Tuesday, March 5, 2013

BP tight-lipped Browse; warns of LNG outlook risk | News | Business Spectator

BP tight-lipped Browse; warns of LNG outlook risk | News | Business Spectator:
Global oil and gas heavyweight BP is keeping tight-lipped about whether it wants the controversial Browse gas project built onshore, or offshore using floating technology.

BP is a joint venture partner in Woodside Petroleum Ltd's $40 billion Browse project in Western Australia, with partners, BHP Billiton Ltd, Shell, Mitsubishi and Mitsui.

The partners will decide in June whether it's economically viable to bring gas ashore at James Price Point, near Broome in the Kimberley region of WA.

While Royal Dutch Shell angles towards developing the project offshore using floating technology, BP group chief economist Christof Ruhl will not reveal whether his company prefers a floating option.

"It's horses for courses," Dr Ruhl told a roundtable discussion.

"It hasn't been tested on a grand scale."


  1. The course is a few smallish fields,hopefully the horse is FLNG.

    Re the dead Dolphin,people have reported some dead or dying sea birds around the new jetty over the last few days.

    (not seagulls)

    Some brown all over,some white.

    Always think of Montara when I hear this.

  2. Slightly different take on the same story,by Matt Chambers @ The Australian :

    BP warns LNG contracts face not-so-perfect storm

    BP's chief economist has warned that existing long-term, oil-linked LNG price contracts underpinning Australia's LNG boom could come under pressure this decade as new Australian supplies move on to the market in the next few years.

    If combined with other uncertain factors such as US exports and a Russian gas pipeline to China in the next couple of years, Asia could quickly find itself facing the same factors that led to a dramatic change in the way European gas was priced, BP chief economist Christof Ruhl said yesterday.

    If that happened in Asia to the extent spot LNG prices were a lot cheaper than oil-linked prices, there would be pressure to redo contracts.

    "If the Australian contracts are coming on and you have US exports at the same time and the global economic recovery is not too strong you will have a lot of LNG coming to Asia," Mr Ruhl said.

    He said that if this combined with a Russian gas pipeline into China -- which is stalled over price negotiations but could become reality if falling oil prices hit Russian export revenue and force a compromise -- and deregulation of the Japanese power sector, prices and pricing systems would come under pressure.

    "If that happens, and I'm not saying it will, you have the same line-up of factors that eroded the oil-linkage in Europe becoming active in Asia," Mr Ruhl said in Sydney yesterday.

    "Clearly, the risks are more towards things changing than remaining the same."

    Australian LNG suppliers are currently building $180 billion worth of LNG projects in a massive drive that will make the nation the world's biggest exporter of the fuel. They have underpinned their investment with long-term contracts linked to the price of oil.

    Japan, the world's biggest export buyer, has been pushing to link prices to cheaper gas in the US, where the shale revolution has turned a shortage into a glut and has most pundits forecasting the US will become a substantial exporter.

    Australian companies have said their existing contracts will remain, but Mr Ruhl said they could not be held as certain. "Normally in times of change, contracts are maintained as long as possible and then, typically, if it gets completely out of fact with the real world you'll see some renegotiations going on," he said.

    "It depends on contracts and clauses in specific contracts, but . . . often times there is space for renegotiations if contracts seriously get out of sync with what happens in the rest of the world."

    Most observers see the Japanese utilities as considering themselves bound by their contracts, but many are less confident about the potential behaviour of Chinese state-owned buyers.

    Mr Ruhl said BP believed that in the next four or five years the odds were weighted towards declining, not rising, prices of both oil and gas.

    1. Russia has just so much "cheaper gas" so close to Chinese borders that there is every chance a deal will be done.

      Northern Japan is as close to some of these fields as China.

      Apart from importing LNG by ship,Japan and Russia are looking at pipelines and running power lines from new Russian power stations directly into Japan,some right into Tokyo.

      Bargaining chips include some disputed islands occupied by Russia off Hokkaido.

      "Minister for the Development of the Far East Viktor Ishayev wrote... that Moscow and Tokyo can remove the obstacles to a solution of the row over four Russian-held islands off Hokkaido “by expanding and deepening bilateral economic cooperation.”"

      "But Tokyo has yet to make a decision on whether to import electricity if the power plant is built, he added.

      Ishayev, believed to be highly regarded by President Vladimir Putin, also said Japan and Russia can work together in such areas as aerospace, shipbuilding, marine product processing, fishing infrastructure building, geothermal power generation and tourism."


      Compare that to the US$19 Mbtu paid recently ex Australia and it is easy to see that these prices cannot be sustained for very much longer.

      Even Coleman in his ivory tower would be able to see this cold hard fact staring at him right between his eyeballs.

  3. All is not well,but the big miners are all going to get bigger.

    "Australia's biggest miners will spend $US213 billion in capital on new and existing projects

    Commodity prices have fallen and investment levels have peaked but the third leg of the resources boom - the boom in volumes - has yet to run its course, analysts say.

    Total capital expenditure by the big three was just $US97 billion in the first decade of the century, it will reach $US289 billion this decade, CBA expects.

    The forecasts are dominated by expected investment in the Pilbara, with Rio lifting its production above 410 million tonnes per annum (mtpa), BHP investing to lift production above 240 mtpa, and Fortescue lifting capacity to 155 mtpa over the next two years."


    Storm warning: extra production no guarantee against price plunge

    THE recent storms that swept across the Pilbara were nothing compared to the tempest that is coming for the iron ore producers in the region.


    This not only applies to China,but to every country,including Australia,involved in China and Indias rapid rise.

    "THE sharemarket fell sharply yesterday after China announced new measures to curb property speculation. Investors were also concerned after China's services sector data missed expectations, and a 60 Minutes report that said China's rapid growth may have created the biggest housing bubble in history."


    The pollution disaster for China,and the pollution disaster for the Great Barrier Reef.

    CHINA'S biggest private coke producer, Meijin, is pushing ahead with plans for a $3bn-plus central Queensland coalmine that will rival the nearby plans of Indian mine developers GVK and Adani.

    Meijin's Australian unit, Macmines AustAsia, is preparing federal and state approval documents for a 45 million tonnes per year mine complex, known as China Stone, after being issued terms of reference for a proposed environmental impact statement in January.


    Who is paying for the Ferguson and Argus plan for a tax that will not tax the miners?

    As usual the most vunerable.

    "AN analysis of government data reveals 60 per cent of single parents transferred from the Parenting Payment to the lower Newstart Allowance on January 1 were already working and 10 per cent of the single mothers were caring for a child or adult with a significant illness or disability.

    The analysis reveals that as the government prepares to launch its disability support scheme, it is financially punishing the very women who take care of some of the most disadvantaged people in the community.

    The figures show one in 10 parents - 6895 people - provide daily care for a child or adult with a significant illness or disability and are receiving the Carer Allowance of $115 per fortnight.

    The data shows 1320 parents are caring for one adult, while 81 single parents are caring for two adults with a disability. There are 5224 single parents caring for one child each with a disability and 462 lone parents caring for two children under 16 who have disabilities.

    One in 10 - 6496 - of those effected have one or more "vulnerability indicators", which points to the existence of employment barriers such as a mental illness, homelessness, significant caring responsibilities or a serious illness.

    Furthermore, 7 per cent have a psychiatric problem or a mental illness. Almost 2200 had an illness or injury requiring frequent treatment and 264 parents lacked literacy and numeracy skills.

    In addition, 131 single parents were homeless and 109 had a cognitive or neurological impairment.

    The UN's special rapporteur on extreme poverty and human rights wrote to the government in October following its decision to move about 84,000 parents to the Newstart Allowance when their youngest child turns eight.

    Under the change, more than 60,000 single parents now receive between $60 to $100 a week less because they're on Newstart.

    1. The values of iron ore companies in Australia are taking a hit with predictions the price of the commodity will slump in the second half of the year.

      A prominent Chinese economist has forecast iron ore prices will fall to $60 US a tonne, a drop of more than half its current value.

      The comments come after the Chinese government announced plans at the weekend to curb investment in property, which would have a direct impact on steel production and therefore iron ore demand.

      Rio Tinto's chief economist also signalled the company was expecting a fall, telling investors China's expansion would slow in the second half of the year

      BIS Shrapnel's Adrian Hart says while he believes prices will fall, he has a more conservative view and thinks they will remain above $100 US a tonne.

      "There's certainly scope for iron ore prices to come back from what seems to be a unsustainably high level," he said.

      "The current price is being supported by a strong demand from Chinese mills as they are restocking but that process won't last forever."

      Mr Hart says some high cost iron ore operations could be put at risk if prices for the commodity slump.

      He says high cost miners will hold on during this forecast slump but could be challenged toward the end of 2015, when iron ore exports from Western Australia increase.

    2. Re the mining tax failure,sadly the people most likely to consider suicide are carers for the mentally disabled.
      This is a terrible blow for these already overstressed people.
      A double blow comming from a Labour government,with the likelyhood of an Abbott gov on the way.
      Gillard,Ferguson et al have no right to call themselves Labour.
      "Lackeys" would be a better description.
      Or "SCABS"

  4. Can Barnett survive 5 more days of not quite being the Premier?

    The return of cantankerous canal Colin

    It was a moment that must have sent shivers up the spines of any Liberal supporter who has been around for longer than eight years.

    Yesterday's press conference on the edge of the Great Northern Highway exposed the ugly side of Premier Colin Barnett – and it had all the hallmarks of the interview that killed his relationship with the media and people of Western Australia only days before the 'winnable' 2005 state election.

    ....yesterday when he (Barnett)grew intolerant of the questions being asked and walked away from a media pack with cameras still rolling, he indicated that after eight long years and hundreds of hard-lost lessons, the leopard has not changed his spots.

    (And who wants Buswell to be Premier?)


    Wheels fall off Libs' Ellenbrook bus plan

    Colin Barnett said yesterday a Liberal Government would not go ahead with plans for a rapid bus transit service to Ellenbrook, seven months after his Government awarded a $630,000 contract to design the "priority" public transport project.

    During a media conference yesterday, the Premier was asked if the Liberal Party would still be looking to deliver the service to the eastern corridor.

    "No, we're not going to do that," he said. "But, we have already improved bus systems and services significantly there."

    Hours later, Transport Minister Troy Buswell appeared to contradict Mr Barnett by saying the Liberals were committed to the rapid bus service but were awaiting the outcome of further design works before committing more money.

    Shortly afterwards, Mr Barnett's office attempted to clarify the situation by releasing a one-sentence statement from the Premier: "There is work going on but we won't be making any further commitments to BRT in this campaign."


    Quay hotel too tall: planners

    City of Perth planners have rejected a proposed luxury hotel at Elizabeth Quay, deeming its 11 storeys excessively tall and bulky.

    They recommended the council's planning committee, which meets tonight, rejects the application for the 4/5-star hotel on the eastern side of Barrack Square because of its size and scale.

    They said it would adversely affect adjoining properties, the boardwalk and general area.

    But the State Government's Elizabeth Quay design guidelines allow a maximum 20 storeys west of Barrack Square and 30 storeys around the project's inlet.

    The planners said guidelines for immediately east and south of Barrack Square were for small-scale developments complementary to existing buildings.

    They said the hotel's height would diminish the Bell Tower's prominence.


    Traders may sue over quay work

    Barrack Square traders are considering suing the Barnett Government over its Elizabeth Quay project after reporting losses of up to 80 per cent since works began.

    With the project in the election spotlight after Labor leader Mark McGowan flagged a scaled-down development, Golden Sun Cruises owner Bill Edgar said in 30 years his business had never been so bad.

    Foot traffic he relied on was almost non-existent and he was operating on four days instead of seven.

    "We're down 80 per cent," he said. "It's really been going down for months. The moment they started work it just started to crawl."

    Mr Edgar said the Court government gave businesses a break from their rent from 1999 to 2001 while the Bell Tower was being built.

    He said a cash compensation offer from the Government this month was "absolutely insulting".

    Mr Edgar said the value of his business was decimated and he was looking at legal action, estimating his losses and stress at $2 million.

  5. There is plenty of information out there to support BP's view.

    These facts of life show FLNG to be a winner in this new world oil and gas order.


    ..."companies pursuing LNG projects in Canada say B.C. is comparing itself to the wrong place when it looks to Australia as it sets its own new taxes. Australia, they say, is yesterday’s news. Canada today is competing with the U.S. and massive new offshore gas finds off the east coast of Africa."

    "The province has asked companies for detailed financial models of their intended LNG investments. It has used those to assess how projects can stand up under new tax loads, with the intent of leaving companies a slightly fatter profit margin in Canada than they might have in Australia."


    Eastern Med FLNG.

    "Tamar is one of two large offshore gas fields in Israel off the coast of the port city of Haifa - the other one being Leviathan. The Tamar gas field reserves are estimated at around 270 billion cubic meters (while the potential of the Leviathan is estimated at around 450 bcm.)

    The Tamar floating LNG project (FLNG), which is expected to be commissioned in 2017, is one of the first of its kind anywhere in the world and would liquefy gas from Israel's Tamar and smaller Dalit fields at a floating liquefaction vessel at rate of 3 million tons per annum, which equated to 84 bcm of gas over the 20-year period of Gazprom's deal, roughly 30% of Tamar's estimated reserves.

    The deal envisages that Gazprom will provide financial support to develop the FLNG project by way of an equity investment or financing, which is expected to be significant.

    The deal allows Gazprom to exclusively purchase the LNG from the Tamar project, meaning an expansion of the Russian company's LNG exports and trading portfolio. A senior Gazprom official has been quoted as saying,

    This is an important milestone for strengthening Gazprom's position in the global LNG market. We are confident that the deal will not only help strengthen and diversify Gazprom's LNG portfolio, but also help… build on our success in the Asia-Pacific region, where we have recently closed long and medium-term deals with numerous counterparts in India and North East Asia."


    "The 3-D seismic surveys have shown that Lebanon probably has major gas fields within its maritime economic zone, which could even be bigger than the potential in offshore Cyprus. Syria lies along the same offshore strata, too. Suffice to say, the US Geological Survey estimates that the Levant Basin (which runs from Syria through the waters of Lebanon, Israel, Cyprus, the Gaza Strip and Egypt) contains 122 trillion cubic feet of gas and some 1.7 billion barrels of oil."


    Japan hunts cheaper gas.

    While U.S. regulators weigh the economic impact of exporting liquefied natural gas to non-Free Trade Agreement countries, one of those nations ­— which has already contracted to buy LNG from a Houston-based company — is expected to lobby even harder to boost those exports.

    News reports circulated this week that Japanese Prime Minister Shinzo Abe plans a direct appeal to President Barack Obama to allow LNG exports to his country — and he is reportedly prepared to offer a guarantee of $10 billion in loans for projects to bring shale gas and other low-cost energy sources overseas.


    JAPAN’S demand for gas in 1980 and its willingness to pay a high price were the catalysts that led to the modern Australian LNG industry. But Slugcatcher reckons that if comments now emerging from Tokyo are correct, Japan’s hunt for cheaper gas may put the skids on Australian LNG.


    Japan Petroleum Exploration (JAPEX) said that it has entered into a Heads of Agreement with Petroliam Nasional Berhad (PETRONAS)to participate in a natural gas development and production project in British Columbia, Canada and a planned LNG project on the western coast of the same province, both of which are undertaken by PETRONAS through Progress Energy Canada Ltd and its affiliates.

  6. JAPEX cont...

    As per the Heads of Agreement, JAPEX will acquire a 10% interest of the natural gas blocks in North Montney, British Columbia through a newly established Canadian subsidiary, JAPEX Montney Ltd., as well as 10% interest of Pacific Northwest LNG Project which is under contemplation located on Lelu Island within the District of Port Edward on land administered by the Port of Prince Rupert (estimated LNG production volume: 12MMtonnes/y), including a commitment to offtake 1.2MMtonnes/y of LNG which is equivalent to the 10% interest.

    With participation in this LNG project, JAPEX will be able to secure long-term natural gas import from Canada into Japan.

    JAPEX will further put a continuous effort to develop domestic natural gas infrastructures for a solid supply system, including planned Soma LNG receiving terminal and related pipeline project, as per 30 JAPEX believes that importing natural gas as LNG from Canada, which has ample reserves, will help diversify Japan’s LNG import, contributing to improve energy supply of Japan.


    An energy advisor for the Japanese government has said that the country may begin importing cheaper supplies of fuel from the U.S. in order to cut its costs of liquefied natural gas (LNG) by roughly 10%. Senior economist Akira Yanagisawa with the Institute of Energy Economics Japan (IEEJ) say that if the country, already seen as the world's largest consumer of LNG following the suspension of nuclear reactors, were to purchase the fuel at $9 per million British thermal units (Btu), it would result in saving of 600 billion yen (approx. $6.49 billion).


    LNG imported by the two countries amount to 38 percent of the global market, and you would imagine them to have the bargaining power. Sadly this is not the case and so the two nations end up paying more than two to six times the rate that Europe and the United States procure their supply at. Japan and India will hold practical meetings several times a year to research supply and demand conditions in the LNG market and come up with a way to procure the gas at a fair price.


    Liquefied Natural Gas Limited said that the Office of Fossil Energy of the Department of Energy (DOE), United States, has granted authorisation for Magnolia LNG to export up to 4 mpta of LNG, from its proposed LNG project site at the Port of Lake Charles, Louisiana.

    The DOE authorisation is valid for LNG sales to commence within 10 years and is then for a period of 25 years from first LNG sales; which sales are permitted to all existing, and any future, countries that have, or enter into, a Free Trade Agreement with the Government of the United States.

    The Magnolia LNG Project comprises the proposed development of an 8 mtpa LNG project on a 90 acres site, in an established LNG shipping channel in the La ke Charles District. The project is based on two 4 mtpa development phases, each phase comprising 2 x 2 mtpa LNG production trains, and will use the Company’s wholly owned OSMR ® LNG process technology.


    InterOil Corporation said that its advisors have informed the company that several bids to partner with InterOil in its Gulf LNG project have been received.

    “The company’s advisors are now evaluating the submissions,” InterOil said in a statement.

    “The InterOil Board of Directors will meet the company’s advisors during March 2013 for the purpose of evaluating bids received for the development of the Gulf LNG Project utilising gas from the Elk and Antelope fields in Papua New Guinea,” InterOil added.


  7. Wouldn't it be easier to do the right thing even when it is obviously easier?

    Chevron Using 60 Law Firms and 2,000 Legal Personnel To Evade Ecuador Environmental Liability, Company Reports

    NEW YORK, Mar. 04 /CSRwire/ - Chevron is deploying at least 2,000 lawyers and legal professionals from more than 60 law firms – including 114 lawyers from the single U.S. firm of Gibson Dunn & Crutcher – in an attempt to deny a fair trial to Ecuadorian villagers in New York as the oil giant furiously tries to contain the growing international fallout from its $19 billion Ecuador environmental liability, according to recent court filings in New York.


    The new information was revealed in a U.S. court filing in New York, where Chevron has launched a “fraud” case against the indigenous and farmer villagers who brought suit against the company and two of their lawyers. In response, Chevron faces counterclaims accusing the company of using the fraud case as a smokescreen to distract attention from judicial findings in Ecuador that it committed environmental crimes, conducted a fraudulent remediation, and launched an intimidation campaign against judges in Ecuador.


    Since an Ecuador court in 2011 found Chevron liable for $19.04 billion for the deliberate dumping of toxic waste when it operated in the country in the 1970s and 1980s, the affected indigenous and farmer communities have filed seizure lawsuits targeting roughly $15 billion in company assets in Canada, Argentina, and Brazil (see here) – something Chevron describes as causing “irreparable harm” to its global operations. Additional seizure actions are slated soon for Colombia and other countries because Chevron refuses to comply with its legal obligations in Ecuador, according to Pablo Fajardo, lead counsel in the lawsuit.


    Chevron is also under growing diplomatic pressure in Latin America over the Ecuador lawsuit. In recent days, a regional diplomatic body started by Venezuela in 2009 – the Boliviarian Alliance for the Americas, or ALBA – decided to take up the issue of Chevron’s campaign to undermine the rule of law in Ecuador at the request of Ecuador President Rafael Correa. Venezuela Vice President Nicolas Maduro – whose country holds billions of dollars of Chevron assets – recently called for a regional meeting to address Chevron’s “aggression” against Ecuador

  8. Increasing rumours amongst traders of potential deals between Buru and a major. Woodside has been mentioned as a possibility. This would be Barnett's dream.

    Also testing to commence soon at Buru's Yulleroo 4.
    Fraccing again?


    1. Wondered how long it would take Woodside to see the gas for Pluto and the NWS was right under their nose.Presuming JPP is as expected,too expensive.

      Would suit Bergman too,he can now sell out the Fitzroy valley to his old chums at Woodside,how cozy is that?
      No Wonder he is walking around town with a giant grin on his face.

      Money money money it must be sunny....

    2. Woodsides new mates are getting antsy....

      FACED with "faster and faster" centrifuges spinning in Iran, Israeli Prime Minister Benjamin Netanyahu has warned that Tehran's nuclear program was getting closer to crossing a crucial "red line."

      Speaking via satellite link from Jerusalem to an influential pro-Israel lobby group, the remarks reiterated Mr Netanyahu's apparent impatience with the policy of leading nations to use sanctions to suppress Iran's atomic ambitions.

      Instead, the comments seemed to underscore Mr Netanyahu's desire to see Tehran face a more robust military threat, in the wake of talks last week between the world's top powers and Iranian negotiators on the disputed nuclear program.

      "Iran enriches more and more uranium, it installs faster and faster centrifuges," Mr Netanyahu told American Israel Public Affairs Committee (AIPAC), the largest pro-Israel lobby in the United States.

      "We have to stop its nuclear enrichment program before it's too late," he said, asserting that Iran is "running out the clock" on the international community's efforts to prevent the country from obtaining an atomic weapon.

      The Israeli prime minister warned that leaders in Tehran had opted to "just grit their teeth" through punishing international sanctions and pursue their plans, come what may.

      "It's still not crossed the red line I drew with the United Nations last September," Mr Netanyahu said, referring to the point at which Israel believes arch foe Iran would be able to build a nuclear bomb.

      "But Iran is getting closer to that red line, and it is putting itself in a position to cross that line very quickly once it decides to do so."