International Gas October 2019 – March 2020
GAS INNOVATIONS FOR A SUSTAINABLE ENERGY FUTURe
International Gas October 2019 – March 2020 Published by International Systems and Communications Limited (ISC) in conjunction with the International Gas Union (IGU). Copyright © 2019. The entire content of this publication is protected by copyright, full details of which are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior permission of the copyright owner.
International Systems and Communications Limited 140 Tachbrook Street London SW1V 2NE England Telephone: + 44 20 7901 3830 Facsimile: + 44 20 7901 3838 E-mail: general@isyscom.com Website: www.isyscom.com
International Gas Union PO Box 3 Plaça del Gas, 1 BTA-02 08003 Barcelona Spain Telephone: + 34 93 412 9789 Facsimile: + 34 93 402 5426 E-mail: secretariat@igu-gasnatural.com Website: www.igu.org
Vision and Mission The International Gas Union (IGU) is a worldwide, non-
IGU works to improve the competitiveness
profit organisation promoting the progress of the gas
of gas in the world energy markets by promoting
industry. Through its many member countries and
transparency, public acceptance efforts and the
corporations representing over 95% of the global gas
removal of supply and market access barriers.
market, IGU covers all aspects of the gas industry.
IGU seeks to collaborate with governmental agencies and multilateral organisations to
Vision
demonstrate the economic, social and
As the global voice of gas, IGU seeks to improve the
environmental benefits of gas in the global
quality of life by advancing gas as a key contributor
energy mix.
to a sustainable energy future.
IGU supports and facilitates the development of new technologies and best practices, while
Mission
emphasising sound environmental performance,
IGU is the key and credible advocate of political,
safety, reliability and efficiency across the entire
technical and economic progress of the global gas industry, directly and through its members and in collaboration with other multilateral organisations.
4 Visi o n a n d M i s s i o n
value chain. IGU maximises the value of its services to members and other stakeholders.
Successfully Producing LNG for a Half-Century From Kenai first producing and importing LNG to Japan in 1969 to starting up 15 new large-scale LNG trains on-time in Australia and the U.S. Gulf Coast over the past four years, the Optimized Cascade® process provides more than 100 million metric tons per year of the world’s LNG supply capacity and is licensed in 27 trains around the world.
The Optimized Cascade® process: Proud past, bright future We Deliver:
5O
• Industry-leading performance, efficiency, and operational flexibility • Predictable execution, startup and operation • Scalable train design from 1.5 to 7 MTPA • Wide feed gas composition capability
The Optimized Cascade® process now provides more EPC Contractor choices for our clients To learn more, visit lnglicensing.conocophillips.com.
Liquefied Natural Gas Optimized Cascade® is a registered trademark of ConocoPhillips Company in the United States and certain other countries. © ConocoPhillips Company. 2019. All rights reserved.
Gas contributes to harmonious progress. As a key international player in gas, we’re developing efficient and environmentally-friendly solutions such as biomethane and hydrogen from renewable resources. Within ENGIE, gas becomes renewable.
engie.com
ENGIE: is a limited company with a capital of € 2,435,285,011 – Nanterre trade register N° 542 107 651.
H2
Contents
october 2019 – march 2020 Introduction Vision and Mission
4
Message from the President and the Secretary General
8
Update on IGU’s current work programme By Jeongwook Khang
12
Natural gas as a backbone of the Russian energy sector By Alexey Semenov The gas industry in Indonesia By Rakhmad Dewanto
LNG2019 Features
17
Gearing up for IGRC 2020 By Mark Blacklock
20
Resilience of integrated energy systems By Gerhard Schmitz, Carsten Bode and Anne Senkel
24
High level of optimism at LNG2019 By Mark Blacklock
News Reports from the Regional Coordinators
Improving resilience and reducing emissions in residential housing By Gregory Caldwell
32
Unveiling gas opportunities in Latin America and the Caribbean By Mauro Chavez and Rodrigo Rosas
36
Improving the air quality of life By Hansch van der Velden
46
Energy system efficiency and the role of gas By Barbara Jinks
50
56 66
73 76
93 96
Members’ corner
104
Presenting IGU’s new members
108
Activities of IGU
114
IGU releases latest Wholesale Gas Price Survey 116
IGU Organisation
120
Members of IGU
122
Events and Acknowledgements
124
The opinions and views expressed by the authors in this magazine are not necessarily those of IGU, its members or the publisher. While every care has been taken in the preparation of this magazine, they are not responsible for the authors’ opinions or for any inaccuracies in the articles.
7
INTRODUCTION
MESSAGE FROM THE PRESIDENT AND THE SECRETARY GENERAL Dear Colleagues,
voice to communicate to the decision
key developments that took place in
Welcome to the latest edition of the IGU
makers and key stakeholders that gas
the last six months.
magazine and “Welcome to the start of
has a vital economic and environ
In April, we successfully completed
the second lap” in our triennium!
mental role in a sustainable future.
one of our co-sponsored flagship events
Amongst other things, we have
– the LNG2019 conference in Shanghai,
well into year two of the Korean Presi
been raising our voice in a number of
with 40 plenary speakers and over 200
dency. With so much happening in the
platforms, including via social media,
industry experts covering the most
global world of gas and the internal
and if you are not already following
pressing issues in front of the LNG
world of IGU, time just flies. And that is
@IGU_News on Twitter and LinkedIn,
industry now and in the immediate
only fitting for such a dynamic, multi-
we encourage you to do so and stay
future. The impressive exhibition space
dimensional, global organisation as ours!
on top of all the action live.
featured an incredible array of over 200
It is hard to believe, but we are now
market participants, and the latest
Your IGU leadership team has been working hard to elevate the long-term
Key developments
technology and service providers. The
role of natural gas in a sustainable
To do a quick recap of our busy first
conference successfully attracted 2,000
energy future, as we raise our global
half of 2019, let us turn to some of the
delegates and 15,000 total attendees. With the LNG2019 conference as the
c Joo-Myung (Joe) Kang (right) and Luis Bertrán Rafecas.
backdrop, we successfully released the 2019 World LNG Report. This is one of the most sought-after IGU reports, delivered by the LNG Committee. This year’s report release was complete with a robust and greatly effective digital amplification campaign, including a short video of key findings that you can view on our YouTube channel: https://bit.ly/2H2wW7z. Shortly after, in May at the Flame 2019 Conference in Amsterdam, IGU released our other flagship annual report, the Wholesale Gas Price Survey 2019 Edition. The survey is the 11th to be undertaken in a series that began in 2007. This is another excellent publi cation, which is widely used around the globe.
8 Message from the President and the Secretary General
INTRODUCTION
Both reports have been widely cited
Key Asian stakeholders from the
Looking forward
by the world’s top media, from Reuters
energy sector and G20 representatives
As far as this triennium’s work plan is
to the Financial Times, and we would
from 18 countries participated in the
concerned, the committees continue
like to thank everyone who contri
meeting. The theme of the event was
their work to address important global
buted to making these superb reports
“Securing Transparency, Competitive
gas topics, aligned with IGU’s strategy
that have been so valuable to IGU
ness and Enhancing Security of Gas
and advocacy priorities. We are very
and the amplification of the global
Markets in Asia”. An incredible success
pleased that we have such a distin
voice of gas!
on all fronts, the IGU G20 engagement
guished group of committee leaders,
efforts continue to result in positive
supported by talented teams of
tive meeting of the IGU Executive
mentions of natural gas in the official
industry professionals and look
Committee (EXC) in Santiago de
proceedings, as this year’s commu
forward to learning more about their
Chile, and that was a historic event
niqué that can be found here demon
projects as they progress throughout
for IGU, as that is where the EXC
strates: https://bit.ly/2IWTzvv.
the triennium. More details of their
Also in May, we held a produc-
endorsed the recommendation to
The IGU leadership has continued
work are shared inside the pages of
transition to the Permanent Secre-
to raise the global voice of gas by
tariat by mid-2021. The recommen
attending key global and regional
dation will be put in front of the
conferences and events including
IGRC2020 hosted by the Sultanate of
Council for a final vote on date and
CERAWeek 2019, the second meeting
Oman in Muscat, February 24-26, 2020.
location in October at the Indonesia
of the G20 Energy Sustainability
Please check out the latest news at
meeting. So, we encourage all to
Working Group, IEA’s 4th Annual
www.igrc2020.com. It promises to
attend this critical gathering!
Global Conference on Energy
be a fantastic event dedicated to
Efficiency, the International Uzbekistan
celebrate “Gas Innovations for a
opportunity to meet with the Minister
Oil and Gas Conference and the
Sustainable Future”.
of Environment of Chile, Ms Carolina
20th Asia Oil and Gas Conference
Schmidt, and the Minister of Energy,
(AOGC, Malaysia).
In Santiago, we also had the
this issue. Our next big event will be
Last but not least, we would like to encourage your comments and feed
Ms Susana Jimenez, and discuss plans
Finally, we would like to draw your
for a joint COP25 event. Stay tuned for
attention to the release of the second
very important to us, as it is our utmost
details as they develop.
edition of the Global Natural Gas
priority to ensure that our members
Insights booklet. It is an invaluable
are being heard. If you have sugges
Charter Member Asociación de
resource that provides key information
tions related to the IGU magazine,
Empresas de Gas Natural (AGN) for a
on the value of natural gas in the
please submit them to info@igu.org.
memorable week in this beautiful city.
sustainable global energy future. The
We are very grateful to our host,
Next, G20! In June, IGU and the
back. Your thoughts and opinions are
Thank you for your continued
2019 edition also contains a special
support and active engagement as we
Japan Gas Association hosted the
section on methane emissions, and the
work to advance the natural gas
Natural Gas Day 2019 in Tokyo,
opportunities that their further reduc
industry and enhance IGU’s relevance.
organised on the occasion of the G20
tions present for the industry. I
Energy and Environment Ministerial. It
encourage you to download your copy
Joo-Myung (Joe) Kang
was one of only three events featured
and look forward to sharing printed
IGU President
in the official G20 Japan Presidency
versions of the booklet with you at the
Luis Bertrán Rafecas
side-events listing.
Council meeting in Yogyakarta.
IGU Secretary General
Message from the President and the Secretary General 9
We see possibilities in the sun and wind.
And in natural gas, the smart partner to renewables.
That keeps the lights shining bright.
We see possibilities everywhere. From renewable energy and cleaner-burning natural gas to advanced fuels and new low carbon businesses, BP is working to make energy cleaner and better.
Visit us at LNG2019 on stand 1653 Natural gas burns 50% cleaner than coal in power generation.
INTRODUCTION
Update on IGU’s current work programme IGU’s committees and task forces are continuing their work under the Korean Presidency. By Jeongwook Khang IGU’s 2018-2021 work programme is
taken over from Azrina Abdullah as
which will be held in Daegu, Korea,
being carried out under the theme
Chair and on the Marketing and
June 21-25, 2021, and the call for
“A Sustainable Future – Powered by
Communications Committee Pierre
papers will be issued on May 11, 2020.
Gas” and the Union’s 11 committees
Bartholomeus has taken over from
There will be 37 Industry Insight
and three task forces are almost
Hansch van der Velden as Chair.
sessions and 22 Technology and
halfway through the triennium. There have been two leadership
The committees and task forces
Innovation sessions, which will look
have finalised the guidelines for org
at commercial, strategic and technical
changes. On the Sustainability
anising the technical sessions at the
issues across the global gas industry
Committee M. Azhar A. Satar has
next World Gas Conference (WGC),
and cover the full gas value chain.
12 Update on IGU’s current work programme
INTRODUCTION
IGU committees and task forces 2018-2021 and chairs
M. Azhar A. Satar is the new Chair of the Sustainability Committee.
Pierre Bartholomeus is the new chair of the Marketing and Commu nications Committee.
For the Plenary and Current Debate sessions, the Coordination Committee will work with the Presidency to select the topics and invite high-level speakers.
Exploration and Production
Ekaterina Litvinova, Russian Federation
Storage
John Heer, USA
Transmission
Patrick Pelle, France
Distribution
José Carlos Broisler Oliver, Brazil
Utilisation
Carlos Serrano Tarafa, Spain
Sustainability
M. Azhar A. Satar, Malaysia
Strategy
Dr Gerald Linke, Germany
Gas Markets
Christina, Zhaoyan Liu, China
LNG
Farid Berrahou, Algeria
Marketing and Communications
Pierre Bartholomeus, The Netherlands
R&D and Innovation
Dr Hisataka Yakabe, Japan
Task Force 1: Strategic Communications and Outreach
Mark McCrory, United Kingdom
Task Force 2: Energy for All
Barbara Jinks, Australia
Task Force 3: Energy Policy
Hedayat Omidvar, Iran
As well as preparing for WGC 2021, the committees and task forces are working on deliverables throughout
March 28 with the theme “The Vital
the triennium to help raise the global
Role of Natural Gas towards a Sustain
voice of gas.
able Energy Future”. The event was
The LNG Committee released IGU’s
organised by the National Organising
2019 World LNG Report during LNG2019
Committee (NOC) of WGC 2021 and
in April. Then, in May, the Strategy Com
the IGU Secretariat and was attended
mittee released the 2019 edition of IGU’s
by representatives of over 60 embassies.
Wholesale Gas Price Survey. Its key find
IGU’s President, Joo-Myung (Joe) Kang,
ings are summarised on pages 116-118.
Secretary General, Luis Bertrán Rafecas,
The Marketing and Communi cations, Sustainability and Utilisation committees and Task Force 2 – Energy
and Public Affairs Director, Mel Ydreos, gave keynote addresses. Membership of the committees and
for All have reports lined up for
task forces has reached 892 from 51
publication later in the year and in
countries and it is not too late to join.
early 2020 and we will have more infor
IGU members can nominate delegates
mation about these in the next issue.
by contacting the Deputy Manager of
Meanwhile, Korea hosted its first
the Korea Presidency Team, Eun Ju Lee
IGU Diplomatic Gas Forum in Seoul on c The Exploration and Production, Gas Markets and Sustainability committees are holding joint meetings throughout the Korean triennium. Pictured are delegates to the meeting in Shenzhen, China in March.
(ejlee@wgc2021.kr) or me directly (jwkhang@wgc2021.kr). Jeongwook Khang is the Chair of IGU’s Coordination Committee.
Update on IGU’s current work programme 13
Features This issue’s features section starts with a report on preparations for IGRC 2020 in Muscat. Then we have two articles from IGU’s R&D and Innovation Committee, the first looking at the resilience of integrated energy systems and the second reporting on Canadian projects to improve resilience and reduce emissions in housing. Next up are a look at gas developments in Latin America and the Caribbean, examples of how greater use of gas can improve urban air quality, an examination of energy system efficiency and the role of gas, a focus on the role of gas in Russia’s energy sector and a review of the gas industry in Indonesia, the host country of IGU’s 2019 Council meeting.
17
A better world With natural gas as the world’s cleanest and most efcient fossil fuel, Oman LNG’s operations near the Omani city of Sur, is helping to make for a better world. Since starting production in 2000, we have delivered over 2,300 cargoes to customers, remaining a reliable supplier of liqueed natural gas that is helping to reduce carbon emissions and preserve the earth’s natural environment for future generations to enjoy. For centuries, this beautiful coastbound nation of Oman was a trade centre connecting different parts of the world through vibrant and ourishing commerce relations. Trade that supported lives in far lands. At Oman LNG, we continue that tradition of seafarers and commerce through bringing energy to many corners of the world. Oman Liqueed Natural Gas LLC (Oman LNG) is a joint venture company established by a Royal Decree in 1994 operating under the laws of the Sultanate of Oman. The company engages in the business of producing and selling liqueed natural gas (LNG), and its by-product, natural gas liquids (NGLs) and operates three liquefaction trains at its plant in Qalhat, serve in Ras al Jinz in the eastern region South Sharqiyah Governorate. of the country boasting one of the world’s largest breeding beaches for Hand-in-hand with our operations Greenback Turtles. comes a strong health, safety and environment performance. Our recent As a company our responsibility to our achievement of over 30 million man- staff, contractors and the community is hours without a Lost-Time Injury (LTI) is to provide a safe environment so that testament to our HSE excellence, and they can come to work and return an exemplary diligence and commit- home to their families, safely every day. ment to the safety of our people, environment, and communities where we Through our empowerment philooperate. Our processes meet the sophy, we continue to develop talent highest of ISO standards, which we are and help remove barriers to reach sucproud to maintain every year and our cess. Our aim is to develop all staff to ceaseless efforts to support the envir- their fullest potential. We support inonment through the sponsoring of country value through focused efforts various initiatives such as the Turtle Re- towards developing local talent and
stimulating local business ventures by enabling Small Medium Enterprises (SMEs), a major cornerstone of Oman’s economy, to ourish and providing equal opportunities to compete for all service contracts. The company is a corporate and social responsible organisation by maximising benets to the employees, stakeholders and community and has a well-designed alignment between sustainable social development and the business. From powering large industries, to keeping homes warm and the lights on, Oman LNG is your reliable energy partner.
Perpetual sustainable investments in the society of Oman Corporate Social Responsibility (CSR) has been an integral part of Oman LNG with a focused objective: to deliver tangible value to Oman and its people through social investment by capitalising on the country’s natural gas resource. The company allocates annually 1.5% net income after tax (NIAT) to various social investment and sustainable programmes; a commitment set when the company was founded. In addition, before the rst cargoes left the LNG plant, the company invested in sustainable development projects for the community which speaks volumes about the company’s business principles; that Oman LNG’s initial investment in social development began even before the production line was fully functional. Today, Oman LNG’s CSR programmes, delivered through Oman LNG Development Foundation, span the entire nation and contribute to the socioeconomic development of the country. Over the past nineteen years, the com-
pany’s social investment programmes have spanned the length and breadth of the country with thousands of projects ranging from healthcare and education to preserving the environment and road safety; reecting its sincere interest to embed the principles of social responsibility as part of its core existence. Through strengthening the cooperation between the public and private sector, the projects and programmes aim to supplement the national economy and ambitious
omanlng.com
oman-lng-l-l-c-
development plans implemented in the Sultanate. Oman LNG Development Foundation supports Oman LNG’s ambitious vision and dedication towards CSR. The Foundation champions private sector contribution to the development of Oman and its people, through CSR and citizenship, as an active contributor to social and societal welfare, and through proactively addressing community needs.
@OmanLNG
Oman LNG
omanlngllc
F E AT U R E S
Gearing up for IGRC 2020 Preparations are gathering pace for the IGU Research Conference 2020 with the theme Gas Innovations for a Sustainable Future. By Mark Blacklock Registration is now open for IGRC 2020,
every three years. IGRC 2020 in Muscat
the latest industry research and
which will be held in Muscat, Sultanate
is the 16th in this series of conferences
innovations which are critical to
of Oman, February 24-26, 2020, and
which are governed by the IGU Execu
the continued development of
there is an earlybird discount for those
tive Committee under the chairman
the industry and its contribution
registering before December 16.
ship of the IGU President.
towards economic and environ-
IGRC is the premier global
“We are very pleased that Oman
mental energy sustainability.”
forum devoted to presentation and
will be hosting IGRC 2020,” declares
IGU’s Secretary General, Luis
discussion of gas research, develop
IGU President Joo-Myung (Joe)
Bertrán Rafecas says that the role
ment and innovation, and attracts gas
Kang. “This important research and
of the IGRC has never been more
company executives, researchers and
innovation conference will gather
important or relevant: “It serves to
others from all over the world. It has
industry experts from around the
facilitate the discussion and debate
been held since 1980, normally once
world to discuss and showcase
around the opportunities and challenges of the industry as well as to display the technological developments becoming available to support our industry’s future. Oman has a longstanding relationship with IGU and we are honoured to support them as hosts for IGRC 2020.” Organisation and programme The conference is being organised by IGU Charter Member Oman LNG and will be held in the Oman Convention and Exhibition Centre which is located in the Madinat Al Irfan district between the airport and the city centre. The JW Marriott Hotel (five stars) is linked to the Convention Centre and the Crowne Plaza Hotel (four stars) is nearby.
Delegates to IGRC 2020 will have the opportunity of taking a technical tour to the Oman LNG plant in Sur.
20 Gearing up for IGRC 2020
The technical programme is being developed by IGU’s R&D and
F E AT U R E S
x The venue for IGRC 2020 is the Oman Convention and Exhibition Centre.
Gearing up for IGRC 2020 21
F E AT U R E S
IGU Events Director Rodney Cox (second left) and Oman LNG’s CEO Harib Al Kitani sign the contract for Oman to host IGRC 2020. They are flanked by Dr Hisataka Yakabe, Chair of IGU’s R&D and Innovation Committee (left) and Khalid bin Abdullah Al Massan, CEO of Oman LNG Development Foundation.
Innovation Committee under the
and advanced technologies.
Exhibition and technical tour
chairmanship of Dr Hisataka Yakabe
Following the momentum of the
of Tokyo Gas, Japan, in conjunction
plenaries, the technical sessions will
advanced gas technology equipment
with the National Organising
not only have common oral, poster and
and services by gas companies and
Committee and the professional
workshop sessions but will also include
manufacturers from around the world.
conference organiser Ubar.
a special session homing in on six
There will also be a technical tour to the
“Under the main theme of Gas
strategic subjects that will be of great
Oman LNG plant in Sur immediately
Innovations for a Sustainable Future,
relevance for delegates. Current and
before the conference on February 23.
we have established five major cate
compelling topics, such as decarboni
gories and relevant sub-topics for
sation and renewable natural gas, will
ted following the Call for Abstracts and
the Call for Abstracts reflecting current
be highlighted and notable experts in
the selected papers are expected to be
R&D trends around the world,” says
these fields are preparing interesting
announced on November 14. For the
Dr Yakabe. “We are very pleased
presentations and looking forward to
latest information check the website
with the number of top-notch
deep discussions.
and sign up for regular updates:
abstracts in diversified genres that have been submitted.”
“IGRC 2020 promises its participants
IGRC 2020 will feature an exhibition of
Conference papers are being selec
www.igrc2020.com. If you require
a unique experience that will excite
additional information please contact
and invigorate the senses,” declares
the IGU Events Director, Rodney Cox at:
sessions revolves around “solutions
Dr Yakabe. “We invite everyone to take
rcox1@outlook.com.au.
from today for the future”, and world-
part in IGRC 2020 and allow us to help
renowned speakers will present global
you realign your compasses towards
Mark Blacklock is the Consulting
perspectives on the future of the
the true north of a sustainable energy
Editor of International Systems &
energy mix, gas for transportation
future with gas.”
Communications Ltd.
The concept for the plenary
22 Gearing up for IGRC 2020
F E AT U R E S
Resilience of integrated energy systems There are a number of critical issues related to greater use of renewable energies in energy systems. By Gerhard Schmitz, Carsten Bode and Anne Senkel Energy systems of the future will be
services, such as low-temperature or
In the past, less consideration
characterised by a higher share of
high-temperature heat, should be
was given to the last aspect; however,
renewable energies with different
provided with which kind of energy?
several blackouts and disturbances
energy qualities, by new and different
And most importantly: will we need a
in power and gas grids in Germany
kinds of energy storage technologies
gas distribution system in the future?
and Austria but also in the USA
and, since renewable energies are fluc
Important criteria for assessing
tuating, by greater dynamic behaviour.
different energy system architectures
To match supply and demand quanti
over a representative period, for
tatively and qualitatively, new energy
example one year, are the:
Defining resilience
distribution concepts, that take differ
Environmental impact, especially
The term resilience is often used as a
ent energy grids like power, gas and
CO2 emissions;
directed attention to the resilience of energy systems.
synonym for the reliability of a system
district heating into consideration, will
Economy; and
but to show the difference between
be necessary in the future (see Figure 1).
Resilience of the system.
these two properties of a system,
Therefore, a number of new ques tions arise. Which system architecture should be preferred? In which form should the energy be stored? What size should energy storage units be? Where
vx Energy systems of the future will be characterised by a higher share of renewable energies.
should they be installed? Which energy
both should be explained in more detail. Reliability means a system’s ability to keep its functionality within a given tolerance band for a certain time. Values for reliability are usually failure probabilities. Resilience (from the Latin word resilire, to jump back) describes the
24 Resilience of integrated energy systems
F E AT U R E S
ability of a system to return to its designed stable state after leaving it due to a disturbance. Since the 1980s, this definition has also been applied to energy systems. However, most
Energy flow chart of an integrated energy system showing the interaction of different kinds of energy using various energy conversion technologies Transport, Transport,Conversion Conversion
Primary PrimaryEnergy Energy
End EndEnergy Energy
Conversion Conversion
Useful UsefulEnergy Energy
Electric ElectricMotor Motor
KIKI/ /PO PO
Heat Heat Pump Pump
LH LH
Chiller Chiller
CO CO
research focuses on a qualitative a quantitative assessment, the duration of the disturbance and its conse quences, the size of its impact, and any performance losses, which the system faces, have to be taken into consideration. A disturbance could be the break of a power transmission line
Renewable Renewable Primary PrimaryEnergies Energies Wind Wind Solar Solar Water Water Geothermal Geothermal Biomass Biomass Biogas Biogas
Non-Renewable Non-Renewable Primary PrimaryEnergies Energies
weather conditions or a malfunction of a component or a control device. To find a value for the resilience,
Electric ElectricStorage Storage
Power-to-Heat Power-to-Heat
Resistant ResistantHeater Heater
LH LH HH HH LH LH
Heat HeatTransformer Transformer
HH HH
Absorption AbsorptionChiller Chiller
CO CO
Engine Engine
KIKI/ /PO PO
Non-Renewables Non-Renewables Renewable RenewableGases Gases
Chiller Chiller
CO CO
Power Power Low LowTemperature TemperatureHeat Heat( (LH LH) )
Boiler Boiler
LH LH
High HighTemperature TemperatureHeat Heat( (HH HH) ) Cooling Cooling( (CO CO) )
Heat HeatPump Pump
LH LH
Absorption AbsorptionChiller Chiller
CO CO
Coal Coal Oil Oil Natural NaturalGas Gas Uranium Uranium
or a gas pipeline, long-lasting extreme
Large Large Scale Scale CHP CHP
Uranium,Coal, Coal, Uranium, NaturalGas Gas Natural
assessment of resilience. To implement
Power-to-Gas Power-to-Gas
Small Small Scale Scale CHP CHP
Thermal ThermalStorage Storage
Natural NaturalGas, Gas,Oil Oil
Natural NaturalGas Gas
Kinetic Kinetic/ /Potential PotentialEnergy Energy( (KIKI/ /PO PO) )
a characteristic variable is chosen which reflects the behaviour of the
Figure 1.
system’s functionality. In the case of a
band and then permanently
the different scales of consumers into
power grid, this can be the frequency
returning into it;
account and therefore the average
and/or voltage; in the case of systems,
The absorptive capacity is charac
number of people and industrial
where a fluid transports the energy,
terised by the maximum deviation
companies, who would be affected by
e.g. gas grids or district heating
of the characteristic variable from
the loss of service at the aggregated
networks, the enthalpy flow or the
its tolerance band; and
points of consumption, the resilience
transferred heat flow to the customer
The adaptive capacity is expressed
are recommended, respectively. If the
by the performance loss of the
characteristic variable remains within
system which is represented by the
the tolerance band, for example
area between the curve and the
50 ± 0.05 Hz in the case of a power
tolerance band.
grid, the system is deemed to be work
The combination of these three
ing in its designed operation mode. For the quantification, three aspects of resilience (see Figure 2) are taken into consideration: The restorative capacity is described
elements leads to the resilience index RI, the values of which will be between
indices are weighted by their energy consumption. Hence, a weighted mean
Behaviour of a system’s characteristic variable after a disturbance Characteristic Characteristic Variable Variable
0 (irresilient) and 1 (reliable).
Disturbance Disturbance
Since the physical values considered
Performance Performance Loss Loss Tolerance Tolerance Band Band
Set SetPoint Point
differ for each consumer in each grid, it Maximum Maximum Deviation Deviation
by the recovery time of the system
is necessary to combine several
which is the time difference
individual resilience indices into one
between first leaving the tolerance
overall index for each sector. To take
Recovery RecoveryTime Time Time Time
Figure 2.
Resilience of integrated energy systems 25
F E AT U R E S
are aggregated. The so- calculated heat
A model example of a complex integrated energy system Gas Consumer NW
demand is scaled to represent the needs Gas Consumer NE
Gas Source
gas boilers (and therefore gas consumers NE and SE) or a central CHP plant. For the
Electrolyser
Biomass Incineration Plant
of several houses supplied by individual
households supplied by the CHP plant,
Disturbance
a storage unit is integrated in the heating system. This decouples supply
Waste Incineration Plant
Gas Consumer SE Heat Consumer DHN
and demand and allows an efficient operation of the CHP plant in its set point, independent of the current heat demand.
CHP Plant
The power produced by the CHP Gas Heat Power
plant is fed into the power grid. Since the operation of the CHP plant is heatled, there have to be other power sup
Figure 3.
pliers in the grid: while a biomass plant
resilience index RIs is calculated which
ling complex integrated energy
and a garbage incineration plant pro
represents the resilience of each sector,
systems is the TransiEnt Library
vide the base load, several photovoltaic
taking into account each consumer.
(www.tuhh.de/transient-ee/en).
(PV) plants and wind turbines generate
To gain the overall resilience index of
In the following, the assessment of
power depending on the current solar
the integrated energy system, RIsys, the
resilience shall be demonstrated using
irradiation and wind speed. During
same approach is used to combine the
an exemplary integrated energy system
periods with high levels of renewable
three sector resilience indices.
(see Figure 3). This system consists of con
generation, an electrolyser will use the
sumers, producers and storage units
power to generate hydrogen which is
Modelling and simulation
which are connected by a gas grid, a
then fed into the gas grid.
The calculation of the curves of the
power grid and a district heating net
Using the TransiEnt library, a gas pipe
characteristic variables is carried out by
work (DHN). The different sectors are
line break was simulated by the authors,
means of system simulation. A suitable
coupled by a combined heat and
entailing full closure of the entire pipe
method for dynamic system simulation
power (CHP) plant and an electrolyser.
line string over a period of 14 hours.
is equation-based modelling. Object-
In the gas grid, one source supplies
This corresponds to the period during
oriented, acausal modelling languages
three consumers: one industrial cus
which the gas supply was shut down
like Modelica (www.modelica.org) help
tomer and two aggregated customers
due to an explosion at the Baumgarten
to structure a complex physical system.
which use the gas for heating. Further
gas hub in Austria in December 2017.
Additionally, different time scales must
more, the CHP plant takes gas from the
Contrary to existing quasi-stationary
be taken into account for different
gas grid.
simulations of the n-1 reliability of gas
parts of the energy system. In the case
A low-order physical model of a
systems, this simulation is performed
of a power grid, seconds are important
single-family dwelling is used for
dynamically and each of the integrated
whereas for gas and district heating
modelling the heat demand. Therein, all
sectors is assessed. Figure 4 (over)
grids, changes propagate in minutes or
heat losses and gains due to heat trans
shows the reactions of the character
hours. An example of a tool for model
mission, ventilation and solar irradiation
istic variable in each sector.
26 Resilience of integrated energy systems
NATURAL GAS REDUCES AIR POLLUTION FROM ROAD AND MARINE TRANSPORT WHEN IT REPLACES DIESEL. www.shell.com/roleofnaturalgas
F E AT U R E S
drop shortly after the disturbance,
Reactions of the variables due to the gas pipeline break
thermal consumer DHN’s temperature
400
Pressure (bar)
10 8 6 Consumer NW Consumer NE Consumer SE CHP Plant
4 2 00:00 Feb 4th
12:00
00:00 Feb 5th
12:00
00:00 Feb 6th
12:00
00:00 Feb 7th
Enthalpy Flow (MW)
12
Consumer NW Consumer NE Consumer SE CHP Plant
300
supply for two hours, even when the
100
CHP plant is not operating. When the 12:00
00:00 Feb 5th
Time
12:00
00:00 Feb 6th
24
00:00 Feb 7th
12:00
Heat Flow (MW)
22
Consumer NE Consumer SE Consumer DHN
16
system can be observed to recover Consumer NE Consumer SE Consumer DHN
250 200
12:00
00:00 Feb 5th
12:00
00:00 Feb 6th
12:00
00:00 Feb 7th
00:00 Feb 4th
disturbance in the gas sector. 12:00
00:00 Feb 5th
12:00
00:00 Feb 6th
12:00
00:00 Feb 7th
12:00
the entire simulation. The observable
111.0
deviations from the set point of 50 Hz
50.02
Voltage (kV)
Frequency (Hz)
110.5 50.01 50.00 49.99
can be traced back to the CHP plant
110.0
turning on and off. When looking at the
109.5
voltage, no noticeable change can be
49.98 49.97 00:00 Feb 4th
12:00
00:00 Feb 5th
12:00
00:00 Feb 6th
12:00
00:00 Feb 7th
12:00
109.0 00:00 Feb 4th
Time
12:00
00:00 Feb 5th
12:00
00:00 Feb 6th
12:00
00:00 Feb 7th
12:00
Time
Figure 4.
Due to the closure of the pipeline,
In the power sector, the frequency stays within the tolerance band during
Time
Time 50.03
cities of the buildings (and the buffer still continues after the end of the
100 50
12:00
gradually. Because of the heat capa storage), the reheating of the buildings
150
0 00:00 Feb 4th
gas pipeline is repaired and the CHP plant resumes operation, the heating
350 300
Room Temperature (ºC)
12:00
Time
18
caused by the installed buffer storage, which is designed to keep up the heat
200
0 00:00 Feb 4th
12:00
20
decline is delayed. This behaviour is
observed during the disturbance as well. Since the CHP plant is operated heat-led, the power sector is designed not to rely on the CHP plant and the shutdown of
sumer SE is then shut down right after
the plant therefore does not affect the
only one route remains for the gas to
the CHP plant also due to the low pres
power grid. Of course, this requires
flow from the source to the consumers
sure. Enthalpy flow, i.e. the mass flow
reliable energy sources or storage units
and thus the pressure losses increase
multiplied by the gross calorific value
for the power grid. If it is largely supplied
strongly. Therefore, the gas pressure
of the gas, is chosen as the character
by volatile renewable power producers,
declines rapidly at the start of the dis
istic variable so that the shutdown of
the situation could change.
turbance (February 5th, 4 am) and does
the consumers can be accounted for.
not recover before the gas pipeline is
In the heating system, shutting
Assessing resilience
fixed at 6 pm. Right after the initial
down the sole heat suppliers, i.e. the
The following resilience assessment
pressure decrease, a smaller pressure
CHP plant for thermal consumer DHN
evaluated the enthalpy flows within
increase can be observed since the CHP
and the gas boiler for thermal con
the gas sector, the transferred heat
plant shuts down due to the delivered
sumer SE, leads to temperature drops
flows in the heat sector and the
gas pressure falling below the plant’s
in those two. While thermal consumer
frequency and voltage in the power
minimum operating pressure. Gas con
SE experiences a drastic temperature
sector. Table 1 (over) shows the
28 Resilience of integrated energy systems
Proven, practical and lowest cost liquefaction ▪
Patented configuration, powered by Baker Hughes-GE’s LM9000 with Air Products’ AP-C1™ liquefaction plants.
▪
Significant economies of scale with 12 mtpa of liquefaction capacity per LIQUI-MAX™ Vessel.
▪
Contracted with TechnipFMC for the pre-FID engineering work. Prior to FID the LIQUI-MAX™ will receive a Capex and Performance wrap.
▪
The LIQUI-MAX™ facilitates low-cost adaptation for off-balance sheet financed, plug-and-play liquefaction tolling stations anywhere in the world. ,
The world’s most experienced FLNG execution team ▪
The selected team of contractors have completed Prelude, Petronas Satu and is delivering ENI’s Coral South project.
▪
The Main Pass Energy Hub™ LNG export project is located in the eastern Gulf of Mexico, with favourable access to gas supplies.
▪
Logistics savings of about $60 million per annum for offtakers due to reduced LNG carrier turnaround time compared to inland terminals.
▪
Site previously approved as an LNG import facility under the Deepwater Port Act. The export project will be permitted by the same team.
▪
DOE approval for the export of 24 mtpa of LNG, target export start-up is mid-2025.
GLS is negotiating an anchor offtake agreement at a tolling fee of $2.16 per MMBtu for the first 12 mtpa
Visit us at www.gls-ltd.com
F E AT U R E S
resilience indices for the gas and ther
The resilience indices of the indivi
sation values chosen. On the one hand,
mal consumers and the three sectors.
dual consumers are weighted by their
this poses the risk of comparing indices
energy consumption during the dis
that are not comparable. On the other
of the gas consumers NE and NW
turbance and then aggregated into
hand, it provides the flexibility to set the
equal 1 since the enthalpy flows to
one sector resilience index for each
tolerances according to the systems
these points are not affected by the
sector. Since the consumption of
under consideration. Furthermore,
pressure drop caused by the pipeline
consumer NE accounts for 47% of the
different system configurations (all-
interruption. However, gas consumer
gas sector and 65% of the heating
electric, all-gas, etc.) and weak spots as
SE and the CHP plant have low resili
sector, the sector indices for the gas
well as corresponding improvements
ence indices since the enthalpy flows
and heating grid are also fairly high:
such as installing additional storage
were interrupted for almost the entire
0.72 and 0.78, respectively. As expec
units, producers or pipelines can be
disturbance period. In the recovery
ted, the resilience index of the power
assessed and the resilience gain or loss
phase, the enthalpy flow at gas con
grid equals 1, since the net frequency
achieved can be judged in combination
sumer SE is used to directly heat the
and the voltage each stayed within
with the necessary additional costs or
supplied buildings, while the heat
their respective tolerance band.
CO2 emissions. As a result, a relationship between changes in capital spend or
As expected, the resilience indices
produced by the CHP plant reheats
The overall resilience index of the
the thermal consumers as well as the
integrated energy system is calculated
released emissions and subsequent
installed buffer storage. The CHP plant
by summing the weighted sector indices.
resilience gains can be established.
thus has a smaller resilience index due
Winter operation was considered, thus
to a longer recovery time compared
the gas and heating grid have a high
resilience of energy systems with a
to gas consumer SE.
share of the overall energy consump
high share of volatile renewables is to
This relation changes in the heat
tion in the period considered leading
be investigated more in-depth. We
sector. The DHN supplied by the CHP
to an overall resilience index of 0.78.
think an integrated energy system,
plant contains a buffer storage unit,
Research in this field is ongoing; the
which relies on various technologies
allowing it to sustain its heat supply for
Continuing research
from the gas, heat and power sector, is
longer after the disturbance compared
Different energy systems can now be
more resilient compared to a pure all-
to thermal consumer supplied by gas
examined and compared in terms of a
electric energy system. Further detailed
consumer SE. However, since the buffer
quantified resilience. Nevertheless, as
information, the latest developments
storage was designed to bypass only
with many evaluation methods, the
and publications including a more
two hours of CHP plant downtime, the
evaluation conditions are crucial; the
detailed presentation of the resilience
resilience index of the DHN is also
absolute values of the resilience indices
index can be found on our homepage:
rather low.
depend on the tolerance and normali
www.tuhh.de/transient-ee/en.
c Table 1.
Resilience indices for the integrated energy system during the pipeline break
Professor Gerhard Schmitz is the Head of the Institute of Engineering Thermo dynamics at Hamburg University of
RINW
RINE
RISE
RICHP/DHN
RIS
Gas
1
1
0.20
0.17
0.78
Heat
-
1
0.21
0.24
0.72
of IGU’s R&D and Innovation Committee.
Power
-
-
-
-
1
Carsten Bode and Anne Senkel are
Sector
Technology (www.tuhh.de) and a member
Research Associates in the Institute.
30 Resilience of integrated energy systems
F E AT U R E S
Improving resilience and reducing emissions in residential housing ATCO’s natural gas experts work closely with industry partners to provide environmentally sustainable solutions. By Gregory Caldwell Canada is continually working towards
customers and create solutions that
AISIN has been selling its gas heat
reducing emissions, growing the eco
support the transition to a lower-
pumps since 2009.
nomy and building its resilience to a
emitting energy system. We believe
mCHP is an energy efficiency
changing climate. With the help of the
natural gas will be part of the energy
technology that uses natural gas to
provinces, territories and consultation
mix for low-carbon homes and build
generate both heat and electricity for
with Indigenous Peoples, the Pan-
ings. Since 2016, ATCO has been evalu
homes and other small buildings.
Canadian Framework on Clean Growth
ating micro combined heat and power
mCHP captures the excess thermal
and Climate Change1 was created.
(mCHP) technology and working with
energy that would normally be lost
To ensure Canadian businesses stay
one manufacturer in particular, AISIN
during power generation and instead
competitive in a low-carbon economy,
Seiki Co., Ltd. AISIN started manu
uses it to heat a home or water,
this plan aims to drive innovation and
facturing and selling the mCHP unit
creating greater efficiencies, lowering
growth by increasing technology
in 2011 in Japan and is now seeking
utility costs and reducing greenhouse
development and adoption. The four
overseas markets. In North America,
gas emissions. Since mCHP generates
main pillars of the Pan-Canadian
electricity exactly where it is needed, it
Framework are: pricing carbon pollu
provides reliable, low-emitting energy
tion; reducing emissions across the
production that gives better control of
economy; adapting to the impacts of
the cost and supply of power now and
climate change and building resilience;
in the future.
and taking action to accelerate inno
The mCHP unit can help reduce CO2
vation, support clean technology and
emissions by up to 31% and can help
create jobs.
the customer achieve net-zero elec
At ATCO, which provides integrated
tricity and even greater emission
energy, housing, transportation and
reductions because mCHP is compati
infrastructure solutions, it is a priority
ble with conventional renewables such
to ensure we continue to understand
as solar panels.
the evolving energy needs of our
For the past few years, we have been installing mCHP units in resi
1 Pan-Canadian Framework on Clean Growth and Climate Change: http://publications.gc.ca/ collections/collection_2017/eccc/En4-294-2016eng.pdf
Two 1.5 kW AISIN mCHP units generating both electricity and heat help make the Effect Home office building completely off grid.
32 Improving resilience and reducing emissions in residential housing
dential homes in the Province of Alberta to help Albertans reduce their greenhouse gas emissions and save on
F E AT U R E S
c The low-carbon Brookfield home is in a developing neighbourhood in Edmonton, Alberta. x Buffer tanks filled with water store thermal energy from the mCHP unit for use in the home.
their utility bills, which in turn helped
solar PV and six 6.6 kWh lithium-ion
it has two mCHP units makes it very
us better understand the potential of
batteries. This office building relies
resilient – even if one mCHP unit goes
this technology and how mCHP units
principally on natural gas and is the
down the other with the solar and
can benefit markets in Alberta.
first commercial building in Edmonton,
batteries will run the building.
Alberta to be completely off the Effect Home
electrical grid. This and the fact that
With the new modern office build ing, the community has been revitali
We had the opportunity to work with Effect Home Builders, a leader in energy-efficient residential construc tion, as they were converting a 1940s era two-storey building into a commer cial office space. The renovation was funded by Canada’s Natural Gas Innovation Fund and included multiple energy efficiency upgrades including: extensive exterior wall and roof treatment to improve insulation and air-tightness; window and door replacement; and complete heating system renewal by implementing two 1.5 kW AISIN mCHP units, 4.8 kW of
Improving resilience and reducing emissions in residential housing 33
F E AT U R E S
envelope and has an upgraded
HOW MICRO COMBINED HEAT AND POWER UNITS AND SOLAR ARRAYS WORK TOGETHER NATURAL GAS AND SUNLIGHT PROVIDE HEAT AND ELECTRICITY
mechanical system that features a 1.5 kW mCHP, a drain water heat recovery, solar panels and natural gas appliances. The home is extremely well insu lated so it will cool very slowly even in extreme cold should electricity/gas be
A solar array generates electricity on sunny days.
lost. Additional resilience is provided by the solar installation and an electric coil in the furnace, which mean that
1
the home and water can be heated electrically with solar assist if the mCHP goes down. The home emits 72% less carbon than a comparable home built to industry code with a conventional 4
3
5
heating and electrical system. Additionally, it has 50% lower utility costs, saving the homeowner up to
2
C$1,500 ($1,155) annually. Two micro combined heat and power (MCHP) units use natural gas to generate electricity when sunlight is not available or the building cools.
Currently, we are monitoring the
A control system routes electricity from both sources to either:
home for a year to analyse the energy
Outlets and lights throughout the building as needed
continue to monitor the home’s energy
Heat created as a byproduct of power generation is used to heat the building.
Batteries for storage of excess electricity
used. After it is sold, the intent is to output with homeowners now occupying it. Our commitment to sustainability extends beyond the materials we choose; it’s about how we solve
How micro combined heat and power units and solar arrays work together.
challenges in a way that benefits our customers, as well as the environment
sed and there’s an 80% decrease in CO2
agency funded a joint partnership
and communities in which we work
emissions compared to the original
between ATCO, Brookfield Residential
and live.
building (view this link for a video tour:
and Southern Alberta Institute of
https://youtu.be/CyJ6xdLQSt4).
Technology (SAIT) to build an afford
Greg Caldwell is the Director of
able low-carbon home. This beautiful
Innovation at ATCO (www.atco.com)
Low-carbon home
1,540 ft2 (143 m2) detached single-
and leader of the study group on cross-
In January 2018, the Western Economic
family home is fuelled by natural gas,
cutting technologies of IGU’s R&D and
Diversification Canada development
built with a high-performance building
Innovation Committee.
34 Improving resilience and reducing emissions in residential housing
THIS IS WHAT WE DO Distributing Energy Worldwide
www.bbenergy.com
F E AT U R E S
Unveiling gas opportunities in Latin America and the Caribbean To coincide with the Latin America and Caribbean Gas Conference being organised by IGU, OLADE and ARPEL in partnership with EnergyNet in Lima, November 14-15, this Wood Mackenzie report takes a look at regional gas market developments. By Mauro Chavez and Rodrigo Rosas The common theme across Latin
stimulated its gas markets and in Brazil,
domestic needs, it creates an oppor
America’s gas markets over the next
gas from the prolific pre-salt fields is
tunity for exports.
few years is one of abundance. Supply
also spurring demand.
looks likely to outstrip domestic
In Mexico, energy reform created an
As supply – especially from
opportunity for Permian producers to
demand. Production in Argentina is
Argentina’s giant Vaca Muerta play –
ship US gas into Mexico. Entrepreneur
growing, energy reform in Mexico has
may be more than enough to sate
ial LNG developers are now seeking opportunities that would see Mexico
South America: main gas transmission pipelines and gas formations FALCON MARACAIBO
Ballena Barranquilla 20 Cartagena
B.Bermeja
Cali
Quito
Neiva
Margarita
GUTRICO-ORIENTE
programme launched by the current
Golfo de Paria
Anaco Puerto Ordaz
Bucaramanga
administration aims to increase the
VENEZUELA
Bogotá
Coast markets. And in Brazil, the “new gas market”
CARIACO-PARIA
Caracas
Morón Maracaibo Ulé Casigua La Fría El Piñal
act as a gateway to thirsty Pacific
competitiveness of the Brazilian gas
Pitalito
COLOMBIA
ECUADOR
URUCU
Coari
market, opening up opportunities for
Manaus
Urucu Fortaleza
PERÚ CAMISEA
Recife
BOLIVIA
Lima
mergers and acquisitions and for gas commercialisation.
BRASIL
Salvador
FOOTHILLS
La Paz/BOOMERANG
Pisco
Cochapamba
Arequipa Ilo
Río Grande
Est. Chiquitos Mutún Corumbá 18
Oruro
Tocopilla
9
Mejillones
Potosí Tarija Tupiza Yacuíba Villazón PARAGUAY Madrejones La Quiaca 1011 Durán Bermejo 8 12 Cornejo Asunción Miraflores
NOROESTE
Antofagasta
CHILE
Córdoba
Concepción
7 6
La Mora
Rosario
Buenos Aires
Loma la Lata
Lagoa Parda Vitória
CAMPOS Rio de Janeiro São Paulo Curitibia
SANTOS
Florianopolis Uruguaiana 14
Porto Alegre
Paysandú Casa Blanca
15 16
CUYANA
Belho Horizonte
Posadas
Paso de los Libres
ARGENTINA
Quillota
Santiago
Mexico
Campo Grande
Ciudad del Este
Quimili 13 Resistencia
Tucumán
Brasilia
Cuiaba 19 San Matías
URUGUAY 17
Montevideo
NEUQUÉN Bahía Blanca
significant move and required making a number of constitutional amendments to change the industry. Initially, reform focused on opening up the upstream sector, but gas had a promoted in the domestic sector. As
SAN JORGE
Projected gas pipelines Gas fields
of energy reform in 2013. It was a
role to play as well, with its use being
Existing gas pipelines Gas pipelines under construction
Mexico kicked off a major programme
AUSTRAL El Cóndor Posesión 4 3 Pla. Dungeness Cabo Negro 5 2 San Sebastián 1 Bandurrias
Source: Latin American Energy Organisation (OLADE)
reform got under way in 2013 and 2014, Mexico needed to import more LNG and expand its pipeline network. Pipeline capacity of 13 bcf/d (360
Figure 1.
36 Unveiling gas opportunities in Latin America and the Caribbean
F E AT U R E S
mcm/d) was built across the US-Mexico
However, at present there is still a
domestic pipeline network is built
border. At the time, total Mexican
need for LNG imports to meet demand.
out and extends to the country’s major
demand was around 6 bcf/d (168
This is because there has been a lag in
demand centres.
mcm/d). As the pipeline network grew,
piped imports, as the import links
so too did piped imports from the US.
cannot be fully utilised until Mexico’s
z There are plans to add liquefaction capacity to Mexico’s Costa Azul LNG regasification terminal in northern Baja California.
According to Wood Mackenzie’s analysis, over the next decade, piped
Central America In Panama’s Costa Norte project, a joint venture of AES Panama and Inversiones Bahía which started up in 2018, a 381 MW power plant is the anchor customer for an onshore regasification terminal with a capacity of 1.5 mtpa (2 bcm) at Isla Telfers, Colón. The terminal has been designed to make small-scale deliveries to a range of other customers, which were due to start at presstime. El Salvador has taken the FSRU route for its gas-to-power project in Acajutla promoted by Energía del Pacífico, which is
An artist’s impression of how El Salvador’s gas-fired power plant in Acajutla will look when completed in 2021. It will supply 30% of national demand.
backed by Invenergy and Quantum Energy. The project is expected to be the lowest cost thermal generator in the country which is currently reliant on
heavy fuel oil-fired generators. Due for start-up in 2021, BW LNG will supply the FSRU and the 378 MW power plant will ultimately supply 30% of national demand.
Unveiling gas opportunities in Latin America and the Caribbean 37
F E AT U R E S
gas will eventually displace LNG in
terms to prevent CFE having to pay
are a stern warning to operators
the country’s supply mix.
such penalties.
from the government. We also believe
Today, the Mexico gas market
This has raised questions regarding
most of the pipelines will be oper
reform faces a numberof challenges –
the fate of the pipelines. CFE has
and many of those are related to
requested international arbitrations on
By 2020, we forecast an increase
domestic pipeline infrastructure.
seven of the planned links, although a
of 8.3% in US piped imports to Mexico,
resolution may be reached before
reaching 5.7 bcf/d (160 mcm/d).
While the country’s energy reform has generally been successful, legal challenges and local opposition
proceedings get under way. Based on our assessment, it is
ational by the end of 2019.
Gas prices will continue to decline as the delayed pipelines start
appears to be the new normal. Major
highly unlikely that the Wahalajara
operating. We expect an average price
backbone pipeline expansions,
corridor – a pipeline linking the
of $4.69 per million Btu for 2019,
originating in southern and western
prolific Waha play in the USA’s
reflecting the critical constraints that
Texas, have faced costly, months-
Permian basin with Guadalajara in
some regions are suffering, such as the
long delays.
Mexico – will be operating until the
Yucatán Peninsula. There will be signs
end of 2019.
of improvement at the end of the year.
Mexico’s President Andrés Manuel López Obrador has made public his
On the other side of the country,
Looking ahead, Mexico may
displeasure at the Federal Electricity
even though construction of the Sur de
experience a slowdown in major
Commission (CFE) having to pay
Texas pipeline is completed, the line
pipeline expansion and focus instead
private pipeline operators for non-
has been idle, waiting for CFE to
on developing regional markets. In this
operational contracted infrastructure.
acknowledge its completion.
sense, as regional markets continue to
These payments are required even
While it is unclear whether the
develop, Baja will be the first state to
when delays are due to circumstances
arbitration process prevents the
re-export US gas as Asia-bound LNG.
beyond the companies’ control. He
pipelines commencing operations,
By mid-2025, we expect the Costa Azul
recently proposed revising contractual
we believe the delays in start-up
liquefaction project to be online with a
Caribbean In the Caribbean, Trinidad and Tobago has been an LNG exporter since 1999 and its four-train Atlantic plant shipped 12.23 mt (16.6 bcm) in 2018 making it the world’s number eight exporter. The Dominican Republic and Puerto Rico are long-standing medium-scale LNG importers for gas-to-power projects, and Puerto Rico recently started up a second project with the part conversion of the San Juan plant from oil to gas. They were joined by Jamaica in 2016, while Curaçao is looking at imports. Jamaica Public Service (JPS), the country’s electricity utility, switched from fuel oil to gas at the 120 MW Bogue
power plant in Montego Bay on the north coast under a deal with New Fortress Energy (NFE). The supply chain involved an FSU, a shuttle tanker and an onshore regasification plant. JPS and NFE are now expanding the use of gas and have replaced the FSU with an FSRU on the south coast. Golar Freeze with a capacity of 3.6 mtpa (4.9 bcm) was stationed offshore Old Harbour Bay at the end of 2018 and delivered its first gas in March 2019. In addition to Bogue via the shuttle tanker, it is supplying the new 190 MW Old Harbour Bay power plant by pipeline. From 2020 it will supply a 150 MW
38 Unveiling gas opportunities in Latin America and the Caribbean
combined heat and power plant being built for the Jamalco bauxite company in Clarendon. NFE also plans to develop the Jamaican southern coast facility into a bunkering hub. Curaçao’s water and power company, Aguaelectra, is also looking at switching from fuel oil to gas and there is a proposal for an LNG terminal at the deepwater port of Bullen Bay. This is tied to the refurbishment of the Isla oil refinery for which the government is seeking a new operator and investor when the current contract with Venezuela’s PDVSA expires at the end of 2019.
Transportation and distribution of natural gas 3,200 km of pipelines. 4.3 million users, nearly 40% of the domestic market. LNG More than 400 Mpcd An strategic hub for the Colombian and the international LNG markets. Production and distribution of electrical energy Costumers: 367,258 Networks: 26,543 km Integrated solutions for the industry Sustainable energy markets, better quality of life and boosting development. This is our commitment. This is our passion.
3,500 employees: Colombia-Peru
Dehydration capacity: 210 Mpcd Compression capacity: 18,100 HP Promisol electricity generation capacity: 42 MW Non-banking finance Loans granted: 2,154,648 Number of users: 2.8 million Portfolio: USD 211 million
F E AT U R E S
ramp-up period of six months –
eration mix. On the industrial side,
Escobar LNG regas terminal for LNG
recording re-export flows of 300 mcf/d
with new infrastructure reaching areas
imports during the winter season (April
(8.4 mcm/d) in 2026 and onward.
without previous access to gas and the
to September).
In the long term, we expect Mexico’s
economic benefits compared to fuel oil
The Vaca Muerta is spurring a host
gas demand to grow at 1.4% (com
and diesel, demand will increase by
of new infrastructure projects, such as
pound annual growth rate) in the
18% in 2030.
the Neuquén-San Nicolas gas pipeline,
period to 2040. The country’s power
new industrial projects and cheaper
and industrial sectors drive this growth,
Argentina
jointly representing 86% of total gas
Turning to Argentina, production
demand by 2040.
from the vast Vaca Muerta shale play
in Vaca Muerta’s liquids window is also
continues to reshape not only the
reflected in cheap associated gas
country, a wave of new, highly-efficient
country’s domestic gas market, but
lowering breakevens for operators. In
combined-cycle power plants are
also its gas trade with its neighbours –
terms of volumes, given Vaca Muerta’s
nearing completion, boosting gas
especially Chile – in the short term.
potential, neither Argentina’s demand,
demand in the power generation
In October 2018, pipeline exports to
nor that in the other Southern Cone
sector to 4 bcf/d (112 mcm/d) in 2021.
Chile restarted. The floating storage
countries, will soak up all the possible
and regasification unit (FSRU)
gas output. It is this lack of domestic
threat in highly-cost competitive
Excelerate Exemplar, located in Bahía
demand, particularly in the summer
renewables as gas, wind and solar
Blanca, sailed off as for now Argentina
season, that is supporting Argentinian
compete for a slice of Mexico’s gen
is self-sufficient, requiring just the
LNG export projects.
As low-cost gas arrives in the
Yet power burn faces a considerable
Argentina exported its first LNG in June 2019 from Tango FLNG in Bahía Blanca.
40 Unveiling gas opportunities in Latin America and the Caribbean
gas for customers. On the upstream side, investment
F E AT U R E S
2024, and could grow to as much as
Argentina’s counterseasonal supply surplus enables LNG exports 80 10 mmtpa 2mmtpa
70 60
Many major LNG portfolio players
2mmtpa High case flows available
are already present in the Vaca Muerta
Highflows caseavailable flows available Base case
60 50 mmcmd mmcmd
10 million tpa by 2030.
10 mmtpa
80 70
too. Malaysian national oil company
Base case flows available
50 40
Petronas is participating via a joint
40 30
venture with YPF, while Chinese giant
30 20
CNOOC participates indirectly through
20 10
its subsidiary, Pan American Energy.
Ja n20 Ja n 21 Ja n22 Ja n23 Ja n24 Ja n25 Ja n26 Ja n27 Ja n28 Ja n29 Ja n30 Ja n31 Ja n32 Ja n33 Ja n34 Ja n35 Ja n36 Ja n37 Ja n38 Ja n39 Ja n40
10 0
Meanwhile, Qatar Petroleum recently -4 0
has shown interest in Argentina, buying
Ja n
Ja n
-3 9
-3 8
-3 7
Ja n
Ja n
Ja n
-3 5
-3 6
-3 4
Ja n
-3 3
Ja n
Ja n
-3 1
-3 2
Ja n
-3 0
Ja n
-2 9
Ja n
-2 8
Ja n
-2 7
Ja n
-2 6
Ja n
-2 5
Ja n
Ja n
-2 3
-2 4
Ja n
Ja n
21
-2 2
Ja n
Ja n
Ja n
-2 0
0
Source: Wood Mackenzie Southern Cone Gas and Power Service
a stake in ExxonMobil’s business unit in
Figure 2.
the country; it is also partnering in an
In June 2019, Argentina became an
Associated gas from Vaca Muerta
offshore exploration venture. Chevron,
LNG exporter, with the first cargo from
will represent 15% of Argentina’s gas
Shell and Total are also all active players
the small-scale (500,000 tonnes per
production by 2024, and other projects
in the Vaca Muerta. An LNG facility
annum/0.68 bcm) Tango FLNG vessel.
in the condensate and dry gas window
would offer not only an outlet for
The country’s rising gas production,
with breakevens below $3 per million
Argentinian gas production, but also
coupled with thirsty Asian markets,
Btu will enter into full development
create more diversity in their portfolios.
eager for LNG, is creating an oppor
in the upcoming years.
tunity for more LNG facilities and an expanding export base.
For buyers too, Argentinian LNG
Supported by the Vaca Muerta,
offers a new supply source away from
Argentina’s production in the
the major growth centres. The season
Neuquén basin will ramp up over
ality of its output could be also seen
increasing seasonality, and peak
the next few years. If this increased
as a virtue for Asian utilities that are
potential LNG production in Argentina
production is channelled towards
looking to contract additional LNG
during the southern hemisphere
LNG exports, LNG production could
during peak demand in the northern
summer coincides with strong winter
potentially reach 6 million tpa in
hemisphere winter.
Global LNG demand is showing
demand from utilities in Asia. This seasonal dynamic could attract Asian
Projected gas demand in Brazil to 2040 by sector
buyers and presents a strong economic case for Argentinian LNG (see Figure 2).
200
Argentina as a location for lique
160
0
9
-4
-4 Ja n
9 -3
Ja n
8 -3
Ja n
7 -3
6 -3
Ja n
5 -3
Ja n
4 -3
Ja n
3 -3
Ja n
2 -3
Ja n
1 -3
Ja n
0
Ja n
8
-3 Ja n
7
-3 Ja n
6
-3 Ja n
5
-3 Ja n
4
-3 Ja n
3
-3 Ja n
2
-3 Ja n
1
-3
0 -3
Ja n
9 -2
Ja n
8 -2
Ja n
Ja n
7 -2
6 -2
Ja n
-2
Ja n
Ja n
-2
-2
Ja n
5
Power (Dry)
4
Commercial
NGPP Consumption
3
Industrial
Others
2
Transport
Residential
Source: Wood Mackenzie Southern Cone Gas and Power Service
Figure 3.
Ja n
0
-3 Ja n
9
-3
-2
Ja n
8 -2
Ja n
7 -2
Ja n
6 -2
Ja n
Ja n
5
4
-2
-2
Ja n
3 -2
Ja n
2 -2
Ja n
Power (Average)
-2
0
Ja n
20
1
0
40
Ja n
mmcmd
-2
Ja n
-2
60
1
80
0
Ja n
overall cheaper alternative to US LNG.
20
120 100
-2
factors help make Argentinian LNG an
40
140
Ja n
Panama Canal congestion. These two
60
0
do not have to contend with potential
80
180
160
-2
Asian markets are far lower and they
100
200
Ja n
shipping costs to potentially lucrative
120
mmcmd
advantages over the US Gulf Coast –
140
Ja n
faction plants also has a number of
180
Power (Average)
Transport
Industrial
Commercial
Residential
Others
NGPP Consumption
Power (Dry)
42 Unveiling gas opportunities in Latin America and the Caribbean
F E AT U R E S
Brazil
Brazil’s projected gas supply to 2040 by source
In Brazil, ongoing energy reform will result in a reduction of Petrobras’s
160 140
footprint in the gas market as the
120 mmcmd
company has committed to divest its transport and distribution assets. The rationale behind the move is to
100 80 60 40
promote competition in the Brazilian
20
Domestic Production
consumers, rather than selling their
LNG
0
9
Ja n
-4
8
-3 Ja n
7
-3 Ja n
6
-3 Ja n
5
-3 Ja n
4
-3 Ja n
3
-3 Ja n
2
-3 Ja n
1
-3 Ja n
0
Ja n
-3
9
-3
8
Ja n
Ja n
Ja n
Flows from Bolivia
Flows from Argentina
Source: Wood Mackenzie Southern Cone Gas and Power Service
gas production to Petrobras, which then acts as an aggregator.
-2
7
ducers can also directly supply gas
-2
6
-2 Ja n
5
-2 Ja n
4
Ja n
-2
3
-2 Ja n
2
-2 Ja n
Ja n
-2
0 -2
-2 Ja n
Ja n
1
0
gas market, so other pre-salt pro-
Figure 4.
Gas demand has fallen in recent
We believe that the transition to a
and 4). Nevertheless, the Brazilian
competitive market will take at least
years due to a two-year recession in
market will represent a challenge for
five years, as there are many supply
2015-16 and an expansion of hydro
LNG suppliers due to its strong
agreements with gas distribution
and renewables. This, together with
hydropower performance causality,
companies and thermal power plants
higher pre-salt production, led to
and the stochastic nature of hydrology.
that will remain in force in that period.
Petrobras ending the lease of one of its
In the meantime, the negotiation of a
three FSRUs in 2017. However, with the
Mauro Chavez is a Principal Analyst
new contract for Bolivian gas supplies
increasing capacity additions of thermal
covering Latin American Gas and LNG
will be the main spur for competition
power plants, we still see Brazil as one
and Rodrigo Rosas is an Analyst covering
in the centre-west, south-east and
of the major growth markets for LNG
Mexico Gas and LNG, both with Wood
south of Brazil.
demand in Latin America (see Figures 3
Mackenzie (www.woodmac.com).
New Brazilian LNG-to-power projects An import terminal serving a new 1.5 GW power plant is set to enter service in Barra dos Coqueiros, Sergipe State in January 2020. Centrais Elétricas de Sergipe (CELSE) is developing the $1.74 billion project. CELSE is a joint venture between EBrasil and Golar Power (itself a joint venture of Golar LNG and Stonepeak Infrastructure Partners). The project will use the Golar Nanook FSRU with a capacity of 5.5 mtpa (7.5 bcm). This will be followed by a further new terminal and two power plants at Açu, Rio de Janeiro State, promoted by Gás Natural Açu, which is a joint venture of Prumo Logística and BP, and Siemens. BW LNG will supply the BW Magna FSRU with a capacity of 5.6 mtpa (7.6 bcm). The first 1.3 GW power plant representing an investment of $1.1 billion is due to start up in 2021 and the second 1.7 GW plant in 2023. When completed, Açu will be the biggest and one of the most efficient gas-fired power facilities in Latin America.
The BW Magna FSRU will serve the Açu project in Brazil which is due to start up in 2021
Unveiling gas opportunities in Latin America and the Caribbean 43
NGC – A valued partner in energy The National Gas Company of Trinidad
devise feasible strategies for bringing more
Supporting the country
and Tobago Limited (NGC) is far from the
gas to market. At the same time, the Company
through growth
company it was 44 years ago. Change –
has been in dialogue with downstream
NGC and its subsidiaries have been an
both reactive and anticipatory – has been a
customers to align supply with demand.
anchor of national growth for over four
cornerstone of business strategy. Whereas in
decades. As the business landscape changes,
its early history the Company was primarily a
Supporting energy sustainability
the Group has had to evolve with it to
midstream player, today, NGC leads a Group
The world today is facing a shared existential
continue generating value for the country.
of Companies with profitable investments
threat in the form of climate change. For its
along the entire value chain. Through
contribution to greenhouse gas emissions,
programme, a campaign is unfolding to take
subsidiaries and investments, NGC is now
the energy sector must accept its share of
the business beyond Trinidad and Tobago.
engaged in industrial site and port develop
the burden of change. As part of the system,
Since 2015, the Company and Group sub
ment, natural gas liquids (NGLs) processing
the NGC Group proactively embarked on
sidiaries have signed partnership agreements
and export, energy marketing and trading,
a programme of energy efficiency (EE) and
with state entities in Venezuela, Grenada,
compressed natural gas (CNG) marketing as
renewable energy (RE) initiatives. These
Jamaica, Ghana, Tanzania and Mozambique,
well as upstream exploration and production.
include education campaigns, RE industry
while advancing discussions on opportunities
development, introduction of an Energy
in Guyana, Chile and the USA.
For this state enterprise, underpinning every business objective and growth initiative
Services Company (ESCO) pilot project and
is a desire to be of service as a valued partner
a lobby for action at the national level.
in energy.
The Group views this clean energy
Astride changes in NGC’s domestic work
In April 2019, the Company extended this internationalisation campaign into Asia, signing a Memorandum of Understanding
agenda through two lenses. On the one
to cooperate with China. Whereas other
Supporting the sector
hand, leading national initiatives will help the
bilateral arrangements largely pivot around
Trinidad and Tobago’s comparative advantage
country meet its commitments to the global
gas acquisition or exporting expertise, NGC’s
as a destination for investment in downstream
community in the matter of emissions
latest collaboration will explore several
manufacturing has been relatively cheap
reduction. This will in turn benefit the planet.
avenues for partnership, beginning with
energy. In recent years, diminishing output
At the same time, reducing gas-powered
LNG marketing.
from the country’s offshore gas fields has made
electricity consumption will liberate more gas
it incrementally scarcer and more expensive.
for downstream use, shoring up the revenues
NGC has fully embraced the need for change
As a result, NGC’s work in energy marketing
and sustainability of the entire NGC Group
as a premise for growth and will continue to
and trading has assumed greater importance.
and its customers. In the process, the Group
build on its solid business foundations. Beyond
Although widely known for its role as
is cultivating new skill sets which can further
seeking company interests, its growth strategy
transporter and merchant of natural gas,
strengthen its value proposition to inter
ultimately pursues sustainability for the
one of NGC’s most critical functions is
national business partners.
industry and country as a whole.
aggregation. The Company’s gas supply is an amalgamation of purchases from all the major upstream gas producers which enables NGC to minimise the adverse impact of shortages in supply from any one producer. NGC has also been leveraging its position in the middle of the value chain to broker collaboration across the energy sector. The Company acknowledges that its long-term viability, and that of the NGC Group, depends on the health of the entire energy ecosystem – from producer to consumer. An appreciation of this symbiotic relationship has led the Group to take a leadership role in addressing some of the immediate challenges facing the sector. NGC has been particularly active, working with upstream operators to
NGC’s Head Office, Point Lisas Industrial Estate.
F E AT U R E S
Improving the air quality of life Air pollution is a serious threat to human health, with premature deaths worldwide estimated to reach up to 9 million a year by 2060. Among the array of solutions available, major cities around the globe are turning to natural gas. By Hansch van der Velden I’m optimistic about tackling the
trillion annually – due to sick days and
pressing issue of bad air. It is doable
medical bills.
to have mega-cities be mega-clean – as long as we join forces.
This trend will be unacceptable to citizens. Public protests against
Natural gas solutions in cities are plentiful. And we have the cities to prove it: Berlin, Germany: Berlin is one
bad air are on the rise. I suspect it will
of Europe’s cleanest major cities
serious threat to human health. Air
reach a tipping point where no local
thanks to the remarkable trans
pollution cuts average life expectancy
government that wants to be
formation of its energy system
of a global citizen by almost two
re-elected can do so without a serious
after Germany’s reunification.
years – more than tuberculosis, malaria,
clean air plan.
Between 1989 and 2015, Berlin’s
Air pollution is the world’s most
There’s no one silver bullet, but
SOx emissions decreased by 95%,
according to the Air Quality Life Index
there is an array of options for cities
NOx emissions by 76% and PM10
(https://aqli.epic.uchicago.edu).
to reduce air pollution. They include
emissions by 83% with the key
Particulate pollution is actually a
better city planning with walkways,
factor being a widespread shift
bigger problem than smoking. And as
bike lanes and public infrastructure;
from coal to natural gas in power
more people move to cities, deaths
better use of natural and renewable
and heat generation, as well as in
from urban air pollution will increase
gas; use of electric cars and motor
residential heating.
substantially unless we take action.
bikes; and promotion of shared driving.
road injuries and HIV combined,
Bogota, Columbia: The city has
By 2050, 70% of global citizens are
All solutions strengthen our joint effort
the world’s largest rapid transit bus
expected to live in a city. Most of these
to clean the air in cities and make them
system, called TransMilenio. It is
mega-cities will be in Asia. Yet the rest
a great place to work, live and laugh.
now replacing its old buses with
of the world has its share of big cities
That, for me, is air quality of life.
with big-city problems. In its 2016
new buses powered by natural gas. Rotterdam, The Netherlands:
report, The Economic Consequences of
Mission possible
The number of premature deaths
Outdoor Air Pollution, OECD estimates
Our contribution as a natural gas
per 10,000 inhabitants puts the
that if we don’t take action, the num
industry is most impactful when we
city in the top 10 worldwide. Mov
ber of premature deaths a year by 2060
displace other fuels, such as coal,
ing ships to LNG as a fuel is a major
will be 6 to 9 million. Moreover, the
heavy fuels or diesel, and use gas in
contributor to better air, as are
economic costs of air pollution are
city power generation, gas in city
greater use of electrification and
staggering. The OECD report forecasts
heating, gas in small generators, gas
bikes, and better public transport.
that air pollution could cost 1% of
for indoor cooking and gas for heavy-
Seoul, Korea: Here, the air pollution
global GDP – approximately $2.6
duty transportation.
46 Improving the air quality of life
level is the worst among the OECD
F E AT U R E S
countries. The government has
replacing coal with renewables and
numbers are a drop in the ocean
put in place an extensive plan for
natural gas.
compared to what is ahead of us,
improvement, including closing
In the IGU reports on clean air
if cities don’t take action now.
coal plants, increasing renewable
and big cities (see box), we also
energy and promoting natural gas
see tremendous progress in
Hansch van der Velden was until recently
for transport with LNG trucks, CNG
other cities including Istanbul
the Corporate Communications Director
buses and LPG in vehicles.
and Toronto.
of Gasunie. He was also the Secretary
Air pollution is not a new problem.
General of the Dutch Gas Association
Nairobi, Kenya: Indoor pollution is a significant contributor to poor
The Great Smog of London in 1952
(KVGN) and Chair of IGU’s Marketing
air quality in Nairobi. People mostly
killed 4,000 people in five days, and
and Communications Committee.
use biomass burning and charcoal
the UK passed the Clean Air Act in
He has now set up Strindberg Consult
for food preparation, which
1956 in response. Of course, 4,000
ancy which specialises in communi
impacts their health. This is
immediate deaths prompt more action
cations and leadership development
especially true for very low-income
than a slower impact. But these
(strindbergconsultancy.com).
people. This is a huge burden to the public health system and accelerates deforestation. In 2016, the government set out on a path to shift Kenyan household energy to LPG, which can eliminate indoor air pollution. New York, USA: The city noted that it would try to accelerate heating oil phase-out by aiding in the development of natural gas transmission pipelines and working with utilities and neighbour hoods to try to cluster buildings in underserved neighbourhoods, where additional gas distribution could have the greatest airquality benefits. Beijing, China: The goal for the Beijing-Tianjin-Hebei region was to reduce PM2.5 levels by 25% by 2017. The specific action plan included decommissioning the highest-emitting vehicles, pro hibiting construction of any new
A common solution IGU has looked at big cities around the world to find clean air solutions in which natural gas plays an important role, and has published a series of reports. The first report, CASE STUDIE released at COP 21 in S IN IMPROV ING URBAN AIR Paris in 2015, presented QUALITY case studies of efforts in four cities – Beijing, 2018 Istanbul, New York and Toronto – to improve urban air quality. The second report was released in Strasbourg, during the 2016 Gas Week at the European Parliament and featured efforts to improve air quality in four European cities: Berlin, Dublin, Krakow and Rotterdam. The third report published in March 2018 provided an update on efforts in Beijing and included two additional examples of major actions in the Chinese cities of Urumqi and Shanghai. It also extended to South America, with an example of air quality improvements in Santiago. For more information, visit: www.igu.org/promotes-clean-air. Case Studies
in Improving
Urban Air Qua
lity
1
heavy polluting industries and
Improving the air quality of life 47
F E AT U R E S
Energy system efficiency and the role of gas Decarbonisation and electrification are often seen as going hand-in-hand but energy systems using gases score highly when considering overall system efficiency. By Barbara Jinks Greater efficiency is an integral part
For example, when comparing
driven vehicles can lead to larger CO2
of moving towards a sustainable future
systems using fossil or renewable
emission reductions than e-mobility;
with the decarbonisation of energy.
energy for the transport of goods to
sector coupling with power-to-gas
The combination of gas and electricity
arrive at an overall figure for emissions
technology provides energy optimi
networks will also play a vital role.
per transported tonne-kilometre, it is
sation compared with total electrifi
When looking at different energy
important to include the manufacture
cation; direct use of natural gas for
carriers, though, it is all too easy to
of the vehicles as well as their oper
energy is significantly more efficient
focus on a specific area where one is
ation. On this basis the very high
than electricity; and decarbonisation
more efficient than another and lose
efficiency of an electric motor may be
policies that include a fuel switch from
sight of the wider picture that may
outweighed by the cost of production,
coal to gas are more efficient in terms
show a better overall outcome.
in particular the battery.
of emissions saved and time to market.
It is essential to assess an energy
In the context of the energy tran
solution in terms of its impact on the
sition to decarbonisation, the term
Gas storage as partner with
entire efficiency chain, known as
system efficiency is used to compare
batteries
system efficiency.
different approaches to decarbonise
Due to the increase in electricity
through improvement. The indicator of
production from renewable sources
system efficiency of an integrated gas
relevance can be technical, comparing
and the mismatch between production
and electricity system that we will
in- and output of a change of technical
and demand, the issue of storage is
reach the optimal way to decarbonise
components, or related to cost per
becoming increasingly important.
and deliver an affordable, sustainable
commodity (for example, the cost to
Means of storing power:
energy transition.
be spent per saved tonne of CO2
Have to balance the difference
It is only by optimising the overall
In a technical context, the term
emissions) or time to market or other
system efficiency is commonly used to
commercial issues such as flexibility
describe the overall efficiency of an
and security of energy supply.
between production and demand; Deliver peak load from the transmission and distribution grid; and
entire interlinked system of technical
Applying the methodology of
components in a commercial environ
system efficiency assessment shows
ment. These are interconnected to con
that energy systems using gases can
vert an energetic input into a requested
score highly compared to other energy
a large scale there is a need to:
output. (When efficiency is used to
sources. The five case studies in this
Provide sufficient capacity; and
describe the fraction of remaining
article highlight that: gas storage is
Be able to store power over a long
output in comparison to input, it is
more efficient than batteries to store
time with a range of many days if
usually expressed as a percentage.)
large quantities of power; light gas-
not weeks.
50 Energy system efficiency and the role of gas
Should be highly efficient. Moreover, when storing power on
F E AT U R E S
Batteries can be charged and drawn
ency. In other words, the fuel cell
Light NGVs vs e-mobility
down quickly and relatively efficiently.
does not only produce power but
On a well-to-wheel basis electric
Other storage, such as storage through
provides heat too;
vehicles score highly, notably because a
gas, where electricity is used to produce
The efficiency of the battery drops
typical electric motor has an efficiency
hydrogen or synthetic gas (methane),
to zero if the power needs to be
of 85% whereas a combustion engine
has the drawback that the chemical
stored for a longer period of several
can only reach 30%. However, the veh
element has to be combusted to gen
weeks or months whereas the
icle production costs and the invest
erate electricity again and that these
chemical storage keeps the poten
ment costs for building up the fuel
conversions involve loss of energy.
tial power for an indefinite time;
production and fuelling infrastructure
Comparing the two different systems: A Power ➜ rectifier ➜ charging a
Batteries cannot provide the
should be included in the assessment
required capacity of many TWh for
too – especially if the power for an
battery ➜ discharging 24 hr later
regional storage management or
electric vehicle needs to be stored in
➜ power electronics ➜ power;
seasonal balancing.
the power grid.
B Power ➜ rectifier ➜ electrolyser ➜
Figure 1 shows that gas storage is
hydrogen ➜ fuel cell combustion
more efficient than batteries by a factor
backs in efficiency of the drive assembly
➜ power electronics ➜ power.
of up to one million. Based on the fact
because the vehicle itself can be manu
Process A is often considered to
that batteries lose the amount of stored
factured more efficiently. This is due to
have a system efficiency of above 90%.
energy over time and that they cannot
the high emissions related to the produc
However, the charging efficiency of
be made large enough in terms of
tion of the battery (see Figure 2 over).
commonly used batteries drops rapidly
capacity, it becomes clear that energy
when charged above 80% of their
storage in the form of gases (such as
compared different traditional fossil
capacity. In addition, other elements
through power-to-gas technology)
fuels (gasoline and CNG), “e-gas” from
like the rectifier, with additional losses,
provides the highest storage efficiency.
wind power and batteries in an Audi
Thus, NGVs can compensate for draw
Research by Volkswagen has
need to be included. Promoters of batteries consider process B to be less efficient, because conventional electrolysers operate
Comparison of different power storage technologies, quantity and discharge time 10,000
typically with an efficiency of 80% it is said that the entire system cannot
100
reach an overall efficiency above 48%.
10
Discharge time (h)
following reasons:
CAES H2
1
pathway with the battery. two systems is not accurate for the
PHS
Batteries
This is roughly half the efficiency of the However, this assessment of the
SNG
1,000
while fuel cells achieve 60%. Therefore,
0.1 Fly Wheels 0.01 0.001 1 kWh
The accuracy is rule of thumb; It ignores the fact that overall fuel
10 kWh 100 kWh 1 MWh
10 MWh 100 MWh 1 GWh
CAES: Compressed Air Energy Storage PHS: Pumped Hydro Storage H2 / SNG: Hydrogen, Synthetic Natural Gas
cell efficiency is the sum of the
10 GWh 100 GWh
1 TWh
10 TWh 100 TWh
Source: DVGW
electrical and the thermal effici Figure 1.
Energy system efficiency and the role of gas 51
F E AT U R E S
could transport peak and excess power
Cradle-to-grave CO2 emissions of different means of transport Gas (CNG)
and even larger quantities of power. This “sector coupling” requires the
24
Natural gas
11
Biomethane Audi e-gas
15
Electric vehicle
47
power to be converted into a gas.
127
92 24
A closer look at comparing the two
48 39
options of power transport is shown in
Battery
Renewable energies
Figure 3 via a power transmission grid
1 48
EU
60
USA
or via sector coupling.
107 81
128
China
123
Diesel
25
Gasoline
24
10
99 24
0
account that the average loss of energy
134 11
50
In the former case it is taken into
170
transported via power lines is 1% over
161 100
150
200
This loss can be higher depending on
CO2 emissions (g/km)
Vehicle manufacture (Cradle-to-Gate)
100km or roughly 10% over 1,000km.
Fuel supply (Well-to-Tank)
the quality of transformers for alter
Usage (Tank-to-Wheel) Source: DVGW
nating current and on the humidity. In the latter case the efficiency of
Figure 2.
the conversion of power to gas and
A3 vehicle. The “e-gas” was methane
Power grid extension is costly, takes
later of gas to power has to be con
produced in an Audi pilot plant in
time and increasingly fails to be
sidered. This is roughly 80% and 60%,
Emsland, Germany, which combines
accepted by the public.
showing that the overall efficiency is
CO2 from a waste-processing biogas plant with hydrogen produced from
Therefore, gas grid operators have proposed that the existing gas grid
approximately 48%. Transmission losses can be ignored as gas can be
water by electrolysis using green electricity. It was found that e-gas from wind power produced the
Comparison of energy transport via cable or pipeline
Infrastructure power and gas
lowest overall CO2 emissions. Power-to-gas enables energy optimisation Renewable (hydro, solar and wind)
H2
electricity is seen as one of the most valuable forms of energy that should
Power transport via gas grid
be used directly – without any con version – at end users’ sites. However, electricity has to be brought to the customers and in many places in the
Power transport via power grid
world the new feed-in capacity from renewable sources like wind and solar is growing so fast that the power grid
H2 Source: DVGW
itself turns out to be the bottleneck. Figure 3.
52 Energy system efficiency and the role of gas
fuel cell
F E AT U R E S
shipped over large distances nearly loss-free (1% over 1,000km). Comparing the 90% efficiency of the
Comparison of efficiency between direct gas and conversion to electricity for buildings
power grid and 48% using the gas grid makes sector coupling look less des irable. However, this is not the case if it is considered that: The efficiency of an electrolyser can be 96%; The heat that is generated from gas-to-power conversion should be included – if the gas-to-power conversion is carried out in a customer’s fuel cell the overall efficiency can be 90%; and The power grid provides no means to store the power whereas the gas grid does – the integrated use of the two systems provides signifi
Source: American Gas Association
cantly higher efficiencies.
Figure 4.
Sector coupling with overall power-
Direct use of natural gas is more
buildings is more than 2.5 times more
to-gas-to-power efficiency of 48% is
efficient than electricity
efficient than converting it to power
the better overall option as it provides
The conversion of any energy form
comparable end-use products, at 91%
several additional inherent benefits:
to another inherently involves losses.
efficiency for gas and 36% for electri
The coupling of two markets,
A study conducted by the Gas Techno
city (see Figure 4).
power and gas, with more cross-
logy Institute for the American Gas
selling and trading options;
Association in January 2019 looked at
Fuel switch from coal to gas
the full-fuel-cycle energy efficiency for
scores highly
gas and electricity as end-use fuels. The
Another definition of energy system
aim was to look at the efficiency of red
efficiency is the speed at which the
(sector coupling) with minimal
ucing emissions from primary energy
system can be decarbonised. Under
losses within the gas grid and
as gas or electricity where comparable.
energy policies that do not support
higher transport capacities (one
The issue of emissions is significant;
gas, renewable power is seen as the
gas pipeline with a diameter of
according to the International Energy
one-and-only solution for this.
1.2m transports the same amount
Agency, buildings were responsible for
of energy as eight parallel high-
39% of primary energy use, 73% of
Germany has made significant invest
voltage pylons, each at 3GW); and
electricity generated and 36% of CO2
ments – based on non-official esti
emissions in the USA in 2017.
mates more than €500 billion – to
Associated redundancy, flexibility and reliability benefits; Access to other transport paths
The option to store power for an unlimited period in the form of molecules.
The conclusion is that direct use of gas as a fuel for heating and cooking in
As an example, over the last 20 years
ramp-up the numbers of windmills and photovoltaic panels to replace fossil
Energy system efficiency and the role of gas 53
F E AT U R E S
Comparison of German and US climate strategies over a period of 10 years
Comparison of the US and Germany
CO2 intensity gains favour the US
Share of electricity generation
Grams CO2/kWh generation
case and showed that savings of more than 100 million tonnes of CO2 emis sions could be generated immediately through a substitution of gas-fired for lignite-fired power generation. As an alternative, the impact and speed of
— Oil
100
utilisation of more renewable energy
600
— Other renewables 80
— Wind/Solar
— Nuclear
60
— Gas
was studied. The results showed that
500
it would take more than 20 years to
400
achieve the same annual emissions reduction via an accelerated ramp-
300
40
up programme for more windmills
200
in Germany.
— Coal
20
100
0
Based on these findings, in 2019 a
0 2005
2015
United States
2005
2015
Germany
2005
2015
United States
2005
2015
Germany
Sources: German Environment Agency (UBA), US Energy Information Administration (EIA)
German semi-governmental expert group prepared the coal exit plan for Germany. The fuel switch to gas is bringing Germany’s decarbonisation
Figure 5.
policy back on target.
fuels by renewable power. However,
fired power station are only one-third
against all odds, the effect on the
of those from a gas-fired power plant.
Towards zero carbon
country’s CO2 reduction has been
Thus a fuel switch offers enormous
The carbon saving by the fuel switch is
rather small as a comparison between
decarbonisation potential.
key to fast decarbonisation and will
Germany and the US, which increased
Gas-fired installations (in the order
gain prominence over time. However,
gas-fired power generation over the
of 1GW) are by far larger power gener
the story will continue not only through
same period, shows (see Figure 5). For
ators than windmills (in the order of
the fuel switch and more optimal sec
this reason, different think-tanks and
MW) or solar panels (in the order of
tor coupling, but also through growth
institutes in Europe have started to
kW) and allow a more rapid decarboni
in the share of renewable and decar
assess more closely the effect of
sation. In addition, they are distributed
bonised gases (biogas, biomethane
decarbonisation through an extended
and do not need the installation of a
and hydrogen). As these measures are
use of natural gas. This is also appli
collector-power system.
increasingly adopted as part of
cable in other regions of the world.
Gas-fired installations can be
national energy strategies, the shift
switched to biomethane (with zero
towards lower-emission gas-driven
a fossil fuel may not seem to be the
emissions) and can therefore provide a
power production will not be limited
first choice to lower emissions and its
long-term gateway to a zero-emission
by the carbon footprint of natural gas
decarbonisation potential might be
economy without further disruption.
on the road to net zero carbon.
At a first glance, natural gas being
limited. However, several factors need to be taken into account. Different fossil fuels differ signifi cantly; the emissions from a lignite-
Studies conducted by the German Technical and Scientific Association for
Barbara Jinks is the leader of Study
Gas and Water (DVGW) in 2018 applied
Group 1 (Efficiency of Gas) of IGU’s
these general findings to the German
Strategy Committee.
54 Energy system efficiency and the role of gas
Powering the Future Through LNG
Chart has a proven track record of delivering robust, reliable LNG solutions that integrate seamlessly with existing infrastructure. • Liquefaction
• Bunkering solutions
• Distribution & storage
• Virtual pipeline
• Receiving terminals
• Vehicle fueling stations
• Power generation
• Fueling systems for road, maritime and rail
www.ChartLNG.com LNG@ChartIndustries.com
F E AT U R E S
Natural gas as a backbone of the Russian energy sector Russia is updating its energy policies and domestic gas market regulations while collaborating with the members of the Eurasian Economic Union to create a common natural gas market. By Alexey Semenov Russia’s hydrocarbon reserves play a
Strategic Planning in the Russian
key role in terms of global scale and a
Federation”, while four main strategic
fundamental role in the country’s
documents cover the development of
economy. Based on the Cedigaz 2018
the energy sector and the gas industry.
statistics, Russia’s proven gas reserves
The general conditions, threats and
Currently these strategic documents are being reviewed and updated. On May 13, 2019, the President of the Russian Federation approved the new Energy Security Doctrine of the
are the largest in the world, amounting
challenges for energy development,
Russian Federation (Decree № 216),
to approximately 25% of the global
together with risks and ways to prevent
which is the fundamental document
total, and it is the world’s second
them, are set out in the “Energy Security
for updating the Energy Strategy of
largest producer of natural gas.
Doctrine of the Russian Federation” and
Russia, as well as other strategic plan
the “Strategy for Social and Economic
ning documents and energy regulations.
In 2018, Russia’s total gas consump tion was 493.2 bcm, up 5.3% year-on-
Development”. The main development
The provisions of the Energy Security
year, and natural gas accounted for 53%
trends and their detailed description,
Doctrine are based on the country’s
of the country’s energy mix, a share
interrelations of the fuel and energy
national interests, resource and intel
that has remained relatively stable over
sectors, and forecasts of the fuel and
lectual potential, and correspond with
the past few years (see Figure 1).
energy balance are presented in
the sustainable development goals
the “Energy Strategy of the Russian
defined by the UN General Assembly,
Strategic planning documents
Federation”. The “General Scheme of
including access to energy and the dev
The basic principles of strategic
Gas Industry Development” focuses
elopment of clean energy technologies.
planning for all industries in Russia are
on detailed plans and scenarios related
determined by the Federal Law “On
to development of the gas industry.
The unsustainable use of energy resources is indicated as the key energy security risk. One of the main
c Figure 1.
Russia’s gas consumption, 2014-2018, bcm 500
the Energy Security Doctrine is to limit 100
negative impacts on the environment
80
and ensure the environmental safety of
60
the energy companies’ economic acti
40
400
2014
2015
Gas consumption (bcm)
2016
2017
Other fuels share (%)
2018
goals of energy security according to
vities. This goal is pursued through the predominant use of the cleanest type
20
of fossil fuel – natural gas. Another
0
goal stated in the document is the
Gas share (%)
Source: Gazprom Annual Report 2018
56 Natural gas as a backbone of the Russian energy sector
reliable and sustainable supply of highquality energy resources and energy
F E AT U R E S
services to consumers. This goal has
The Law “On Strategic Planning
upcoming decade. The share of natural
been successfully implemented by
in the Russian Federation” defines
gas in Russia’s energy mix will not
PJSC Gazprom for many years.
the General Scheme of Gas Industry
change significantly due to the funda
Development as a regulatory document
mental role of natural gas in the coun
following the Energy Strategy.
try’s economy, ensuring the achieve
The current version of the Energy Strategy of the Russian Federation for the period to 2030 was approved by
The current version of the Scheme
ment of sustainable development
Government Resolution №. 1715-p
(until 2030) was adopted in 2011 by
(dated November 13, 2009). The Energy
the Ministry of Energy. The advance
Strategy determines the goals of the
version of the document for the period
Legislative framework
long-term development of the whole
to 2035 will include: a new scenario
Unified Gas Supply System
energy sector including the gas ind
of socio-economic development of
One of the key components of the
ustry. It defines economically feasible
the country; recent proposals for the
Russian domestic market is the UGSS,
strategic directions for the develop
development of gas exports (including
which is the centralised system for
ment of the gas industry to ensure:
LNG); the development of gas refining
natural gas production, transportation,
A reliable gas supply for Russian
and processing; optimal solutions for
storage and supply.
consumers;
the development of the Unified Gas
goals and energy security.
Under the Federal Law “On Gas
Supply System (UGSS); using gas as a
Supply in the Russian Federation”
intergovernmental agreements
motor fuel; the helium programme;
(dated March 31, 1999), Gazprom is
and long-term supply contracts;
and methane-hydrogen mixtures.
the sole owner and operator of Russia’s
The fulfilment of obligations under
and
Thus, the state strategic planning
gas pipeline network. According to
documents provide for stable gas
the Natural Monopolies Law the trans
markets.
consumption in the Russian Federation
portation of natural gas through pipe
The basic scenario of the Energy
and even a slight increase in the
lines is considered a monopolistic
New gas supplies to foreign
Strategy presents a model of the development of the energy sector. According to the Energy Strategy forecasts (taking into account the principles of inter-fuel competition and optimal balance of energy use) gas consumption in 2030 is expected to be between 605 and 645 bcm and have a share of approximately 50% in Russia’s energy mix. The updated version of the Energy Strategy for the period to 2035 was submitted by the Russian Ministry of Energy to the Government of the Russian Federation on February 1, 2017 but has not been approved yet. Approval is expected soon.
Russia’s UGSS is the centralised system for natural gas production, transportation, storage and supply – pipelines bringing gas from the Bovanenkovo field in the Yamal Peninsula for processing.
Natural gas as a backbone of the Russian energy sector 57
F E AT U R E S
Russia’s UGSS – the Baidaratskaya compressor station on the Bovanenkovo-Ukhta 2 pipeline.
activity and the entities engaged in
Price regulation and exchange-
regulated, but those prices are closely
it are deemed natural monopolies.
based trading
aligned to the prices at which gas is
In Russia, gas is sold and purchased
supplied by Gazprom and its affiliates.
Gazprom is required to provide independent suppliers access to the
using two different pricing approaches
In order to create a level playing
UGSS. This obligation is subject to:
– with prices fixed by the Government
field in the domestic market, deregula
The availability of spare capacity
or unregulated prices.
tion (at least partial) of wholesale gas
in the UGSS; Certain quality specifications for natural gas; and The availability of connections
In accordance with applicable
prices is required and certain steps have
Russian laws, wholesale prices of gas
already been taken in this direction:
produced by PJSC Gazprom and its
PJSC Gazprom and its affiliates are
affiliates are subject to regulation.
allowed to use unregulated
between consumer and supplier
These prices are differentiated bet
wholesale prices in respect of
pipelines at the date of
ween consumer groups (households
natural gas produced by these
commencement of supply.
vs industrial consumers), as well as
entities (as of January 1, 2018)
Thus, a gas pipeline network is a
by price zone, based on the relative
when selling it in a gaseous state
natural monopoly in the Russian
distance from the gas production
to LNG producers for liquefaction
Federation and all market participants
region to the consumer.
and export;
have access to the grid on a nondiscriminatory basis.
The prices charged for the supply of gas by independent producers are not
58 Natural gas as a backbone of the Russian energy sector
PJSC Gazprom and its affiliates are allowed to use unregulated whole
Engineering for extremes Through innovation, technology and our project execution skills, we’re helping clients unlock new possibilities in developing their oil and gas resources. At Yamal LNG, the largest modularized LNG project ever and one of the most ambitious industrial undertakings in Siberia, our innovations in process plant design, project execution and logistics have broken new ground. Discover more about how we’re enhancing the performance of the world’s energy industry. TechnipFMC.com
F E AT U R E S
applies in Russia to the gas industry (and petroleum industry in general) consists of a combination of mineral extraction tax (MET), corporate profits tax, export duty and tax on additional income (from 2019): The profit tax rate is 20%; MET for natural gas and gas condensate is calculated on the basis of a special formula; The tax on additional income is 50% (for specific projects); and Export duty is 30% for pipeline gas Russia’s overland Power of Siberia pipeline is expected to start supplying China at the end of 2019.
and 0 for LNG. For natural gas and gas conden-
sale prices when gas is provided to
resource rent, due to the fact that the
sate, MET is payable considering the
methanol producers for the pro
subsoil within the country’s borders is
base rates (set in accordance with the
duction of methanol from natural
state property, and the exploration and
calorific value of the fuels – RUB 42
gas in a gaseous state for exports;
production of subsoil resources (inc
($0.67) per tonne for gas condensate
luding gas) are administered through
and RUB 35 ($0.56) per 1,000m3 for
was ended for natural gas supplied
the granting of subsoil use licences.
gas) adjusted by coefficients, which
to industrial consumers if liquefac
There are two kinds of tax regime
Government regulation of gas prices
tion and/or regasification technology
provided for under Russian law:
are used in a gas supply chain.
Conventional tax regime – the
Exchange-based gas trade in the Russian market has been developed by the St Petersburg International
dominant regime governing oil and gas extraction in Russia; and Production sharing regime – the
reflect: A base value of a unit of standard fuel; A coefficient reflecting the diffi culty of the extraction of gas or gas condensate; and
Mercantile Exchange (SPIMEX), which
provisions related to production
was launched in October 2014 for nat
sharing regimes are set out in the
transportation costs of gas.
ural gas sales on the domestic market.
Federal Law on Production Sharing
As the coefficients applied for
In 2018, the natural gas purchased
Agreements (PSAs), dated
Gazprom (and Gazprom-affiliated com
through SPIMEX was supplied to
December 30, 1995, which has
panies) and non-Gazprom-affiliated
42 Russian regions with total volumes
been substantially amended.
companies vary considerably, the MET
of 15.1 bcm. There were 86 trading
However, all existing PSAs in Russia
rates for Gazprom (and Gazprom-
members and 316 customers.
were concluded before the entry
affiliated companies) are much higher.
An adjustment linked to the
into force of the PSA Law and The fiscal regime
therefore due to grandfather
Gas export regulation
The fiscal regime in the Russian
clauses are governed by the
Russia is the world’s top gas exporter
Federation is the fundamental govern
provisions of the PSAs concluded.
with sales of pipeline gas and LNG
mental mechanism related to the
The conventional tax regime that
totalling approximately 270 bcm in
60 Natural gas as a backbone of the Russian energy sector
ISC Customised ContraCt Publishing solutions
International Systems and Communications Limited (ISC) was set up in 1991 to offer a high-quality, customised publishing service for event-linked, commemorative and annual publications. Today’s prestigious client base is testimony to a business philosophy based on quality and a flexible approach. ■ CLIENTS
■ FLEXIBILITY
For all your contract event-
Organisations like the Association of
We tailor our services to meet your
linked, commemorative
Caribbean States, International Gas
requirements ranging from an
and annual publishing
Union, International Telecommuni-
advertising sales and printing contract
needs contact:
cation Union, United Nations
to a full turnkey operation including
Conference on Trade and Development
multiple language editions.
and the Secretariat General of the Gulf
Robert Miskin, Publisher
Cooperation Council have contracted
■ DELIVERY
ISC to produce publications.
On-time performance; international
I S C LT D
distribution.
140 Tachbrook Street London
■ QUALITY
Experienced editing, production and
■ SERVICE TO ADVERTISERS
sales team; editorial contributions
Targeted access to an international
from respected journalists and
audience of influential decision-
international figures; and high-quality
makers; full design and production
E-mail: general@isyscom.com
production standards.
service available for advertisements.
Website: www.isyscom.com
MINDS OF ENGINEERS. PIONEERS AT HEART. Wintershall and Dea have become Wintershall Dea. We explore and produce gas and oil – worldwide. Responsibly and efficiently. Now going ahead as one. For we are pioneers at heart, equipped with 245 years of experience in engineering excellence. wintershalldea.com
SW1V 2NE, UK Telephone: + 44 20 7901 3838
F E AT U R E S
under such subsoil use licence for liquefaction at an LNG plant; and State-controlled companies (at least 50% of their charter capital) or their subsidiaries in respect of the LNG export projects. Sakhalin 2 (two trains totalling 10 mtpa) and Yamal LNG (currently three trains totalling 16.5 mtpa with a fourth train of 0.9 mtpa due to enter service in 2020) are the large-scale LNG projects at the operational stage. There is also the small-scale (660,000 tpa) Cryogas-Vysotsk project. Other LNG projects are expected in service from 2022/3 (e.g. Arctic LNG 2 with 19.8 mtpa, 2018 (see Figure 2). The gas export
sidiary (Gazprom Export) holds the
Ust-Luga with 13 mtpa and a third train
regulation plays a very important
exclusive right to export natural gas.
of 5 mtpa for Sakhalin 2).
role in the context of national energy
Due to amendments (dated
Development of LNG projects is
policy, which considers the need to
December 2013) which partially
one of Russia’s strategic goals and the
protect Russia’s economic interests.
liberalised the export of LNG, the right
country is currently the world’s sixth
to export LNG has been given to:
largest LNG exporter (see Figure 3).
The fundamentals of the state regu lation of gas exports are laid down in the
Companies that, as of January 1,
Federal Law № 117-FZ “On the Export
2013, have provisions in their
The common gas market of the
of Gas” (dated July 18, 2006). According
subsoil use licence that presume
Eurasian Economic Union
to the Law the operator of the UGSS
construction of an LNG plant, and/
The agreement to establish the
(Gazprom) or its wholly owned sub
or transportation of gas extracted
Eurasian Economic Union (EAEU) was signed on May 29, 2014. The creation of the EAEU launched the process of
150
z The offshore TurkStream pipeline to Turkey, seen here being laid by the Pioneering Spirit, is also expected to enter service in late 2019.
100
c Figure 2.
positions in the world. According to
bcm
Russia’s gas exports, 2015-2018, bcm 300 250 200
50
unifying the energy markets of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. The gas segment of the EAEU member states occupies one of the key Cedigaz, the gas reserves of the EAEU
0 1
2 LNG export
3
4
Natural gas pipeline export
Source: Gazprom Export, IHS
member states are estimated at 26% of the world total. If we compare the production and consumption of natural gas
62 Natural gas as a backbone of the Russian energy sector
F E AT U R E S
in the EAEU countries and the EU 28 (including the UK for the time being), it is clearly seen that the emerging market of the EAEU member states is comparable to the EU market by consumption and significantly exceeds it in terms of gas reserves and gas extraction capabilities (see Figure 4). The authority to regulate general issues in the energy sector, including the issues of interaction of the EAEU member states, is attributed to the Union’s permanent executive body – the Eurasian Economic Commission (EEC). The EEC’s competence covers
Gazprom and RusGazDobycha are working on an integrated gas processing complex with annual production of up to 13 mt of LNG, 3.8 mt of ethane fraction, 2.4 mt of LPG and 0.2 mt of pentanehexane fraction. The plant will be adjacent to the port of Ust-Luga (pictured) in the Leningrad Region and the first trains will come onstream in late 2023.
such areas as the regime of mutual trade, access to infrastructure, technical regulation, information exchange and harmonisation of legislation. The long-
the Concept (May 31, 2016) and the
or approval stage and should be
term objective of the EEC in the energy
Programme (December 6, 2018) for
adopted by 2025 – the date for
sector is to create common markets for
the creation of a common gas market.
launching a common gas market.
The core documents clarifying
the different types of energy including
the provisions of the Concept and
Alexey Semenov is the Deputy Head of
Programme and defining specific
Gazprom’s Expert and Analysis
ised bodies of the EAEU member
parameters for the common gas
Directorate and a member of IGU’s Task
states, has developed and approved
market are mainly at the development
Force 3 – Energy Policy.
natural gas. The EEC, together with the author
The top 10 LNG producers, 2018, million tonnes
800 700 600 500 400 300
& id
ad
Figure 3.
Tr in
Source: IGU 2019 World LNG Report
an
ria
Om
go
ge Al
ba
To
ia
ne sia
ss
do In
Ru
Ni ge
A
ria
200
US
Qa ta r Au st ra lia M al ay sia
90 80 70 60 50 40 30 20 10 0
Natural gas production and consumption in the EU 28 and EAEU, bcm
100 2013
2014
EU-28 Production
2015
EU-28 Consumption
2016
2017
EAEU Production
2018 EAEU Consumption
Source: EEC, Eurostat
Figure 4.
Natural gas as a backbone of the Russian energy sector 63
Bringing High Reliability to Small-Scale LNG Processes: The 27 MW Mixed Refrigeration Compressor from Atlas Copco Gas and Process When it comes to LNG, availability and efficiency are essential – cost efficiency, operational efficiency and energy efficiency with maximum availability. Any one of these factors can make or break a small-scale LNG (SSLNG) plant. With a focus on these objectives, Atlas Copco Gas and Process has for more than four decades consistently developed solutions that improve efficiency for every aspect of process gas applications. Each compressor and expander in the company’s wide-ranging portfolio is designed to help both EPCs and operators handle the strategic and operational pressures they face every day. To that end, the company’s integrally-
operational cost by achieving more than
ongoing operating costs. Also, the MRC’s
84% overall compressor efficiency.
skid-based modularity speeds up installation and commissioning.
geared mixed refrigerant compressor (MRC)
The operational efficiencies provided by
solution marks a true breakthrough for SSLNG.
Customisable for specific
Used in an LNG plant with 2 Million Nm³/d
application needs
intercooling technology and inlet guide vanes
capacity, the 27 MW Atlas Copco Gas and
The MRC can be tailored to the precise
(IGVs) allow operators to make full use of
Process MRC is the world’s biggest integrally-
needs of plant processes. Atlas Copco
agile plant deployment. Intercooling helps
geared centrifugal mixed refrigerant
Gas and Process engineers have designed,
reduce the energy required for multi-stage
compressor, with the smallest footprint among
built, delivered and maintained more than
compression, while IGVs help regulate inlet
compressors of its kind. The 27 MW MRC is
8,000 turbomachines, and they apply that
flow to provide more accurate process
highly engineered to bring unrivaled efficiency
expertise to design solutions that reflect all
control and deliver a constant discharge
to single mixed refrigerant (SMR) processes –
key process needs.
pressure. IGVs are standard with all Atlas
and it’s the first in the world to do so at such a small size. Integral gearing makes all the difference.
Our design engineers can help determine
Copco compressors, and they increase
whether open or closed impellers are right
compressor efficiency by 9% compared to
for the process needs, and then select the
other inlet assemblies.
Integrally-geared compressors can support up
best seals for your application – whether dry
Variable IGVs also offer a wide operating
to eight stages mounted on a single gearbox,
gas, floating carbon ring, or labyrinth seals in
range and excellent partial-load performance
shrinking the overall footprint while boosting
single, double, or tandem arrangements. In
over a wide range of conditions. When
reliability. The smarter design of the Atlas
fact, Atlas Copco Gas and Process was the
combined with the efficiency gains inherent
Copco integrally-geared compressor ensures
first compressor manufacturer to implement
to the compressor’s multi-section design,
that the individual compressor stages are
dry gas seals on integrally-geared
these enhancements also promote significant
running at optimal speed for better efficiency,
compressors to pack maximum efficiency,
energy savings.
with lower seal leakage rates than an inline
high machine availability and superb process
compressor. High-speed rotors are supported
control into a small footprint.
by radial tilting pad bearings that eliminate
Atlas Copco Gas and Process offers the
Handling the pressure in LNG Over the last four years, Atlas Copco Gas
virtually all vibration for optimal stability and
shop testing to ensure optimal performance
and Process has helped a variety of projects
smooth rotation.
and reliability that won’t let you down.
with its groundbreaking compressor. But its MRC is just one example of the company’s
The result is that the MRC’s rotors are designed to keep secure ongoing production,
Efficiencies at every phase
many innovative solutions. Around the globe,
delivering 99.8% reliability and excellent
The MRC is built for flexible plant design,
Atlas Copco Gas and Process compressors
efficiency and stability for SMR processes.
with design efficiencies like customised
and expanders support some of the LNG
Improved process control enhancements, as
aerodynamics and a low-leakage seal design
industry’s most critical applications through
well as stage intercooling, help to reduce
that help reduce both initial investment and
out the value chain.
“Energy is a major cost driver in running an LNG plant. But with efficient Atlas Copco mixedrefrigerant compressors, we’re using less energy and saving more money.” Zhang Jia-Hua, Operations Team Leader Baotou Lu Ding Natural Gas Co. Ltd. Inner Mongolia, China
Handle the Pressure
Although balancing the mechanics of your LNG plant can put a lot of stress on your budget, Atlas Copco Gas and Process can help you handle the pressure with highly efficient, integrally geared centrifugal compressor solutions that help keep costs under control. Learn more about Atlas Copco Gas and Process at www.atlascopco-gap.com
F E AT U R E S
The gas industry in Indonesia Indonesia has ambitious plans to increase the share of gas in its energy mix. To mark the country’s hosting of IGU’s 2019 Council meeting, we take a look at the development of the gas industry in ASEAN’s largest economy. By Rakhmad Dewanto In the gas world Indonesia is known as
enhanced oil recovery (EOR) was
one of the pioneers of the LNG indus
launched by Standard Vacuum
PT Pupuk Sriwijaya (Pusri) led the way
try, starting exports in 1977, becoming
Petroleum Maatschappij (later
with the first commercial utilisation
the world’s top exporter in 1984 and
PT Stanvac Indonesia) in 1927. The
of gas in its urea fertiliser plant in
holding that position until 2005. But
produced gas was re-injected to
Palembang in 1963. The feed gas was
the country’s gas industry started
maintain reservoir pressure in the
piped 80km from the Raja field in
operations in 1863, when manu
Benakat, Jirak, Pendopo and Talang
South Sumatra.
factured gas was introduced for street
Akar fields in South Sumatra and the
lighting in Jakarta, while natural gas
project continued until 1956.
use dates back to 1927.
Outside the petroleum industry,
From the second half of the 1960s, the government made it a priority to
A second EOR project in South
increase the use of natural gas and
Sumatra was started in 1950 by
reduce flaring. During the 1970s and
Early use of natural gas
Shell using a gas-lift process in the
1980s, the Pusri plant was expanded
Indonesia started oil production in
Prabumulih field and the excess
with additional units and new fertiliser
1885 and associated gas was flared
gas was piped 100km to the Plaju
plants were built in West Java, East
until an innovative project to use it for
refinery to be used as fuel.
Kalimantan and Aceh. Carbon black,
Indonesian gas reserves, new upstream projects, LNG plants and regas terminals Arun LNG (regas)
Tuna
Block A Aceh East Natuna
Badak LNG
Indonesia Deepwater Development Merakes
Donggi Senoro LNG
Sakakemang
Tangguh LNG Asap, Kido, Merah Sengkang LNG
PGN FSRU Lampung Nusantara Regas Satu Jawa Satu Regas
Jakarta
Jambaran-Tiung Biru
Saumlaki (proposed LNG plant for Abadi)
Yogyakarta Karunia Dewata
Abadi
Region I
Region II
Region III
Region IV
Region V
Region VI
187 bcm
2,119 bcm
19 bcm
132 bcm
435 bcm
1,150 bcm
66 The gas industry in Indonesia
Sources: Indonesia National Gas Balance 2018-27, Directorate General of Oil and Gas
F E AT U R E S
Badak LNG in Bontang, East Kalimantan (and thus sometimes referred to as Bontang LNG) was the first to start up. It shipped its first cargo to Japan in August 1977 and initially had a capacity of 5.24 mtpa with two trains. Indonesia was the sixth country to enter the LNG business following Algeria, the USA, Libya, Brunei and Abu Dhabi in the UAE. Arun LNG with an initial capacity of 4.5 mtpa and three trains shipped its first cargo in October 1978. c The Badak LNG plant in Bontang, East Kalimantan was Indonesia’s first with production starting in 1977.
In 1982, Pertamina requested that the operators of two oil blocks in East Kalimantan (Total for the Mahakam block and Union Oil, later acquired by Chevron, for the East Kalimantan and Attaka block) stop flaring asso
LPG and methanol plants were also
Minyak dan Gas Bumi Negara (State Oil
ciated gas and instead supply it to
built, while the 220km West Java
and Natural Gas Mining Company)
Badak LNG to meet growing LNG
pipeline supplied industrial and
known as Pertamina had overall
demand and optimise the use of
domestic consumers allowing city
management of operations and
gas systems to start switching from
worked with foreign companies which
manufactured to natural gas. Gas also
provided technical assistance and bore
started to be used by the state-owned
all exploration risks, production and
electricity company Perusahaan Listrik
development costs in return for a share
Negara (PLN) for power generation in
of profits. The PSC partners responsible
Palembang in 1983. And, in a key
for the large gas discoveries were
development following the discovery
Mobil Oil Indonesia, which found the
of the Arun field in Aceh in 1971 and
Arun field, and Roy M. Huffington Inc.
the Badak field in East Kalimantan in
(Huffco), which found the Badak field
1972, the decision was made to enter
in the Sanga Sanga block.
the LNG business.
Contracts with foreign buyers were negotiated, Japanese electric utilities
The first LNG plants
being among the first customers, and
As the basis for developing its petro
then work started on two liquefaction
leum resources, Indonesia was an early
plants both using the Air Products
user of production sharing contracts
propane-precooled mixed refrigerant
(PSCs) whereby PN Pertambangan
(C3MR) cycle.
Indonesia and IGU Indonesia joined IGU in 1980 and the Charter Member is the Indonesian Gas Association. The Indonesian Gas Society and Pertamina joined as Associate Members in 2014, with Pertamina becoming a Premium Associate Member in 2015. Indonesia hosted LNG7 in Jakarta in May 1983, the meetings of the IGU Council in October 1984 and September 1993, and of the Executive Committee in April 2010, which were all held in Bali. The 2019 Council meeting is being hosted in Yogyakarta. The latter two events were organised by the professional conference organiser PT Indomedia Gemilang Komunikasi (IEEC).
The gas industry in Indonesia 67
F E AT U R E S
petroleum resources. This resulted in
ablishment of two more LNG plants
from the Senoro-Toili (operated jointly
the construction of two additional
and the start of exports to China,
by Pertamina and Medco) and Matindok
trains (5.2 mtpa) at Badak LNG.
Mexico and other markets. Tangguh
(operated by Pertamina) blocks.
The continuous discovery of giant
in Papua shipped its first cargo in July
Production at the new plants
gas fields, particularly Tambora, Tunu,
2009 and has a current capacity of
partly compensated for lower output
Peciko, Sisi, Nubi and South Mahakam in
7.6 mtpa with two trains. A third train
at Arun and Badak due to declining gas
the Mahakam block in East Kalimantan,
of 3.8 mtpa is set to start up at the end
supplies. Arun gradually closed down
enabled the further expansion and
of 2021. Donggi Senoro in Sulawesi
trains with the final two being taken
debottlenecking of the two LNG pro
has a single 2.5 mtpa train and started
offline in 2014 and was converted into
jects to reach a nameplate capacity of
up in August 2015. Tangguh uses Air
a regasification terminal. Today it is
22.5 mtpa for Badak LNG with a total of
Products’ C3MR process with a split
owned by Pertamina and the Aceh
eight trains, the last of which started up
MR machinery configuration; the
Regional Government.
in 1999, and 12.5 mtpa for Arun LNG
smaller Donggi Senoro uses the
with a total of six trains, the last of which
AP-C3MR process.
Production at Badak peaked in 2001 and declined to 8.5 mt in 2018. Adding
started up in 1986. LNG cargoes were
The regulator’s PSC partner for
delivered to Japan, Korea and Taiwan.
the Tangguh discovery was Atlantic
output, Indonesia produced a total of
For decades, gas producers in East
Richfield (subsequently acquired by
18.4 mt of LNG in 2018 of which
Kalimantan and Aceh succeeded in
BP). The six fields include the two
15.5 mt (21 bcm) was exported.
maintaining Indonesia’s contribution to
super-giant gas fields of Wiriagar Deep
the LNG market. After the expiration of
and Vorwata as well as the smaller
accounted for 29% of overall gas
all PSCs in East Kalimantan in 2017-18,
adjacent fields of Roabiba, Ofaweri,
production. A further 11% (7.6 bcm)
Pertamina Hulu Indonesia, wholly
Wos and Ubadari. Their operations are
was exported by pipeline to Singapore
owned by Pertamina, took over the
covered by three PSCs. BP is the oper
and Malaysia, principally from three
operatorship of the Mahakam, Sanga
ator of the Tangguh project with MI
blocks in the West Natuna Sea.
Sanga, East Kalimantan and Attaka
Berau (held by Mitsubishi and Inpex),
blocks through its subsidiaries
CNOOC, Nippon Oil Exploration (held
Premier Oil with Kufpec, Petronas,
(Pertamina Hulu Mahakam, Pertamina
by JX Nippon Oil & Gas Exploration and
Pertamina and PTTEP as partners
Hulu Sanga-Sanga and Pertamina Hulu
Jogmec), KG Berau Petroleum and
consists of four separate producing
Kalimantan Timur).
KG Wiriagar Petroleum (held by
fields (Anoa, Gajah Baru, Naga and
Jogmec, Mitsui, MI Berau and
Pelikan) which have been developed
More LNG plants and pipeline
JX Nippon Oil & Gas Exploration) and
via a combination of platforms and
exports
Indonesia Natural Gas Resources (held
subsea tie-backs to the Anoa facility
In 2001, the Government of Indonesia
by LNG Japan which in turn is held by
and the Gajah Baru wellhead platform
through Law 22/2001 established
Sojitz and Sumitomo) as partners.
and central processing platform.
BP Migas, whose responsibilities are
Pertamina is a direct shareholder in
in the Tangguh and Donggi Senoro
Indonesia’s LNG exports in 2018
Natuna Sea Block A operated by
Natuna Sea Block B is operated by PT
now carried out by SKK Migas, as
Donggi Senoro LNG through its sub
Medco with Prime Natuna as a partner
the upstream regulator taking over
sidiary PT Pertamina Hulu Energi along
and Kakap is operated by Star Energy
Pertamina’s previous role.
with Sulawesi LNG Development (held
with Batavia Oil, PetroChina and
by Mitsubishi and KOGAS) and PT
Pertamina as partners. The gas is
Medco. The plant’s gas feedstock comes
exported to Singapore via the 654km
The discovery of sizeable gas fields in Papua and Sulawesi led to the est
68 The gas industry in Indonesia
F E AT U R E S
Tangguh LNG in West Papua started up in 2009 with two trains and a third is due online in 2021.
The Anoa gas export platform in Natuna Sea Block A.
West Natuna Transportation System,
(mostly in western areas such as Bali,
Lampung started up in July 2014 and has
which entered service in 2001. Exports
Java and Sumatra).
an annual capacity of 3.7 bcm (2.7 mt).
to Malaysia started in 2002 via a 96km
Indonesia’s gas industry has met the
The converted Arun LNG plant
pipeline to the Duyong gas offshore
challenges of developing transmission
started its new life as a regasification
facilities in Malaysian waters from
infrastructure and the country now has
terminal in February 2015. Operated
Natuna Sea Block B.
approximately 16,450km of pipelines
by Perta Arun Gas, a unit of Pertamina
together with a network of four regasi
Gas, it has an annual capacity of
Singapore from South Sumatra via the
fication terminals allowing domestic
4 bcm (3 mt) and supplies industrial
468km Grissik-Batam-Singapore pipe
use of LNG.
customers and power plants in
Indonesia also exports gas to
line, which entered service in 2003.
The development of the regasifi cation terminals has enabled greater
North Sumatra via the 340km ArunBelawan pipeline.
Increased focus on domestic
use of gas in the power sector. The first
The fourth terminal is a small-scale
consumption
started operations in West Java in May
project with an annual capacity of 0.5
At the time Indonesia became the
2012 and is a floating regasification
bcm (0.37 mt) in Benoa, Bali. This is
world’s largest LNG producer in 1984,
and storage unit (FSRU) called
operated by JSK Shipping/Humpuss
exports accounted for more than 80%
Nusantara Regas Satu chartered from
under charter to Pelindo Energi
of gas production. Domestic demand
Golar LNG by a joint venture of
Logistik (PEL) and supplies PEL’s power
was predominantly driven by captive
Pertamina and Perusahaan Gas Negara
plant. The project started up in May
buyers such as fertiliser, petrochemical
(PGN). The vessel is stationed 15km
2016 with separate regasification and
and other industrial plants. Moreover,
offshore in Jakarta Bay to supply the
storage vessels which were replaced in
Indonesia’s geography hindered the
Muara Karang and Tanjung Priok power
November 2018 by an FSRU called
development of gas infrastructure.
stations and has an annual capacity of
Karunia Dewata.
The country is an archipelago with
5 bcm (3.7 mt).
large distances between the major
PGN went it alone to charter a second
A fifth terminal is planned to enter service in December 2021. The Jawa
supply areas (mostly located in
FSRU from Höegh LNG which is
Satu Regas project, jointly owned by
eastern areas such as Kalimantan
stationed 16km offshore Maringgai in
Pertamina, Marubeni and Sojitz, will
and Papua) and centres of demand
Lampung Province, Sumatra. PGN FSRU
use an FSRU chartered from Mitsui OSK
The gas industry in Indonesia 69
F E AT U R E S
v The floating production unit for the West Seno field off Kalimantan, Indonesia’s first deepwater develop ment, which is oper ated by Chevron.
Lines with an annual capacity of 3 bcm
Growing demand
(2.2 mt). Moored 14km offshore in the
Indonesia currently has around 1.4%
operated by PT Medco started
Cilamaya Sea east of Jakarta, the gas
of proven global gas reserves (2.8 tcm)
production. Meanwhile, the first train
will supply a new power plant.
with a further 1.2 tcm of potential gas
of Energy World Corporation’s delayed
Indonesia’s wellhead gas produc-
reserves. The country will also import
Sengkang LNG project in Sulawesi is
tion peaked in 2010 at 90.5 bcm and
LNG to meet growing demand in the
expected to start soon. The plant has
declined to 80 bcm in 2018. Of the
near future.
been designed on a modular basis with
marketed volume domestic consump
In December 2018, Block A Aceh
New supplies will support grow-
up to four 0.5 mtpa trains using Chart
tion accounts for 60% of gas production
ing demand to fuel oil refineries as
Industries’ integrated pre-cooled single
and the share of gas in the primary
they are upgraded (Pertamina has
mixed refrigerant process.
energy mix is 18%. The biggest gas
a refinery development master
consumers are the industry (25%),
plan for the Balikpapan, Balongan,
Pertamina’s Jambaran-Tiung Biru
power (19%) and fertiliser (11%)
Cilacap and Dumai plants), the
project in East Java, the Merakes field
sectors. Smaller shares are accounted
expansion of gas-fired power
offshore East Kalimantan in the
for by the EOR, LPG production, trans
generation and new fertiliser and
Makassar Strait, operated by Eni with
portation and city gas sectors.
petrochemical plants.
Neptune Energy and Pertamina as
Expected onstream in 2021 are
partners, the Asap, Kido and Merah c Indonesia’s first FSRU Nusantara Regas Satu started operations in West Java in May 2012
fields in West Papua operated by Genting and additional feedstock at Tangguh to supply Train 3. Subject to final investment decisions are: phase two of the Indonesia Deep water Development (IDD) offshore Kalimantan (operated by Chevron with Eni and Tip Top as partners – possible start-up 2023); the Tuna development which would export
70 The gas industry in Indonesia
F E AT U R E S
by pipeline to Vietnam (Premier Oil with Mitsui and GS Energy, 2023); the Sakakemang block in South Sumatra (Repsol with Petronas and Mitsui, 2025); the Abadi LNG project with offshore production from the Maslea Block in the Arafura Sea and the LNG plant in Saumlaki (Inpex with Shell for 2027); and the East Natuna project (Pertamina, 2027). The target is to increase the share of gas in the energy mix to 22% by 2025 and gas production to 82 bcm by 2027. Rakhmad Dewanto is the Secretary General of the Indonesian Gas Society (www. indonesiangassociety.com).
v PGN FSRU Lampung started operations in 2014. The vessel is stationed 16km offshore and uses a tower yoke mooring system.
FROM INDONESIA TO THE WORLD
BADAK LNG CENTER OF EXCELLENCE LNG CENTER OF EXCELLENCE We Provide Services for LNG Business TRAINING
Training Tailored to Your Need
1
Real LNG plant and state of the art Operator Training Simulator
2
COMMISSIONING
OPERATION & MAINTENANCE
BADAK LNG BENCHMARKING
3
Losses Lowest Plant Losses
Commissioning & Start Up Assistance Experienced personnel ensures smooth and safe LNG plant startup
1st
Maintenance Cost Lowest Maintenance Cost
Reliability Highest Plant Reliability (99.7 %)
1st
Safety Health & Environment Reported zero Lost Time Injuries (LTIs) since 2006
1st
LNG Plant Operation & Maintenance Experienced personnel ensures smooth and safe LNG plant startup
Benchmarked by worldwide reputable assessor in 2017 among eighteen (18) LNG companies representing around 80% of the world LNG production LNG companies representing around 80% of the world LNG production
LNG & HYDROCARBON FIRE FIGHTING TRAINING Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ
@badaklng_id
1st
@badaklng_id
HSE Policy Hazardous Material Response Physical Exercise Leadership and Teamwork Fire Theory Extinguishing Media Portable Fire Extinguisher Fire Equipment Hose Drill & Jet Effect Hydrocarbon Fire Fighting Aircraft Rescue Breathing Apparatus LNG Fire Fighting
Badak LNG
Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ
OUR ACHIEVEMENT More Than
ONE OF OUR RECOGNIZED TRAINING PROGRAM
Water Hydraulic Confined Space & Tower Rescue First Aid Tactic and Strategy Gas Testing Pre Fire Planning Emergency Communication Emergency Control Plan Fire Pump Fire Truck Fire Protection & Detection Plant Safety
Badak LNG Maju Bersama Masyarakat
1
43 YEARS of experience
2
> 9300 LNG Cargos Shipped
3
in LNG plant operation and maintenance
up to December 2018. The most shipment of LNG in the world.
97 MILLION SAFE MANHOURS
since November 2006. The benchmark of plant safety.
www.badaklng.co.id
LNG2019 This special section reports on LNG2019, which was held in Shanghai, April 1-5. Over 15,000 people from more than 80 countries attended the event, which brought together speakers from the world’s biggest LNG players, the heads of China’s “big three” energy giants, leading contractors and shipping companies together with senior government representatives, policy makers and LNG professionals from across the industry to discuss the growing importance of LNG on the global stage and the trends impacting its growth.
73
A TRANSFORMATIONAL OPPORTUNITY Project Sanctioned June 2019
Golfinho/Atum
AQUIFER ORCA LNG Facility Site
Prosperidade
MOZAMBIQUE
AFRICA
TUBARÃO TUBARÃO TIGRE
APC Working Interest Block
AREA 1 | OVERVIEW
Initial Development
Natural Gas Field
Area 1 | Project Sponsors
~75
Trillion Cubic Feet
1st
Mover Distinction For Onshore
2
Train Project With Scope
~2
Bcf/d Feedgas
France
1.2 MTPA
China
1.5 MTPA EDF
Japan/UK/ Taiwan
CNOOC
4.5 MTPA
India
1 MTPA
TOHOKU ELECTRIC BHARAT
TOKYO GAS / CENTRICA JERA / CPC
PERTAMINA
Indonesia Global Portfolio Player
2 MTPA
1 MTPA SHELL
Markets of Global Customers
Mozambique LNG is transformative in terms of…
Revenue
Opportunities
Steady, long-term revenue and reliable source of domestic gas for Mozambique
Supporting thousands of jobs and opportunities for sustainable training and education
The Environment and Cleaner Source of Energy
Investment
Mozambique LNG is ideally positioned to meet the needs of customers in rapidly growing Asian and European markets
The largest foreign investment in the history of Mozambique and will likely more than double the country’s current GDP
LNG2019
High level of optimism at LNG2019 The consensus at LNG2019 was that global LNG trade could double by 2040 to over 600 mt provided the challenges facing sustainable growth are met. By Mark Blacklock The triennial LNG X conferences owned
ation with the support of the Shanghai
by IGU, the Gas Technology Institute
Municipal People’s Government.
(GTI) and the International Institute of
The Chinese hosts led calls for cost-
He highlighted the need to reduce costs to make LNG more affordable and this message was underscored by
Refrigeration (IIR) alternate between
competitive, flexible LNG and more
senior executives of the major Chinese
importing and exporting countries
investment in infrastructure, while the
energy companies.
with LNG2019 being held in China,
major producers acknowledged the
the world’s number two LNG importer
need to tackle costs, improve efficiency
enhanced by shorter contracts,
after Japan.
and reduce methane emissions.
reduced costs and improved efficiency,”
The event was hosted by IGU
“While there is a promising future for
“The global LNG trade will be
said Yang Hua, Chairman of CNOOC
Charter Member the China Gas Society,
the LNG industry there are also chal
and Honorary President of the LNG2019
IGU Associate Member the China LNG
lenges,” said Zhang Jianhua, Director of
National Organising Committee (NOC).
Association, the Chinese Association of
China’s National Energy Administration,
“CNOOC adheres to the strategy of
Refrigeration and the China Gas Associ
during the opening ceremony.
innovation-driven development.”
Representatives of the owners and hosts at the LNG2019 opening ceremony.
76 High level of optimism at LNG2019
LNG2019
Ying Yong, Mayor of Shanghai addressing the opening ceremony.
Zhang Jianhua, Director of China’s National Energy Administration: Promising future for the LNG industry but also challenges.
“The key challenges to sustain-
The messages were received loud
able development of the LNG market
Yang Hua, Chairman of CNOOC and Honorary President of the LNG2019 NOC: CNOOC adheres to the strategy of innovation-driven development.
“If we want to convince new cus
and clear.
tomers energy needs to be affordable
are price constraints on demand and
and competitive which means
the need for more flexible terms to
Cutting costs
controlling costs in each segment
enhance liquidity,” said Wang Yilin,
“Affordability is something we are all
of the LNG value chain,” said Patrick
Chairman of CNPC. “We need to
going to have to focus on,” said Ron
Pouyanné, Chairman & CEO of Total,
promote technological and busi-
Snedic, Chairman of the LNG2019
who was echoed by Ben van
ness innovation.”
Steering Committee and Senior Vice
Beurden, CEO of Royal Dutch Shell:
President, Corporate Development
“Gas must be affordable; that means
at GTI.
we must control costs”. He pointed to
In his address to the opening ceremony IGU President Joo-Myung (Joe) Kang was succinct, declaring the
“We need to find ways to be more
the company’s latest project to reach
challenge is to get “more energy to
cost-competitive when developing
FID (in October 2018), the 14 mtpa
more people with less carbon at a
projects,” said Mike Wirth, Chairman
LNG Canada, which is being developed
lower cost”.
& CEO of Chevron.
with partners Petronas, PetroChina,
Wang Yilin, Chairman of CNPC called for affordable LNG prices and more flexible contract terms.
IGU President Joo-Myung (Joe) Kang: Challenge is to get more energy to more people with less carbon at a lower cost.
Mike Wirth, Chairman & CEO of Chevron: Need to find ways to be more cost-competitive.
High level of optimism at LNG2019 77
An interview with Justin Bird, President, Sempra LNG You’ve recently started
Sempra Energy one of North America’s
commercial operations from
largest developers of LNG projects.
the first train of your first
As you noted, the first train of our first
liquefaction export project,
liquefaction project, Cameron LNG Phase 1,
what lessons did you learn
began commercial operations in August. At
developing Cameron LNG?
the same site, we are also working with our
Experience is everything when you develop
partners to develop a potential Phase 2 of
nearly 50%. This reduction in time represents
multi-billion-dollar projects such as Cameron
the project. The expansion already received
significant cost savings for customers, as
LNG. Sempra Energy has over 150 years
its Federal Energy Regulatory Commission
shipping costs account for approximately
of experience in gas supply, transmission
(FERC) authorisation and is anticipated to
20% of total delivered cost of LNG.
and distribution that we were able to
include two additional liquefaction trains and
leverage for the development of our first
up to two additional LNG storage tanks.
liquefaction train.
Port Arthur LNG is an approximately
Justin Bird, President, Sempra LNG
Last November, affiliates of Total, Mitsui & Co. and Tokyo Gas signed preliminary agreements for the full export capacity of
11-Mtpa fully-permitted project in Texas.
Phase 1 of the ECA LNG project, which
in operation, we will be able to apply
Last December, we signed a definitive
includes approximately 2.4 Mtpa of export
lessons learned from the Cameron LNG
20-year sale-and-purchase agreement with
capacity. By building a Phase 1 project and
project into our other world-class LNG
the Polish Oil & Gas Company (PGNiG) for
utilising existing marine and storage facilities,
development opportunities.
2 Mtpa of LNG, and we also signed a
LNG could potentially become available to
preliminary agreement with a subsidiary of
market as early as 2023.
Now, with the first liquefaction train
I should also add that we have gained invaluable experience in forming joint
Saudi Aramco for 5 Mtpa of LNG offtake.
ventures and alliances with world-class LNG
We have great commercial momentum going
project which could provide an additional
Industry players that will help us continue to
for this proposed project.
12 Mtpa export capacity.
improve our projects as we move forward.
We are also developing a Phase 2 of the
Together with IEnova, Sempra Energy’s Mexican subsidiary, we are also developing
Where do you see Sempra LNG
What are the next development
the proposed ECA LNG export project in
in the years ahead?
plans for Sempra LNG?
Mexico. Its unique location on the West
Sempra Energy has a clear vision to be North
We are currently developing one of the
Coast of North America is a true
America’s premier energy infrastructure
largest LNG export infrastructure portfolios in
differentiator and has the potential to be a
company. We continue to expect significant
the US. Our portfolio includes five strategi
game changer for isolated markets in Mexico
growth in LNG demand as nations transition
cally located multi-billion-dollar liquefaction
and customers in Asia. ECA could provide its
to cleaner natural gas and search for energy
facilities with the goal to develop 45 Mtpa of
customers with a competitive advantage,
security and reliability. The US will be at the
liquefaction capacity, which would make
reducing shipping times to Asian markets by
center of this transition as a world leader in natural gas production. We believe that Sempra is in a privileged position to capitalise on this market opportunity. We believe North American natural gas has an opportunity to be a game changer for European, Middle East and Asian markets by offering long-term, low-cost LNG supply sources that could increase reliability and provide greater energy security while supporting the US economy and creating more American jobs. With our projects in development, we have the opportunity to unlock North America’s energy potential and play a leader
Cameron LNG ships the first commissioning cargo of US LNG from the first liquefaction train of the export project in Hackberry, Louisiana – May 2019.
ship role in supporting America’s energy renaissance as a major global gas supplier.
UNLOCKING NORTH AMERICA’S ENERGY POTENTIAL
Sempra LNG develops, builds and invests in natural gas liquefaction facilities. We are pursuing five strategically located LNG opportunities in North America, with a goal of delivering 45 million tonnes per annum (Mtpa) of clean natural gas to the largest world markets, which would make Sempra Energy one of North America’s largest exporters of LNG.
Sempra LNG, LLC is not the same companies as the California utilities, San Diego Gas & Electric company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra LNG, LLC is not regulated by the California Public Utilities Commission. ©2019 Sempra LNG, LLC. All copyright and trademark rights reserved.
LNG2019
c Yamal LNG was on time with Train 1, which shipped its first cargo in December 2017, and ahead of schedule with Trains 2 and 3.
Mitsubishi and KOGAS for start-up
and project owners to learn lessons.
(0.9 mtpa) is due in service in 2020.
in 2024.
“First and foremost the front-end
Novatek is also evaluating the 4.8 mtpa
“We are reducing costs by using
engineering and design studies must
Ob LNG project which would share
tried and tested modular construction
be of very high quality,” he said. “Then
some of Yamal LNG’s infrastructure
methods,” explained van Beurden.
you have to have a very strong risk
but draw on different resources.
Other plus factors are a favourable
assessment and it has to be done in
Ob LNG is based on the resources of
fiscal framework and the fact that the
a collaborative way.”
the Verkhnetiuteyskoye and Zapadno-
site in Kitimat, British Columbia has
Pilenko cited Yamal LNG in north-
Seyakhinskoye fields located in the
good existing infrastructure, including
west Siberia, Russia as an example,
central part of the Yamal Peninsula,
a port, roads, railway and power
where TechnipFMC in joint-venture
whereas Yamal is fed by the South
supply, and is only 10 days sailing time
with JGC and Chiyoda carried out the
Tambeyskoye field in the north-east
from major markets in North Asia.
engineering, procurement, supply,
of the Yamal Peninsula.
The adoption of modularisation,
construction and commissioning
TechnipFMC has also been awarded
allowing construction in the controlled
(EPSCC) of the plant: “We agreed how
the EPSCC contract for Novatek’s Arctic
environment of a factory or fabrication
to manage risk and share contin
2 LNG project with Total, CNPC sub
yard before installation on site, and
gencies together.”
sidiary China National Oil and Gas
standardisation rather than bespoke
Yamal LNG, led by Novatek with
Exploration and Development Company,
project designs are helping to cut
Total, CNPC and the Silk Road Fund as
CNOOC, Mitsui and Jogmec as part
costs, while bringing in a project on
partners, was on time with Train 1,
ners, which was expected to reach FID
time helps avoid budget over-runs.
which shipped its first cargo in
at presstime. The project will have
December 2017, six months ahead of
three 6.6 mtpa trains using resources
of TechnipFMC, noted how few LNG
the initial schedule with Train 2 (August
of the Salmanovskoye (also known as
projects around the world in the last
2018) and a year early with Train 3
Utrenneye) field and is located on the
25 years have been completed on time
(December 2018). Each train has a
Gydan Peninsula, facing Yamal. The first
and said it is important for contractors
capacity of 5.5 mtpa. A smaller Train 4
train is scheduled to start up in 2023.
Thierry Pilenko, Executive Chairman
80 High level of optimism at LNG2019
LNG2019
coming with new business models and innovative ideas on how to deliver projects,” said TechnipFMC’s Pilenko. “The industry has invested on a boom and bust cycle,” said Hendrik Gordenker, Senior Corporate Vice President of JERA. “We can build our projects faster and in phases so supply is more responsive to demand.” Mark Gyetvay, CFO & Deputy Chairman of Novatek: Arctic LNG 2 will have lower costs and a smaller environmental footprint than Yamal LNG.
Mark Gyetvay, CFO and Deputy
“Our business model is to capture market share by driving on costs,” said Michael Sabel, co-CEO, co-Chairman and founder of Venture Global LNG, which is planning three projects in
Hendrik Gordenker, Senior Corporate Vice President of JERA: We can build our projects faster and in phases so supply is more responsive to demand.
The second and third projects,
Chairman of the Management Board of
Louisiana, USA using midscale trains
Plaquemines and Delta on the
Novatek, told LNG2019 delegates that
fabricated off site and arranged in
Mississippi River south of New Orleans,
Arctic LNG 2 will have lower lique
pairs. Each pair or “block” will have a
will be twice the size of Calcasieu Pass
faction costs and a smaller environ
capacity of 1.2 mtpa and be able to
with 18 blocks and four storage tanks.
mental footprint than Yamal LNG by
operate independently. Venture Global
FID for Plaquemines is expected in late
using the company’s Arctic Cascade
LNG has contracted with Baker Hughes,
2019 with the first phase of nine blocks
process and three concrete gravity-
a GE company, to supply the modular
starting up in late 2022 and the
based structures (GBS), one for each
liquefaction trains plus power gener
remaining nine in late 2023. No time
train. They will be fabricated in
ation and electrical distribution equip
line for Delta has been announced yet.
Murmansk by a joint venture of Saipem
ment that will be standardised across
and Renaissance, towed to Gydan and
the company’s sites. “We believe we
also in Louisiana – on the Calcasieu
anchored approximately 500m from
have achieved the lowest cost of lique
River, south of Lake Charles – and also
the shoreline. Each GBS will accommo
faction in the world,” declared Sabel.
modular but based on larger trains
date the liquefaction unit, LNG and gas
Construction of Venture Global LNG’s
Tellurian’s Driftwood LNG project is
using Chart’s process technology and
condensate storage tanks, power unit
first project, Calcasieu Pass, is underway
and offloading arms. “They will be self-
with Kiewit having been awarded the
The approach is to have 20 1.38
contained for liquefaction and power
engineering, procurement and con
mtpa trains grouped into five plants
which will be unique for the industry
struction (EPC) contract. Located at
each made up of one pre-treatment
and a game changer going forward,”
the intersection of the Calcasieu Ship
unit and four trains for a project total
declared Gyetvay.
Channel and the Gulf of Mexico, the
of 27.6 mtpa. Tellurian would market
plant will have nine 1.2 mtpa blocks
13.6 mtpa and equity partners the
Game changing
and two 200,000m3 full containment
balance. Total, which is a shareholder in
Other projects presented at LNG2019
storage tanks. Venture Global signed up
Tellurian, signed to become the first
also claimed to be game changing.
Stonepeak Infrastructure Partners as an
equity partner in Driftwood at
equity partner in Calcasieu Pass in May
LNG2019. Tellurian is negotiating
and operations are due to start in 2022.
equity partnerships with other parties
“What is striking about the current wave is the diversity of the players
82 High level of optimism at LNG2019
GE compressors.
INNOV TING
TO PROVIDE LOW-COST LNG TO THE WORLD > Safely delivering low-cost, long-term LNG > Leveraging a pre-assembled unit approach > Providing optimal gas sourcing > Exceptional maritime locations Today’s energy customers need affordable LNG to stay competitive. That’s why Venture Global LNG has created an innovative engineering approach to delivering North American LNG. Our three world-class LNG projects have cost-effective access to America’s lowest cost production basins. Our method of pre-assembled liquefaction units allows for faster implementation and lower labor requirements, both yielding lower LNG prices.
VentureGlobalLNG.com Lake Charles
LOUISIANA
Lake Charles
New Orleans
Plaquemines Delta LNG
Calcasieu Pass Gulf of Mexico
LNG2019
c The commissioning cargo from Sempra’s Cameron LNG in Hackberry, Louisiana was shipped in May aboard the Marvel Crane.
including Petronet. FID on the first
Also nearing FID is Sempra Energy’s
ation and NYK), was shipped in May.
phase of three plants is expected in
Port Arthur project in Jefferson County,
late 2019 with production starting in
Texas. “The tolling model was most
projects is how long the US-China
2023. Start-up of the second phase with
common for the first wave of US
trade dispute continues. China
two more plants is envisaged in 2026.
projects,” said Sempra LNG’s President
imposed a 10% tariff on LNG imports
Bechtel has the EPC contract.
Justin Bird, giving Cameron LNG in
from the USA in September 2018 and
Hackberry, Louisiana as an example.
increased it to 25% in June. The current
tiple pricing options is a new and dis
“We have transited from a tolling
US producers only supplied 2.26 mt to
ruptive model,” said Matt Schatzman,
to an SPA model.” Phase 1 of Port
China in 2018 and can find other
President & CEO of NextDecade, who
Arthur is a two-train, 11 mtpa project.
customers in the meantime, while
announced the first sales and purchase
Sempra has agreed a 2 mtpa SPA with
Sempra is hedged by Energía Costa
agreement (SPA) for US LNG linked to
PGNiG and signed a Heads of Agree
Azul’s location in Mexico. But as more
the Brent crude pricing benchmark at
ment with Saudi Aramco covering the
US capacity comes onstream, being
LNG2019. Shell signed for 2 mtpa over
negotiation of a 5 mtpa SPA and an
effectively locked out of the second
20 years from NextDecade’s Rio Grande
equity stake.
largest LNG market pending a new
“We believe our ability to offer mul
LNG project with some three-quarters
Sempra is also lining up the Energía
A big question facing the US
trade agreement would have an
indexed to Brent and the balance linked
Costa Azul project near Ensenada in
to domestic US gas indexes, including
Baja California, Mexico for FID, which
Henry Hub. Rio Grande in Brownsville,
would be supplied by US gas. Phase 1
New capacity in Africa and the
Texas is planned for a maximum
of this involves the addition of a
Middle East
capacity of 27 mtpa with six trains. The
2.4 mtpa liquefaction train to the exist
While Australia recently took Qatar’s
EPC contract for the first three trains
ing regasification terminal. Meanwhile,
crown to become the largest LNG
and two 180,000m3 storage tanks was
the first cargo from Cameron LNG, a
producer with nameplate capacity of
awarded to Bechtel in May. FID was
joint venture of Sempra, Total, Mitsu
87.6 mtpa, the Middle Eastern nation
expected at presstime, with commercial
and Japan LNG Investment (in turn
was bullish at LNG2019. HE Saad
operations targeted to begin in 2023.
jointly owned by Mitsubishi Corpor
Sherida Al-Kaabi, Qatar’s Energy Affairs
84 High level of optimism at LNG2019
increasingly severe impact.
LNG2019
HE Saad Sherida Al-Kaabi, Qatar’s Energy Affairs Minister and President & CEO of Qatar Petroleum: Initial contracts awarded to increase LNG capacity to 110 mtpa
Tony Attah, CEO & Managing Director of Nigeria LNG: FID on Train 7 expected at end October.
Darren Woods, Chairman & CEO of ExxonMobil: Time of transformation for the industry.
Minister and President & CEO of Qatar
Empresa Nacional de Hidrocarbonetos
transformation. We’re seeing increased
Petroleum, told delegates that prepar
(ENH), Bharat PetroResources, PTTEP
supplies from a geographically diverse
ations for the North Field expansion
and Oil India as partners. It is based on
resource base, greater liquidity, more
project to increase the country’s
gas resources in Mozambique’s off
competition and a growing number
capacity from 77 to 110 mtpa with four
shore Area 1. A joint-venture of
of buyers and sellers.”
new megatrains were well underway.
McDermott, Saipem and Chiyoda
He said that the contract for early site
has the EPC contract and start-up
markets are strong,” said Jack Fusco,
works for the onshore facilities had
is expected in 2024.
President & CEO of Cheniere Energy.
been awarded to a joint venture bet
The site for the liquefaction plant
“The long-term fundamentals for LNG
According to IGU’s 2019 World LNG
ween Consolidated Contractors and
will be shared with the two-train 15.2
Report, highlights of which were
Teyseer Trading and Contracting, while
mtpa Rovuma LNG project based on
presented at LNG2019, global trade
a contract for the fabrication and
resources from offshore Area 4.
increased 9.8% in 2018 to 316.5 mt.
installation of eight offshore jackets
Rovuma’s partners are ExxonMobil, Eni,
The biggest importing region remains
had gone to McDermott.
CNPC, ENH, Galp Energia and KOGAS,
Asia-Pacific (defined in the IGU report
and FID is expected later in 2019.
as Japan, Korea, Malaysia, Singapore,
Anadarko’s Chairman & CEO Al Walker presented Mozambique LNG
Nigeria too was bullish about
Taiwan and Thailand) where imports
and said the project was on target to
expansion after years of postponing it.
increased by 4.9% to 153.3 mt, but it
reach FID by the end of June (which it
“We expect to take FID on Train 7 to
is the Asia region (Bangladesh, China,
did). “This is going to be a transform
add 8 mt on October 31,” said Tony
India and Pakistan) which is driving
ational project,” he declared. “It will
Attah, CEO & Managing Director of
demand growth. Imports surged 36%
change the quality of life for people
Nigeria LNG. “We don’t think that will
to 85.9 mt, with China accounting for
in Mozambique.”
be the end; we see more trains.”
70% of the increase.
The two-train 12.88 mtpa project is
“China is the most dynamic LNG
led by Anadarko (although once the
Transformation
market and the one with the most
company is taken over by Occidental
“It’s not just a period of growth,”
potential,” declared Ye Guobiao,
its African interests will be sold on to
declared Darren Woods, Chairman &
Chairman of the Shanghai Petroleum
Total) with Mitsui, ONGC Videsh,
CEO of ExxonMobil. “It’s also a time of
and Natural Gas Exchange.
86 High level of optimism at LNG2019
LNG2019
China’s gas consumption in 2018
The country’s fifth import terminal, and
grew 17% to 280 bcm of which 56%
the first on the east coast at Kamarajar
was produced domestically, 27%
Port near Chennai, received its com
imported as LNG and 17% via pipeline.
missioning cargo in February. Two
The country’s Blue Sky Policy to reduce
other terminals at Mundra and Jaigarh
air pollution is driving a move away
on the west coast are expected to start
from coal and the target is to double
up later in 2019 and a second east
the share of gas in China’s primary
coast terminal at Odisha is planned
energy mix to 15% by 2030, when con
for 2021. Jaigarh will use the country’s
sumption is forecast to reach 500 bcm. Achieving the forecast means signi ficant investments in infrastructure and
Li Yalan, Chair of Beijing Gas Group and IGU’s Vice President: Chinese city gas companies need to build infrastructure.
to foster this in the transmission sector
first floating storage and regasification unit (FSRU). Pakistan and Bangladesh, where gas already has a significant share of
the Chinese government has announced
China is also working to improve
plans to create a national pipeline com
energy efficiency. “We have put a lot of
tively – are also expected to show
pany by combining the transmission
effort into enhancing the efficiency of
strong demand growth. Pakistan
assets of the state-owned energy
using gas,” said Alfred Chan, Managing
doubled LNG imports in 2018 through
majors. In the distribution sector,
Director of the Hong Kong and China
its two FSRUs, while Bangladesh, which
“Chinese city gas companies need to
Gas Company.
started LNG imports in August 2018,
build infrastructure particularly storage
the energy mix – 44% and 68% respec
Like China, India is seeking to reduce
brought a second FSRU online just
capacity to cover 5% of consumption,”
urban air pollution, has a target to
after LNG2019 at the end of April.
said Li Yalan, Chair of Beijing Gas Group
increase the share of gas in its energy
Pakistan is planning to add a third
and IGU’s Vice President. More regasi
mix to 15% by 2030 and is developing
FSRU and Bangladesh is planning an
fication capacity is being built. For
its pipeline infrastructure. Gas con
onshore regasification terminal.
example, CNOOC operates 10 of
sumption grew 8% in 2018 to 58.1 bcm
China’s 21 LNG import terminals and
of which 47% was produced domesti
Japan remains the world’s largest
has plans to build 17 more.
cally and the balance imported as LNG.
importer although its imports declined
Of the main markets in Asia-Pacific,
v India’s fifth import terminal, and the first on the east coast at Kamarajar Port near Chennai, received its commissioning cargo from the Golar Snow in February.
High level of optimism at LNG2019 87
LNG2019
slightly in 2018 (by 0.6 mt) and future
years and also using more of the
Argentina. Prelude is the largest FLNG
demand will depend on the rate of
vessel’s capacity.”
project at 3.6 mtpa plus 1.3 mtpa of
nuclear reactor restarts. Meanwhile,
Keppel Shipyard is currently
condensate and 0.4 mtpa of LPG.
Korea’s demand for LNG increased 17%
converting a second Golar tanker (the
Shell’s partners are INPEX, KOGAS
in 2018 and is expected to continue
Gimi) for the Greater Tortue Ahmeyim
and CPC. Tango is the smallest FLNG
rising said Young-Doo Kim, acting
LNG project offshore Mauritania and
at 0.5 mtpa.
President & CEO of KOGAS. Korea has
Senegal. This is being developed by BP
reduced taxes on LNG and increased
and Kosmos Energy with Petrosen and
Dua, will enter service offshore Sabah
them on coal as the country moves to
Société Mauritanienne des Hydro
in 2020 to produce from the Rotan
reduce coal’s share in the energy mix.
carbures et du Patrimoine Minier.
field operated by PTTEP (which
Going forward, Golar is looking at a
acquired its interest from Murphy Oil)
developed around the world. Indeed,
larger FLNG conversion-based design
with Petronas as a partner, while the
David Knipe, Head of International Gas
with a capacity of 3 to 3.3 mtpa and
Mozambique FLNG project, Coral Sul
at BP, said that half of LNG import
also at a new-build. “Storage is the
with Eni, ExxonMobil, CNPC, Galp
growth to 2040 would come from
thing people want and a limiting factor
Energia, KOGAS and Empresa Nacional
greenfield markets.
for us is the 125,000m3 capacity [of the
de Hidrocarbonetos as partners, will
existing converted tankers],” said Ross.
follow in 2022. Coral Sul has a capacity
Floating LNG
“We note the Petronas FLNGs have a
of 3 mtpa of LNG and 0.48 mtpa
Two sessions at LNG2019 were devoted
capacity of 177,000m3 and our new
of condensate.
to floating LNG which Golar LNG CEO
design would be similar with our new-
Iain Ross pointed out, “can be very
build in-between.”
Moreover, new markets are being
The second Petronas FLNG vessel,
Reducing methane emissions
competitive in terms of schedule and
Petronas inaugurated the first
Industry leaders at LNG2019 agreed
cost”. He presented Cameroon FLNG,
floating liquefaction project when
that tackling methane emissions is
which was the second floating lique
Petronas FLNG Satu started shipping
vital and that working together is
faction project to start up (shipments
in April 2017 from the Kumang
the way forward. According to figures
started in May 2018). Société Nationale
cluster field, offshore Sarawak,
presented by Shan Weiguo, Head of
des Hydrocarbures du Cameroun (SNH)
Malaysia. The company announced at
Gas Market Research at CNPC’s
and Perenco have contracted Golar’s
LNG2019 that it had just relocated the
Economics and Technology Research
Hilli Episeyo, a converted LNG tanker.
vessel to increase output at the
Institute, the petroleum industry emits
Production currently uses two of the
Kebabangan cluster field, offshore
nearly 100 bcm of methane a year. As
vessel’s four trains for an output of
Sabah, Malaysia, which is operated
well as the environmental impact this
1.2 mtpa.
by Petronas with ConocoPhillips and
represents an economic loss of
Shell as partners. The first LNG cargo
$30 billion a year.
“FLNG Hilli Episeyo came in at a cost of $500 per tonne but bear in mind this
from the new location was shipped
is a dry facility with no liquids,”
in June.
explained Ross. “Our model is a tolling
Also shipped in June were the
“We must convince people of the environmental case for natural gas,” said Ben van Beurden, CEO of Royal
model which is a very low capital
first LNG cargoes from Shell’s Prelude
Dutch Shell. “Unless we succeed in
intensive way of developing a field.
FLNG offshore Australia, which had
reducing methane leaks throughout
We are working with Perenco and SNH
shipped its first condensate in March,
the industry that environmental case
about extending the term from eight
and YPF’s Tango FLNG in Bahía Blanca,
will be hard to meet.”
88 High level of optimism at LNG2019
LNG2019
MethaneSAT will be launched in 2021 said Yang Hanling, Director of Inter national Policy & Legal Affairs at the Environmental Defense Fund. EDF claims MethaneSAT will improve on existing satellite measuring as it has the capacity to detect lower emission sources while being able to attribute the source of those emissions at scales Bob Dudley, Group Chief Executive of BP: The world needs gas to be better.
relevant to oil and gas infrastructure. From LNG2019 to LNG2022
Peter Coleman CEO & Managing Director of Woodside: Industry needs to show it is com mitted to effective action on climate change.
All in all 40 plenary speakers addressed
colleagues thanked the Chinese hosts
One way is to minimise methane
the conference along with 200 industry
and the organising team for a success
emissions,” said Bob Dudley, Group
experts covering the entire LNG value
ful event and invited participants to
Chief Executive of BP.
chain, while the accompanying exhi
Russia for the next edition which will be
“We need to improve our own
bition featured 200 exhibitors present
held in St Petersburg, April 4-8, 2022.
operations, increasing energy effici
ing their latest technology and services.
ency, reducing methane emissions
There were 15,000 attendees overall,
Mark Blacklock is the Consulting
across the natural gas value chain and
just over 2,000 of which were
Editor of International Systems and
investing in biosequestration,” said
conference delegates. At the closing
Communications. IGU’s 2019 World
Peter Coleman, CEO & Managing
ceremony Sergey Kalityuk, Director
LNG Report can be downloaded from
Director of Woodside Energy.
General of the LNG2022 NOC and his
www.igu.org.
“The world needs gas to be better.
“Governments and markets need to work together to co-create a sustain able environment,” said Wan Zulkiflee, President & Group CEO of Petronas. In September 2018, 13 companies in the Oil and Gas Climate Initiative (OGCI) signed up to a pact to limit methane emissions to 0.25% of their total mar keted product by 2025, with a stated ambition to go as far as 0.2%. The OGCI member companies are BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occi dental, Pemex, Petrobras, Repsol, Royal Dutch Shell, Saudi Aramco and Total. Improved monitoring of emissions is important with the use of drones and the launch of a new satellite.
90 High level of optimism at LNG2019
Farewell to “Chat” Dr Nirmal Chatterjee, Chairman of the Programme Committee (PC), which is responsible for the technical programme of the LNG X conferences, retired at the end of LNG2019. He chaired the PC for eight conferences starting with LNG12, which was held in 1998. Dr Chatterjee (Chat) received his PhD in Chemical Engineering in 1971 from the University of California in Berkeley. He then worked for Air Products and Chemicals, retiring in 2004 as their Global Vice President of Engineering and Environment, Health and Safety. He was the first to solve the LNG rollover problem in La Spezia, Italy in 1971 and his recommendations are standard design and operating practice in all LNG storage tanks. He was involved in all aspects of LNG development, engineering, operation and safety.
The Global LNG Services Mission and Offering
Supporting the growth of global energy
ject at the Main Pass Energy Hub™
supply at affordable levels is critical, as is
(MPEH). GLS has contracted with
US Maritime Administration (MARAD) as
the replacement of coal as a fuel. In a
TechnipFMC as the EPCIC contractor to
a Deepwater Port for the liquefaction,
global context, coal-related air pollution
complete the pre-FID engineering for the
storage, offloading, and export of LNG.
causes seven million deaths per year.
LMV with FID scheduled for MPEH in 2021.
MPEH already holds DOE approval for
33 billion tonnes of CO2 is currently being
The Project will be permitted by the
export of 24 mtpa of LNG to Free Trade
emitted versus the Paris objective of
Lowest cost liquefaction
Agreement nations. In line with
18 billion tonnes by 2040. Coal to gas
provider
established DOE procedure, MPEH
switching, using low-cost natural gas
GLS is offering its anchor offtaker an
will apply for approval of export to
converted to LNG, is the ideal mechanism
industry-low tolling fee of $2.16 per
non-FTA nations following MARAD’s
to reduce global emissions. It is therefore
MMBtu for the full volume of the first
approval. The DOE recently released
important for global consumers to have
LMV, providing US shale producers a
a study which essentially eliminates the
access to low-cost US LNG.
pathway to global markets. The GLS cost
risk of not receiving non-FTA approval.
advantages stem from GLS’ patent-
The outstanding permitting track record
business in which the lowest cost provider
protected innovations:
of the GLS team and the well-known
is chosen. The lowest cost liquefaction
• Application of proven technology with
regulatory requirements of the Deep
Liquefaction of gas is a commodity
contract on the US Gulf Coast (USGC)
no residual technology risk.
was the 2010 anchor contract between
• Patented air cooling instead of
two major industry players at $2.25 per
environmentally problematic water
MMBtu. The most recent contract was
cooling for the liquefaction process.
water Port Act (DPA) further reduces risk associated with obtaining necessary licenses. GLS is a Norwegian-based company
priced at $2.75 per MMBtu. Even lower
• Largest conventional ship hull to
with offices in several countries, including
prices are required if the US is to com
maintain competitive bidding.
the US. GLS is led by its founder Dr Paul
petitively participate in the continued global growth of LNG. GLS was founded in 2013 with a management directive of reducing the cost
• Pre-processing located off the LMV
Eckbo and a team of highly experienced
provides maximum space on the vessel
principals and board members. Peter
for liquefaction facilities.
Mellbye of the GLS BOD built the Statoil
• Stay-on-station design eliminates time
gas business into the largest gas business
of liquefaction by an order of magnitude.
consuming relocation of the vessel
in the world outside Russia. The mem
The key focus was to leverage significant
under adverse metocean conditions
bers of GLS’ management team have a
economies of scale and series production
• Series production of standardised LMVs
long history of offshore permitting,
of standardised large-scale, air-cooled
at Asian yards supports the global
liquefaction vessels that would meet the
“plug and play” market for access to
strictest global regulatory standards for
stranded gas.
process of being negotiated with
The MPEH Project’s excellent location
creditworthy counterparties for the full
safety and environmental impact.
operating and construction experience. Offtaker agreements are in the
east of the Mississippi River entrance,
12 mtpa of capacity from the first LMV.
portfolio including the patented LIQUI-
outside the main shipping lanes and inland
GLS anticipates substantial worldwide
MAX™ Vessel (LMV), capable of LNG
waterways, and away from the congestion
demand for its low-cost liquefaction
production of 12 mtpa. The leading
of the existing and proposed projects in
solution, and is pursuing projects in the
industrial companies in the liquefaction
the western Gulf, provides substantial
US Gulf of Mexico, Canada, Africa, the
space, TechnipFMC, Air Products and
logistical operating cost savings for
Middle East, and Latin America.
Chemicals Inc., Baker Hughes – a GE
prospective LNG offtakers of as much as
company, and Emerson participated in the
$60 million per year per LMV. This
development and verification of the LMV
location provides ready access to abundant
Basis of Design and will continue to
and favourably priced gas supply from
Paul L. Eckbo, Founder and Chairman,
participate in completion of the first pro
multiple production basins.
Global LNG Services
GLS developed an intellectual property
TAP - Preparing for commercial operations & first gas deliveries in 2020 TAP construction progress in 2019*:
Pipeline construction - Skrapar, Albania
• Overall construction close to 90% complete • 94% land along the route reinstated • Facilities: - Compressor station in Fier, Albania over 96% complete - Compressor station in Kipoi, Greece over 95% complete - Pipeline Receiving Terminal in Melendugno, Italy over 32% complete • 43.2m man hours worked and 121.2m km driven without any major incident
Offshore construction - Adriatic Sea
Reinstated land - Greece
• Market test launched 1st July 2019 *construction progress figures as of end of June 2019
Construction site - Melendugno, Italy
For more information, please visit our website: www.tap-ag.com
NEWS We start this issue’s news section with reports from the Regional Coordinators for North Asia & Australasia and for South & South East Asia. Then the Members’ corner focus is on Spain’s Sedigas. Next up are profiles of IGU’s new members followed by news from the Secretariat and a review of the latest edition of IGU’s Wholesale Gas Price Survey. After the news section, we round off with an overview of IGU’s organisation, members and the events calendar.
93
NEWS
Reports from the Regional Coordinators In this issue we bring you reports from IGU’s Regional Coordinators for North Asia & Australasia and South & South East Asia. Gas: A breath of
in North China (2017 to 2021), which
period Chinese gas consumption has
fresh air for
requires that by 2019 the clean heating
risen by 44% to 280 bcm (see Figure 1).
North Asia
rate in North China should reach 70%,
However, the share of gas in primary
By Graeme Bethune
replacing 150 million tonnes of coal.
energy consumption in 2018 was still
Natural gas is
Natural gas is playing an important
only 7.5%, well below Japan and Korea.
bringing cleaner
role in this transformation. In 2017,
The government has a target for the
energy to the world,
4 million households switched from
gas share to reach 10% by 2020 and
reducing reliance on coal, diesel and
coal to natural gas and electricity,
15% by 2030.
biomass. Nowhere is this more
exceeded in 2018 by a further 4.8
important than in North Asia, with its
million households.
cold winters and resulting pall of smog from burning coal. China
As we heard at the LNG2019 con ference in Shanghai in April, achieving
All households in the Beijing-Tianjin-
these targets will require substantial
Hebei and Shanxi-Shaanxi regions
investment in infrastructure. China has
will switch from coal to gas for heating
high peak demand in winter but has a
by 2020.
lack of storage so this increases prices.
Gas is one of the tools China is using to
China’s share of coal in its total
tackle its air quality challenge head on.
energy mix is falling, down to 59% in
trated in the south but winter demand
It has a Clean Heating Plan for Winter
2018 from 64% in 2015. Over the same
is in the north, with insufficient pipe
Regasification terminals are concen
North Asia gas consumption, 2013-2018 (bcm) 300.0
250.0
200.0
150.0
100.0
50.0
0.0 2013 China
z China’s NGV fleet includes 250,000 LNG-fuelled trucks. 2014 Japan
2015
2016
2017
2018
Korea
Sources: BP, EnergyQuest
96 Reports from the Regional Coordinators
c Figure 1.
NEWS
line capacity and a lack of pipeline
Vice President and will become IGU
ment policy is now encouraging gas
connections. Trucking is widely used to
President in 2021.
and renewables, lowering taxes on
transport LNG, from regasification
China produces its own gas but
terminals, pipelines and mini-LNG
domestic production is only sufficient
and raising taxes on thermal coal. LNG
plants inland. About 14% of gas
to meet around 60% of demand,
imports were up by 17% year-on-year
demand is met by trucking LNG. There
making the country a major gas
in 2018 to a record 44.5 mt. Nuclear is
are currently proposals to establish a
importer by both pipeline and LNG.
relatively important in Korea (10% of
national pipeline company.
China’s LNG imports increased by
the energy mix) but is also politically
40.7% year-on-year in 2018 to 54.8 mt
controversial. Australia is the second
China has the world’s largest down
and total imports (LNG and pipeline)
biggest LNG supplier to Korea.
stream LNG market (24 mt in 2018).
were up by 32.4% to 90 mt, passing
About 10 mt is liquefied from small gas
Japan to be world’s largest gas
with relatively clean air. Over the last
fields and pipelines. The largest sector
importer. Australia is the leading
three years Japanese gas consumption
is industrial buyers who are not
supplier of LNG to China, supplying
has fallen by 6%. Gas consumption
connected to pipelines or who want
43% of LNG imports in 2018. Pipeline
peaked in 2012, shortly after the Great
security of supply.
gas currently comes from Central Asia
Eastern Earthquake which closed down
and Myanmar but the Russian Power of
the country’s nuclear generation.
countries is that there is already
Siberia pipeline is also due to start
However, nuclear is now back on the
large-scale use of gas in transport in
supplying northern China by the end
table with five reactors starting up
China, reducing carbon emissions by
of 2019.
again in 2018. Japan also relies entirely
Reflecting the lack of infrastructure,
One difference from many other
over 25% compared with diesel. Gas
LNG by up to 74% from April 2019
Japan is an exception in North Asia,
on LNG for its gas supplies, with
is also cheaper than diesel. China has
Korea and Japan
6 million natural gas vehicles and
China is not the only North Asian
the fleet is forecast to increase to
country with an air pollution problem.
Australasia
10 million by the end of 2020.There
Earlier in the year (March 13, 2019) The
The other two countries in the
are already 250,000 trucks powered
Guardian ran an article headed, “Social
region are Australia and New Zealand,
by LNG, forecast to increase to
disaster: South Korea brings in emer
collectively known as Australasia.
1.5 million. China has 3,000 LNG
gency laws to tackle dust pollution”.
By Asian standards Australia has a
filling stations.
The paper said that air quality has
relatively small domestic gas market
become a key political issue after
of around 42 bcm but is now the
record pollution levels hit the country.
world’s largest LNG supplier, with
Korea, which relies on LNG imports,
exports expected to reach around
city-gas distributors and major gas
has a well-developed gas market with
80 mt in 2019. The last decade has
users such as Beijing Energy, Beijing
substantial storage and an integrated
seen a massive LNG building boom
Gas, China Gas, ENN, Guanghui Energy,
national pipeline system. Nonetheless
in Australia with seven new projects
Guangzhou Gas and Shenzhen Gas.
the share of gas in the energy mix is
added to the three existing projects.
Many of them are relatively unknown
only 16%, well below the 22% in
Prelude, the last of these and the
in the west but are likely to be very
neighbouring Japan.
world’s first large-scale floating
The LNG2019 conference provided an opportunity to meet China’s large number of second-tier gas companies,
important in future. The chair of Beijing Gas, Madam Li Yalan, is currently IGU
Australia the largest supplier.
Since 2015, Korean gas consump tion has increased by 29%. Govern
LNG project is now coming into production.
Reports from the Regional Coordinators 97
NEWS
Australia’s latest LNG project to start up is Prelude which shipped its first condensate cargo in March and its first LNG cargo in June on the Valencia Knutsen (pictured).
The customers for all this LNG are pre
gas prices. This has reduced gas-use for
only 6% coal and 11% renewables,
dominantly North Asian: China, Japan
power generation, benefitting coal and
17% gas and 27.5% hydro according
and Korea. Australia has been supplying
subsidised renewables. While LNG is
to the BP energy statistics for 2018.
Japan since 1989 and started first supp
reducing greenhouse emissions in Asia,
However, despite this it has the fifth
lies to China in 2006. This has provided
it is criticised for increasing emissions
highest level of per capita greenhouse
LNG buyers with a secure source of clean
in Australia.
emissions in the OECD. While it only
energy, improving urban air quality. Unfortunately, despite its manifest
New Zealand has an even smaller
produces modest volumes of methane
domestic gas market than Australia of
from gas wells, it also produces signi
benefits, natural gas development has
around 7 bcm. Gas development is not
ficant volumes from its cattle and
become increasingly unpopular in
encouraged. While there have been
sheep. A “clean” energy mix is no
Australia. The anti-fossil fuel movement
some recent onshore exploration
guarantee of low emissions.
has been successful in restricting
licences released, the government has
onshore development in the two most
said it will not issue any further
Dr Graeme Bethune is Chair of the
populous states, New South Wales and
offshore permits.
Australian Gas Industry Trust and the
Victoria, leading to a tight domestic gas market and much higher domestic
Overall New Zealand has a relatively “clean” energy mix with 38.5% oil but
98 Reports from the Regional Coordinators
IGU Regional Coordinator for North Asia & Australasia.
NEWS
Major growth for
c Bangladesh is the region’s newest LNG importer and has two FSRUs offshore Moheshkhali Island in the Bay of Bengal. The first to enter ser vice was the Excellence in August 2018 and it is contracted by Petrobangla. The second FSRU, Summit LNG, (pictured arriv ing on station) was commissioned in April 2019 and is contracted by Summit Energy. Both vessels have been supplied by Excelerate Energy.
gas in South & South East Asia By Hazli Sham Kassim Covering an area of some 10 million km2 with a population of nearly 2.5 billion population and a combined GDP of approximately $6 trillion, IGU’s South & South East Asia Region makes up the bulk of non-OECD Asia. The region holds great potential as a critical driver of global gas consump tion growth. By 2040, IEA projects that consumption in non-OECD Asia will
terminal projects in many countries
Gas is boosted by the fact that fin-
increase by over 600 bcm/year, accoun
as they turn towards imports to com
ancial institutions in the region are
ting for nearly 40% of global growth.
plement domestic production.
making a decisive switch towards
As the region increases its reliance
Gas is used mostly for power
funding only clean energy sources,
on gas, it is also facing supply con
generation in the region, where it
including gas-fired power plants.
straints. The need to ensure energy
traditionally competes against a
Indeed, several – such as the Asian
security is spurring LNG regasification
cheaper alternative, namely coal.
Development Bank and Singapore’s
The need for energy security is spurring LNG regasification terminal projects in South East Asia countries, such as the world’s first jetty-based regasification unit in Malacca, Malaysia, built, operated and owned by Petronas.
100 Reports from the Regional Coordinators
Common Energy Common Future
NEWS
major existing and planned gas pipe
Gas statistics for Bangladesh, India and Pakistan, 2018 (bcm)
line infrastructure within ASEAN coun tries to ensure greater security of gas
70
supply for the region through redund
60
ancy and enhanced sourcing options.
50
On the demand side, electricity
40
consumption in ASEAN countries is
30
set to grow by an average of 5.6% annually, which translates into about
20
13GW of additional power generation
10
capacity per annum in the years 2020-
0 Bangladesh Production
India LNG imports
2030. Gas demand, driven by both this
Pakistan
key power sector as well as the non-
Consumption
power sector, is expected to increase
Source: BP Statistical Review of World Energy 2019
c Figure 2.
by 20% from 2017 to 2030, with LNG imports increasing by more than 10%
leading banks – have ceased financing
Philippines, Singapore, Thailand
new coal power projects.
and Vietnam). Regional cooperation in oil and gas
per annum during the same period. South Asia
South East Asia
matters takes the form of the ASEAN
This sub-region covers Bangladesh,
This sub-region essentially com-
Council on Petroleum (ASCOPE) plat
India and Pakistan. It is facing acute
prises the members of the Asso-
form that is made up of national oil
supply constraints resulting in a need
ciation of South East Asian
companies. A cooperative initiative
to expand its gas supply infrastructure.
Nations – ASEAN (Brunei, Cambodia,
under ASCOPE is the Trans-ASEAN Gas
Indonesia, Laos, Malaysia, Myanmar,
Pipeline, which aims to interconnect
In India, the government aims to increase the share of gas in the primary energy mix from 6% to 15% by 2030. There are plans to nearly double the
Gas statistics for ASEAN countries*, 2018 (bcm) Country Production
LNG imports
LNG exports
Pipeline imports
Brunei
12.6
Indonesia
70.6
21.0
Malaysia
72.5
33.0
Myanmar
17.8
Philippines
1.8
Pipeline Consumption exports
8.8 7.6
0.6 10.6
4.2
Singapore
4.5
Thailand
6.2
Vietnam
pipeline network from 16,000 km to city from 27 to 78 mtpa. Meanwhile,
42.0
regasification terminals in Pakistan and
41.3
Bangladesh that have been commis
7.2 4.1
8.8
12.3
7.8
49.9
9.6
9.6
37.7
0.7**
3.8
30,000 km and triple LNG import capa
sioned in recent years will facilitate more LNG imports for the region as demand continues to grow (see Figure 2).
Notes:
Hazli Sham Kassim is President of the
* Cambodia and Laos do not currently have natural gas supplies but Cambodia is planning to start LNG imports using a floating storage and regasification unit (FSRU)
Malaysian Gas Association and the IGU
** re-exported
Regional Coordinator for South & South
Sources: BP Statistical Review of World Energy 2019, SKK Migas Annual Report 2018
102 Reports from the Regional Coordinators
East Asia.
NEWS
Members’ corner This section of International Gas gives IGU members an opportunity to profile themselves and their relationship with the Union. In this issue we have a Q&A with Marta Margarit Borras, the Secretary General of the Spanish Gas Association (Asociación Española del Gas – Sedigas). International Gas (IG) Could
activities the key role the use of gas
you introduce Sedigas briefly
is going to play when facing the
to readers in terms of your
environmental, energy and economic
membership and activities?
challenges in the future. Sedigas has
Marta Margarit Borras (MMB)
committed itself to help achieve the
Sedigas is an association that brings
goals set by the recently presented
together all companies from the
National Energy and Climate Plan,
Spanish gas sector. Our work aims to
providing greater energy efficiency
comply with the UN’s 2030 Agenda of
and encouraging the introduction
the Sustainable Development Goals
of renewable energy.
and the EU’s energy and climate objec
By 2030 the National Energy and
tives. Our main goal is to promote the
Climate Plan has forecasted the quick
use of gas, as it is a mature, tested, effi
insertion of renewable energies in the
cient and easily substitutable techno
sector due to the gradual disappear
logy, which works as an alternative
ance of coal and, subsequently, of
energy source to more polluting fuels. We also work to promote the
Marta Margarit Borras, Secretary General of Sedigas.
cooperation of all the agents involved in accelerating the energy transition,
nuclear energy and gas will play an important part in guaranteeing the energy supply. The Plan highlights the
Our organisation integrates among
government’s intention to develop
which seeks a balance between
its members companies engaged in
specific plans to achieve the pene
looking after the environment and the
the transmission, distribution or mar
tration of renewable gas. In this regard,
guarantee of supply, economic growth
keting of gas, as well as associations of
it specifies that gas must play an
and consumer welfare.
companies and product and services
important role in the energy matrix by
suppliers for the gas industry.
providing a sink for CO2 – which serves
Sedigas thus becomes the sector’s representative body and interlocutor
to reduce emissions – and providing
with national, regional and inter
IG How has Sedigas been involved
solutions to the problem of waste
national administrations, as well as
in the drawing up of Spain’s
management. The Plan also aims to
a key player in promoting the use of
National Energy and Climate Plan
foster gas usage in the building sector,
gas through its numerous initiatives
and what is the outlook for the gas
in its heating and hot water applica
and activities developed by the
industry in Spain to 2030?
tions and to advance hybrid gas and
Committees and Working Groups that
MMB We have worked on ensuring
renewable technologies as highly effi
make up its functional structure.
and communicating through our
cient and achievable energy alterna
104 Members’ corner
NEWS
IG An important feature of the
solid particles and sulphur can be
gas industry in Spain is the growing
reduced by 80%, in addition to reduc
use of gas as a transportation fuel.
ing greenhouse gases by 20%. Through
How has Sedigas been working to
greater implementation of gas in
promote this?
mobility, a greater number of people
MMB We aim to contribute to a rapid
will have access to clean and econo
and effective transformation towards
mical transport thanks to this efficient
a more sustainable society through
technology.
many actions and one of our main
tives. Furthermore, the Plan seeks to support economic growth and the creation of local employment: up to 25,000 jobs in Spain by 2030, with a contribution to GDP of up to
We have worked on organising
concerns has been mobility. Sedigas
presentations and conferences with
has worked on promoting and foster
experts in order to explain the advan
ing the use of natural gas powered
tages that using these kinds of vehicles
vehicles especially in the taxi sector.
could bring to the taxi sector: their
Thanks to natural gas vehicles, emis
safety, economic savings, easy main
sions of nitrogen oxides and almost all
tenance and EU Ecolabel (which
z Rosa María Sanz García of Naturgy is the President of Sedigas and a member of IGU’s Executive Committee.
€472 million.
cz The use of gas as a transportation fuel is growing in Spain. l e f t Some 42% of the buses operated by local transport operator EMT in Madrid run on CNG. a b ove The ferry operator, Baleària is midway through a programme to convert six vessels to run on LNG and add three new-builds to its fleet. Pictured is the Abel Matutes, which re-entered service in July 2019 after conversion.
Members’ corner 105
NEWS
recognises environmental excellence)
to improve the quality of life by
affecting the gas industry worldwide.
are some of the attractions of this
advancing gas as a key contributor
This contact with other companies and
mature and reliable technology, which
to a sustainable energy future. Thanks
organisations belonging to the same
will be boosted through the instal
to our membership, Sedigas has a
sector has provided a unique oppor
lation of more refuelling stations. We
network of influential contacts due
tunity for improving future decision
are trying to raise awareness among
to the fact that we belong to an
making, enhancing business relation
taxi drivers because they can become
organisation whose members are
ships, and developing operational
pioneers in the large-scale use of these
associations and corporations of the
excellence. We also get the chance to
gas-powered vehicles fostering their
gas industry representing over 95%
have access to top-level information
use in cities.
of the global gas market and covering
and reports on key topics concerning
the complete gas value chain from
the gas industry like pricing and new
IG What do you see as the main
exploration and production to
developments, which helps us make
benefits that IGU offers its
transmission and distribution.
the best decisions based on the most
members?
Joining IGU has allowed us to par
MMB We value being part of a global
ticipate in meetings and conferences
organisation like IGU, one that seeks
that address the most critical issues
up-to-date information. IG Thank you.
Spain and IGU – a brief history Spain was involved in the early discus sions to establish IGU and its national association was all set to be a founder member. Indeed, the Asociación de la Industria en España de la Destilación de la Hulla y sus Derivados was included in Article 2 (members) of the 1931 statutes. However, 1931 was a year of political turmoil in Spain with the exile of King Alfonso XIII and the declaration of the Second Republic, and IGU membership went on the back burner. Then the Spanish Civil War and World War II inter vened and it was not until 1951 that Spain joined IGU. The joining member was the Sindicato Nacional de Agua, Gas y Electricidad. The arrival of natural gas in Spain in 1969 prompted the gas companies to look at setting up a body dedicated to the gas industry. As only the govern ment had the right to set up national associations this body had to be struc tured as a limited company and in April 1970 the Sociedad para el Estudio y Desarrollo de la Industria del Gas
106 Members’ corner
(Sedigas) was founded. The Sindicato Nacional remained the IGU member. The return of democracy to Spain following the death of General Franco in 1975 and the draw ing up of a new con stitution led to the abolition of the Sindicato Nacional and Sedigas became Spain hosted LNG15 in Barcelona in April 2007. Pictured is the then President of Spain’s National Energy Commission, María Teresa Costa the IGU member Campí, opening the exhibition flanked by the then President of in 1978. Sedigas changed Sedigas, Antoni Peris Mingot (left) and Antoni Llardén i Carratalà, Honorary LNG15 Chair (right). its status from a Of IGU’s flagship conferences limited company to Spain has hosted LNG15, which an association in 1998 and became was held in Barcelona in April 2007. the Asociación Técnica Española de la Spain currently hosts the IGU Industria del Gas – now shortened to Secretariat, which is based in the the Asociación Española del Gas – administrative headquarters of while retaining the well-established Naturgy in Barcelona. Sedigas name.
Energy changed the world. Let’s change it again now.
naturgy.com
NEWS
Presenting IGU’s new members During an electronic session held between May 20 and June 3, the IGU Council approved the applications of Ghana National Gas Company to become a Charter Member and of Tubacex to become an Associate Member. Here they give brief overviews of their activities and their reasons for joining the Union. There is also a new Charter Member for Vietnam. generation company, Volta River
improve the quality of life by advanc
Authority (VRA), which in turn
ing gas as a key contributor to a
produces electricity for the industrial
sustainable energy future.
sector and the nation as a whole, while
The company under the leadership
Ghana National Gas Company
the LPG and condensate produce
of the governing board is operated on
By Dr Ben K. D. Asante
are sold on both the local and inter
a business model which primarily
Ghana National Gas Company is a
national markets. This reduces the
generates revenue through processing,
midstream state-owned enterprise;
nation’s heavy dependence on
transportation and the sale of natural
established with the core mandate to
imported fuel therefore cutting
gas and natural gas liquids. This
build, own and operate infrastructure
down import expenditure.
concept will accelerate the nation’s effort of rapid industrialisation by
required for the gathering, processing and transportation of natural gas
Values of IGU
providing cost-competitive natural
resources in Ghana.
Ghana Gas identifies itself with the
gas and gas-based products for the
core values of IGU, which seeks to
domestic markets and to feed the
The company was incorporated in July 2011 by the Government of Ghana under the 1963 Companies’ Act, 179. The decision to establish a national gas company came about following the recommendations of the National Gas Development Taskforce after commer cial quantities of associated gas were discovered 60km offshore; between the Deepwater Tano and Western Cape Three Points blocks in the Western Region of Ghana. The company began operations officially in November 2014. Ghana Gas is responsible for the prospecting and processing of lean gas, condensate, LPG and isopentanes; ultimately, being the catalyst in the nation’s industrial sector as it is the major gas supplier for the power
108 Presenting IGU’s new members
zv Ghana Gas offers Ghanaian engineers a range of skilled employment opportunities.
NEWS
existing and emerging gas-based
its commissioning and commercial
issue of interrupted power gener-
industries in sectors such as petro
operations began, therefore reducing
ation and supply will be curtailed
chemicals, food processing, plastics,
the LPG import bill by $47 million. In
or possibly extinguished.
fertiliser manufacturing and above
summary, the capacity of Ghana Gas
all for power generation, as well as
to take over the duty of supplying
board and staff, the company looks to
exporting to foreign markets.
processed gas for the generation of
achieve more in the coming years and
power for the whole country in place
bridge the gap between demand for
in Accra, with the main gas processing
of LCO has helped save the country
gas and its supply in the country.
plant situated at Atuabo and an
millions of US dollars.
The company has its headquarters
operational office at AB Bokazo, both being located in the Western Region.
For the project with Karpowership,
With the support of the governing
Vision
which is ongoing in the Western
Ghana National Gas Company focuses
Region, Ghana Gas will supply lean
on being the fulcrum of Ghana’s
Achievements
gas to the Karpowership barge in
economic development and seeks to
Ghana Gas has clocked up noteworthy
place of fuel oil, which will save the
develop business, build human capa
achievements since it began oper
country millions of US dollars. This is
city and improve community engage
ations in 2014. A key development was
Karpowership’s first project in Africa
ment through best business practices
the move to 100% local staffing of the
and a significant step towards meeting
to make the company a giant in the
Atuabo gas processing plant. In April
the electricity demand of Ghana’s
global gas production industry.
2017, the operation of the plant and all
population and industry. With a
its ancillary facilities were fully taken
capacity to produce 470MW of
Dr Ben K. D. Asante is the CEO of Ghana
over by Ghanaian engineers. An
power from gas resources from the
National Gas Company. For more
international contractor had been
Western Region of the country, the
information, visit: www.ghanagas.com.gh.
initially tasked to operate the plant whilst providing the required transfer of knowledge and training to the technical staff of Ghana Gas. This move has resulted in savings of $24 million per year and has also provided local skilled employment thereby helping to reduce the menace of youth unemployment in the country. The use of processed gas from the Atuabo plant for power generation by VRA in place of light crude oil (LCO) generated savings of about $42.6 million in 2017 and about $206.4 million in early 2018. The yearon-year analysis shows that Ghana Gas supplied 40% of domestic LPG demand in 2017, the highest since
Presenting IGU’s new members 109
NEWS
Tubacex Group,
efficiency of their projects and
opportunity to reinforce a division with
adding value to the
processes and reducing total project
a constantly growing product and
upstream operations
costs. Tubacex has supplied tubular
service portfolio closer to customers:
By Antón Azlor
solutions (pipes, tubes and fittings) to
Tubacex Advanced Solutions.
The Tubacex Group,
the most relevant projects related to
premium stainless
gas production worldwide.
steel tubular solutions partner, has
Tubacex Advanced Solutions integrates the largest global network of own stock and service centres
moved forward in the value chain
Integrated model
worldwide with a presence in Spain,
to become a full-service supplier
Tubacex provides advanced stainless
France, Central Europe, Houston, Brazil,
offering advanced stainless steel
steel tubular solutions from alloy
the Middle East and India (Tubacex
solutions to the final customer with
design, thanks to its integrated
Service Solutions).
a value proposal able to cover all the
manufacturing system, with its own
stages of the process: from design to
steelworks, which enables the full
CRA specialist
maintenance services.
production process to be monitored
Tubacex has become the world’s
from steel development onwards. This
largest provider of corrosion-resistant
a solid strategic plan focused on
model guarantees traceability in the
alloy (CRA) solutions for oil and gas
growth, diversification and excellence
quality control of the product and
drilling operations. Certified in
in service. These three pillars are aimed
ongoing improvement throughout
accordance with the latest edition of
at providing high technological steel
the process.
API 5CRA, Tubacex is equipped with
This position has been leveraged by
solutions developed in co-creation with customers, increasing the global
The position of Tubacex as a fullservice supplier has represented an
state-of-the-art facilities for the manu facture of CRA tubulars to serve c Tubacex is a fullservice supplier of stainless steel tubular solutions. vz Duong Manh Son, General Director of PetroVietnam Gas (left) at the signing ceremony for the Thi Vai LNG terminal project on June 24.
110 Presenting IGU’s new members
NEWS
challenges. Joining IGU represents an opportunity to share industry’s chal lenges and work together in tailored solutions. One of the main concerns of the gas industry is to manage corrosion throughout the life of materials. Tubacex has innovative solutions that help our customers to improve their CAPEX and OPEX, offering the right solution at the right time. Antón Azlor is Vice President Global Marketing & Sales at Tubacex. For more information, visit: www.tubacex.com. upstream operations with safety,
Innovation strategy
efficiency and flexibility. This leadership
As part of its strategy towards
New Charter Member for Vietnam
status, together with a good position
integrated tubular solutions, Tubacex
The Charter Member for Vietnam,
ing in the Middle East, has led to a
is launching new lines of action in R&D
previously Vietnam Oil and Gas Group,
strategic alliance with SENAAT General
as well as in the search for strategic
is now one of the Group’s member
Holding Corporation, one of the largest
alliances to develop integrated value
companies, PetroVietnam Gas Joint
investment and industrial holding
proposals, in particular, applications
Stock Company (JSC), which is one of
companies in the United Arab Emirates.
with a high technology component.
the largest publicly traded Vietnamese
The aim is to jointly develop energy
Innovation management at Tubacex
companies.
projects in the region, contributing
is carried out under open innovation
to its economic development with
principles, which allows for the inte
integrated operations, from drilling for
local investments.
gration of capacity and knowhow from
gas through to marketing. It controls
a network of companies, including
nearly 70% of the domestic market for
alliance, Tubacex and SENAAT have
customers, suppliers, research centres
LPG and is planning to start LNG
acquired NTS Group, a company
and partners in general. Most of the
imports through the Thi Vai terminal in
specialised in repairing and manufac
innovation projects that are currently
the coastal area southeast of Ho Chi
turing stainless steel components
under development at Tubacex
Minh City. The facility will provide
for the upstream sector of the oil and
emerged from alliances and consortia
natural gas to the Nhon Trach
gas industry with manufacturing
with other companies. These include
combined-cycle power plant. Phase
plants in Saudi Arabia, Dubai and
the design of components and
one with a capacity of 1 mtpa is
Norway. With the acquisition of NTS,
even subsystems.
scheduled to enter service in 2022
In the framework of this strategic
Tubacex is moving forward in its
PetroVietnam Gas JSC runs
followed by phase two increasing
strategy to become a global supplier
IGU membership
of tubular solutions by significantly
Tubacex believes that collaborative
strengthening its product portfolio
models can contribute to facing the
For more information, visit:
for upstream customers.
gas community’s global energy
www.pvgas.com.vn.
capacity to 3 mtpa in 2023.
Presenting IGU’s new members 111
Public Gas Corporation (DEPA) S.A.
Playing a major role in the energy sector
www.depa.gr
The natural gas industry is a major contributor to the GDP of many countries. It is by nature large-scale, employing thousands, generating associated revenues and tax income. The natural gas helps fuel local businesses and builds a platform to grow Greece’s economy. DEPA, with its long presence in the Greek market, is a modern and competitive group of companies with a dynamic role in the energy sector and substantial contribution to the development of the Greek economy, the protection of the environment and the improvement of the quality of life of local communities. With the continuous expansion of natural gas pipelines DEPA Group is bringing natural gas to more and more regions of the country. It sources gas from a number of suppliers through longterm supply contracts and provides security of gas supply in the Greek energy market.
COMPRESSED NATURAL GAS for transport
Clean environment Unadulterated fuel
DEPA is a group that: • is the largest natural gas importer and distributor in Greece, selling gas to large consumers and to gas supply companies.
Noiseless performance High reliability
• expands natural gas network in Greece. • makes significant contributions to the Greek economy, growth, environmental protection and improvement of local communities’ quality of life.
IGB
• has opened up the way to gas-powered driving by establishing filling stations in large cities.
TAP LNG
I
IG
Αλεξανδρούπολη
TAN
AP
DEPA’s INTERNATIONAL ACTIVITIES • Interconnector Greece - Bulgaria (IGB)
Athens
• LNG Terminal in Northern Greece in Alexandroupolis GREECE
• Interconnector Greece - Italy (IGI) • The Eastern Mediterranean pipeline (EastMed) EASTMED
NEWS
Activities of IGU A round-up of news from the Secretariat. Natural Gas Day 2019
Key Asian stakeholders from the
(JGA) delivered the IGU-JGA Gas Day
IGU and the Japan Gas Association
energy sector and G20 representatives
Communiqué to HE Hiroshige Seko,
held the Natural Gas Day 2019 on June
from 18 countries participated in the
Minister of Economy, Trade and
12 in Tokyo. The event was organised
meeting. The theme of the event was
Industry of Japan.
on the occasion of the G20 Energy and
“Securing Transparency, Competitive
Environment Ministerial and was one
ness and Enhancing Security of Gas
Understanding methane emissions
of only three events being featured in
Markets in Asia”.
The 32nd European Gas Regulatory
the official G20 Japan Presidency sideevents listing.
Following a press conference,
Forum (also known as the Madrid
IGU President, Joo-Myung Kang
Forum), which gathered key stake
together with Mr Michiaki Hirose,
holders across the European gas sector
Chair of the Japan Gas Association
to discuss opportunities and chal
IGU and JGA held the Natural Gas Day 2019 on June 12 in Tokyo. i n s e t President, Joo-Myung Kang (left) delivering the IGU-JGA Gas Day Communiqué to HE Hiroshige Seko, Minister of Economy, Trade and Industry of Japan.
114 Activities of IGU
NEWS
take to further reduce its
while supporting reliable access to
methane emissions.
modern energy.
IGU was pleased to be
The 2019 edition also contains
among an impressive list of
a special section on methane
industry contributors to the
emissions, and the opportunities
report. IGU’s Global Group of
that their further reductions present
Methane Experts, established
for the industry.
in late 2016, was instrumental in sharing the most critical
Farewell to Rafael
information on the issue from
Rafael Huarte
around the world.
Lázaro, Director
The report can be down
Advisor in the
loaded from: www.igu.org/
Secretariat, ended
publications-page.
his service to IGU on April 30 when
lenges and to share information on European gas market regulations, took
Global Natural Gas
he retired from Naturgy. Taking up
Insights – 2019 edition
his post in November 2016, when the
IGU has released the second
Secretariat moved to Spain, Rafael
edition of Global Natural
provided valuable contributions to
Gas Insights. This handy booklet contains the
IGU in many areas. He led the strategic partnerships programme and pro
place during the first week of June.
latest information on natural gas and
moted multiple regional meetings in
Discussions centred on the prospects
its role in helping economies grow,
Latin America and Africa. He also
for the next European Union gas
lifting people out of poverty and
organised the meetings of IGU’s
package (2020), including cutting
cleaning up the environment,
Regional Coordinators.
methane emissions. As requested by the Directorate General for Energy of the European Commission last year, Marcogaz and Gas Infrastructure Europe, which are organisations affiliated to IGU, led the development of a report presenting the current state of industry activity on methane emissions in the European Union and beyond. The report, Potential Ways the Gas Industry Can Contribute to the Reduction of Methane Emissions, also proposes a set of recommendations and potential actions that the industry can under-
GLOBAL NATURAL GAS INSIGHTS • 2019 EDITION
Sustainable Future Powered by Gas Activities of IGU 115
NEWS
IGU releases latest Wholesale Gas Price Survey IGU has released the latest edition of the Wholesale Gas Price Survey covering price developments in 2018 and here we give its key findings. This is the 11th Wholesale Gas Price
respectively, but the latter declined
but reflects the fact that there are
Survey to be undertaken with the
by almost half a percentage point,
multiple buyers and sellers, distin
series covering 2005, 2007, 2009 and
reflecting slower consumption growth
guishing it from the bilateral monopoly
2010, and then each year from 2012.
in countries with regulated social and
category, where there would be a
The 11 surveys show the changing
political pricing and a switch away in
single dominant buyer and/or seller.
trends in wholesale price formation
Argentina to regulated cost of service.
mechanisms over a period of rapid and
In turn, regulated cost of service lost
price escalation to gas-on-gas compe
significant change in the global gas
share in China to oil price escalation.
tition, has seen the latter’s share inc
market. They consider different types
Over the 2005 to 2018 period, the
reasing from 15% in 2005 – when oil
of price formation mechanism which
share of gas-on-gas competition has
price escalation was 78% – to 76% in
are described in the box on page 118.
risen by almost 16 percentage points,
2018 – when oil price escalation had
while oil price escalation has declined
declined to 24%.
In Europe the move from formal oil
Share of pricing mechanisms
by 5 percentage points. Bilateral mono
The share of gas-on-gas competition
poly has declined by 2.5 percentage
share in Europe, there have been large
rose by half a percentage point bet
points, while in the regulated cate
gains in share in Asia with a rise from
ween the 2017 and 2018 surveys to
gories regulation cost of service has
35% in 2005 to 67% in 2016, initially as
47%. That largely reflected the increas
risen by 9 percentage points, regu
China began importing more LNG and
ing share of spot LNG cargoes in LNG
lation social and political has risen by
pipeline gas, but largely reflecting the
imports and rapidly growing US
nearly 3 percentage points and regu
domestic pricing reform, initially in two
consumption, which more than offset
lation below cost has declined by
Chinese provinces, followed by rolling
the declining share in pipeline imports,
almost 20 percentage points.
these changes out to the whole of
as a result of reduced European pipe
The major overall changes, in the
While oil price escalation has lost
China for most sectors. The share fell
line imports and increased China
2005 to 2018 period, have been the
back slightly in 2017 but recovered in
pipeline imports. The oil price esca
continuous move away from formal
2018 to 67% again.
lation share declined by a quarter of a
oil price escalation to gas-on-gas com
percentage point to 19%, with the loss
petition in Europe, and also in Russia
steady increase in oil price escalation
in LNG imports being partly offset by
as the independents and Gazprom
up to 2017, reaching some 66%,
gains in pipeline imports and domestic
competed for sales to large eligible
largely at the expense of regulated
production in China. The regulated
customers such as power plants. This
pricing, principally in Malaysia and
cost of service and regulated social
is clearly a different kind of gas-on-gas
Indonesia. The share of oil price
and political mechanisms were largely
competition from the liquid trading
escalation declined in 2018 as spot
unchanged overall, at 10% and 14%
markets in North America and Europe
LNG imports surged.
116 IGU releases latest Wholesale Gas Price Survey
In Asia-Pacific there has been a
NEWS
Move away from subsidies
61% in 2018, as oil price escala
Apart from the changes concerning
tion declined from 57% to 31%.
gas-on-gas competition and oil price
However, the decline in oil price
escalation in Europe, Asia and Asia-
escalation has been partly off
Pacific, there have also been signifi-
set by a switch from bilateral
cant changes in the regulated pricing
monopoly in intra-former Soviet
categories. The increases in regulated
Union trade in 2009, and more
pricing and policy changes in Russia
recently the imports of pipeline
not only saw a switch towards gas-
gas from Turkmenistan to
on-gas competition, but also a switch
China, and in 2016, the
from the subsidised regulation below
change in one of the gas con
cost in 2009 to regulation cost of
tracts from Russia to Turkey.
service as Gazprom finally stopped
GAS PRICE SU RVEY 2019 EDITIO N
A GLOBAL RE VIEW OF PRICE FORMATION MECHANISM S 2005 TO 2018 MAY 2019
The rise in gas-on-gas
losing money on its domestic gas sales,
competition at the expense
although with the freeze in regulated
of oil price escalation has
prices in 2014, there was a partial
been almost entirely in the
switch back to regulation social
European market as the
and political.
northwest Europe coun
There were also significant changes
WHOLESALE
tries began switching to gas-on-
in China as pricing reforms, again
gas competition and more recently the
Indeed, 2018 saw the most signi
around the 2009 period, saw domestic
Central Europe countries and, in 2014,
ficant change in LNG imports since IGU
production prices being more formally
Italy. In respect of pipeline imports into
began releasing its surveys, driven by
regulated and the price formation
Europe, gas-on-gas competition in
the continued rise in Henry Hub priced
mechanism changing from regulation
2018 had a 75% share compared to
US LNG exports as well as a general
social and political to regulation cost
25% for oil price escalation. This is in
rise in spot LNG cargoes. The share of
of service, before the significant move
marked contrast to 2005 when it was
spot LNG imports reached just over
to oil price escalation. Similarly, in Iran
91% oil price escalation and only 7%
30% of total LNG imports in 2018,
prices were raised significantly with the
gas-on-gas competition. In 2017,
amounting to some 126 bcm – an
category changing from regulation
Ukraine switched to importing gas
increase of 65 bcm since 2016, or 10.5
below cost to regulation social and
from Europe at hub prices, reducing
percentage points. Gas-on-gas com
political in 2012. There was also a
the oil price escalation share in the
petition for LNG imports in the traded
change in Nigeria in 2014, as prices
former Soviet Union.
markets, mainly in northwest Europe, added another 4.5% of total LNG
increased and gas-on-gas competition LNG trade
imports. Gas-on-gas competition
From 2007 to 2017, in contrast, oil price
accounted for more than 50% of
Pipeline trade
escalation largely held its share in the
LNG imports into Europe in 2018,
In pipeline imports there has been a
LNG market, averaging 72%, compared
compared to 33% in 2017, while gas-
largely continuous rise in gas-on-gas
to 28% for gas-on-gas competition.
on-gas competition in China and the
competition at the expense of oil price
However, in 2018, there was a large
Indian sub-continent rose from 24% to
escalation, rising from 23% in 2005 to
surge in spot LNG imports.
30.5% and for the Asia-Pacific importers
was introduced.
IGU releases latest Wholesale Gas Price Survey 117
NEWS
(mainly Japan, Korea and Taiwan) from
$4.38 per mmBtu – the highest average
cost of production and transportation
18% to 24%. Despite the growth in
price since 2014.
–Algeria, Turkmenistan and Venezuela.
LNG imports between 2017 and 2018
The highest wholesale prices in
of some 22 bcm or 5.5%, the actual
2018 were again found in the main
Price convergence
volume of oil price escalation imports
LNG importing countries in Asia and
Global gas prices have been converg
declined for the first time ever.
Asia-Pacific – Japan, Korea and Taiwan
ing continuously since 2005, indicating
– plus Singapore and China. Not far
further globalisation of the gas mar
Wholesale prices
behind were many European countries,
kets, at least up until 2018, when some
Wholesale prices outside North America
with gas-on-gas pricing, as spot prices
divergence occurred. It is also con
rose continuously between 2005 and
rose in 2018. Prices were much lower in
cluded that there is more gas price
2014, declined in most regions in 2015
the USA, where prices were even below
convergence amongst countries: (1)
and 2016, before rebounding in 2017
those in Egypt, Indonesia, Malaysia,
with market related pricing; (2) which
and 2018 in almost all regions. This was
Nigeria and some Middle East
are connected with the global gas
mainly in Europe and Asia, as oil prices
countries. Prices in Russia have fallen
market through gas imports; (3) with
increased and spot markets tightened.
well below other countries, which, in
oil-indexed gas prices; and (4) within
Prices also increased in the more regu
previous years, they had been above,
Europe. The trend of global gas price
lated regions such as Africa and the
as a consequence of the large rouble
convergence is more distinct when we
Middle East, as authorities continued
depreciation. At the bottom of the
exclude the data of North America.
policies to increase prices to more
chart are generally countries where
market or economic levels. The average
wholesale prices were subject to some
The full report can be downloaded from
world wholesale price in 2018 was
form of regulation and often below the
www.igu.org.
Types of price formation mechanisms Oil price escalation
The price is linked, usually through a base price and an escalation clause, to competing fuels, typically crude oil, gas oil and/or fuel oil. In some cases, coal prices can be used as can electricity prices.
Gas-on-gas competition
The price is determined by the interplay of supply and demand and is traded over a variety of different periods (daily, monthly, annually or other periods). Trading takes place at physical hubs (e.g. Henry Hub) or notional hubs (e.g. NBP in the UK). There are likely to be developed futures markets (NYMEX or ICE). Not all gas is bought and sold on a short-term fixed price basis and there will be longer-term contracts but these will use gas price indices to determine the monthly price, for example, rather than competing fuel indices. Also included in this category are any spot LNG cargoes, any pricing which is linked to hub or spot prices and also bilateral agreements in markets where there are multiple buyers and sellers.
Bilateral monopoly
The price is determined by bilateral discussions and agreements between a large seller and a large buyer, with the price being fixed for a period of time – typically this would be one year. There may be a written contract in place but often the arrangement is at the government or state-owned company level. Usually there would be a single dominant buyer or seller on at least one side of the transaction, to distinguish this category from gas-on-gas competition, where there would be multiple buyers and sellers.
Netback from final product
The price received by the gas supplier is a function of the price received by the buyer for the final product the buyer produces. This may occur where the gas is used as a feedstock in chemical plants, such as ammonia or methanol, and is the major variable cost in producing the product.
Regulation: cost of service
The price is determined, or approved, by a regulatory authority, or possibly a ministry, but the level is set to cover the “cost of service”, including the recovery of investment and a reasonable rate of return.
Regulation: social and political The price is set, on an irregular basis, probably by a ministry, on a political/social basis, in response to the need to cover increasing costs, or possibly as a revenue raising exercise – a hybrid between regulation: cost of service and regulation: below cost. Regulation: below cost
The price is knowingly set below the average cost of producing and transporting the gas often as a form of state subsidy to the population.
No price
The gas produced is provided free to the population and industry, possibly as a feedstock for chemical and fertiliser plants, or in refinery processes and enhanced oil recovery. The gas produced maybe associated with oil and/or liquids and treated as a by-product.
118 IGU releases latest Wholesale Gas Price Survey
KINGDOM OF MOROCCO
ONHYM, promoter of National Mining and Oil Resources since 1928. An established expertise for the future... .
5, Avenue Moulay Hassan B.P. 99, 10000, Rabat - Morocco Tel: +212 (0) 5 37 23 98 98 • Fax: +212 (0) 5 37 70 94 11 • www.onhym.com • info@onhym.com
O R G A N I S AT I O N
IGU Organisation 2018–2021 IGU Council
IGU Executive Committee Mr Mazighi Ahmed, Algeria
IGU Management Team
President Executive Committee
Task Force 1: Strategic Communications and Outreach
Task Force 3: Energy Policy
Strategy
Exploration and Production
IGU Secretariat
Coordination Committee
Task Force 2: Energy for All
Sustainability
Vice President
Secretary General
Storage
Dr Graeme Bethune, Australia, Regional Coordinator North East Asia and Australasia
Mr Hazli Sham Kassim, Malaysia, Regional Coordinator South and South East Asia
Mr Jean-Pierre Hollevoet, Belgium
Mr Han Fennema, Netherlands, The
Mr José Carlos Broisler Oliver, Brazil
Mr Pål Rasmussen, Norway
Mr Khaled Abu Bakr, Regional Coordinator Africa and the Middle East
Mr Andrey Sapozhnikov, Russian Federation
Mr Andrea Stegher, Regional Coordinator Europe
Rosa María Sanz García, Spain
Mr Orlando Cabrales Segovia, Regional Coordinator Latin America and the Caribbean
Ms Che Lixin, China, People’s Republic of Marketing and Communications
LNG
Transmission
Dr Jeongwook Khang, Korea, Republic of
Ms Li Yalan, China, People’s Republic of,
Committees
Gas Markets
Mr Patricio da Ré, Argentina
Distribution
R&D and Innovation
Utilisation
Mr David Carroll, United States of America
Dr Chen Xavier, China, People’s Republic of
Ms Karen A. Harbert, United States of America
Mr Andreas Rau, Czech Republic Mr Patrick Corbin, France Mr Gerald Linke, Germany Mr Mostafa Sepehrian, Iran Mr Satoshi Yoshida, Japan Mr Joo-Myung (Joe) Kang, Korea, Republic of
IGU Management Team
Mr Joo-Myung (Joe) Kang, President (Republic of Korea)
Dr Jeongwook Khang, Chair of the Coordination Committee (Republic of Korea)
Mr Luis Bertrán Rafecas, Secretary General
Ms Li Yalan, Vice President (People’s Republic of China)
Mr Liu He, Associate Member, CNPC Mr Francisco P. de la Flor, Premium Associate Member Enagás
Mr Peder Bjorland, Premium Associate Member, Equinor Mr Ajay Shah, Premium Associate Member, Royal Dutch Shell
Mr Timothy M. Egan, Regional Coordinator North America Mr Marcel Kramer, Regional Coordinator Russia-Black Sea-Caspian Sea Mr Luis Bertrán Rafecas, Secretary General
Mr Jean-Marc Leroy, Premium Associate Member, ENGIE
Dr Chen Xavier, Vice Chair of the Coordination Committee (People’s Republic of China)
Mr David Carroll, Immediate Past President (United States of America)
IGU Secretariat Team c The staff of the IGU Secretariat (from left to right): Emma Siobhan Paños Knowles, Administrative Advisor; Hyunchang Kim, Advisor; Flavia Malet de Hvidbo, Senior Advisor; Luis Bertrán Rafecas, Secretary General; Luisa Peris Meléndez, Executive Assistant; Luis Calvo, Director Advisor. Not pictured: Menelaos (Mel) Ydreos, Public Affairs Director; Rodney Cox, Events Director; Tatiana Khanberg, Manager Public Affairs.
120 IGU organisation 2018–2021
NATURAL GAS Clean Fuel, Sustainable Future
Natural gas is emerging as the “fuel
“LNG at the doorstep” initiative
exclusive rights for 17 Geographical
of the 21st century,” steadily replacing
which started in 2007 is highly popular
Area (GA) sites. In addition, IndianOil
liquid fuels and coal due to its low
with bulk consumers located away from
with its JV partners bagged 23 more GA
ecological footprint and inherent
gas pipelines. At present, IndianOil
sites taking its total tally to 40 GA sites.
advantages for all user segments:
supplies LNG to about 60 institutional
The Corporation’s investment in
Industries, Transport, Households.
customers from fertiliser, power, steel
development of CGD networks in the
and other industrial sectors. The
next eight years is likely to be about Rs.
ambitious plans to increase the share
Corporation is also importing LNG
10,000 crore ($1.4 billion), which
of natural gas in the country’s energy
in greater quantities directly to meet
includes equity contribution in JVCs.
mix from the current 6.5% to 15% in
increasing domestic demand.
The Government of India has
the next decade by boosting domestic
As the second largest player in the
IndianOil is also a JV partner in Indradhanush Gas Grid Ltd linking
production and encouraging infra
growing segment, IndianOil is making
all the major cities in the Northeast
structure rollouts in the form of LNG
significant investments and capacity
for supply of natural gas to various
import terminals, pipelines and city gas
commitments across the value chain,
customers in the domestic, commercial,
distribution (CGD) projects.
viz., LNG sourcing, LNG import
industrial and automobile segments.
terminals, natural gas pipelines,
The Corporation is also investing in two
CGD networks, etc.
more JV companies that are laying three
A number of steps have been taken in this direction by way of policy changes, marketing and pricing free
The Corporation’s 5 MMTPA
gas pipelines of a combined length of
dom, capital grant, reduction of duties,
LNG import terminal at Ennore,
3,760km connecting Mehsana-Bhatinda,
gas pooling mechanism and CGD
commissioned in March 2019, has
Bhatinda-Jammu-Srinagar and
bidding rounds. Thanks to the proactive
begun supplying R-LNG to Manali
Mallavaram-Bhopal-Bhilwara-Vijaipur,
steps taken to promote a gas-based
Refinery and other anchor customers in
covering nine States.
economy, India’s natural gas demand
the neighborhood. There is a provision
outlook is continuously improving. India
to expand its capacity up to 10 MMTPA
as green auto-fuel at its over 27,000
is now the fourth-largest LNG importer,
in future. A 1,244km pipeline network
fuel stations across India and is also
after Japan, China and South Korea,
is being laid to make LNG from the
collaborating with fleet owners and
and accounts for 7.1% of total global
terminal available right across Tamil
automobile manufacturers to introduce
LNG imports.
Nadu, Pondicherry and Karnataka.
LNG as on-board fuel in long-haul
Indian Oil Corporation Ltd
IndianOil had formed two
The Corporation is adding CNG
commercial vehicles. The Corporation
(IndianOil), India’s downstream
joint ventures, Green Gas Ltd and
has also taken up field trials on use
petroleum major, proactively took up
IndianOil Adani Gas Pvt. Ltd, to
of LNG in mining (HSD+LNG)
marketing of natural gas in 2004
enter the burgeoning CGD segment
and bunkering.
through its joint venture, Petronet LNG
through CNG networks for the trans-
Ltd, that has set up two LNG import
port sector and piped natural gas
IndianOil is committed to energising
terminals at Dahej and Kochi on the
networks for households coming up
the future, naturally through Gas.
west coast of India.
across the country.
Over the years, the Corporation
The Corporation, on its own, made
has rapidly expanded its customer base
an aggressive bid for CGD projects in
of gas users by leveraging its proven
the 9th and 10th rounds announced by
marketing expertise in liquid fuels and
the Petroleum & Natural Gas Regulatory
its countrywide reach. Its innovative
Board (PNGRB) of India and won
MEMBERS
Members of IGU Albania Algeria Argentina Armenia Australia Austria Azerbaijan
Bahrain Belarus Belgium Bolivia Bosnia and Herzegovina Brazil Brunei
Bulgaria Cambodia Cameroon Canada Chile China, People’s Republic of
Chinese Taipei Colombia Côte d’Ivoire Croatia Cyprus Czech Republic Denmark
Egypt Equatorial Guinea Finland France Germany Ghana Greece Hong Kong, China Hungary India Indonesia Iran Iraq Ireland Israel Italy Japan Korea, Republic of Kuwait Latvia Lebanon Libya Lithuania Macedonia Malaysia Mexico Monaco Mozambique Netherlands, The New Zealand Nigeria Norway
Albania Albanian Energy Regulator (ERE)
Bolivia Yacimientos Petrolíferos Fiscales Bolivianos (YPFB)
Colombia Asociación Colombiana de Gas Natural – Naturgas
Israel The Israel Institute of Energy & Environment
Algeria Association Algérienne de l’Industrie du Gaz – AIG
Bosnia and Herzegovina Gas Association of Bosnia and Herzegovina
Argentina Instituto Argentino del Petróleo y del Gas
Brazil Associação Brasileira das Empresas Distribuidoras de Gás Canalizado (ABEGÁS)
Côte d’Ivoire Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire – PETROCI Holding
Germany Deutscher Verein des Gasund Wasserfaches e.V. (DVGW
Countries represented in IGU 88 Charter Members 14 Premium Associate Members 61 Associate Members
Oman, Sultanate of Peru Poland Portugal Qatar Romania Russian Federation Saudi Arabia Serbia Singapore Slovak Republic Slovenia South Africa Spain Sudan Sweden Switzerland Thailand Timor-Leste Trinidad and Tobago Tunisia Turkey Ukraine United Arab Emirates United Kingdom United States of America Uzbekistan Venezuela Vietnam Yemen
Charter Members
Armenia Union of Gas Companies of Armenia (UGCA) Australia Australian Gas Industry Trust Austria Österreichische Vereinigung für das Gasund Wasserfach (ÖVGW) Azerbaijan State Oil Company of the Azerbaijan Republic (SOCAR) Bahrain The National Oil and Gas Authority (NOGA) Belarus Gazprom Transgaz Belarus Belgium Association Royale des Gaziers Belges
Brunei Brunei Energy Association Bulgaria Overgas Inc. AD Cambodia Cambodian Natural Gas Corp. Ltd Cameroon Société Nationale des Hydrocarbures Canada Canadian Gas Association
Croatia Croatian Gas Association Cyprus Ministry of Energy, Commerce, Industry & Tourism Czech Republic Czech Gas Association Denmark Dansk Gas Forening – Danish Gas Association Egypt Egyptian Gas Association
Chile Asociación de Empresas de Gas Natural (AGN)
Equatorial Guinea Sociedad Nacional de Gas de Guinea Ecuatorial (SONAGAS G.E.)
China, People’s Republic of China Gas Society
Finland Finnish Gas Association
Chinese Taipei The Gas Association of Chinese Taipei
France Association Française du Gaz (AFG)
122 Members of IGU
Ghana Ghana National Gas Company Greece Public Gas Corporation of Greece S.A. (DEPA) Hong Kong, China The Hong Kong & China Gas Co. Ltd Hungary Hungarian Electricity Plc (MVM) – Hungarian Gas Trade India Gas Authority of India Ltd (GAIL) Indonesia Indonesian Gas Association (IGA) Iran National Iranian Gas Company (NIGC) Iraq State Oil Marketing Company/Ministry of Oil (SOMO) Ireland Gas Networks Ireland
Italy Comitato Italiano Gas (CIG) Japan The Japan Gas Association Korea, Republic of The Korea Gas Union Kuwait Kuwait Petroleum Corporation (KPC) Latvia JSC Latvijas Gāze Lebanon Ministry of Energy and Water Libya National Oil Corporation
Monaco Société Monégasque de l’Électricité et du Gaz (SMEG) Mozambique Empresa Nacional de Hidrocarbonetos, E.P. (ENH) Netherlands, The Royal Dutch Gas Association – Koninklijke Vereniging van Gasfabrikanten in Nederland (KVGN) New Zealand The Petroleum Exploration & Production Association of New Zealand Inc. Nigeria Nigerian Gas Association c/o Nigeria Gas Co. Ltd
Lithuania Nacionalinė Lietuvos Energetikos Asociacija (NLEA)
Norway Petoro AS
Macedonia Macedonian Gas Association
Poland Polskie Zrzeszenie Inżynierów i Techników Sanitarnych (PZITS) – Polish Gas Association
Malaysia Malaysian Gas Association Mexico Asociación Mexicana de Gas Natural, A.C.
Oman, Sultanate of Oman LNG L.L.C.
Portugal Associação Portuguesa das Empresas de Gás Natural (AGN)
MEMBERS
Charter Members – continued Qatar Qatar Liquefied Gas Company Ltd (Qatargas)
Singapore SP PowerGrid Ltd
Spain Spanish Gas Association – Asociación Española del Gas (Sedigas)
Thailand PTT Public Company Ltd
Turkey BOTAŞ
United States of America American Gas Association
Timor-Leste TIMOR GAP, E.P.
Ukraine Naftogaz of Ukraine
Uzbekistan Uzbekneftegaz (UNG)
United Arab Emirates Abu Dhabi Gas Liquefaction Company Ltd (ADGAS)
Venezuela Petróleos de Venezuela S.A. (PDVSA)
Romania S.N.G.N. Romgaz S.A.
Slovak Republic Slovak Gas and Oil Association
Russian Federation PJSC Gazprom
Slovenia Geoplin
Sudan Ministry of Petroleum and Gas
Trinidad and Tobago The National Gas Company of Trinidad and Tobago Ltd
Saudi Arabia Saudi Arabian Oil Company (Saudi Aramco)
South Africa South African Gas Develop ment Company (Pty) Ltd
Sweden Swedish Gas Association – Energigas Sverige
Tunisia Association Tunisienne du Petrole et du Gaz (ATPG) c/o STIR
Serbia Gas Association of Serbia
Switzerland Swissgas
United Kingdom The Institution of Gas Engineers and Managers
Vietnam PetroVietnam Gas JSC Yemen Yemen LNG
Premium Associate Members Anadarko Petroleum Corporation (USA)
ENGIE (France)
Naturgy (Spain)
Beijing Gas Group (China)
Equinor ASA (Norway)
PT Pertamina – Persero (Indonesia)
Cheniere Energy Inc. (USA)
ExxonMobil Gas & Power Marketing (USA)
Royal Dutch Shell (The Netherlands/UK)
China National Petroleum Corporation – CNPC (China)
İGDAŞ – Istanbul Gas Distribution Co. (Turkey)
TOTAL S.A. (France)
Enagás (Spain)
Korea Gas Corporation – KOGAS (Korea)
Associate Members Abu Dhabi National Oil Company (ADNOC) Distribution (UAE)
GAZBIR – Association of Natural Gas Distributors of Turkey
Regas (Italy)
Hermann Sewerin GmbH (Germany)
Repsol S.A. (Spain)
AGL Energy Ltd (Australia)
HIMOINSA S.L. (Spain)
Russian Gas Society (Russia)
Atlas Copco Gas & Process (USA)
Indian Oil Corporation Ltd (India)
Samsung Engineering Co. Ltd (Korea)
Australian Petroleum Production & Exploration Association – APPEA (Australia)
Indonesian Gas Society (Indonesia)
Santos Ltd (Australia)
INPEX Corporation (Japan)
Schlumberger (USA)
BP Gas Marketing Ltd (United Kingdom)
Instituto Brasileiro de Petróleo, Gás e Biocombustíveis – IBP (Brazil)
Sempra LNG & Midstream (USA)
Bureau Veritas (France)
Israel Natural Gas Lines Ltd (Israel)
Société Suisse de l’Industrie du Gaz et des Eaux – SSIGE/SVGW (Switzerland)
Bursagaz (Turkey)
Liander N.V. (The Netherlands)
Sonorgás (Portugal)
Chevron Gas & Midstream Company (USA)
Linde AG (Germany)
TAQA Arabia (Egypt)
China LNG Association (China)
Natural Gas Society (India)
Tatweer Petroleum (Bahrain)
China Petrochemical Corporation – Sinopec (China)
NextDecade Corporation (USA)
COM-therm (Slovakia)
N.V. Nederlandse Gasunie (The Netherlands)
TBG – Transportadora Brasileira Gasoduto Bolívia-Brasil S.A. (Brazil)
ConocoPhillips Company (USA)
Oman Gas Company SAOC (Oman)
TgP – Transportadora de Gas del Perú (Peru)
DNV GL (Norway)
OMV Gas & Power GmbH (Austria)
The Association of Oil & Gas Exploration Industries in Israel
Edison S.p.A. (Italy)
ONC Energy (China)
Tubacex (Spain)
Enerdata s.a.s. (France)
Origin Energy Limited (Australia)
Turboden (Italy)
Energodiagnostika (Russia)
Petróleo Brasileiro S.A. – Petrobras (Brazil)
Uniper SE (Germany)
Eni (Italy)
Petronet LNG Limited (India)
Vitol S.A. (Switzerland)
Eurogas
Posco Daewoo (Korea)
Westnetz GmbH (Germany)
GasTerra B.V. (The Netherlands)
PwC (The Netherlands)
Woodside (Australia)
ARPEL – Regional Association of Oil, Gas and Biofuels Sector Companies in Latin America and the Caribbean
GIIGNL – Groupe International des Importateurs de Gaz Naturel Liquéfié/International Group of LNG Importers
MARCOGAZ – Technical Association of the European Natural Gas Industry
Energy Delta Institute (EDI)
NGV Global
Pipeline Research Council International, Inc. (PRCI)
Gas Infrastructure Europe (GIE)
Russian National Gas Engine Association (NGA)
Gas Technology Institute (GTI)
NGVA Europe – European Association for Bio/Natural Gas Vehicles
GERG – Groupe Européen de Recherches Gazières/ European Gas Research Group
International Pipe Line & Offshore Contractors Association (IPLOCA)
Baker Hughes, a GE company (USA)
Organisations Affiliated to IGU
World LPG Association (WLPGA)
Members of IGU 123
EVENTS AND ACKNOWLEDGEMENTS
IGU events and other major gas-related events 2019-2020 2019 October 8-10 IGU Council, Executive Committee and Coordination Committee meetings Yogyakarta, Indonesia November 5-7 European Annual Gas Conference Paris, France November 6-8 European Gas Technology Conference 2019 Groningen, The Netherlands
November 10-12 GIIGNL General Assembly Singapore November 11-22 25th Session of the Conference of the Parties to the UNFCCC (COP 25) Santiago, Chile November 14-15 IGU-EnergyNet Latin America & Caribbean Gas Conference & Exhibition (LGC 2019) Lima, Peru
2020 February 24-26 IGU Research Conference (IGRC 2020) Muscat, Oman April 21-23 IGU Executive Committee and Coordination Committee meetings Prague, Czech Republic September 17-18 GIE Annual Conference Lucerne, Switzerland
October 6-8 IGU Council, Executive Committee and Coordination Committee meetings Vancouver, Canada November 2-4 33rd World LPG Forum Dubai, UAE November 9-19 26th Session of the Conference of the Parties to the UNFCCC (COP 26) Glasgow, UK December 6-10 23rd World Petroleum Congress Houston, USA
Acknowledgements For the IGU Secretariat Secretary General: Luis Bertrán Rafecas Director Advisor: Luis Calvo Events Director: Rodney Cox Director Public Affairs: Menelaos (Mel) Ydreos Manager Public Affairs: Tatiana Khanberg Senior Advisor: Flavia Malet de Hvidbo Advisor: Hyunchang Kim Executive Assistant: Luisa Peris Meléndez Administration Consultant: Emma Siobhan Paños Knowles For ISC Consulting Editor: Mark Blacklock Copy & Picture Editor: Adrian Giddings Publisher: Robert Miskin Finance Director: Yvonne O’Donnell Finance Assistant: Maria Picardo Senior Consultants: Michael Gaskell, Karin Hawksley and Jonathan Unsworth Art and Design Director: Michael Morey Printed by Buxton Press Ltd which is certified to Chain of Custody Standards for the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC), all paper used being sustainably sourced.
124 Events and Acknowledgements
IGU and ISC would like to express their thanks to all those who helped in the preparation of this publication. Thanks are also due to the following companies, people and organisations for providing pictures. The credits are listed by article. Where the pictures for an article came from a variety of sources, the appropriate page numbers are given in brackets after each source.
The gas industry in Indonesia: Badak LNG (67), BP plc (69 left), Premier Oil plc (69 right), Chevron Indonesia (70 upper), PT Nusantara Regas (70 lower), Höegh LNG (71).
Cover (the pipelaying vessel Pioneering Spirit): Gazprom.
Reports from the Regional Coordinators: EnergyQuest (96 upper), Eugene Pronin (96 lower), Shell Australia Pty Ltd (98), Malaysian Gas Association (100 upper left), Summit Power International (100 upper right), Petronas (100 lower).
Introduction: IGU. Gearing up for IGRC 2020: Oman LNG (20), Oman Convention and Exhibition Centre (21), Oman LNG Development Foundation (22). Resilience of integrated energy systems: mjm_foodie [CC-BB-2.0] (24 wind turbines), Torresol Energy Investments, S.A (24 solar). Improving resilience and reducing emissions in residential housing: ATCO (32 & 33), NAIT-Northern Alberta Institute of Technology (34). Unveiling gas opportunities in Latin America and the Caribbean: Sempra LNG (37 upper), Wärtsilä (37 lower), Exmar (40), BW LNG (43). Natural gas as a backbone of the Russian energy sector: Gazprom (57, 58, 60, 62 & 63).
High level of optimism at LNG2019: LNG2019 (76, 77, 82, 86, 87 upper & 90 upper), JSC Yamal LNG (80), Sempra LNG (84), GAC (87 lower), LNG17/Gary Fountain (90 lower).
Members’ corner: Sedigas (104, 105 top & 106), Baleària (105 middle), Scania AB (105 bottom). Presenting IGU’s new members: Ghana National Gas Company (108 & 109), Tubacex (110), PetroVietnam Gas (111). Activities of IGU: IGU. IGU Organisation: Korea Gas Union (Joo-Myung Kang & Jeongwook Khang, 120), Beijing Gas Group (Li Yalan & Chen Xavier, 120), IGU (Luis Bertrán Rafecas & Secretariat team, 120), GTI (David Carroll, 120).
Pertamina is Developing its Gas and LNG Portfolio From domestic and international sources to secure the energy demand in Indonesia and ready for global LNG trading business
Note: LNG Source
Gas Business Journey of Pertamina
LNG Market Development Source
Market
Transportation
Big - Medium
Medium - Small
1970s
LNG Dispenser
Road Transportation (Trucking)
Rail Transportation
LNG for Industry
Develop Badak & Arun LNG Terminal for exporting the LNG to Japan Korea & Taiwan Market
LNG Microbulk for Hotel/ Restaurant/Cafe
LNG for Mall/Hotel/Apartment
2010-2015
2016
202-2022
Convert Arun LNG Liquefaction Terminal to become LNG Regasification terminal and Develop Nusantara Regas to support Indonesia LNG market supply
Improving the LNG trading business capability with Pacific Petroleum Trading (PPT) Co. Ltd
Pertamina has been acknowledged as a global integrated LNG player
2017
LNG for for Workshop
2000–Present
Shipping and Other Transportation
Construct pipeline for gas supply in Java, Sumatra and Kalimantan Area (priority demand point)
LNG for co-Gen
Pertamina as a Pioneer for Integrated LNG to Power Project in Indonesia
2011-2015 Develop Donggi Senoro LNG Liquefaction Terminal for monetizing the gas reserve around Sulawesi Area. The LNG is supplied to Japan Korea & Taiwan Market
Pertamina formed Global Ventures to develop overseas energy business incl gas supply, infrastructure, and power
Jawa-1 Project Scope
Other Parties
Regasification
Power Plant
ONSHORE GAS RECEIVING FACILITY LNG CARRIER
POWER PLANT TRANSMISSION LINE
FSRU
MOORING FACILITY LNG PLANT/ LNG HUB
1760 MW OFFSHORE GAS PIPELINE
ONSHORE GAS PIPELINE
SUBSTATION
