Weekly HEG Global Energy Digest

LNG:

Shell ramps up in Kitimat, raising Canada’s €30bn LNG hopes

A flurry of activity in a remote Canadian town is raising optimism that Royal Dutch Shell Plc and its partners are ready to go ahead with the nation’s largest infrastructure project: a C$40 billion ($30 billion) liquefied natural gas terminal that could at last unlock energy exports to Asia.

The action is unmistakable in Kitimat, British Columbia, the Pacific coast city hugging a deep inlet that would be the closest launch point on the continent for LNG cargoes to Asia. The lights are on, shades open and SUVs parked outside a 49-unit apartment complex built to house Shell executives, which sat mostly darkened for the last two years. Local workers have left jobs at a Rio Tinto Plc smelter nearby to join contractors ramping up for the LNG project. Landlords are raising rents and houses are selling twice as fast as they used to in anticipation of a flood of workers coming to town.

 

“I would put money on it — it’s going ahead,” says Phil Germuth, mayor of Kitimat, who recently hosted a banker from Barclays Bank Plc visiting from the U.K. to examine the project. Germuth also met a group of officials reporting to the board of Mitsubishi Corp., one of the project’s five partners, who visited the site in May.

 

When Crystal Smith, head of the Haisla Nation whose indigenous lands surround the proposed terminal, was invited to the project site last week by another group from Mitsubishi, she couldn’t find a spot in the usually deserted parking lot.

 

LNG Canada, as the project is called, is stunning in scale. It proposes to eventually ship as much as 28 million tons a year out of Kitimat, the equivalent of 10 percent of global LNG supply in 2017. It would carve out a new path — the shortest by days — between North America and Asia for super-chilled gas. For Canada, whose energy exports are sold almost exclusively to the U.S. at depressed prices for the lack of a coastal facility, it means unlocking the Montney, a massive formation holding about half the total reserves of Qatar. It would also mean an investment triple the size of Canada’s largest single infrastructure project to date, LNG Canada Chief Executive Officer Andy Calitz said in a LinkedIn post last month.

Article Source: http://www.energymarketprice.com/energy-news/shell-ramps-up-in-kitimat–raising-canada%E2%80%99s-30bn-lng-hopes

 

Oil:

Savannah makes oil discovery at Kunama-1 exploration well in Niger

The oil find at the Kunama-1 well, which was drilled by the GW 215 Rig to a total measured depth of 2,460m, marks the firm’s third consecutive discovery in its maiden exploration campaign in the R3 portion of the R3/R4 PSC Area in ARB.

According to preliminary results, the Kunama-1 well encountered a total estimated 9m of net oil bearing reservoir sandstones in the E1 and E5 reservoir units within the primary Eocene Sokor Alternances objective.

 

The company said that the wireline logs indicate the reservoir properties to be good quality.

 

As part of a batch campaign, the firm is planning to perform production test later in the year on the well, which is currently being suspended for future re-entry.

 

Upon completion of the testing program, the firm intends to install a downhole completion assembly to Amdigh-1 to enable the well to function as a production well in the future.

 

Savannah is also planning to spud the Eridal-1 exploration well located on the R3 portion of the R3/R4 PSC Area 6km from Amdigh-1.

 

As part of this plan, the GW 215 rig is being mobilized to the Eridal-1 well site, where preparation is in the final stages of completion.

 

Savannah noted that the well aims to evaluate potential oil pay in the Eocene Sokor Alternances as the primary target while the secondary target of potential oil pay in the Eocene Upper Sokor is being considered as upside.

 

Savannah Petroleum CEO Andrew Knott said: “The Kunama discovery, following on from Amdigh and Bushiya, provides further encouragement for our plans to establish an early production scheme in Niger, which we expect to be able to provide an update on later in this quarter.

 

“The improved understanding of the R3 geology we have gained from the outcome of these wells has also given us the confidence to extend our campaign to target the Eridal prospect, located in close proximity to Amdigh, and we expect to provide updates on further potential additional drilling activity over the course of the coming months.”

Article Source: http://www.energymarketprice.com/energy-news/savannah-makes-oil-discovery-at-kunama-1-exploration-well-in-niger

 

Wind:

Greece awards 7 onshore wing projects totaling 171 MW

The Greek Regulatory Authority for Energy (RAE) has awarded seven wind projects with a total capacity of 171 megawatts (MW) in the country’s first onshore wind auction, WindEurope said Thursday.

The price range of the winning bids was €68–€72 per megawatt-hour (MWh), with the weighted average price coming in at €69.53/MWh, the association said in a press release.

 

It noted that the auction was oversubscribed, with 14 wind projects with a total capacity of 308 MW bidding in.

 

Of the winning bids, four projects are in Northern Greece, two in the center of the country and one on the island of Andros, the statement said.

 

Greek daily Ekathimerini said the domestic players appeared “unprepared” for the entry of foreign investors who offered “considerably lower and clearly more competitive rates”.

 

“In wind power projects, the bids made in the context of the tenders were 22.7 percent below the starting price, while in photovoltaics the prices were 20.2 percent lower,” the daily said in a report published late Wednesday.

 

According to the report, the lowest prices (between €62.97 and €62.99 MWh) in photovoltaics came from the subsidiaries of German group ABO, which secured five projects with a total capacity of 45 MW out of a total auctioned capacity of 53 MW.

 

“Portugal’s EDP was also aggressive,” Ekathimerini said, adding its Renovaveis subsidiary participated in the wind projects tenders, and offered a price of €68.18/MWh after a starting price of €90/MWh, securing a 44.6 MW wind park.

 

Greece had announced plans in May to auction 2.6 gigawatts (GW) of renewable energy capacity by 2020, in addition to the 2.6 GW already installed in the country.

Article Source: http://www.energymarketprice.com/energy-news/savannah-makes-oil-discovery-at-kunama-1-exploration-well-in-niger

 

Natural Gas

Spirit Energy to take an operatorship of North Sea gas field

Oil and gas operator Spirit Energy will take on the operatorship of a UK gas field in which it holds a 13 per cent share, it was confirmed today.

The company reached an agreement with its joint venture partners to take on operatorship of the Babbage gas field in the North Sea, and will do the same at the nearby Cobra discovery, in which it holds a 50 per cent interest.

 

It also announced additional plans to drill an exploration well at the adjacent Python prospect next year to further access reserves in the region.

 

Transfer of the operatorship is subject to completion of the divestment of existing operator Premier Oil’s interests to Verus Petroleum, as well as securing the relevant regulatory approvals.

 

Chief executive of Spirit Energy, Chris Cox, said: “Becoming operator at Babbage is an excellent adjustment to Spirit Energy’s portfolio.

 

“It is an asset and an area we know well and we are looking forward to working with our partners to maximise the value of the field.

 

“With an exploration well at the nearby Python prospect to come in the second quarter of 2019, we see significant opportunities to build on the greater Babbage area and boost production further from a field which is expected to produce gas for many years to come.”

 

The Babbage field, which first started producing gas in 2010, is an installation 55 miles off the east coast of the UK. So far this year it has a year-to-date average production of around 5,600 barrels of oil equivalent per day

Article Source: http://www.energymarketprice.com/energy-news/spirit-energy-to-take-on-operatorship-of-north-sea-gas-field

 

 

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