BG Delivered 49 LNG Cargoes in Q1, UK

BG Delivered 49 LNG Cargoes in Q1

BG Group said on Thursday that it has delivered 49 LNG cargoes in the first quarter of 2013, four fewer than in 2012. Cargo deliveries comprised 33 to Asia, 10 to South America, 4 to the USA and 2 to Europe (2012 : 53 cargoes: 34 Asia, 12 South America, 5 USA and 2 Europe).

The company’s LNG Shipping & Marketing total operating profit increased 3% to $742 million, as the benefit of lower hedging losses was partially offset by the impact of reduced margins, predominantly as a result of the pricing change on cargoes delivered to Chile , and fewer cargo deliveries.

BG Group’s Chief Executive, Chris Finlayson said: “As I outlined in February, we continue a relentless focus on safety as well as excellence in execution across our growth projects and base assets. We have made a good start to the year, delivering the three key milestones for the first quarter, whilst also making progress with our project execution programme for the year.

First quarter results were consistent with our expectations and guidance. Earnings were down 3%, reflecting the impact of lower production volumes and increased costs in the Upstream segment. LNG Shipping & Marketing total operating profit was up 3% at $742 million , which is in line with our 2013 outlook. Additionally , cash flow from operations was up 3% to $2.7 billion and gearing ended the quarter at 23.5% .

We set three key project milestones for the first quarter and we have delivered on those commitments. In Brazil, the second FPSO began operations on time and on budget, while in the UK, Elgin/Franklin resumed production from three wells and our Everest East expansion project was brought onstream. Additionally, future 2013 project milestones remain on target, most notably with FPSO 3 now moored on location and all modules for Jasmine installed ahead of expected start – up in the fourth quarter.”

On the Group’s major growth projects, Chris highlighted continuing progress saying: “In Australia, despite the impact of heavy rain throughout the first quarter on our drilling activities and pipeline construction, we made good progress on the QCLNG project and remain on target for both first LNG in 2014 and the $20.4 billion Phase 1 cost estimate. We were slightly behind our first quarter well target; however, we have already recovered the impact on drilling activities and expect to make up the pipeline schedule impacts during the course of the year.

We achieved a critical milestone by safely connecting Curtis Island to the mainland via Australia’s longest large – diameter underwater pipe – pull beneath the Narrows Crossing. At the terminal on Curtis Island, all 62 modules required for Train 1 and the common facilities have been delivered, and the 900 tonne steel dome roof on the first LNG storage tank has been raised.

In Brazil, the start – up of our second FPSO , on schedule and budget , has increased total gross production from our interests in the Santos Basin to around 140000 barrels of oil equivalent per day. The third FPSO is on schedule to start production in the second quarter, while work on the fourth and fifth FPSOs is around 60% complete, with one en route from China to Brazil .”

Chris added: “Elsewhere in our portfolio, we completed a successful appraisal at the Jodari and Mzia fields offshore Tanzania with results showing better than expected reservoir properties. We also finalised the agreement for the long – term sale of up to 2.5 million tonnes per annum of LNG to India , and in Egypt, as part of our recovery plan, we sanctioned the next development phase for the West Delta Deep Marine concession with drilling now started ahead of new production in 2014. While our receivable balance in respect of domestic gas sales was reduced by $0.1 billion from year end, we continue to monitor the business environment in Egypt closely. ”

In conclusion Chris said: “I am pleased with the delivery of our key milestones in the first quarter. We have made a good start to the year and while there is still more to accomplish, I am encouraged by the progress we are making against our remaining 2013 targets .

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LNG World News Staff, May 2, 2013; Image: BG