Shell close to clinching Hong Kong’s first LNG import deal

Shell’s Prelude LNG tanker. The oil and gas major is close to clinching a deal to supply 1.2 million tons per annum of LNG to Hong Kong over a 10-year period starting in 2020. (AFP)
Updated 15 March 2018
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Shell close to clinching Hong Kong’s first LNG import deal

SINGAPORE: Royal Dutch Shell is close to bagging a deal to supply Hong Kong with liquefied natural gas (LNG), beating out major competitors for the right to be the first company to supply LNG to the city.
Shell has edged out companies such as Malaysia’s Petronas to supply LNG through a long-term contract to Hong Kong utility CLP Power, two sources familiar with the matter told Reuters.
Hong Kong is undertaking a massive shift to using more natural gas to fuel its electric power generation from coal, potentially creating a steady and lucrative demand source in the Asian LNG market.
Under the deal, Shell will supply about 1.2 million tons per annum (mtpa) of LNG for about 10 years starting after 2020, the sources said, declining to be named as they were not authorized to speak to the media.
However, the supply agreement will be subject to a final investment decision (FID) for an offshore LNG import terminal that will include a floating storage and regasification unit (FSRU), one of the sources said.
It was not immediately clear if the deal was binding or a memorandum of understanding.
CLP and Petronas did not immediately reply to requests for comment. Shell declined to comment on the specific deal and said it “continuously seeks opportunities to grow and improve profitability.”
“This may include talking with third parties from time to time, any conversations are confidential,” a spokeswoman said.
As part of its commitment to the Paris Climate Change Agreement, Hong Kong is aiming to increase the use of natural gas in its total fuel mix for power generation to about 50 percent by 2020 from 22 percent as of 2012.
Hong Kong currently produces power using imported fuel in domestic power plants or from imported natural gas from the mainland. The country’s coal-fired plants will reach the end of their useful life in the next decade.
Hong Kong’s gas demand is expected to grow after 2020 as a result of efforts to meet environmental targets, said Edmund Siau, an LNG analyst with consultancy FGE.
“A mixture of LNG imports and increased pipeline gas imports from China will likely help to meet this demand growth,” he said.
CLP Power is building a new gas-fired generation unit at its Black Point Power station at a cost of HK$5.5 billion ($701.42 million) which will start operations by 2020, according to the company’s 2017 annual report.
It is also planning to develop an offshore import terminal using the FSRU that will be located in the southern waters of Hong Kong, according to the report.
CLP is now undertaking an environmental impact assessment of the Hong Kong Offshore LNG Terminal project, which involves the FSRU, said a spokeswoman from the country’s Environmental Protection Department.
Apart from CLP Power, privately-owned Hong Kong Electric Company is also looking to import LNG, a source familiar with the matter said. Hong Kong Electric did not immediately respond to an email seeking comment.
In 2008, CLP scrapped a $1-billion LNG plant after China signed an agreement with Hong Kong to guarantee a steady supply of energy to the city for a further 20 years.


UAE gives 6,800 investors permanent residency under new ‘Golden Card’ system

Updated 42 min 51 sec ago
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UAE gives 6,800 investors permanent residency under new ‘Golden Card’ system

  • Permanent residency will be granted to foreign investors after they invest a combined $27 billion in the Gulf state
  • The UAE cabinet also approved providing renewable 10-year visas to foreigners with investments in the UAE of at least 10 million dirhams

DUBAI: The United Arab Emirates said on Tuesday it will grant 6,800 foreign investors permanent residency under a new “Golden Card” system after they invested a combined 100 billion dirhams ($27 billion) in the Gulf state.
Typically, foreigners have renewable visas valid for only a few years, often tied to employment, but the government announced plans last year to ease its visa policy.
“We launched a new ‘Golden Card’ system to grant permanent residency to investors and exceptional doctors, engineers, scientists and artists,” Sheikh Mohammed bin Rashid Al-Maktoum, the ruler of Dubai and the vice president and prime minister of the UAE, said in a tweet on Tuesday.
“The first batch of 6,800 investors with 100 billion dirhams worth of investments will be granted the ‘Golden Card.’“
In May last year the Gulf Arab state announced plans to grant long-term permits to investors, senior scientists and entrepreneurs, in an effort to support its economy and real estate market, which had been hurt by low oil prices, but had not mentioned the Golden Card.
Economic growth has slowed since a slump in oil prices in 2014 and white-collar professionals are seeing stagnant or even falling employment.
“The permanent residency ‘Golden Card’ will be granted to exceptional talents and everyone who positively contributes to the success story of the UAE,” Sheikh Mohammed said his tweet.
Last year, the UAE cabinet also approved providing renewable 10-year visas to foreigners with investments in the UAE of at least 10 million dirhams, if non-real estate assets account for at least 60 percent of the total. Investors can bring spouses and children into the country.
It also approved five-year residency to owners of UAE real estate worth at least 5 million dirhams.