Storm delays Petronas' MRU work at Pegaga gas field
Malaysia's state-owned Petronas has delayed the installation of an interim mercury removal unit (MRU) at the Pegaga gas field offshore Sarawak to 21 December because of stormy weather, according to some term offtakers of the 30mn t/yr Bintulu liquefaction and export project.
But Petronas is still targeting a 20 January start to gas production at the Pegaga field, unchanged from expectations last week, the offtakers said. The Pegaga field will supply feedstock gas to the Bintulu plant.
Petronas had early last week told some offtakers that it would likely commission the MRU on 16 December. But that was delayed because of stormy weather, a Japanese offtaker said. "There is a hurricane-like [phenomenon] in Malaysia ... so they couldn't install the MRU as planned," he said.
Several regions in Malaysia have been hit by heavy rains since 17 December, resulting in flash floods that have displaced more than 50,000 people as of 20 December. The Malaysian Meteorological Department issued a notice on 21 December stating that the tropical depression is expected to bring "continuous rains and strong winds" to the northern states and "can cause floods in low-lying areas."
"I am not sure if [Petronas] will still face difficulty installing the MRU today [given current weather conditions]," the offtaker said.
Petronas did not immediately respond to Argus' request for comment. But it told Argus on 1 December that the installation of the interim MRU at the Pegaga field was "progressing as planned" and that "the first gas is expected by Q1 2022", without specifying exact dates.
"The permanent mercury removal unit is targeted to be ready by Q4 2022 as per the current plan," it added.
Term buyers from Bintulu LNG include Japan's Tokyo Gas, Osaka Gas, Toho Gas, Jera, Tohoku Electric, Japex, Saibu Gas, Shizuoka Gas, Hiroshima Gas and Eneos — formerly known as JX Nippon Oil and Energy — along with state-controlled China's CNOOC, Taiwan's CPC and South Korea's Kogas.
High mercury levels detected at the Pegaga gas field in early September have delayed the start of production at the field and resulted in the cancellation of several cargoes for delivery up until next year. Shell, which has a 20pc interest in the Pegaga project, said in March that it expected to see first production from the gas field by the fourth quarter of 2021.
Around 7-8 cargoes/month for delivery in January and February are currently expected to be cancelled, in addition to cancellations of around 5-6 cargoes/month for delivery in March-May. This is a reduction from earlier expectations that more than 10 January-delivery cargoes would be cancelled, when the interim MRU was expected to be installed in March 2022, market participants said.
High mercury content at gas fields may poison catalysts in downstream process units and damage downstream equipment through corrosion, potentially resulting in equipment failure, unscheduled outages, or even fires.
By Joey Chua
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Hurricane Helene shuts in 29pc of US Gulf oil
Hurricane Helene shuts in 29pc of US Gulf oil
New York, 25 September (Argus) — Hurricane Helene, which is forecast to intensify as it heads for a late Thursday landfall in Florida, has shut in about 29pc of US Gulf of Mexico oil output. Around 511,000 b/d of US offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 313mn cf/d of natural gas production, or 17pc of the region's output, was also off line. Operators have so far evacuated workers from 17 offshore platforms. Helene was last about 110 miles north-northeast of Cozumel, Mexico, according to a 2pm ET advisory from the US National Hurricane Center, with maximum sustained winds of 80 mph. Helene is expected to be a major hurricane, with winds of at least 111mph, when it reaches the eastern Florida coast on Thursday evening. "A turn toward the north and north-northeast with an increase in forward speed is expected later today through Thursday, bringing the center of Helene across the eastern Gulf of Mexico and to the Florida Big Bend coast by Thursday evening," the center said. Shell restarting some production Although the hurricane will largely pass to the east of most offshore oil and gas production areas, companies have taken precautionary measures. Given a shift in the forecast track, Shell said late Tuesday that it had started to ramp up production at the Appomattox platform to normal levels, and was in the process of restoring output at the Stones facility, both off the coast of Louisiana. It paused some drilling operations. Chevron said earlier it was shutting in production at company-operated facilities in the Gulf of Mexico, and evacuating all workers. Equinor said it was shutting down the Titan oil platform. BP had earlier this week started to shut in production at its Na Kika and Thunder Horse platforms, southeast of New Orleans, and was curtailing output from its Argos and Atlantis facilities, as well as removing non-essential staff. US offshore production was disrupted earlier this month when Hurricane Francine made landfall, with up to 42pc of production was offline at one point. The offshore Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG glut coming and may catch many by surprise: Orsted
LNG glut coming and may catch many by surprise: Orsted
London, 25 September (Argus) — There will be an oversupply of LNG on the global market in the coming years, which may contribute further to "the decade of turmoil", Danish utility Orsted senior vice-president Rune Sonne Bundgaard-Jorgensen told Argus . "The [energy] crisis is absolutely not over. To me, an energy crisis is one of uncertainty and volatility," Bundgaard-Jorgensen said on the sidelines of the Energy Trading Week conference in London. "We are going to see an LNG glut which we all in this [conference] room see is coming but the rest of the world does not necessarily. That is going to catch a lot of people by surprise," he said, adding that "surprises are never good when it comes to energy". According to Bundgaard-Jorgensen, "we are going to see an ongoing decade of turmoil. Who knows where the war in the Middle East with the latest attacks on Hezbollah and Israel is going to take us," he said. Among other concerns, he mentioned "uncertainties in the Far East, around the South China Sea". "So, though the current energy crisis of decoupling from Russian pipe gas is over, the continued crisis of where we are going to get sustainable, long-term energy from is far from over," Bundgaard-Jorgensen said. Commenting on Orsted's long-term gas plans, Bundgaard-Jorgensen stressed that Orsted is "constantly evaluating" its gas portfolio. He refused to say whether Orsted is negotiating another long-term deal with Norwegian state-controlled Equinor after their previous contract expired in April. Orsted entered an agreement with Equinor at the end of 2022, after Russian state-controlled Gazprom halted deliveries to the firm from June 2022 following Orsted's refusal to pay for its supply in roubles . "We are quite happy that we are out of our long-term contract with Gazprom," Bundgaard-Jorgensen said. "As a company we believe in decarbonisation — but I also need to believe in a resilient portfolio. So, we are constantly looking to optimise. Gas is not a strategic core of Orsted but it is a very important tool of securing our portfolio," he said. Bundgaard-Jorgensen refused to comment on whether the firm is planning to appeal a decision made by the Danish Supply Authority in July that the tariff levied by Orsted on the Tyra-Nybro pipeline to Denmark from 2011 to October 2012 was too high. The authority reduced the tariff in the period by almost 30pc to 7.20 Danish kroner/m³ from DKr10/m³. By Alexandra Vladimirova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Helene shuts in about 16pc of US Gulf oil: Update 2
Helene shuts in about 16pc of US Gulf oil: Update 2
Adds daily spot market crude pricing information. New York, 24 September (Argus) — Tropical storm Helene, which is expected to develop into a hurricane on Wednesday before coming ashore in Florida Thursday, has shut in about 16pc of US Gulf of Mexico oil output. Around 284,000 b/d of US offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 208mn cf/d of natural gas production, or 11pc of the region's output, was also off line. Operators have so far evacuated workers from four offshore production platforms. Helene was last about 175 miles east-southeast of Cozumel, Mexico, according to a 2pm ET advisory from the US National Hurricane Center, with maximum sustained winds of 45 mph. The current forecast has the center of Helene entering the eastern Gulf of Mexico Wednesday morning and moving north-northeast toward a possible landfall near the Florida panhandle region late Thursday. By then it will have strengthened into a major hurricane, with winds of at least 111mph, according to forecasts. While the storm will largely pass to the east of most offshore oil and gas production areas, companies started suspended some operations on Sunday. Chevron began evacuating workers and shutting in its Blind Faith and Petronius platforms. "While we are also transporting nonessential personnel from our four other Chevron-operated Gulf of Mexico platforms, production there remains at normal levels," the company said. Shell said Monday it had shut in output from its Stones facility and curtailed production from the Appomattox platform, both off the coast of Louisiana. The company was also relocating non-essential workers from its assets in the Mars corridor, and suspending some drilling operations. Equinor said it was shutting down the Titan oil platform as a precaution. BP had started to shut in production at its Na Kika and Thunder Horse platforms, southeast of New Orleans, and was curtailing output from its Argos and Atlantis facilities, as well as removing non-essential staff. Offshore spot prices rise slightly The Na Kika platform is connected by pipeline to the Shell-operated Delta pipeline system, which carries Heavy Louisiana Sweet (HLS) crude to shore. During trading on Tuesday, October HLS rose by 20¢/bl relative to the light sweet crude benchmark in Cushing, Oklahoma, to an 80¢/bl discount. The October US pipeline trade month ends Wednesday. The Thunder Horse platform production is marketed as part of a sour crude stream by the same name that is priced at the Louisiana Offshore Oil Pipeline's (LOOP) facility in Clovelly, Louisiana, where it has dedicated underground cavern storage, as does Mars. On Tuesday, Thunder Horse traded at a 50¢/bl discount to the Cushing benchmark, after wide discussion circled a 40¢/bl discount in the prior session. Medium sour secondary benchmark Mars tightened its gap to the Cushing basis by 30¢/bl to a volume-weighted average discount of roughly $1.55/bl. Crude production from the 140,000 b/d capacity Argos platform feeds into the Cameron Highway Oil Pipeline System (CHOPS), which carries Southern Green Canyon (SGC) crude to the Texas Gulf coast. Argos platform serves the Mad Dog 2 field development that came online last year. Atlantis production also feeds into SGC. No SGC transactions were reported on Tuesday. It was offered as low as $1/bl under the Cushing benchmark, lower than trade at a 50¢/bl discount in the prior session. US offshore production was disrupted earlier this month when Hurricane Francine made landfall as a category 1 storm. Up to 42pc of production was offline at one point. The offshore Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Helene shuts in about 16pc of US Gulf oil: Update
Helene shuts in about 16pc of US Gulf oil: Update
Adds BSEE production shut in data, updated storm info. New York, 24 September (Argus) — Tropical storm Helene, which is expected to develop into a hurricane on Wednesday before coming ashore in Florida Thursday, has shut in about 16pc of US Gulf of Mexico oil output. Around 284,000 b/d of US offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 208mn cf/d of natural gas production, or 11pc of the region's output, was also off line. Operators have so far evacuated workers from four offshore production platforms. Helene was last about 175 miles east-southeast of Cozumel, Mexico, according to a 2pm ET advisory from the US National Hurricane Center, with maximum sustained winds of 45 mph. The current forecast has the center of Helene entering the eastern Gulf of Mexico Wednesday morning and moving north-northeast toward a possible landfall near the Florida panhandle region late Thursday. By then it will have strengthened into a major hurricane, with winds of at least 111mph, according to forecasts. While the storm will largely pass to the east of most offshore oil and gas production areas, companies started suspended some operations on Sunday. BP said Monday it had started to shut in production at its Na Kika and Thunder Horse platforms, southeast of New Orleans, and was curtailing output from its Argos and Atlantis facilities, as well as removing non-essential staff. Chevron began evacuating workers and shutting in its Blind Faith and Petronius platforms. "While we are also transporting nonessential personnel from our four other Chevron-operated Gulf of Mexico platforms, production there remains at normal levels," the company said. Shell said Monday it had shut in output from its Stones facility and curtailed production from the Appomattox platform, both off the coast of Louisiana. The company was also relocating non-essential workers from its assets in the Mars corridor, and suspending some drilling operations. Equinor said it was shutting down the Titan oil platform as a precaution. US offshore production was disrupted earlier this month when Hurricane Francine came ashore near Morgan City, Louisiana, as a category 1 storm. Up to 42pc of production was offline at one point. The offshore Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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