State-run gas company GAIL is just steps away from signing a 20-year contract for shipping two million tonnes of LNG a year from US east coast, The Times of India said, citing sources close to the development.
Value of this contract would be approximately $12 billion.
GAIL executives were in the US last week in order to give final touches to the deal, the newspaper said.
In December 2011, GAIL inked a $20 billion contract with Sabine Pass Liquefaction for 3.5 million tonnes of LNG annually.
- India in talks with US for LNG imports (shippingtribune.com)
- India’s Biggest LNG Buyer Seeks $1 Billion in Debt to Expand (bloomberg.com)
Cove Energy, a UK oil and gas company with primary assets in East Africa, yesterday urged its shareholders to accept the $1.8 billion takeover bid from Shell before May 23, the first closing date for the offer from Shell.
The board of Cove, having already endorsed the offer, has said it continues to believe that it is in the best interests of Cove shareholders to accept the offer.
Despite also receiving a similar offer from Thailand’s PTTEP, and the rumors that a consortium from India is preparing a $2 billion offer, the board of Cove has said that, to date, Shell Bidco is the only firm bidder and has strongly recommended its shareholders to accept the offer as soon as possible.
To support the recommendation, the board has highlighted the fact that Shell has already secured the consent of the Government of Mozambique to the indirect acquisition of Cove’s interest in Rovuma Offshore Area 1 which would arise on the takeover of the company.
An 8.5% interest in Mozambique Rovuma Offshore Area 1 is Cove Energy’s primary asset. Anadarko, the operator of the area, last week announced it had made another major discovery in the field. The discovery well, named Golfinho, encountered more than 193 net feet (59 net meters) of natural gas pay. The well was drilled using the Belford Dolphin drillship.
- Anadarko: Another Major Discovery Offshore Mozambique (mb50.wordpress.com)
- Shell banks on expertise to win US$1.8B battle for Cove (business.financialpost.com)
(Reuters) – A major Chinese ship insurer will halt indemnity cover for tankers carrying Iranian oil from July, dealing a blow that narrows the insurance options for Tehran’s main export already constricted by payment barriers caused by Western sanctions.
With Western sanctions on Tehran increasing, sources at the China P&I Club told Reuters on Thursday it did not want to stand alone in the market, especially after insurers in Japan and Europe plan to either limit or ban their own coverage for tankers operating in Iran.
This is the first sign that refiners in China, Iran’s top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country. Iran’s other top customers — India, Japan and South Korea — are running into similar problems, raising questions on how Tehran will be able to continue to export the bulk of its oil.
Crude oil prices are up nearly 14 percent since the start of this year on concerns that Iranian supplies may be disrupted due to Western sanctions. Brent crude traded above $123 a barrel on Thursday. <O/R>
The China P&I Club, whose members include major Chinese shipping firms Sinotrans (0368.HK) and COSCO Group COSCO.UL (600428.SS), is the first Chinese maritime insurer to confirm it will halt business with tankers operating in Iran.
“Many ship owners want to join our club and want our club to cover this risk, but considering all these regulations from the United States and the EU, I know the China P&I club will not do that,” said a Hong Kong-based official with the insurer, which provides coverage to more than 1,000 vessels.
“The China P&I club will not take the risk. We have asked our members not to go there, if they go there, they take their own risk,” the official added, who wished not to be named because he was not authorized to speak to the media.
Starting in July, European insurers and reinsurers will be barred from indemnifying ships carrying Iranian crude and oil products anywhere in the world, in line with sanctions on Tehran.
Iran sells most of its 2.2 million barrels per day of oil exports in Asia, where China, India, Japan and South Korea are the four biggest buyers.
Growing pressure by the West has led some Iranian oil buyers to cut imports, but the problem over obtaining maritime insurance could altogether halt shipments to Asian customers. Chinese imports from Iran are already down more than 21 percent in the first two months of 2012 to around 395,000 barrels per day compared to the same period last year.
Along with Russia and the Middle East, China is one of the few remaining alternatives for Asian ship owners to replace European-based coverage. It is not clear if other Chinese ship insurers also planned to follow China P&I Club and cut coverage.
“I really don’t know what will happen,” said a Beijing-based Chinese industry official. “We are talking about $1 billion in coverage (per tanker). No single insurance company can handle that.”
European insurers provide cover for the majority of the world’s oil tanker fleet. Industry officials say ship owners who still legally trade with Iran will be pressed to find sufficient, or comprehensive, alternative insurance.
“Western insurance companies, taking advantage of their market dominance, have been raising insurance costs gradually for ship owners,” said a Chinese shipping executive.
“Now they say they don’t want to provide cover to those disputed regions. China should really make its own comprehensive considerations (on this issue).”
An official with the China P&I club held out hope the European Union would decide on a last-minute easing of the sanctions. European nations are divided over the sanctions, while oil refiners, insurers and tanker owners face lost business opportunities with OPEC’s second-largest producer.
“As far as I’ve seen with these new published sanctions, it seems to us that there might be some room for compromise,” said a Beijing-based club official, who wished not to be named.
China P&I Club is not a member of the Group of International P&I Clubs, an association of customer-owned ship insurers which cover 95 percent of the world’s tankers against pollution and personal injury claims. The Chinese insurer has applied to join the club and could be taking the action on Iranian coverage to ensure it becomes a member, industry sources said.
The Japan P&I club, the only Asian-based member of the Group of International P&I Clubs, said last month it would only be able to provide a fraction of cover for tankers operating in Iran.
“It’s now non-life (insurers) and shippers who can tell us how many cargoes we will be able to ship from Iran,” said a manager from a Japanese firm that buys Iranian crude, adding that importing cargoes without insurance was unthinkable.
(Additional reporting by Aizhu Chen in Beijing, Risa Maeda in Tokyo and Meeyoung Cho in Seoul; Editing by Ed Lane)
- Japan refiners want force majeure to cover Iran oil shipping ban (mb50.wordpress.com)
- India ships will lose insurance due to Iran sanctions, may look to China – Reuters (reuters.com)
- S&P: Tankers Brace For Headwinds From Iran Trade Sanctions (gcaptain.com)
- Iran oil exports fall as sanctions take toll (business.financialpost.com)
Cochin Shipyard Limited (CSL) delivered a 120T Bollard pull Anchor Handling Tug Supply Vessel (AHTS), “SCI Kundan”, to M/s Shipping Corporation of India, Mumbai (SCI). This is the Second of the series of 4 Nos of 120T Bollard pull AHTS being built by CSL for M/s Shipping Corporation of India.
The vessel is of AH03 type, designed by STX OSV, Norway (ex- Aker Yards) and is certified under dual class by the Rules and Regulations of American Bureau of Shipping & Indian Register of Shipping and is registered under Indian flag.
This 65.2 x 16.0 Meter vessel is a high end Anchor handler with a capacity of 120 T Bollard pull which is equipped with 2 Nos of 4000 KW Diesel Engines and 2 Nos of Controlled pitch propeller in Kort Nozzles. The vessel is having Grade I Dynamic Positioning feature along with compliance to ERRV class ‘C’ and also having capability of Fire Fighting class I.
The vessel is built to accommodate 29 persons with all the capabilities of a Platform Supply Vessel in addition to the Anchor Handling facility. These vessels are used as support platforms to Rigs/Oil platforms. The shipyard is presently constructing another 4 nos of offshore vessels for M/s Shipping Corporation of India which are all in advanced stages of construction.
- India: Cochin Shipyard Delivers PSV to Norwegian Owner (mb50.wordpress.com)
- STX OSV Adds to their Backlog, DOF ASA Sends Newbuild Order for Subsea Construction Vessel (mb50.wordpress.com)
- MacGregor Systems for New OSVs in Asia and Europe (mb50.wordpress.com)
- Otto Marine Entrenches Deeper into West Africa with 3-year Multi-Million Dollar Contract (gcaptain.com)
Cochin Shipyard recently delivered a Platform Supply Vessel “Brage Trader” to M/s Brage Supplier K S, Norway. This is the fourth of a series of the high technology offshore vessel that have been constructed and delivered by CSL this financial year.
The vessel is of PSV 09 CD type designed by STX OSV Norway and are classed under the Rules and Regulations of Det Norske Veritas and is flagged under the Norwegian regulations. The 88 x 19 Meter vessel is a high end Diesel Electric PSV with by 4 Nos 1665 KW Diesel gen. sets and 2 Nos 2200 KW contra rotating propellers. The vessel with Grade II Dynamic Positioning features has been assigned the ‘CLEAN’ design notation by DNV signifying the highest levels of environmental compliance.
The vessel with accommodation for 42 persons also meets the requirements of COMF class signifying high comfort levels due to special arrangements to attain very low levels of noise and vibration. The vessel has special stainless steel tanks with Nitrogen inerting arrangements to carry low flash liquids and is capable of all other normal offshore supply operations.
Brage Trader PSV will be operated by Simon Møkster Shipping AS from Norway.
- Norway: STX OSV Brevik Shipyard Hands Over PSV Island Captain (mb50.wordpress.com)
- STX OSV Adds to their Backlog, DOF ASA Sends Newbuild Order for Subsea Construction Vessel (mb50.wordpress.com)
- Turkey: Tersan Shipyard Splashes Multipurpose Offshore Construction Vessel Grand Canyon (mb50.wordpress.com)
- Norway: Naming Ceremony for Olympic Energy PSV (mb50.wordpress.com)
- BP Hires PSV ‘Sea Brasil’ (mb50.wordpress.com)
In a letter sent to FERC, Cheniere said failure to receive FERC authorization by Thursday could result in delays in construction of the liquefaction project and significant price increases.
Cheniere is developing a project to add liquefaction and export capabilities to the existing infrastructure at the Sabine Pass LNG terminal.
The Liquefaction Project is being designed and permitted for up to four modular LNG trains, each with a nominal capacity of approximately 4.5 mtpa.
In November, Sabine Liquefaction entered into a lump sum turnkey contract for the engineering, procurement and construction of the first two trains of the project with Bechtel Oil, Gas and Chemicals.
Sabine Liquefaction has also entered into four long-term customer sale and purchase agreements for 16.0 mtpa of LNG volumes.
- Cheniere: Sabine 1,2 Train Construction Start in H1 2012 (USA) (mb50.wordpress.com)
- GAIL to buy 3.5 million tonnes of LNG from U.S. firm (mb50.wordpress.com)
- USA: Cheniere, KOGAS Ink Sabine Pass LNG Deal (mb50.wordpress.com)
- USA (Sabine Pass): BG Ups Sabine Pass LNG Volumes to 5.5 MTPA (mb50.wordpress.com)
- Cheniere Energy Partners Reports Fourth Quarter and YE 2011 Results (prnewswire.com)
- Zachry-CB&I venture lands Freeport FEED (mb50.wordpress.com)
- USA: Sabine Pass LNG Gets Cargo (mb50.wordpress.com)
- Macquarie Vies To Sell U.S. LNG To India (mb50.wordpress.com)
Rogers spoke with Business Insider to discuss commodities, the global economy, his legendary career, and his life in Singapore.
What follows is the complete transcript of our interview with Jim Rogers.
Inflation, Commodities and the Consumer
What is feeding into oil prices at the moment?
Iran obviously, is one thing, but another is in the U.S. it’s the infrastructure problem. We have oil but it’s in the wrong places. On the east coast, they use imported oil, and imported oil is higher because of Iran. And it comes from Europe. North Sea production is in decline. There are supply-demand reasons that oil prices are high in many parts of the world. And known reserves of oil are in decline worldwide. And the IEA is going around telling people that known reserves are in a steady decline and we’re going to have a huge problem in a decade or two, a gigantic problem, unless somebody finds a lot of oil very quickly. So underneath the supply-demand, shorter term it’s infrastructure and Iran probably.
At what level do you think oil prices will break the back of the American recovery?
We are going to have a slowdown. Such is the staggering debt that America has, it has caused more and more of a drag on our economy. I would also point out to you that every four to six years we’ve had an economic slowdown in the U.S., since the beginning of time, so by 2012, 2013, 2014, we are well overdue for an economic slowdown for whatever reason. Whether it’s caused by high oil or what, we’re going to have a slowdown in the foreseeable future.
How do you see oil prices impacting consumers in emerging markets, especially in Asia, when many of them are struggling to rein in inflation and drive growth?
Everybody is paying higher prices for oil and that obviously impacts consumption everywhere and its not just oil, its food and everything else that’s going up. There’s inflation everywhere, the U.S. lies about it, I mean the U.S. government lies about inflation but there’s inflation everywhere. I mean I don’t know if you go shopping, but if you do, you know prices are up. The government says they’re not, I don’t know where they shop. Everybody else’s prices are up.
If you could own / invest in just one commodity which would it be?
I guess it would have to be one of the agricultural commodities, it would depend on which is down the most but it would be agriculture I can tell you that.
You said earlier this year that if gold moved towards $1,600 you would be interested in buying more. Are you looking at gold now?
I’m certainly watching, if it goes below $1,600 I’m sure I’ll buy more. If it goes to $1,200 I hope I’m smart enough to buy a lot more. Gold has been up 11 years in a row now, which is extremely unusual for any asset. So it would not surprise me if gold doesn’t … continue to have a nice correction in 2012. If it does, if it does, I hope I’m smart enough to buy a lot more. I’m not selling. I’m not selling. I have not sold and will not sell until the bubble comes. There will be a bubble in gold some day but that’s ten years, I don’t know, several years from now. I hope I’m smart enough to sell when the bubble comes.
China and the emerging markets
You’re a China bull. Could you tell me the one thing that you think China bears have got wrong?
Not quite sure. If you mean the people who say China is going to explode. Those guys have been saying that for three years. I guess someday they’ll be right. So far they’ve been dead wrong, for years. There will be setbacks in China along the way. In America in the19th century we had 15 depressions with a capital “D,” we had no human rights, we had not much rule of law, (and we) had a horrible civil war, yet we became the most successful country in the 20th century.
China is going to have plenty of setbacks but what these guys are mainly missing is China has been in decline for three or four hundred years but started turning it around in 1978. And there’s a long history of entrepreneurship, capitalism, they have the brains, they have the know-how, there are many overseas Chinese who will bring back money and management ability. And the Chinese have a very, very high savings rate. They save over 35 percent of their income and so even if they start going off, they’ve got something to fall back on, as opposed to America and the rest of the world.
There was a housing bubble in urban, coastal real estate, which the government has popped purposely, I mean they knew what they were doing. But as far as, I mean Jim Chanos, says it’s going to be a thousand times worse than Dubai. Well that shows he doesn’t understand Dubai, and he doesn’t understand China. Now I’ve told him this to his face though, so I’m not talking behind his back. China is vastly different from Dubai, vastly.
Could you explain how Dubai and China’s real estate property problems differ?
Dubai was building its plan, its economic plan was to build an economy based on real estate speculation. It didn’t have anything else. It didn’t have oil, natural resources, it had a small population etc. and there was gigantic real estate speculation in construction. China has huge amounts of stuff. It has a growing population. It has vast natural resources, not enough, but it’s got some. And then all those natural resources in Siberia which they can tap and they’ve got huge financial reserves. Dubai does not. Dubai has a rich big brother, but that’s all Dubai has and China has it all – resources, cheap labor, discipline, educated labor and vast markets.
China lowered their growth rate, wage inflation is worrying and it’s the year of leadership change. Do you think China is in control in terms of their property prices and economic growth…
I doubt the government planned to have a bubble. They got a bubble. I mean they’ve been trying to cool it off and they’ve done so. As far as the lower growth rates, I don’t pay attention to government growth figures because they’re all phony. Nobody knows how much China is growing, including China. I don’t pay attention to all of these figures. They’re not important to me. They’re irrelevant. China is certainly doing better than most countries and it will continue to do so. It will have setbacks. There’s nothing that says China should not have a recession. But China has a lot of money saved for a rainy day and when it rains they’re going to spend. America doesn’t have any money saved for a rainy day. And when it rains we’re going to try to borrow it or print it,neither of which is good for America or for the world.
You have said previously that India is a great place to travel but not a great place for investors. What is the one thing that you do think makes a good investment opportunity in India?
Tourism. Tourism in India, partly because the Chinese can now travel and are traveling, and they’re very close and India is cheap. Indian tourism is going to be a wonderful, wonderful growth area in the next decade, or two, or three.
You have previously said those that invest in Myanmar could be rich in the next 20 – 40 years. Myanmar is beginning its process of reforms and is beginning to end its economic isolation form the West – what are your thoughts on Myanmar now?
China made the decision to open up in late ’78 but it took a while to put things in place. Myanmar has made the decision, they don’t even have their currency sorted out yet, so it’s going to take a while, but no ,everyday that goes by, I get more excited. Unfortunately I’m a citizen of the land of the free and we from the land of the free are not allowed to invest in Myanmar, it’s illegal. You could invest there, but I cannot.
Life in Singapore and career advice
What’s the one thing you miss the most about the U.S.? Conversely what’s the one thing Singapore has that the U.S. doesn’t?
Well I don’t really miss… I mean I go to the U.S., I was just there last week. My main complaint about Singapore is not a serious complaint but it’s not very bi-cycle friendly. The U.S. is much more bicycle friendly. I guess I wish Singapore were as bicycle friendly as parts of the U.S.
What’s your typical day like in Singapore?
“I take my daughters to school. We wake up at six because they have to get to school early. I take them on the bicycle, I come back, I exercise I have interviews while I’m exercising. I collect my daughters. I have lunch with them. Then in the afternoons I’ll have meetings, go on the computer or whatever. At night I’ll have dinner with my family unless we’re going out and then my wife and I will go out and do whatever the dinner is. And then I’ll go the disco. That’s a joke.
What’s the best piece of advice you ever got?
“Buy low and sell high. When I went to wall street. Actually all the old guys used to say ‘figure out the money and you’ll figure out what’s going on’. And so I don’t know of any specific individual but that’s advice I got a lot of times.
What’s the worst job you have ever had?
“Worst job? I don’t remember. Maybe the U.S. army, but even that, I don’t ever remember having a bad job. I was a grocery store boy when I was a teenager but even that, I learned, I don’t remember being unhappy in any job I’ve ever had. In the army, I would have liked to have done other things with those two years but even those two years were not totally wasted.”
Read more: BI
- JIM ROGERS: Jim Chanos Is Wrong About China And I Said It To His Face (businessinsider.com)
- JIM ROGERS: The Government Is Lying About Inflation And It’s Crushing The Consumer (businessinsider.com)
- 10 Quotes From The Always Charming Commodities Guru Jim Rogers (businessinsider.com)
- China Is About To Take A HUGE Step Toward Internationalizing Its Currency (businessinsider.com)
- Jim Rogers: Greece deal is a sham! (investmentpostcards.com)