Santos, BG to link Australia LNG pipelines in bid to cut costs

Thu, Jul 04 01:18 AM EDT By Rebekah Kebede PERTH, July 4 (Reuters) - Australia's Santos Ltd and BG Group PLC agreed on Thursday to link their major gas pipelines, allowing them to buy, sell, and swap gas supplies - a move that will help slash costs at a time when they have been hit by budget overruns. The long-awaited first step toward collaboration between three coal seam gas to LNG projects under construction on Australia's seaboard should result in savings of hundreds of millions of dollars, according to Santos. The connection between the two projects' pipelines will also allow upstream gas field operations to continue when their liquefied natural gas plants are shut for routine maintenance. "We're spending less than $50 million on this, but we think it will generate savings over the long term of many times that," Rod Duke, Santos vice president of Gladstone LNG Downstream, told Reuters. "We expect that this will be just one of many mutually beneficial arrangements across the industry in the future," Duke said. Santos, BG, and Origin Energy are leading the construction of three separate coal seam gas to LNG projects on Queensland's Curtis Island at a total cost of more than A$60 billion ($54 billion) but have been criticized for failing to collaborate and save costs. Santos' Gladstone LNG project has seen its costs jump around 15 percent from $16 billion to $18.5 billion, while BG's Queensland Curtis Island LNG has seen a 36 percent blowout to $20.4 billion from $15 billion, mostly due to a strong Australian dollar. There may also be collaboration with Arrow LNG, a fourth coal seam gas to LNG project that is a joint venture between Royal Dutch Shell and PetroChina , although the project appears to have stalled. This year, Origin Energy offered Arrow the opportunity to work together on the expansion of its A$24.7 billion plant under construction on Curtis Island. ================ Entire Pakistan is talking of this Mega corruption carried out by hungry rulers from PML-N, but shameless brothers are least bothered.They are bent upon doling out such huge amounts of this poor cash starved country without any certification or Audits just in haste to fill their own pockets. The unfortunate part of this episode is that despite such hue & cry from all over the country on these payments, our Mr. Suo-Moto is sleeping as nothing is happening around. The mega corruption of Rs 100 billion in clearing circular debt By Shafiq Awan ISLAMABAD: PML N stalwart will earn Rs 100 billion as commission out of total payment of circular debt 500 billion. The said stalwart is a family member of Mian Nawaz Sharif and holds an important ministry at federal government. He is said to be the caretaker of Mian Nawaz sharif’s finnical interest. Sources disclosed that after this deal it was decided to clear all the circular debt. The political circles and financial experts were surprised to know how a huge amount of 500 billion rupees was set to clear within months. Later it was disclosed by a CEO of an energy company that this was decided after paying 20 percent commission. However he admitted that during past regime this commission was between 10 to 15 percent but PML N Government raised this ratio with the promise of more benefits to the companies. He was hopeful that through 20 percent commission their payments would not be held in future and they would be accommodated in rates as well. He further disclosed that this deal was struck during the recent visit of the Energy and the said Minister to UAE. Sources further disclosed that all the payments have been made in advance in UAE. The said CEO admitted the commission is a routine matter but 5 percent addition by the current regime is the only difference. Sources disclosed that a commission of 20 percent was settled between the Energy companies and PML N to clear the debt. The energy companies were insisting to fix the rate up to the 15 percent but later it was mutually agreed to 20 percent with the commitment that no more companies would not be asked to pay further amount to any government functionaries including ministers. Sources disclosed the Minister related to Energy and power Sector demanded the companies for his share but he was told this job is related to Finance Ministry so he could not be accommodated in this deal as it has nothing to deal with the production of electricity or fixing the rates. Later the said Minister was asked not to interfere in this matter. But his cronies continued pressurizing the energy companies after he was warned again and at a moment he was about to replaced but he was advised to behave and ultimately he decided to surrender. Sources disclosed that the said Minister interfered on the behest of family MNA of Sharifs. Talks underway with India over LNG imports News Comments (0) Online50 min ago | Comments (0) NEW DELHI - Talks between India and Pakistan to export natural gas from the former to the latter through a pipeline are underway. State gas utility GAIL’s Chairman and Managing Director B Tripathi proposed to lay a 110 km pipeline from Jalandhar to the Wagah border via Amritsar to supply natural gas to Pakistan. Gas in its liquid form (liquefied natural gas or LNG) will be imported via ports in Gujarat and will be moved through GAIL’s existing pipeline network till Jalandhar. The proposed line will ensure the transfer of gas from Jalandhar to Wagah. “Pakistan has demonstrated interest in taking LNG from us to meet its energy demand and the export is techno-commercially feasible. We can carry the process forward if the government of India approves it and if we can reach a commercial agreement,” Tripathi said. Pakistan initially wanted to import 1-1.5 million tonnes of LNG, however, pricing and other commercial negotiations are currently ongoing, he added. LNG imports to India currently range between $13 and 14 per million British thermal units after including customs or import duty, pipeline transportation charges and local taxes, thus the price upon delivery will be close to $21. Although Pakistan currently does not have an LNG import facility, it is willing to buy LNG from GAIL provided that India exempts it from taxes to bring down the cost.