jan 07 update

Developers of one of two liquefied natural gas terminals proposed offshore from Gloucester have agreed to pay $23.5 million in fishing and environmental impact compensation, according to a published report.

The Boston Globe reported that the deal, common on major infrastructure construction projects, was reached between Texas-based Excelerate Energy and the state, giving it environmental approval from the state. Excelerate proposes to build its Northeast Gateway terminal 13 miles off Gloucester.

Gov. Mitt Romney still must give final approval of the Excelerate Energy project, and had until Dec. 26 to make a decision.

Observers expect a similar agreement to be reached on the Neptune project proposed about 10 miles off Gloucester by the company that owns the Distrigas LNG terminal in Everett. That project is expected to get a final environmental decision from the state in December, and Romney's final decision is due by Jan. 2.

Another proposal calls for building an LNG terminal on Boston Harbor's Outer Brewster Island.

The projects have gained the interest of public officials balancing energy needs and safety concerns about land-based terminals in populated areas. Supporters of the offshore projects say they might eliminate the need for a Fall River terminal opposed by officials in both Massachusetts and Rhode Island. But opponents say the projects, which involve underwater pipelines, could cause permanent environmental damage.

Texas-based Excelerate had predicted just $2.5 million in damage to fishermen over the 25-year life of its project, and minimal effect on marine life. But after months of negotiations with state officials, the company agreed to pay $8 million to New England fishermen for the loss of fishing grounds.

The agreement also calls for Excelerate to pay about $7 million for the use of public waters, $4 million to for impacts on marine habitats and resources that may be disturbed, and $4 million prevent harm to whales and other marine mammals, the Globe reported.

"If you look at the balance between the need for reliable energy and minimizing the impacts on the environment, this is a good outcome," said Environmental Affairs Secretary Robert W. Golledge Jr.

The fishermen's compensation package includes a $6.3 million payment to help start a Gloucester nonprofit that would pay local fishermen who want to quit the business a fee to use their fishing permits and allotted fishing days. The nonprofit would lease the permits to other fishermen. The rest of the $8 million would compensate commercial lobstermen and be administered by the Massachusetts Lobstermen's association.

"We'd prefer they take their money and go away," said Bernie Feeney, president of the lobstermen's association. He said a recent gas line built under Massachusetts Bay caused permanent changes to the sea floor that disturbed lobsters.

Northern Star Natural Gas offers $50 Million for Salmon Recovery in Exchange for LNG Approval

A natural gas company has pledged $50 million toward salmon recovery efforts on the Columbia, but there's a catch.

The gift from Northern Star Natural Gas Co. is contingent on the company getting approval to build a proposed liquefied natural gas facility at Bradwood Landing, 38 river miles up from the Columbia River's mouth.

The project is one of five LNG terminals being considered in Oregon and the furthest along in seeking federal approval. Three other proposed terminals are on the Columbia River and a fifth is in Coos Bay.

Northern Star wants to build two LNG storage tanks at the Bradwood Landing site, with the capacity to pump about 1 billion cubic feet of natural gas a day - enough to meet about a third of the needs of the Pacific Northwest.

Officials with the company have said the promised $50 million is “above and beyond” the company's legal requirements to offset the impacts of the LNG project.

The $50 million wouldn't come in one big dose. Instead, it would be spread out over 35 years, with $7 million promised between the start of construction and operation of the facility in 2010.

Building the natural gas facility would mean dredging at least 12 acres of the river, to make way for LNG ships, as well as building a berth, filling wetlands at the terminal site and installing a 36-mile pipeline to deliver gas.

Environmental mitigation could involve purchase and restoration of 150 acres of an island in the Columbia River adjacent to Svensen, plus work on hundreds of acres of habitat for chinook, coho and chum salmon, steelhead trout and Columbia white-tailed deer on several sites in Columbia County.

The Lower Columbia Fish Recovery Board, which was created by Washington state and developed the first federally-approved recovery plan for endangered fish in the Northwest, said it will work with Northern Star on its proposed mitigation efforts.

The board will take no official position on the liquid gas proposal, said its executive director, Jeff Breckel.

But he said the company's plan is a “great opportunity” to bring the corporate world into salmon recovery.

The Lower Columbia Estuary Partnership, however, declined the offer to help orchestrate the company's mitigation and enhancement plans in order to better assess whether the project fits with the group's goals, according to its director, Debrah Marriott.

“We don't think further industrializing the lower Columbia River is an integral part of restoring the Columbia River,” he said.

Dan Evans, a consultant for the Bradwood Landing project, said the company has put significant resources toward improving its project plans in light of environmental concerns.

The company has “virtually eliminated” the threat to fish from engine cooling and ballast water intake and discharge, he said.

New England Lawmakers Expect Boost in LNG Fight

New England lawmakers say the Democratic takeover of Congress should strengthen their hand as they press federal regulators to come up with a regional approach to siting liquefied natural gas terminals.

Proposed LNG facilities in Massachusetts and in Long Island Sound between Connecticut and New York have been controversial, stoking concerns about public safety and the environment.

Because key Democrats from New England will be assuming more powerful roles in the new Congress, advocates for a regional LNG strategy expect to have more leverage in persuading federal officials to scrap the current project-by-project review of proposed facilities - and start looking at the proposals from a broader perspective before giving approval.

The congressmen contend too many LNG proposals are in the approval pipeline while environmental and safety concerns take a back seat, and that not all of the projects are needed to meet the region’s growing energy needs.

"The seismic shift in Congress holds great promise for finally advancing a thoughtful regional approach on the siting of LNG terminals," said Sue Reid, a staff attorney at the Conservation Law Foundation. "This should put an end to the ’LNG-derby,’ a first-come-first-served disaster that fails to take into account the relative environmental or public safety merit of LNG projects."

The Suez Distrigas facility in Everett, is New England’s only LNG terminal. There are nine pending or proposed LNG terminal projects in New England, Reid said, including the Weaver’s Cove Energy terminal in Fall River Though Weaver’s Cove has won Federal Energy Regulatory Commission approval, it is embroiled in legal challenges.

Some energy analysts have predicted that by 2010 there won’t be enough natural gas supply to keep up with the region’s energy needs.

U.S. Rep. James McGovern, D-Mass., who will be the second-ranking Democrat on the Rules Committee, a powerful panel that controls the flow of legislation on the House floor, said New England lawmakers are eager to renew their push for a regional strategy when the new Congress meets next year.

"We are going to have sympathetic committee chairmen and chairwomen who are not going to just do whatever the industry wants them to do," he said. "That’s been a problem in the past. We’ll have more opportunity to legislate smartly on this issue."

Lawmakers want a more comprehensive approach by regulators that factors in the region’s overall energy needs before deciding which projects should be approved. The lawmakers complain that government regulators, who focus on safety and environmental factors, have been reluctant to play the role of regional decision-makers.

Officials at Broadwater Energy, which wants to build a giant floating LNG terminal in Long Island Sound, warn that a regional approach won’t work.

"The problem is, you end up with an endless loop of proposals," said company senior vice president John Hritcko. "People will protect their own turf. ... They like the project so long as it’s not in their area."

Connecticut Sen. Joe Lieberman, who is in line for the Homeland Security panel chairmanship, opposes Broadwater and considers himself a "strong supporter" of a regional siting approach.

Sen. Edward Kennedy, D-Mass., who will also become a key Senate committee chairman in the new Congress, is among those pushing for a regional strategy.

"The senator is hopeful that the (Bush) administration will be more willing to consider a regional approach to siting these facilities," said Kennedy spokeswoman Melissa Wagoner.

New England lawmakers who met with Energy Secretary Samuel Bodman last year to urge his agency to adopt a region-wide strategy said he seemed receptive to the idea, but made no promises.

Legislation may be needed to force federal regulators to take a stronger regional approach, McGovern said.

An Energy Department spokesman said officials there were looking forward to working with both parties in the new Congress.

"The department continues to believe that having more access to natural gas is better than having less, especially for the people of the Northeast," said Energy Department spokesman Craig Stevens. "Energy is a bipartisan issue and we look forward to working with members of both parties to ensure that Americans have access to the energy that they need."

McGovern and several other lawmakers from Massachusetts and Rhode Island are fighting the proposed Weaver’s Cove terminal. They consider it a public safety threat because of its proximity to city residents. A terrorist strike or accident could be devastating, they warn.

"We don’t think a regional approach is the answer," said James Grasso, a Weaver’s Cove spokesman. "What will really determine if the project will go or not is the marketplace."

A prolonged stretch of cold weather could also sway lawmakers, added Grasso.

"If we have a cold winter and the Democrats start getting complaints from constituents about high gas prices, they may respond to that," Grasso said.

Rep. Patrick Kennedy, D-R.I., however, predicted the incoming Democratic majority on Capitol Hill will transform energy policy.

"The LNG debate in New England is just the latest example of how the Republican-controlled Congress has let the industry dominate this debate," he said. "With this approach, there are too many important factors left out of the decision process, such as local safety issues and the effects of other projects already in development, as is the case in Canada."

FERC Approves Mississippi LNG Terminal's EIS

Construction of a proposed LNG terminal near Pascagoula, Miss., would have minimal environmental impact, the US Federal Energy Regulatory Commission's staff said in a final environmental impact statement.

Impacts would be most significant during construction of the Gulf LNG Clean Energy Project, which also would include a new pipeline to ship as much as 1.5 bcfd of gas out to three interconnection points, FERC said.

Gulf Energy LLC, which is building the terminal, sought FERC's approval to build a berth and unloading facilities capable of accommodating one LNG tanker, LNG transfer systems, two 160,000-cu m LNG storage tanks, 10 high-pressure submerged combustion vaporizers, vapor handling systems, hazard detection and response equipment, and ancillary buildings, utilities, and service facilities.

Gulf LNG Pipeline LLC separately requested FERC approval for a 5-mile, 36-in. gas sendout pipeline and associated support facilities, including three interconnects and meter stations, one pig launcher, and one pig receiver.

Quoddy Bay Files Maine's First Application for LNG Terminal

Quoddy Bay LNG has become the first company to file a formal application with federal regulators to operate a liquefied natural gas terminal in Maine.

Quoddy Bay, which wants to build its facility at the Passamaquoddy Tribe's Pleasant Point Reservation in Washington County, submitted boxes of applications, reports and supporting documents to the Federal Energy Regulatory Commission on December 15.

FERC is expected to make a final decision on the case in 10 to 18 months, according to FERC spokeswoman Tamara Young-Allen.

After accepting the document, FERC will accept public comment and motions to intervene for approximately 20 days, Young-Allen said

It's one of two proposed projects in Washington County. A second company, Downeast LNG, hopes to build a facility in Robbinston.

Currently, New England's only LNG terminal is in Everett, Mass., but there are nine pending or proposed LNG terminal projects in New England, according to the Conservation Law Foundation.

Bob Godfrey, spokesman for the Save Passamaquoddy Bay, predicted that neither of the Washington County projects would become a reality.

"Neither project has any chance of actually succeeding. Both have insurmountable obstacles," said Godfrey, whose group opposes the proposed LNG terminals.

Godfrey said he expects both proposals to fail the state's permitting process and U.S. federal, Canadian and international environmental requirements.

Quoddy Bay Project Manager Brian Smith, son of President Donald M. Smith, disagrees.

"We've been through two full draft submittals and subsequent reviews with FERC and state agencies and individuals, and so far all of the comments and questions we've received have indicated that the project has a very good chance of being approved," he said.

El Paso Corp. Seeks $930 Million Elba LNG Expansion

El Paso Corporation says that Elba Express Company, L.L.C., (EEC), a subsidiary of Southern Natural Gas Company (SNG), has filed its application with the Federal Energy Regulatory Commission (FERC) to construct the Elba Express Pipeline; and Southern LNG, a subsidiary of SNG has filed its application to expand the Elba Island LNG receiving terminal near Savannah, GA. The projects will be constructed in phases with the in-service date of the first phase of each expected to be in 2010 and the second phase of each expected to be in 2012. The total expected capital cost for all phases of both projects is approximately $930 million.

The proposed pipeline will transport natural gas from the company's Elba Island liquefied natural gas terminal near Savannah, Georgia, to markets in Georgia and South Carolina, and, by way of its interconnects, Elba Express will also supply natural gas to markets throughout the southeastern and eastern United States. The approximately 190-mile, 42-inch and 36-inch diameter pipeline will have a total capacity of approximately 1.2 billion cubic feet per day (Bcf/d) with an initial in-service date of mid-2010. The LNG terminal expansion project will add 8.4 billion cubic feet (Bcf) of LNG storage, which will more than double Elba's capacity to 15.7 Bcf. The expansion will also add .9 Bcf/d of send-out capacity, raising Elba's capacity to 2.1 Bcf/d.

BAHAMAS

Teekay LNG to Buy 4 Carriers for $106 Million

Teekay LNG Partners LP said December 6 it will buy four liquefied petroleum gas carriers for a total cost of $106 million.

The vessels will begin service under 15-year, fixed-rate time-charters with IM Skaugen ASA, and are expected to generate about $11.6 million per year in cash flow from vessel operations.

Teekay LNG said it initially will finance the acquisition with borrowings under its revolving credit facilities, cash balances or both. Three of the LPG carriers are currently under construction and will be purchased from IM Skaugen when they are delivered from the shipyard between early 2008 and mid-2009.

Skaugen operates a fleet of 44 vessels.

Teekay LNG said it also will buy the 2000-built LPG carrier Dania Spirit from Teekay Shipping Corp. in January 2007. This vessel is currently on a fixed-rate time-charter to Statoil ASA with a remaining contract term of nine years.

"We are excited about these accretive transactions because they move the partnership into another gas transportation market segment. LPG shipping is a natural extension of our core liquefied natural gas transportation business, and Skaugen is a market leader in operating these types of vessels," said Peter Evensen, Teekay LNG's CEO. "The sea borne trade in LPG is projected to grow by about 6 percent per annum through 2012, and this transaction provides us with a platform for future growth in this market."

Teekay LNG was formed by Teekay Shipping to expand operations in the LNG shipping sector. The company services major energy and utility companies through its fleet of 13 LNG carriers, 4 LPG carriers and 8 Suezmax class crude oil tankers.

CANADA

Foster Wheeler Awarded Contract for CanaportTM LNG Import Terminal

Foster Wheeler Ltd. announced December 7 that its subsidiary, Foster Wheeler Canada Ltd., has been awarded a contract by CanaportTM LNG Limited Partnership to provide project management consultancy services for a liquefied natural gas regasification terminal in Saint John, New Brunswick, Canada. CanaportTM LNGLP is a partnership of Repsol YPF, S.A. and Irving Oil Limited.

The terms of the award were not disclosed. The project was included in the company's Global Engineering and Construction Group’s third-quarter 2006 bookings.

In addition to project management services, Foster Wheeler will also provide technical advisory services during the detailed engineering, procurement, construction, commissioning and start-up phases. Services will be performed in cooperation with Foster Wheeler USA Corporation at its offices in Houston, Texas.

When commissioned, the CanaportTM LNGLP terminal will have a send-out capacity of one billion cubic feet of natural gas per day. The terminal is scheduled to be completed in late 2008.

Newfoundland’s Arnold’s Cove Picked for LNG Transshipment

Arnold’s Cove could be home to Newfoundland,s first natural gas facility.

Grassy Point, located between the community and the Whiffen Head Transshipment facility, is the proposed location for a LNG transshipment and storage terminal.

Newfoundland LNG Ltd. — jointly owned by North Atlantic Pipeline Partners, LP (50%) and LNG Partners, LLC (50%) — is now in the process of seeking federal and provincial environmental approval for the facility.

According to the company the terminal will provide low-cost, high availability LNG transshipment and storage services to the northeastern United States (U.S.) and Canadian LNG importers and providers. It will also provide facilities for LNG cargo transfer, temporary vessel-based LNG storage and a lay-up site for in-transit LNG carriers. The terminal will also include land-based storage opportunities for reloading of smaller or specialized LNG carriers and for customers with peak-use requirements or seasonal needs.

Company president and Chief Operating Officer Mark Turner says having the proposal registered for environmental assessment represents a milestone for the project.

The company looked at several sites for the facility including Come By Chance, Admiral’s Beach and Long Harbour in Newfoundland as well as Point Tupper, Flat Head, Bear Head and Goldboro in Nova Scotia.

"Two years ago we actually conducted a site test, a site evaluation for which area would be most appropriate for such a facility," says Turner. "Hands down Placentia Bay came up each and every time. It is a fantastic port. I usually term it the jewel in Newfoundland’s crown because it is a very unique site.

"In North America it is one of the only deep water, ice-free ports. It has a very experienced pilotage capability and there is quite a bit of infrastructure existing in the Bay such as Newfoundland Transshipment (NTL), the Come By Chance refinery and the proposed new refinery."

Newfoundland LNG already has a group of interested clients.

"These companies are very large, they are international clients and they already have a supply of LNG," says Turner.

"This facility is just a storage facility, very similar to that of NTL. The only difference is our clients will store their LNG in our tank farm and smaller, specially designed doubled-hulled vessels will pick up that cargo and bring it to the Northeastern United States or any other Canadian providers or suppliers that may require additional LNG."

Turner says Placentia Bay is strategically located for this type of operation.

"Our clients are looking forward to . . . using our facility as a way point. We are only about a day and half steam from Massachusetts, for example."

That is a day and half compared to 15-20 or more days to transport the LNG from the supply areas.

"Most of our cargo will come from places like the Barents Sea (North of Russia), Norway, Russia, the Persian Gulf, Middle East and those areas.

"Newfoundland and Placentia Bay is so strategically placed, geographically, it offers so many benefits. It’s close to the markets," says Turner.

In addition the proposed facility could play a major role in the development of Newfoundland and Labrador’s own natural gas reserves.

"By constructing this facility we basically add to the critical mass of the offshore oil and gas infrastructure here in Newfoundland. It also gives us the potential to develop our own natural resources, such as gas, which we have a lot of offshore in the Grand Banks and Labrador.

"This is not something that is going to happen overnight but certainly it gives us that springboard effect so we can look at the development of our own offshore resources," notes Turner.

The start of construction ultimately depends on the outcome of the environmental assessment process.

The company hopes to begin construction in 2007.

According to the company, the terminal design will incorporate the most advanced proven technologies available with respect to LNG vessels, associated infrastructure, air emissions removal and control and will comply with or exceed modern regulation standards.

Construction will be done in three phases. When complete, the facility will include three jetties with berthing capability for LNG tankers up to 265,000 cubic meters, a tugboat basin capable of handling up to three tugboats and eight specially designed 160,000 cubic metre storage tanks.

Construction will also include access roads, offices, security infrastructure and utilities.

The terminal will have the infrastructure in place to maintain the gas in its liquefied state.

"It stays on our site as LNG in very expensive tanks which have a high nickel content and are insulated with very advanced technology. It is always kept at minus 160 degrees Celsius. If there is any vapourization due to heat gain say, for example, transferring it to the tank, that vapour is recaptured, reliquefied and put back into the holding tank. I think another important factor here is our facility will be a closed loop system. There is no pipeline. It is simply a transshipment and storage facility."

Turner says during construction there should be around 300 or more direct and indirect jobs.

"Upon completion we will have a steady group of around 25 full-time employees there as well.

"It will probably be phased in over a five to six year period."

The cost of getting the terminal built and in operation is estimated at $500 million.

The environmental assessment process will consider the impacts the proposed facility will have in the region, including impacts on the fishery in Placentia Bay.

"We hope to have a public consultation session later this month or early January. We have to wait until we make some progress with our environmental assessment, get some comments back from the minister before we get involved in that." Turner says.

In terms of safety concerns relating to spills or fires, Turner stresses LNG is a very safe product.

"It is a safe product.It is safer than crude. It is not pressurized gas. It is simply gas in a liquid state."

There is no question this terminal will increase traffic in Placentia Bay

"We are confident Coast Guard and Transport Canada can manage the increased traffic within the area but we will conduct risk and safety analysis in relation to the increased shipping."

The proposed LNG terminal was registered with the Department of Environment and Conservation Nov. 23. Public comments were due by Dec. 29, and minister Clyde Jackman’s decision is due by Jan 7.

Poyam Awarded Cryogenic Valves Supply by EPC contractors Saipem and SNC Lavalin for Canaport LNG

Poyam has been awarded the complete supply of cryogenic valves (ball, globe and check ) for the Canaport LNG project (Canada) from the EPC contractors Saipem (France) and SNC Lavalin (Canada). Poyam Valves consolidates its position as the leading manufacturer for cryogenic valve applications in North American LNG market, as the last five North American LNG Receiving terminals have been supplied by POYAM VALVES: Altamira LNG, Sabine Pass LNG, Freeport LNG, Costa Azul LNG and Canaport LNG.

This terminal comes from the agreement between Irving Oil and Repsol. Both companies formed a new partnership, Canaport? LNGLP, which will construct, own and operate the LNG import and regassification terminal. Located in the city of Saint John, New Brunswick, East of Canada, the LNG regassification terminal has an initial capacity of 1 billion standard cubit feet per day. Three storage tanks with a capacity of 160,000 cubic meters will be built in the plant, with a throughput capacity of 600,000 cubic meters of gas per hour. This project is scheduled for completion in 2008.

DOMINICAN REPUBLIC

Dominican Republic Seeks to become Hub for Qatari LNG Exports to US

The Dominican Republic hopes to expand an existing LNG re-gasification facility so it can become a transit point for Qatari LNG to reach the US.

The US currently has five LNG receiving terminals and needs to have at least 20 more such facilities in order to be able to begin receiving Qatari LNG from 2011 onwards.

But the country may not develop the LNG terminals due to security reasons in the aftermath of 9/11. Hence the Dominican Republic can play a middleman’s role by routing Qatari LNG to the US from its terminal, says the ambassador of the Dominican Republic in Doha, Hugo Guiliani Cury.

Cury said that the capacity of the LNG terminal his country currently has, is small but it can be expanded. The Dominican Republic is some 600 nautical miles from the Florida coast in the US. The country has a 1,000 mega watt (MW) gas-fired power plant and it presently imports natural gas for the purpose from Trinidad and Tobago.

The LNG imports are low, and in the near future the country can think of importing its gas requirements from Qatar as well. “Once Doha has acquired those big LNG vessels, we can get a shipload of LNG (some 225,000 cubic meters) to the Dominican Republic once every three weeks or every month,” the envoy said. “We are too keen to do business with Qatar. This place is thriving economically.”

2. ASIA

AUSTRALIA

The Linde Group gets Lump-Sum Turnkey Installation of LNG Plant near Perth

The Linde Group has received an order from Wesfarmers Ltd for the lump-sum turnkey (LSTK) installation of a small-scale LNG plant in the Kwinana industrial zone near Perth, Western Australia. The order value exceeds EUR 40 million. The facility will be installed downstream of Wesfarmers' existing LPG plants and is scheduled for completion during first quarter 2008. The new plant will have a load-out capacity of some 60,000 metric tons per year of LNG.

Santos Casino Gas and Darwin LNG Projects to Fire up Australia Production by 13pc

The emergence of a small domestic liquefied natural gas development is set to help boost Australian natural gas production by 13 per cent next financial year, according to the Australian Bureau of Agricultural and Resource Economics.

Its latest commodity forecast, said output would increase mainly as a result of the ramp-up in production at the ConocoPhillips Darwin LNG project, which began shipping to Japan earlier this year, and the Santos Casino gas project, in Otway Basin, south of Port Campbell in Victoria.

The 2007 figures would also include start-up production from Woodside's Otway gas development and the Karratha LNG project.

This project, being constructed by Energy Developments, is designed to produce a relative minnow in terms of export LNG - delivering around 78,000 tonnes of LNG that will be trucked to remote-area power stations in Western Australia.

ABARE noted that a number of new LNG agreements had been signed between the North West Shelf venture and Japanese energy companies in the past few months, and shipments were scheduled for 2009.

"With a number of countries looking to secure sources of cleaner fuel for power generation, demand for Australian LNG exports is expected to increase," ABARE said.

"In response, Australian production of LNG is forecast to increase substantially in the short term, supported by higher production from Darwin LNG, the start-up of production from Karratha LNG and the commencement of operations from the fifth train of the North West Shelf venture (4.2 million tonnes a year), scheduled to come online in late 2008."

ABARE had forecast Australia's exports of LNG would increase by around 22 per cent to 15.2 million tonnes in 2006-07, while LNG exports would increase by 24 per cent to $5.5 billion in the year.

2007 in Australia Set to be a Year for Gas Developments

Gas developments will feature highly in the resources calendar for Australia in the coming year. Aside from the rapidly growing coal seam methane sector, natural gas and LNG projects will be prominent.

According to the national commodity forecaster, the Australian Bureau of Agriculture and Resource Economics (ABARE), Australia's natural gas production will increase 13 per cent next financial year.

ABARE's prediction is that output will increase mainly as a result of the ramp-up in production at ConocoPhillips's Darwin LNG project, which began shipping to Japan earlier this year, and Santos's Casino gas project, in the Otway Basin, south of Port Campbell in Victoria.

The 2007 figures would also include start-up production from Woodside's Otway gas development and the Karratha LNG project, a small plant being constructed by Energy Developments, designed to produce around 78,000 tonnes of LNG a year that will be trucked to remote-area power stations in Western Australia.

But natural gas reserves available for domestic use will continue to fall in eastern states as the ExxonMobil/BHP Billiton fields in Bass Strait and the Santos-operated Cooper/Eromanga reservoirs astride the South Australia-Queensland border continue their natural decline even though remaining reserves in the two areas top 5 trillion cubic feet.

The big news in gas in the coming year will be whether the Gorgon partners - Chevron, ExxonMobil and Shell - will commit in the next few months, having received tough new environmental conditions from the West Australian Government for the planned 10 million tonnes a year export LNG development on Barrow Island.

About four years ago this was costed at $US11 billion and, on the known configuration, it is predicted that this has blown out by about 40 per cent, taking the spend to around $US15 billion ($19 billion). While Gorgon is backed by our biggest known offshore gas reservoirs and is top of the pile in Chevron's project list, Shell and ExxonMobil remain to be convinced that the difficulties of developing a world-scale LNG project on a Class A nature reserve can be covered by returns in the existing marketplace.

By any account Gorgon will ultimately be developed, but whether it will meet market needs in the next decade remains moot considering the current price of LNG has not not kept pace with the sustained boost in crude oil prices.

There are not so many doubts concerning Woodside's Pluto project, which the Perth-headquartered company owns 100 per cent.

Woodside chief executive officer Don Voelte has been enthusiastic since the small Pluto reservoir was discovered last year that a stand-alone LNG project could be developed to meet what he believes is a unique market opening in North Asia from about 2010.

For Mr Voelte, the gap between burgeoning demand and limited supply is a market opportunity which will result in Woodside doubling its equity in LNG production.

Woodside appears to have overcome objections to locating the onshore Pluto processing plant on a site south of the existing North West Shelf plant which contains Aboriginal petroglyphs.

Ahead of a final investment decision in the next few months, Woodside has committed to spending $1.4 billion on "long lead time" items.

Gorgon and Pluto alone are set to cost up to $25 billion but they represent only about a quarter of Australian LNG developments in store. According to ABARE, Australia has about eight potential new LNG projects or expansions, not including the fifth production train now under construction on the North West Shelf project, which keeps signing up new contracts regularly and is set to lift the development's output to more than 16 million tonnes a year before the end of the decade.

In a report in December ABARE said a number of countries were looking to secure sources of cleaner fuel for power generation, leading to expectations that demand for Australian LNG would increase.

The forecaster's outlook to 2029 estimates production of gas in Western Australia and the Northern Territory (the current growth regions) will grow at an average rate of 6.4 per cent a year, rising from 984 petajoules in 2004-05 to 4280PJs in 2029.

It says about 93 per cent of additional gas production in the two areas is accounted for by assumed developments in the LNG sector.

This suggests the development of fields in the Browse Basin north of Broome - in which the Japanese group Inpex, Shell, Woodside, BP, BHP Billiton and smaller listed companies such as Nexus and Coogee Resources have interests - will be the focus of much activity in the coming year.

Mr Voelte told an international conference in China earlier this year that Browse was best described in four words: scarcity, size, security and simplicity. "It is one of the very few large undeveloped gas resources outside the Middle East or Russia, making it both scarce and valuable," he said.

Browse already has the potential to be Australia's second North West Shelf development and it is still relatively unexplored. The Browse reservoirs in general are expected to be supplying LNG customers from the middle of next decade.

Further news should emerge early in the year concerning the extent of new gas discoveries in the Timor Sea north of Darwin.

ConocoPhillips is partnering Santos in a bid to find more reserves that could justify an expansion of the fully committed Darwin LNG plant now supplied with gas from the Bayu Undan project in the Joint Petroleum Development Area (JPDA) administered by Australia and East Timor.

After the East Timor elections in May it is possible Woodside will be in a position to announce the future of the Greater Sunrise reservoir in the JPDA.

Greater Sunrise is also a possible supplier to Darwin LNG, which has a license 5233e to produce 10 million tonnes of LNG annually but only has capacity to supply 3.24 million tonnes a year.

Before mid-2007, the long-awaited joint government-industry strategic review of Australia's upstream oil and gas industry will be published.

Led by the Australian Petroleum Production and Exploration Association, with the support of state, territory and federal governments, the strategy is expected to identify new areas where gas can be used domestically, as well as encouraging further LNG exports.

India’s NTPC to Bid for Offshore Blocks in Australia

NTPC is all set to bid for offshore blocks, which are being offered by Australia, Financial Express reported.

Australia has put 36 blocks on offer in the Commonwealth waters. The bids will be assessed by using a work program bidding system and award exploration permits for an initial term of six years.

The company plans to undertake an exploratory study with Michigan-based Oil Ex. The American company is involved in consulting, drilling, well management and site restoration, sources said.

Since NTPC has no technical capability it is likely to tie up with other entities with experience in the petroleum sector to bid jointly, sources added.

The company would also continue to look for partners with expertise in exploration and production, and considerable knowledge of the LNG business in Australia and other countries. NTPC will also explore the possibility of tying up with an oil and gas public sector firm.

NTPC is also exploring the option of setting up a gas-based power project in Nigeria and has also signed an agreement with Sri Lanka for a coal-based project.

CHINA

PetroChina to Buy Iran LNG

PetroChina, the nation's largest oil company, has signed an initial agreement to buy three million tons of liquefied natural gas a year from Iran to supply terminals it plans to build on China's northern coast.

PetroChina signed the 25-year agreement with National Iranian Gas Export, spokesman Cao Zhengyan said December 21. Gas deliveries will start in 2011, Cao said.

The company is expanding gas production and sales as demand for cleaner-burning fuels increases in the world's fastest-growing major economy.

PetroChina plans to build three LNG receiving terminals in Rudong in Jiangsu province, Dalian in Liaoning and Tangshan in Hebei. The first phase of the terminals will be completed by 2010, the company said.

"It is a very initial agreement," Cao said, declining to give details of the contract or which terminal the Iranian gas will supply. The company is looking for LNG suppliers and is in talks with potential foreign partners for the terminals, PetroChina said.

PetroChina targets 26 million tons of LNG receiving capacity for the three terminals, more than double the combined 10.5 million tons they are designed to have in their first phase of development, Su Yun, a marketing executive from PetroChina Natural Gas and Pipeline, said November 28. The Dalian terminal is projected to have initial capacity of three million tons a year.

China Petrochemical Corp, the nation's second-largest oil company, is in negotiations with Iran for an agreement estimated to be worth as much as US$100 billion (HK$780 billion), involving crude oil and LNG purchases.

Sinopec Group, as China Petrochemical is known and Iran still need to agree on pricing of the energy deal, Tehran Times said, citing Mehdi Bazargan, the managing director of state-owned Petroleum Engineering and Development, which supervises foreign oil and gas projects in Iran.

National Iranian Oil president Gholamhossein Nozari said "all elements" of the contract had been completed and that an invitation to sign the accord had been sent to the mainland company.

Under an initial agreement signed by Sinopec in 2004, China would pay Iran as much as US$100 billion over 25 years for the oil and gas purchases and for a 51 percent stake in the Yadavaran oil field, in Khuzestan province near the border with Iraq. The deal would allow China to buy 150,000 barrels of Iranian crude a day at market rates for 25 years as well as 250 million tons of LNG.

Niigata Loading Systems Awards Poyam Cryogenic Valves Contract for Fujian LNG Terminal

Poyam has recently been awarded for the supply of the cryogenic valves used at a new liquefied natural gas (LNG) import terminal in Fujian Province, Peoples Republic of China, by the Japanese company Niigata Loading Systems.

The terminal will be owned and operated by CNOOC Fujian LNG Co. Ltd., a co-investment of China National Offshore Oil Corporation (CNOOC) and Fujian Investment and Development Corporation.

Located in the city of Xiuyu, Fujian Province, in southeast China, the LNG regasification terminal has Phase I capacity of 2.6 million tonnes of LNG per year with Phase II expansion under planning. The natural gas from the terminal will be provided to gas-fired power plants that will be built during the project's first phase and to household users in five cities in the province.

Poyam has already supplied the valves portion for the LNG loading arms of Guangdong LNG (China), Shakalin LNG (Russia) and Ras Laffan LNG (Qatar) Projects.

INDIA

India’s LNG Import to Rise to 23.75 Million Tons per Year by 2012

India's import of liquefied natural gas is projected to increase to 23.75 million tons per annum by the end of 11th Plan period (2012) it was reported December 7.

"LNG import is projected to increase to 23.75 million tons per annum, equivalent to around 83 million standard cubic meters per day," Minister of State for Petroleum and Natural Gas, Dinsha Patel, said.

During 2005-06, Petronet LNG Ltd., imported 4.81 million tons of LNG at its Dahej terminal in Gujarat, while Shell imported 0.171 million tons.

"While domestic supplies from the existing fields of ONGC would show a decline, the gas supply from KG basin would see a significant increase," he said, adding gas availability is likely to go up to 98.3 million standard cubic meters per day by 2011-12.

"This (98.3 mmscmd) is based on gas supply of 40 mmscmd from Reliance Industries' offshore blocks in the KG basin. However, Reliance has projected production beyond this level," he said.

Patel said while Petronet's doubling its Dahej terminal capacity to 10 million tons per annum, the 5 million tons Dabhol LNG terminal would be fully operational in 2009.

Also the 2.5 million tons Kochi LNG terminal, with provision of expansion to 5 million tons, would be commissioned by 2010.

"The total LNG capacity is projected to increase to 23.75 million tons per annum," he added.

Toyo Engineering Orders Poyam Valves for Petronet Dahej Expansion Project.

Toyo Engineering has ordered all the cryogenic valves for the Petronet Dahej Expansion project from Poyam. In 2000-2001 Toyo had also ordered all the cryogenic valves from Poyam for Petronet Dahej Greenfield LNG regassification plant. With this, Poyam becomes the supplier to both the LNG plants of India, Shell Hazira as well as Petronet Dahej.

INDONESIA

Pertamina Picks Mitsubishi to Build LNG Plant

A consortium comprising state-owned PT Pertamina and PT Medco Energi Internasional has appointed Japan's Mitsubishi Corp. to build a natural gas processing facility in Central Sulawesi.

The facility, which will have one gas processing train, will have an annual capacity of 2 million metric tons, said Tri Siwindono, deputy director of Pertamina's upstream business unit.

Construction will start next year and is expected to be completed late 2009, Siwindono added, but didn't provide details on the cost of the project.

Pertamina and Medco have an equal stake in the consortium, which will own the plant.

KOREA

Landmark LNG Ship under Construction by Samsung Heavy Industries

Araldite LNG adhesives from Huntsman Advanced Materials are being employed by world reputable shipyards, including Samsung Heavy Industries in the construction of a brand new LNG ship. The vessel is the 100th of its kind to employ Araldite adhesives and to be built for use in the global LNG industry.

The global LNG market is experiencing a period of rapid growth. It is estimated that in 2006, Europe will import over 40 million tonnes of LNG to make up for short falls in domestic energy supplies.* To meet worldwide demand for the cost-effective delivery of LNG supplies, the enormous industry containment ships are required to transport cooled LNG supplies thousands of miles.

Each ship has an average capacity of about 145k cubic meters (CuM) up to 264k CuM, and during construction requires in excess of 100 tonnes of specialist thixotropic industrial adhesive. These adhesives are typically used to create high performance, durable seals between the inside of LNG vessels and the internal insulation box that helps keep the gas stable at temperatures as low as -165ºc.

Huntsman has been providing material engineering adhesive and mastic solutions to the LNG sector since 1992. It has approval from major shipping organisations and industry specifiers including Lloyds Register and Gaz Transport & TechniGaz (GTT). It also has a dedicated team that works in close co-operation with the world’s leading LNG containment developers, shipyards and panel fabricators.

Commenting on Huntsman’s credentials for the LNG market and Samsung’s association with the company, Soohae Yea, Manager for the Shipbuilding Purchasing Section of Samsung Heavy Industries said, “We pride ourselves on building ships that are safe, environmentally-friendly and which satisfy customer demands for quality. Huntsman’s Araldite products are the industry standard for LNG mastics and adhesives and are the obvious solution for us to use. Providing a one-stop shop for LNG companies like Samsung, Huntsman provides us with the technical know-how and a range of qualified products for use in containment vessels and at land storage facilities.”

Samuel Lau, Regional Director for Asia Pacific at Huntsman Advanced Materials said: “Samsung’s latest ship is the 100th of its kind to be built using Huntsman adhesives. This highlights the success of our products for LNG applications and our commitment to the current and future needs of the industry.

Continuing he said: “In 2006 we announced $10 million worth of investment in new reactors and packaging lines for the creation of LNG adhesives and mastics. As part of this investment, our LNG team is collaborating with industry partners to see how new tank designs and floating LNG terminals can benefit from the use of containment technologies like adhesives and mastics.

South Korea to Build Two $459 Million- $534 Million LNG Storage Tanks

Two storage facilities potentially costing as much as half a billion dollars will be built in South Korea to store Omani liquefied natural gas (LNG), under a landmark joint stockpiling deal between the two countries. The tanks will each have a storage capacity of 200,000 kiloliters. It will cost US$459 million-US$534 million to build two tanks of that size, said an official at state-owned Korea Gas Corp. (Kogas), which will be involved in their construction through a joint venture with the Omani government. Kogas and the Omani government have agreed to establish the joint venture by 1 January 2007, and that the construction of the tanks is expected to begin at the end of next year.

PAKISTAN

Work on Pakistan’s $400 Million-$500 Million LNG Project Expected to Start Soon

Sui Southern Gas Company (SSGC) has submitted the pre-feasibility study on an LNG import project for Economic Coordination Committee (ECC)’s final endorsement, Managing Director SSGC Munawar Baseer said.

Names of some of the top companies interested in carrying out the $400-500 million project had already been short-listed, he said without going into further details.

“The list includes (names of) all major companies. It is a good selection,” he said in a limited reference to the firms, which are willing to construct Pakistan’s first LNG terminal, re-gasification plant and related storage facilities.

LNG import that will augment gas supplies by 500 million standard cubic feet per day (mmscfd) is one of the options that the government is pursuing to meet gas demand-supply gap, which is expected to emerge in a year or two.

About the 700-page pre-feasibility report, Baseer said it covered all the aspects including LNG pricing, supply-demand situation, background of international market and project structure.

The ECC of federal cabinet is likely to approve the report in next few months as Oil and Gas Regulatory Authority (OGRA) has invited expressions of interest from consultants to review the project details.

SSGC has originally envisaged awarding the contract by January 2007, enabling the completion of required infrastructure by early 2010 when first LNG shipment is also expected.

During a visit to the utility’s upcoming installations, MD SSGC said additional 180-200 mmcfd of gas from Bhit and Zamzama gas fields would be supplied to Karachi by next June on completion of 24-inch 136km Karchat to Karachi pipeline. “Almost all the gas will be utilized by industrial consumers,” he said, adding later that high number of industrial consumers gave SSGC comparative advantage over Sui Northern Gas Pipelines Ltd (SNGPL).

Gas to residential consumers is highly subsidized and real incentive for transmission and distribution companies, like SSGC and SNGPL, is to increase the number of industrial and commercial customers.

On the impact of new tariff structure, he said it was not different than the previous formula based on rate of return on average net fixed assets.

Consortium Signs MOU for Karachi LNG Terminal

A consortium of Dana Gas, Single Buoy Moorings (SBM), and Granada Group has signed a memorandum of understanding to develop a 3.5 million t/y LNG terminal in Pakistan at Karachi's Port Qasim. It has plans to develop a network of LNG terminals, mainly in the Middle East and North Africa, and "to tap the LNG value chain, including LNG trading activities." Dana Gas has signed a cooperation agreement with SBM under which Dana would focus on LNG marketing and SBM on the supply and operation of LNG floating storage and regasification terminals.

Another unit, United Gas Transmissions Co. Ltd (UGTC), will operate a gas receiving platform connected to Crescent facilities in offshore Mubarak oil and gas field and an 80km, 30in gas pipeline from the receiving platform to SajGas facilities onshore for sweetening. The platform and pipeline are under construction. UGTC plans a pipeline to transport sweet gas in Sharjah and has an agreement to build, own, and operate a common-user gas pipeline from Sajaa to the Sharjah Hamriya Free Zone. The UGTC facilities will carry Mubarak gas supplied by a third Dana Gas unit, Crescent National Gas Corp.

3. EUROPE / AFRICA / MIDDLE EAST

CROATIA

E.ON Ruhrgas and ADRIA LNG Sign Cooperation Agreement for Croatian LNG Terminal

ADRIA LNG Study Company (current shareholders are OMV, TOTAL, RWE Transgas, INA and Geoplin), and E.ON Ruhrgas AG have agreed to prepare joint feasibility studies for the construction of an LNG regasification terminal in Croatia by signing a cooperation agreement. The studies are to be based on investigations already started in 1995 and will lay the foundations for a decision on this major infrastructure project.

The agreement now concluded will provide a basis for close cooperation between the participants. It is proposed that the studies should be followed by an intensive technical and economic planning stage in which other companies from Croatia will also participate. It is envisaged to finish feasibility and basic engineering studies by end of 2008 so that the terminal could be commissioned by the end of 2011. The capacity is to be around ten billion cubic meters of natural gas per year, allowing deliveries to Croatia and other countries in Southern and Eastern Europe.

The LNG terminal on the Croatian coast will have a key role to play in improving the security of natural gas supplies in the region and ensuring closer integration of Croatia into the European natural gas grid. As a result of this major project, the entire region will benefit from greater diversification in natural gas supplies and additional economic impetus.

FRANCE

Poweo to Build LNG Terminal at Antifer France

Le Havre Port Authority has selected Poweo, a Paris-based electricity and gas supply company, to build an LNG terminal at Antifer, near the Le Havre petroleum port. The EUR 500-600 million, 9 billion cum/yr terminal is due on stream in 2011. Poweo is associated with the Le Havre Maritime Industrial Committee, the operator of the petroleum port, and will be in charge of construction and operation of the terminal. Poweo is also building a 412MW gas-powered combined-cycle facility at Pont-de-Sambre, near Maubeuge, in northern France, due on stream in 2008. The location is near the Taisnière gas hub, where Russian gas enters France.

ITALY

Italy’s Enel SpA Plans 2 LNG Terminals and other Investments

Enel SpA plans to invest 14.5 bln eur in Italy over 2007-2011, including in two liquid natural gas regasification import terminals, said CEO Fulvio Conti.

Enel's business plan for 2006-2010 includes 13 bln eur of investments, and industry sources said the additional investments have been widely foreseen.

'We are ready to construct two LNG regasification plants and to convert further power stations to coal, after ongoing works on Civitavecchia and Porto Tolle,' Conti said at a parliamentary hearing.

Other investments will include modernizing the electricity distribution network, he said.

Industry sources said Enel officials have been cited before talking about 'at least two' LNG plants, with planning already well-advanced for an offshore plant at Porto Empedocle, near Siracusa in Sicily.

Enel is looking at various other sites for LNG plants, including in Lazio region around Rome, which are less advanced, they said.

The government is seen approving 4-5 LNG import terminals in addition to Italy's only current terminal, which is Eni SpA's near La Spezia in the north.

THE NETHERLANDS

4Gas Granted Environmental Permit in Development of Lion Gas LNG Terminal

4Gas, the global LNG terminal developer and operator, has announced the first ever environmental permit for the supply of liquefied natural gas in the Rotterdam port area. The responsible authority DCMR Milieudienst Rijnmond granted the final environmental permit to the LionGas LNG terminal in the Rotterdam Port on 13 September 2006. As a result, the LionGas terminal can become operational as of 2010 and strengthen the security of supply of natural gas to Northwest Europe and the position of the port of Rotterdam as major energy port.

Rotterdam based 4Gas’ LionGas terminal is the only LNG project in the Netherlands to have acquired the required environmental permit. Chief Executive Officer of 4Gas, Paul Q.J. van Poecke: “The quick as well as meticulous manner in which LionGas treated the licensing procedure was made possible by the close and constructive cooperation between DCMR, the Port of Rotterdam, 4Gas and the local communities. The granted permit ensures that the intended LionGas facility will comply with all rules with regard to environment, safety and health. 4Gas is now in a position to make real progress with key customers and suppliers as the first LNG import facility in Rotterdam.”

The planned independent LionGas LNG import terminal will be located in Europoort Rotterdam and will have an initial capacity of 9 BCM (billion cubic meters) of natural gas per year with expansion capability of up to 18 BCM per year. 4Gas is an independent terminal developer and operator and offers use of the terminal to any third party including new entrants to the Dutch gas market. The model of an open, multi-user terminal as introduced by 4Gas will therefore contribute to the diversity and competition in the gas market.

NORWAY

Norway’s Knutsen to Expand LNG Fleet

Knutsen OAS Shipping of Haugesund, Norway has ordered a second 166,000m3 LNG carrier new building at Daewoo Shipbuilding and Marine Engineering (DSME). Like the first of the pair, the new vessel will have GTT NO 96 membrane tanks and be powered by a dual-fuel diesel electric propulsion system. To be delivered in mid-2010, a few months after the first of the pair, the ship will cost USD 245 million and is the 15th LNG carrier ordered at the DSME yard this year. The latest order will provide Knutsen OAS with a fleet of seven LNG carriers when it is completed.

UNITED KINGDOM

Honeywell Gets $2.8 Million Grid Pact

Honeywell International Inc. said December 5 it received a $2.8 million contract from a unit of United Kingdom-based National Grid PLC for two separate projects to upgrade the company's terminal systems.

The Morris Township, N.J.-based company will provide design, engineering and installation services of its Experion process knowledge system into Grain LNG Ltd.'s terminals.

The second part of the contract, awarded through London-based CB&I John Brown Ltd. contracting engineer, will provide work on the process control and safety system for the expansion project at Grain's terminal near London.

EGYPT

Poyam Gets Order from Spanish Egyptian Gas for Damietta LNG Liquefaction Plant

Poyam gets a maintenance order from Spanish Egyptian Gas Co. to supply extra cryogenic ball, gate and check valves for their LNG liquefaction plant in Damietta (Egypt). Commissioning and start-up phases were already made and plant is running as scheduled so far.

EQUATORIAL GUINEA

Nigeria Gas Deal Boosts Equatorial Guinea LNG Project

Equatorial Guinea's plans to become an LNG exporting hub in Africa's Gulf of Guinea have received a big boost with the signing of a landmark natural gas supply deal with Nigeria, officials said on December 14.

They said the agreement, which also involves Nigeria taking on two oil and gas exploration blocks in Equatorial Guinea acreage, marked a major step in cooperation between the two leading Sub-Saharan African oil producers.

Under the accord signed in Abuja, the Nigerian National Petroleum Corporation (NNPC) will supply 600-800 million standard cubic feet per day of natural gas to the planned Train 2 of the LNG plant being built in Equatorial Guinea.

Train 1 of the plant being constructed by Marathon Oil on the outskirts of the island capital Malabo is due to start deliveries of LNG to international markets from mid-2007.

"The agreement signed responds to the political will of the presidents of Equatorial Guinea and Nigeria and will convert Equatorial Guinea in the near future into a gas processing center in the Gulf of Guinea," Mines and Energy Minister Atanasio Ela Ntugu Nsa told reporters.

The deal also foresees the construction of a pipeline from Nigeria to Punto Europa in Equatorial Guinea.

Officials said NNPC was being allocated two oil and gas exploration blocks in Equatorial Guinea's open acreage, the first overseas blocks in the Nigerian company's portfolio.

NNPC would also apply for a third block in a future licensing round.

Equatorial Guinea's national gas company Sonagas, which has a 25 percent stake in the $1.4 billion LNG plant being built, is seeking to tie up long-term natural gas supplies from its Gulf of Guinea neighbors Nigeria and Cameroon.

Cameroon's state-run National Hydrocarbons Company (SNH) announced last month it would export gas to the Equatorial Guinea plant and a bilateral gas supply agreement was expected to be signed in January, officials said.

NIGERIA

Nigeria Invests Heavily in LNG Projects

Nigerian Minister of State for Petroleum Edmund Daukoru has said that the nation is investing heavily in LNG projects, News Agency of Nigeria reported on December 5.

Daukoru was quoted as saying that the West Africa Gas Pipeline project would come on board in early 2007. "The success story of the Nigeria LNG Limited (NLNG) in Bonny had resulted in the establishment of the two LNG projects," he said, adding that the two projects were expected to be operational in 2009.

There had been significant gas export since 1999 with NLNG earning over 3 billion U.S. dollars for the country.

Nigeria's gas reserves are put at 180 trillion cubic feet and the first gas export was in the form of Liquefied Natural Gas (LPG) from the Escravos gas project in 1997. Daukoru, who is also the OPEC president, said that Nigeria and other OPEC member countries would continue to invest in gas projects since gas has become a global commodity.

YEMEN

Yemen's $3.7 Billion LNG Project to be 45 Percent Complete by Year End

Yemen's $3.7 billion project to produce liquefied natural gas in the country for the first time is on schedule and will be 45% complete by the end of the year, Yemen LNG's general manager said December 4.

The project is targeted for an early 2009 completion date, Joel Fort said on the sidelines of the Gastech 2006 conference in Abu Dhabi.

The project's total capital expenditure stands at $3.7 billion, Fort said.

"The project is one of 25 major projects in the oil and gas sectors worldwide in terms of size," Fort said.

"It is a game change for Yemen. It is Yemen's entry into LNG and it is a large investment in the (local) industry. There are not a lot of large businesses in Yemen," he said.

The company's two LNG trains will each produce 3.5 million tons a year of LNG.

Fort said that although provisions for a third LNG train have been made, "there are no firm plans" for further expansion and that those would depend on further gas exploration.

Yemen LNG gets its gas from block 18 in the Marib area.

France's Total is a shareholder and project leader in Yemen LNG

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