Warren R. True
Chief Technology Editor-LNG/Gas Processing
BANGKOK, Mar. 11 -- Industry keynote speeches opening Gastech 2008 in Bangkok centered on the bright future of natural gas, especially LNG; the need for cooperation among international oil companies, national oil companies, and resource-host governments; and the critical role technology will play in industry's growth to 2030.
One speaker later in the day offered a view of the LNG industry that runs counter to the prevailing view of the dominance of Asia-Pacific markets.
Delivering keynotes were Chevron Asia Pacific Exploration & Production Co. Pres. Jim Blackwell, ExxonMobil Gas & Power Marketing Co. Pres. Andy Swiger, and Jon Chadwick, executive vice-president, Asia-Pacific, for Shell Gas & Power. An industry-contrarian view was presented by Stefan Judisch, chief executive officer for RWE Gas Midstream.
The keynote also announced advance of an offshore project in the Gulf of Thailand from Chevron and initiation of new technologies from Shell.
Gastech 2008, being held Mar. 10-13, has drawn more than 2,000 delegates and 3,000 exhibitors and other visitors, according to conference officials. They are touting this year's event as the largest in its 35-year history.
Meeting anticipated growth in gas demand to 2030, according to Blackwell, requires three principles to strengthen industry partnerships: shared respect, shared capabilities, and shared rewards.
He named the Angola LNG project as an example in which partnerselements of NOC Sonagol and the various IOC companieshave worked in shared respect to overcome inherent conflicts of interest to achieve common goals. Partners in the project announced a final investment decision at yearend 2007.
Blackwell cited Chevron's nearly 30-year contract with PetroChina to develop major fields in the country for which Chevron, exemplifying shared capabilities, called on its expertise in handling sour gas as key to project success.
To illustrate his principle of shared rewards, Blackwell announced the advance to FID for construction of the Platong Gas II natural gas project in the Gulf of Thailand (OGJ Online, Mar. 10, 2008). Total development cost of the field is about $3.1 billion with start-up set for first quarter 2011, he said.
The shallow-water Platong Gas II development, 120 miles offshore, will add 420 MMcfd processing capacity and feed growing Thailand gas demand. Chevron operates the field and holds a 69.8% participating interest with Mitsui Oil Exploration Co. Ltd. (27.4%) and PTT Exploration & Production PCL (2.8%).
ExxonMobil's Swiger reviewed the company's growth prospects for gas generally and LNG specifically. Overall energy growth to 2030 will advance by 1.3%/year with fossil fuels being indispensable to meeting that growth and natural gas advancing to meet 25% of demand, up from 20% in 2007.
Technology advances will be critical for supply to meet demand by, importantly, enabling higher gas production as LNG to move from remote sites.
Perhaps most importantly, according to Swiger, is the need for strong, sustaining partnerships among IOCs, NOCs, and governments in emerging countries that host new gas developments.
Underscoring the role technology is to play in helping LNG to maintain and expand its role in bringing new gas supplies to markets, Shell's Chadwick announced two new technologies that are advancing toward implementation.
One is Shell's Automated Cool-Down that monitors and controls cooling in liquefaction plants' main cryogenic heat exchangers. The tool addresses the occasional problem of bundle tube leaks in the MCHE. The leaks, he said, can cause unexpected unit shutdowns. Further, the tool "leads to rapid start-up and less flaring."
Shell also announced in Chadwick's remarks that it was proceeding with development of floating LNG aboard a vessel 400 m by 75 m wide and capable of producing 3.5 million tonnes/year. The design also embodies hydrocarbon liquids handling capabilities.
Although he avoided tagging the FLNG plans with cost estimate or production timetable, Chadwick said that within 4 months, the company would issue an international tender to selected consortia consisting of Japanese and Korean shipyards and EPC contractors.
In an afternoon address, Judisch stated that the immediate future of LNG is not one of Asia-Pacific drawing away all supply. That, he said, is conventional wisdom. In fact, in the "next few months," several capacity additions are due for Asia and the Middle East, culminating in 2010 with as much as 96 million tonnes/year coming to the marketplace.
His central message was that "markets work", and he cited as an example how Woodside has been building new LNG trains every 2 years.
Moreover, he said recent history shows US Henry Hub and Europe's National Balancing Point above Japanese Crude Cocktail (JCC) pricing; "it can happen again," he said, as the number of short-term cargoes increases and LNG supply and market flexibility grow.
"We now have an overbuild of regasification with more than half existing terminals empty," Judisch said. Floating LNG is "an answer" to managing the imbalance between production and regasification.
Contact Warren R. True at email@example.com.