LNG expands on three continents as new plants boost the industry Featured

Thursday, 07 December 2017
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Yamal LNG in Siberia, Cove Point in the US state of Maryland and the Wheatstone facility in Western Australia have or are set to ship their first cargoes and are testament to the energy industry’s faith in natural gas as the fuel to ensure an orderly transition to a clean-energy future.

China has put faith in LNG and pipeline gas for its economic expansion and more importantly as a means of removing air pollution from its cities while guaranteeing the provision of gas-fired power and heat for its citizens, which renewable energy can never do because wind and solar power are intermittent.

The Australian, Russian and US liquefaction plants cost a combined $60 billion to complete and will produce the cleanest hydrocarbon energy currently available for the next 40 years - until collective, reliable power sources can be harnessed to end greenhouse-gas emissions.

The oil and gas industry has been at the forefront of economic development since the start of the 20th century and will continue to be so for China, India and the countries of Southeast Asia, Africa and Latin America.

Analysts believe LNG will be the true tradable power commodity for the 2020s when even more liquefaction plants will come on stream in areas such as the US Gulf Coast to export huge volumes of the shale-gas surplus, as well as offshore and onshore Africa.

The Cove Point LNG plant on Chesapeake Bay in Maryland, owned by Dominion Energy, is the second US exporter to come on stream to match Cheniere Energy’s Sabine Pass plant in Louisiana.

When commissioning is completed, including the shipping of the first cargoes, Dominion said a flow of LNG would be opened up for its Asian customers who have 20-year contracts.

They are the Japanese companies Sumitomo Corp. and Tokyo Gas, as well as Gas Authority of India.

Cove Point, which had been an import terminal since 2003, added on its liquefaction capability to produce 5.25 million tonnes per annum of LNG after ramp-up.

Combined with the 18 MTPA now being produced at Sabine Pass, the US now has net export capacity of 23.25 MTPA.

Russian project developer Novatek was also exporting its first cargo from its plant on the Yamal Peninsula.

The first Train has a nameplate capacity of 5.5 MTPA and two others are being built and a fourth is planned.

“The commencement of LNG production begins a new chapter in our corporate history,” said Novatek Chairman Leonid Mikhelson.

“Many contractors and suppliers from Russia and abroad were involved in this project. We have received great support from the Russian government in implementing it,” he added.

Australia also continued on its path to overtake Qatar as the world’s largest LNG exporter as it built up production at the Wheatstone plant after the first cargo was delivered in November 2017.

“Wheatstone is a legacy asset that will be an important contributor to the Australian economy for the next 40 years, providing significant economic, social and community benefits,” said the US major.

“Wheatstone, along with the Gorgon Project, forms part of a new generation of facilities positioning Australia as a leading and reliable supplier of affordable natural gas to the world,” Chevron added.