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Wednesday, 23 August 2017 21:57

Keppel bags LNG-powered vessel work

Singapore’s Keppel Offshore & Marine has secured work from Honolulu-based Pasha Hawaii for the construction of two liquefied natural gas (LNG) fueled containerships.

Worth more than US$400 million, the dual fuel LNG vessels will be built by its US-based subsidiary Keppel AmFELS, with delivery of the vessels expected in Q1 and Q3 2020 respectively.

Keppel AmFELS president Simon Lee said building these ships will have a direct impact on American jobs at the firm’s shipyard and suppliers across the country.

“[Therefore] we are pleased that Pasha has chosen us to build their first two LNG fueled containerships to our innovative design,” he said.

The 774ft Jones Act vessels will be able to carry 2525 TEUs, including a fully laden capacity of 500 45ft containers, 400 refrigerated containers, and 300 40-foot dry containers, with a sailing speed of 23 knots. The ship's hull has been fully optimized using computational fluid dynamics and will be one of the most hydrodynamically efficient hulls in the world.

The containerships will be able to run completely on LNG fuel, dramatically reducing their environmental impact and increasing fuel efficiency. Energy savings will also be achieved with a state-of-the-art engine, an optimized hull form, and an underwater propulsion system with a high-efficiency rudder and propeller.

Lately, Keppel has been in the forefront of developing vessels that can run on LNG. In May, its subsidiary Keppel Singmarine secured a SG$103 million contract to build two LNG carrier vessels for Oslo-listed Stolt-Nielsen.

Expected to be completed in Q2 and Q3 2019 separately, both vessels will come equipped with engines that can run on both diesel and LNG. The carriers will have a class notation for bunkering which adds to their versatility to not only transport but also provide LNG bunkering services if required.

According to Keppel, when compared to conventional fuels, LNG is a much cleaner alternative fuel for shipping and offers significant environmental benefits, including the reduction of up to 95% sulphur oxides, nearly 100% particulate matter, up to 90% nitrogen oxides, and up to 25% carbon dioxide emissions from engine exhaust emissions. 

Junior oil and gas explorer Senex Energy recorded lower financial loss in 2017 and increased capital expenditure significantly for the next fiscal year to focus on major growth projects.

For the full year ended 30 June, the Brisbane-based company posted loss of AU$22.7 million, a 32% improvement from the $33.2 million reported in FY16.

This was primarily driven by lower sales volume of 0.75 MMboe and lower oil price combined with higher exploration expense. Senex’s FY17 sales revenue totaled $43.6 million.

The firm has a planned capital investment program of $80-100 million for the 2018 financial year, up from $62.3 million, in addition, is looking to increase production to 0.75-0.9 MMboe.

Senex said output will primarily be generated from the Cooper basin western flank as well as the Vanessa gas field. Gas volumes from the Western Surat Gas project will ramp up throughout FY18 with material gas production expected in FY19.

“Our FY18 investment program is designed to deliver returns from the oil business and growth in our gas business while maintaining a strong balance sheet,” said CEO Ian Davies. “We expect to achieve a number of project milestones for the Western Surat Gas project during FY18, which will ultimately facilitate a final investment decision for the project.”

During FY17, Senex commenced production from the Glenora pilot at Western Surat, with the raw gas sold to the Gladstone liquefied natural gas plant in Queensland, Australia. Furthermore, the firm sanctioned its first major investment in the project, committing $50 million to a 30-well drilling campaign, which commenced in June 2017.

The firm expects to have the first of these wells online in Q1 FY18 and will complete the drilling program by end calendar year 2017. It will also undertake an expanded program of appraisal activity west of the Eos block during FY18, including securing environmental and regulatory approvals.

Running in parallel is Senex’s oil business in the Cooper basin which continues to generate free cash flow at current oil prices. In FY18, Senex plans to implement a capital investment program focused on a small number of western flank drilling targets with internal rates of return higher than 50%.

“The majority of our oil is produced from the prolific western flank of the [Cooper] basin, an area with solid economic credentials even in a low oil price environment. Our recent Birkhead oil discovery provides further evidence of the western flank’s potential, and we have confidently refocused our efforts and spend in pursuit of high-value opportunities in the region,” Davies said.

Senex's sales revenue for FY16 was $69.3 million, down from $115.9 million in FY15. Total full year production of 1.0 MMboe was 26% down on the previous year, reflecting natural field decline and a limited number of new wells brought online due to reduced capital investment.

Image: Ian Davies / Senex

Wednesday, 16 August 2017 00:24

Woodside first-half profit jumps 49%

Australian energy giant Woodside has recorded half-year profit of US$507 million, 49% higher than 1H 2016, thanks to higher oil prices and lower production costs.

In the six month to July, sales revenue dipped about 4% to $1.76 billion due to lower output of 42.2 MMboe.

Chief executive Peter Coleman said the company continued to deliver on the long-term plan and was in a strong position heading into the second half of 2017.

“Our free cash flow is up 170% from 1H 2016 to $445 million and our break-even oil price for the half was $34/bbl,” he said.

Unit production costs in 1H 2017 were down 6% to $4.9/boe, and capital expenditure was $651 million, down from 1H 2016 expenditure of $754 million.

Approximately 70% was invested in sanctioned projects, including Wheatstone LNG, the Greater Enfield project and the North West Shelf (NWS) subsea tieback projects, which are expected to contribute to production growth of approximately 15% from 2017-20.

Woodside said the Chevron-operated Wheatstone LNG project, in which the Perth-based company has 13% stake, has made significant progress, with LNG Train 1 close to first production. Wheatstone is expected to provide Woodside more than 13 MMboe of annual production once fully operational.

Elsewhere in Myanmar, Woodside completed the appraisal of the Thalin-1B and Thalin-2 wells in 1H 2017, just before making a third gas discovery in the Pyi Thit-1 well in August. Development concepts currently under consideration include a new Northern or Southern Rakhine basin hub for broader gas aggregation and export or development as a tieback to existing infrastructure.

“[Additionally], we are progressing concept definition on Pluto LNG expansion; the North West Shelf project participants have agreed on a tolling proposal and started discussions with third party resource owners, and the Browse joint venture participants have agreed on Browse to NWS as the reference development concept for technical studies,” Coleman said.

“We also executed a long-term sales agreement with Pertamina that will see Woodside become a significant supplier of LNG to Indonesia,” he added. 

Image: Woodside CEO Peter Coleman / Woodside 

Monday, 14 August 2017 21:06

Santos, ENGIE ink gas deal

Australian energy company Santos announced it has signed an agreement with ENGIE in Australia for the supply of gas to the Pelican Point Power Station that will help support South Australia’s energy needs.

Starting in January 2018, the contract is for 15PJ, which will be sourced from the Gladstone Liquefied Natural Gas (GLNG) project and Santos’ gas portfolio.

ENGIE is a French utility company operating about 2000 MW of renewable, gas-fired and brown coal-fired generating plants in Victoria, Western Australia, and South Australia.

Santos chief executive Kevin Gallagher said energy security for South Australia was a priority and the agreement demonstrated the company’s willingness to work with its GLNG partners, including Petronas, Total, and KOGAS, to reach a positive outcome.

“The Australian Energy Market Operator in its report published in June 2017 identified the resumption to full service of Pelican Point Power Station as critical to supporting South Australia’s electricity needs,” he said.

“This agreement demonstrates that Santos is delivering for Australians and that natural gas has a crucial role to play if Australia is going to have a balanced and pragmatic approach to energy policy.”

In Q2 2017, Santos produced 14.7 MMboe, in line with the previous quarter as higher GLNG equity gas and Western Australia domestic gas production was offset by slightly lower Cooper basin gas production

Sales volumes were up 16% to 21.5 MMboe and sales revenues up 12% to US$769 million primarily due to higher LNG prices and the timing of liftings. As a result, the firm increased its production and sales volume guidance for 2017 to 57-60 MMboe and 75-80 MMboe respectively.

In June, Santos announced the launch of a new strategic partnership with existing Chinese investors ENN Group and Hony Capital, who hold a combined 15.1% of Santos shares. The agreement will see the three companies jointly invest in gas exploration and LNG production in Australia and Papua New Guinea (PNG).

Operated by ExxonMobil, in PNG Santos is a 13.5% equity holder in the US$19 billion PNG LNG project - an integrated development currently supplying LNG to Asian customers. In June, PNG LNG operated at an annualized rate of 8.6 MTPA, the highest monthly rate since start-up in 2014. 

Image: Santos workers at GLNG / Santos

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