It’s been a long time coming, but 2018 will be the year Australia becomes a LNG export powerhouse. After years of delays and billions of dollars wasted from postponements, the final two projects of the initial six LNG projects, tapping into giant natural gas basins in the north and northwest waters off Australia are finally ready. Shell’s Prelude FLNG project, which was once planned to be the first FLNG project in the world until Petronas FLNG Satu and Golar LNG beat them to it – is now ‘materially ready’ to begin production, while Inpex’s Ichthys project is scheduled for a Q218 operational start-up after years of delays. The struggles with meeting timelines isn’t confined to Shell and Inpex; with the exception of Darwin LNG, all of the major Australia north-western projects have struggled with workforce issues and service operations. The slump in crude & LNG prices also thwarted the once best laid plans.
But finally it is done. Australia’s six major LNG projects have added some 41 mtpa of LNG to a global demand base that is still growing strongly. Between now and 2035, natural gas demand is expected to grow at an average of 2% per year; twice the rate of total global energy demand. Demand for LNG is set to increase at an average of 4% per year. This year China overtakes South Korea’s massive appetite for the super-cooled and clean(er) fuel. Japan still holds its number one importer for now. Asian demand grew by more than 17 million tonnes, beating industry predictions going into the year. That is nearly as much as the total volume that Indonesia, the world’s 5th largest exporter, produced in 2017. However there are challenges that come with high LNG consumption growth. Namely, infrastructure. In China, where demand for LNG is expected to double within the next six years, LNG tanks were full to the brim last winter, and it could take no more, resulting in the tanks closed for a few weeks. Other hungry markets like Pakistan and Bangladesh and Vietnam, lack import capacity, which takes time to build hence the idea of deploying floating storage and regasication units (FRSUs) there.
There are also worries, legitimate ones, that increased gas production from the rest of the world, including Russian piped gas and LNG, as well as America entering the fray with recent LNG exports to Europe and China, would spoil the party for the Australians. But it seems that the real victim is Canada. While Australia managed to enter the market in the nick of time – or so it seems – the promised ‘tsunami’ of LNG that would threaten markets in 2022/23, is less of a threat now. And that’s entirely because projects in Canada’s Pacific Northwest – which lagged behind by Australia’s by only a decade at most – did not make financial sense. Particularly given that environmental and indigenous population concerns are exponentially tougher to overcome in British Columbia. Petronas and Nexen have cancelled their projects, and are seemingly rallying behind Chevron’s Kitimat, which itself it facing problems both politically and economically. Meanwhile, American Gulf Coast LNG is nimbly developing along.
While Australia’s LNG appears to have made the grade, will Canada’s projects see the light of day? If you have read Shell’s LNG 2018 outlook report, it may appear so. “Following the wave of investment from 2011 to 2015, final investment decisions (FIDs) on LNG projects have nearly stopped. As LNG projects generally take more than four years to start production, new supply will not be ready until well into the next decade. FIDs on new LNG supply projects are required soon to avoid a supply shortage in the 2020’s.”
Up-coming courses on Gas and LNG in the region
LNG Fundamentals - http://bit.ly/2DqpkXM
Small Scale LNG Operations - http://bit.ly/2IlmXsZ
LNG Bunkering - http://bit.ly/2p91fzw
LNG Terminal Operations - http://bit.ly/2paJM9Q
LNG Markets, Pricing and Risk Management - http://bit.ly/2pf38f5
Gas & LNG Contract Negotiations - http://bit.ly/2DpJm4I
Gas Processing - http://bit.ly/2IowrDz
Advanced LNG Vessel Transfer Ship to Ship (STS) - http://bit.ly/2HPDTXd
Integrated Methods For Offshore LNG Transfer - http://bit.ly/2FUTZOJ
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Malaysia has the fourth largest oil and gas reserve in Southeast Asia and produces a whopping 30,000 megawatts of energy per year. The country continues to be hopeful about the prospects of its oil & gas industry and expects it to contribute meaningfully towards the growth of its economy. But then again, what does it mean for the employees who are working in the industry or plan to enter it? Is it a profitable industry in terms of salary growth and expectations? Let’s figure out what the industry holds for its employees and job seekers of oil and gas jobs in Malaysia.
What does the number say?
The best way to analyze the oil and gas job sector is to look at the recent studies and research conducted, which can give a substantial view into the future of the industry. As per the statistics department, Malaysia saw 8.1% growth in the salary in 2017 amounting to RM 2880 as compared to 2016, in which the average salary recorded was RM 2657. Additionally, the chief statistician of the department, Datuk Seri Dr Mohd Uzir Mahidin, said that an increase in the mean monthly salary and also the wages are in sync with the country’s economic performance. Even the exports indicated to grow by 20.3% which amounts to RM935.5bil. He made these observations based on the results of Salaries and Wages Survey 2017 of oil and gas professionals and entry-level oil and gas job seekers.
What the number means for prospects of oil and gas salary in Malaysia
If the above data is viewed on a sectoral basis, then the mining and quarrying sector indicated the highest monthly salaries as well as wages, which amounted to a mean of RM5,709 and a median of RM3,700.
Datuk Seri Dr Mohd Uzir Mahidin, further added that capital-intensive industries like the oil and gas, which is a major part of mining and quarrying sector, employs professionals, who are highly skilled and hence a bigger paycheck and higher mean and median salary.
The observation made by the chief statistician gets further backing by an online job site’s employment index. Although, it shows a decrease of 11% in May 2018 for the hiring activities in comparison to the previous year. However, it pointed towards a steep growth in the Oil & Gas sector. The hiring activity went up by 14% year-on-year in May 2018.
What can be the salary expectations for energy professionals?
The above studies and research indicate a positive outlook for both upstream and downstream players of this sector. However, it is important to note that a lot of factors help to determine your salary potential, which includes: education, years of experience, expertise, work ethics, job location, skill set and so on.
As per payscale.com, a Petroleum Engineer can earn on an average RM 104,343 per year. Which means an average salary of RM 99,803 with an estimated average bonus of RM 22,500 and profit sharing of RM 5120. Your experience and education play a major role in determining your salary. Similarly, in oil and gas industry, the average salary of a mechanical engineer amounts to RM 72,000 whereas the average salary of Account is RM 82,248 and for Project Engineer is RM 57,000 while a sales manager has the potential of RM 120,000.
Since the industry prefers professionals with high-level skills in the respective areas, it is advisable to enhance your overall employability factors to enjoy higher compensation and perks. And also use oil and gas professional networks to your advantage in getting the desired contacts and opportunities.
Headline crude prices for the week beginning 13 August 2018 – Brent: US$72/b; WTI: US$67/b
Headlines of the week
Source: U.S. Energy Information Administration, Weekly Petroleum Status Report
For the week ending July 6, 2018, the four-week average of U.S. gross refinery inputs surpassed 18 million barrels per day (b/d) for the first time on record. U.S. refineries are running at record levels in response to robust domestic and international demand for motor gasoline and distillate fuel oil.
Before the most recent increases in refinery runs, the last time the four-week average of U.S. gross refinery inputs approached 18 million b/d was the week of August 25, 2017. Hurricane Harvey made landfall the following week, resulting in widespread refinery closures and shutdowns along the U.S. Gulf Coast.
Despite record-high inputs, refinery utilization as a percentage of capacity has not surpassed the record set in 1998. Rather than higher utilization, refinery runs have increased with increased refinery capacity. U.S. refinery capacity increased by 862,000 barrels per calendar day (b/cd) between January 1, 2011, and January 1, 2018.
The record-high U.S. input levels are driven in large part by refinery operations in the Gulf Coast and Midwest regions, the Petroleum Administration for Defense Districts (PADDs) with the most refinery capacity in the country. The Gulf Coast (PADD 3) has more than half of all U.S. refinery capacity and reached a new record input level the same week as the record-high overall U.S. capacity, with four-week average gross refinery inputs of 9.5 million b/d for the week ending July 6. The Midwest (PADD 2) has the second-highest refinery capacity, and the four-week average gross refinery inputs reached a record-high 4.1 million b/d for the week ending June 1.
U.S. refineries are responding currently to high demand for petroleum products, specifically motor gasoline and distillate. The four-week average of finished motor gasoline product supplied—EIA’s proxy measure of U.S. consumption—typically hits the highest level of the year in August. Weekly data for this summer to date suggest that this year’s peak in finished motor gasoline product supplied is likely to match that of 2016 and 2017, the two highest years on record, at 9.8 million b/d. The four-week average of finished motor gasoline product supplied for the week ending August 3, 2018, was at 9.7 million b/d.
U.S. distillate consumption, again measured as product supplied, is also relatively high, averaging 4.0 million b/d for the past four weeks, 64,000 b/d lower than the five-year average level for this time of year. In addition to relatively strong domestic distillate consumption, U.S. exports of distillate have continued to increase, reaching a four-week average of 1.2 million b/d as of August 3, 2018. For the week ending August 3, 2018, the four-week average of U.S. distillate product supplied plus exports reached 5.2 million b/d.
In its August Short-Term Energy Outlook (STEO), EIA forecasts that U.S. refinery runs will average 16.9 million b/d and 17.0 million b/d in 2018 and 2019, respectively. If achieved, both would be new record highs, surpassing the 2017 annual average of 16.6 million b/d.