Novatek CEO sees growth in global gas markets to absorb all Russian LNG

MOSCOW (MRC) -- The OAO Novatek-led Yamal LNG project will benefit from accelerating growth in demand for liquefied natural gas on world markets, which can absorb all new production from Russia, said Hydrocarbonprocessing, citing CEO Leonid Mikhelson.

He spoke at Davos, Switzerland, where he attended the World Economic Forum.

On the LNG market: "“We are optimistic about the LNG market development. LNG demand is increasing faster than the gas market in general. A competition between fuels is under way. In the past few years, gas has been losing this competition, but I think in the future the share of gas in the total energy balance will increase."

On competition with Gazprom, Rosneft LNG projects: "It’s deeply misleading that all these projects will compete against each other. Given the growth of the LNG market, projects in Russia could be multiplied by two, and those volumes will be in demand. Within the next 10 years Russia simply must build as much as 80 million tons a year of LNG capacity."

On European energy policies: "Russia is right about trying to diversify supplies to Asian markets. There is some discomfort about the European Union’s energy policy. A recent sharp increase in coal generation in Europe shows that the EU doesn’t have a strategy for energy market development. Gazprom re-orienting flows and investments will lead to Europe losing out a lot, which in fact has already happened with crude oil."

As MRC wrote before, Novatek, which is leading the USD20 billion LNG project in the Russian Arctic region, is challenging Gazprom’s monopoly on supplies of super-chilled fuel abroad to benefit from the Asian nation’s rising energy demand. Russia plans to allow Novatek, as well as oil producer Rosneft, to export LNG from 2014. Yamal LNG at full capacity will produce 16.5 MMtpy of LNG starting from the end of 2016, according to Novatek.
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MOSCOW (MRC) -- The signing of a gas production-sharing agreement between Ukraine and an international consortium led by US major Exxon Mobil has been postponed for the second time in a row, reported Reuters with reference to Ukraine's fuel and energy minister's statement.

"We will sign it (the agreement) in February," Eduard Stavytsky told reporters in brief remarks after an official briefing. He did not give a reason for the fresh delay.

The government orginally intended to sign the deal, which is expected to bring Ukraine several billion cubic metres (bcm) of gas per year, in November but Stavytsky postponed the decision until January due to mass anti-government protests in Kiev.

In 2012, Ukraine selected a group of companies led by Exxon Mobil to explore conventional gas deposits in the southern Skifska area on the Black Sea shelf, which has a potential output of 3 bcm of gas per year.

The postponed deal would have formalised a production sharing agreement for these deposits.

Ukraine took its first major step away from dependency on Russian gas imports by signing a USD10 billion shale gas deal with Shell in early 2013 and with Chevron in late 2014.

As MRC wrote previously, in November 2013, Foster Wheeler was selected by Rosneft and ExxonMobil to undertake the initial phase of the front-end engineering design (FEED) for a proposed Russian Far East liquefied natural gas (LNG) project.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
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MOSCOW (MRC) -- Anglo-Dutch energy giant Royal Dutch Shell said Wednesday that it has sold a large stake in an offshore Brazilian oil field to Qatar for about USD1 billion, said Nst.

Shell said it has agreed to offload a 23-percent interest in the Parque das Conchas (BC-10) project offshore Brazil to Qatar Petroleum International.

The deal remains subject to regulatory approval in Brazil. The group will continue to operate the oil field, which currently produces 50,000 barrels of oil equivalent per day. Shell added that it will retain a "significant" upstream presence in Brazil.

As MRC wrote before, Shell is interested in Brazil's upcoming oil and natural gas concession auctions but has not yet decided whether to participate.

Royal Dutch Shell, commonly known as Shell, is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is also one of the world's most valuable companies. As of January, 2013 the largest shareholder is Capital Research Global Investors with 9.85% ahead of BlackRock in second with 6.89%. Shell topped the list of largest companies in the world.
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MOSCOW (MRC) -- Alfa Laval- a world leader in heat transfer, centrifugal separation and fluid handling – has won an order to supply Alfa Laval Packinox heat exchangers to an integrated refinery-petrochemical complex in the Middle East, said the producer in its press release.

The order, booked in the Process Industry segment, is worth approximately SEK 65 million and delivery is scheduled for 2014 and 2015.

The Alfa Laval Packinox heat exchangers will be included in a process to remove non-desirable substances, such as sulfur, from the feed stock. "This order confirms the continuous investments in energy-efficiency we see in the process industry. Our Packinox heat exchanger has a proven performance and is a perfect fit for the demanding applications in the refinery and petrochemical industries," says Lars Renstrom, President and CEO of the Alfa Laval Group.

As MRC wrote before, Alfa Laval has won an order to supply its OLMI heat exchangers to a petrochemical plant in the US. The order, booked in the Process Industry segment has a value of approximately SEK 60 million. Deliveries are scheduled for 2014 and 2015.

Alfa Laval is a leading global provider of specialized products and engineering solutions based on its key technologies of heat transfer, separation and fluid handling. The company’s equipment, systems and services are dedicated to assisting customers in optimizing the performance of their processes. The solutions help them to heat, cool, separate and transport products in industries that produce food and beverages, chemicals and petrochemicals, pharmaceuticals, starch, sugar and ethanol.
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MOSCOW (MRC) -- Solvay, a Belgian chemicals maker, said a natural gas shortage has emerged in southern France as suppliers bypass the region in favor of faster growing markets in Asia, as per Hydrocarbonprocessing.

The premium "represents 25% on gas prices versus the rest of Europe," Philippe Rosier, president of Solvay Energy Services, said in an interview. It’s "adding to the competitiveness problem of industry in the south of France."

The shortage of natural gas, widely used in industry applications, for furnaces and fertilizer, and in households for cooking, is adding to the woes of French industry, which is already reeling from Europe’s economic woes.

European chemical companies Solvay, Arkema and Ineos Group have operations in southern France and the Rhone Valley.

Southern France is also losing out as the main pipeline connecting the region to north European gas networks has limited capacity.

Intensive gas users in the south of France have to buy part of their gas on the spot market and "the price spread has catastrophic consequences on industrial sites" in the region, said Daniel Marini, director of economic and international affairs at French chemical makers federation UIC.

"It’s a real issue," said Gilles Galinier, a spokesman for Arkema, which makes fluoro-gases and polymers in the region.

As MRC informed earlier, in November 2013, Ineos opend one million tonne deep-sea ethylene terminal at Ineos Oxide, Zwijndrecht, Belgium. The new deep-sea terminal, at the heart of the second largest petrochemical region in the world, is now fully operational. Ineos has a very large demand for ethylene, supplied substantially by its own production from several steam crackers across Europe. To balance the shortfall the company has traditionally bought ethylene from other companies that sit on the ARG pipeline. The new one million tonne deep sea terminal now presents an opportunity for INEOS to import competitively priced ethylene from around the world, thereby improving its flexibility.
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