Following the signing by Sumitomo Corporation of a precedent agreement with respect to the bi-directional liquefied natural gas processing services with Dominion Cove Point LNG, LP, the body implementing the Cove Point LNG Project in the State of Maryland, the United States, Sumitomo Corporation has started negotiation with Dominion to conclude a final terminal service agreement. In this context, Sumitomo Corporation and Tokyo Gas Co., Ltd. have agreed to jointly work as a team to negotiate with Dominion.
The Project is envisaged to build a new LNG liquefaction plant in the existing Cove Point LNG import terminal owned and operated by Dominion (in Maryland, the United States), enabling Dominion to provide natural gas liquefaction service for export in the form of LNG. This means tolling customers concluding TSA with Dominion will be able to liquefy natural gas procured by themselves in the United States through the relevant LNG liquefaction plant. Upon obtaining the approval from the U.S. Department of Energy to export LNG to Japan or other nations that have not yet ratified a free-trade agreement (FTA) and also the approval for plant construction from the authorities, in addition to other processes required including but not limited to the final investment decision on the Project, Dominion plans to commence construction of a new LNG liquefaction plant to start-up the Project operation by sometime in 2017.
Sumitomo Corporation and Tokyo Gas have so far conducted a comprehensive deliberation on potential cooperation regarding the natural gas business in the United States and the import of LNG to Japan. Following the conclusion of the PA between Sumitomo Corporation and Dominion, Sumitomo Corporation and Tokyo Gas have decided to work together as a team to negotiate the TSA with Dominion.
In addition, Sumitomo Corporation and Tokyo Gas contemplate that the natural gas liquefied for import to Japan should be procured from the Marcellus shale gas field, etc. where located adjacent to the Project and in which Sumitomo Corporation has an interest. If the Project is realized, it would be a LNG of its kind in the US derived from shale gas destine to Japan.
Sumitomo Corporation is the first Japanese company to participate in the development of a shale gas field in the United States and currently holds two interests, including one in the Marcellus shale gas field. In addition, Pacific Summit Energy LLC, a fully owned subsidiary, is engaged in the gas trading business in the United States. Therefore, if the Project is finally agreed, Sumitomo Corporation will be able to establish a natural gas and LNG value chain in the United States across natural gas upstream development, through distribution and liquefaction, to LNG export.
Tokyo Gas is seeking to increase its procurement of LNG from un-conventional natural gas resources across the globe in order to diversify its portfolio, and to expand its global LNG value chain with the aim of reducing the costs of raw materials pursuant to its “Challenge 2020 Vision.” If the Project is finally agreed, these goals will be realized.
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“Five projects (in the US) have applied to US authorities for approval to export gas,” Petronet CEO and Managing Director A K Balyan told reporters in New Delhi. “We are talking to some of them with an aim to tie up long-term volumes.”
He refused to give details. With domestic gas output falling, companies are looking at new LNG contracts to meet the growing energy demand.
Besides Petronet, state-owned gas utility GAIL India, too, is looking to acquire capacity at proposed LNG terminals on the US Gulf Coast.
So far, Cheniere’s Sabine Pass, Freeport LNG and Southern Union’s Lake Charles are the three projects that have applied to export LNG.
“We have to see how export permissions work out,” Balyan said, adding Petronet was looking at picking up an equity in the terminals to get better pricing of gas.
It is also looking at supplies from the US and Australia among others to feed the 25 million-tons-a-year LNG import capacity it will have by 2015-16.
Balyan said Petronet is expanding the Dahej terminal capacity to 15 million tons a year from 10 million tons in next 40 months while building a new import facility at Kochi in Kerala.
Another 5 million tons facility is planned on the east coast for which three sits – two in Andhra Pradesh and one in Orissa have been shortlisted.
Petronet reported almost doubling of its net profit at Rs 260.33 crore in the quarter ended September 30, on the back of higher volumes it imported in the three-month period.
“We regassified 135.08 trillion British thermal units of gas in July-September as against 99.78 trillion BTUs in the same period a year ago,” he said, adding that besides the long-term LNG contract from Qatar, the company imported 12 cargoes from the spot market in the quarter.
It had not imported any shipload of LNG in Q2 of previous year.
“We hope to maintain the trend (during the current quarter). Import from spot market should be 12 to 14 cargoes,” he said.
Petronet in all imported 42 cargoes or shiploads of LNG. Of these, Petronet imported six cargoes from spot market by itself and an equal number were contracted by its promoters, GAIL and Gujarat State Petroleum Corp (GSPC).
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After the BRICS Interbank Cooperation Mechanism Annual Meeting and Financial Forum, Petrobras’ CEO, José Sergio Gabrielli de Azevedo, its CFO and Investor Relations Director, Almir Barbassa, and company executives were welcomed today (April 13) by the chairman of the China Development Bank, Chen Yuan, and his top aides.
During the meeting, they discussed mechanisms for cooperation between the Chinese bank and the Brazilian company.
The chairman of the CDB opened the meeting stating that the bank has loaned upwards of $14 billion to Brazilian companies, $10 billion of which to Petrobras, and stressed that the projects are being very well implemented. Chen Yuan highlighted the importance of the Brazil-China partnership and the need for transparency in the negotiations for further integration.
Petrobras’ CEO spoke of the strategic relations between the governments of Brazil and China, the importance of the credit that has been extended to the company, and the opportunities that are opening up in Brazil.
( Original Article )