Good to have more positive news in this sector. Shell should have a look at CTP. :)
Golar pips Shell as preferred buyer in race for LNG
Matt Chambers | December 29, 2008
Article from: The Australian GLADSTONE liquefied natural gas hopeful LNG Ltd is close to an offtake agreement with shipping company Golar, which is leading Shell as preferred LNG buyer.
Norway-listed Golar is hopeful of wrapping up an offtake and equity stake deal soon, chief executive Gary King told The Australian, indicating that Golar, rather than Shell, is the buyer LNG has been trying to finalise an agreement with.
LNG managing director Maurice Brand has said the company has chosen its preferred buyer, but he remains tight-lipped about whom he was in talks with.
Last week Mr Brand said he expected to announce a deal to the market in early January, and that recent market conditions and sliding oil prices had contributed to a delay in the process.
Shell, which bought a 30 per cent stake in Arrow's LNG ground in June, was seen as the most likely candidate for the deal because Arrow has signed an agreement to supply gas for the plant.
However, this does not look to be the case, at least for the first 1.5 million tonnes a year LNG train planned.
"We are still actively engaged in dialogue with LNG Ltd, trying to finalise arrangements to secure LNG offtake from the Gladstone LNG project," said Mr King, an Australian who worked for Shell before taking the helm at Golar. "We remain hopeful of reaching agreement on this soon."
If successful, UK-based Golar is expected to take a 40 per cent stake in the project, leaving LNG Ltd with 40 per cent and Arrow with 20 per cent.
Since taking its stake in Arrow's ground in June, Shell has been silent on its plans for its Gladstone LNG, and its Perth office has not returned recent calls.
However, in August, Arrow Energy chief executive Nick Davies said Shell wanted offtake from the project and was in talks with LNG Ltd.
Shell has also been silent amid the huge consolidation in the region, as fellow international majors BG Group, Conoco Phillips and Petronas have signed big deals with local players.
The June agreement with Arrow gave Shell the right to offtake the gas, subject to "a binding agreement for such offtake, on market-based terms with the LNG sellers".
Last week, Arrow signed a $551 million deal to buy Pure Energy in a move to shore up enough gas for two LNG trains at Gladstone.
If a second goes ahead, there will be the chance for Shell to buy more LNG, but many analysts have questioned whether the oil major would be interested in such a small stake.
Golar is LNG Ltd's biggest shareholder, with a 16 per cent stake.
