Norway’s Natural Gas Production Could Set New Record This Year
The European Union is reducing its dependence on Russian natural gas and has made some progress. Norway has displaced Russia as the top supplier of NatGas to the EU as energy supply chains are rejiggered, reported Reuters, as Moscow reduces flows to EU countries via the Nord Stream 1 pipeline. According to government data in May, Norway ramped up NatGas production by at least 8% versus last year. This means the Scandinavian country could produce upwards of 122 billion cubic meters (bcm) of NatGas this year. Refinitiv Eikon data show Norway is now the largest supplier of NatGas to Europe, surpassing Russia, which has slashed Nord Stream capacity to just 20%. By Wednesday, the pipeline will undergo a surprise three-day shutdown for ‘maintenance’ work. Norwegian petroleum & energy minister Terje Aasland expects production levels can be sustained through the decade as new projects are coming online. This is undoubtedly a relief for the energy-stricken continent. “I expect that we can maintain the production levels we are at now until 2030. “We see that there are projects and also plans for development and operation coming now that can help maintain the high gas volumes going forward,” Terje Aasland told Reuters in an interview. The energy minister said diversification of EU’s Natgas supplies away from Russia is critical. He said, “this is an important message to get from the EU.” Increasing flows from Norway also come as European Natas prices have tripled and repeatedly hit new records this summer. Though prices plunged on Monday from all-time highs reached last week following news Germany was ahead of schedule in filling up storage facilities ahead of winter. “In principle, the market is predictable. When there is scarcity, prices are high. That also contributes to increasing production and steers the gas to the markets that need it most,” Aasland said. Despite Norway’s largest oil and gas producer, the majority state-owned Equinor, boosting renewable energy and low-carbon technologies investments, it will also increase hydrocarbon exploration projects to meet EU demand. Europe’s ability to unlock partial energy independence could be through Norway, as the oil-rich nation is now the largest supplier of NatGas to the continent and could be on track to sustain high production levels through at least 2030.
Amigo LNG Looks to Leverage Offtake Interest, Pipeline Capacity to Fast-Track Mexico Project
Mexico’s LNG space continues to grow with a new project called Amigo near the port of Guaymas in Sonora expecting a final investment decision by next February. “The fundamental driver behind the project is offtake interest in Asia, especially in India,” CEO Muthu Chezhian of Singapore-based LNG Alliance Ltd. told NGI’s Mexico GPI. India is the fourth largest consumer of liquefied natural gas in the world. An Indian company has already secured 50% of the proposed first train, he said. LNG Alliance develops end-to-end infrastructure solutions in the LNG space. The project would source gas from the Permian Basin in the United States. The Amigo LNG project has secured U.S. Department of Energy export permits for a terminal with 7.8 mmty of capacity across two trains. “The funding is in place, all the key elements are in place,” Chezhian said. “The big thing in Mexico is you want enough pipeline capacity, and access to that pipeline. Our project is very close to the Sasabe-Guaymas line. It literally runs right alongside.” The 700 MMcf/d Sasabe-Guaymas pipeline is anchored by Mexican utility Comisión Federal de Electricidad (CFE). Today, the pipeline feeds CFE’s 770 MW Empalme combined cycle power plant, and a significant amount of its capacity is unused. The state of Sonora is on board with the project, said Chezhian, and has agreed to lease the land for the project. A project launch event back in April saw representatives from the state in attendance, including the Governor of Sonora, the Mayor of Guaymas, and representatives from the Secretaría de Marina (Semar). “We are now working with the pipeline stakeholders directly for a contract for the next 25 years,” the CEO said. Nearby Shipping Channel Other LNG companies seeking to develop projects on Mexico’s Pacific Coast have floated the idea of potentially constructing a pipeline, but the existing pipeline is the quickest option. “I have fairly strong confidence that we will be able to negotiate a good and mutually beneficial deal,” Chezhian said. The project would be a tolling facility. “The water depth is good, it’s one of few places in the Sea of Cortez with this natural depth of 17 meters.” No dredging would be required, the CEO said. The Guaymas port shipping channel is nearby. “We will use services from the port of Guaymas and the maritime concession secured through the Port of Guaymas. This is a win-win cooperation model for both parties, as this project will enhance the overall port capacity by 35%.” The module-based fabrication would mean in-service would occur two and a half years after “we press the start button.” A short list of engineering, procurement and construction contractors has been drawn up. The modules would be built in Singapore and China, with the marine facility contract going to a U.S. company, Chezhian said. Upstream, the company has commitments on gas volumes starting in 2025 out of the Permian Basin. “Volumes are not a difficulty, the pipeline is the problem. If you want to lay a new pipeline, it takes years.” He says there is room for more projects in Sonora, if the pipeline capacity is enhanced. “But it’s not who starts the race, it’s who makes it to the finish line,” he said. He thinks the region can handle 10-15 mmty of LNG capacity. “But a tsunami of projects is not going to happen.” He thinks bypassing the Panama Canal gives these Mexico West Coast projects about an 80-cent advantage over U.S. Gulf Coast projects. The CEO said the way to handle the current market volatility is through a diversified demand strategy. “Our portfolio is a balanced one. It has to be a blended offtake.” The company has import projects in Montenegro, Indonesia, and in Karnataka, India. The target market in India is the fast-growing city gas distribution market. “LNG used to be a market for developing nations,” Chezhian said. “But with recent astronomical spot prices and higher cost long-term deals, countries like Pakistan, Bangladesh, the Philippines and Vietnam will find LNG to be less economically attractive.” He said, “we are also cautious that this market upcycle won’t be able to continue. We think within the first quarter of 2023 the market will be different.”
ONGC to add 100,000 sq km of new exploration area annually
ONGC’s current exploratory acreage stands at 170,000 sq km. India’s top oil & gas producer ONGC plans to add around 100,000 sq km of new exploration area annually to take the total exploratory acreage to 500,000 sq km by 2024-25. Addressing the shareholders in the company’s annual general meeting (AGM) on Monday, ONGC’s acting chairman and managing director Alka Mittal said, “Your company has launched a very ambitious exploration programme under which it plans to increase the exploratory acreage to 5,00,000 sq km by 2024-25 with an addition of around 1,00,00 sq km of new exploration area annually.” ONGC’s current exploratory acreage stands at 170,000 sq km. Mittal said the company plans to forge new partnerships and collaborations in exploration and production activities. The company has signed an initial pact with ExxonMobil, Aramco and Equinor. ONGC is currently implementing 21 major projects, each costing over Rs 1 billion. The total investment in these projects is around Rs 600 and envisaged oil and gas gain of about 97 million tonne of oil equivalent. During FY22, ONGC’s crude oil production, including share of production from joint ventures, was 21.7 million tonne (mt) while natural gas production was 21.68 billion cubic metres. Production of value-added products was 3.09 mt.