Clean Energy Fuels Corp. has signed a 10-year agreement with Green Energy Oilfield Services, a major Texas truck transport provider, to build, supply, and maintain a new liquefied natural gas fueling station at Green Energy headquarters in Fairfield, Texas.

The Clean Energy LNG station will fuel Green Energy's new fleet of 60 LNG-powered heavy-duty Peterbilt trucks, which will support Green Energy's oil production customers within a 100-mile radius of Fairfield, in the Freestone oil region of Central Texas. The trucks are anticipated to use approximately 1.2 million gallons of LNG annually.

Development of the new Green Energy Fairfield LNG station is set to begin in August 2012, with completion scheduled by the end of 2012. Green Energy's future plans include development of additional LNG truck fueling stations in the Barnett (Fort Worth), Haynesville (Marshall), and Eagle Ford Shale (Laredo) petroleum-producing areas of Texas.

Roger Nevill, President and COO of Green Energy, said, "Our company is committed to acquiring and deploying fleets comprised exclusively of LNG-powered trucks. Together with many of our oilfield services customers, we are anxious to secure the cost-saving and clean-air benefits offered by natural gas. Another important goal for us is helping reduce America's need for foreign oil imports, and natural gas fuel is sourced domestically."

James Harger, Clean Energy's Chief Marketing Officer, said, "With the availability of new class-8, 2010 EPA-compliant natural gas trucks from several major manufacturers, regional and national trucking operators are deploying natural gas fleets in increasing numbers. Their goals include conserving costs, adding fuel diversity, curtailing harmful emissions, and reducing America's dependence on imported oil. We commend Green Energy for its pace-setting commitment to powering truck fleets with natural gas fuel."

Currently priced up to $1.50 or more per gallon lower than diesel (depending upon local markets), the use of natural gas fuel reduces costs significantly for vehicle and fleet owners, and reduces greenhouse gas emissions up to 23% in medium to heavy-duty vehicles. Additionally, natural gas is a secure North American energy source, with 98% of the natural gas consumed produced in the U.S. and Canada.

A new liquefied natural gas fueling station built, owned and operated by Clean Energy Fuels has opened in Seville, Ohio to support the expanding fleet of LNG trucks deployed by major contract freight carrier Dillon Transport serving Owens Corning.

James Harger, Chief Marketing Officer, Clean Energy, said, "The opening of this new Clean Energy LNG truck fueling station, the first in the industrial heartland of America, is a major step toward realizing our program to create a national LNG fueling infrastructure that will extend along major truck routes nationwide. Our efforts to create America’s Natural Gas Highway are in direct response to the increasing demand for natural gas fuel as major trucking companies secure and deploy LNG-powered trucks. We commend Dillon Transport, Owens Corning and Clean Fuels Ohio for their leadership role in this rapidly growing movement."

Dillon Transport’s temperature-sensitive tanker truck fleets operate throughout the U.S. and Canada, with contract services concentrated east of the Rocky Mountains. The new Ohio station will support Dillon-operated trucks that deliver raw materials to Owens Corning industrial production plants.

"Dillon Transport is proud to be a part of the partnership between Owens Corning and Clean Energy that has created the LNG station in Seville, OH. This station is on the leading edge of the natural gas highway that Clean Energy is developing across the United States over the next two years. We believe natural gas will be a mainstream alternative to diesel for class 8 truck fuel, because natural gas is a cleaner, less expensive, domestic and abundant solution to the energy crisis we face every day as Americans. Our goal is to continue to field natural gas vehicles in support of our strategic partners’ initiatives of environmental stewardship and cost reduction," said Jeff Dillon, President of Dillon Transport.

A grant to help fund the development of the Clean Energy LNG station was awarded to Clean Fuels Ohio by the U.S. Department of Energy, as part of the federal American Recovery and Reinvestment Act stimulus program.

"Clean Fuels Ohio was happy to work with Clean Energy in opening Ohio’s first liquefied natural gas station," Clean Fuels Ohio Executive Director Sam Spofforth said. "We hope to see more fleets join Dillon Transport to use this less expensive and environmentally friendly substitute for diesel fuel."

Cheniere Energy Partners, L.P. on February 27 announced that it has entered into an exclusive arrangement with Blackstone Energy Partners L.P., Blackstone Capital Partners VI L.P., and certain affiliates (collectively, "Blackstone") to finalize and execute definitive agreements under which Blackstone would purchase newly issued CQP Senior Subordinated Paid-in-Kind Units ("CQP PIK Units") for $2 billion in financing.

CQP would use the proceeds of the financing to fund the equity portion of the costs of developing, constructing and placing into service its Sabine Pass liquefaction project being developed at the Sabine Pass LNG terminal, the purchase of the Creole Trail pipeline from Cheniere Energy, Inc. and other partnership business purposes.

Cheniere Partners is advancing towards a positive final investment decision for the development and construction of the first two of four liquefaction trains. The cost for the construction of the first two trains is currently estimated to be $4.5 billion to $5.0 billion, before financing costs. The debt financing for the Sabine liquefaction lroject is expected to be completed by the end of the first quarter. Construction is expected to commence in the first half of 2012. The purchase of the Creole Trail pipeline is expected to close concurrently with the closing of the financing.

Under the units purchase agreement currently under negotiation, Blackstone would purchase approximately 111 million CQP PIK Units for $18 per unit. The CQP PIK Units would have a quarterly PIK rate of 4.2% and convert into CQP common units after two liquefaction trains begin commercial operation, which is expected to occur in 2016. The parties contemplate that the Board of Directors of CQP's general partner would consist of eleven members, including four directors appointed by Blackstone, four directors appointed by Cheniere Energy, Inc. and three independent directors.

"Obtaining this financing will be a significant milestone for the advancement towards construction of the first two liquefaction trains. Blackstone is one of the world's largest private equity investors, with significant experience in the energy sector and a history of successful development of large scale energy projects. We look forward to a successful working relationship with Blackstone as a value-added partner in the development of our Sabine Pass liquefaction project," said Charif Souki, Chairman and CEO. "We expect to obtain the remaining financing needed to fund the first two trains by the end of the first quarter and to commence construction in the first half of 2012."

The closing of financing is subject to, among other things, the execution of definitive documents, receipt of regulatory approvals required to permit commencement of construction of the Sabine Project, closing of the purchase of the Creole Trail pipeline, closing of the debt financing for the first two trains and other conditions necessary to complete the transaction.

Cheniere Partners owns 100 percent of the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish, Louisiana. The Sabine Pass terminal has regasification and send-out capacity of 4.0 billion cubic feet per day (Bcf/d) and storage capacity of 16.9 billion cubic feet equivalent (Bcfe). Cheniere Partners is developing a project to add liquefaction and export capabilities to the existing infrastructure at the Sabine Pass LNG terminal. As currently contemplated, the Sabine Project is being designed and permitted for up to four modular LNG trains, each with a nominal capacity of approximately 4.5 mtpa.

The Sabine Project is expected to be constructed with each LNG train beginning operations approximately six to nine months after the previous train. In November 2011, Sabine Liquefaction entered into a lump sum turnkey contract for the engineering, procurement and construction of the first two trains of the project with Bechtel Oil, Gas and Chemicals, Inc.

Sabine Liquefaction has also entered into four long-term customer sale and purchase agreements ("SPAs") for 16.0 mtpa of LNG volumes, which represents approximately 89 percent of the nominal LNG volumes. The customers include BG Gulf Coast LNG, LLC ("BG") for 5.5 mtpa, Gas Natural Fenosa for 3.5 mtpa, KOGAS for 3.5 mtpa and GAIL (India) Ltd. for 3.5 mtpa. The BG SPA commences with the start of train one operations and the Gas Natural Fenosa SPA commences with the start of train two operations. Commencement of construction for the first two trains is subject, but not limited to, regulatory approvals and Cheniere Partners making a final investment decision. The KOGAS SPA commences with the start of train three operations and the GAIL (India) Ltd. SPA commences with the start of train four operations.

Commencement of construction for the third and fourth trains is subject, but not limited to, entering into an EPC contract, regulatory approvals and Cheniere Partners making a final investment decision. Cheniere Partners has placed documentation pertaining to the Liquefaction Project, including the applications and supporting studies, on its website. Credit Suisse Securities LLC is advising Cheniere Energy Partners on the financing.

A joint venture (JV) comprised of CB&I and Zachry Industrial has secured a front-end engineering and design (FEED) contract for the Freeport liquefaction project in Texas.

The Zachry/CB&I JV will engineer and design three LNG liquefaction trains and corresponding pretreatment facilities near the existing Freeport LNG regasification terminal.

The three LNG liquefaction trains will each have a rated capacity of 4.4 million tons per annum.

Within the three-train design, the JV will develop a fixed price/fixed schedule proposal for both a one-train initial development and a two-train initial development.

The design of the three-train project will allow for the expansion of additional liquefaction train(s) and pretreatment facilities.

The Freeport LNG regasification terminal is owned and operated by Freeport LNG Development.

Royal Dutch Shell PLC is actively looking at ways to improve the profits it gets from U.S. natural gas, including seeking land for potential liquefaction and export terminals.

The Anglo-Dutch energy giant has invested heavily in U.S. shale gas assets, but depressed local gas prices risk driving up the costs of its projects there.

Chief Financial Officer Simon Henry said Shell was examining plans to develop the gas into products that are more closely linked to oil prices, such as liquefied natural gas for export and gas-to-liquids technology that turns gas into a transport fuel.

He said Shell was even seeking out land to build possible sites to build the types of facilities needed but cautioned that at a cost of "around $5 billion to $10 billion a project, we have to be selective."

Three Colombian electric power generators are together proposing a liquefied natural gas import terminal on Colombia's Pacific Coast to insure gas supplies to the country, a top industry official said March 5.

The planning for the $350 million LNG re-gasification facility is in advanced stages, said Eduardo Pizano, president of NaturGas, Colombia's largest natural gas industry association.

The LNG project, he said, was planned by three electric power utilities: EPM, the municipal utility of Medellin; Colinversiones, Colombia's fourth-largest power generator; and Isagen, owner of four hydroelectric power and one thermoelectric power generation plants in Colombia.

"These generation firms are worried about having problems with gas supply and so they have to plan for all possibilities," Pizano said.

The proposed LNG project is in response to a December 2010 report by Colombia's Regulatory Commission for Energy and Gas, known by its Spanish initials CREG, that warned of an upcoming gas shortage that could be exacerbated by El Nino climate conditions.

Although the LNG facility would likely be built on the Pacific Coast to easily access supplies from Peru or Asia, Pizano said its location has not been determined. Also possible is Colombia's Caribbean Coast, especially if large gas deposits are discovered there by upcoming offshore exploration efforts, in which case the LNG project might include a liquefaction function.

Colombia currently produces about 1.1 Bcf/d of gas, three-quarters consumed domestically, with about 250,000 Mcf/d of the gas sent to Venezuela. But CREG is concerned that declining reserves could leave the country vulnerable to shortages.

CREG noted that LNG is increasingly a valid option for Colombia's power generators and industrial consumers, given liquefaction facilities in Trinidad and Tobago and Peru, the growing LNG tanker fleet and flexible contracts that can be adapted to seasonality of thermoelectric consumption.

But Pizano warned that LNG comes at a higher cost currently three times the cost of domestically-produced gas that would have to be absorbed by consumers.

"The cost of LNG currently is about $12 (per million BTUs) versus $4 paid for Colombian production," Pizano said.

NaturGas' estimate of Colombian gas reserves is not as dire as CREG's, Pizano said, adding the group believes Colombia has seven years' worth of gas, a timeline that could be extended as producers Chevron and Equion improve recovery methods.

Improved recovery methods prompted Chevron to re-open its Riohacha gas field in the Guajira in recent weeks. The company expects to add 60,000 Mcf/d to its production there by the end of the year, Pizano said.

Cusiana, the ex-BP oil field acquired by Equion, could see an another 260,000 Mcf/d of production over the next year or two, as gas formerly reinjected to ease crude extraction is routed to the market, Pizano said.

Brazilian state-run oil company Petroleo Brasileiro (Petrobras), said February 3 that it had signed a letter of intent to study the feasibility of building fertilizer and liquefied-natural-gas, or LNG, regasification plants in Rio Grande do Sul state.

The studies will be conducted over the next six months, Petrobras said. The letter of intent was signed by Petrobras, Samsung's machinery and ships division and Hyundai's bulk-carrier division.

Petrobras has been expanding its use of floating LNG regasification plants in order to capitalize on growing natural-gas production in Brazil. The ships not only allow Petrobras to import cheap natural gas from overseas, but also allow for exports.

The federal oil company is also building natural gas-based fertilizer plants to meet growing demand from Brazil's massive agricultural sector. Brazil currently imports more than half its fertilizer needs.

The government has been pressuring major fertilizer companies to increase production in an attempt to lower costs for farmers. Brazil's agribusiness sector has been a major contributor to the country's trade surplus over the years, but high fertilizer import costs have hurt local farmers' profit margins.

2. ASIA

Engineering and construction company Clough Limited in February said that the BAM Clough Joint Venture has been awarded a contract by Bechtel, for the design and construction of the Chevron-operated Wheatstone Project LNG product loading facility and tug berths near Onslow, Western Australia.

The contract is valued at approximately A$400 million.

The scope of work includes the design and construction of a 1.2 kilometre jetty with operations platform, a product loading platform with a single LNG and condensate load out berth, and associated piping modules and piping installation.

At peak, the contract will result in approximately 200 jobs, the majority of them in Australia. This includes 15 in the Pilbara region, 90 in Western Australia and 30 elsewhere in Australia.

Engineering, procurement and planning work for the project will commence in February 2012 with construction activities on site scheduled to start third quarter 2013. The project is scheduled for completion in fourth quarter 2016.

Clough’s Chief Executive Officer Kevin Gallagher said "This contract represents significant growth for our near shore marine construction business, which was established with long-term partner BAM in 1964. Forty-eight years later we are still fully committed to this business. With major LNG and minerals projects requiring load out jetties and near shore marine infrastructure, we are seeing more near-term opportunities relating to the Australian resources boom than ever before".

"As an Australian contractor we are proud to be providing local capability to this important Australian project. We will draw on our extensive jetty design and construct experience and will work closely with partner BAM to deliver excellent project outcomes to Bechtel, and our ultimate client Chevron".

KBR said in a statement that its joint venture with JGC Corporation and Chiyoda Corporation, the JKC JV, has signed the formal contract for engineering, procurement and construction (EPC) activities on the Ichthys LNG Project in Northern Australia.

The JKC JV partners signed this EPC contract, valued at US$15 billion, with the Ichthys LNG Project owners, INPEX and Total.

"We are pleased to support INPEX and Total in delivering what will be one of the world’s largest LNG facilities. This is a visionary project that will bring benefits both to Japan, through a long-term supply of cleaner energy, and to Australia, through economic growth and community development," said Mitch Dauzat, KBR President, Gas Monetization. "We are excited to have the opportunity to play a key role in this world-class project."

The Ichthys LNG Project is a Joint Venture between INPEX (76%, the Operator) and Total (24%). Gas from the Ichthys Field in the Browse Basin, approximately 200 kilometers offshore of Western Australia, will undergo preliminary processing offshore to remove water and extract condensate.

The gas will then be exported to onshore processing facilities in Darwin via an 889 kilometer subsea pipeline. The Ichthys Project is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with approximately 100,000 barrels of condensate per day at peak.

BG Group's Australian LNG subsidiary QGC has awarded a $350 million (A$325 million) contract for the construction of gas processing facilities in the eastern state of Queensland to construction and resources contractor Thiess, the company said February 8.

The contract involves the construction of six field compression stations and one central plant to process coalseam gas from Queensland's Surat Basin. The facilities will service QGC's Queensland Curtis LNG project, being built on Curtis Island in the port city of Gladstone.

The facilities, about 40 km (25 miles) west of the town of Dalby, will process gas to be transported through an underground pipeline network to Gladstone where it will be liquefied in the plant on Curtis Island.

Thiess, which is a wholly owned subsidiary of Australia's Leighton Holdings, is scheduled to start work on the facilities this month, with completion targeted for the first half of 2013.

QGC approved the development of QCLNG in October 2010. The project will produce 8.5 million mt/year of LNG and is expected to start up in 2014.

The contract with Thiess marks the first major construction package for QCLNG gas processing facilities, according to QCLNG Senior Vice President Sandy Nairn.

QGC spent more than A$5.1 billion on its domestic gas business as well as the QCLNG project in the 18 months to September 30, 2011, the company said.

Engineering and construction company Clough has won a $140 million contract for work on Inpex's $US34 billion ($A31.82 billion) Ichthys liquefied natural gas project.

Clough on Februry 7 said its equal joint venture with BAM International had received a letter of intent for the design and construction of a module offloading facility near Darwin, Northern Territory, where the gas will be processed.

"It is a key facility that will be used to offload modules being supplied under other subcontracts to assemble the LNG liquefaction plant," Clough said in a statement.

Construction of the module offloading facility is expected to start in early 2013 with completion slated for early 2014, employing 130 people at the peak of activities.

"This award represents further growth in our near shore marine construction business," Clough chief executive Kevin Gallagher said.

The Ichthys project will draw gas from Western Australia's Browse Basin, with first production scheduled for the end of 2016 and exports bound for Japan.

Leighton Holdings Ltd. said a joint venture with Belgium's BESIX SA has won a A$260 million development contract for the Chevron Corp.-operated Wheatstone gas export project in Western Australia state.

The joint venture will develop the project's breakwater and materials offloading facility for lead contractor Bechtel, Leighton said in a statement. It's the second Wheatstone win for Leighton, which was also awarded a separate tunnelling contract for the project.

KBR announced February 9 that its joint venture with JGC Corporation and Chiyoda Corporation, The JKC JV partners signed this EPC contract, valued at US$15 billion, with the Ichthys LNG Project owners, INPEX and Total.

The Ichthys LNG Project is a Joint Venture between INPEX (76%, the Operator) and Total (24%). Gas from the Ichthys Field in the Browse Basin, approximately 200 kilometers offshore of Western Australia, will undergo preliminary processing offshore to remove water and extract condensate. The gas will then be exported to onshore processing facilities in Darwin via an 889 kilometer subsea pipeline. The Ichthys Project is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with approximately 100,000 barrels of condensate per day at peak.

"We are pleased to support INPEX and Total in delivering what will be one of the world's largest LNG facilities. This is a visionary project that will bring benefits both to Japan, through a long-term supply of cleaner energy, and to Australia, through economic growth and community development," said Mitch Dauzat, KBR President, Gas Monetization. "We are excited to have the opportunity to play a key role in this world-class project."

A joint venture between Thiess and EV LNG Australia (EVT) has won an approximately AUD$500 million contract to build LNG storage and condensate tanks for the Chevron-operated Wheatstone Project, a liquefied natural gas and domestic gas project in Western Australia.

Thiess’ multidisciplinary capabilities, paired with EV LNG Australia’s specialist design and construction expertise in LNG tanks, allows the joint venture to focus on providing storage facilities in this growing sector.

The EVT JV is responsible for the engineering, procurement and construction of two LNG full containment storage tanks which have a capacity of 150,000 cubic metres each and two condensate storage tanks with a capacity of 120,000 cubic metres each. The project is located near Onslow in the WA’s north west. The project will create 475 jobs and 75% of the work under this contract will take place in Australia.

Thiess Managing Director Bruce Munro welcomed the contract as a further endorsement of Thiess’ capabilities in the sector and said it continues the company’s productive and ongoing relationship with Chevron. He said the JV had been formed to draw on the international LNG tank capability of EV LNG Australia, which is a wholly owned Australian subsidiary of Entrepose Projets and Vinci Construction Grands Projets of France, as well as Thiess’ previous LNG tank experience including the Darwin LNG tanks.

"The joint venture brings a unique combination of capabilities that will deliver a high quality outcome and bring certainty to these large complex projects," Mr Munro said.

This is Thiess’ third project on the Wheatstone LNG project. Thiess in joint venture is already contracted to Bechtel, which is managing the contract for Chevron, to deliver the design and construction of the breakwater and materials offloading facility. Thiess is also contracted to Chevron to deliver the microtunnel on the project site. Work will commence immediately with construction to begin on site in 2013 and is scheduled for completion by in 2016.

Thiess is also completing two contracts for Chevron on the Gorgon LNG project at Barrow Island - the Construction Village, and the Site Preparation and Temporary Facilities.

Further expanding its presence in Australia’s liquefied natural gas sector, GE Oil & Gas has received a contract of more than US$150 million from Apache in Australia to supply subsea equipment for the Julimar Development Project, located offshore near Dampier in Western Australia.

The Apache-operated Julimar Development Project is a joint venture between Apache (65 percent) and Kuwait Foreign Petroleum Exploration Company (35 percent). The project will supply raw gas from the Julimar and Brunello gas fields to the Chevron-operated Wheatstone Project in Western Australia. GE also is supplying equipment for Wheatstone, which will become one of Australia’s largest resource projects and will consist of LNG and domestic gas processing facilities.

GE’s contract represents the largest subsea agreement ever awarded by Apache in Australia. GE will be responsible for project management, engineering and procurement of the subsea equipment for the Julimar project.

"We were looking for an equipment supplier that could meet the specific challenges of this important project, including the demands of our tight schedule. With its technology expertise and broad experience in the LNG sector, GE met our requirements," said Warren Ford, Apache Energy deputy managing director and director of projects in the Australia Region.

"Field conditions for the Julimar project dictate the use of large-bore equipment with high pressure and temperature requirements," said David Leslie, regional leader for Australia of GE Oil & Gas. "We are able to supply the right technology to meet those standards while also taking advantage of our local presence and global experience."

The GE equipment for the Julimar project includes subsea manifolds, well systems and fully integrated subsea and topside control systems. Shipments will begin in June 2013 with installation starting in the fourth quarter of that year.

Shell is continuing its successful relationship with AGR’S Riserless Mud Recovery system (RMR™) with a new US$4.7m deal.

The contract is for multiple development wells on Shell’s Prelude Floating LNG development off Australia’s north-west coast.

Bernt Eikemo, General Manager Asia Pacific at AGR, said: "Shell has used RMR™ on all the wells it has drilled in Australia since 2006 – a fact that AGR is very proud of.

"We are very happy to get the opportunity to work once again with Shell Development (Australia) Pty Ltd."

The contract is for three years with the option of two one-year extensions.

RMR™, together with its sister technology the Cutting Transportation System (CTS™), has been deployed on more than 500 wells worldwide.

Riserless Mud Recovery allows engineered mud to be used in the top-hole section of a well, enabling a much more stable foundation for successful drilling, with all mud and cuttings being returned to the rig. There is no discharge to the seabed.

The top-hole section can be drilled more safely, quickly and with less impact on the environment.

State-controlled Ennore Port said February 29 it is in talks with oil marketing firm Indian Oil Corp for setting up a terminal at an investment of Rs 4,300 crore for importing liquefied natural gas.

"We have proposed to develop an LNG terminal in association with Indian Oil Corp (IOC)," S Velumani, Chairman and Managing Director of Ennore Port said.

IOC board has approved an investment of Rs 4,300 crore for the development of the terminal, he said, adding that the terminal would have berth, regassification and storage facilities.

The entire investment would be done by IOC and Ennore Port would facilitate the development of the terminal.

On the current status of the proposed project, Velumani said, "IOC is engaged in getting environment clearances and the discussion on the commercial nitty-gritty of the endeavour is on."

Meanwhile, Ennore Port on February 29 signed a preliminary agreement with the Ministry of Shipping to increase its target of cargo handling capacity to 61.5 million tonnes by 2014-15.

"The current cargo handling capacity of Ennore Port is 15 million tonnes which the company plans to enhance to 61.5 million tonnes by developing new terminals through PPP (public private partnership)," he said.

The investment in construction of cargo handling will be by private companies and Ennore Port would be the facilitator.

Ennore Port would take up four major projects -- development of liquid terminal for Rs 250 crore, common use coal terminal for Rs 380 crore and iron ore export terminal for which the investment would be made in phases.

An investment of Rs 360 crore would be made in the first phase and in the second phase when the traffic (demand for iron ore exports) picks up, he added.

The company would also build a container terminal with a capacity of 1.5 million tonnes at an investment of Rs 1,400 crore.

JGC Corp. has recently been awarded a contract from PETRONAS, Malaysia's state-owned oil company, for the Front-End Engineering and Design (FEED) work and Early Works of Engineering, Procurement, Construction and Commissioning (EPCC) for PETRONAS LNG Train 9 Project, which is located in Bintulu, Sarawak, Malaysia.

The contract, which adopts a Dual FEED competition scheme, will increase the existing LNG plant facilities with an additional capacity of 3.6 million ton/year. The FEED is planned to be completed in the fourth quarter of 2012.

The execution of the works was managed by an Engineering team from JGC. Last year, JGC had successfully performed the pre-FEED for the project within a six-month period.

Following strong user interest from numerous industry players, Singapore is considering expanding the $1.7 billion Singapore liquefied natural gas (SLNG) terminal - adding two more storage tanks to the three being built there - even before the Jurong Island facility starts up in the second quarter of 2013. Going by industry estimates, the two additional tanks could cost US$400 million.

A decision on the expansion could be made in the coming 12 months, S Iswaran, Minister in the Prime Minister's office and Second Minister for Trade & Industry and Home Affairs disclosed February 13.

The move comes as the appointed LNG aggregator, BG Group, has sold 2.65 million tonnes per annum (tpa) to power plants and industries here, or close to 90 per cent of its franchised volume of three million tpa - which it is expected to hit by 2013.

With growing domestic gas demand, plus the entry of numerous LNG producers and trading houses in anticipation of a regional LNG trading hub emerging here, Singapore is studying how it can best secure LNG supplies beyond that.

McKinsey & Co are working on a possible future LNG import framework for Singapore and Mr Iswaran said the Energy Market Authority will issue a consultation paper next month to gather industry and public feedback on the findings.

'The consultation exercise involving industry players, stakeholders, and the general public has to take into account various factors including technical limitations here and interests from diverse parties. Most importantly, it has to ensure a competitive market, so that LNG can be competitively priced.'

Mr Iswaran who was visiting the SLNG terminal stressed that the project was a key part of Singapore's energy diversification effort as it 'will allow us access to gas supplies around the world, not just geographically, but also to tap unconventional gas, like shale gas that is being discovered'.

He said, 'SLNG is well on track to start operations in Q2 next year, taking us to 3.5 million tpa processing capacity, which in itself will fully accommodate the BG franchise. Beyond that, additional jetties as well as a third storage tank by Q1 2014 will take us to six million tpa.'

This will allow for some additional spot cargoes into the Singapore terminal by that stage, industry officials said. But given the strong demand, SLNG will have to start looking beyond having just a third tank soon. Its masterplan provides for up to seven tanks.

Groundbreaking of the SLNG terminal first took place in March 2010, which means that the first phase of the terminal, including the first two tanks, will take three years in all to build.

Noting this, Mr Iswaran said that 'as the lead time is quite significant, we really need to make a decision (to expand) beyond the first three tanks in short order'.

Asked by BT whether this could be made in the coming year, he said: 'Quite possibly. But it also depends on what the consultation exercise yields and EMA's own assessment of demand patterns and how things are evolving.'

Singapore’s Energy Market Authority CEO, Chee Hong Tat said Singapore’s LNG terminal he said that the project is about 80% complete and is on track to commence operations in the second quarter of 2013.

It will have an initial capacity of 3.5 Mtpa, and this will increase to 6 Mtpa by end 2013 when a third tank and additional regasification facilities are added.

When fully developed, the terminal can accommodate up to 7 tanks and will go a long way towards enhancing Singapore’s energy security and meeting our gas demand.

"Singapore’s domestic LNG uptake has also surpassed initial expectations. We had initially projected LNG demand to reach 3 Mtpa by 2018.

So far, BG, who is currently the LNG Aggregator for Singapore, has sold about 2.65 Mtpa (or 88%) of their 3 Mtpa franchise and they expect to reach the 3 Mtpa mark either by this year or next year," he said.

"Over the past few months, we have been discussing with industry players and studying how other countries have procured LNG, and whether these models are applicable to Singapore.

EMA plans to launch a public consultation paper later this month on the possible LNG import frameworks that Singapore could adopt.

The consultation exercise is expected to take around 3 months, and can be accessed via EMA’s corporate website," Chee Hong Tat said.

Singapore’s Energy Market Authority CEO, Chee Hong Tat, said that since the last LNGA conference in March 2011, the global LNG market has evolved significantly.

"On the supply side, United State’s Department of Energy has approved some LNG exports from the U.S., which through the discovery of shale gas, has turned from a net importer of gas to a potential major exporter.

Unconventional gas is not unique to the U.S. Other regions in the world, including China, Australia and Europe can also tap on their unconventional gas reserves.

Some analysts have estimated that total unconventional gas output in China could reach 11.3 mtpa in 2015 and 21.9 mtpa in 2020."

"From my discussions with various industry players, most people agree on one point – that the LNG market is likely to tighten over the next few years. This is mainly due to rising Asian LNG demand, driven by the fast-growing economies of China and India," Chee Hong Tat said.

"However, there is an additional factor at play, and that is Japan’s growing LNG demand following the Fukushima incident. Since Fukushima, LNG imports in Japan shot up 12% by volume and 52.5% by cost in 2011.

However, it is unlikely that the upward trend will continue unabated as there is a limit to Japan’s capacity for LNG import and gas-fired power generation.

Overall, Wood Mackenzie believes that the Asian LNG market is expected to be tightest in 2014, as the region will require over 40 Mtpa of incremental LNG."

He said that on the supply side, there is a significant amount of liquefaction capacity coming on-stream, but these will take a few years.

The next wave of LNG projects will be led by Australia, which will add about 33 Mtpa of new supply from 2016.

While this is good news for LNG buyers, the period between now to 2015 or 2016 will be tight.

"The rise of unconventional gas in the U.S. will add to global supply in the latter half of this decade," he said.

"Back in mid-2008, when Henry Hub was priced around US$12/mmBtu, most people could not have imagined that by 2011, the U.S. would become completely self sufficient in natural gas, Henry Hub would fall to less than US$3, and the U.S. could be exporting as much as 45 Mtpa of LNG within this decade.

In addition, the shale gas revolution has led to a "decoupling" of oil and natural gas prices in the U.S., and hopefully, this could have some knock-on effects on prices here in Asia."

He said that there are some initial signs of this development.

LNG cargoes that were initially meant for the U.S. market have been diverted to the more premium markets of Asia and Europe.

"Spot market sales have increased to 20% of the global LNG trades in 2010 compared to just 2% a decade ago.

Facts Global Energy recently reported that Qatar is changing its pricing strategy by giving buyers a discount for the first 4-5 years if the buyer signs onto a 20 year contract," he said.

Lithuania LNG terminal would cost preliminary $261.6 million (682 million litas), the company in charge of the project said on February 8.

Klaipedos Nafta, a majority-state owned company which manages an oil terminal, has been charged with also developing a liquefied natural gas terminal at Klaipedos port.

The company said in a statement to the stock exchange it planned to invest 532 million litas, while Klaipedos port would come with another 150 million litas to prepare the infrastructure.

In January, Klaipedos said it picked Norway's Hoegh LNG to supply and maintain an offshore platform for imports of LNG to end-2014.

The contract, which is expected to be signed within a month, will be based on a 10-year leasing period, after which Klaipedos Nafta will have the right to purchase the FSRU.

Lithuania wants an alternative gas supplier to Gazprom as the Baltic state, which joined the EU and NATO in 2004, depends entirely on Russian gas supplies.

Höegh LNG said it has entered into a ten year time charter for a floating LNG storage and regasification unit to be used as an LNG import terminal in Lithuania.

The agreement is subject to the approval of the shareholders of AB Klaipedos Nafta. The Lithuanian state owns 70.63% of Klaipedos Nafta’s shares.

Höegh LNG said in January that the company had the winning tender offer for this project.

Höegh LNG intends to use the second of the three new regasification vessels being built at Hyundai Heavy Industries Ltd. in South Korea for this agreement, which will commence in the second half of 2014. The time charter is expected to give an EBITDA contribution of about USD 50 million per year.

Polskie LNG, the operator of the Polish LNG terminal under construction on the Baltic coast at Swinoujscie, is looking to broaden its customer base by developing LNG-as-fuel services for trucks and shipping, the terminal's director of operations said on February16.

The planned 5 billion cubic meter (Gm³)/year capacity terminal will be equipped with a truck loading station, which currently can deliver around 177,750 tonnes per annum (tpa) of LNG, the equivalent of 5% of the terminal's capacity, Wojciech Cudny told at the Global LNG Forum in Marseille.

Transporting LNG by road is a particularly useful alternative for supplying natural gas to industrial sites in Europe where pipeline supplies are not available, and Cudny said that the service is essential in parts of northeast and northwest Poland that are not connected to the network.

The planned truck loading service at the terminal is already fully subscribed, and there is room for expansion of another loading base as well as offering a rail loading service if demand is sufficient, Cudny said.

The Polskie LNG official said the terminal's location, next to the second-largest port in Poland, also gave it the option to tap into growing demand for LNG as a shipping fuel by offering LNG bunkering services.

The 1% sulfur-content limit in marine fuels in the Baltic Sea (and the North Sea and English Channel will be cut to 0.1% from 1 January 2015) is driving vessel owners to focus on LNG as the most cost-efficient alternative to expensive low-sulfur bunker oil.

Polish natural gas incumbent PGNiG is the sole company holding capacity at the terminal, with a 65% share, or around 3.2Gm³/year.

The remaining capacity was made available to the market late last year but the sole bid submitted by the end of the open season late January was rejected.

While Polskie LNG is exploring its options to market the remaining 1.8Gm³/year, the terminal operator has no immediate plans to offer the capacity again.

"Capacity is not available at the moment but another open season will be organized before the start-up," Cudny said.

With the construction of a jetty set to start in July, the terminal is expected to receive its first cool-down cargo by March 2014 for a commercial start-up in June that year.

The facility will be capable of receiving vessels up to Q-Flex size (210,000-216,000m³).

Neither Polskie LNG, nor PGNiG have finalised any supply agreements for the terminal, although Cudny said that a 20-year, 1mtpa heads of agreement signed between PGNiG and Qatari supply consortium Qatargas in 2009 had not lapsed.

"The deal between PGNIG and Qatargas is still on and will be starting at full capacity in mid-2014," Cudny claimed.

Royal Dutch Shell announced February 22 that it wants to buy East Africa-focused Cove Energy for $1.57 billion (GBP 992 million).

The news comes after Cove announced on February 21 that it and its partner Anadarko had discovered further natural gas in the Lagosta field in Mozambique's offshore Rovuma Basin.

Shell said that its decision to buy Cove fits with its strategy to drive forward with its investment program and that it sees East Africa as a "major prospective hydrocarbon province". The Anglo-Dutch oil major already has interests in Tanzania, and the acquisition of Cove would mark Shell's entry into exciting new hydrocarbon provinces in Kenya and Mozambique, with significant potential for new liquefied natural gas from recent gas discoveries offshore Mozambique, said the firm.

In Mozambique, the Rovuma offshore basin is a frontier exploration area that holds large amounts of natural gas resources that Shell believes are suitable for LNG projects. According to Cove, this play represents the potential for more than 30 trillion cubic feet of gas and six LNG trains, while Shell said it understands that bringing these resources on stream is a strategic priority for the government of Mozambique.

Shell pointed out that it is one of the world's largest LNG producers with one of the most diverse LNG portfolios and access to strategic global markets, with sales volumes amounting to 18.83 million tons per annum of LNG in 2011.

For its part, Cove's management team said that it believes the level and nature of the proposed offer "are such that it is in its shareholders' interests to progress matters" with Shell.

London-based investment bank Westhouse Securities said that it considers the move by Royal Dutch Shell will preclude other majors, such as ExxonMobil, from making a counter offer.

"However the state linked firms of Korea (KNOC), India (GAIL), and China (CNOOC and/or others) might consider making a higher bid," said oil sector analysts at the bank. "At the end it will probably come down to which party can gain the backing of the Mozambique government."

Shell's offer for Alternative Investment Market-quoted Cove follows a report earlier in February by UK accountancy firm Ernst & Young that warned junior oil and gas companies remain vulnerable to takeovers from majors due to ever-tightening credit markets.

Westhouse backed this view by commenting that the February 22 news shows that "large cash rich companies are clearly taking advantage of the fact that on current valuations it is cheaper to buy reserves through the stock market than to explore".

The Nigerian National Petroleum Corporation's (NNPC's) bid to divest 19 per cent of its equity interest in the $8.5 billion Brass LNG project has been put on hold by other partners in the project, according to THISDAY.

Accordingly, NNPC is seeking to cut down its equity from the present 49 per cent to 30 per cent in the Brass LNG project, with the twin objective of reducing its cash contribution to the project as well raise funds to cover its equity.

Towards this end, the NNPC had sold the 19 per cent interest to various interested parties; the Bayelsa state government (10 per cent), LNG Japan (4 per cent), Itochu Corporation (3per cent) and a joint venture between Nigerian indigenous firm Sahara and US-based firm Sempra Energy with 2 per cent.

A source close to the Brass LNG project told THISDAY mid-February in Abuja that the equity composition of the project which Final Investment Decision (FID) is expected to be taken within the second quarter of 2012, is still intact irrespective of NNPC's desire to divest some of its fraction.

"The equity status is still as it is; NNPC with 49 per cent, then the rest with the remaining however, I believe the NNPC has in the course of time given out some of its equity but they cannot bring those it ceded its shares on the board of Brass LNG because the shareholders agreement precludes NNPC from doing so at this point in time.

It is after the FID has been taken that it can now announce its divestment of shares to the board for notation, but that is an arrangement just purely between the NNPC and the people that it brought with it to share in its shareholding but note that none of them have up to 10 per cent shareholding in the company and as such they cannot be represented on the board; so it is still NNPC that will represent them on the board of brass," the source stated.

The source also explained: "All of the companies that you hear NNPC bring on are just there due to NNPC's interest in different things either in gas or anything, there are different things that the NNPC brought them for, but yes, we have heard something like the divestment plan but they are yet to announce to the board until after the FID because the shareholders agreement definitely preclude them from doing that but even at that they cannot sit on the board of the company."

Commenting on the planned FID within the second quarter of 2012, the source said, "As you are aware, the GMD of NNPC has said recently that the FID will come in the second quarter of the year; I think he is of more authority to speak in that sense.

But you must understand that most of the deliverables that are needed for the FID have been exceeded, we have far exceeded most of the deliverables except for some issues that are not significant but I think they are finding a way around it."

The source further said: "The GMD of NNPC said that by the second quarter of this year; that is around April and June 2012 and this time, we are more optimistic that the FID will eventually be taken. The deliverables which include the early site works entailed that we now have to open up access roads to areas where the tank farms will sit on, sand-pile them; that was supposed to be done for nine months but it has gone on for two years now but those remote areas where the tank farms will be situated have been laid out and we have acquired the land at the island of Brass.

"Then we have developed policies and procedures as well as a governance structure in place for every aspect of our operations; the environment, human resource and safety, Nigerian Content Act and Department of Petroleum Resources (DPR) requirements. We have in excess of 30 approvals from the Nigerian Content Board on our activities; social and economic."

"We have done the front end engineering which was one of the first major things we did in 2005 as well as optimisation. All of that we have done and so everything is in place to see the company coming into reality with the FID even though we are an offshoot of four companies," the source noted.

The Brass LNG project was flagged off in 2002 but progress has since then been slow. Its completion has been shifted from previous date of 2012 to 2014.

According to the implementation plan for the project, each of the shareholders will be required to pay money for the construction of the project into an Escrow account within 10 days after the FID had been signed.

NNPC originally holds 49 per cent equity in the liquefied natural gas project sited in Brass area of Bayelsa state. ConocoPhillips, Eni and Total are the other partners in the project with 17 per cent equity each.