BP » Topics » Liquefied natural gas

This excerpt taken from the BP 20-F filed Mar 4, 2008.
Liquefied natural gas
Our LNG and new market development activities are focused on establishing international market positions to create maximum value from our upstream natural gas resources and on capturing third-party LNG supply to complement our equity flows.
     BP Exploration and Production has interests in a number of major existing LNG supply projects: Atlantic LNG in Trinidad & Tobago, Bontang in Indonesia and the North West Shelf (NWS) project in Australia. Additional LNG supplies are being pursued through an expansion of the existing LNG facilities at the NWS project in Australia and green-field developments in Indonesia (Tangguh) and Angola.
     We continue to access major growth markets for the group’s equity gas in the Pacific region. During 2007, development continued on the Tangguh LNG project (BP 37.2% and operator) from which the first commercial delivery is expected in early 2009. Tangguh will be the third LNG centre in Indonesia and has signed sales contracts for delivery to customers in China, South Korea and the west coast of Mexico. During 2007, further progress was made in securing contracts for LNG to be derived from the remaining uncontracted reserves at the NWS project. Agreements for the supply of LNG to Japan have been signed with Chugoku Electric, Kyushu Electric, Tohuku Electric and Toho Gas and for the supply of LNG to South Korea with the Korean Gas Corporation (KOGAS). The Guangdong LNG re-gasification and pipeline project in south-east China, in which BP is the only foreign partner, completed installation of its third storage tank in the third quarter of 2007, increasing its throughput to 7 million tonnes per annum. In addition to LNG supplied under a long-term contract with the NWS project, the terminal took delivery of an additional seven spot cargoes during the year, to meet rapidly growing local demand for gas.
     In the Atlantic and Mediterranean regions, BP is creating opportunities to supply LNG to North American and European gas markets. The fourth LNG train at Atlantic LNG in Trinidad, with a capacity of 5.2 million tonnes per annum (253,000mmcf), began operations in late 2005. These BP-marketed volumes supplement a 2005 long-term agreement with EGAS of Egypt to purchase 1.45 billion cubic metres per year of LNG from the Spanish Egyptian Gas Company (SEGAS) plant at Damietta, and a short-term contract to purchase LNG from Oman and periodic spot purchases of LNG. BP is marketing its LNG entitlement directly, utilizing BP-controlled LNG shipping and contractual rights to access import terminal capacity in the liquid markets of the US (via Cove Point and Elba Island) and the UK (via the Isle of Grain). In Spain, environmental permits have been issued to allow an expansion of the Bilbao re-gasification terminal in which BP has a 25% equity stake.
     In Nigeria, discussions are ongoing following the 2006 signing of a memorandum of understanding for the purchase of LNG from Brass

River LNG. A final investment decision is expected in 2008 and could lead to first LNG in 2012.
     BP continues to seek approvals for a new terminal development in the US. The proposed 1.2 billion cubic feet per day (bcf/d) Crown Landing terminal is to be located on the Delaware River in New Jersey. The Federal Energy Regulatory Commission (FERC) granted its approval for the siting, construction and operation of this project during 2006. BP continues to work with state agencies in New Jersey to complete state permitting requirements and with the relevant federal, state and local authorities to put in place security plans for the facility and associated shipping activities. BP is also monitoring the progress of a proceeding filed by the State of New Jersey against the State of Delaware in the US Supreme Court concerning New Jersey’s jurisdiction over developments on its shores, including the project’s loading jetty that extends into the Delaware River. The US Supreme Court heard the New Jersey versus Delaware case on 27 November 2007 and a decision from the court is expected in 2008.

This excerpt taken from the BP 20-F filed Mar 6, 2007.
Liquefied natural gas
Our LNG and new market development activities are focused on establishing international market positions to create maximum value from our upstream natural gas resources and on capturing third-party LNG supply to complement our equity flows.
     BP Exploration and Production has interests in major existing LNG projects in Trinidad, ADGAS in Abu Dhabi, Bontang in Indonesia and the North West Shelf in Australia. Additional LNG supplies are being pursued through an expansion of the existing LNG facilities at the North West Shelf project in Australia and greenfield developments in Indonesia (Tangguh) and Angola. BP has no proved reserves associated with its interests in LNG projects in Abu Dhabi and Angola.
     We continue to access major growth markets for the group’s equity gas. In Asia Pacific, agreements for the supply of LNG from the Tangguh project (BP 37.2%) have been signed with POSCO and K-Power for supply to South Korea and with Sempra for supply to the Mexican and US markets. Together with an earlier agreement to supply LNG to China, these agreements mean that markets for more than 7 million tonnes a year (380bcf) of Tangguh LNG have been secured. In March 2005, Tangguh received key government approvals for the two-train launch and the project consortium is now executing the major construction contracts, with start-up planned in late 2008. During 2006, further progress was made in securing contracts for LNG to be derived from the remaining uncontracted reserves at the North West Shelf project.
     In the Atlantic and Mediterranean regions, significant progress has also been made in creating opportunities to supply LNG to North American and European gas markets. The fourth LNG train at Atlantic LNG in Trinidad, with a capacity of 5.2 million tonnes per annum (mtpa) (253bcf), began operations in late 2005. BP is marketing its LNG entitlement directly, utilizing BP-controlled LNG shipping and contractual rights to access import terminal capacity in the liquid markets of the US (Cove Point and Elba Island) and the UK (Isle of Grain). These BP-marketed volumes supplement a 2005 long-term agreement with Egyptian Natural Gas Holding Company (EGAS) of Egypt to purchase 1.45 billion cubic metres per year of LNG from the Spanish Egyptian Gas Company (SEGAS) plant at Damietta, short-term contracts to purchase LNG from Oman and Qatar and periodic ‘spot’ purchases of LNG. We have signed a memorandum of understanding with Brass River LNG in Nigeria to purchase around 2 million tonnes a year of LNG, starting in 2010 for 20 years, which will be supplied to multiple markets in the Atlantic basin.


 

32  

Back to Contents

     In south-east China, the Dapeng LNG import and regasification terminal and Trunkline Project (BP 30%) in Guangdong province received its first commissioning cargo during May 2006 and commenced commercial operations in September. LNG for the terminal is supplied under a long-term contract signed with Australia LNG in October 2002 that involves deliveries from the North West Shelf project (BP 16.7% infrastructure and oil reserves/15.8% gas and condensate reserves).
     BP continues to progress options for new terminal development in the US. The proposed 1.2 billion cubic feet per day (bcf/d) Crown Landing terminal is to be located on the Delaware River in New Jersey. The Federal Energy Regulatory Commission (FERC) granted its approval for the siting, construction and operation of this project during 2006. BP continues to work with the State agencies in New Jersey to complete State permitting requirements and with the relevant federal, state and local authorities to put in place security plans for the facility and associated shipping activities. BP is also monitoring the progress of a proceeding filed by the State of New Jersey against the State of Delaware in the US Supreme Court concerning New Jersey’s jurisdiction over developments on its shores, including the project’s loading jetty that extends into the Delaware River. The court has agreed to hear the case.

This excerpt taken from the BP 20-F filed Jun 13, 2006.

Liquefied Natural Gas

        Within BP, Exploration and Production is responsible for the supply of LNG and the Gas, Power and Renewables business is responsible for the subsequent marketing and distribution of LNG (see details under Gas, Power and Renewables — New Market Development and LNG in this Item on page 67). BP Exploration and Production has interests in four major LNG plants. The Atlantic LNG plant in Trinidad (BP 34% in Train 1, 42% in Trains 2 and 3, and 37.8% in Train 4); in Indonesia through our interests in Sanga-Sanga PSA, (BP 38%), which supplies natural gas to the Bontang LNG plant, and Tangguh (PSA, BP 37%), which is under construction; and in Australia through our share of LNG from the North West Shelf natural gas development (BP 16.7%).

42



        Significant activity during 2004 included the following:

    We have a 10% equity shareholding in the Abu Dhabi Gas Liquefaction Company, which in 2004 supplied 5.9 million tonnes (302 bcf) of LNG, up 9% on 2003.

    In Australia, we are one of six equal partners (BP 16.7%) in the NWS Venture. The joint venture operation covers offshore production platforms, a floating production and storage vessel, trunklines, onshore gas processing plants and LNG carriers. During 2004, a fourth LNG Train (capacity 4.2 million tonnes/191 bcf per annum) and a second trunkline were commissioned. A ninth LNG carrier was also commissioned during the year. NWS produced 9.3 million tonnes (424 bcf) of LNG, an increase of 15% on 2003.

    In Indonesia, BP is involved in two of the three LNG centres in the country. Firstly, BP participates in Indonesia's LNG exports through its holdings in the Sanga-Sanga PSA (BP 38%). Sanga-Sanga delivered around 25% of the total gas feed to the Bontang LNG plant, the world's largest, in 2004. The Bontang plant produced 20 million tonnes (914 bcf) of LNG in 2004, a reduction of 3% on 2003.

    Also in Indonesia, BP has interests in the Tangguh LNG joint venture (BP 37% and operator) and in each of the Wiriagar (BP 38% and operator), Berau (BP 48% and operator) and Muturi (BP 1%) PSAs in Northwest Papua that will supply feed gas to the Tangguh LNG plant. In March 2005, Tangguh received key government approvals for the launch of two trains and is now executing the major construction contracts, with start-up planned late in 2008. Tangguh is expected to be the third LNG centre in Indonesia, with an initial capacity of 7.6 million tonnes (388 bcf) per annum. Tangguh has signed sales contracts for delivery to China, Korea, and North America's West Coast.

    In Trinidad, construction at the Atlantic LNG Train 4 (BP 37.8%) continued to proceed as planned and was estimated two-thirds complete at end 2004. Train 4 is designed to produce 5.2 million tonnes (253 bcf) per annum of LNG. BP expects to supply at least two thirds of the gas to the train. The facilities will be operated under a tolling arrangement, with the equity owners retaining ownership of their respective gas. The LNG is expected to be sold in the USA, Dominican Republic, and other destinations at the option of the owners. The project is on schedule for end 2005 start-up with the first LNG cargo scheduled for December 2005. BP's net share of the capacity of Atlantic LNG Trains 1, 2 and 3 is 4.5 million tonnes (212 bcf) of LNG per annum.

43



REFINING AND MARKETING

        Our Refining and Marketing business is responsible for the supply and trading, refining, marketing and transportation of crude oil and petroleum products to wholesale and retail customers. BP markets its products in over 100 countries. We operate primarily in Europe and North America, but also market our products across Australasia and in parts of Southeast Asia, Africa and Central and South America.

 
  Years ended December 31,

 
  2004

  2003

  2002

 
  ($ million)

Turnover (a)   179,587   149,477   125,836
Total operating profit   6,084   2,483   1,969
Total assets   66,289   58,602   54,505
Capital expenditure and acquisitions   3,014   3,080   7,753

 

 

($ per barrel)

Global Indicator Refining Margin (b)

 

6.08

 

3.88

 

2.11

(a)
Excludes BP's share of joint venture turnover of $594 million in 2004, $453 million in 2003, and $415 million in 2002.

(b)
The Global Indicator Refining Margin is the average of six regional industry indicator margins which we weight for BP's crude refining capacity in each region. Each regional indicator margin is based on a single representative crude with product yields characteristic of the typical level of upgrading complexity. The refining margins are industry specific rather than BP specific measures, which we believe are useful to investors in analysing trends in the industry and their impact on our results. The margins are calculated by BP based on published crude oil and product prices and take account of fuel utilization and catalyst costs. No account is taken of BP's other cash and non-cash costs of refining, such as wages and salaries and plant depreciation. The indicator margin may not be representative of the margins achieved by BP in any period because of BP's particular refining configurations and crude and product slate.

        There are four areas of business in Refining and Marketing: Refining, Retail, Lubricants and Business to Business Marketing. Our strategy is to continue our focused investment in key assets and market positions. In all areas, we aim for greater operational efficiency, and at the same time we seek to improve our asset portfolio. The acquisition of Veba's marketing and refining operations in 2002 provided an important addition to our operations, particularly in Germany.

        Refining and Marketing manages a portfolio of assets that we believe are competitively advantaged across the chain of downstream activities. Such advantage may derive from several factors, including location, operating cost and physical asset quality.

        We are one of the major refiners of gasoline and hydrocarbon products in the USA, Europe and Australia. We have significant retail and business to business market positions in the USA, UK, Germany and the rest of Europe, Australasia, Africa and Southeast Asia and we are enhancing our presence in China and Mexico.

        During the course of 2004, BP disposed of its one-third share of the Singapore Refining Company Private Limited, with one sixth being sold to each of Caltex Singapore Private Limited and Singapore Petroleum Company Limited. The sale was completed in June. The refinery had total crude distillation capacity of 248,000 barrels per day. BP also terminated refining operations at the ATAS Refinery in Mersin, south eastern Turkey. The site had a crude distillation capacity of 100,000 barrels per day and will continue to operate as a fuels terminal.

44



        BP announced the sale of its 70% share in its Malaysia fuels business to 30% shareholder Lembaga Tabung Angkatan Tentera (LTAT). The business comprises 240 service stations, a modern fuel terminal and two joint-venture automated LPG bottling plants with turnover of $500 million and employs 250 staff. The transaction is expected to complete in the third quarter of 2005.

        In July 2004 BP announced conditional agreement had been reached with Singapore Petroleum Company Limited (SPC) for sale of BP's retail and LPG business in Singapore. The retail business comprises 30 stations and associated business administration and the LPG business comprises BP's 70% shareholding in BP Wearnes Gas Ltd. The transaction was completed in the third quarter of 2004.

        During 2003, divestments mandated in connection with the Veba transaction as a condition of regulatory approval of the deal were completed with the sale of a 45% stake in Bayernoil refinery, an 18% stake in the Trans Alpine Pipeline (TAL), 741 retail stations in Germany, 55 stations in Hungary and 11 in Slovakia in separate packages to PKN Orlen and OMV AG, for a total of $580 million in cash and assumption of debt.

        Capital expenditure and acquisitions in 2004 was $3,014 million compared with $3,080 million in 2003 and $7,753 million in 2002 (including $5,038 million for the Veba acquisition). Excluding acquisitions, capital expenditure was $2,831 million in 2004 compared with $3,006 million in 2003 and $2,682 million in 2002. Capital expenditure excluding acquisitions is expected to be around $3.2 billion in 2005.

This excerpt taken from the BP 20-F filed Jun 30, 2005.

Liquefied Natural Gas

        Within BP, Exploration and Production is responsible for the supply of LNG and the Gas, Power and Renewables business is responsible for the subsequent marketing and distribution of LNG (see details under Gas, Power and Renewables — New Market Development and LNG in this Item on page 62). BP Exploration and Production has interests in four major LNG plants. The Atlantic LNG plant in Trinidad (BP 34% in Train 1, 42% in Trains 2 and 3, and 37.8% in Train 4); in Indonesia through our interests in Sanga-Sanga PSA, (BP 38%), which supplies natural gas to the Bontang LNG plant, and Tangguh (PSA, BP 37%), which is under construction; and in Australia through our share of LNG from the North West Shelf natural gas development (BP 16.7%).

41



        Significant activity during 2004 included the following:

    We have a 10% equity shareholding in the Abu Dhabi Gas Liquefaction Company, which in 2004 supplied 5.9 million tonnes (302 bcf) of LNG, up 9% on 2003.

    In Australia, we are one of six equal partners (BP 16.7%) in the NWS Venture. The joint venture operation covers offshore production platforms, a floating production and storage vessel, trunklines, onshore gas processing plants and LNG carriers. During 2004, a fourth LNG Train (capacity 4.2 million tonnes/191 bcf per annum) and a second trunkline were commissioned. A ninth LNG carrier was also commissioned during the year. NWS produced 9.3 million tonnes (424 bcf) of LNG, an increase of 15% on 2003.

    In Indonesia, BP is involved in two of the three LNG centres in the country. Firstly, BP participates in Indonesia's LNG exports through its holdings in the Sanga-Sanga PSA (BP 38%). Sanga-Sanga delivered around 25% of the total gas feed to the Bontang LNG plant, the world's largest, in 2004. The Bontang plant produced 20 million tonnes (914 bcf) of LNG in 2004, a reduction of 3% on 2003.

    Also in Indonesia, BP has interests in the Tangguh LNG joint venture (BP 37% and operator) and in each of the Wiriagar (BP 38% and operator), Berau (BP 48% and operator) and Muturi (BP 1%) PSAs in Northwest Papua that will supply feed gas to the Tangguh LNG plant. In March 2005, Tangguh received key government approvals for the launch of two trains and is now executing the major construction contracts, with start-up planned late in 2008. Tangguh is expected to be the third LNG centre in Indonesia, with an initial capacity of 7.6 million tonnes (388 bcf) per annum. Tangguh has signed sales contracts for delivery to China, Korea, and North America's West Coast.

    In Trinidad, construction at the Atlantic LNG Train 4 (BP 37.8%) continued to proceed as planned and was estimated two-thirds complete at end 2004. Train 4 is designed to produce 5.2 million tonnes (253 bcf) per annum of LNG. BP expects to supply at least two thirds of the gas to the train. The facilities will be operated under a tolling arrangement, with the equity owners retaining ownership of their respective gas. The LNG is expected to be sold in the USA, Dominican Republic, and other destinations at the option of the owners. The project is on schedule for end 2005 start-up with the first LNG cargo scheduled for December 2005. BP's net share of the capacity of Atlantic LNG Trains 1, 2 and 3 is 4.5 million tonnes (212 bcf) of LNG per annum.

42



REFINING AND MARKETING

        Our Refining and Marketing business is responsible for the supply and trading, refining, marketing and transportation of crude oil and petroleum products to wholesale and retail customers. BP markets its products in over 100 countries. We operate primarily in Europe and North America, but also market our products across Australasia and in parts of Southeast Asia, Africa and Central and South America.

 
  Years ended December 31,

 
  2004

  2003

  2002

 
  ($ million)

Turnover (a)   179,587   149,477   125,836
Total operating profit   6,084   2,483   1,969
Total assets   66,289   58,602   54,505
Capital expenditure and acquisitions   3,014   3,080   7,753

 

 

($ per barrel)

Global Indicator Refining Margin (b)

 

6.08

 

3.88

 

2.11

(a)
Excludes BP's share of joint venture turnover of $594 million in 2004, $453 million in 2003, and $415 million in 2002.

(b)
The Global Indicator Refining Margin is the average of six regional industry indicator margins which we weight for BP's crude refining capacity in each region. Each regional indicator margin is based on a single representative crude with product yields characteristic of the typical level of upgrading complexity. The refining margins are industry specific rather than BP specific measures, which we believe are useful to investors in analysing trends in the industry and their impact on our results. The margins are calculated by BP based on published crude oil and product prices and take account of fuel utilization and catalyst costs. No account is taken of BP's other cash and non-cash costs of refining, such as wages and salaries and plant depreciation. The indicator margin may not be representative of the margins achieved by BP in any period because of BP's particular refining configurations and crude and product slate.

        There are four areas of business in Refining and Marketing: Refining, Retail, Lubricants and Business to Business Marketing. Our strategy is to continue our focused investment in key assets and market positions. In all areas, we aim for greater operational efficiency, and at the same time we seek to improve our asset portfolio. The acquisition of Veba's marketing and refining operations in 2002 provided an important addition to our operations, particularly in Germany.

        Refining and Marketing manages a portfolio of assets that we believe are competitively advantaged across the chain of downstream activities. Such advantage may derive from several factors, including location, operating cost and physical asset quality.

        We are one of the major refiners of gasoline and hydrocarbon products in the USA, Europe and Australia. We have significant retail and business to business market positions in the USA, UK, Germany and the rest of Europe, Australasia, Africa and Southeast Asia and we are enhancing our presence in China and Mexico.

        During the course of 2004, BP disposed of its one-third share of the Singapore Refining Company Private Limited, with one sixth being sold to each of Caltex Singapore Private Limited and Singapore Petroleum Company Limited. The sale was completed in June. The refinery had total crude distillation capacity of 248,000 barrels per day. BP also terminated refining operations at the ATAS Refinery in Mersin, south eastern Turkey. The site had a crude distillation capacity of 100,000 barrels per day and will continue to operate as a fuels terminal.

43



        BP announced the sale of its 70% share in its Malaysia fuels business to 30% shareholder Lembaga Tabung Angkatan Tentera (LTAT). The business comprises 240 service stations, a modern fuel terminal and two joint-venture automated LPG bottling plants with turnover of $500 million and employs 250 staff. The transaction is expected to complete in the third quarter of 2005.

        In July 2004 BP announced conditional agreement had been reached with Singapore Petroleum Company Limited (SPC) for sale of BP's retail and LPG business in Singapore. The retail business comprises 30 stations and associated business administration and the LPG business comprises BP's 70% shareholding in BP Wearnes Gas Ltd. The transaction was completed in the third quarter of 2004.

        During 2003, divestments mandated in connection with the Veba transaction as a condition of regulatory approval of the deal were completed with the sale of a 45% stake in Bayernoil refinery, an 18% stake in the Trans Alpine Pipeline (TAL), 741 retail stations in Germany, 55 stations in Hungary and 11 in Slovakia in separate packages to PKN Orlen and OMV AG, for a total of $580 million in cash and assumption of debt.

        Capital expenditure and acquisitions in 2004 was $3,014 million compared with $3,080 million in 2003 and $7,753 million in 2002 (including $5,038 million for the Veba acquisition). Excluding acquisitions, capital expenditure was $2,831 million in 2004 compared with $3,006 million in 2003 and $2,682 million in 2002. Capital expenditure excluding acquisitions is expected to be around $3.2 billion in 2005.

"Liquefied natural gas" elsewhere:

Chevron Corporation (CVX)
Total S.A. (TOT)
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki