Hyundai Heavy Industries announced that it completed developing its own Hyundai FLNG (Floating Liquefied Natural Gas Plant) model in association with Linde AG, an international industrial gases and engineering company of Germany.

The Hyundai FLNG has an annual production capacity of 2.5 million tons of LNG and can store about 193,800 m3 LNG with its compact size of 355 m in length, 70 m width and 35 m in height.

The FLNG, existing only as a concept as for now, is a special floating vessel that can produce natural gas, liquefy it, and offload it directly to an LNG carrier. Hyundai Heavy conducted risk and safety evaluations of the FLNG and received the approval-in-principle from the Norway's DNV.

The FLNG consists of hull and topside facilities. The topside includes not only liquefaction and pre-treatment units but also utilities such as fresh water supply unit, the air compression, heat source and power generation systems. The development of Hyundai FLNG makes Hyundai Heavy the only company in the world that can conduct engineering, procurement, installation and commissioning for both the topside and hull part.

Since Hyundai FLNG takes 25 percent less time to build compared to the onshore liquefaction and storage plant, the offshore plant could be an attractive option for oil majors and global shipping companies looking to commercialize stranded gas in offshore fields.

"Hyundai FLNG has an efficient and economical production capability in that it just takes about 45 months to build. Considering the fact that the need for the development of stranded offshore gas fields is expected to be on the rise down the road, we will continue to step up our effort to win orders to build Hyundai FLNG," said Mr. Kim Yoon-choon, senior vice president of Hyundai Heavy's Offshore and Engineering Division who is the charge of the FLNG development project.

Since the high oil prices and steep increase in the natural gas demand triggered by Japanese nuclear disaster boost the need for the development of offshore gas fields, the FLNG market is expected to grow further.

In addition, Hyundai Heavy Industries was selected as a core institute for the development of FLNG system engineering by the LNG Plant R&D center of KOGAS. The goal of the project is to develop the Korean FLNG by 2016.

Royal Dutch Shell an integrated oil-and-gas player is involved in almost every facet of the energy industry. It was formed 105 years ago when Shell Transport & Trading merged with Royal Dutch Petroleum Co. And today, Royal Dutch Shell has a market cap of nearly $200 billion, making it one of the biggest private-sector companies in the world. It's one of the six supermajor oil-and-gas companies.

The Netherlands-based company explores for oil and gas, extracts deposits and sends through pipelines the raw product to refiners, often its own refiners. The refined product is then sent to distribution centers and retail destinations. It’s earnings and revenue are rising at a nice clip, because big-money funds are accumulating the stock. However, the company has been cleaning its portfolio in the past few years, selling noncore businesses and redirecting its efforts.

Among its new ventures, Shell is stepping up its efforts in the area of LNG or liquefied natural gas. Shell already is one of the world's leading LNG suppliers. In May, it announced it will build the world's first offshore LNG facility, located off the coast of Australia. LNG is solving a crucial problem in the energy world. Natural gas seems an attractive alternative to oil because it's cleaner and cheaper.

But it's hard to transport long distances. Fracking in North America doesn't add supply to Egypt or Romania.

The sole purpose of liquefying natural gas is to enable long transport. Expect huge new specialty port facilities at major ports in the next few years.

Shell's offshore Australian LNG platform will be useful in delivering product to China.

Royal Dutch Shell broke out from a cup or flat base with handle on December 22. Its 72.49 buy point was triggered in impressive fashion, with a gap-up advance and a volume surge that came in 49% above its usual pace of business. Earnings rose 35% in Q3, a bit better than expected, but still less than half of the prior quarter's year-on-year growth result (74%).

Anything worse would have been a serious flaw.

Revenue gains have accelerated in the past four quarters, from 21% to 24%, 28%, 34% and 36%. Pretax margin limped in at 9% in 2010, while return on equity amounted to 14%. These numbers could use a boost.

Note that the integrated oil group stands at 48th place out of the 197 industries tracked by IBD, as of the January 4 edition. The group has moved up from 75th place in just four weeks.

Finally, Royal Dutch Shell offers a dividend that comes to 3.9% at current prices, a solid return in today's low-interest-rate environment.

Det Norske Veritas (DNV) has developed a new pipeline concept, called X-Stream that can significantly reduce the cost of a deep- and ultra-deepwater gas pipeline while still complying with the strictest safety and integrity regime.

X-Stream is based on established and field-proven technologies which have been innovatively arranged.

X-Stream can reduce both the pipeline wall thickness and time spent on welding and installation compared to deep-water gas pipelines currently in operation. The exact reduction in the wall thickness depends on the water depth, pipe diameter and actual pipeline profile. Typically, for a gas pipeline in water depths of 2,500 m, the wall thickness reduction can be 25 to 30 % compared to traditional designs.

"It’s essential for DNV that the new concept meets the strict requirements of the existing safety and integrity regime, and I’m pleased to confirm that this concept does," says Dr. Henrik O. Madsen, DNV’s CEO, who announced the news at a press briefing in London January 20.

"DNV has been instrumental in developing and upgrading the safety and integrity regime and standards for offshore pipelines over the past decades. Today, more than 65 % of the world’s offshore pipelines are designed and installed to DNV’s offshore pipeline standard. As the deep-water gas transportation market will experience massive investments and considerable growth over the coming years, new safe and cost-efficient solutions are needed," Dr. Madsen adds.

Current deep-water gas pipelines have thick walls and, due to quality and safety requirements, the number of pipe mills capable of producing the pipe is limited. When installing pipelines, the heavy weights are difficult to handle and the thick walls are challenging to weld. And finally, the number of pipe-laying vessels for deep-water pipelines is limited too.

New offshore oil and gas fields are being developed in deeper and deeper waters and export solutions for the gas are critical. New exploration activities are also heading for ultra-deepwaters. The distance to shore is increasing too. The X-Stream concept can for such fields represent an alternative to e.g. floating LNG plants combined with LNG shuttle tankers.

By controlling the pressure differential between the pipeline’s external and internal pressures at all times, the amount of steel and thickness of the pipe wall can be reduced by as much as 25-30 % – or even more compared to today’s practice and depending on the actual project and its parameters. This will of course make it easier and cheaper to manufacture and install the pipeline.

"By utilizing an inverted High Pressure Protection System – i-HIPPS – and inverted Double Block and Bleed valves – i-DBB – the system immediately and effectively isolates the deep-water pipe if the pressure starts to fall. In this way, the internal pipeline pressure is maintained above a critical level for any length of time," explains Asle Venås, DNV’s Global Pipeline Director.

The new concept is simple and reliable. During installation, it is necessary to fully or partially flood the pipeline to control its differential pressure. During operation, the i-HIPPS and i-DBB systems ensure that the pipeline’s internal pressure can never drop below the collapse pressure – plus a safety margin. In sum – a certain minimum pressure will be maintained in the pipeline at all times.

"It will also be important to maintain the minimum pressure in the pipeline during pre-commissioning. This can be done using produced gas separated from the water in the pipe by a set of separation pigs and gel. This technology is not new to the industry. This method has already been initiated as standard practice by several oil companies," says Mr Venås.

A team of mainly young highly skilled engineers, headed by DNV in Rio de Janeiro, Brazil, is behind the X-Stream concept. As with the other DNV concepts launched in 2010 and 2011, the X-Stream team was asked to think outside the box.

The DNV study is a concept study, and a basic and detailed design will need to be carried out before the X-Stream concept is realized on a real project. DNV intends to work further with the industry to refine and test the concept.

"I’m pleased to announce the outcome of this innovation project. At DNV, we feel confident that, by further qualifying the X-Stream concept, huge financial savings can be made for long distance, deep-water gas pipelines without compromising pipeline safety and integrity," concludes Dr. Madsen.

A joint industry project managed by the Norwegian classification society Det Norske Veritas (DNV) is presenting valuable findings on the technology of LNG cargo tanks.

Since 2008, BW Imo has participated in a study on sloshing impact forces in LNG membrane tanks. A new method of measuring these forces was introduced this year, whereby pressure sensors are pre-installed in the cargo tank. Measuring liquid sloshing is particularly important for avoiding damage to internal insulation systems of LNG carriers.

The next step will be to study the measured impact forces and their correlation with external factors such as weather, wave condition, loading condition and tank filling height. The study is expected to lead to an advanced decision support system for smarter ship operations.

Governor Sean Parnell met January 5 in Anchorage with the chief executive officers from BP, ConocoPhillips and Exxon Mobil to discuss alignment between the three companies on commercializing the North Slope's vast natural gas reserves.

The meeting took place at the request of Governor Parnell after he publicly called on the three companies -- the major lease holders for gas reserves on the North Slope -- to work together on developing a liquefied natural gas project that focuses on exporting Alaska North Slope gas to Asia's growing markets.

The governor invited the three CEOs to meet with him to discuss the opportunities for commercializing North Slope gas and the project's importance to Alaskans.

"We had a productive discussion about how to get alignment between the companies and grow Alaska's economy through oil and gas development," Governor Parnell said. "I made it clear that we want to see progress on commercializing Alaska's gas for Alaskans and markets beyond."

The Parnell administration is targeting LNG exports to Asia given increasing demand there.

Governor Parnell and the CEOs -- Bob Dudley of BP, Jim Mulva of ConocoPhillips and Rex Tillerson of Exxon Mobil -- met for two hours. During the meeting, the CEOs briefed the governor on the extensive work they've been doing in response to his request.

"I appreciate the willingness of the chief executives to come to Alaska to discuss the important topic of commercializing North Slope gas," Governor Parnell said. "For a gas project to advance, all three companies need to be aligned behind it. This meeting is an important step, but much work remains.

Cheniere Energy will consider adding two more trains to the Sabine Pass liquefied natural gas facility now that the company has completed commercial contracts for four trains at the terminal, a company spokesperson confirmed to Rigzone on January 31.

Media reports earlier in the week quoted the company's chairman and CEO Charif Souki as saying the company would seek to expand the facility's export capacity.

The company reported that its subsidiary Sabine Pass Liquefaction had entered a sale and purchase (SPA) agreement with Korea Gas Corporation (KOGAS), through which KOGAS would purchase approximately 3.5 million tones per annum (mtpa) of LNG. The purchase would take place when Sabine Pass' third train begins operations.

On January 26, Cheniere reported it had entered an amended SPA with BG Group subsidiary BG Gulf Coast through which BG would purchase an additional 2 mtpa of LNG. The amended agreement would raise BG's total annual contract quantity to 5.5 mtpa of LNG.

BG will buy 3.5 mtpa of LNG when Sabine Pass' first train begins operations and purchase a portion of the additional 2 mtpa of LNG as operation of the second, third and fourth trains commence.

Cheniere is developing a liquefaction project at the Sabine Pass LNG terminal in Cameron Parish, La., which will include four liquefaction trains capable of producing up to 18 mtpa of LNG.

Construction of the liquefaction project's first phase is scheduled to begin this year; construction for the second phase is expected to begin in 2013. Operations of the first and second phase are estimated to start in 2015-2016 and 2017-2018, respectively.

The Sabine Pass terminal has regasification and send-out capacity of 4.0 Bcf/d and storage capacity of 16.9 Bcfe.

The Sabine Pass facility was originally constructed as an LNG import facility. The abundance of U.S. gas supply has prompted Cheniere and other LNG operators to seek to add LNG export capacity to existing import facilities.

BW Gas and InterEnergy Holdings have agreed to form a joint venture to build a liquefied natural gas terminal in San Pedro de Macoris, in the Southeastern coast of the Dominican Republic.

The terminal will be part of an all-encompassing logistics solution to bring natural gas to the country.

This will be BW’s first investment in the Caribbean. BW said it strongly believes in the future of the Dominican energy market and in the opportunity to partner with InterEnergy to bring a more economical and efficient fuel solution to the country’s power generators and other consumers of natural gas.

According to Celso Marranzini, Dominican Government Minister and CEO of the Dominican state’s electric sector holding company, Corporación Dominicana de Empresas Electricas Estatales (CDEEE), "This announcement is one of the most important developments in the country’s energy market in the last decade." Mr. Marranzini also pointed out that "the project confirms the significant and sustained interest by large international groups like BW and InterEnergy to invest in the Dominican Republic and, more specifically, in its power sector."

The joint venture leverages on BW’s unparalleled knowledge of the gas transportation and storage business, and InterEnergy’s unique power sector experience and extensive footprint in the Dominican Republic. The combination of the two partners has proven to be critical to secure long term gas contracts from multiple suppliers and lock in the most competitive gas rates in the market.

BW Group CEO Andreas Sohmen-Pao says: "BW is very excited to partner with InterEnergy Holdings and its market leading companies in the power sector to bring a compelling energy solution to such an important and growing market like the Dominican Republic."

For InterEnergy, the venture also has significant strategic value given the group’s investments in the Dominican power generation and distribution segment, including integrated utility CEPM serving the Punta Cana and Bavaro resort regions, 300MW generation facility CESPM and generation company EGE Haina.

Rolando Gonzalez Bunster, InterEnergy’s Chairman and CEO adds: "This project reinforces our long term commitment to bringing reliable and cost-effective electricity to the Dominican market by continuing to deploy significant capital in the country, and partnering with global industry leaders like BW."

Total investments are expected to surpass US$350 million, and completion is scheduled for 2014. Anchor clients for the new terminal, in addition to companies related to InterEnergy, include the Martí Petroleum Group. Marti’s Tropigás division is a leading propane and natural gas distribution business in the Dominican Republic with over 3,000 industrial, commercial and residential propane clients and nearly two-thirds of the local natural gas distribution market. Martí Petroleum Group is also one of the potential co-investors in the terminal, alongside other anchor clients that have been approached by BW and InterEnergy.

2. ASIA

Arrow Energy said it welcomes the January 11 implementation of the Scheme of Arrangement for the 100 percent acquisition of Bow Energy which will deliver additional strategic coal seam gas assets to the company’s portfolio.

Bow Energy business will be integrated into Arrow and operated as a single entity.

Arrow Energy Chief Executive Officer Andrew Faulkner said the completion of this acquisition was good news for all stakeholders. Bow shareholders realized compelling value for their shares in a volatile market, Bow employees received the opportunity to join Arrow and the acquisition allows Arrow the potential to expand the liquefied natural gas (LNG) train size at its planned LNG facilities on Curtis Island.

FMC Technologies, Inc. announced that its Australian subsidiary has signed an agreement with Woodside Energy Ltd. for the design, manufacture and supply of subsea production systems to support the Greater Western Flank (GWF) Phase 1 Project. The contract has a value of approximately $150 million in revenue to FMC Technologies.

The GWF Phase 1 Project will develop the Goodwyn GH and Tidepole fields, and represents the next major development for the Woodside operated North West Shelf Project. The GWF fields are located in water depths of 230 to 425 feet (70 to 130 meters). FMC’s scope of supply includes six subsea production trees, six wellheads, two manifolds, subsea and topside controls and flowline connection systems. Deliveries are expected to commence in the second half of 2012 and continue through 2013.

"Greater Western Flank becomes the most recent addition to the many Woodside projects that FMC supports under our existing frame agreement," said Tore Halvorsen, FMC’s Senior Vice President, Global Subsea Production Systems.

"Today’s announcement provides excellent opportunities for FMC as this project will continue to maximize the value of existing infrastructure and demonstrates additional investments in Australia’s largest resource project."

Mitsubishi Heavy Industries Compressor Corporation (MCO), a wholly owned subsidiary of Mitsubishi Heavy Industries, Ltd. (MHI), has received orders for three compressor trains and a power generation system to be used at the world’s first floating liquefied natural gas production, storage and offloading facility (FLNG).

Shell will deploy the FLNG facility to the Prelude field located off the northwest coast of Australia.

The three compressor trains on order are used for gas recovery from gas wells and for the transmission and compression of gas in the gas treatment and for stabilization. The power generation system consists of three 40 megawatt (MW) steam turbine power generation units. MCO, with cooperation from Mitsubishi Corporation, received the orders for the compressors and power generation system from Technip France, part of the Technip Samsung Consortium which Shell has tasked to engineer, procure, construct and install the Prelude FLNG facility.

The 488 meter (m) long, 74m wide FLNG facility forms the core of Shell’s Prelude Floating Liquefied Natural Gas Project. The FLNG facility – the world’s largest offshore floating facility – will be moored at a site approximately 200 kilometers offshore from the coast of Western Australia.

FLNG is a breakthrough innovation that will allow the production, liquefaction, storage and transfer of LNG at sea, helping to open up offshore natural gas fields that are currently too costly or difficult to develop.

Shell’s facility, which is expected to be the world’s first FLNG to go on-stream, will use mechanical drive steam turbines. Compared with gas turbines, which are generally used in conventional land LNG facilities, steam turbines permit continuous long term operation as well as easier maintenance performed at extended intervals between regular inspections, thereby contributing to higher productivity. They also are able to respond flexibly to fluctuations in production volume. MCO is the world’s leading manufacturer of mechanical drive steam turbines. The company believes its compressors’ recognized advantages, combined with its track record in deliveries, led to its winning of the latest order.

Last May MCO concluded an Enterprise Framework Agreement with Shell relating to the supply of main compressors for use at LNG plants, and the company now looks to progressively build up a stable, long-term relationship with Shell as a strategic supplier. Upon receiving the order for the FLNG installations, MCO began enhancing its production facilities, ordering needed new equipment last October.

South Korea’s Samsung Heavy Industries Co. said January 16 it has received a letter of agreement from Inpex to build an offshore gas processing facility for around US$2.26 billion.

Work on the 100,000-tonne facility will begin in 2013 and the structure will have 110 meters (361 feet) both in height and width when delivered by the end of 2015.

The facility will be deployed in the Browse Basin offshore Western Australia.

Inpex is seeking to explore the Ichthys gasfield in a joint venture with French energy firm Total.

The gas will be transported from the processing facility through a subsea pipeline more than 885 kilometers to the onshore LNG processing plant proposed for Blaydin Point on Middle Arm Peninsula, Darwin, Northern Territory.

Inpex Corporation and Total S.A. on January 13 confirmed the Final Investment Decision (FID) on the US$34 billion Ichthys LNG Project.

INPEX Chairman Naoki Kuroda made the announcement in Darwin, the site of the onshore gas processing facilities which will be built to produce 8.4 million tonnes of liquefied natural gas per annum.

"The Ichthys FID announced today by INPEX and Total signals the start of construction of one of the world’s largest LNG facilities based on an estimated 40 years of gas and condensate reserves from the Browse Basin offshore Western Australia," Mr Kuroda said.

"In delivering this important Project into production we will be securing vital long-term energy supply to Japan and our other customers while delivering sustainable economic and social benefits across Australia."

Mr Kuroda said the Ichthys LNG Project was the cornerstone in the company’s growth strategy into the 21st Century and would be the first time INPEX was leading such a world-scale project as operator.

"Ichthys production volumes represent more than 10% of Japan’s LNG imports at current levels," Mr Kuroda said. "Ichthys will provide a long-term stable supply of cleaner energy to Japan, and help Japan diversify its energy sources.

"Ichthys will contribute significantly to the growth of the Australian economy while strengthening friendly ties between Japan and Australia."

Mr Kuroda said the Ichthys LNG Project’s commercial strength would help INPEX achieve its objective of doubling oil and gas production over the next decade.

INPEX and Total recently announced binding Sales and Purchase Agreements for the entire LNG production from the Project for 15 years from 2017.

In addition, the Project will produce an estimated 1.6 mtpa of liquefied petroleum gases.

The liquids-rich gas stream will also generate approximately 100,000 barrels of condensate per day at peak.

Mr Kuroda said mobilization for construction of the Project would start immediately with preliminary works at the Blaydin Point site due to commence within weeks.

Mr Kuroda confirmed that Engineering, Procurement and Construction (EPC) of the onshore LNG plant and associated infrastructure would be undertaken by the JKC joint venture, comprising JGC Corporation, KBR and Chiyoda Corporation.

Mr Kuroda said that between them, the three onshore EPC joint ventures had been responsible for designing and delivering a large percentage of the world’s major oil and gas processing plants, including large-scale LNG facilities across the globe.

Mr Kuroda also confirmed contracts to be awarded for the major offshore work packages, including:

• Central processing facility – Samsung Heavy Industry

• Subsea production system – General Electric

• Subsea flow line construction and installation – McDermott in cooperation with Heerema

• Gas export pipeline – Mitsui-Europipe, Sumitomo, Nippon Steel-Metal One (pipe manufacture); Mitsui-Bredero Shaw (pipe concrete coating); Saipem (pipelay)

• Floating production storage and offloading vessel – to be announced in the coming weeks.

Mr Kuroda said all successful tenders to the Ichthys LNG Project in Australia had to demonstrate how they will maximize the use of Australian products and services.

"Ongoing compliance and reporting mechanisms will ensure contractors perform to the standards set by the Ichthys Project’s approved Australian Industry Participation plans and contractual obligations," Mr Kuroda said.

"Ichthys will truly be an international collaboration. An estimated 3000 jobs will be needed in Darwin during the peak of construction with a further 1000 offshore. Once the Project is in operation we will require approximately 700 permanent positions."

INPEX and Total have already committed to a $91 million environmental and social benefits package to provide long-term benefits for the community over the life of the Project and beyond, which includes a $3 million contribution to Charles Darwin University to accelerate plans for the North Australian Centre for Oil and Gas.

In 2010 Inpex and Total also contributed $3 million to fund construction of the Larrakia Trade Training Centre, the biggest cross-training facility under one roof in the Northern Territory. It is delivering accredited qualifications, traineeships and apprenticeships to Aboriginal and non-Aboriginal students from across Northern Australia.

Australia’s Liquefied Natural Gas Ltd has signed an engineering, procurement and construction services contract with China Huanqiu Contracting & Engineering Corporation for its Fisherman’s Landing liquefied natural gas project in Queensland

The contract value is estimated at US$760 million and covers the first LNG train, including the LNG tank and related infrastructure, with a design LNG production capacity of about 1.9 million tonnes per annum and guaranteed capacity of 1.5 million tpa.

Based on the contract value, LNG Ltd said the total estimated development costs of the first LNG train was expected to be about US$1.1 billion (AU$1.1 billion) when taking into account marine works, which are not covered under the EPC contract, and other development and finance costs.

LNG Ltd and China Huanqiu will work on an open book basis to complete the detailed engineering design and agree a fixed lump sum EPC contract price and bankable EPC contract by June 30.

"The company’s primary focus remains on securing gas supply and ensuring the LNG project is in a position to then quickly progress to [final investment decision] and commencement of construction," LNG Ltd managing director Maurice Brand said.

LNG Ltd recently had its deadline to meet the conditions for a lease over the proposed project site, near Gladstone, extended until June 30.

Part of those conditions include the procurement of gas supply for the project, which LNG Ltd said on January 20, it expected to be in a position to provide an update on during the second quarter of the year.

LNG Ltd said its construction schedule for the first phase of the project remained unchanged at 30 months from FID to first LNG production.

The project also has a proposed second phase of development which will see the construction of another 1.5 million tpa train with first production within three years of the start-up of the first train.

China Huanqiu, a subsidiary of China National Petroleum Corporation, is LNG Ltd’s largest shareholder with a 19.9% stake.

Woodside Petroleum Ltd. said January 27 it's considering selling some of its stake in the Browse liquefied natural gas project in Australia, but plans to retain its position as operator.

The Perth-based company said it was conducting a "limited process" to assess the sale of a minority portion of its 50% equity interest in response to significant interest from a number of unnamed parties. However, it said it hadn't made a decision at this time.

A sale of even a small stake would bring in cash for Woodside on a project that government officials have estimated could cost roughly A$30 billion, and which as been plagued by delays.

Woodside said in a statement that the review of its Browse stake could provide it with value early in the development of the project.

In an August presentation to investors, CEO Peter Coleman said the company's large equity stakes in projects including Browse meant that it had options, adding the company would deliver "value from the LNG growth options over the medium to longer term."

The Browse fields are located some 400 kilometers north of Broome in Western Australia State. The venture has plans for floating gas and liquids platforms that would feed an onshore LNG production facility able to process 12 million metric tons of LNG a year.

Woodside's partners in the project are BHP Billiton Ltd. (BHP), BP PLC (BP), Chevron Corp. (CVX) and Royal Dutch Shell (RDSB RDSA). The company said in December that it may need to delay an investment decision on Browse by a year, until into the first half of 2013.

Technip Oceania, a Perth, Australia subsidiary of France's Technip Group, announced January 26 that it has been awarded a contract worth $117 million (AUD 110 million) by Daewoo Shipbuilding and Marine Engineering for the detailed design for Chevron's Wheatstone offshore gas-processing platform.

The upstream (offshore) portion of the project is comprised of the development of gas fields in the WA-17-R and WA-253-P petroleum titles located on the Northwest Shelf offshore Western Australia at water depths of 230 feet to 655 feet (70 to 200 meters).

Subsea gas-gathering systems will transport production to the processing platform where the gas and condensate will be treated. It will then be exported to the onshore gas plant located at Ashburton North, 7.5 miles (12 kilometers west) of Onslow, on the Pilbara coast of mainland Western Australia.

This award follows on from Technip Oceania's successful completion of the front-end engineering design of the project, a contract awarded by Chevron in 2009. The contract represents a breakthrough for Technip Oceania, who are leading the work.

"The Wheatstone Platform is one of the largest offshore platforms ever built, and I am proud that we have been able to deliver the design for DSME from our Australian operation. We have had to expand locally to perform the work, with over 200 people in Perth working on the project," said Technip Oceania Managing Director Frans Roozendaal.

"It has been good to be able to use Technip's Australian office to lead this work. The continuation from FEED, the knowledge of Australian requirements, and the proximity to Chevron gives us a great advantage," said KH Lee – a project manager for DSME.

Technip's operating centers in Perth, Australia and Kuala Lumpur, Malaysia will execute the contract, which is scheduled to be completed in the second half of 2012.

Western Australia's liquefied natural gas sector along the state's north-west coast is experiencing a wave of development and expansion.

Woodside's 90 per cent-owned Pluto LNG project is due for completion and first cargo in March, substantially increasing the company's production profile.

The company said; in its fourth quarter report that construction of the foundation project: "Is in its final phase with commissioning and production start-up of sections of the offshore and onshore production systems progressing to plan".

Pluto, 190km north-west of Karratha, will process gas from the Pluto and Xena gas fields into LNG and condensate.

The project will initially comprise five subsea wells on the Pluto gas field connected to an offshore processing platform in 85 meters of water.

An LNG processing train, with forecasted production capacity of 4.3 million tonnes per annum, will service Pluto onshore, along with storage facilities and an export jetty.

Woodside said the project had generated more than 5,000 jobs and, by the end of 2010, had delivered more than $6 billion locally.

The $US29 billion Wheatstone project, majority owned by U.S. company Chevron, was given the all clear for construction last September.

Wheatstone, which will be comprised of two LNG trains with capacity to produce 8.9mtpa and an offshore processing facility, is a joint venture between Chevron (73.6 per cent), Apache Energy (13 per cent), Kuwait's Kufpec (7 per cent), and Royal Dutch Shell (6.4 per cent).

The proponents claim the project will create 6,500 jobs at the peak of construction and inject more than $17 billion into local goods and services, with first gas planned for 2016.

North of Wheatstone, Chevron's Gorgon project is the largest-ever resource development undertaken in Australia at more than $43 million.

Given the go-ahead for construction in September 2009, Gorgon is a joint venture between Chevron (47.3 per cent), ExxonMobil (25 per cent), Royal Dutch Shell (25 per cent), Osaka Gas (1.25 per cent), Tokyo Gas (1 per cent), and Chubu Electric (0.42 per cent).

Gorgon includes the construction of a 15mtpa LNG plant on Barrow Island and a domestic gas plant with a 300-terrajoule-a-day capacity.

Meanwhile, the North West Shelf project continues to thrive, providing operator Woodside with record annual revenue of $US3 billion in 2011.

The venture's six participants (Woodside, Chevron, BP, Shell, BHP Billiton, and MIMI) have agreed to proceed with phase 1 of the Greater Western Flank project, which is designed to sustain gas supply to the existing Karratha gas plant.

Dutch company SBM Offshore has won a $500 million contract to supply a turret and mooring system to the Ichthys liquefied natural gas project off the coast of Western Australia.

SBM Offshore will also assist during the integration of the turret into Ichthys’ floating production storage and offtake vessel, expected to occur in mid-2015.

The engineering, procurement, fabrication and supply contract it signed also covers SBM’s provision of assistance while the vessel is installed in the Browse basin.

In an announcement, SBM said the turret would weigh 7,000 tonnes and be able to accommodate up to 15 risers. It will be designed to operate for 40 years without being disconnected.

The news is the latest is a number of contract awards for the Inpex-operated field to be announced in the last two weeks of January.

While the winner of the FPSO contract is yet to be announced, Inpex had earlier announced engineering, procurement and construction of the project’s onshore LNG plant facilities would be conducted by JKC, a joint venture between Japanese LNG companies JGC Corporation and Chiyoda Corporation and US-based KBR.

Samsung Heavy Industry would build the $2.27 billion (2.6 trillion won) central processing facility, while a subsea production system would be provided by General Electric, the company signing a $1 billion contract for equipment and services January 30.

Engineering and construction company McDermott would work with Dutch company Heerema in providing subsea flow line construction and installation in a $2 billion deal McDermott said was the largest subsea deal it had ever secured.

GE Oil & Gas has confirmed signing contracts worth more than $1 billion to supply equipment and services for the giant Ichthys LNG project in north-west Australia.

The $34 million Ichthys project, which received formal approval from its partners earlier this month, will source gas via an 889-kilometer-long subsea pipeline stretching from the Browse basin off Australia to an onshore processing facility in Darwin.

GE will provide rotating equipment, including gas turbines and compressors, for the plant at Blaydin Point as well as an associated floating production storage and offloading vessel and a central processing facility located in the Browse basin.

The U.S. equipment-maker will also supply subsea production systems for the offshore portion of the project, as well as subsea connectors for the pipeline.

Under the terms of the agreement, GE will provide four Frame 7EA Gas Turbines and eight MR/PR compressors for the LNG plant; 10 PGT25+G4 gas turbines and 10 compressors for upstream facilities; and 22 subsea production trees, five off-subsea manifolds, an integrated subsea control system and a 42-inch trunkline connection system.

The equipment will be shipped by 2014, GE said in a statement on January 30 following an announcement at the company’s annual meeting in Florence, Italy.

Once completed, the Ichthys facility is expected to produce 8.4 million tonnes per annum of LNG and 1.6 mtpa of liquid petroleum gas.

The project is a joint venture between operator Inpex of Japan and French giant Total. Inpex owns a 72.805% interest with Total on 24%. Tokyo Gas holds a 1.575% stake with Osaka Gas on 1.2% and Toho Gas on 0.42%.

McDermott International has said the huge subsea contract it scooped recently from Japan's Inpex for the Ichthys liquefied natural gas project in Australia is worth around $2 billion.

Confirming an award revealed by Inpex earlier this month, McDermott said the deal, secured along with Heerema Marine Contractors, is the largest subsea contract it has ever secured.

McDermott is to work on the subsea umbilical, rise and flowline (SURF) project for Ichthys which includes engineering, procurement, construction and installation (EPCI) as well as pre-commissioning work.

Although preliminary work has already begun, construction of the 16,000 tonnes of subsea equipment will start at a facility on Batam Island, Indonesia in early 2013, McDermott said.

"McDermott will also install mooring systems for the floating production, storage and [offloading] vessel and central processing facility as well as installation engineering for future flowlines, risers and umbilicals." The company will use the subsea vessels Emerald Sea and North Ocean 102 for the installation.

"The contract value is in the order of magnitude of $2 billion and is the largest subsea contract McDermott has been awarded to date," the company wrote in a bourse statement on January 25.

Inpex earlier this month listed off the contractors and fabricators awarded deals for the $34 billion project after a final investment decision was made.

The JKC joint venture featuring JGC, KBR and Chiyoda was awarded the largest contract for the engineering procurement and construction of the onshore LNG facilities.

Under sub-contract to the JKC joint venture, the construction of the LNG plant is expected to be done by two companies in Thailand and one in China, which will fabricate 200,000 tonnes of LNG modules for shipment to Darwin. One of the Thai yards is publicly-listed STP&I, while the Chinese yard is Offshore Oil Engineering Corporation, although this has not been officially confirmed.

Inpex confirmed that Samsung Heavy Industries would build the huge 110,000-tonne semi-submersible central processing facility. The newbuild FPSO is yet to be awarded, but sources indicate a pairing between Daewoo Shipbuilding & Marine Engineering with Technip have a competitive advantage.

GE Vetco Gray has won the contract to provide the large subsea production system. Several contracts were awarded linked to the 890-kilometre subsea pipeline. Saipem will carry out the complicated pipelay, manufacturing will be done by Mitsui-Europipe with Sumitomo, Nippon and Steel-Metal One, while the concrete coating has been let to Mitsui-Bredero Shaw.

Recently, Mr. Werner Schlott, CEO of TGE Gas Engineering GmbH, a leading Engineering company with many years involvement in Chinese projects and Mr. Philippe Berterottière, President & CEO of GTT, the world leader in LNG containment systems, signed a License Agreement for the design and construction of LNG land storage Tanks.

The signature was made in the presence of Mr. Zhao Qingsheng, Vice-President of CIMC Group – China International Marine Containers (Group) Ltd. CIMC are 60% shareholders of TGE Gas Engineering GmbH and are a major Chinese company with interests in many industrial fields.

The flexibility of the GTT membrane tank design permits the construction of a safe, reliable, modern cost-effective and schedule saver LNG land storage tank for a full range of projects from small to very large scale.

TGE will be able to build on their experience gained from many storage projects for liquefied gas worldwide including the construction of LNG receiving terminals in China and with the support of being part of the Chinese business community.

On the occasion of the signing, GTT President, Philippe Berterottière, said: "The signature of this license agreement with TGE is a major landmark in the long successful and friendly partnership of GTT with China".

INDIA

Anil Ambani-promoted Reliance Power and energy giant Shell are in talks to jointly set up India's first east-coast LNG terminal to fuel factories and power plants that are eyeing imports as output from the D6 block has fallen sharply, people familiar with the matter said.

Several companies, including Petronet LNG; the country's biggest gas importer, are considering setting up a terminal on the east coast. Power projects with a total capacity of about 7,000 mw, including Reliance Power's Samalkot project, would be stranded due to gas scarcity, as local gas is scarce and importing LNG from existing facilities on the west coast is not economically viable.

Shell and Reliance Power declined comment on the matter, but government and industry sources said the two companies were ready to set up an equal joint venture for an LNG terminal at Kakinada. The development comes two months after Mukesh Ambani-promoted Reliance Industries and oil major BP incorporated their equal joint venture, India Gas Solutions, for global sourcing and marketing of natural gas in India.

The proposed new terminal is expected to involve an investment of Rs 3,000 crore, industry officials said. Shell operates an LNG terminal on the west coast in Hazira, Gujarat, which it set up with an initial capacity of 2.5 million tonnes per annum (mtpa). Its capacity is being increased to 5 mtpa, but the additional capacity cannot be used by customers on the east coast because of high transportation charges and local taxes.

A Reliance Power spokesman said, "Reliance Power keeps exploring various business opportunities. The company would not like to comment on specific business proposal." Shell India spokesman Deepak Mukarji said, "We at Shell do not comment on rumour or speculation."

Another Shell executive, who did not want to be identified, said talks were on between the companies. One industry official with direct knowledge of the matter said Kakinada Port may pick up a minority stake in the proposed JV. "The port is considered to be an ideal location for setting up an LNG import terminal due to its modern infrastructure, all-weather operations and proximity to gas consumers in Andhra Pradesh," said the official, who did not wish to be identified.

A Plan panel report in August had estimated that domestic gas output would rise to 199 million metric standard cubic meters per day by 2016-17 from about 145 mmscmd now. According to an estimate by the oil ministry, natural gas demand from fertilizer, power, city gas distribution, petrochemical, refinery and steel sectors would cross 341 mmscmd by 2014-15.

In a significant step towards ensuring the natural gas energy security for the country, GAIL Gas Limited signed anMoU with the Government of Andhra Pradesh for setting up of an LNG terminal/FSRU along the state's expansive sea coast.

The MoU was signed in the presence of Chief Minister of Andhra Pradesh N Kiran Kumar Reddy and J Geeta Reddy, Minister for Major Industries for AP by J Wason, CEO, GAIL Gas Limited and S Bhattacharya, Principal Secretary (Investment and Infrastructure), AP at the Partnership Summit 2012 organized by the Government of A.P and CII.

The Floating Storage and Re-gasification Unit (FSRU)/ Liquefied Natural Gas terminal of 3.5 to 5 MMTPA will be set up around Kakinada/Vishakapatnam and is likely to be the first such facility on the east coast of the country with an estimated investment of Rs 5,000 crores.

The proposed facility would supply R-LNG, a preferred feedstock for the power, industrial and other sectors to meet the growing needs of the state. The facility would engender the much needed fillip for the development of natural gas usage in the state and the required infrastructure for transmission and distribution.

Andhra Pradesh Gas Distribution Company Limited (APGDC), a joint venture of GAIL Gas and APGIC will execute the project with the support of GAIL and work will be completed by Financial Year 2013. The company is in the process of finalizing an upstream partner for project execution and LNG supplies to the proposed terminal. As per the MoU, the AP Government will facilitate GAIL Gas/APGDC to obtain necessary permissions, registrations, approvals, clearances, etc. from the concerned departments to set up the project.

Foster Wheeler AG said January 19 that its India subsidiary, Foster Wheeler India Private Limited, part of its Global Engineering and Construction Group, has been awarded a contract for a new LNG receiving terminal to be built in Ennore, in the state of Tamil Nadu, India.

The contract was awarded by India’s national oil company, Indian Oil Corporation Limited (IOCL).

The Foster Wheeler contract value for this project was not disclosed and will be included in the company’s fourth-quarter 2011 bookings.

Foster Wheeler’s scope of work includes basic design, front-end engineering design, and the preparation of capital and operating cost estimates for the new LNG import, storage and regasification terminal, which will be designed to process five million tonnes per annum of LNG. Foster Wheeler’s scope also includes marine studies to enable IOCL to finalize the jetty location, utilities, and regasified LNG send-out facilities. The LNG terminal facilities are planned for completion by 2015-16.

Indonesian national oil firm PT Pertamina (Persero) said January 27 that between 2012 and 2014 it will invest US$1.96 billion (EUR 1.49bn) in planned floating liquefied natural gas (FLNG) terminals and associated gas pipelines.

The company will spend US$1.15 billion on the construction of a floating storage and regasification unit in Central Java and a pipeline, which will connect East Java-Central Java with West Java.

Pertamina and power utility PT Perusahaan Listrik Negara, or PLN, will build a number of mini LNG terminals in eastern Indonesia, which will cost the firm US$400 million.

In 2014, the group will give US$380 million to convert a liquefied natural gas (LNG) plant in Arun into a receiving LNG terminal.

All of the above will contribute to Indonesia's master plan for economic development aimed at diversifying its energy consumption, boosting the downstream industry and reducing the burden of subsidizing oil-based fuel.

Poland's natural gas transmission system operator (TSO) GAZ-SYSTEM is preparing conceptual work for the addition of a liquefaction facility to the LNG import terminal currently being built at Swinoujscie on the Baltic coast, the company told ICIS Heren.

The possibility of building the infrastructure to export LNG from Poland has been prompted by increased interest in exploring - and eventually producing - unconventional volumes from the country's prospective reserves.

Early estimates from the U.S. suggest that Poland could have 5.3 trillion cubic meters of shale and tight gas reserves - the largest of any EU country.

GAZ-SYSTEM said it was planning to undertake "conceptual work connected with the analysis of additional functionalities of the LNG terminal." This work would include the possibility of adding liquefaction equipment, it added.

As yet, the analysis has not been subject to consultation with market participants, the TSO added.

State-controlled GAZ-SYSTEM, through its wholly-owned subsidiary Polskie LNG, is currently building a 5 billion cubic meter (Gm³)/year import terminal in the northwest of the country. The Swinoujscie terminal is scheduled to be operational in mid-2014.

Both Polskie LNG and GAZ-SYSTEM have previously said the terminal could be upgraded to import up to 7.5Gm³/year. The Polish local media has long speculated that Swinoujscie would be upgraded to have export functionality, given the rising interest in Polish unconventional reserves. However, this is the first time GAZ-SYSTEM has stated it is actually considering this option.

Treasury minister Mikolaj Budzanowski has also regularly stated the TSO should prepare itself for adding a liquefaction facility to the LNG terminal.However, a treasury spokeswoman said: "It is too early to talk about the specific parameters of the terminal, its cost and construction schedule. Its implementation depends on the situation on the market.

"Implementation of specific projects will depend on the size of [unconventional] extraction and the results of feasibility and cost-effectiveness studies - the choice will be determined by the economic and market factors."

Should unconventional production prove to be commercially viable in Poland, it could fundamentally change the country's - as well as the EU's - security of supply, as Poland heavily imports from Russia.

Over the coming year, Poland is also undertaking a swift and far-reaching gas market liberalization program, that will see an end to industrial and commercial tariffs. This is expected to notably reduce the market dominance of state-owned incumbent PGNiG. To date, Polskie LNG has marketed 65% of the regasification capacity of the import terminal - all to PGNiG. The terminal operator recently put the remaining 35% of capacity up to tender, with the results expected to be announced next week.

Poland's first commercial volumes of unconventional production are expected in 2014.

Rolls-Royce, the global power systems company, has signed a contract to deliver highly efficient engines and propulsion systems for the world’s first liquid natural gas powered tugs.

Rolls-Royce has signed a contract to deliver engines and propulsion systems for liquid natural gas powered tugs.

The two vessels have been ordered by Norwegian company Buksér og Berging AS and will enter service in late 2013 for Statoil, the international energy company, and Gassco, the operator of the gas transportation network off the Norwegian coast.

In addition to two gas engines and a single LNG tank, Rolls-Royce will deliver a mechanical direct driven azimuth propulsion system for each tug that will provide a quick response time for maneuvering, the company said. The combined power and propulsion system will also provide low fuel consumption in all operating modes. Rolls-Royce will also provide automation and control systems for the two escort vessels.

Rolls-Royce’s scope of supply includes two US35 Aquamasters, two Bergen C6 mechanical drive engines, an RR Acon control and monitoring system for the gas system and one AGA Cryo LNG tank with an LNG system based on two cold boxes, according to the company.

Gas-Oil LLC a Gazprom subsidiary is thinking of building mini-LNG production units in regions where this type of fuel is in demand, the company told Interfax.

The company has almost finished building a pilot mini-LNG unit in the Kaliningrad region, which will have four cryogenic tanks and capacity to produce 3 tonnes of LNG per hour (21,000 tonnes per year).

Gazprom Export is thinking of selling all of the Kaliningrad unit's output to Poland, Gazprom Export says in its Gas Industry journal.

A tender will soon be called for the right to perform feasibility studies for units to produce LNG as a type of bunker fuel. Gas-Oil LLC thinks it would make economic sense to build units capable of producing at least 7 tonnes of LNG per hour in time.

Sergei Sakharov, a head of department at Gazprom Export, said the market for using LNG as an alternative fuel for small and medium industrial plants and settlements that are not linked to the trunk pipelines, was just taking off. This market could reach 200 million-250 million cubic meters in gas equivalent in Poland alone in the next five or seven years.

The bunker fuel market is also set to grow, as EU requirements to reduce sulfur oxide emissions by seaborne transport come into effect at the beginning of 2015. Ship-owners will then have to use either costly maritime diesel fuel, which has its limitations, use special scrubbing systems or use gas.

The LNG bunker fuel market could range from hundreds to millions of tonnes by 2020 (1,360 cu m of gas for every tonne of LNG). Orders have already been placed to build new ferries that run on LNG. Two such ferries, which get through 42,000 tonnes of LNG per year, will be built in Finland and another three with 5,400 tonnes in Denmark by 2013. Two ferries running on 40,000 tonnes of LNG per year will be built in Germany by 2015.

The administration of the Sakhalin region is engaged in negotiations with the Energy Ministry on the construction of stage 3 of the LNG plant with a capacity of up to 5 million tonnes under the Sakhalin-2 project.

"We believe it necessary to launch stage 3 of the LNG plant with a capacity of up to 5 million tonnes and are working on this with the Energy Ministry," Sakhalin Region Deputy Governor Galina Pavlova said on January 30.

In her opinion, it would be advisable to build an oil refinery and gas chemical facilities under the Sakhalin-1 and Sakhalin-2 projects.

Sakhalin Energy Executive Director Andrei Galayev called for building stage 3 of the LNG plant under the Sakhalin-2 project.

He believes that demand for LNG would grow in 2017-2018, and in order to meet it the decision on the third stage of the plant should be made already this year.

"Appetite for LNG in APR countries is very big and will grow more. The plant should be already finished in 2017-2018. Therefore the decision should be made this year. We have already made our assessments. Now Gazprom is doing its own calculations," Galayev said.

However this issue has to be coordinated with the project shareholders. The approximate cost of stage 3 is US$5-7 billion. "This is an absolutely tentative price," Galayev added.

As a project shareholder, Gazprom objected to the construction of stage 3 and insisted that the gas be used for meeting demand in the Far East.

Galayev stressed that gas production under Sakhalin-2 will keep stage 3 running at least at half of its capacity or maybe even more.

Gazprom also called for building additional LNG facilities in Vladivostok for gas to be delivered from Eastern Siberia.

Sakhalin-2 is an oil and gas production project in Sakhalin. It includes the development of the Piltun-Astokhskoye oil field and the Lunskoye natural gas field offshore Sakhalin Island in the Sea of Okhotsk, and associated infrastructure onshore. The project is managed and operated by Sakhalin Energy Investment Company Ltd. (Sakhalin Energy).

Sakhalin-2 includes the first liquefied natural gas plant in Russia. The two fields contain an estimated 1,200 million barrels of crude oil and 500 billion cubic meters of natural gas; 9.6 million tonnes of liquefied natural gas per year and about 180,000 barrels per day of oil will be produced.

To accelerate the commencement of the Sakhalin-2 development, Sakhalin Energy proposed a phased approach to the Project implementation.