In this issue

 

Regardless of the trade war between the United States and China, state-controlled Sinopec has reaffirmed plans to reserve 75% of the project's LNG production capacity. Sinopec wants to become the project’s main offtake customer, allowing CIC Capital to be an equity investor, while the Bank of China will help refine the financing structure. Financial close is targeted for late 2019, or in early 2020. 

Royal Dutch Shell will keep investing in global gas projects as demand is anticipated to grow at a rate of 2% per year, twice the rate to worldwide energy demand. “Our core business is, and will be for the foreseeable future, very much in oil and gas… and particularly in natural gas,” Shell CEO Ben van Beurden told a conference in London, warning about the risks of an LNG "supply crunch" by the mid-2020s. 

Golar LNG chairman Tor Olav Troim said he is looking for the next opportunity, encouraged by investors embracing the $1.74 billion integrated LNG-to-power project in Brazil. Golar Power, a venture between Golar LNG and Stonepeak Infrastructure Partners, in April took FID on the 1.5GW project in northeast Brazil.

David Keane, President of Canada’s Woodfibre LNG project, has announced the imminent construction start for the brownfield liquefaction facility, licensed to export over 2 mtpa of LNG for 40 years. The decision to the construction stage comes shortly after the Sinapore-backed project signed a preliminary supply deal with the largest Chinese LNG importer, China National Offshore Oil Corp (CNOOC). Works are slated to start in the first quarter of 2019.

More shale gas produced in Texas will soon cross the border to Mexico after the U.S. Department of Energy (DOE) approved an application by Mexico Pacific Ltd (MPL) to export up to 1.7 Bcf/d to a planned liquefaction and export plant in the state of Sonora. MLP is developing a an LNG export facility of up to 12 mtpa in the Mexican state of Sonora, with the first phase planned to be in service in 2023.

Tightening in global LNG markets has allowed the second wave of US LNG ventures to gain momentum again. Since early 2018, a second wave of projects set to bring more than 10 mtpa to the market under binding sales and purchase agreements (SPAs) have reached the starting blocks.

Anticipating a speedy energy transition globally, the global classification society DVN GV says upstream players are adapting to this trend by shifting to faster, leaner and cleaner hydrocarbon production techniques. Oil and gas demand is forecast to peak in 2023 and 2034, respectively, prompting upstream players to favour a greater number of smaller reservoirs with shorter life-spans. 

Coal-to-gas switch policies in China’s energy sector are expected to boost the country’s LNG demand by a 12 million tons in 2018, exceeding last year’s record growth of 8 mt. Already today, China’s energy hunger lies behind half of global LNG demand growth and Wood Mackenzie says: “Given China is only through its five year clean air policy, this growth story is far from finished.” 

AES Colón – a $1.15 billion LNG import terminal and adjacent combined-cycle power plant – is being fast-tracked in Panama. The project comprises the first LNG regas terminal in Central America and a CCGT with 381 MW capacity. Commercial operation was slated to start on September 1.

The International Energy Agency (IEA) has called on Saudi Arabia, Russia, Iraq, the UEA, Nigeria and Venezuela to step up efforts to diversify their economies to be able to cope with volatility of shale gas supply, and uncertainties over the pace of demand growth. In its Outlook for Producer Economies, the IEA assesses how the world’s six resource-dependent economies might fare until 2040 under a variety of price and policy scenarios. 

Since the Trump administration threatened fresh sanctions against Iran, the oil-rich country has substantially scaled down its production and exports of crude oil and natural gas. In May 2018, the White House said it would withdraw from the Joint Comprehensive Plan of Action (JCPOA) and reinstate sanctions against the regime in Teheran. 

Unplanned downtime can cost an LNG facility as much as $4 million per day. With potential costs so high, profitability is largely linked with unplanned downtime. According to GE Power estimates, unplanned shutdowns in the process industry globally cost 5% of total annual production — that’s as much as $30 billion a year.

Dresser-Rand, part of Siemens Group, has commissioned an LNGo-HP (high-pressure) micro-scale natural gas liquefaction system for Altagas Ltd. in Dawson Creek, British Columbia, Canada. Producing approximately 30,000 gallons of LNG per day since January 25, 2018, the Dawson Creek facility allows Altagas to scale production in line with demand. The LNGo-HP system converts diesel and other fuels to natural gas, enabling users to monetize stranded gas deposits.

Sempra Energy, developer of the Cameron LNG export plant in Louisiana, has received its draft environmental impact statement from regulators for the proposed Port Arthur LNG project in Texas, comprising the largest liquefaction Trains planned so far for a Gulf Coast venture.

News Nudges

Former KBR CEO joins Teekay LNG

Bill Utt, the former President and CEO of US energy and LNG engineering company KBR, has been appointed as a new member of the Teekay LNG Partners board. The New York-listed affiliate of the shipping company has a global fleet of 207 ships and its LNG carriers are operated with ownership portions ranging from 30% to 100%.


KinderMorgan seeks to advance with Gulf LNG

Kinder Morgan, one of the main US pipeline operators, said it could now move forward with modifying its Gulf LNG import facility in Mississippi to handle exports as it is already doing with its Elba Island plant near Savannah, Georgia. The existing Gulf terminal at the port of Pascagoula in Mississippi could be taken forward by other parties, supported by Kinder, CEO Steve Kean told investors in New York.


NextDecade starts FERC process for Galveston LNG

Houston-based NextDecade, developer of the Galestone LNG project, has requested the start of its authorization process through FERC to produce an initial 16.5 mtpa from a proposed liquefaction facility near Texas City. The Galveston Bay venture has already received a Department of Energy permit to ship cargoes for 20 years to nations with a Free Trade Agreement with the US and a non-FTA permit was pending.