In this issue

 

Segolene Royale, the French minister of the Environment, Energy and Marine Affairs, has told parliament she will examine ways to ban LNG imports sourced from shale gas. Three of France’s main energy companies – Total, EdF and Engie – have contracts to receive LNG cargoes from the US Gulf Coast.

Advancing a competing project, the former Cheniere CEO Charif Souki has filed an initial plan with regulators for Driftwood LNG on the US Gulf Coast to produce 26 mtpa. Souki is throwing his weight behind this new project together with ex-BG Group LNG chief Martin Houston.

Shares in Cheniere Energy surged over 6% on the day when the first US LNG exporter named a new CEO, ending a quarrel at the top of the firm. The former head of Calpine Corp Jack Fusco, who was once VP for Goldman Sachs, is now at the helm of Cheniere, replacing interim CEO Neal Shear.

Florida-based Eagle LNG has announced it started the construction of its Florida liquefaction plant in the port city of Jacksonville to supply the marine fuels market and other sectors from 2017.

Dredging works are progressing at Freeport LNG to accommodate a second ship dock. Works began in early February 2016 and once completed in 2018, the Freeport facility will be able accommodate Qatari Q-max as well as the optimum-designed vessel of just over 170,000 cubic metres capacity to transit the Panama Canal.

The US Federal Energy Regulatory Commission (FERC) has given the green light to Cameron LNG to build two additional liquefaction Trains and five in total for almost 25 mtpa in production. Sempra can now proceed with building Train 4 and Train 5 under a similar design as the three other trains under construction, as well as a tank with 160,000 cubic metres of storage.

Within hours of the opening of the first booking period, the Panama Canal Authority (ACP) has filled all 25 available slots. First commercial transit through the expanded Canal is due on June 27, with a maximum of four slots available per day – one of which reserved for LNG vessels.

The first cargo of US LNG to head for Europe is expected to land in Portugal. Galp Energy purchased the cargo shipped from Cheniere’s Sabine Pass terminal which is expected to arrive at the Portugal’s import terminal at Sines in late April or early May.

Passing of “The Energy Policy Modernization Act” in the US Senate by a vote of 85-12 was hailed by LNG project developers as a ‘watershed moment’. The bill will speed up projects as it requires the Department of Energy to make a permit decision within 45 days of an export project’s completion for the environmental review.

With the first ever US LNG cargo having set sail from Sabine Pass in February, the share of LNG from North America will continue to grow and is forecast to reach nearly 18 Bcf/d by 2035, according to BP estimates.

Despite relatively low prices, production of US natural gas production reached a record high level of 79 Bcf/d in 2015, up 5% year-on-year, according to EIA figures. Five states – Pennsylvania, Ohio, West Virginia, Oklahoma, and North Dakota – produced most of the growth, offsetting declining gas output in much of the rest of the United States.

A decline in engineering quality is jeopardizing timely proceedings and project management for new LNG ventures, Neeraj Nandurdikar, analyst at Independent Project Analysis (IPA) of Ashburn told the LNG18 conference.

Not only will Iran’s oil exports rise, once sanctions are untangled, the Islamic Republic is also gearing up to boost natural gas and liquids production. EIA analysts anticipate Iran’s non-crude liquids production to grow by 150,000 b/d by the end of 2016, and by an additional 100,000 b/d by the end of 2017, dependent on how speedily the 24 development phases of South Pars will progress.

Once sanctions are lifted, Iran aims to sell gas to Persian Gulf states, notably Oman, for export as LNG to global markets. The head of National Iranian Gas Export Co. (NIGEC), Alireza Kameli, specifically referred to a proposal to build a gas pipeline from Iran to Oman which would enable Iran “to take advantage of the gas refineries and liquefaction facilities in Oman."

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.”