Wednesday, 19 June, 2024 / Edition 12

I hope the dads of our industry enjoyed some much-deserved love this past weekend! My youngest daughter drove home to play a round of golf with my better half and me. It was a lot of fun.

Now, let me share two pieces of news on the LNG business.

Shangyou Nie

Editor, Well Read

Aramco Signs Heads of Agreement with NextDecade for Rio Grande LNG

Ayman Zaid/Shutterstock.com

The world’s largest oil company is entering the U.S. LNG market. Aramco signed a Heads of Agreement with NextDecade for 1.2 mtpa LNG offtake rights. This is NextDecade’s second agreement with a major Middle Eastern oil company on Rio Grande LNG, as they work toward FID for Train 4.

Catch up fast:

• On 13 June, NextDecade signed a non-binding HOA with Aramco.

• Aramco will purchase 1.2 mtpa from Train 4 for 20 years on a FOB basis, with gas prices indexed to Henry Hub.

• The two sides are negotiating a binding agreement, subject to Train 4 FID, which is scheduled for Q4 2024.

Key context:

• Aramco is growing its international LNG portfolio “to expand its presence in global energy business,” according to President Nasir K. Al-Naimi. It entered the global LNG market in September 2023.

• NextDecade is currently constructing Phase 1 of Rio Grande LNG in Corpus Christi, Texas. The first three trains will have 17.6 mtpa of capacity.

• Stakeholders hope to leverage the project’s prime location to draw inexpensive gas from the Eagle Ford and Permian basins.

• ADNOC and NextDecade signed an agreement on 20 May.

• ADNOC will take a 11.7 percent upstream equity stake in Phase 1 and buy 1.9 mtpa from Train 4.

What to watch:

• U.S. LNG continues to attract international investors, including Middle Eastern players Qatar Energy, ADNOC, and now, Aramco. Who’s next?

• The draw for new LNG market players will create opportunity for U.S. gas/LNG companies and investors to partner with them.

• LNG technical and commercial specialists might find good employment or service opportunities.

A message from AspenTech

Available now for FREE download:

Formation Evaluation for a Sustainable Future

Compliments of AspenTech, this whitepaper will give insights into:

1️⃣ Formation evaluation techniques—including seismic imaging and well logging—that can be repurposed to assess subsurface conditions for sustainability projects
2️⃣ Digital solutions that help ensure economic feasibility and safety, while improving collaboration, communication, and regulatory conformance in geothermal and CCS projects
3️⃣ Informed decision-making around natural resource utilization, promoting sustainability

Golar LNG to Assist Nigeria with FLNG

GreenOak/Shutterstock.com

According to Upstream Online, Nigerian National Petroleum Corp. (NNPC) signed a project development agreement with Golar LNG to deploy a floating LNG (FLNG) vessel in Nigerian waters.

Key context:

• FLNG technology targets small to mid-size gas fields that are not big enough to warrant an onshore LNG project.
• The project’s first gas production is targeted for 2027, with FID expected before year end 2024.

• The vessel will be installed in either OML 86 or 88, which is estimated to contain 2.8 tcf of untapped gas.

• The world FLNG market currently has 16.8 mtpa total capacity.

Who is Golar LNG?

• Golar LNG is a specialized LNG developer for floating LNG, which aims to help commercialize offshore gas.

• The company is listed on the NASDAQ and has a market cap of $3 billion.

• Golar LNG currently has two FLNG projects, 2.7 mtpa in Cameroon, with the upstream field operated by Perenco, and 2.4 mtpa in Senegal and Mauritania operated by BP.

• Golar LNG is the global leader with 5.1 mtpa FLNG capacity, followed by ENI (4.0 mtpa), Shell (3.6 mtpa), Petronas (2.7 mtpa), and NFE (1.4 mtpa).

NNPC and the Nigerian market:

• Nigeria has more than 200 tcf of gas, according to EIA.

• Shell is leading a six-train Nigeria LNG project that is producing 22 mtpa, with partners TotalEnergies, ENI, and NNPC. Train 7, with a capacity of 4.2 mtpa, is in construction.

Why it matters: As more of these projects and investments accrue, it seems floating LNG may be a viable commercial solution for some offshore gas fields.

👍 If you enjoyed this edition of Well Read, consider supporting AAPG's brand of newsletters by forwarding to a friend or colleague and signing up for our other newsletters here.

➡️ Was this newsletter forwarded to you? Sign up for Well Read here.

✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.