LNG to be dominant fuel by 2030

LNG will be the dominant fuel powering the global shipping industry by 2030, according to experts speaking at the LNG Bunkering Mediterranean Summit in Barcelona on Thursday.
The forecast was based on LNG being considerably cheaper than low-sulphur marine oils. It would mean that 80% of the current
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Santos’ GLNG Project Produces First LNG

By MarEx 2015-09-24 17:14:23

Santos’ Australian GLNG project has started producing its first LNG on Curtis Island, Queensland.

LNG is currently being produced from Train 1 ahead of the first cargo, which is expected to be shipped to Asian markets in the coming weeks.

Work on the second train is continuing, with Train 2 expected to be ready for start-up by the end of the year.

Santos Managing Director and Chief Executive Officer David Knox said startup marked the most significant milestone to date for Santos’ first operated LNG project.

“Our upstream facilities are fully operational and performing well, we’re producing LNG on Curtis Island, and we’re now looking forward to safely delivering our first LNG cargo in the coming weeks.”

Project revenue is underpinned by binding long-term LNG sales contracts covering more than 90 percent of the plant’s capacity.

“Production from GLNG will be a significant addition to Santos’ growing LNG portfolio, which already includes the Darwin LNG and PNG LNG projects,” said Knox.

GLNG produces natural gas from Queensland’s coal seams and converts it into LNG. It involves gas field development in the Surat and Bowen Basins, a 420-kilometre gas transmission pipeline and a two-train LNG plant on Curtis Island, near Gladstone which will have the capacity to produce 7.8 million tons of LNG per year when fully operational.

Santos is the operator and has a 30 percent interest in the project. Other co-venturers include Petronas (27.5 percent), Total (27.5 percent) and Kogas (15 percent).

The project ran on schedule and within budget.

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World’s Largest Semi-Submersible Floated Out

By MarEx 2015-09-24 16:48:06

The Inpex-operated Ichthys LNG Project in Australia has reached a milestone with the safe launching of its central processing facility (CPF) from the offshore floating dock at the Samsung Heavy Industries shipyard in Geoje, South Korea.

Managing Director Ichthys LNG Project Louis Bon expressed his congratulations to the project and contractor teams for the excellent result. “The operation was completed within two days in the safest conditions,” Bon said. “The CPF is now berthed quayside at the shipyard where work is continuing to lift and install the living quarters and integrate and commission all equipment in preparation for the CPF’s sail away.”

Once completed, the CPF, which was started in January 2013, will be towed 5600 kilometers to the Ichthys Field in the Browse Basin, offshore Western Australia (WA), where it will be permanently moored for the life of the project, more than 40 years.

Currently under construction in South Korea, the CPF and FPSO, once completed, will be towed to the Ichthys field in 2016 where they will be moored by 40,000 tons of chain secured to about 20,000 tons of foundation piles.

Mooring installation work is being led by Heerema Marine Contractors Australia, under subcontract to the lead contractor McDermott Australia, using the deepwater construction vessel DCV Aegir.

The Ichthys reservoirs are situated in the Timor Sea around 200 kilometers off the WA coast and more than 800 kilometers (500 miles) southwest of Darwin. Exploration wells resulted in the discovery of an extremely promising gas and condensate field with reserves estimates from two geological horizons of around twelve trillion cubic feet of gas and five hundred million barrels of condensate. This makes it the largest discovery of hydrocarbon liquids in Australia in more than 40 years.

When operational, the project is expected to produce 8.4 million tons of LNG and 1.6 million tons of LPG per annum, along with approximately 100,000 barrels of condensate per day at peak.

The project includes some of the world’s biggest and most advanced offshore facilities, massive onshore processing facilities near Darwin in the Northern Territory and an 889 kilometer gas export pipeline to unite them. Each of these three components is itself a mega-project and work is progressing for all, with production scheduled for the end of 2016.

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China Investigating Port Overcharging Allegations

By MarEx 2015-09-24 16:10:44

Seven Chinese state departments are investigating four local shipping companies over allegations that they have levied arbitrary and excessive charges for port services after receiving complaints from several foreign firms.

The companies are Ningbo Dagang Pilotage, a subsidiary of Ningbo Port Group, Nantong Youbang Port Services, Taizhou Dingan Ocean Shipping Services, and Dandong Dehai Ship Services, which operate at the ports of Ningbo, Nantong, Taizhou and Dandong, respectively.

The state departments conducting investigations are the National Development and Reform Commission (NDRC), the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Transport, the Ministry of Commerce, the General Administration of Customs, and the General Administration of Quality Supervision, Inspection.

NDRC has found that some shipping companies list too many items on document charges and unreasonable telex release charges.

Ningbo Dagang allegedly collected pilotage fees that were higher than required by national regulations. Dangdong Dehai has allegedly overcharged operators for waste dumping fees.

China Shipping Association officials said that the four companies used their monopoly positions to charge these excessive fees and they will be regulated going forward.

According to reports, some shipping firms have already adjusted and reduced charges for telex releases.

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Rig Decommissioning Concerns Rise

By MarEx 2015-09-24 15:01:20

Decommissioning offshore rigs used to be an afterthought for energy companies as skyrocketing crude oil prices fueled the industry. But as oil prices have plummeted to around $45 per barrel, stockholders are no longer willing to absorb decommissioning costs.

Rig life has been extended due to improved recovery methods and continued maintenance in the past. And as large operators exited fields, smaller oil companies often bought them and ended up with the decommissioning liability.

As oil prices have bottomed, decommissioning has moved to the forefront of the industry’s concerns. The U.S. Department of Interior (DOI) has now proposed guidelines to ensure that companies set aside enough money to scrap older rigs in the Gulf of Mexico.

The Bureau of Ocean Energy Management’s (BOEM) has proposed that fewer companies be self-insure and that decommissioning costs be set aside via financial assurance bonds rather than surety bonds.

Click here to read BOEM’s proposal.

As decommissioning costs continue to rise, the federal government wants to ensure that taxpayers are not left paying the costs.

Regulations currently stipulate companies put up at least $50,000 in surety bonds at initial exploration. Financial requirements then increase depending on the development of the field and the oil companies may have to put up at least $500,000. The companies can post bonds covering a single lease or for all of their activity in the region. Some of the largest companies are required to post up to $3 million.

Today, regulators are authorized to get supplemental bonds on top of those baseline requirements with calculations based on potential liabilities, royalties, rental fees and decommissioning costs.

But, BOEM can waive supplemental assurances as long as projected decommissioning cost is 50 percent or less than a company’s net worth.

Under the new proposed guidelines, these type waivers will no longer be available but companies can self-insure if the decommissioning liabilities are 10 percent or less than their net worth.

While BOEM see the guidelines as increasing flexibility, oil companies have voiced their concerns that they may be forced to double or triple bond decommissioning liabilities.

BOEM is planning to hold a workshop in Houston, Texas on October 9 to present the details of its proposal and accept public commentary.

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