LNG

Italy-based Adriatic LNG has launched the accreditation phase for its Open Season 2026, offering medium- to long-term regasification capacity from January 2029 through December 2051. Accreditation is open through September 14 and the bidding phase will run from September 17-30.

Italian gas grid and LNG terminals operator Societa Nazionale Metanodotti (SNAM) has given a detailed update on the plans to deploy a floating storage and regasification unit (FSRU) at the port of Ravenna in the North of the Adriatic coast.

The Italian Adriatic LNG import terminal has launched the accreditation phase for a 2024 open season to offer long-term regasification capacity to natural gas market operators.

Italian floating LNG terminal company, OLT Offshore LNG Toscana controlled by Italian natural gas grid and LNG terminals operator Societa Nazionale Metanodotti (SNAM), said the “FSRU Toscana” has been towed to a shipyard in Genoa for the first phase of a maintenance programme.

ExxonMobil Corp., the largest US oil company and leading LNG producer and a partner of Qatar in many global projects, will have its first-quarter 2024 earnings impacted by price shifts while also completing the sale of its stake in the Adriatic LNG import terminal offshore Italy and pursuing the huge takeover of Pioneer Natural Resources in the US.

ExxonMobil estimated that large decreases in oil, gas and fuel prices would deliver a first-quarter operating profit of between $6.65 billion and $11.6Bln for the first three months of the year compared with $7.63Bln in the fourth quarter of 2023.

ExxonMobil filed its first-quarter earnings indicator with the US Securities and Exchange Commission.

The ExxonMobil earnings total would be well below the prior-year first quarter when natural gas prices were much higher.

Weaker prices

Overall weaker oil and gas prices alone were expected to reduce ExxonMobil’s profits by about $600 million compared with the fourth quarter of 2023.

The company also said fuel derivatives adversely affected gains in gasoline and diesel margins, costing it about $1.1Bln compared with the fourth quarter.

Refining maintenance costs also increased during the fourth-quarter and the first quarter of the 2024.

“To give perspective regarding market and planned factors affecting 1Q 2024 results, we are providing the summary of items management believes will impact 1Q 2024 results relative to 4Q 2023 results,” said the company.

“These factors are generally limited to significant planned activities, market dynamics and seasonal demand patterns,” the filing explained.

“This is only intended to provide information regarding current estimates of these factors,” said the filing.

“It is not comprehensive of all changes between 4Q 2023 and 1Q 2024 results and is not an estimate of 1Q 2024 earnings for the Corporation,” ExxonMobil stated.

Adriatic LNG sale

Dutch energy storage group VTTI has also acquired the 70 percent stake previously held by ExxonMobil in Italy's biggest LNG terminal, the gravity-based structure facility Adriatic LNG, and the balance of 30 percent is now owned by Italian gas grid and terminals operator SNAM.

ExxonMobil had stated in March 2023 that it was considering selling its stake of just over 70 percent in Adriatic LNG as a non-core asset.

The Adriatic terminal is located 15 kilometres (9.3 miles) off the Veneto coastline of Italy and has been on line since 2009.

It includes two LNG storage tanks, each with a capacity of 125,000 cubic metres.

The operating company is called Terminale GNL Adriatico. ExxonMobil had held its majority stake while a QatarEnergy unit, Qatar Terminal Company, owned 22 percent and SNAM had held 7.3 percent.

ExxonMobil is also pursuing the all-stock deal to acquire Texas-based Pioneer Natural Resources for $59.5Bln.

The combination gives ExxonMobil a stronger position in the Permian Basin in Western Texas and New Mexico.

ExxonMobil is expected to report first-quarter earnings on April 26.

Adriatic LNG, the import terminal offshore northeast Italy, reported a record year in terms of shipments and regasified volumes delivered into the Italian national grid.

The operating company, Terminale GNL Adriatico, is a gravity-based terminal that came on line in 2009 and 70-percent owned by ExxonMobil Corp.

The other minority shareholders include a subsidiary of QatarEnergy and the Italian grid operator and import terminals owner, SNAM.

“The regasification terminal located off the Veneto coast sent 8.5 billion cubic metres of natural gas into the national pipeline network, an increase of 7 percent from the previous year,,” said Adriatic LNG.

Steady cargo flow

A total of 75 LNG carriers called at the terminal last year, mainly from Qatar and the United States but also from other geographical areas, including, for the first time, Mozambique.

The volumes provided over 14 percent of natural gas consumption and confirmed itself as the third main entry source for Italian gas imports.

“The terminal therefore broke its previous best annual record, scored in 2022, when it sent 7.9 Bcm of gas into the national grid,” added the company.

Adriatic LNG noted that the results confirmed the increasing relevance of LNG in the Italian energy mix.

In 2023, total LNG imports to Italy amounted to 16.6 Bcm, a 16.8 percent increase compared with 2022.

The cargoes met 27 percent of the national natural gas needs of 61.5 Bcm.

Strategic infrastructure

For all of 2023 over 50 percent of Italian LNG imports were shipped through Adriatic LNG.

“Our terminal confirmed to be a strategic energy infrastructure for Italy and Europe,” said Alfredo Balena, Director of External Relations at Adriatic LNG.

“We can say that the 8.5 Bcm of natural gas injected by Adriatic LNG into the national grid represent an energy quantity equivalent to approximately 93 million megawatt-hours, equivalent to the total energy consumed the Veneto and Lombardy regions for a year,” stated Balena.

In total, from 2009 to 2023, 1,058 LNG carriers arrived at the regasification terminal for a total of 92 Bcm of gas sent into the national gas grid.

“The security of energy supplies in Europe and Italy is and will increasingly be based on LNG,,” Balena explained.

“The significant growth in LNG imports occurring over the last two years is linked to efforts being made to reduce dependence, and increase resilience, of the European gas system,” he concluded.

Italian floating LNG terminal company, OLT Offshore LNG Toscana controlled by Italian natural gas grid and LNG terminals operator Societa Nazionale Metanodotti (SNAM), said the “FSRU Toscana” vessel would be undergoing long-term maintenance for a longer period than initially expected.

Global shipping chaos is leading to huge additional economic costs for imports and exports and in terms of shipping liquefied natural gas spot charter rates for West of Suez and East of Suez have plummeted.

London shipbrokers said shipping spot charter rates for West of Suez slumped this week because of the Red Sea crisis by $40,000 per day to $105,000 per day.

Rates for East of Suez tumbled by $30,000 per day to be at $75,000 per day because of extra cargo and fuel costs stemming from having to take longer delivery routes around the Cape in South Africa,

Charter demand has also been seriously affected because clauses in time-charter agreements exclude the deliberate entry into “war zones” that would affect hull, cargo and crew insurance.

LNG carriers from Qatar are continuing to use the Suez Canal and one that has just delivered to Italy’s Adriatic LNG import terminal was well on its way back to Ras Laffan.

Vessels carrying LNG from the Atlantic Basin via Suez had been less frequent before the crisis and are not expected to be re-using the Suez route anytime soon.

Containership costs soar

An example of the shipping chaos in terms of financial costs are the measures and cost adjustments having to be taken by companies like France’s Marseille-based group CMA CGM, which runs one of the largest containership fleets and many of whose vessels are powered by LNG.

CMA CGM has been forced to raise its tariffs for customers because of the Red Sea and Suez Canal shipping disruptions caused by terrorism and those on the Panama Canal caused by drought.

CMA CGM is one of the groups that has halted its ships from entering the Red Sea, and thus the Suez Canal, because of the dangers of terrorist missile attacks from Iran-backed Houthi rebels in Yemen.

One of the company’s vessels, the “CMA-CGM Jacques Saade”, the world’s first LNG-powered very large containership with 23,000 twenty-foot equivalent unit containers, normally travels to and from Asia via the Suez Canal on the Asia trade route.

The vessel was heading for the Moroccan port of Tangiers on December 21 after travelling from the East Mediterranean just after the company stopped using the Suez Canal that took its vessels past Yemen on the Red Sea route.

“In continued efforts to ensure the safety of our crew, vessels, and your cargo amid the ongoing developments in the Red Sea region, we would like to provide you with important information regarding the re-routing of several vessels from their intended route to through the Cape of Good Hope (South Africa),” said CMA CGM.

“As highlighted in our previous Customer Advisory, the re-routing of these vessels is a precautionary measure taken to navigate away from potentially unsafe areas,” explained the company.

“This decision is in line with Clause 10 of our Bill of Lading, and while we understand it may impact your logistics and supply chain operations, it is a necessary step which comes with a cost,” stated CMA CGM.

Red Sea ports

“Accordingly, we hereby inform you that, effective immediately and until further notice, a Red Sea Charge will apply to all cargo to and from Red Sea ports unless you decide to accomplish the Bill of Lading at the designated hub ports,” the company explained.

The Red Sea Charge details are as follows: US$1,575 per 20-foot Dry, $2,700 per 40-foot Dry and $3,000 per Reefer container and special equipment.

The scope of these charges relate to routes for already-agreed cargoes that traditionally past Jeddah, the Port of Neom, Djibouti, Aden, Hodeidah, Port Sudan, Massawa, Berbera, Aqaba and Sokhna

“The date of application is December 20th, 2023 for cargo on board or to be loaded/ discharged to/from Red Sea, said the company.

Panama Canal

The company also informed its customers in November 2023 that the severe drought and further transit restrictions affecting the Panama Canal had taken a “severe toll” on operations so that consequently CMA CGM prices had to be increased from January.

The company noted that during the year, and despite several water conservation measures, the Canal draft was reduced from 14.94 metres to 13.41 metres (44 feet).

“The lack of precipitation over the summer months has forced the Panama Canal Authority to reduce the number of vessels transiting per day,” CMA CGM explained.

“As a consequence, by January 1st 2024, the booking windows for transiting the Neopanamax locks will be reduced by 30 percent,” said the company.

“These restrictions combined with an increase in the Canal Tariff implemented earlier in the year, are taking a severe toll on CMA CGM’s operations,” stated CMA CGM.

“Therefore, please note that CMA CGM will apply a US$150 per Twenty-Foot Equivalent unit (TEU) Panama Adjustment Factor starting on January 1st, 2024,” the company told customers.

Nov 27 (LNGJ) - SNAM, the Italian natural gas grid operator and floating and onshore import terminal owner, has launched a consultation regarding the first assignment procedures for the regasification capacity at the proposed floating storage and regasification unit (FSRU) to be deployed at the port of Ravenna. The FSRU “BW Singapore” will be on station at the Adriatic port of Ravenna and be operational by the end of 2024.

   “The first assignment procedures for the regasification capacity at the FSRU Ravenna Terminal have been published,’ said SNAM. “Interested parties can submit their observations on the procedure for the first assignment by 17 December 2023. As part of the consultation, interested parties may also submit expressions of interest for capacity products with a duration shorter than the assignment period by 30 November 2023,” added SNAM.

SNAM, the Italian gas gid operator and liquefied natural gas import terminals owner, said it was moving forward on plans for a fifth LNG regasification facility at the Adriatic port of Ravenna.

SNAM has already started the construction of the associated facilities for the new Floating Storage and Regasification Unit (FSRU) to be deployed at Ravenna.

A meeting in Ravenna involving SNAM Chief Executive Stefano Venier, the utility’s Chief Operating Officer Massimo Derchi as well as the Mayor of Ravenna, Michele de Pascale, as part of a public conference outlined progress on bringing the FSRU “BW Singapore” to Ravenna.

The FSRU is the second purchased by SNAM to improve Italy’s energy security and will be operational by the end of 2024.

The ship will provide the country with an additional 5 billion cubic metres of gas, in addition to those already supplied by the FSRU “Golar Tundra” which has been operational on Italy’s West Coast port of Piombino in Tuscany since July 2023.

Municipal benefits

SNAM said that Ravenna would also benefit from hosting the FSRU and helping with Italy’s energy security by having backing for town and regional projects.

“These works will enable the Municipality to carry out significant interventions in various areas, from urban regeneration to sustainable mobility, from reforestation to energy saving with a total commitment of €10 million (€10.7M),” said SNAM.

“At the peak of activities, more than 1,200 people will be employed, involving over 100 suppliers from the province of Ravenna and the Emilia Romagna Region, with contracts assigned to local companies in the Ravenna area amounting to over €300 million ($320M),” the company added.

“During the Ravenna conference, SNAM also provided an update on progress of the works for the first carbon-capture and storage (CCS) project, which will make the Ravenna hub one of the world's largest sites for CO₂ storage and the largest in the Mediterranean,” the company added.

Built in 2015, the “BW Singapore” will be able to store 170,000 cubic metres of LNG, regasify it then have it transferred into a new pipeline connected to the connection point with the National Gas Pipeline Network located around 42 kilometres (26 miles) from the FSRU mooring point.

Bunkering

Ravenna is already the location of a small-scale LNG bunkering station established under the European Union's clean fuel policies.

Spanish LNG terminals and gas grid operator Enagás and Italian utility company Edison are among the shareholders in the small-scale facility serving the LNG trucking and ship bunkering sectors.

In addition to the Piombino FSRU terminal on the west Coast, SNAM already operates the onshore Panigaglia LNG facility on the northwest coast near Genoa and which has been in service since 1969.

The grid operator also has a controlling stake in the “FSRU Toscana” moored off the West Coast Italian port of Livorno.

The new FSRU facility at Ravenna will be in the same area as the Adriatic LNG terminal

Adriatic LNG terminal is majority-owned by US major ExxonMobil and with QatarEnergy also a shareholder.

The Adriatic terminal is a gravity-based structure located 15 km (9.3 miles) off the Veneto coastline and SNAM is a 7.3 percent shareholder in the facility.