LNG

FSRU owner and operator, Excelerate Energy reported a net loss of $4 mill for the second quarter of this year, which reflected an expected $21.8 mill one-time charge for an IPO-related FSRU acquisition. 

A US government report outlines a rise in Argentina’s domestic natural gas production noted over the past three years, largely because of increasing production from the Neuquén Basin’s Vaca Muerta Shale and tight-gas play, while the nation has also started LNG exports.

“As production has grown, Argentina has resumed exporting natural gas by pipeline to neighboring Chile and Brazil and has started exporting liquefied natural gas,” said the report from the US Energy Information Administration.

Production from Vaca Muerta Shale surpassed 1.0 billion cubic feet per day (Bcf/d) in December 2018 and Argentina’s first LNG export cargo was shipped on June 6 from the offshore Tango floating liquefaction unit, according to the report.

“The growth in Argentina’s shale and tight gas production has partially offset declines in its natural gas production from mature fields,” said the EIA.

However, output from Vaca Muerta now accounts for about 23 percent of Argentina’s total gross natural gas production.

“The Vaca Muerta shale formation has technically recoverable resources of 308 trillion cubic feet of natural gas and 16 billion barrels of oil and condensate within 8.6 million acres, and it is geologically comparable to the Eagle Ford shale play in southern Texas,” stated the EIA.

“Only 4 percent of Vaca Muerta’s acreage has entered the development phase so far,” the report added.

“Argentina’s domestic natural gas production exceeds consumption during warmer months, from October through April, though production is insufficient to meet demand during colder months, May through September, which requires Argentina to import natural gas by both pipeline and as LNG,” explained the EIA.

“Because Argentina doesn’t have geologically suitable formations to serve as large-scale natural gas storage facilities, natural gas producers have to shut in surplus production to accommodate seasonal consumption patterns,” said the report.

“Argentina is conducting feasibility studies to identify potential natural gas storage sites,” it added.

From 1990 through 2007, Argentina was a net exporter of natural gas. Since then, Argentina has been importing more natural gas both by pipeline (mainly from Bolivia) and as LNG.

Argentina imports LNG using a floating storage and regasification vessel (FSRU) moored at the Escobar port near Buenos Aires.

In the last two years, with the growth in domestic production, Argentina has been importing LNG only during cooler months, March through October.

“Argentina will likely continue importing LNG during cooler months until additional pipeline infrastructure is built to deliver growing shale production to major demand centers,” said the US report.

“Argentina’s seasonal demand patterns, the opposite of countries in the Northern Hemisphere, allows Argentina to export LNG during months when major consuming countries in Asia are importing more LNG,” it added.

Natural gas from Vaca Muerta is transported by an existing pipeline network to the port of Bahía Blanca, where it is liquefied at Tango FLNG, a floating production barge chartered from Belgian shipping company Exmar.

“These pipelines were previously used to transport imported LNG from an FSRU moored offshore at Bahía Blanca,” said the EIA.

“Tango FLNG has an LNG production capacity of 500,000 metric tons (0.07 Bcf/d) and is expected to produce up to eight LNG-export cargoes per year,” it added.

“Future growth in LNG exports will require additional investments in onshore liquefaction facilities and pipeline infrastructure or the use of additional floating LNG-production vessels,” stated the US report.

Exmar, the Belgian fleet owner with LNG assets such as the “Tango FLNG” production hull operating at Bahia Blanca in Argentina, said it had repaid a senior unsecured bond as it reorganised some of its finances and cut costs to underpin its financial future.

Exmar said in an update on its finances that it had repaid the unsecured bond funded partially with a new unsecured two-year bond of 650 million Norwegian crowns ($75 million) and partly with available resources.

The company, led by Chief Executive Nicolas Saverys, currently manages a fleet of 10 LNG carriers and FSRUs and owns two FLNG barges. The company, like many others, has suffered over the last few years from the shipping industry downturn.

Exmar also operates in the liquefied petroleum gas market, where it owns or operates around 30 vessels. It has been expanding in the LPG sector while consolidating its LNG interests.

Antwerp-based Exmar said in the financial update that it organized the payments on the Floating Storage and Regasification Unit (FSRU) barge in the second quarter of 2019.

The financing is approved by the credit committee of China State Shipbuilding Corporation (CSSC), where the vessel was built, but due to a delay in the finance documentation with CSSC, the financing is not yet concluded.

“The completion of the documentation is expected in the course of the third quarter of 2019,” said Exmar.

The company also explained that further to the successful performance acceptance tests of the “Tango FLNG” in June 2019, Exmar met all conditions for the partial release of the debt service reserve amounts for the repayment of the $200M loan with Bank of China and Deutsche Bank ($40M in a first phase).

“This repayment is subject to the approval of Sinosure (export credit insurer), the latter taking more time than previously communicated,” it explained.

“Exmar will do its utmost to expedite this repayment, expected to occur in the course of the third quarter of 2019,” stated the Belgian company.

The “Tango FLNG” plant is chartered by Argentina energy company YPF under a 10-year agreement. The vessel was built at the Chinese Wison shipyard in Nantong and delivered to Exmar in 2017.

The vessel is the former floating liquefaction unit, “Caribbean FLNG”, constructed for a cancelled venture in the South American state of Colombia and renamed before being sent to Argentina.

Pending the settlement of both the Chinese credit issues, Exmar said it acquired a bridging loan for $30M to temporarily increase its liquidity.

Additionally, Exmar has signed an agreement with Compagnie Maritime Belge (CMB) for the sale of 50 percent of its shares in Reslea, owner of the office buildings in Antwerp.

Exmar will realize a capital gain of about $19M and therefore reinforce its liquidity position.

The company also gave the instruction to pay the first instalment for the construction of two Very Large Gas Carriers (VLGCs) in accordance with the shipbuilding contract with Jiangnan Shipyard in China.

“Both vessels are under construction in Shanghai and will serve under a firm contract of five years with Equinor after delivery in 2021,” said Exmar.

“Exmar expects and believes that as per December 2019 it is foreseen that all (financial) covenants will be met,” it added.

Exmar posted an annual pre-tax loss of $14.2 million compared with a profit of $29.3M the previous year, though said it was confident of a sound financial future.

Argentina is offering its first liquefied natural gas cargo produced by a floating liquefaction unit deployed at the port of Bahia Blanca as it aims to end its import requirements and become a future large-scale exporter of LNG made from the huge Vaca Muerta shale-gas resources.

ExxonMobil and LNG business partner Qatar Petroleum won three exploration blocks offshore Tierra del Fuego at the southern tip of South America during Argentina’s first bid round, adding to their onshore acreage in the world-class onshore Vaca Muerta shale basin.

Exmar, the Belgian shipping line with floating liquefied natural gas interests, including the “Tango FLNG” production hull now deployed at the Argentine port of Bahia Blanca, has recorded a pre-tax loss as its business is restructured.

Wison Offshore and Marine, the Chinese shipbuilding company and builder of the first floating LNG production barge set to be deployed in Argentina, has received approval from the American Bureau of Shipping for its latest Floating Natural Gas-to-Methanol facility, recalling previous methanol and LNG plans for the Tassie Shoal offshore Australia.

Argentina is set to change from being an importer to an exporter of liquefied natural gas and has initiated a study on the first liquefaction and export venture with US floating project specialist Excelerate Energy.

April 18 (LNGJ) - The 155,900 cubic metres capacity “Clean Planet”, operated by Dynagas, will deliver a cargo on May 1 to the Argentine Bahai Blanca import terminal in the southwest of the province of Buenos Aires from the US Sabine Pass export facility in Louisiana, owned by Cheniere Energy. The 176,300 cubic metres capacity vessel “Rioja Knutsen” will deliver a shipment on May 13 to China’s Dalian terminal, operated by PetroChina in the northern Liaoning Province, from the US Sabine Pass plant.

May 25 (LNGJ) - The 155,000 cubic metres capacity “British Ruby”, operated by BP Shipping, is unloading a Qatargas cargo on May 25 at the Bahia Blanca import facility in Argentina in the form of the FSRU “Exemplar”, according to shipping data. The 145,700 cubic metres capacity “LNG Benue” is unloading a shipment on May 26 at the Brazilian Guanabara Bay FSRU, near Rio de Janeiro. The 266,000 cubic metres capacity Q-Max vessel “Al Bahiya” is scheduled to unload a cargo on May 30 at the Rotterdam Gate import terminal from Ras Laffan in Qatar.