by Ganesh Sahathevan
Australia's Anthony Albanese is off on another flight of fancy, this time to Malaysia and Brunei, in his desperate search for oil. In Malaysia he will meet with Anwar Ibrahim, who as prime minister, has ultimate control of Petronas. He may well reach a deal with Petronas to "guarantee" supply of crude (which Australia has only limited capacity to refine).
Meanwhile, in Australia, the Hellenic News Agency and others report:
Prime Minister Anthony Albanese has announced an extraordinary agreement to increase Australia’s fuel supply as global markets remain volatile following the Iran conflict.
Speaking from the Ampol Lytton Refinery in Queensland, Albanese said Export Finance Australia had reached an agreement with Ampol and Viva Energy to enable additional fuel shipments into Australia.
“This is not business as usual,” he said.
“This is additional supply in Australia that they will be able to source, and as part of this agreement the government can direct where that supply goes.”
The additional fuel will be directed particularly to regional areas, which have been most affected by supply shortages.
Energy Minister Chris Bowen said legislation passed last week allows Export Finance Australia to support fuel imports.
He said the agreement enables Ampol and Viva Energy to purchase spot cargoes on international markets with government backing when supply becomes available.
Viva is the Australian subsidiary of oil trader Vitol, who with other traders has placed bets in Australia for a time such as this,when Australia's net zero policies will leave it begging for oil.
Vitol's international network includes Petronas and it has at least one long term deal with Petronas , albeit for the purchase of LNG. Nevertheless, given its storage facilities in Singapore and Malaysia and elsewhere Vitol is likely to have enough LNG to swap for curde oil (from say Petronas) which it can sell to Albanese at huge premiums. The permutations and combinations are limitless, for large cash profits are guaranteed by the Australian Government.
Viva Vitol!
To Be Read With
Saturday, April 11, 2020
The Petronas -Vitol deal: Was it at a fixed price above current market prices, or is Vitol stockpiling very cheap Malaysian LNG?
by Ganesh Sahathevan
LNG prices have fallen to a 10 year low. For reasons best known to its directors Petronas entered into a long term gas supply agreement with one of the biggest, smartest, sharpest oil and gas traders in the world, Vitol.
Whether Petronas has now the advantage of selling at a fixed price above current market prices, or whether Vitol is stockpiling cheap Malaysian LNG is unknown.
TO BE READ WITH
by Ganesh Sahathevan
Petronas recently announced that it entered into a 15 year LNG sale contract with Vitol, one of a handful of privately held oil and gas traders whose trades are so large they rival the majors (Exxon, Shell ,Chevron and others).
Petronas, Vitol Asia inks LNG supply deal
OIL & GAS
Thursday, 29 Nov 20188:05 PM MYT
KUALA LUMPUR: Petronas, through its subsidiary, Petronas LNG Ltd (PLL), signed a binding heads of agreement on Oct 1, 2018, with Singapore-based Vitol Asia Pte Ltd for a long-term liquefied natural gas (LNG) supply deal.
The supply to Vitol Asia would commence in 2024 for up to 800,000 tonnes per annum with a period of up to 15 years on both delivered ex-ship and free-on-board basis.
“The primary supply to Vitol will come from LNG Canada and other PLL's global LNG supply portfolio. LNG Canada is a major LNG project located in Kitimat, British Columbia, Canada, where Petronas is one of the joint venture participants with an equity holding of 25%,” it said in a statement today.
Canada is Petronas' second largest resource holder after Malaysia, with vast unconventional oil and gas resources in North Montney.
Meanwhile, Petronas LNG Marketing and Trading Vice-President Ahmad Adly Alias said Petronas was able to provide flexible solutions within a changing and evolving LNG market due to its strong global supply portfolio.
“Petronas is pleased to sign this long-term LNG supply deal with Vitol and hopes that it will continue to enhance the long history of business collaboration with the Vitol group,” he said.
Vitol LNG Head Pablo Galante Escobar said Petronas supplied the company's first LNG cargo in 2005 and the company has now extended its LNG relationship until at least 2038.
“We are also committed to the long-term development of the LNG market and its evolution to become a more flexible and tradeable commodity.
"This supply deal with Petronas will further strengthen our ability to offer reliable and flexible LNG solutions to customers, worldwide,” he added. - Bernama
Read more at https://www.thestar.com.my/business/business-news/2018/11/29/petronas-vitol-asia-inks-lng-supply-deal/#55wsK8Bbd22d4VEm.99
LNG prices have fallen to a 10 year low. For reasons best known to its directors Petronas entered into a long term gas supply agreement with one of the biggest, smartest, sharpest oil and gas traders in the world, Vitol.
Whether Petronas has now the advantage of selling at a fixed price above current market prices, or whether Vitol is stockpiling cheap Malaysian LNG is unknown.
TO BE READ WITH
Friday, November 30, 2018
Petronas & Vitol: Why, How Much, And Petronas Must Make Contracts Public
by Ganesh Sahathevan
Petronas recently announced that it entered into a 15 year LNG sale contract with Vitol, one of a handful of privately held oil and gas traders whose trades are so large they rival the majors (Exxon, Shell ,Chevron and others).
The deal seems odd for Petronas as a national oil company (NOC) has rights ,access and financing that the likes of Vital and even the majors can only dream of. The LNG will come from Petronas' long delayed Canadian Kitimat project, where Petronas' JV partners have rights to product in exchange for their investment.
Petronas has a 25% stake, and it is hard to understand why Petronas needs the likes of Vital to sell the LNG.Quite apart from direct contact with NOCs around the world, Petronas has trading hubs in ,among others, Singapore and the UK.
In the spirit of New Malaysia, Petronas needs to explain why this deal with Vitol is necessary.
END
Petronas, Vitol Asia inks LNG supply deal
OIL & GAS
Thursday, 29 Nov 20188:05 PM MYT
KUALA LUMPUR: Petronas, through its subsidiary, Petronas LNG Ltd (PLL), signed a binding heads of agreement on Oct 1, 2018, with Singapore-based Vitol Asia Pte Ltd for a long-term liquefied natural gas (LNG) supply deal.
The supply to Vitol Asia would commence in 2024 for up to 800,000 tonnes per annum with a period of up to 15 years on both delivered ex-ship and free-on-board basis.
“The primary supply to Vitol will come from LNG Canada and other PLL's global LNG supply portfolio. LNG Canada is a major LNG project located in Kitimat, British Columbia, Canada, where Petronas is one of the joint venture participants with an equity holding of 25%,” it said in a statement today.
Canada is Petronas' second largest resource holder after Malaysia, with vast unconventional oil and gas resources in North Montney.
Meanwhile, Petronas LNG Marketing and Trading Vice-President Ahmad Adly Alias said Petronas was able to provide flexible solutions within a changing and evolving LNG market due to its strong global supply portfolio.
“Petronas is pleased to sign this long-term LNG supply deal with Vitol and hopes that it will continue to enhance the long history of business collaboration with the Vitol group,” he said.
Vitol LNG Head Pablo Galante Escobar said Petronas supplied the company's first LNG cargo in 2005 and the company has now extended its LNG relationship until at least 2038.
“We are also committed to the long-term development of the LNG market and its evolution to become a more flexible and tradeable commodity.
"This supply deal with Petronas will further strengthen our ability to offer reliable and flexible LNG solutions to customers, worldwide,” he added. - Bernama
Read more at https://www.thestar.com.my/business/business-news/2018/11/29/petronas-vitol-asia-inks-lng-supply-deal/#55wsK8Bbd22d4VEm.99
Friday, November 30, 2018
Petronas & Vitol: Why, How Much, And Petronas Must Make Contracts Public
by Ganesh Sahathevan
Petronas recently announced that it entered into a 15 year LNG sale contract with Vitol, one of
a handful of privately held oil and gas traders whose trades are so large they rival the majors (Exxon, Shell ,Chevron and others).
The deal seems odd for Petronas as a national oil company (NOC) has rights ,access and financing that the likes of Vital and even the majors can only dream of. The LNG will come from Petronas' long delayed Canadian Kitimat project, where Petronas' JV partners have rights to product in exchange for their investment.
Petronas has a 25% stake, and it is hard to understand why Petronas needs the likes of Vital to sell the LNG.Quite apart from direct contact with NOCs around the world, Petronas has trading hubs in ,among others, Singapore and the UK.
In the spirit of New Malaysia, Petronas needs to explain why this deal with Vitol is necessary.
END
Petronas, Vitol Asia inks LNG supply deal
OIL & GAS
Thursday, 29 Nov 20188:05 PM MYT
KUALA LUMPUR: Petronas, through its subsidiary, Petronas LNG Ltd (PLL), signed a binding heads of agreement on Oct 1, 2018, with Singapore-based Vitol Asia Pte Ltd for a long-term liquefied natural gas (LNG) supply deal.
The supply to Vitol Asia would commence in 2024 for up to 800,000 tonnes per annum with a period of up to 15 years on both delivered ex-ship and free-on-board basis.
“The primary supply to Vitol will come from LNG Canada and other PLL's global LNG supply portfolio. LNG Canada is a major LNG project located in Kitimat, British Columbia, Canada, where Petronas is one of the joint venture participants with an equity holding of 25%,” it said in a statement today.
Canada is Petronas' second largest resource holder after Malaysia, with vast unconventional oil and gas resources in North Montney.
Meanwhile, Petronas LNG Marketing and Trading Vice-President Ahmad Adly Alias said Petronas was able to provide flexible solutions within a changing and evolving LNG market due to its strong global supply portfolio.
“Petronas is pleased to sign this long-term LNG supply deal with Vitol and hopes that it will continue to enhance the long history of business collaboration with the Vitol group,” he said.
Vitol LNG Head Pablo Galante Escobar said Petronas supplied the company's first LNG cargo in 2005 and the company has now extended its LNG relationship until at least 2038.
“We are also committed to the long-term development of the LNG market and its evolution to become a more flexible and tradeable commodity.
"This supply deal with Petronas will further strengthen our ability to offer reliable and flexible LNG solutions to customers, worldwide,” he added. - Bernama
Read more at https://www.thestar.com.my/business/business-news/2018/11/29/petronas-vitol-asia-inks-lng-supply-deal/#55wsK8Bbd22d4VEm.99
Saturday, January 5, 2019
Vitol's "all Christmases at once" deal with Petronas makes one wonder if Petronas has become a charitable organisation
by Ganesh Sahathevan
Petronas, through its subsidiary, Petronas LNG Ltd (PLL), signed a binding heads of agreement on Oct 1, 2018, with Singapore-based Vitol Asia Pte Ltd for a long-term liquefied natural gas (LNG) supply deal.
“The primary supply to Vitol will come from LNG Canada and other PLL's global LNG supply portfolio. LNG Canada is a major LNG project located in Kitimat, British Columbia, Canada, where Petronas is one of the joint venture participants with an equity holding of 25%,” it said in a statement today.
Reuters reported the same but included this additional bit of information:
Royal Dutch Shell decided in October (2018) to construct the export terminal. It was the first major investment decision in a new North American LNG export project for two years and was expected to launch a new wave of such projects in the region.
Petronas, the Malaysian oil and gas company that bought a 25 percent stake in the project in May, will supply Vitol with 0.8 million tonnes per year (mtpa) of LNG starting from 2024 for 15 years, Vitol said in a statement.
Vitol joins Asian utilities Tokyo Gas, Toho Gas and Korea Gas Corp (Kogas) as buyers, committing to offtake around 2.4 mtpa collectively.
Such long-term agreements normally underpin project finance and are critical before a final investment decision is taken.
But because Shell and partners Petronas, PetroChina, Mitsubishi and Kogas are such large players in the LNG market, they can absorb the output into their global portfolios without needing to find significant other buyers.
erm contract
Under previously announced deals, Toho Gas will buy 0.3 mtpa, Tokyo Gas 0.6 mtpa and Kogas 0.7 mtpa from LNG Canada.
In other words, Petronas has agreed to put-up the massive capital investment that
will enable Vitol, a trader, to secure its supplies of LNG under a long term contract. In contrast, the other investors in the project have invested to secure long term supplies for their long-term customers, to whom the cost of the investment will be passed on.
Which makes one wonder, is Petronas a charity,and is its management in competition with Santa Claus?
END
SEE ALSO
Friday, November 30, 2018
Petronas & Vitol: Why, How Much, And Petronas Must Make Contracts Public
by Ganesh Sahathevan
Petronas recently announced that it entered into a 15 year LNG sale contract with Vitol, one of
a handful of privately held oil and gas traders whose trades are so large they rival the majors (Exxon, Shell ,Chevron and others).
The deal seems odd for Petronas as a national oil company (NOC) has rights ,access and financing that the likes of Vital and even the majors can only dream of. The LNG will come from Petronas' long delayed Canadian Kitimat project, where Petronas' JV partners have rights to product in exchange for their investment.
Petronas has a 25% stake, and it is hard to understand why Petronas needs the likes of Vital to sell the LNG.Quite apart from direct contact with NOCs around the world, Petronas has trading hubs in ,among others, Singapore and the UK.
In the spirit of New Malaysia, Petronas needs to explain why this deal with Vitol is necessary.
END
Monday, July 3, 2023
Vitol's bet of Australia's fuel shortage paying off with a AUD 450 Million per year, floating rate 12 year contract with Defence - Minister for Defence Industry Pat Conroy blames "years of declining local oil refining and fuel production"
by Ganesh Sahathevan
Vitol-Shell's Viva Energy bet on fuel shortages in Australia is paying off with a AUD 450 Million per year, floating rate 12 year contract with Australia's Department Of Defence
Australian company Viva Energy Refining has been awarded a $450 million per year contract, subject to market fluctuations, for an initial six years which may be extended to 12 years.
The contract includes the supply of the specialist military aviation fuel for Navy helicopters, known as F44, and could be worth an estimated $2.7 billion over six years.
Minister for Defence Industry, the Hon Pat Conroy MP, welcomed this announcement saying, “The Albanese government is proud to be supporting Australian industry and jobs rather than importing specialist military aviation fuel.”
This fuel will be produced at the Viva Energy refinery in Geelong, Victoria, one of two remaining oil refineries in Australia, where around 1,000 people are employed.
Minister Conroy also stressed the importance of this commitment for Australia’s national security and resilience, saying, “Coming after years of declining local oil refining and fuel production, this will be good for Australia’s defence, good for Australia’s energy security, and good for Australian jobs.”
Defence currently imports this specialist fuel and it has not been produced in Australia since 2013.
“The government is working hard to build a resilient fuel supply for Defence and to strengthen Australia’s national security — and this domestic fuel supply contract will contribute to this,” Minister Conroy added.
TO BE READ WITH
Saturday, February 22, 2020
World's sharpest, shrewdest oil, gas and coal traders, and Twiggy Forrest, counting on Australian governments to ban local production, enforce use of expensive & unreliable renewables, and force Australia to import, oil, gas and coal.
by Ganesh Sahathevan
Vitol, Glencore and Trafigura are among the world's biggest privately owned oil, gas and coal trading companies. They have done with their own money what ExxonMobil, Shell ,Chevron and others have taken more than a century to accomplish, with money from stockmarket investors. These independents have grown very large and very influential in about half the time (and less).
About a decade ago ,when Australian governments decided that refining oil here was not good for the environment, the independents began buying up old refineries to turn into import terminals.
Joining then is Australia's very own Twiggy Forrest ,in a JV with Japan's Marubeni (see story below).
Forrest to build NSW's first LNG import terminal at Port Kembla
By Cole Latimer
June 4, 2018 — 10.30am
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Fortescue Metals chairman Andrew "Twiggy" Forrest’s Australian Industrial Energy will build a floating LNG import terminal in Port Kembla to bring more gas to NSW and Victoria as soon as 2020.
The regasification facility, which will cost between $200 million and $300 million to construct, will also be NSW’s first LNG import terminal.
The LNG import terminal will be the first in NSW.CREDIT:MICHELE MOSSOP
The Port Kembla terminal will import up to about 100 petajoules of LNG, which could meet about 75 per cent of NSW’s total gas demand.
AIE chief executive James Baulderstone said the import terminal would "solve the gas shortage in NSW", while NSW Minister for Trade and Industry Niall Blair called it a "game changer" for the state.
Advertisement
“From 2020, AIE plans to ship up to 1.8 million tonnes of LNG into Port Kembla. That’s enough gas to supply around 85,000 average homes for an entire year," Mr Blair said.
“NSW currently relies on various interstate sources for 95 per cent of its gas needs, which can be less reliable and more expensive. This proposal has the potential to provide long-term security of gas supply at competitive prices.”
AIE is also targeting Victorian customers.
"One of the reasons we chose Port Kembla is because it's at the intersection of the Eastern Gas Pipeline, so we can get gas into Victoria," Mr Baulderstone told Fairfax Media.
"Victoria is a much bigger market so that is how we get more volume. We've signed some Victorian deals already."
The majority of the gas will be provided to large manufacturers and businesses.
RELATED ARTICLE
EXCLUSIVE
ENERGY
Australia should import LNG if it wants cheaper gas: global expert
Add to shortlist
It comes after the Australian Competition and Consumer Commission forecast a looming gas shortage on the east coast of up to 150 petajoules, and the government last year threatened gas companies with a mechanism that would slash exports unless they secured more domestic gas supply.
The new gas terminal is a lower-cost alternative to proposed interstate pipelines and a cross-country, $5 billion West to East gas pipeline, which could also alleviate a gas shortage.
The location of the new east coast gas terminal came down to a decision between two sites - Port Kembla or the Port of Newcastle. AIE chose Port Kembla as it is closer to large consumers of industrial gas as well as existing pipeline infrastructure.
The terminal will have storage tanks capable of holding around four petajoules of gas, equivalent to between 10 and 12 days of NSW’s total demand.
For the second stage of the development, AIE is investigating the construction of a new gas-fired power plant. It is understood this could include either expanding on existing small-scale power plants nearby to provide more energy to industrial users, or building a new 750-megawatt power plant.
Mr Baulderstone said it planned to develop this power generation between 2020 and 2022.
The facility will see LNG carriers visiting Port Kembla around every two to three weeks.
Who is AIE?
Australian Industrial Energy is led by the former Santos and Duet Group executive James Baulderstone, and Stuart Johnson, the head of Mr Forrest’s gas business, Squadron Energy. The consortium has the backing of Japanese firms Marubeni Corp and JERA, which is the world’s largest buyer of LNG.
Fortescue chairman Andrew Forrest. CREDIT:BLOOMBERG
JERA will supply the gas while trading house Marubeni provides infrastructure financing.
"The $200 million price tag is relatively small capital to these investors," Mr Baulderstone said.
AIE has already signed 12 memorandums of understanding with industrial users for the supply of gas but declined to name these groups.
JERA’s fuel business development and gas and power development senior vice president, Gaku Takagi, said the facility would be able to bring cheaper LNG to NSW.
“We believe we can make a major contribution to NSW and east coast energy supply competition and security,” Mr Takagi said.
Mr Baulderstone said AIE would work as quickly as possible to get the facility off the ground as the rising price of gas stretches Australian businesses' operating costs as they seek new sources of gas supply.
The floating regasification terminal will be built in Port Kembla Harbour.
“In recent times, wholesale gas prices have doubled, and in many cases tripled, in NSW. In addition, many industrial companies are now unable to secure gas for any period longer than 12 months,” Mr Baulderstone said.
“AIE is well placed to deliver firm, long-term gas on highly competitive pricing and terms as a soon as 2020.”
The development is a boon for NSW, which has traditionally imported gas for industry and power generation from Queensland.
AIE is planning to lodge its development applications within the next few months.
The project is similar to AGL's $250 million floating LNG import terminal and jetty proposed for Crib Point, in Victoria, which is slated to begin construction next year.
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License this article
ENERGY
ANDREW FORREST
Cole Latimer
Email
Covering energy and policy at Fairfax Media.
Vitol, Glencore and Trafigura are among the world's biggest privately owned oil, gas and coal trading companies. They have done with their own money what ExxonMobil, Shell ,Chevron and others have taken more than a century to accomplish, with money from stockmarket investors. These independents have grown very large and very influential in about half the time (and less).
About a decade ago ,when Australian governments decided that refining oil here was not good for the environment, the independents began buying up old refineries to turn into import terminals.
Joining then is Australia's very own Twiggy Forrest ,in a JV with Japan's Marubeni (see story below).
These are billion dollar bets which are in some part financed by "shorting"ie shuttering or selling coal assets. Some have chosen to cap production ie conserve the resource for the future, while curtailing supply, which in turn drives up current prices.
They are also long term bets, so these players can wait for that day, in say 5-10 years, when Australia's energy needs will have to be met by largely imported oil, gas and coal due to government policies that will make local exploration and production a waste of time. The coming of that is also likely to coincide with a growing reliance on renewables, regardless of efficiency and reliability.
END
This was published 1 year ago
Forrest to build NSW's first LNG import terminal at Port Kembla
By Cole Latimer
June 4, 2018 — 10.30am
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Normal text sizeLarger text sizeVery large text size
Fortescue Metals chairman Andrew "Twiggy" Forrest’s Australian Industrial Energy will build a floating LNG import terminal in Port Kembla to bring more gas to NSW and Victoria as soon as 2020.
The regasification facility, which will cost between $200 million and $300 million to construct, will also be NSW’s first LNG import terminal.
The LNG import terminal will be the first in NSW.CREDIT:MICHELE MOSSOP
The Port Kembla terminal will import up to about 100 petajoules of LNG, which could meet about 75 per cent of NSW’s total gas demand.
AIE chief executive James Baulderstone said the import terminal would "solve the gas shortage in NSW", while NSW Minister for Trade and Industry Niall Blair called it a "game changer" for the state.
Advertisement
“From 2020, AIE plans to ship up to 1.8 million tonnes of LNG into Port Kembla. That’s enough gas to supply around 85,000 average homes for an entire year," Mr Blair said.
“NSW currently relies on various interstate sources for 95 per cent of its gas needs, which can be less reliable and more expensive. This proposal has the potential to provide long-term security of gas supply at competitive prices.”
AIE is also targeting Victorian customers.
"One of the reasons we chose Port Kembla is because it's at the intersection of the Eastern Gas Pipeline, so we can get gas into Victoria," Mr Baulderstone told Fairfax Media.
"Victoria is a much bigger market so that is how we get more volume. We've signed some Victorian deals already."
The majority of the gas will be provided to large manufacturers and businesses.
RELATED ARTICLE
EXCLUSIVE
ENERGY
Australia should import LNG if it wants cheaper gas: global expert
Add to shortlist
It comes after the Australian Competition and Consumer Commission forecast a looming gas shortage on the east coast of up to 150 petajoules, and the government last year threatened gas companies with a mechanism that would slash exports unless they secured more domestic gas supply.
The new gas terminal is a lower-cost alternative to proposed interstate pipelines and a cross-country, $5 billion West to East gas pipeline, which could also alleviate a gas shortage.
The location of the new east coast gas terminal came down to a decision between two sites - Port Kembla or the Port of Newcastle. AIE chose Port Kembla as it is closer to large consumers of industrial gas as well as existing pipeline infrastructure.
The terminal will have storage tanks capable of holding around four petajoules of gas, equivalent to between 10 and 12 days of NSW’s total demand.
For the second stage of the development, AIE is investigating the construction of a new gas-fired power plant. It is understood this could include either expanding on existing small-scale power plants nearby to provide more energy to industrial users, or building a new 750-megawatt power plant.
Mr Baulderstone said it planned to develop this power generation between 2020 and 2022.
The facility will see LNG carriers visiting Port Kembla around every two to three weeks.
Who is AIE?
Australian Industrial Energy is led by the former Santos and Duet Group executive James Baulderstone, and Stuart Johnson, the head of Mr Forrest’s gas business, Squadron Energy. The consortium has the backing of Japanese firms Marubeni Corp and JERA, which is the world’s largest buyer of LNG.
Fortescue chairman Andrew Forrest. CREDIT:BLOOMBERG
JERA will supply the gas while trading house Marubeni provides infrastructure financing.
"The $200 million price tag is relatively small capital to these investors," Mr Baulderstone said.
AIE has already signed 12 memorandums of understanding with industrial users for the supply of gas but declined to name these groups.
JERA’s fuel business development and gas and power development senior vice president, Gaku Takagi, said the facility would be able to bring cheaper LNG to NSW.
“We believe we can make a major contribution to NSW and east coast energy supply competition and security,” Mr Takagi said.
Mr Baulderstone said AIE would work as quickly as possible to get the facility off the ground as the rising price of gas stretches Australian businesses' operating costs as they seek new sources of gas supply.
The floating regasification terminal will be built in Port Kembla Harbour.
“In recent times, wholesale gas prices have doubled, and in many cases tripled, in NSW. In addition, many industrial companies are now unable to secure gas for any period longer than 12 months,” Mr Baulderstone said.
“AIE is well placed to deliver firm, long-term gas on highly competitive pricing and terms as a soon as 2020.”
The development is a boon for NSW, which has traditionally imported gas for industry and power generation from Queensland.
AIE is planning to lodge its development applications within the next few months.
The project is similar to AGL's $250 million floating LNG import terminal and jetty proposed for Crib Point, in Victoria, which is slated to begin construction next year.
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License this article
ENERGY
ANDREW FORREST
Cole Latimer
Covering energy and policy at Fairfax Media.
Saturday, February 22, 2020
World's sharpest, shrewdest oil, gas and coal traders, and Twiggy Forrest, counting on Australian governments to ban local production, enforce use of expensive & unreliable renewables, and force Australia to import, oil, gas and coal.
by Ganesh Sahathevan
Vitol, Glencore and Trafigura are among the world's biggest privately owned oil, gas and coal trading companies. They have done with their own money what ExxonMobil, Shell ,Chevron and others have taken more than a century to accomplish, with money from stockmarket investors. These independents have grown very large and very influential in about half the time (and less).
About a decade ago ,when Australian governments decided that refining oil here was not good for the environment, the independents began buying up old refineries to turn into import terminals.
Joining then is Australia's very own Twiggy Forrest ,in a JV with Japan's Marubeni (see story below).
Forrest to build NSW's first LNG import terminal at Port Kembla
By Cole Latimer
June 4, 2018 — 10.30am
Share on Facebook
Share on Twitter
Send via Email
Normal text sizeLarger text sizeVery large text size
Fortescue Metals chairman Andrew "Twiggy" Forrest’s Australian Industrial Energy will build a floating LNG import terminal in Port Kembla to bring more gas to NSW and Victoria as soon as 2020.
The regasification facility, which will cost between $200 million and $300 million to construct, will also be NSW’s first LNG import terminal.
The LNG import terminal will be the first in NSW.CREDIT:MICHELE MOSSOP
The Port Kembla terminal will import up to about 100 petajoules of LNG, which could meet about 75 per cent of NSW’s total gas demand.
AIE chief executive James Baulderstone said the import terminal would "solve the gas shortage in NSW", while NSW Minister for Trade and Industry Niall Blair called it a "game changer" for the state.
Advertisement
“From 2020, AIE plans to ship up to 1.8 million tonnes of LNG into Port Kembla. That’s enough gas to supply around 85,000 average homes for an entire year," Mr Blair said.
“NSW currently relies on various interstate sources for 95 per cent of its gas needs, which can be less reliable and more expensive. This proposal has the potential to provide long-term security of gas supply at competitive prices.”
AIE is also targeting Victorian customers.
"One of the reasons we chose Port Kembla is because it's at the intersection of the Eastern Gas Pipeline, so we can get gas into Victoria," Mr Baulderstone told Fairfax Media.
"Victoria is a much bigger market so that is how we get more volume. We've signed some Victorian deals already."
The majority of the gas will be provided to large manufacturers and businesses.
RELATED ARTICLE
EXCLUSIVE
ENERGY
Australia should import LNG if it wants cheaper gas: global expert
Add to shortlist
It comes after the Australian Competition and Consumer Commission forecast a looming gas shortage on the east coast of up to 150 petajoules, and the government last year threatened gas companies with a mechanism that would slash exports unless they secured more domestic gas supply.
The new gas terminal is a lower-cost alternative to proposed interstate pipelines and a cross-country, $5 billion West to East gas pipeline, which could also alleviate a gas shortage.
The location of the new east coast gas terminal came down to a decision between two sites - Port Kembla or the Port of Newcastle. AIE chose Port Kembla as it is closer to large consumers of industrial gas as well as existing pipeline infrastructure.
The terminal will have storage tanks capable of holding around four petajoules of gas, equivalent to between 10 and 12 days of NSW’s total demand.
For the second stage of the development, AIE is investigating the construction of a new gas-fired power plant. It is understood this could include either expanding on existing small-scale power plants nearby to provide more energy to industrial users, or building a new 750-megawatt power plant.
Mr Baulderstone said it planned to develop this power generation between 2020 and 2022.
The facility will see LNG carriers visiting Port Kembla around every two to three weeks.
Who is AIE?
Australian Industrial Energy is led by the former Santos and Duet Group executive James Baulderstone, and Stuart Johnson, the head of Mr Forrest’s gas business, Squadron Energy. The consortium has the backing of Japanese firms Marubeni Corp and JERA, which is the world’s largest buyer of LNG.
Fortescue chairman Andrew Forrest. CREDIT:BLOOMBERG
JERA will supply the gas while trading house Marubeni provides infrastructure financing.
"The $200 million price tag is relatively small capital to these investors," Mr Baulderstone said.
AIE has already signed 12 memorandums of understanding with industrial users for the supply of gas but declined to name these groups.
JERA’s fuel business development and gas and power development senior vice president, Gaku Takagi, said the facility would be able to bring cheaper LNG to NSW.
“We believe we can make a major contribution to NSW and east coast energy supply competition and security,” Mr Takagi said.
Mr Baulderstone said AIE would work as quickly as possible to get the facility off the ground as the rising price of gas stretches Australian businesses' operating costs as they seek new sources of gas supply.
The floating regasification terminal will be built in Port Kembla Harbour.
“In recent times, wholesale gas prices have doubled, and in many cases tripled, in NSW. In addition, many industrial companies are now unable to secure gas for any period longer than 12 months,” Mr Baulderstone said.
“AIE is well placed to deliver firm, long-term gas on highly competitive pricing and terms as a soon as 2020.”
The development is a boon for NSW, which has traditionally imported gas for industry and power generation from Queensland.
AIE is planning to lodge its development applications within the next few months.
The project is similar to AGL's $250 million floating LNG import terminal and jetty proposed for Crib Point, in Victoria, which is slated to begin construction next year.
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ENERGY
ANDREW FORREST
Cole Latimer
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Covering energy and policy at Fairfax Media.
Vitol, Glencore and Trafigura are among the world's biggest privately owned oil, gas and coal trading companies. They have done with their own money what ExxonMobil, Shell ,Chevron and others have taken more than a century to accomplish, with money from stockmarket investors. These independents have grown very large and very influential in about half the time (and less).
About a decade ago ,when Australian governments decided that refining oil here was not good for the environment, the independents began buying up old refineries to turn into import terminals.
Joining then is Australia's very own Twiggy Forrest ,in a JV with Japan's Marubeni (see story below).
These are billion dollar bets which are in some part financed by "shorting"ie shuttering or selling coal assets. Some have chosen to cap production ie conserve the resource for the future, while curtailing supply, which in turn drives up current prices.
They are also long term bets, so these players can wait for that day, in say 5-10 years, when Australia's energy needs will have to be met by largely imported oil, gas and coal due to government policies that will make local exploration and production a waste of time. The coming of that is also likely to coincide with a growing reliance on renewables, regardless of efficiency and reliability.
END
This was published 1 year ago
Forrest to build NSW's first LNG import terminal at Port Kembla
By Cole Latimer
June 4, 2018 — 10.30am
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Fortescue Metals chairman Andrew "Twiggy" Forrest’s Australian Industrial Energy will build a floating LNG import terminal in Port Kembla to bring more gas to NSW and Victoria as soon as 2020.
The regasification facility, which will cost between $200 million and $300 million to construct, will also be NSW’s first LNG import terminal.
The LNG import terminal will be the first in NSW.CREDIT:MICHELE MOSSOP
The Port Kembla terminal will import up to about 100 petajoules of LNG, which could meet about 75 per cent of NSW’s total gas demand.
AIE chief executive James Baulderstone said the import terminal would "solve the gas shortage in NSW", while NSW Minister for Trade and Industry Niall Blair called it a "game changer" for the state.
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“From 2020, AIE plans to ship up to 1.8 million tonnes of LNG into Port Kembla. That’s enough gas to supply around 85,000 average homes for an entire year," Mr Blair said.
“NSW currently relies on various interstate sources for 95 per cent of its gas needs, which can be less reliable and more expensive. This proposal has the potential to provide long-term security of gas supply at competitive prices.”
AIE is also targeting Victorian customers.
"One of the reasons we chose Port Kembla is because it's at the intersection of the Eastern Gas Pipeline, so we can get gas into Victoria," Mr Baulderstone told Fairfax Media.
"Victoria is a much bigger market so that is how we get more volume. We've signed some Victorian deals already."
The majority of the gas will be provided to large manufacturers and businesses.
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It comes after the Australian Competition and Consumer Commission forecast a looming gas shortage on the east coast of up to 150 petajoules, and the government last year threatened gas companies with a mechanism that would slash exports unless they secured more domestic gas supply.
The new gas terminal is a lower-cost alternative to proposed interstate pipelines and a cross-country, $5 billion West to East gas pipeline, which could also alleviate a gas shortage.
The location of the new east coast gas terminal came down to a decision between two sites - Port Kembla or the Port of Newcastle. AIE chose Port Kembla as it is closer to large consumers of industrial gas as well as existing pipeline infrastructure.
The terminal will have storage tanks capable of holding around four petajoules of gas, equivalent to between 10 and 12 days of NSW’s total demand.
For the second stage of the development, AIE is investigating the construction of a new gas-fired power plant. It is understood this could include either expanding on existing small-scale power plants nearby to provide more energy to industrial users, or building a new 750-megawatt power plant.
Mr Baulderstone said it planned to develop this power generation between 2020 and 2022.
The facility will see LNG carriers visiting Port Kembla around every two to three weeks.
Who is AIE?
Australian Industrial Energy is led by the former Santos and Duet Group executive James Baulderstone, and Stuart Johnson, the head of Mr Forrest’s gas business, Squadron Energy. The consortium has the backing of Japanese firms Marubeni Corp and JERA, which is the world’s largest buyer of LNG.
Fortescue chairman Andrew Forrest. CREDIT:BLOOMBERG
JERA will supply the gas while trading house Marubeni provides infrastructure financing.
"The $200 million price tag is relatively small capital to these investors," Mr Baulderstone said.
AIE has already signed 12 memorandums of understanding with industrial users for the supply of gas but declined to name these groups.
JERA’s fuel business development and gas and power development senior vice president, Gaku Takagi, said the facility would be able to bring cheaper LNG to NSW.
“We believe we can make a major contribution to NSW and east coast energy supply competition and security,” Mr Takagi said.
Mr Baulderstone said AIE would work as quickly as possible to get the facility off the ground as the rising price of gas stretches Australian businesses' operating costs as they seek new sources of gas supply.
The floating regasification terminal will be built in Port Kembla Harbour.
“In recent times, wholesale gas prices have doubled, and in many cases tripled, in NSW. In addition, many industrial companies are now unable to secure gas for any period longer than 12 months,” Mr Baulderstone said.
“AIE is well placed to deliver firm, long-term gas on highly competitive pricing and terms as a soon as 2020.”
The development is a boon for NSW, which has traditionally imported gas for industry and power generation from Queensland.
AIE is planning to lodge its development applications within the next few months.
The project is similar to AGL's $250 million floating LNG import terminal and jetty proposed for Crib Point, in Victoria, which is slated to begin construction next year.
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ENERGY
ANDREW FORREST
Cole Latimer
Covering energy and policy at Fairfax Media.
Monday, June 15, 2020
Vitol ,RAPID-ARAMCO, RAPID "closed tender" contracts: New Petronas CEO Taufik has much to review
by Ganesh Sahathevan
Tengku Muhammad Taufik Tengku Aziz has been appointed as the new president and group chief executive officer of Petroliam Nasional Bhd (Petronas) effective July 1 2020
New Petronas CEO Tengku Muhammad Taufik should take his predecessor Wan Zulkiflee's advice and take a principled review of the following:
New Petronas CEO Tengku Muhammad Taufik should take his predecessor Wan Zulkiflee's advice and take a principled review of the following:
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