that Russian gas sup- plies had reached 328mn cubic metres.
At the same time, domestic gas production has surged in recent years in response to the country’s ever-expanding demand. Production climbed by 9.8% year on year in 2019 to 173.6bn cubic metres, according to National Bureau of Statistics data.
However, while pipeline imports and domes- tic production are projected to continue rising in the coming years, the outlook for China’s LNG remains strong, as underlined by Beijing’s recent trade deal with the US. The Sino-US agreement has seen China agree to import $52bn worth of US energy products in 2020-2021, with LNG anticipated to account for a large portion of the final figure.™
EAST ASIA
MODEC seeks to grow offshore Brazil
PROJECTS & COMPANIES
JAPAN’S MODEC, a manufacturer of floating oil and gas equipment, has said it plans to grow its business in Brazil, the largest oil producer in South America, by winning one or two major platform contracts each year.
The company is looking to take advantage of the boom in Brazil’s offshore zone, a senior exec- utive told Reuters. Soichi Ide, MODEC’s chief digital officer and vice-president of operations for Latin America and Ghana, said that a series of contract wins in recent years had made Brazil a key market for the company.
“There are no other locations like Brazil, where we can really keep producing in new areas. That’s not happening anywhere in the world, only in Brazil,” he was quoted as saying by Reuters.
Ide said that his company was expecting Brazil’s national oil company (NOC) Petrobras and the global oil majors operating in the coun- try to need between 20 and 30 new platforms within the next five years. To this end, MODEC is intending to hire around 800 employees in the country by 2020, which represents a 35% increase on current levels, he said.
MODEC has been present in Brazil since the early 2000s. The Japanese firm has already supplied a total of 11 platforms for work in the country’s pre-salt and conven- tional zones, and its floating equipment now accounts for 35% of production from pre- salt fields.
On a global level, Tokyo-based MODEC has a total of 18 platforms in Latin America, Africa, Asia and the Pacific.
More than half of these are now deployed in Brazil’s pre-salt areas, where oil and gas can be found under layers of salt trapped beneath the ocean floor.
The pre-salt zones, which cover an area of around 149,000 square km off the coast of the southern states of Santa Catarina and Espírito Santo, are among the world’s most promising reserves. They hold oil and gas that is widely considered to be of high commercial value and of very good quality. Indeed, Petrobras is currently engaged in a major divestment programme that aims to sell off non-core assets so that the company can focus on pre-salt projects.™
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