A number of deals were signed across Asia and the Middle East in recent weeks to further expand the availability of natural gas and develop new resources.
BP plc has signed a 10-year natural gas supply agreement with a subsidiary of China’s State Power Investment Corp. (SPIC) to supply 200,000 metric tons/year (mty) starting in 2023. BP would deliver pipeline gas sourced from the Guangdong Dapeng liquefied natural gas (LNG) receiving terminal to the southern Guangdong province. The British major owns a 30% stake in the terminal and was the first international energy company in China to invest in an operating LNG terminal. The latest deal builds on others BP signed last year to supply ENN Group and Foran Energy with 300,000 mty in Guangdong for two years.
Elsewhere in Asia, Vietnam announced changes to the March draft of its National Power Development Plan. Under the revisions, planned LNG-based power projects would be cut by nearly half, limiting expectations that Vietnam would be among the next big markets for LNG in Southeast Asia. The latest revisions would see power generation capacity from imported LNG decrease to 22.4 GW by 2030, rather than 40.95 GW previously quoted in the March draft. Meanwhile, 2045 targets were reduced to 55.75 GW from 83.55 GW.
Instead, offshore wind power would increase to 4GW from 3 GW by 2030, while electricity storage capacity would double to 2.4 GW from 1.2 GW as part of efforts to reach net-zero emissions by 2050.
In the Pacific, Australia’s Woodside Petroleum Ltd. has awarded a contract for the subsea development of the Scarborough offshore natural gas field to the Subsea Integration Alliance between Luxembourg-based Subsea 7 SA and Houston-based Schlumberger Ltd. Subsea 7 said the work covers the engineering, procurement, construction and installation of subsea pipelines and production systems, which is expected to be completed in 2025.
Scarborough would provide feed gas for the Pluto LNG expansion. The gas field is estimated to hold 11.1 Tcf of dry natural gas. Woodside sanctioned the project last month. Bechtel Corp. was awarded the front-end engineering and design contract in 2019 and has started work on the project.
In another deal earlier this month, Woodside signed a memorandum of understanding with Viva Energy to advance discussions on capacity rights at Viva’s proposed LNG regasification terminal in Geelong, Victoria. This would give Woodside the opportunity to supply LNG from its Western Australian projects and global portfolio into Australia’s east coast gas market. Existing partners in the Geelong project include Engie SA, Mitsui & Co. Ltd. and Vitol Inc.
Viva Energy also signed a heads of agreement with Hoegh LNG to lease a floating storage and regasification unit for the planned Geelong terminal. The deal with Hoegh is subject to a final investment decision on the Geelong project, which Viva hopes to take by 3Q2022.
Meanwhile, in the Middle East, TotalEnergies SE, Shell plc and Oman signed several agreements, including a new LNG partnership.
Marsa LNG LLC was formed with TotalEnergies as an 80% stakeholder and Oman National Oil Co. (OQ) with a 20% stake. Marsa LNG would produce natural gas sourced from Block 10 of the onshore Saih Rawl gas field and eventually develop an LNG plant in Sohar, Oman, to provide LNG for marine bunker fuel. The Sohar plant would be powered by solar electricity.
The second deal is a concession agreement to develop and produce gas from Block 10. Marsa LNG would hold a 33.19% interest in the concession, together with partners OQ and Shell Integrated Gas Oman as operator. Under a third deal, the Marsa LNG partners agreed to sell gas from Block 10 to the government of Oman for 18 years, or until the start-up of the Marsa LNG plant.
