In this issue

 

Friday, 02 September 2016

The US Federal Energy Regulatory Commission (FERC) has prepared a final environmental impact statement (EIS) for the Golden Pass LNG Export Project proposed by Golden Pass Products, LLC and Golden Pass Pipeline, LLC.

Northwest Europe is evolving beyond being ‘a market of last resort’ for US LNG, as rising gas prices on the forward curve are propping up the economics and profit margins for shipping cargoes across the Atlantic. Just short of 70 mtpa nameplate capacity will be commissioned by 2019 from five US liquefaction projects. Over in France, the Dunkirk regas terminal awaits its commissioning cargo by July 8.

Over $5.3 billion have been spent to widen the Panama Canal – a strategic shortcut for sea voyages between the Atlantic and Pacific oceans. Exporters of US shale gas now aspire to send up to 550 LNG tankers by 2021 through that vital sea-link from the US Gulf Coast to Asia.

A 3-month clock has started ticking for Canada’s prime minster Justin Trudeau to make a decision on the Petronas-led Pacific NorthWest LNG project on Lelu Island, BC. The count-down started after the project’s final filing was posted on the website of the Canadian Environmental Assessment Agency on June 27. [ http://www.ceaa-acee.gc.ca/050/document-eng.cfm?document=114745 ]

Wednesday, 06 July 2016

Eying to export LNG from the US Gulf Coast, Houston-headquartered Eos Investment Group has started the permitting process in Chile for a Floating Storage and Regasification Unit (FSRU) to be deployed as an import terminal. Meant to become Chile’s fourth such facility, the GNL Talcahuano FSRU will be located at a port in the Biobio region.

Commissioning of the newest European import terminal at the French Channel port of Dunkirk is set to start in the first week of July with the first cargo to be delivered by July 8, followed by a second cargo in August. The $1.13 billion regas terminal, managed by Dunkerque LNG on behalf of EDF, Total and Fluxys, is set to be fully operational by September.

Norwegian LNG transport firm Golar has launched a proposal to the Brazilian government, featuring a regasification terminal in the state of Para in the lower Amazon basin. If build, the LNG regas facility would supply new power generation plants and local industries that currently have no access to natural gas.

AG&P is looking to partner with private developers in building small-scale LNG facilities that can deliver 5 to 20 MW of decentralised power. Commenting on average investment needs, AG&P President Albert D. Altura said: “The rule-of-thumb for LNG, and this is highly dependent on the area, is about $1 million per megawatt for small-scale projects.”

China National Petroleum Corporation (CNPC) and Russia’s Gazprom have agreed to form a joint venture for gas-fired power generation and underground gas storage in China. The MoU was signed on Saturday after detailed discussions on Russian gas supplies via the western route – the so-called ‘Power of Siberia’ pipeline is already under construction.

Japan's Jera Co, a joint venture of Tepco and Chubu Electric, has started to sell excess contracted LNG to EDF Trading under a deal sealed in late May to divest up to 1.5 mtpa to the London-based trading arm of the French utility. Sluggish gas demand in Japan makes utility buyers seek to offload over-contracted volumes.

Dominion has filed a report to FERC on the progress of construction work at its 5.25 mtpa Cove Point LNG terminal in Maryland, stating the regas project was now 38% complete and would be on track to start operation in late 2017.

Overstating its optimism, Gazprom has suggested China’s gas demand will exceed 260 Bcm in 2016 and edge close to 300 Bcm/year by 2020. Actual figures show a cautious recovery, with demand up 0.3 million tons, or 27%, to 1.43 million tons y-o-y in May. South Korea, in contrast, saw a 5.8% decline in LNG imports last month – the fifth month in a row of y/y declines.

An oversupply in global gas markets is here to stay until the end of the decade, as the LNG glut is unlikely to be soaked up by utility buyers. IEA Executive Director Fatih Birol explained that cheaper coal and continued strong renewables growth were blocking gas from expanding more rapidly in the power sector.

Nova Scotia-based Goldboro LNG and Woodfibre LNG in Squamish, BC, are seeking to take a financial investment decision by the end of this year. Woodfibre’s prospects just got boosted by signing-up a major Chinese buyer, while the offtake of Goldboro’s entire Train 1 is underpinned by a firm commitment from Germany’s Uniper.

News Nudges

Rio Grande LNG gears up for stock market listing

Next Decade is following the trend of US Gulf Coast liquefaction projects to get their project companies listed on the stock exchange. Kathleen Eisbrenner’s NextDecade has signed a letter of intent for a business combination transaction that will allow the privately-held company to become a publicly-listed company. To that end, Eisbrenner is using the services of Harmony Merger Corp. The listing is meant to ease the fund-raising process for Next Decade’s 27 mpta Rio Grande LNG project that is currently advancing through the FERC permitting process. Tellurian Inc., meanwhile, recently completed a reverse takeover of a small oil and gas exploration firm to gain a Nasdaq-listing that is meant to boost the prospects for Driftwood LNG.


Driftwood LNG aims to raise $200m in Nasdaq listing

Preparing a first share offering, Tellurian in mid-March issued a prospectus proposing to sell shares valued up to $200 million on the Nasdaq Capital Markets stock exchange. Tellurian Inc., developer of the Driftwood LNG project in Louisiana, recently chose SG Americas Securities to provide a financial strategy for the venture. SG Americas is the US broker-dealer subsidiary of France's Societe Generale. Charif Souki, Tellurian founder and ex-Cheniere Energy chairman, completed a reverse takeover in February 2017 to get Tellurian listed in a move to efforts of ease fund-raising. Meg Gentle, president and CEO, said that with SG’s expertise at hand, financial structuring of Driftwood LNG would advance swiftly, hence “we anticipate construction in 2018 and first LNG from Driftwood in 2022.”


CB&I ‘optimistic’ for growth

Philip K. Asherman, President and CEO of US engineering and construction company Chicago Bridge and Iron (CB&I) said he was “optimistic” that stability in commodity prices and major capital programs, particularly in North America and the Middle East, “will result in resumption of substantial backlog growth by mid-year of 2017.” CB&I posted an operating loss of $665.6 million last year but Asherman stressed that all proceeds from the divestiture of the company’s Capital Services business will be spent to reduce debt to optimize the balance sheet. The firms Engineering& Construction (E&C) backlog was $9.9 billion in December 2016 versus $12.8 billion at the end of the previous year.


First gas for Kosmos-BP FLNG Train 1 eyed in 2021

Kosmos Energy is drilling an exploration well with total discovered resource of 25 Tcf of feed-gas. The US firm cooperates with BP on plans to produce LNG floating hulls offshore Senegal and Mauritania; to that end it successfully drilled the Teranga-1 exploration well in 2016. First gas from Kosmos-BP FLNG Train 1 is scheduled for 2021, the company said, and the start of FLNG Train 2 is set for 2023.


Sabine Pass Train 3&4 to come onstream in 2017

Cheniere Energy, owner of the Sabine Pass liquefaction plant in Louisiana, the first US LNG export facility, said transition and execution will remain central themes for Cheniere in 2017. “We expect Trains 3 and 4 at Sabine Pass to begin commercial operations, with Train 3 having produced its first commissioning cargo in January,” Jack Fusco, Cheniere's President and CEO stated when presenting the company’s annual report. Once all six Trains come on stream, Sabine Pass will have a have nameplate capacity of 27 mtpa. Corpus Christi LNG, Cheniere’s second venture on the Texas Gulf Coast, is designed to produce an initial 13.5 mtpa, with Trains 1 and 2 expected “to reach substantial completion in 2019.”