DOF Subsea, a subsidiary of DOF ASA advises that it has secured a campaign of work in the New Zealand Taranaki Basin for the new build DSV Skandi Singapore for an undisclosed sum. The vessel will mobilize for New Zealand on completion of the current work program in Indonesia for Conoco Philips.
Work in the Taranaki Basin involves diving and ROV operations for for AWE Limited, Shell Todd Oil Services Limited and Origin Energy. The program of work will be completed in February 2012.
Steve Brown, EVP, Asia Pacific said
“The Skandi Singapore is an ideal vessel for the work in the Taranaki Basin. The vessel is the newest DSV in the DOF Subsea fleet and is equipped for extreme weather operation in environmentally sensitive areas. Since delivery, the Skandi Singapore has proven to be a highly capable vessel and is building an excellent reputation with our regional clients.
With the delivery of new vessels into the region, DOF Subsea continues to build a strong project focused organization based in Perth, Australia and Singapore. With a regional project management and engineering capability based around 220 permanently employed engineers and support staff and the highest quality vessels in the region DOF Subsea continues to pursue growth across all subsea market sectors”
Mons Aase, CEO said that the contract awards in Asia Pacific are great news and that the investment in new assets is positive for further growth in the region.
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Queensland’s recent heavy rains and floods could delay the expansion of BG Group’s $18 billion Queensland Curtis LNG plant at Gladstone because the British gas giant has been unable to shore up gas reserves as quickly as it had hoped.
Speaking to investors in London on Tuesday night, chief executive Frank Chapman said BG was still targeting a mid-2012 sanction of a third LNG production train at Gladstone.
“The name of the game at the moment is the maturation of that reserves and resources base within that period,” Mr Chapman said.
“That has suffered some impact because of the flooding and the impact that’s had on access to drilling sites, but we’re still focused on moving some of that prospective resource into a more, higher confidence level to underpin a third train.”
Despite the rains, BG was still on track for first LNG exports from Gladstone in 2014, he said.
BG was the first of three big CSG-to-LNG proponents planning exports out of Gladstone from 2014.
Mr Chapman joined the chorus of voices touting stronger LNG demand because of the Japanese earthquake and subsequent Fukushima nuclear disaster.
He said the flow-on effect was likely to be long-term. “After (the) Three Mile Island (1979 nuclear accident) in the US, we saw lead times for nuclear projects going out to something like 12 or 13 years, and associated with that will be increased costs associated with more stringent regulatory safety requirements,” he said.
“All of this, I think will result in medium to long-term higher gas demand for power, and as a consequence, extra demand for LNG, and this is going to cause a further tightening of a market situation which we already regarded as quite tight.”
Published 4:26 PM, 21 Apr 2011
Oil giant Sinopec on has signed China’s second-largest gas purchase agreement, worth around $US85 billion ($A80.7 billion) over 20 years by one estimate, in a deal that also gives it 15 per cent of the Australia Pacific liquefied natural gas (LNG) project.
ConocoPhillips and Origin announced the deal at a joint news conference overseen by Resources Minister Martin Ferguson.
“Australia very shortly become the second-largest exporter of LNG in the world and we have effectively now got a very important new industry in Queensland,” Mr Ferguson said, referring to the northern state where the project is to be built.
“Deals like this one put Australia on track to be one of the world’s largest suppliers of LNG in coming years.”
“The APLNG project has the potential to significantly expand the burgeoning coal seam gas to LNG industry on Australia’s east coast and cement Gladstone’s place as a key LNG hub.”
Australia has around $US200 billion in LNG projects on the drawing board. Much of their exports are destined for China, which is looking to lock in supplies to feed its rapid growth and cut its reliance on polluting coal energy.
Australia Pacific LNG will have initial capacity of 4.5 million tonnes per annum (mtpa) of LNG, eventually ramping up to 18 mtpa, and is expected to come online at the end of 2015.
Sinopec’s deal to take at least 4.3 million mtpa could be worth around $85 billion if pricing is similar to that of recent coal seam gas supply deals done by Australian gas firm Santos, said CLSA analyst Mark Samter.
The price of $US1.5 billion for the 15 per cent stake is also well above similar deals made recently – state-run Korea Gas Corp (KOGAS) paid just over $US600 million in cash to buy a 15 per cent stake from Santos Ltf and Malaysia’s Petronas .
“That price reflects their view of the value of the project…APLNG is dramatically stronger I think than other projects, and that’s what reflects in that price,” Origin managing director Grant King said.
“It’s a full price… they’ve extracted a decent amount of value for the equity,” Mr Samter said.
The project holdings of Conoco and Origin are now 42.5 per cent each following Sinopec’s equity investment, and the joint venture partners are still aiming to make a final investment decision by mid-2011.
Origin Energy shares were placed on a trading halt on Thursday. Sinopec shares were up 0.9 per cent in Hong Kong.
Mr King in February said the company may sell down more of its stake in the project to future LNG buyers.
He said the joint venture would not give a running commentary on current gas marketing efforts.
But ConocoPhillips senior vice president exploration and production Ryan Lance said APLNG was largely targeting the Asian region.
“The large buyers in Japan and Korea down through China to India as well,” Mr Lance said.
Mr Ferguson said China was Australia’s second-largest LNG customer and the Sinopec deal brought new and existing LNG contracts with the Asian superpower to more than 15 million tonnes per annum.
The APLNG project will involve the progressive development of coal seam gas fields in south central Queensland over a 30-year period and a 450 kilomtre transmission pipeline from the gas fields to Curtis Island near Gladstone, where an LNG facility will be built.
Federal Environment Minister Tony Burke gave the project the green light on February 22.
Welcoming the project, Queensland’s Finance Minister Rachel Nolan said Australia Pacific LNG estimates the annual contribution to the economy of the Darling Downs and Southwest region at up to $900 million during operation.
Ms Nolan said the economy of the Mackay-Fitzroy-Central West region could see an increase of up to $770 million a year during construction.
“On a state level, Australia Pacific LNG estimates the project could stimulate an increase in Queensland’s Gross State Product of approximately $2 billion per annum,” Ms Nolan said.
Chinese demand ramps up
China aims to boost gas consumption to 10 per cent of its total energy use by 2020 as it tries to reduce greenhouse gas emissions by cutting the use of dirtier burning coal. It has spent tens of billions of dollars buying into energy resources from Africa to Latin America.
Energy consultancy Wood Mackenzie has forecast China’s LNG imports to rise five fold to 46 million tonnes by 2020.
Sinopec’s deal will be second only to China’s first LNG import deal sealed in 2002 when China National Offshore Oil Corp (CNOOC) secured 3.7 mtpa of gas from Australia’s Northwest Shelf project for 25 years.
CNOOC, parent of CNOOC Ltd , is the leading Chinese LNG developer with three receiving terminals in operation and another two under construction.
PetroChina‘s two terminals were scheduled to begin operation from April.
The deal will also be Sinopec’s first venture into foreign unconventional gas assets and moves Australia Pacific LNG one step closer to meeting its target of making a final investment decision this year.
Sinopec is building its first terminal in eastern Shandong, which will be fed from ExxonMobil‘s Papua New Guinea LNG project.
The latest deal will enable Sinopec to accelerate work at the proposed 17 billion yuan ($A2.46 billion) terminal in the southern coastal city of Beihai in the Guangxi region, which is expected to open in 2014.
The Beihai terminal will have an initial capacity of three million tonnes per year, expandable to five mtpa by around 2015 when Australia Pacific LNG comes online.
The deal has environmentalists fearing for the future of the Great Artesian Basin.
Friends of the Earth spokesman Drew Hutton said the agreement was bad news for the environment, the Great Artesian Basin and for landowners.
“The federal government water group and Geoscience Australia believe there are going to be dramatic draw-downs (of the water table) in sections of the Great Artesian Basin and the damage could last for hundreds of years,” Mr Hutton told AAP.
The basin is a major source of water for farmers and communities in inland Queensland.
Origin Energy managing director Grant King says he’s confident the project would not harm the basin.
“Our project has done an enormous amount of work in understanding the impact the project will have on water, acquifers and the Great Artesian Basin,” Mr King said.
“The technical work, the engineering and scientific work done by our teams gives us the confidence there won’t be any adverse impacts.”
Mr King said trials were underway to understand issues surrounding water management.
He also said they were treating the unwanted water that comes up during the gas extraction.
“That water is treated and applied for a number of beneficial uses and one of the uses could be reinjection (into acquifers),” Mr King said.
Mr Hutton said CSG companies don’t know what to do with the unwanted water.
“They don’t know how to treat it to an acceptable level at an acceptable cost,” he said.
“They don’t know what to do with the one million tonnes of salt a year that comes to the surface except to wack it into landfill.
“Is it worth disrupting and sometimes destroying the farms that provide our food and fibre?
“The cost of this industry is far too great.”
According to Australia Pacific LNG, at its peak this project will create about 6000 direct jobs in construction, and about 1000 direct jobs in the operational phase of the project.