California’s Senate approved a bill on January 28 that would give the state a larger role in monitoring and assessing future applications to build liquefied natural gas terminals.

Sen. Joe Simitian, D-Palo Alto, said he hopes the current lull in interest in such projects will enable lawmakers to put in place requirements for state oversight that did not exist three years ago, when a proposal by the Australian energy firm BHP Billiton to build a terminal off the Oxnard coast created a storm of controversy.

Since that time, natural gas prices have fallen and California's available supply has increased, dampening interest in building such terminals, which would allow natural gas from abroad to be imported into the state. There are eight LNG terminals in the United States, but the only such facility on the West Coast is along Mexico's Baja California coast.

"There were three years when we needed this bill, and three years when it was obvious we weren't going to get a bill while there were pending applications," Simitian said.

By acting now, he argues, the state will be in better position to assess LNG applications when and if industry interest in the projects returns.

The measure would require the state Energy Commission to maintain and regularly update a matrix on its Web site detailing all LNG proposals on the West Coast. It further requires that applicants affirm they have consulted with the Department of Defense. That became an issue in the BHP Billiton application, given concerns expressed by the Navy about how the project might impact missile testing and other activities out of Naval Base Ventura County.

Finally, the bill would require applicants to assess in environmental impact reports the greenhouse gas emissions their projects would generate.

The bill passed the Senate 25-9, with mostly majority Democrats in support. They were joined by Sen. Tony Strickland, R-Moorpark.

MEXICO

S. Korea's STX Heavy to Build LNG Terminal in Mexico

South Korea's STX Heavy Industries Co. said February 11 it has clinched a preliminary deal with Mexico's Grupo Indi to build a liquefied natural gas terminal at a port on Mexico's Pacific coast.

The LNG terminal, to be built at the Lazaro Cardenas port, is projected to have the capacity to receive and process up to 3.8 million tons of LNG, said STX Heavy, an unlisted manufacturer of ship parts.

The South Korean company did not disclose financial terms of the deal.

PERU

Peru LNG Awards Wood Group $150 Mln Contract

Wood Group GTS has been awarded a long-term service agreement by Peru LNG worth US$150 million over an 18-year term. Wood Group GTS will provide a service and maintenance program to maximize machine availability of the gas turbines, compressors and generators for Peru LNG at their Pampa Melchorita site south of Lima. The agreement covers two General Electric Frame 7 (7EA DLN-1) gas turbine-driven compressor trains for the LNG process and three GE LM2500 + DLE aero derivative gas turbine power generator sets.

Wood Group GTS will implement remote monitoring and diagnostics, supply of spare parts, component repair, inventory management, field service and maintenance management to maximize machine availability over the 18-year term. Wood Group GTS worked with the Peru LNG team to develop a flexible and risk sharing contract.

On winning the contract, Mark Papworth, Wood Group GTS' chief executive commented, "Our team integrated its technical skills and commercial knowledge to put forward a complete turnkey maintenance solution for the power generation and compressor drive equipment at our client's new LNG facility. This contract is an example of how Wood Group GTS can provide a broad, comprehensive solution to our customer. By aligning our performance and compensation to the operational objectives of Peru LNG, our focus will be on helping them extract maximum value from their rotating equipment assets by keeping them available and reliable, as well as driving down the overall cost of maintenance."

Wood Group Production Services has supported Peru LNG with the supply of specialized and technical personnel to Compañía Operadora de LNG del Perù (COLP), the operating company of Peru LNG, since 2007. COLP has been responsible for constructing the LNG plant and gas supply pipeline and will be responsible for the plant and pipeline operation and support services.

TRINIDAD & TOBAGO

Centrica to Gain LNG Foothold in Trinidad & Tobago

Centrica, through its subsidiary Centrica Resources (Armada) Limited (CRAL), has signed an agreement with Suncor Energy, under which Centrica will acquire Suncor's Trinidad and Tobago portfolio of gas assets for US $380 million (£246 million) in cash. This acquisition provides Centrica with its first producing LNG position and significant development opportunities for future, long-term LNG supplies.

This portfolio of gas assets comprises a 17.3 percent stake in the North Coast Marine Area (NCMA-1) gas production area and equity interests in three blocks; Blocks 22, 1(a) and 1(b), for future development.

The NCMA-1 block currently supplies gas into the Atlantic LNG (ALNG) facility and holds remaining working interests of 266 billion cubic feet (bcf) of proven and probable (2P) reserves, attributable to Centrica's 17.3 per cent stake. This will provide Centrica with 60-70 million standard cubic feet per day (mmscfd) of gas production in 2010. Gas produced from NCMA-1 has been contracted to a third party on a long-term basis until 2023, achieving international gas prices with any additional benefits from diversion being shared between the partners.

Gas development opportunities in Block 22 and Blocks 1(a) and 1(b) comprise a 90 percent and 80 percent operated interest respectively and contain significant contingent gas resources, with recoverable resources attributable to Centrica's equity stakes estimated at 1.34 trillion cubic feet (tcf). Centrica will consider options for the development of these gas discoveries together with appropriate equity partnerships. Blocks 1(a) and 1(b) of just under 0.2 tcf are subject to pre-emption from existing field partners.

Sam Laidlaw, Centrica Chief Executive, said, "This is a significant move into one of the world's most established LNG areas providing us with access to both gas producing and development blocks. Combined with last year's acquisition of Venture Production, this agreement builds further on our upstream capability and marks a step change in our global gas position."

ASIA

AUSTRALIA

BG Ups Capacity for Queensland LNG Project to 8.5 mty

BG Group PLC said February 5 that it will expand the planned capacity at its Curtis liquefied natural gas project in Queensland, Australia, to 8.5 million metric tons a year, from 7.4 million tons a year previously.

The company said it has already signed supply contracts for 8.3 million tons a year of that capacity and will make a final investment decision on the project in the middle of this year. The reserves of coal seam gas that will supply the plant now stand at 17.3 trillion cubic feet, it said.

BG Group Chief Executive Frank Chapman said the Queensland LNG project will become, "the jewel in the crown of our LNG portfolio...on the doorstep of the world's largest LNG markets."

Chapman said BG has the capital, the expertise and the gas resources to complete the project without needing another partner, although he would consider joining forces with other companies on infrastructure that could be shared, such as a pipeline from the gas-producing region Gladstone on Queensland's coast.

The plant is scheduled to commence production in 2014.

Another major LNG project in which BG has a stake, Nigeria's OKLNG, is currently on the backburner and is unlikely to start up until the second half of this decade, said BG's Chief Financial Officer Ashley Almanza.

BG said its output growth in 2010 will be modest, but will accelerate beyond 2011 close to the top end of the 6% to 8% per annum range. By 2020 the company will be producing around 1.6 million barrels equivalent of oil and gas a day, said Chapman.

Golar Announces FLNG Deal Termination

Golar LNG Energy Limited and PTTEP Offshore Investment Company Limited have announced the joint termination of the Heads of Agreement and Joint Study Agreement governing their joint development of a floating liquefied natural gas (FLNG) project based on the gas fields in North West Australia owned by PTTEP. The two companies have also announced their termination of a Memorandum of Understanding covering their global cooperation to identify and develop FLNG projects. Golar appreciates the learning and experience gained during the period of this cooperation.

Golar will continue to actively pursue FLNG projects which fit with its financial objectives and best captures its technical capabilities. Golar will also continue to seek equity positions along the LNG value chain, including entitlement to LNG.

Golar's FLNG strategy will be expanded to include the development of low capital cost, rapid deployment floating facilities utilizing the conversion of high quality existing LNG carriers, floating technologies for the liquefaction of pipeline quality gas or associated gas (requiring minimal processing) and seek other innovative LNG solutions.

This strategy complements Golar's industry leadership position in floating LNG regasification facilities development. Golar has chartered-out the world's first and second floating storage and regasification units based on the conversion of existing LNG carriers to Petrobras in Brazil. A third conversion is currently at an advanced stage and will be chartered to the Dubai Supply Authority. Other similar projects are currently under development, reflecting Golar's very positive view of growth opportunities in this sector.

In an era of intense competition in the LNG industry and the high cost and long lead time of land based LNG facilities, Golar believes highly cost efficient approaches based on floating LNG liquefaction, storage and offtake, shipping and regasification facilities of the types now being developed by the company will be key to substantial additional growth opportunities.

Transfield-Worley Parsons JV Wins $627.41 Mln Contracts to Maintain Woodside LNG Facilities

A joint venture between Transfield Services Ltd and Worley Parsons Ltd has won contracts worth US$627.41 million (A$700 million) to provide maintenance to Woodside Petroleum Ltd's liquefied natural gas facilities in Western Australia.

Transfield Worley Services will carry out a four-year contract with forecast turnover of A$600 million to deliver brownfield project services to Woodside's offshore and onshore facilities, with a four-year extension option.

The deal included a two-year contract with a forecast turnover of about A$100 million to provide maintenance and shutdown services to Woodside's onshore Karratha gas plant and offshore facilities, with a two-year extension option, the companies said January 29.

The new contracts are in addition to the joint venture's existing deals with other LNG operations in Qatar and the Philippines.

Australia Pacific Lodges Draft EIS for Gladstone Project

Australia Pacific LNG in January lodged its draft Environmental Impact Statement (EIS) for its coal seam gas to liquefied natural gas project with the Queensland Government.

The EIS will now be assessed by the Queensland Government for compliance with the Terms of Reference set by the Coordinator-General prior to its release for public consultation at a future date.

The EIS addresses the project's maximum development case and covers the gas fields in southern central Queensland, the 450km gas transmission pipeline and a four-production-train LNG plant near Laird Point on Curtis Island in Gladstone.

The Australia Pacific LNG EIS includes an assessment of the cumulative impacts of the proposed CSG to LNG industry on the communities within the Project area.

"The lodging of our draft EIS is another milestone in our progress towards a Final Investment Decision," Project Director Todd Creeger said.

Australia Pacific LNG has undertaken extensive public consultation on the project as part of the EIS process over the last 12 months and will conduct further public consultation, including further public meetings in affected areas, once the document is released for public comment.

The Final Investment Decision by Australia Pacific LNG on the project is expected by December this year with the first gas expected to be exported in late 2014.

In a first for an EIS in Queensland, the document will be available to the public in a fully-interactive format on the Internet once it has been released by the Queensland Government.

Australia Browse Firms Pick James Price Point for LNG Plant Site

The gas process plant for Australia's Browse liquefied natural gas project will be built at James Price Point in Western Australia, operator Woodside Petroleum said on February 9, ending a long dispute among the project's partners.

The decision in favor of Woodside's preferred location advances the project towards the engineering phase and ends an impasse that even forced government intervention.

Perth-based Woodside, Australia's second-largest oil and gas producer said the next phase of the development will be basis of design, followed by front-end engineering and design in 2011 to enable a final investment decision by mid-2012.

Woodside owns 50 percent of Browse, which is estimated to hold about 15 trillion cubic feet (tcf) of gas. BP and Chevron have 16.67 percent each, while Royal Dutch Shell and BHP Billiton each have 8.33 percent.

Frustrated by a lack of progress on the project, the federal and Western Australian state governments had imposed a deadline for the partners to select a development concept by April 2010 as a condition of retaining leases associated with the Browse field.

BG Group to Award $3 Bln in Contracts for Australia LNG Project

BG Group Plc, the UK energy company planning a $6.9 billion liquefied natural gas project in Australia, intends to start ordering $3 billion in equipment for the venture in Queensland in the first half of the year.

BG has awarded Bechtel Corp., the largest U.S. engineering company, a procurement and construction contract for the Queensland Curtis project, according to a statement on the venture’s Web site. Bechtel has been instructed to order “long-lead items” for the LNG plant and begin preparations for construction, BG said.

The UK company plans to invest about $6.9 billion (A$8 billion) in the Queensland Curtis venture as it seeks to produce more LNG. The project will boost BG’s global fuel-output capacity 59 percent to 20 million tons a year by mid-decade.

BG has increased the planned capacity of the Queensland Curtis LNG venture to 8.5 million tons a year from a 2009 estimate of 7.4 million tons, Chief Executive Officer Frank Chapman said February 5.

The Reading, England-based company holds about 17.3 trillion cubic feet, or almost 3 billion barrels in oil equivalent, of gas reserves and resources in Australia, of which 12.6 trillion cubic feet are available in the Surat Basin to supply the LNG plant on Curtis Island, Chapman said.

Emerson Wins Contract to Supply Roxar Wetgas Meters to Chevron’s $39.8 Bln Gorgon Project

Emerson Process Management announced February 2 that its Roxar subsea wet gas meters are to be installed in the Greater Gorgon fields, one of the world's largest untapped natural gas fields. The contract was signed with Vetco Gray, a GE Oil & Gas business. The operator is Chevron Australia Pty Limited.

The Gorgon project, 130 kilometers offshore Western Australia, is believed to contain over one trillion cubic meters of liquefied natural gas. A phased subsea development is currently taking place, where subsea wells will be directly tied back to an onshore LNG plant on Barrow Island. The LNG plant is estimated to have an annual capacity of around 15 million metric tons per year. The project is estimated to cost approximately US$39.8 billion (A$43 billion) for the first development phase, with first gas planned for 2014.

The Roxar subsea Wetgas meter, which will operate in depths of between 200 and 1,300 meters, will provide Chevron Australia with real-time, accurate measurements of hydrocarbon flow rates and water production, as well as the online detection of formation water breakthrough.

By accurately measuring the early onset of formation-water production in real-time and accurately, Chevron Australia will be able to take immediate preventative or remedial action, such as adjusting the concentration of MEG injection, injecting the right amount of corrosion inhibitor, choking back or shutting in the well, or instigating zonal isolation. The result is continuous flow assurance.

"We are very proud to be providing flow assurance and production optimization to such an important LNG field," said Gunnar Hviding, CEO & President, Roxar AS. "Whether it be production well testing, improved reservoir management, or hydrate and scale prevention, the accurate and real-time measurement of wet gas flow is crucial to today's operators - particularly with subsea tiebacks, as is the case with the Gorgon development."

"The Roxar subsea Wetgas meter addresses these challenges head-on, providing operators with vital information for optimized reservoir and process management. The meters' exceptionally compact design, low weight and low power consumption also ensure easy integration with subsea systems, as is the case here."

The Roxar subsea Wetgas meter's high availability, its 100% true redundancy, and cost effective intervention methods were also key factors in the decision, as was the track record of delivering wet gas meters on time and of the highest quality to similar-sized, high profile projects. These include the Ormen Lange field, the largest natural gas field on the Norwegian Continental Shelf, and the Independence Hub development in the Gulf of Mexico, representing 13% of the offshore Gulf's natural gas production.

The Gorgon Gas Fields project is being developed by the Gorgon Joint Venture, which consists of Australian subsidiaries of three international energy companies - Chevron Australia, which has a 50% share and is the main operator, Shell Development Australia, and Mobil Australia Resources, a subsidiary of Exxon Mobil, who have a 25% share each. In May 2008,

Vetco Gray was awarded a 5-year frame agreement to supply subsea equipment and support services for the project and, in October 2009, GE Oil & Gas announced a US$400 million contract to deploy advanced LNG technology in the fields. Delivery of the Roxar meters will be in the third quarter of 2010.

Arrow Energy Confirms It’s Considering LNG Funding Options for Queensland Fisherman’s Landing

Arrow Energy Ltd. said February 9 it is considering a number of options to fund the proposed liquefied natural gas terminal at Fisherman’s Landing in Queensland State, including sourcing more debt, issuing new shares, or selling down part of its interest in the project.

The company didn’t provide cost guidance for its share of the LNG plant’s development, other than to provide an A$1.32 billion cost estimate for expenses relating to the production of feed gas for the project and a pipeline from Arrow’s gas fields to the plant.

Arrow has a strong balance sheet, having sold a chunk of its coal seam gas acreage to Royal Dutch Shell PLC in 2008, but LNG projects cost a lot of money to build and Arrow last month raised its stake in the Fisherman’s Landing development.

Brisbane-based Arrow restructured its agreement with Liquefied Natural Gas Ltd. and will now own the LNG produced from the first processing train of the plant. It also said it plans to t to 8.5ake an up to 100% interest in the first train, and a 30%-49% interest in the plant’s other infrastructure.

Merrill Lynch estimates that two, 1.5 million metric tons a year production trains could cost around A$2.1 billion to build. It has also estimated that the project’s entire upstream and pipeline costs could reach around A$2.9 billion.

Arrow also said February 9 that any share issue would likely be "predominately entitlement based", which may have helped its shares to rise 3.9% to A$3.69 by 0320 GMT, having fallen 9.7% on February 8.

The group was responding to a share price query issued by the Australian Securities Exchange, prompted by Chief Executive Nick Davies telling Dow Jones Newswires on February 8 that the company had asked advisors to examine ways to raise funds.

Arrow confirmed that by making a final investment decision on the Fisherman’s Landing project it will trigger a previously agreed payment from Shell of US$133 million.

A final investment decision is still expected to be made by March 31, it said.

Merrill Lynch analyst Mark Hume, however, warns of potential delays.

"Given the recent restructure of the project we believe this now represents a stretch target and would not be surprised if this decision were deferred," Hume said in a client note.

"This in our view could place pressure on the share price and could provide a more attractive entry point for long-term investors."

Hume has initiated his coverage of Arrow with a neutral recommendation and A$4.31 price target. He said takeover speculation is clouding Arrow’s valuation, but said it’s unlikely an offer from Shell will emerge with Arrow’s share price as high as it is currently.

Credit Suisse analyst Andrew William kept an Outperform rating on the stock and said he doesn’t believe a share issue will be necessary to fund the first train at Fisherman’s Landing. "We do, however, acknowledge that the full expansion options will leave Arrow capital-constrained," Williams said in a client note.

Arrow also said that it expects earnings before interest, tax, depreciation and amortization before one-off items for the six months to December 31 of between A$10 million and A$12 million, compared to the previous corresponding period’s A$5.5 million.

Yokogawa to Become a Major Player in Australia’s LNG Market

Yokogawa Australia and Yokogawa Engineering Asia have been awarded a major contract by INPEX Browse to perform front-end engineering design (FEED) for its Ichthys liquefied natural gas project, which will include new gas, condensate and LNG facilities. Once complete, the project will place Yokogawa Australia as a firm contender in the Australian LNG market.

Yokogawa Australia will participate in the FEED for a control and safety system for the new facilities, which are planned for the Browse Basin off the coast of Western Australia and in the Northern Territory city of Darwin.

The Ichthys LNG project is a joint venture between INPEX (76 per cent) and Total E&P Australia (24 per cent). For this project, Yokogawa hopes to supply a CENTUM series Integrated Production Control System, Exaquantum Plant Information Management System, Exasmoc Multi-Variable Model Predictive Controller, PRM Plant Resource Manager, OmegaLand operator training system, and other products.

According to Yokogawa Australia managing director, John Hewitt, this major project win, together with the company’s ongoing involvement with the Gorgon LNG site in Western Australia, will entrench Yokogawa Australia firmly in the local LNG game.

“The Ichthys LNG project and the Gorgon LNG project place Yokogawa as a major LNG player for the first time in Australia,” he told PACE.

“This project is a major win for us, and for Yokogawa globally. It has had a lot of attention from our regional headquarters in Singapore, as well as Tokyo. If all goes well, we hope to be awarded with the full equipment contract for this site,” he said.

The Ichthys field is located in the Browse basin, 150km off the coast of Western Australia. Discovered in 2000, it is one of Australia’s largest undeveloped gas fields, with an estimated 12.8 trillion cubic feet of gas and 527 million barrels of condensate.

The Ichthys field’s offshore facilities will consist of a large floating production platform and an associated FPSO for condensate processing and storage. These facilities will be connected via an 850km subsea pipeline to an onshore LNG plant at Blaydin Point in Darwin Harbour. Two LNG trains are currently planned for the Darwin plant, and each will have a capacity of around four million tonnes per year. Both the offshore and onshore facilities will have an expected operational life of over 40 years.

Yokogawa will supply engineering teams to work with the FEED contractors: AMEC in London for the offshore plant and JKC (a joint venture between JGC, KBR, and Chiyoda) in Yokohama, Japan, for the onshore plant. It is expected that the FEED phase will be completed and a final investment decision made by the end of 2010, with first LNG shipment to be scheduled for 2015.

Though Yokogawa Australia is relatively new to the local LNG market, Yokogawa is by no means an amateur when it comes to providing instrumentation and control systems for major LNG projects. Yokogawa in Singapore is one of the top-two LNG control systems providers in its region, and Yokogawa’s Tokyo office has had its fair share of major LNG contract wins, Yokogawa’s Hewitt said.

For Hewitt, his overseas counterparts have been instrumental in providing engineering support and know-how for both the Gorgon LNG project and now the Ichthys LNG project.

“We are bringing experience and expertise that has been learnt from other parts of Yokogawa to play in this country. The LNG market is not new for Yokogawa. Our company is a very serious player in LNG globally, and will now become quite a serious player in the Australian LNG market,” he said.

“This is a new direction for our Australian business, and we will be leveraging the experience of our colleagues in Singapore and Tokyo to expand our local LNG business.”

Arrow Energy to Take Full Control of Fisherman's Landing LNG Plant

Arrow Energy has reached an agreement with LNG Limited to acquire the entire Fisherman's Landing liquefied natural gas plant and associated infrastructure through the acquisition of LNG Ltd subsidiary Gladstone LNG Pty Ltd (GLNG).

The agreement is subject to the completion of confirmatory due diligence by Arrow and LNG Ltd gaining shareholder approval for the transaction at a meeting expected to be held within the next 45 days.

Arrow Energy Chief Executive Officer Nick Davies said, "Initial site works have already commenced at Fisherman's Landing and project design and planning is well advanced. Arrow is excited to be taking full control of the construction and future operation of the world's first CSG to LNG facility. This further simplification of the Fisherman's Landing LNG development and the elimination of the commercial agreements with LNG Limited, will improve the ability to construct, finance and ultimately allow for greater flexibility in the operation of the plant. This project offers Arrow investors an extremely attractive path to profitable monetization of the company's vast gas resource in conjunction with Arrow's existing domestic gas supply and power generation business. In the meantime we would like to recognize the significant achievements of the LNG Ltd. team in bringing this project to an advanced state of development using their proprietary OSMRTM technology."

Arrow Energy will be acquiring the LNG Ltd subsidiary Gladstone LNG that holds the rights to develop the Fisherman's Landing site, all approvals and the pre-development work. The upfront purchase price for the acquisition is A$51million, being the reimbursement of actual project costs incurred to date, estimated at A$45million, an initial US $5million licensing fee for use of the OSMRTM technology and a grant of 12.5million options to acquire Arrow shares at an exercise price of A$3.50 with a May 14, 2010 expiry date.

Further payments will be payable to LNG Ltd once certain milestones are reached:

A$24million at Final Investment Decision (FID)
An additional US $5 million licensing fee for the use of OSMRTM technology at FID
A$24million when the plant reaches one million tonnes per annum LNG production
A$63.5million when the plant reaches three million tonnes per annum LNG production (through a second train)

Arrow Energy will also pay LNG Ltd a minimum royalty of 0.7 percent (capped at 0.9 percent) calculated on the oil price differential above US $60/barrel for the first train. The higher royalty of up to 0.9 percent will be payable if the capital expenditure on the Fisherman's Landing development is materially lower than current estimates. Royalty principles have been agreed with LNG Ltd for a second LNG train.

Arrow Energy will now focus on full integration of the design and construction plans for the Fisherman's Landing LNG facility into its overall project development plan under Arrow's LNG Project Director. This will include an assessment of the previously announced March 31, 2010 FID date and any project enhancement opportunities that may be available on an integrated basis. The completion of the upstream and midstream components of the FID work remains on track. Arrow will advise the market of any revision to the target FID date in the near future. At this stage first LNG production is still expected in late 2012.

As a result of the above restructure, Golar Energy Ltd (Golar) and Arrow are in discussions to transfer the existing LNG Off-take Heads of Agreements with Golar / Toyota Tsusho to Arrow.

KBR to Conduct Browse Design Study

KBR announced February 10 that it has been awarded a contract by Woodside to execute a basis of design study for the company's Browse Liquefied Natural Gas Development. The study will focus on Woodside's onshore LNG facilities within the Western Australian Government's proposed Browse LNG Precinct in the north of Western Australia.

KBR will execute the study for a 12 million tons per annum (MTPA) liquefaction facility, as well as the associated infrastructure and marine facilities. The anticipated duration of the study is nine months. The award of the basis of design study follows the recent award to KBR of a front-end engineering and design (FEED) contract for Woodside's Pluto LNG trains 2 and 3.

"We are pleased to be working with Woodside on this important project. I am confident KBR's global LNG expertise, coupled with our local Australian capabilities, will be invaluable to the execution of Browse," said Mitch Dauzat, President, KBR Gas Monetization. "In our continuing relationship with Woodside, KBR will apply its experience in mega projects, remote projects and modularized LNG facilities to provide a quality design study for our valued client."

Technip to Finish Wheatstone LNG FEED Work

Technip expects to finish FEED work on the offshore processing platform for Chevron’s Wheatstone LNG project by the end of 2010. The work scope involves the selection of the optimum offshore configuration and development of the full FEED for the selected concept including flow assurance of the associated flowlines and pipelines.

The platform topsides will be among the world’s largest single-integrated structures to be installed via a float-over method. The LNG development will draw gas from Chevron’s WA-17-R and WA-253-P permits North West Shelf off Western Australia, transporting via subsea gathering systems to the offshore platform for processing before being exported to an onshore gas plant at Ashburton North on the Pilbara coast of WA.

Chevron and TEPCO Sign HOA for Wheatstone LNG

Chevron and Tokyo Electric Power Co have signed a Heads of Agreement (HOA) to deliver 4.1 million tons per annum (MTPA) of LNG for up to 20 years from Wheatstone. TEPCO also intends to acquire 15% of Chevron's equity share in the Wheatstone field licenses and an 11.25% interest in the Wheatstone LNG processing facilities to be developed onshore near Onslow in north-western Australia. The initial phase of Wheatstone will have the capacity to process 8.6 MTPA of LNG and will include a domestic gas plant. A final investment decision is expected in 2011.

Intecsea Wins Offshore Wheatstone LNG FEED Contracts from Chevron

Chevron has awarded the FEED contracts for the offshore portion of Wheatstone to Intecsea Pty Ltd, which will design the subsea gas gathering options. The upstream scope included subsea gas gathering for the Wheatstone and Iago fields, an offshore production platform and a 200 km pipeline linking the platform to the onshore gas liquefaction plant.

Clough AMEC Awarded Woodside’s Maintenance Services Contract

Clough AMEC has been awarded a new contract by Woodside Energy Ltd to provide offshore maintenance services for their Australian oil and gas assets located on the North West Shelf off Western Australia. Clough AMEC has provided asset support services to Woodside Energy for the last 5 years.

This new two-year contract includes two one-year extension options. Clough AMEC will provide maintenance services for the supply of offshore core crew and routine/campaign maintenance works on Woodside Energy’s key offshore oil and gas production assets. The offshore work will be managed and controlled from Clough AMEC’s Perth office.

AusGroup Gets Woodside Fabrication Services Job

AusGroup is set to start a fabrication services deal worth more than A$30 million for Woodside. The contract covers fabrication services in support of the maintenance program at Woodside’s facilities, both onshore, at the Burrup Peninsular and offshore, on the North West Shelf. The deal is for an initial term of three years with three successive one yearly options.

Wah Seong Gets Pipeline Coating Job for Gorgon LNG Project

Wah Seong Corp of Malaysia is expected to start an A$162.86 million pipeline coating deal for Gorgon LNG project. The scope of the contract involves coating around 850 km of pipes, with the work expected to start in the second quarter 2010 and completion scheduled in 2012. First LNG from the Gorgon project is due in 2014.

Australia Pacific LNG Awards Rig Contract to Savanna Energy Services

Australia Pacific LNG has awarded an A$220 million drilling and workover rig contract for the project. The contract was awarded to Savanna Energy Services Pty Ltd (Savanna) for the provision of two proprietary hybrid drilling rigs and two workover rigs for a five year term from September 2010. Australia Pacific LNG is a 50:50 coal seam gas (CSG) to liquefied natural gas (LNG) joint venture between Origin and ConocoPhillips.

Santos-Petronas JV Set To Green Light Gladstone Construction

Santos Ltd. said February18 its joint venture with Petronas will officially green light the construction of their Gladstone LNG project even if they don't find a second customer before a midyear deadline. That means the only remaining obstacle to sanctioning the massive project is lawmaker approval of its associated environmental impact statement, or EIS, which Santos Chief Executive David Knox said is expected to occur in line with the joint venture's tight timetable.

Approval of the project would put the JV on track to release 3.6 million metric tons of LNG a year into global gas export markets by 2014. This should boost Santos' revenues astronomically but risks remain, with the jury still out on whether enough LNG demand and skilled labor exists to underpin the construction, and ongoing operation, of around a dozen planned Australian LNG projects.

Knox said he doesn't believe "there are any real showstoppers" to getting environmental approval but said "there are lots of issues that have come back to us that need consideration and discussion".

Approval of the EIS will largely determine the precise timing of a final investment decision, or FID, Knox said.

Santos met analysts' expectations with a steep fall in annual profit, dragged down by lower oil and gas prices, but the LNG developments are more crucial to its prospects.

The company wants to sanction a doubling of the size of the Gladstone LNG project by mid-2011 but will need to find more customers and more gas to support the expansion.

For its first production train, Santos has already agreed to sell up to 3 million metric tons a year of LNG to Petronas, virtually underpinning its full 3.6 mtpa capacity.

"We would very much like to introduce another third party customer into the first train but it's not a requirement for us to move forward to FID," Knox told analysts on a conference call.

He shrugged off analysts' concerns that Santos isn't proving up its reserves quickly enough to support a second train, or that such concerns are complicating ongoing negotiations with buyers.

Santos still wants to divest another 9% of the project and Knox said that while it's getting "strong engagement" from potential takers, the stake sale component is slowing offtake negotiations.

Andrew Williams, an energy analyst at Credit Suisse, said an agreement with a more traditional, external LNG buyer would give the project more credibility, while a second train would greatly enhance its economics, given that extra trains are cheaper to build.

Williams, however, said Santos could face challenges convincing potential customers that it has enough feed gas to underpin a second train.

"Until coal seam gas establishes a bit of a track record in lager-scale sustained production, the buyers are probably going to want to see more reserves cover than you'd need for a more traditional project," Williams said.

To date, Santos has proven up just over half the reserves it will need to support a two-train project.

The company's funding outlook is also watched closely by analysts.

Despite it raising A$3 billion from a share issue last year, Santos is also involved in the construction of a US$15 billion project in Papua New Guinea, and has a more long-dated floating LNG venture with GDF Suez to consider.

While it had A$5.06 billion in cash and committed debt facilities at Dec. 31, JPMorgan reckons Santos will need to raise another A$2.15 billion if oil prices remain at US$75 a barrel and it can't sell the 9% stake in Gladstone LNG.

Knox said Santos won't provide a cost estimate for the project until it is sanctioned. He reiterated that Santos has assets in the Timor Sea that it could sell, among a number of "big levers" in its funding plans.

Pluto LNG Instrumentation Contract Goes to Kentz

Kentz, through its Australian joint venture operating company Thiess Kentz Pty Ltd, was awarded the Site Wide Specialist Instrumentation Contract for the Pluto LNG Project following a competitive bid process. This brings the combined value of work secured to date on the project to in excess of AU$120 million.

The Pluto LNG Project is being developed by Woodside. Woodside has appointed Foster Wheeler Pty Ltd and WorleyParsons Services Pty Ltd, known as FWW, as its Engineering Procurement and Construction manager (EPCM).

The project is located on the Burrup Peninsula in Western Australia and will be developed across two sites -- the storage and export site and the LNG processing site. The storage and loading site consists of LNG and condensate storage tanks along with the jetty. The LNG liquefaction train and gas turbines/power distribution facilities will be on the LNG processing site.

Kentz scope of work includes instrument calibrations, testing of instrument loops, testing the electrical network monitoring and control system including all serial loops across both sites. Mobilization has already commenced.

Australia Pacific LNG, QGC Pty Ltd Agree To Joint Development Plan

Australia Pacific LNG and QGC Pty Limited (QGC), a BG Group business, have agreed to a framework for the development of jointly owned coal seam gas (CSG) tenements ATP 648P and ATP 620P in South East Queensland. The parties have also entered into conditional gas sales agreements to support the development of both Australia Pacific LNG and QGC's LNG projects.

Origin's Managing Director, Grant King said, "Australia Pacific LNG and QGC have agreed to work together to efficiently develop these jointly owned resources to support both of our planned LNG projects.

"The gas sales agreements will deliver significant value to Australia Pacific LNG and Origin. They will open an export channel to market for part of Australia Pacific LNG's gas resource and bring forward its monetization.

"Australia Pacific LNG expects to sell around 190 PJ of gas over an initial ramp up period of around two years to QGC under the agreements. Annual volumes sold to QGC are expected to reduce to average 25 PJ over the balance of the initial 20 year contract period. Australia Pacific LNG will separately market the balance of its gas from these tenements for the long term.

"The transaction evidences the importance of project cooperation. It supports the development of both Australia Pacific LNG and QGC's LNG projects by assisting in the efficient development of reserves and management of gas production," King said.

The field development framework provides a mechanism for the parties to progress the technical design and conditions for the ultimate development of these jointly owned resources.

The commencement of gas sales to QGC is aligned with the start of commercial operations at QGC's Queensland Curtis LNG project (QCLNG), which is currently expected in 2014. The initial contract term for gas sales to QGC from ATP 648P is 20 years and QGC holds two extension options, each with a 5 year term. The parties have also agreed a short term gas sales agreement from ATP 620P for around two years from the commencement of commercial operations at QCLNG. This will assist both parties in managing their gas requirements as they ramp up production of their respective LNG projects. The actual volume of gas sold will depend upon field development and performance.

The field development plans and gas sales agreements are conditional on QGC making a Final Investment Decision on QCLNG.

Australia Pacific LNG is a 50:50 CSG to LNG joint venture between Origin and ConocoPhillips.

The CSG tenements are operated by QGC with Australia Pacific LNG's permit interests being 31.25% for ATP 648P and 40.625% for ATP 620P.

CHINA

Hudong-Zhonghua Shipbuilding Gets Order for 6th LNG Carrier

Hudong-Zhonghua Shipbuilding (Group) Co., Ltd., a large shipbuilder under the wing of China Shipbuilding Group Corporation (CSSC), has just received the order for its sixth LNG carrier after it succeeded in building the first five LNG vessels.

On February 7, the shipbuilder signed the order with Shanghai LNG Shipping Co, reported to be a joint venture among China LNG Shipping (Holdings) Co., Shenergy Group, and China National Offshore Oil Corp. (CNOOC).

After the newly-ordered LNG carrier is delivered, it will serve the LNG terminal in the eastern metropolis of Shanghai. It is to be responsible for LNG transportation from Malaysia to Shanghai for more than 20 years.

The signing of the order is believed to give a big leg up to the construction of China's ocean energy shipping channel and the implementation of the national energy strategy. It has gained the support from many parties, including the National Development and Reform Commission (NDRC), the National Energy Administration (NEA), Bank of China (BOC), Shenergy, and CNOOC.

INDONESIA

Indonesia Rejects Development Plan for LNG Project

Indonesia's upstream oil and gas regulator BPMigas rejected a plan of development for an LNG project proposed by Energy Equity Epic Sengkang (EEES), a wholly owned subsidiary of Energy World Corp. (EWC).

"The plan of development is not backed up with valid data," said BPMigas Chairman R. Priyono, adding, "How can we approve the plan of development if we don't even know the reserve data?"

Priyono said BPMigas rejected EEES's work program and budget for development of new gas reserves because they don't follow the standard operating procedures. "It's strange they want to drill without an initial seismic survey," Priyono said.

EWC's general counsel Thompson Situmorang said a 3D seismic survey would be expensive for a marginal field like Sengkang. "We propose a mini-seismic method, which will be more economical and cause no harm for the environment, but BPMigas has not agreed yet," he said.

Thompson claimed the development plan is "still under discussion" with government officials.

EEES holds the production-sharing contract for the Sengkang Block, which is estimated to hold reserves of 2-4 tcf of recoverable gas. Currently, the gas is being used to fuel the 195-Mw gas-fired combined-cycle Sengkang Power Plant operated by EWC subsidiary PT Energi Sengkang.

EWC is considering construction of an LNG plant near the Sengkang block, built with an initial production capacity of 2 million tonnes/year and later rising to 5 million tpy, according to EWC Chief Executive Stewart Elliot.

Elliot said the company had additional reserves that could be processed by the proposed LNG plant, a point reiterated by EWC Executive Director Brian Allen.

During a hearing with the House of Representatives Commission VII overseeing energy and mineral resources, Allen said the new reserves would be able to provide 300-500 bcf of gas for the proposed LNG plant

Allen said the proposed LNG development would cost EWC $500 million and "a small percentage" of the LNG would be exported to finance the construction and operation of the facility.

According to analyst BMI, rejection of the EEES proposal will set back plans for the liquefaction plant and is likely to delay the launch of LNG supplies to state-owned gas distributor PT Perusahaan Gas Negara (PGN).

BMI said PGN, following an agreement signed last September, had hoped to purchase 1.5-5 million tpy of LNG from Sengkang to feed its planned regasification terminals in North Sumatra and Java.

EWC owns 100% of the Sengkang production-sharing contract. The project has a take-or-pay power sales contract until 2022 to supply power to state-owned power utility PT Perusahaan Listrik Negara. EWC also owns 95% of the Sengkang power plant, while Medco Sengkang holds a 5% interest.

Indonesia to Build LNG Floating Terminals

Indonesia's state-owned oil and gas firms PT Pertamina and gas distributors PT Perushaan Gas Negara (PGN) agreed on February 4 to build a floating liquefied natural gas receiving terminal off West Java, the Antara news agency reported.

The construction of the terminal will start later this year and will fully operation next year.

The terminal would store 1-1.5 million tonnes of LNG.

The two firms agreed to form a joint venture to operate the floating LNG receiving terminal. Pertamina will have 60 percent of the shares in the joint venture.

"The project will complement Pertamina's LNG chain which has been in place for more than 30 years, "Pertamina Director Karen Agustiawan was quoted as saying by Antara news agency.

The joint venture will get supplies from East Kalimantan of 11.75 million tonnes over 11 years.

JAPAN

Japan Petroleum Exploration to Build $70 Mln Hokkaido LNG Terminal

Japan Petroleum Exploration will build a new LNG receiving terminal in Hokkaido for around US$70 million to meet projected growth in winter demand. Construction is expected to start in Jun 2010 for completion in Sep 2011. The first domestic vessel is scheduled to arrive at the terminal in November 2011. The current supply to Hokkaido is limited to gas produced at the company's Yufutsu gas field in Tomakomai.

PAPUA NEW GUINEA

ExxonMobil Suspends PNG LNG Work after Deadly Tribal Dispute

ExxonMobil has suspended work near a liquefied natural gas site in Papua New Guinea after four local villagers were killed in a tribal dispute.

The clash between two rival coastal villages near the capital Port Moresby occurred in an area where ExxonMobil is to build a plant to liquefy, store and load gas for shipment overseas.

The incident has forced the shutdown of road building works being undertaken by Curtain Bros, an Australian construction firm, to the planned plant site.

The fight erupted west of Port Moresby on January 30 after intoxicated Borea village youths threw stones at Porebada villagers as they were gardening in the area.

Later that day to resolve the dispute Porebada villagers went to Borea village, where four were shot and killed.

PNG's National newspaper reported the fight was linked to ongoing tensions regarding land ownership and LNG leases.

PNG's Post Courier newspaper reported the two villages met on Sunday night, and Porebada clansmen vowed to close down the nearby LNG-related activities until the dispute was settled.

A spokesman for ExxonMobil in Port Moresby said a police investigation would provide more information about the "tragic event".

"The safety and security of our workforce and the communities in which we operate are of the utmost importance and we are monitoring the situation closely," he said.

"The project has temporarily suspended work in the area out of respect for the victims and their families."

The Post Courier had reported 11 villagers were killed in PNG's Southern Highlands Province (SHP) in a tribal fight tied to a land dispute over the LNG project.

ExxonMobil emphatically denied any LNG connection, while Oil Search, a partner in the A$16 billion (US$14.06 billion) LNG project, said only two villagers died in the SHP clash.

Thousands of landowners from a variety of groups are set to profit from the LNG project, which will pump gas starting in 2014 from SHP to the plant site near Port Moresby 600km away, before shipping it to mainly Asian buyers for an estimated 30 years.

Landowners spent weeks last year cutting a deal with the PNG government, but some parties believe they missed out or were excluded from the talks.

ShawCor Receives $170 Mln Pipe Coating Services Contracts for PNG LNG Project

Bredero Shaw has received US$170 million contracts from Mitsui & Co to provide pipeline coatings and related products and services for the PNG LNG Project.

The contracts will be executed at Bredero Shaw's facilities in Kabil, Indonesia and Kuantan, Malaysia. The contracts involve coating approximately 900 km of 8" to 34" pipe that will be protected with three layer anticorrosion or dual layer fusion bonded epoxy coating and SureFlo(TM) internal coating as well as Rock Jacket(R) mechanical protection and concrete weight coating.

PNG’s Esso Highlands Taps Chiyoda, JGC for EPC Work

Chiyoda and JGC Corp have been awarded an EPC, pending final project authorizations. The scope of the work is for a 6.6 million tonnes per annum (MTPA) LNG plant, with two 3.3 million trains, including facilities for inlet processing, treating, liquefaction, storage, and loading. It is estimated that peak employment levels for the plant construction will be 8500 workers. Chiyoda and JGC have formed a joint venture for this project which the joint venture is under Chiyoda's leadership.

SINGAPORE

Singapore LNG Awards EPC Contract for Terminal to Samsung

The Singapore LNG Corporation Pte Ltd (SLNG) has awarded the contract for the engineering, procurement and construction (EPC) of Singapore's LNG terminal to Samsung C&T Corp.

The total budget for the terminal funded by the Singapore Government is S$1.5 billion, of which about S$1 billion is for the EPC contract. SLNG, which owns and oversees the development of the terminal, will issue a "Notice to Proceed" to Samsung to start the detailed design, engineering and construction phases of the terminal immediately

"Samsung and its major sub-contractors involved in the project are well experienced in developing LNG terminals internationally and have solid track records in the industry. With the award of this contract to Samsung, we have taken a major step forward in the project, and can look forward to the start-up of the LNG terminal in 2013," said Lawrence Wong, Chief Executive of the Energy Market Authority (EMA).

Jeong Ki Cheol, Senior Executive Vice President of Samsung C&T said, "Singapore is a key priority to us. We are very excited about the opportunity to work with SLNG on Singapore's first LNG terminal. We hope to leverage on our expertise and experiences, and deliver a successful LNG terminal to Singapore on schedule."

The LNG terminal is expected to be Asia's first open-access, multi-user terminal. The terminal will not only provide capacity for Singapore to import regasified LNG for its own needs, but also open up opportunities for companies to make use of the terminal for LNG trading. "This LNG terminal is an iconic development for Singapore as it gives us access to global gas markets, thereby strengthening supply and improving key infrastructure, which underpins this vibrant economy. It is my hope that the new LNG terminal will be a catalyst for Singapore to become a major LNG hub in the future," said Neil McGregor, SLNG's Executive Director.

In addition to the award of the EPC contract, Foster Wheeler Asia Pacific Pte Ltd (Foster Wheeler) has also been appointed by SLNG to be its Project Management Consultant. SLNG and Foster Wheeler will jointly manage the EPC contractor through an "Integrated Project Management Team" approach, which would allow SLNG to be fully involved in the management of the engineering and construction activities. "Foster Wheeler is a worldwide engineering company and has an excellent reputation in the energy sector. We are combining the strengths of both SLNG and Foster Wheeler to take on the complex task of managing the EPC contractor through to completion. Through this seamless and integrated approach, we will work towards the timely start-up of the LNG terminal," McGregor continued.

The LNG terminal at Jurong Island will have an initial capacity of 3.5 million tonnes per annum (Mtpa), with provisions for expansion to 6 Mtpa or more, if required. The LNG terminal will be located on an approximately 30-hectare site on the south western part of Jurong Island.

TASMANIA

Contract Awarded for Tasmanian Pipeline to GLP Plant

The contract for the gas supply pipeline between the Tasmanian Gas Pipeline and the BOC Micro-LNG Plant being built in Westbury, Tasmania has been awarded.

The contract was awarded to GLP Plant who will design, build and commission the 80 mm diameter, 180 meter long steel pipeline. Trenchless Technology is being considered for crossing sections of the pipeline.

The plant, which is also being designed, built and commissioned by GLP Plant, will have the capacity to provide 50 tonnes per day of LNG to the heavy transport sector.

The plant is expected to be fully operational mid-2010.

EUROPE / AFRICA / MIDDLE EAST

POLAND

Three Consortia Vie for Polish LNG Project

Polish state-owned company Polskie LNG has received offers to build a liquefied natural gas terminal from three consortia, which include Italian, Korean and Polish builders it shortlisted last year, the company said February 5.

The groups are Italy's Saipem SpA with Poland's PBG, Italy's Tecnimont SpA with Poland's Polimex-Mostostal SA and France's Sofregaz SA, and Korea's Daewoo Engineering & Construction Co with Korea Gas Corporation.

Polskie LNG will now negotiate with the bidders who will be expected to file final offers in April. The company plans to sign an agreement with the winning consortium in May.

Construction will begin in the second half of this year, with the terminal set for completion by the end of the first half of 2014.

The LNG terminal's capacity will be 5 billion cubic meters of natural gas a year, which may be expanded to 7.5 billion cubic meters a year. Poland currently consumes around 14 billion cubic meters a year, the company said.

According to earlier reports, the cost of the project is estimated at EUR700 million. The terminal, to be located on Poland's Baltic coast near the border with Germany, is part of the central European country's drive to diversify its potential gas supply sources and reduce its reliance on Russia, which provides 60% of Poland's annual gas supply.

Polish Parliament Approves Two Pipeline Projects along with Amendments for Swinoujscie LNG Project

Two new gas pipelines will be built in southwestern Poland after the Sejm [parliament] on February 19 approved amendments of the law on the Swinoujscie LNG terminal project.

The pipelines are to be built between the town of Lasow on the Polish-German border and gas storage facilities near Milicz. The other pipeline is to connect the towns of Jeleniow and Dziwiszow, near Jelenia Gora. The investor of the two pipelines will be state-owned Gaz-System gas transmission operator.

Deputy Treasury Minister Mikolaj Budzanowski said that although the two government-proposed gas pipelines will be located in southwestern Poland, still they may be treated as investments linked with the LGN terminal in Swinoujscie.

Speaking before the Sejm Treasury Committee, the minister assured MPs that the building of the pipelines will improve Poland's energy security. The development of a center in Lasow will enable the export of gas after the commissioning of the Swinoujscie terminal.

According to plans, the construction of the terminal is to start in the second half of 2010. When ready the terminal will be able to handle up to 5 billion cubic meters of gas per year. If needed, terminal's capacity may be increased to 7.5 billion cubic meters. Currently, Poland's annual gas consumption amounts to around 14 billion cubic meters.

RUSSIA

Gazprom Says Shtokman Gas Field Delayed

Market conditions for liquefied natural gas prompted a decision to delay activity at the Shtokman gas field for several years, Russian gas giant Gazprom said.

Gazprom along with its partners at Norway's Statoil and French supermajor Total said the market situation, "particularly in the LNG market," necessitated a delay for a final investment decision to the end of 2011.

"The FID on pipeline gas is planned to be taken in March 2011, and the FID on LNG before the end of 2011," the Russian gas monopoly said. "According to the shareholders' opinion this will allow for pipeline gas production start up in 2016 and LNG in 2017."

The three companies entered into a joint venture for the Shtokman field in the Barents Sea in February 2008. The field holds an estimated 134 trillion cubic feet of gas, with deliveries of Russian gas slated for markets in the Atlantic basin.

The initial phase of development anticipated yields of 836 billion cubic feet of gas per year, with pipeline deliveries expected by 2013 and LNG by 2014.

Gazprom in July suggested market conditions could force delays at Shtokman, though the company said the partnership remained committed "to actively continue working on its joint implementation."

QATAR

Technip/Chiyoda JV Wins PMP Contract in Qatar

Technip, leader in a joint venture with Chiyoda, has been awarded by Qatar Liquefied Gas Company Limited (Qatargas 1) an engineering, procurement and construction contract for the Plateau Maintenance Project (PMP) in Ras Laffan, Qatar.

Technip and Chiyoda previously carried out the feasibility study, pre-front-end engineering design (pre-FEED) and FEED of the facilities.

The scope of this contract includes a new acid gas removal unit, a new sulphur recovery unit, and modifications to utility systems for handling increased feedgas rates to the existing LNG trains. The contract is scheduled to be completed in 2013.

Qatargas 1, a joint venture composed of Qatar Petroleum, Total, ExxonMobil, Mitsui and Marubeni, has been operating three LNG trains since 1996. These trains are currently producing 10 million tones of LNG per annum.

UNITED ARAB EMIRATES

Bahrain Plans Regas Facilities

Bahrain is to set up facilities to receive hundreds of thousands of tonnes of liquefied natural gas in the next few years to take care of its future energy needs.

Oil and Gas Minister and National Oil and Gas Authority (Noga) chairman Dr Abdulhussain Mirza said two studies have already been done on setting up such facilities in the country and both -- by U.S. companies Shell and Hess -- have found the project viable.

"We have also been told by several gas producing countries they would be extremely interested in exporting gas to Bahrain so we shall ask them to start bidding by the second half of this year," Dr Mirza told the GDN.

"Qatar, Russia and Egypt, among others could be the source of the gas, transported in the liquid form and then turned into gas again to power Bahrain's industries and infrastructure.

"Gas coming into the country in LNG form is extremely safe and does not require the complicated infrastructure commonly associated with pumping in gas through pipelines."

He said the companies bidding for the project could be tendering for the complete package, which will also look after the imports.

He said Bahrain's gas production is already set to more than double to 2.7 billion cubic feet per day in the next few years, from the present 1.3bn cubic feet per day, thanks to the agreement that has been entered into with the new company Tatweer, launched in Bahrain a few days ago.

"In addition to drilling for oil, they will also contribute to increasing gas production in the country.

"This will take care of the demands of Bahrain for the next 15 years. The LNG imports' infrastructure will then be firmly in place and take care of the energy needs then and also act as a back-up."

Dr Mirza said one of the world's largest gas drilling companies had started a survey on whether there is gas in Bahrain deeper than the 16,000 feet that has been drilled for the last 78 years.

"It believes there is gas at between 15,000 and 16,000 feet and it has begun a survey. If there is, we shall enter into a production agreement with that company and if there is nothing, there would be no cost to Bahrain."

McIlvaine Company,

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