In the latest step toward internationalising the US shale gas boom, the developer of a $10bn LNG export facility in Louisiana has agreed to sell half its stake in the project to a group of Japanese and French companies.

Japan’s Mitsui & Co, Mitsubishi Corp and Nippon Yusen, together with GDF Suez of France, had previously signed on as buyers of the liquefied natural gas that is to be shipped from the planned Cameron LNG facility starting in 2017.

 Now, they have agreed to provide construction financing in return for equity stakes totalling 49.8 per cent, the companies said on Friday. The deal reflects expectations that US restrictions on natural gas exports that have largely limited supplies to domestic customers will soon be eased. >> Read More

So far, so good for “Abenomics”. Japan’s stock markets are soaring, property is bubbling, and consumer confidence is at its highest level for six years.

And after months of expectations for aggressive monetary easing, the yen has been bumping up against the key threshold of 100 to the dollar, a level it last saw just over four years ago.

Since mid-November, when it became clear that Shinzo Abe’s campaign to reflate the world’s third-largest economy would carry him to victory in parliamentary elections, Japan’s currency has lost at least one-fifth against every one of the G10 currencies, causing trading partners from South Korea to Russia to mutter about unfair advantages.

But does a much weaker currency really make Japan Inc a more formidable competitor?

Economists are unsure. In the past, the correlation seemed a reliable one: a weaker yen would lift profits at exporters, who would then plough more funds into hiring, higher wages and capital investment. >> Read More

Japan’s 10 listed power companies will likely have total interest-bearing liabilities of 26 trillion yen for the year ending March, an increase of about 4 trillion yen compared with fiscal 2009, before the earthquake and tsunami hit the Tohoku region in March 2011, The Nikkei learned Tuesday.

The utilities held combined debts of about 25.3 trillion yen at the end of last year. That was equal to about 14% of the 184 trillion yen in debt held by all listed firms whose fiscal year ends in March, excluding financial institutions and start-ups.

When this fiscal year ends in March, the 10 power companies are expected to have total debts of 26 trillion yen, an increase of nearly 1.5 trillion yen on the year. The rise is largely due to higher imports of liquefied natural gas and oil for thermal power stations. Nearly all of Japan’s nuclear plants are off-line for safety checks in the wake of the Fukushima Daiichi meltdown.

In April-December of last year, the 10 utilities spent roughly 5.1 trillion yen on fuel, a year-on-year rise of about 1.2 trillion yen. They have been unable to pay the higher fuel bills through electricity tariffs alone, forcing them to borrow money to make up the difference. >> Read More

Reliance Industries has opposed a move to make marketing margin charged by it and other sellers of domestically produced natural gas uniform, while giving gas importers a free hand, saying that it would be a gross discrimination.

RIL, whose 13.5 cent per million British thermal unit as marketing margin on KG-D6 gas is higher than 11 cents charged on gas produced by ONGC/OIL but lower than 18 cents that GAIL charges for western offshore gas, said there was no legal basis to regulate the levy.

RIL President and COO B Ganguly on November 29 wrote to Oil Secretary debunking oil regulator PNGRB’s reported advice to the government to stipulate a uniform marketing margin for sellers of domestic gas, while giving free hand to sellers of imported liquefied natural gas (LNG) and firms selling CNG to automobiles and piped cooking gas to households. >> Read More

With domestic output stagnating, India will become a net importer of natural gas in next two years with expensive LNG meeting rising energy demand of the growing economy.

 Liquefied natural gas (natural gas cooled to its liquid form for ease of transporting in ships) imports at 39.32 million standard cubic meters per per day constituted 25.5 per cent of the total consumption of the fuel in the country in 2011-12.

This share, according to Petroleum Ministry’s latest estimates, will rise to 41 per cent in current fiscal and to 50 per cent in the next.

In 2012-13, domestic natural gas production is estimated to be around 104 mmscmd, down from 114.90 mmscmd in the previous fiscal. In current year, LNG imports will jump to 73 mmscmd and are projected to further rise to 105 mmscmd in 2013-14, equalling the domestic gas production of that year. >> Read More

Reliance Industries Ltd has cut its estimate of gas reserves in the D6 block off India’s east coast by about two-thirds to 3.4 trillion cubic feet (tcf), the oil ministry said, hurting plans for the country to reduce its gas imports.

The D6 block in Krishna Godavari (KG) basin, jointly operated by Reliance and BP Plc , was expected to contribute up to a quarter of the gas supply for Asia’s third-largest economy.

But output from KG fields has declined, leaving India more dependent on expensive liquefied natural gas (LNG) imports. Development of the field has been beset by arguments over spending and the strategy for tapping its complex geology.

 Reliance’s latest revision compares with its December 2006 estimate of 10.3 tcf of reserves and brings the figure back closer to the November 2004 estimate of 3.81 tcf, the ministry said on Thursday.

The company also has revised its capital spending plan from $8.8i billion in 2006 and $2.4 billion in 2004, it said. >> Read More

A Reliance Industries-led consortium may have to shut key gas producing fields in the KG-D6 block in 2015-16, Oil Secretary G C Chaturvedi said on Tuesday.

Canadian company Niko Resources has a 10% stake in the D6 block in the Krishna Godavari basin, while Reliance and BP, the operators, have 60 percent and 30% respectively.

Currently, the block is producing 26 million standard cubic metres a day of gas from the D1 and D3 fields.

 In response to a question on whether the consortium might have to shut the fields in 2015-16, Chaturvedi said: “That is a fear.”

The consortium has said it will not be able to produce as much gas as anticipated due to geological complexities, the oil ministry says.

The gas block off the country’s east coast has had an unforeseen decline in output that has left India more reliant on expensive liquefied natural gas imports. Analysts Morgan Stanley said on Monday the field could be exhausted in five years. 

Reliance Industries’ key gas producing fields off India’s east coast could be exhausted in five years, Morgan Stanley analysts said in a report. 

The researchers’ findings are based on estimates by block D6 partner Niko Resources that total proved plus probable reserves at the block had decreased to 1.93 trillion cubic feet as of March 31. 

Canadian Niko has a 10 per cent stake in the D6 block in the Krishna Godavari basin, while Reliance and BP, the operators, have 60 per cent and 30 per cent share respectively. 

The block was expected to contribute up to a quarter of the gas supply for Asia’s third-largest economy, but its unforeseen decline in output has left India more dependent on expensive liquefied natural gas (LNG) imports.  >> Read More

The D6 block in Krishna Godavari basin, jointly operated by the two energy companies, was expected to contribute up to a quarter of the gas supply for Asia’s third-largest economy, but its unforeseen decline in output has left India more dependent on expensive liquefied natural gas (LNG) imports.

CAG had last year criticised the government as well as Reliance over development of the KG gas field, which has been beset by arguments over spending and strategy for its complex geology.

“It was … brought to (the companies’) notice that CAG (Comptroller and Auditor General) recommended withholding of sanction to work plans and budgets if access to records is denied to CAG,” the statement said on Tuesday, referring to a meeting between the companies and the ministry on July 13.

Media reported earlier in the day that Reliance and BP had said at the July 13 meeting that D6 would stop producing in 2015 unless the government approved investment plans. >> Read More