Petronas signs charters for three new LNG carriers

Market: Natural gas
29/04/21

Malaysian state-owned Petronas has signed charter agreements for three new 174,000m³ LNG carriers with South Korean shipowner Hyundai LNG Shipping (HLS), for use with the planned 14mn t/yr LNG Canada project.

Petronas is scheduled to receive the carriers from the second quarter of 2024. They have already been ordered by HLS from South Korean shipbuilder Hyundai Heavy Industries. HLS has eight carriers on the water.

Petronas reached a final investment decision on LNG Canada — located in British Columbia on Canada's Pacific coast — with its partners in 2018. The project is due to come on line in 2024.

Direct access to the Pacific means that, like the Energia Costa Azul LNG project in Mexico, cargoes heading to northeast Asian markets will not have to transit the Panama Canal.

The recent buildout of liquefaction capacity in the US Gulf has significantly increased Panama transit demand, causing delays at the waterway when Asian LNG demand is strong enough to pull Atlantic volumes away from Europe and other demand regions in the basin.

By Samuel Good

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

02/05/25

Mexico bets on new contract model to lift gas output

Mexico City, 2 May (Argus) — Mexico's push to raise domestic gas output to 5 Bcf/d by 2030 depends on a new shared participation model designed to attract private investment, with four strategic gas fields prioritized as tenders begin. State-owned Pemex this week released the detailed guidelines for the mixed production scheme, first introduced in February. The model guarantees Pemex at least a 40pc share of production and gives the company wide discretion to set contract terms and choose the bidding process — including no-bid awards. But interest in the new contracts is expected to center on Mexican firms with close ties to President Claudia Sheinbaum's administration, such as Carlos Slim's Grupo Carso, according to market sources. "With these guidelines, Pemex can finally pick and choose who they want, how they want," said Miriam Grunstein, a former adviser to energy regulator CRE and senior partner at Brilliant Energy Consulting. "The downside is they are likely to turn to Mexican firms that lack the technical experience for complex projects, rather than international companies with the know-how for deep-water or unconventional plays," Grunstein said. "This scheme isn't made for companies like BHP, Total, or Eni," added Eduardo Prud'homme, former technical director at Cenagas and co-partner at consultancy Gadex. "Pemex doesn't want operators as partners. Though it is perfect for Carso." A relative newcomer to the upstream sector, Carso is one of the government's most important contractors for infrastructure projects and stands to gain on future business whether or not the upstream partnerships succeed. Prud'homme doubts international majors looking for a one-off deal would be willing to take on the heavily regulated, high-risk projects when the maximum stake is 60pc. "If you fail, Pemex will not share the loss," said Prud'homme. "If you succeed, Pemex decides how much to share." Pemex management said it plans to launch 17 projects under the new scheme this year. It remains unclear how many of these will focus on gas development. Still, gas is a core focus. Pemex's 2025–2030 business plan allocates Ps238bn (US$12.1bn) to gas projects in pursuit of the 5 Bcf/d goal. Four key fields — Burgos, Quesqui, Ixachi and Bakte — are expected to provide 54pc of total projected output. Carso is already active, partnering with Pemex on the complex deep-water Lakach gas project, which is now expected to migrate from a service contract to the new mixed contract model. Slim began renegotiations in February after the model was announced. Carso has also expanded upstream, buying into the oil-rich Zama project in December. In March, Sheinbaum confirmed the government is in talks with Carso to partner on Ixachi. Turning the tide Still, gas output continues to decline. An analysis by Mexican think tank IMCO found that Pemex and its farmout partners this year posted their lowest first-quarter gas production in 15 years. In the first quarter, Pemex produced 4.408 Bcf/d of gas, down by 8pc from the same period in 2024 and 12pc lower compared with the same quarter 2023. The 367 MMcf/d annual decline marks the steepest first-quarter drop since 2018, when output fell by 536 MMcf/d year over year. On the positive side, Pemex's natural gas production in March ticked 0.3pc higher from the previous month to 4.39 Bcf/d – marking the second consecutive month of increases after February output was up 1.3pc from January. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Shell says can deliver solid returns below $50/bl

02/05/25

News

02/05/25

Shell says can deliver solid returns below $50/bl

London, 2 May (Argus) — Shell can pull on several levers to maintain shareholder returns in a sub-$50/bl oil price environment, including adjusting capital expenditure (capex), chief financial officer Sinead Gorman said today. Shell is facing questions about contingency plans for lower oil prices after Ice Brent crude futures briefly dipped below $60/bl in intraday trading earlier this week for only the second time in more than four years. Oil prices are not only under pressure from weakening global economic growth prospects due to US import tariffs, but also from the Opec+ group's decision to bring back production faster than previously flagged. At $50/bl, Shell's commitment to return 40-50pc of its cash flows to shareholders would mean $8bn/yr of dividends and $6bn-7bn/yr of share buybacks, while only having to pull back "a little bit" on capex, Gorman said. In a $40/bl oil price environment, Gorman expects Shell's operating cash flow to still cover the $8bn/yr in dividends. "But of course, for us, the important thing is to be able to try and maintain the buyback for as long as we can," she said. At these lower oil prices, Shell can make use of its comparatively strong balance sheet to support share buybacks. Shell's debt gearing remained below 19pc at the end of the first quarter despite the company increasing its net debt during the period. "Are we comfortable leaning on the balance sheet? Yes," chief executive Wael Sawan said. The balance sheet has been positioned so it can be used to generate shareholder value, "whether that shareholder value is best created through more buybacks, or whether that shareholder value is created through an inorganic [investment] or the like", he said. For now, Shell is sticking to its $20bn-$22bn capex budget for 2025 and expects to carry on with planned investments in projects and other commitments. But the company has demonstrated in the recent past "a strong ability to be able to pull many levers" should oil prices fall futher, Gordon said, referencing the reduction in capex to below $18bn during the Covid pandemic. "So, the flex is there, but that's not the position we're in at the moment. We don't need to do that and we see great opportunities for value," she said, pointing to the company's announcement earlier this year that it is raising its stake in the Ursa oil project in the US Gulf of Mexico. Earlier today, Shell said it is maintaining its quarterly dividend at 35.8¢/share and will continue to buy back its shares at a rate of $3.5bn/quarter, despite a 35pc drop in its first-quarter profit to $4.8bn. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Shell’s 1Q European gas production up

02/05/25

News

02/05/25

Shell’s 1Q European gas production up

London, 2 May (Argus) — Shell's European gas production for sale in January-March slightly stepped up on the year, but the company expects works to limit global oil and gas production this quarter. Shell produced 24.9mn m³/d in the first quarter, up from 24.8mn m³/d a year earlier but below the 25.2mn m³/d in fourth-quarter 2024. Shell has stakes in UK and Dutch fields, as well as a 17.8pc share in Norway's Ormen Lange field and an 8.1pc stake in the giant Troll field. Output from the two Norwegian fields was down on the year in January-February, the latest months for which data are available. Ormen Lange produced 19.8mn m³/d in January-February, down from 22.6mn m³/d a year earlier. Troll production averaged 123.6mn m³/d over those two months, also down from 126.2mn m³/d a year earlier. Shell's integrated gas business was the company's top performing segment with profits of $2.8bn, slightly higher on the year. Lighter maintenance at the Pearl gas-to-liquids plant in Qatar supported production, but unplanned works and weather constraints in Australia left the company's LNG volumes at 6.6mn t in January-March from 7.6mn t a year earlier, Shell said. Meanwhile, Shell's upstream division posted $2.1bn in profit, down 8.5pc on the year earlier but double compared with the fourth quarter 2024. The segment was hit with a $509mn tax bill related to the UK's Energy Profits Levy in the first quarter, partially offset by gains from asset sales. Across the entire company, Shell reported first-quarter profits adjusted for inventory valuation effects and one-off items of $5.6bn, surpassing analysts' expectations of $5.3bn . Shell's first-quarter worldwide oil, liquids and gas production was 2.84mn boe/d, down from 2.91mn boe/d a year earlier but up from 2.82mn boe/d in the previous quarter. The company expects lower oil and gas production this quarter in a 2.45mn-2.71mn boe/d range because of maintenance across its integrated gas portfolio and an absence of volumes from its SPDC business in Nigeria, which Shell sold off in March. By Aleksandra Godlewska and Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Shell’s 1Q profit falls but beats expectations

02/05/25

News

02/05/25

Shell’s 1Q profit falls but beats expectations

London, 2 May (Argus) — Shell's Integrated Gas business segment delivered a solid performance in the first quarter, helping the UK major exceed analysts' earnings estimates despite ongoing struggles in its downstream Chemicals and Products business. Shell reported a first-quarter profit of $4.8bn, down from $7.4bn a year earlier. Adjusted for inventory valuation effects and one-off items, profit was $5.6bn, surpassing analysts' expectations of $5.3bn. Integrated Gas was Shell's top-performing segment, with a profit of $2.8bn, slightly higher than the first quarter of 2024. Production was down by 6.6pc year-on-year at 927,000 b/d oil equivalent (boe/d), but up 2pc from the previous quarter. Less maintenance at the Pearl gas-to-liquids plant in Qatar had a positive impact on production, Shell said. But the company's LNG volumes were affected by unplanned maintenance and weather constraints in Australia, falling to 6.6mn t from 7.6mn t a year earlier. The Upstream segment posted a profit of $2.1bn, down by 8.5pc on a year earlier but double what it made in the fourth quarter of 2024. The segment was hit with a $509mn tax charge related to the UK's Energy Profits Levy in the first quarter, partially offset by gains from asset sales. Production for the segment was slightly down compared to a year earlier at 1.86mn boe/d, partly due to the divestment of Shell's SPDC business in Nigeria. Overall, Shell's first-quarter production was 2.84mn boe/d, down from 2.91mn boe/d a year earlier but up from 2.82mn boe/d in the previous quarter. Shell expects lower production in the current quarter, ranging from 2.45mn boe/d to 2.71mn boe/d due to maintenance across its Integrated Gas portfolio and the absence of volumes from the SPDC business. The Chemicals and Products segment reported a $77mn loss for the first quarter, compared to a $1.3bn profit a year earlier. Refinery runs were down by 4.8pc year-on-year, and chemicals sales volumes were marginally lower. Despite persistent low margins in the downstream, Shell noted that refining and chemicals margins improved compared to the fourth quarter. Shell expects capital spending for 2025 to be within a $20bn-$22bn range, in line with last year's spending. The company is maintaining its dividend at 35.8¢/share and its share buyback programme at $3.5bn a quarter. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Australia's Coalition eyes power, resource funding cuts

02/05/25

News

02/05/25

Australia's Coalition eyes power, resource funding cuts

Sydney, 2 May (Argus) — Australia's federal Coalition opposition has announced it will cut key energy rebates and resource sector subsidies, if elected on 3 May, to reduce forecast future budget deficits. The Peter Dutton-led opposition will cut programs, including the Labor government's A$20bn ($12.8bn) Rewiring the Nation transmission plan, and the A$15bn National Reconstruction Fund aimed at underwriting green manufacturing using domestic minerals. It will also unwind electric vehicle tax concessions to save A$3.2bn, and cancel planned production tax credits for critical minerals processing and green hydrogen estimated to cost A$14.7bn. Combined savings measures will improve the budget's position by A$13.9bn over the four years to 2028-29, the Coalition said on 1 May, cutting debt by A$40bn during the same timeframe. The announcement comes as opinion polls show Australia's next federal government is likely to force one of the two major parties into minority, after a campaign where cost-of-living relief promises have trumped economic reform policy. The centre-left Labor party is more likely than the conservative Coalition to form government at the 3 May poll. It holds a thin majority of just three seats in parliament's main chamber, the House of Representatives, meaning a swing against it would force it to deal with minor parties such as the Greens and independent groupings. Promising a stable government, as Australia emerged from Covid-19, Labor had benefited from a resources boom as Russia's invasion of Ukraine led LNG and coal receipts to skyrocket and China's emergence from lockdowns revitalised its demand for iron ore, which jointly form the nation's main commodity exports. But as markets adjust to a period of protectionist trade policy and predictions of a slowdown in global growth abound, economists have criticised the major parties' reluctance to embrace major reform on areas such as taxation, while continuing to spend at elevated levels post-pandemic. Australia's resource and energy commodity exports are forecast to fall to A$387bn in the fiscal year to 30 June 2025 from A$415bn in 2023–24. The Office of the Chief Economist is predicting further falls over the next five years, reaching A$343bn in 2029-30, lowering expected government revenue from company tax and royalties. Gas The Coalition has pledged a domestic reservation scheme for the east coast, forcing 50-100PJ (1.34bn-2.68bn m³/yr) into the grid by penalising spot LNG cargoes. Australia's upstream lobby has opposed this, but rapidly declining reserves offshore Victoria state mean gas may need to be imported to the nation's south, depending on the success of electrification efforts and an uncertain timeline for coal-fired power retirements. Labor has resisted such further gas interventions , but it is unclear how it will reverse a trend of rising gas prices and diminishing domestic supply, despite releasing a future gas plan last year. The party is promising 82pc renewables nationally by 2030, meaning it will have to nearly double the 2025 year-to-date figure of 42pc. This could require 15GW of gas-fired capacity by 2050 to firm the grid. On environmental policy, narrowing polls mean Labor's likely partners in government could be the anti-fossil fuel Greens and climate-focused independents — just some of the present crossbench of 16 out of a parliament of 151. The crossbench may drive a climate trigger requirement in any changes to environmental assessments, which could rule out new or brownfield coal and gas projects. Coal has been conspicuously absent from policy debates, but Labor has criticised the Coalition's nuclear energy policy as expensive and unproven, while the Coalition has said Labor's renewables-led grid would be unstable and costly because of new transmission requirements. The impact of the US tariff shock that dominated opening days of the month-long election campaign remains unclear. Unlike Canada, Australia is yet to be directly targeted by US president Trump's rhetoric on trade balances and barriers. But the global unease that has set in could assist Labor's prime minister Anthony Albanese, as he presents an image of continuity in an uncertain world economy. Australia's main exposure to Trump tariffs is via China, its largest trading partner and destination for about 35pc of exports, including metal concentrates, ores, coal and LNG. A downturn in the world's largest manufacturer would spell difficult times ahead for Australia, as it grapples with balancing its budget in a normalising commodity market. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more