Daily Digest: March 4th, 2020

SANTOS, BP TEAM UP FOR OZ CARBON CAPTURE PROJECT

Santos has entered a non-binding agreement with BP that could lead to the UK major investing A$20mn (US$13.2mn) in the Australian producer's Moomba carbon capture and storage (CCS) project in South Australia.

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The Big Picture:

• A final investment decision on the project is targeted for the end of 2020, Santos said, adding that front end engineering design work had begun.

• "Australia needs low-cost, large-scale abatement to maintain our position as a leading energy exporter and manufacturer of energy-intensive materials such as steel and cement, as well as to enable new industries such as hydrogen,” Santos CEO Kevin Gallagher said.

CANADA’S TOURMALINE SEEKS GREATER MARKET DIVERSITY

Canada’s Tourmaline Oil, the country’s largest natural gas producer at nearly 1.5bn ft3/day, said it will continue to seek greater market diversification – in North America and elsewhere – while also greening its gas production.

The Big Picture:

• In releasing its Q4 2019 results, Tourmaline pointed out that it is already the largest gas producer in Alberta’s Deep Basin and the third largest in the prolific Montney play straddling the BC-Alberta border.

• But it also has the lowest greenhouse gas (GHG) emissions intensity of any Canadian senior producer, and cut its overall CO2emissions by 46% between 2013 and 2018.

SEMPRA SELECTS BECHTEL FOR PORT ARTHUR EPC WORK

Sempra Energy and Bechtel have signed a fixed-price engineering, procurement and construction (EPC) contract for the Port Arthur LNG liquefaction project under development in Port Arthur, Texas, the companies said March 3 in a joint statement.

The Big Picture:

• The scope of the agreement also includes continuing pre-final investment decision engineering to better assure project cost and schedule certainty, the companies said.

• The Port Arthur LNG development project is expected to initially include two liquefaction trains, two LNG storage tanks and related infrastructure necessary to provide liquefaction services, with a nameplate capacity of approximately 13.5mn metric tons/year of LNG.

• In January, Sempra and Saudi Aramco signed an interim provisional agreement for transferring equity in the Port Arthur project.

MCDERMOTT TO PROCEED WITH $2.7BN SALE OF TECH ARM

US-based McDermott International confirmed on March 3 it will push ahead with the $2.73bn sale of its technology business Lummus to a joint venture between US investment firms Chatterjee Group and Rhone Capital.

The Big Picture:

• McDermott, which has struggled with mounting debt since the $6bn merger of its offshore engineering business with Chicago Bridge and Iron (CB&I) in 2018, announced in late January it would file for Chapter 11 bankruptcy protection.

• Lummus is a licensor of gas processing, refining, petrochemical and coal gasification technologies, as well as a supplier of proprietary catalysts, equipment and related engineering services.

• Among its recent awards, Lummus was hired late last year to license out its ethylene production and separation technology for a $11bn gas-based petrochemical project in Russia.

FORTUM, KVAERNER EYE CARBON CAPTURE PLANS

Fortum is investigating the possibility of carbon capture and storage (CCS) plants under a broad co-operation agreement with Norwegian engineering firm Kvaerner, the Finnish state entity said March 2.

The Big Picture:

• Like other European utilities, Uniper has already embarked on the decarbonisation path and it is planning to unveil its longer-term strategy March 10.

• This will involve conversion to gas, which is the fastest way to achieve carbon savings in power generation, industry, space heating and transport, and could help Europe cut carbon emissions by up to 65%.

CAMEROON'S ETINDE PARTNERS AWARD FEED CONTRACT

The partners at the Etinde block in the shallow waters off Cameroon have awarded a front-end engineering design (Feed) contract to oilfield services provider TechnipFMC for development of the IM gas condensate field.

The Big Picture:

• TechnipFMC will work with the venture's partners, UK-based Bowleven and New Age (African Global Energy), and Russia's Lukoil, to lead the onshore and offshore elements of the Feed programme.

• "The award of a lead Feed contractor is a significant milestone for the JV partners, as we look to make a final investment decision on Etinde in 2020," Bowleven CEO Eli Chahin commented.

• New Age also signed a letter of intent in February on the supply of Etinde's gas to London-listed Victoria Oil and Gas, to supplement the latter's own supplies to Cameroon's power sector.

WARTSILA GETS O&M CONTRACT FOR EL SALVADOR GAS PLANT

Finland's Wartsila has landed a 15-year operation and maintenance (O&M) contract for a 378-MW gas-fired power plant in El Salvador, it said.

The Big Picture:

• It will be the largest and most efficient plant in El Salvador, Wartsila said, covering around a third of the Latin American country's electricity needs and helping it to reduce the use of oil and heavy fuel in power generation.