What’s New – The Blog Spot

Posted by on Jun 5, 2014 in News | 0 comments

Leigh Bolton RETIRES

Leigh Bolton has retired from April 2017 and Holmwood Consulting Limted will formally close it’s doors at the end of the year. It has been a particular pleasure to work with many, many great people around the World over the years and I will miss this interaction, if not the work hassle.

I intend some more pleasurable travelling in the next years – no rushing around to meetings anymore – and to leisurely explore new places and some old favourites. Others have said that since retiring they wonder where they the time to work – we will see.

All the best to you for the future !!

**********************************************

LNG Life Cycle Assessment of Greenhouse Gas Emissions

I don’t often give other consultancy companies free advertising but this valuable study on “LNG and Coal Life Cycle Assessment of Greenhouse Gas Emissions” gives very good information and is definitely worth reading. It was undertaken to evaluate greenhouse gas (“GHG”) emissions from the LNG life cycle and compare them with GHG emissions from the coal life cycle. The scope of this assessment includes an estimate of the total life cycle GHG emissions (in metric tonnes of CO2 equivalent per megawatt hour) for each segment of the LNG supply chain from the well head, to the liquefaction plant, aboard a tanker for export, at the LNG receiving terminal, and as end-use for power generation. This assessment amounts to a life cycle analysis, or LCA. In addition to the LNG LCA, a coal LCA was performed to calculate emissions throughout the lifecycle process of coal extraction, transportation, and end-use combustion for power generation.

The Pace Global consultancy study found greenhouse gas (GHG) emissions from coal-generated electrical power to be 92 percent to 194 percent higher than power generated from U.S.-produced LNG in five key international markets.

**********************************************

The message from LNG18: A need to change course and strategies – Perth, Australia

The clear message from LNG18 was that the LNG industry must no longer take growth for granted. As an industry, it was assumed that the demand growth would come automatically (even though some lone voices were urging caution), and more dramatically that the environmental and economic case was absolutely compelling. We didn’t need to engage in forming public opinion or in many cases listen to customers. The huge drop in oil price and its knock on to LNG pricing has thrown these false assumptions into disarray. Typically, with demand growth by LNG use as marine fuel probably delayed by at least 10 years due to oil pricing. The stark reality check has been a while coming but now we all need to take note and revise strategies, whether you are a seller, a buyer, a trader or indeed Government/ Regulator.

There is also growing consensus by big industry that LNG’s build-it-and-they-will-come approach of recent years is massively out of step with today’s markets ……….. the change of recent years from demand led liquefaction build projects to sheer profit making build programmes with high cost plant no longer applies. And, as world governments turn their attention to COP21 climate targets, the industry will now have to work ever harder to persuade the wider public that LNG offers a safe, clean and cost-effective alternative to traditional “dirty” fossil fuels.

We have had the wake up call. Now, is the time to change course but not come to a full stop.

******************************

Review of LNG Global Congress Asia 2016 – SingaporeSingapore_Casino

The 2016 conference programme was again well designed to be informative (obviously) but also to allow debate and discussion of the key topics facing the Asian LNG business today. In many ways the conference continued the debates raised in the series 2015 conferences from Singapore, Houston and London with the benefit of another year’s knowledge and the arrival of the first real volumes leaving US shores – albeit going to Brazil. Inevitably, there was considerable discussion of LNG pricing developments and effects, the new Singapore “Sling” Asian benchmark, and updates from US LNG projects and the effect this new US LNG might have on the Asian buyer market in terms of volumes and price until the middle of next decade. There were again a number of key buyer market sessions with representatives from Japan, Korea, China and South East Asia (particularly the Philippines) in terms of demand centres. Unfortunately for some reason both Indian buyer presentations had to be withdrawn as their presenters just failed to attend the conference – very bad reflection on them and their organisations.

Considering the current low LNG prices and the fact that many organisations are cutting back heavily on any “non-core” (probably better described as “non-profit making”) activities, I have to say that it was still reasonably well attended on Day 1 with a good mix of delegates across geography and parts of the LNG supply chain and, I think, more investors and legal eagles. For some inexplicable reason, however, numbers appeared to halve for Day 2 (possibly an indication of the pleasures of the Singapore night life), but then “upped” again with many local traders arriving for the sell-out Platts LNG Forum at the end of the day. I don’t envy conference organisers in the current market, as they are also presumably under short term profit targets.

So what were our top take-aways from this as Holmwood Consulting’s Principal Leigh Bolton had the privilege to sit on the US LNG Panel discussion and to act as conference Chairman. As I mentioned in a previous blog, perhaps this gives me a unique position to comment.

  1. The event was primarily very interesting to observe the continued intense interest and questioning concerning the estimated 62M tonnes of new US LNG arriving by end of decade and where it was going to go – too expensive for Asia (and now poor demand prospects in time period under discussion); little required in Europe (despite Brussels politicians talking it up), and South American and Middle East markets being relatively small. A large slice of reality is now arriving on all sides of this debate as the first US LNG left Sabine Pass for Brazil.
  2. There was considerable discussion around the many analyst and media reports that “most” of the new US LNG exports would be coming to Europe, instead of Asia, to “save us” from the nasty Russian gas imports. The author sat on the US LNG panel and expressed some dismay and confusion over the many “political” reports and statements being made and sought to bring some clarity to what “bringing to Europe” actually meant. The European gas market has considerable import piped gas supply on long-term contracts with take or pay levels which have been at minimum over recent years – these would be ramped up as demand was seen to return. Gazprom will vigorously defend its position and the author positioned that they would defend market share over price considerations. Norwegian piped gas is priced against TTF gas hub so US LNG will be no threat to this. In addition, of course, there are existing European long and medium term LNG SPAs with Nigeria and Qatar amongst others which will be honoured.
  3. So, what does “bringing to Europe” really mean? There is no doubt that European import terminals are heavily under-utilised with lots of available storage. This, of course, does not mean much arriving US LNG held will regasified into the Euro gas markets, although clearly some will. A key point to note here is that although Spain has considerable LNG import infrastructure, its domestic gas market is already heavily supplied and there is only a single 3bcm pipeline to get gas out of the country and this is already pretty full. Perhaps, what we are really saying is the European terminals will become a storage “sink” for US LNG which will subsequently be traded on and/ or reloaded. As an after-thought, perhaps this is reflected in the fact that many trading houses, including Asian company traders, are now increasing their LNG trading desks in London and elsewhere in Europe in preparation for this occurrence, much as was seen for Singapore when Asian trading was going to arrive over recent years
  4. No clear answers came forth from this “US LNG” panel debate but it was clear that while US LNG “had done its job” in challenging the established global pricing mechanisms before any volume had been produced. A reality check on where produced volumes might actually be regassed and used remained a matter of speculation in such an over supplied LNG world. The author questioned how much flexibility in terms of “turn down” there would be in US export plants in the current market although there is little doubt that as global demand returns the US exports will be the mosr responsive and first to take up the slack.
  5. This huge and growing LNG supply over-hang and it’s consequent stimulus for the short-term (spot) raised a number of interesting points from debate, including the fact that we are already seeing multiple trades (increased churn) of a single cargo before delivery. The effects of this growing short term trade raised some interesting discussion around pricing benchmark development and hedging requirements, plus the fact that new buyer importers were clearly still in favour of long term contracts, particularly as many of these were for power generation use.
  6. There were, of course, a number of delegate questions to speakers about the possibilities of new global liquefaction plant FIDs in the short to medium term which inevitably led to a selection of comments on winners and losers in terms of geography, size and technology.
  7. There was a brief but wide ranging discussion around cargo-reloading that highlighted disparate views from delegates and speakers but came down to the fact that with prices converging globally there was little or no incentive for traders to do this for arbitrage but, particularly in Asia, we were seeing operational cargo-reloading becoming more prevalent.
  8. An extremely interesting debate occurred, following a legal presentation, around the expectation that there will be increasing buyer pressure for numerous Asian long-term SPA price renegotiations to occur in the short term. The impetus has clearly been set by the Petronet-RasGas successful price renegotiation and it was clear that lawyers are gearing up in the region for many more such price renegotiations, even where there is no price review clause within the contract.
  9. Conference networking was both relaxed and intense – always a very good sign – plus from anecdotal comments with sponsors and others they felt they were doing useful business.
  10. Lastly, a feature for me was once again the active interest by all in the Small-scale LNG Summit day – clearly a rapidly growing area in Asia for both onshore and ship bunkering and definitely one to watch.

So, in summary another excellent LNGgc Asia event based on the very active delegate discussions, networking and “business on the side” but clearly effected by the current market and cost saving conditions in the O&G industry generally.

These thoughts on the conference are the authors alone, and he will be happy to discuss anything commented upon.

Leigh Bolton

************************************************

NordStream 2 as EU Gas Supply or Weapon of War? – Europe

We recently came across a challenging and very interesting lecture by Prof. Alan Riley on the proposed NordStream 2 gas pipeline for further supply of natural gas from Russia to the EU, during which he presents salient arguments on the difficulties to bring Nord Stream 2 within the stated EU Energy Union policy to ensure supply and route diversity. Prof. Riley looks expressly at the EU policy and broader legal issues concerning this project and, as a non-lawyer myself, presents the issues in a clear and convincing manner.

We would direct all interested parties to view the video of this event for themselves at  https://www.youtube.com/watch?v=4BZbDScG4sU

***********************************************************************

Media links Holmwood Consulting Limited to new LNG Consulting and Training JV venture – India

Somewhat to our amazement, it has been reported in a 25 January 2016 online article (http://corporateethos.in/featured/petronet-to-float-lng-consultancy-jv-scouts-for-partners/) that India’s Petronet is scouting JV partners for its new LNG consulting and training venture and may consider Holmwood Consulting.

“Public sector Petronet LNG, (Petronet) the prime mover in the India’s natural gas space, is planning to enter the LNG (liquefied natural gas) consultancy and training business, a nascent but promising commercial proposition in the region. At least four UK-based global oil and LNG consultancy and training majors are on the Petronet’s radar as plausible suitors for the proposed joint venture. Currently, this business (LNG consultancy and training) is dominated by the UK-based multi-location multinationals.  The company has not yet opened any talks with any of the potential suitors, but a few are in the radar.  Industry sources said those companies in Petronet radar for its LNG consultancy and training JV may be the UK-based FGE, Holmwood Consulting Ltd, the Cleveland-based LNG Consultancy Ltd and MJMEnergy Ltd.  All the four currently dominate the LNG consultancy and training space and are likely suitors for Petronet’s new JV”

***********************************************************************

KAPSARC – Saudi Arabia

Our Principal, Leigh Bolton, was recently invited to visit the impressive King Abdullah Petroleum Studies and Research Centre (KAPSARC) in Riyadh, Saudi Arabia from 23 to 26 November 2015.  This relatively new facility for energy research and knowledge is still growing but boasts a number of award winning architectural buildings.

KAPSARC02KAPSARC03KAPSARC01

 

 

 

 

Perhaps, more impressive is their movement to become a world leading independent energy research centre with some 18 nationalities already represented on compound. Holmwood Consulting delivered a very well received 3-day Natural Gas Industry capability building workshop for 15 KAPSARC staff during this period.

 

************************************************************************

Perspectives on LNG Global Congress Americas 2015 – HoustonHouston

The programme had been extremely well designed to put context to, and challenge some of the media myths around, the future LNG export from North America – much has been printed over recent times about a “flood” of US LNG exports and the supposed market destinations of such exports. There were a number of buyer market sessions with representatives from Japan, Korea and South East Asia in terms of demand centres (with discussion of China also) and from Europe, discussion of the developing Latin American and Caribbean markets, as well as updates from several of the LNG export projects from the USA and Canada.

So what were my top take-aways from this as I had the privilege last week to Chair this inaugural Americas conference as part of the series which has been held successfully in Europe and Asia (which I also Chair) over a number of years and perhaps this gives me a unique position to comment.

Firstly, I have to say that it was reasonably well attended with a good mix of delegates across geography and parts of the LNG supply chain. It was primarily very interesting to observe the intense interest and questioning of the buyers position in terms of actual future volume and pricing requirements. It was also very clear that in some cases this was a bit of an eye opener for American export orientated delegates. The US and Canadian project updates also seemed to me to be a bit more realistic than I had heard last year – pragmatism had dawned and the so-called “flood” was now being seen as more of a steady (but no less important) trickle. The effect (and non-effects) of the low oil price and Henry Hub gas pricing and “security of supply” versus FOB contracting were also seen as a hot discussion topic with some interesting results. Latin America and Caribbean were discussed and seen as an interesting but more complex market than many had assumed. The conference networking was both relaxed and intense which is always a very good sign. Another feature for me was the active interest by all in the Small-scale LNG Summit which majored on LNG as a ship fuel and what was useful experience from Europe, and what was not – clearly an area to watch in the Americas market

As a first “out of the box” for the conference series in the Americas it was without doubt a huge success from delegate comments and I would just note anecdotally one from a US company attendee – “the most useful and best LNG conference I’ve been to for many years!” Well done to IBC Energy for putting on this event and, of course, for inviting me to Chair it – looking forward to 2016 conference already.

These thoughts on the conference are the authors alone, and he will be happy to discuss anything commented upon.

Leigh Bolton

*********************************************************************

Perspective on the World Gas Congress 2015 – ParisParis

Unfortunately, I could not attend the WGC myself this year but have been interested in the many comments and reviews that I have seen from this. References to the impending ‘golden age’ of gas which had previously abounded were absent from this important conference with gas demand not looking healthy in Europe and question marks over consumption in some of the key LNG importers in Asia such as South Korea and Japan.  From an LNG perspective, a key issue that (re)emerged was how countries with natural gas resources must find ways to balance raising revenue from LNG production while meeting increasing domestic energy demand – Indonesia and Nigeria were referenced as classic examples.

One of the most interesting reviews I’ve read was Gas Mid-life Crisis? by Nikos Tsafos, enalytica. His review indicated an event full of anxiety—which did not feel like the “golden age of gas” and felt more like a midlife crisis. The anxiety detected was this: what if the rest of the world starts to look like Europe? What if countries find that coal and renewables (and nuclear) offer a better path forward than natural gas? What future does gas have then? Can gas compete?

While the outlook for gas in some Asian countries such as China is pretty positive, the industry in Europe was seen to face more of a challenge than ever and to need far greater political support and intervention. The overall natural gas, and by implication the LNG, industry has for many years been seen as a “bridge to the future” (whatever this means or turns out to be) but perhaps now IS the time to re-consider this and explore a new positioning for natural gas as we move forward.

************************************************************************

Small & Medium Scale LNG Terminals – VaasaVaasa01

***********************************************************************

Senior Management  Oil & Gas Capability Building – HelsinkiHelsinki

************************************************************************

Kitimat goes to Oman LNGOman LNG

This post is something rather different in that it references a video showing how LNG Canada/ Shell took representatives of the First Nations and local community to visit a working LNG export plant in Oman. This is superb (can’t think of a bigger superlative!) commitment bringing the local community into the Canadian LNG project and understanding what it means for their locality – a huge pat on the back for Shell for organising this initiative.

Watch this video of their trip and reactions.

************************************************************************

LNGgc Asia Pacific conference – Singapore

including a full-day HCL workshop on “LNG Trading, Portfolios, Risk & Hedging”suntec 

Holmwood Consulting’s Managing Director, Leigh Bolton, was pleased to again Chair this cutting edge conference on 9-12 February 2015. See short video here for flashback on 2014’s sell-out conference.

Holmwood Consulting’s Associate, Alan Whitefield and Leigh Bolton were pleased to also deliver this well-received workshop at the February 2015 LNGgc  Asia conference at the Suntec Centre in Singapore.

Thanks to those that attended.

************************************************************************

Essentials of the Oil & Gas IndustryCairoCairo

Holmwood Consulting Limited are pleased to announce that we have recently contracted with local training provider Hudson Egypt to deliver a brand new, expanded, cutting edge 3-day Oil & Gas training course, with a focus on the upstream, exclusively for the Egyptian market. First delivery of this course will occur towards the end of 2015.

This is part of the ongoing revamp of our training provision worldwide for 2015 and beyond. See link for more information on this exciting new course.

************************************************************************

Senior Management Oil & Gas Capability Building – Houston

************************************************************************

Essentials of Gas Trading & RiskLondon Olympics London

Many thanks to participants from ArcelorMittal (France), GdF Suez E&P (UK), United Biscuits (UK),  Enel Trade SPA (Italy, ENI Trading (Belgium), Ezpada AG (Switzerland and POZAGAS AS (Slovakia) who made this 2014 December 15-16, 2-day course in London such a success covering the aspects of the rapidly changing European gas trading markets and key developments.

  ************************************************************************

Perspectives on the 2014 EAGC – Londoncontact

The 2014 European Autumn Gas Conference was held in London this year from 28-30 October and, for a change, I was in the right place to attend. Over the Trader’s Forum and subsequent 2-days of main conference there were the usual excellent Board level panel speakers and a good quality of delegates, but I left with an impression that Europe is in a “holding pattern” and waiting for the shoe to drop regarding gas. The advent of US coal and its pricing being a proxy for shale gas exports to Europe, but with the dangerous side effect that it puts most CCGTs out of the money and encourages coal fired power generation in the absence of any realistic carbon penalties, appears to have to left us with an additional layer of confusion that is seemingly hard to work through.

Some quick bullets:

  • There was the expected heavy and sometimes heated debate centred around Russia-Ukraine, excellently facilitated (as always) by my old friend Jonathan Stern from OIES
  • The traders were very clear that to make money in European gas trading “Origination” had to be taken to the next level with the need to create more products around client services, managing client assets and increased value offerings rather than the traditional spot trading activity.
  • Martin Houston’s (a sad loss to BP in my opinion and now CEO at Parallax)  main conference Day 1 keynote summed up a lot in the first presentation – “Crisis? What Crisis?”.
  • However, on Day 2 another major speaker, Han Fennema (CEO Gasunie) referred to a Belgian saying …… we need “to put the church back in the centre of the village” ………….. as being key for European gas which has kind of lost it’s way and been side-lined, perhaps even officially via Brussels.
  • A point raised for some further pondering was that Europe is penalising the wrong thing with the ETS (assuming it has any value in its revamped format) and that the CO2 equivalent needs to be widened to encompass SOx and NOx emissions, as per transportation standards
  • Another old friend, Alex Barnes’ (Gazprom Marketing & Trading) amusing cartoon-based presentation once again highlighted that even now the Brussels regulators do not understand how the industry works, are not listening and were creating new Codes that were blatantly laughable and ridiculous in the extreme.
  • I also detected an ongoing theme throughout with the perhaps surprising focus on LNG for what is essentially a “piped gas” conference. Europe was quoted variously as being the “new global LNG sink”and the “global swing market due to reload activities” at a time when we have flat or negative demand forecasts on European gas needs as far out as we can see.  Still, it gives the import terminal operators a new profitable line of business.

Overall, my lasting impression was one of very cautious optimism by all which is probably a small step up from the downright pessimism of 12 months ago.

***********************************************************************

Small & Medium Scale LNG Terminals – Finland, India & SingaporeIndia

***********************************************************************

Negotiating Successful Gas & LNG Contracts – PRC ChinaChina Guangdong Dapeng

During August 2014, Holmwood Consulting’s Principal had the pleasure of delivering a highly successful in-house capability building session in Shenzhen China for Guangdong Dapeng LNG.

This course covering piped gas and LNG contracts and their negotiation was heavily attended with members from commercial, planning and strategic planning departments.

************************************************************************

Shanghai LNG Masterclass – PRC China

Thank you to all attendees for a wonderful week in Shanghai!

CDMC Shanghai

CDMC Shanghai

Participants from JAPEX (Japan), China Tianchen Engineering Corporation (China), GEA Refrigeration, Baker & McKenzie (Hong Kong), Eaton Shanghai (China) and Wartsila took part in the 3-day “Mastering Global LNG” Masterclass at the Doubletree Hilton in Shanghai-Pudong PRC on 4-6 June 2014.

The program was highly interactive with lively debate and discussion on the global dynamics shaping the LNG business today and China’s developing natural gas and LNG role. Presentations were complimented by group work and exercises. The latest trends in the industry, including developments such as FLNG technology and the commercial impacts of US LNG exports for Asia, were also covered.

                                            IMG_1236

  Working Hard on Group Activity

*************************************************************************

London Essentials of Gas Trading & Risk – London

Participants from BP Gas (Spain), OMV Trading (Romania), Edison (Italy), Total Gas & Power (UK) and Naturgas Energia Commercializadora (Spain) all benefitted from this sunny April 2014, 2-day course in London covering the European gas trading markets and developments.

*************************************************************************

Investor Round Table – SingaporeSingapore skyline

Leigh Bolton hosted a “closed” investor round table lunch at the prestigious Tower Club Restaurant with magnificent views across the Singapore skyline on 7 March 2014 discussing developments in Floating LNG from both a FLNG production and FSRU basis.

The event was very well attended with around 20 key investor representatives, and a vigorous Q&A session. Our thanks to Jane Yao for an excellent event organised by GLG’s Singapore office .

*************************************************************************

In-company Capability Building –  WorldwideAd2keyboardglobe

The visit to Vaasa Finland at end of October 2013 to present the customised, 2-day Fundamentals of Oil & Gas Industry brought to an end over 2 years enjoyable and successful Learning & Development capability building events for Wartsila to position and develop into the O&G industry with a greater focus and knowledge. During this time “sell-out” events had been held in Wartsila major offices around the world including Houston USA, Dubai UAE, Singapore, Quito Ecuador, Rio de Janeiro Brazil,  Stavanger Norway, Shanghai PRC as well as several in Vaasa itself.

Holmwood Consulting Limited is now working with Wartsila on more focussed in-house capability building activities, particularly regarding LNG import terminals, with events held in Singapore, Mumbai and Vaasa.

************************************************************************

Akfel Group photoNegotiating LNG & Gas Contracts – Turkey

Staff and guests of the Akfel Group took part in the “Negotiating Successful Gas and LNG Contracts” training course in Istanbul at the end of September 2013.  Leigh Bolton, and friend and colleague Dr. Yvonne Barton, delivered the gas and LNG training programme to staff of Akfel, SOCAR Trading, ENERCO and GasTrans in Istanbul. Holmwood Consulting thanks our Associate, Angus Warren, for organising this highly successful event.

industry-training

 

Leigh Bolton explains US Sabine Pass LNG offtake contract pricing

 

 

 

The programme was highly interactive with lively debate and discussion on the latest trends in gas and LNG contracts. Presentations were complimented by case studies, group work and exercises.

The following comments were provided by delegates:

“Positive in all means.  Thank you.”

“Helpful to create new products for our customers (trading companies).”

“Improved the know-how and vision, positive effect.”

 

 

Bookmark and Share

Leave a Reply

Your email address will not be published. Required fields are marked *