LNG

The official start of the Atlantic Hurricane season is still three months away but forecasters say it’s never too early to start preparing for what may or may not come in 2024, especially along the Gulf Coast of Texas and Louisiana.

Excelerate Energy, the leading US provider of floating storage and regasification units (FSRUs) and an LNG trader with increased demand from Europe and Asia, has now completed two long-term LNG supply accords focused on delivering more cargoes to Bangladesh and to integrate its business in the South Asian nation.

Excelerate has just signed a 15-year Sales and Purchase Agreement (SPA) with QatarEnergy after signing a similar SPA in late 2023 with Bangladesh’s national energy company PetroBangla as the customer this time.

Excelerate said that under the QatarEnergy deal the Texas-based company would purchase up to 1 million tonnes per annum of LNG from Qatar on a delivered ex-ship basis in Bangladesh and beginning in January 2026.

The US company will purchase 850,000 tonnes per annum in 2026 and 2027 and 1.0 MTPA from 2028 to 2040.

Qatar deal

“This inaugural long-term supply agreement with the world’s largest LNG supplier marks a new milestone in our collaboration with QatarEnergy,” said Steven Kobos, President and Chief Executive of Excelerate.

“Qatar delivers approximately 10 percent of its current annual LNG production through Excelerate FSRUs and we are pleased to unlock further new demand in the markets where we operate,” Kobos explained.

“This agreement highlights our ability to secure critical and affordable LNG volumes for our customers with increasing natural gas demand, while driving stable, long-term economic uplift on our existing infrastructure,” he stated.

QatarEnergy President and CEO Saad Sherida Al-Kaabi said he was pleased to sign the Excelerate agreement focused on Bangladesh.

“This new agreement will further strengthen our relationship with Excelerate while also supporting the energy requirements of the People’s Republic of Bangladesh and its stride towards greater economic development,” added Al-Kaabi.

PetroBangla agreement

Excelerate in the third-quarter of 2023 had signed a long-term SPA contract with PetroBangla.

Under that deal the Bangladeshi company has agreed to purchase between 850,000 tonnes and 1.0 MTPA LNG from Excelerate for that 15-year term.

Excelerate first opened the Bangladesh market to LNG in 2018 with the development of its integrated Moheshkhali LNG FSRU terminal.

In the years since, the company deployed a second FSRU terminal to the Bay of Bengal and has utilised its infrastructure position to win spot LNG cargos sales into Bangladesh.

Excelerate's two FSRUs in Bangladesh deliver around 25 percent of the country’s natural gas supply.

European and Asian natural gas futures and spot prices declined again as markets were confident that threats to shipping would be stopped in strategic trading routes as some European Union nations even managed to build gas storage levels in the week before entering 2024.

North Asian spot LNG cargo prices fell on the week while European wholesale natural gas values also declined as full storage in the southern European Union nations of Spain and Italy and mild seasonal weather in Northwest Europe eased geopolitical supply concerns.

Asian LNG imports generally declined in the first half of 2022 with rising gas prices curbing demand in the Japanese and South Korean electricity sectors, while a combination of high spot prices and ongoing Covid-19 lockdowns reduced gas consumption in China.

The East African nation of Tanzania said it signed a framework agreement with Norwegian energy major Equinor and UK-based Shell to intensify studies on a new LNG export project.

Osaka Gas, the Japanese utility and one of the nation’s top six LNG importers, said its engineering subsidiary was awarded a contract for the large expansion project at the Tai-Chung LNG import terminal in Taiwan.

The Australian energy safety authorities have ordered the closure of the “Prelude” floating liquefied natural gas production plant offshore northwest Australia after the latest incident in an electrical utility on board and reported on December 2.

The Shell-operated FLNG vessel is moored 400 kilometres north of the town of Broome on Western Australia’s Kimberley coast and has 3.6 million tonnes per annum of capacity.

The Australian National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) issued the order for a deeper safety probe by Shell.

This means Shell will likely be halting the offloading of LNG cargoes from “Prelude” into 2022 while the unreliable power shutdown issues are investigated .

The direction from NOPSEMA means the FLNG hull, the largest in the world, will be off stream until Shell can convince the regulators that the problem has been permanently fixed.

NOPSEMA has directed Shell to review what happened on the Prelude between December 2 and 6 and then develop a detailed plan to implement “all necessary corrective actions.”

Shell must also provide NOPSEMA with monthly reports on its progress from early March 2022.

Onboard inspectors

Shell must additionally convince the safety regulator that it can safely recover essential power and other services after a power outage alarm sounds.

“The failure to restore reliable power was seen to represent an ongoing impact and risk to the health and safety of the personnel on the facility,” said the NOPSEMA statement.

After visiting the 488m-long vessel NOPSEMA inspectors concluded that Shell “did not have a sufficient understanding of the risks of the power system on the facility, including failure mechanisms, inter-dependencies and recovery” mechanisms.

According to Shell, smoke triggered the automatic fire detection and management systems in the early December incident and an evacuation of most of the 200 or so crew on board was started. All workers on the facility were accounted for and no injuries reported.

The Shell facility was previously shut down for 11 months after electrical issues. Operations only resumed in February 2021 following an “electrical trip” in early 2020 and three incidents which NOPSEMA had described at the time as “dangerous occurrences”.

For the Shell project, the Concerto gas field and the nearby Prelude field, with combined resources of around 3 trillion cubic feet, are providing the feed gas to produce the LNG.

The Prelude joint venture is owned 67.5 percent by Shell and 17.5 percent by Inpex Corp. of Japan, operator of the Australian Ichthys project.

A further 10 percent of Prelude is held by LNG buyer Korea Gas Corp. and 5 percent by CPC Corp. of Taiwan.

Taiwan voted in a referendum to retain the site of the nation’s third liquefied natural gas terminal, currently under construction at Taoyuan, though will extend the LNG carrier jetty slightly further out to sea away from a sensitive reef area.

Höegh LNG Partners, the US affiliate of Höegh LNG Holdings now partnered with the infrastructure unit of US investment bank Morgan Stanley, has reorganized part of its finances on a floating storage and regasification unit deployed in Indonesia and the subject of a dispute with the former charterer.