LNG

Cheniere Energy, the owner of the Sabine Pass liquefaction and export plant in Louisiana and the Corpus Christi facility in Texas, has signed another long-term LNG sale and purchase agreement with Equinor, the Norwegian LNG and pipeline gas supplier to Europe.

Under the latest SPA, Equinor has agreed to purchase about 1.75 million tonnes per annum of LNG from the Cheniere Marketing unit of the Houston, Texas-based company on a free-on-board (FOB) basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.

Delivery of half of the volume associated with the SPA will commence in 2027 and delivery of the remaining half, which is subject to a positive Final Investment Decision with respect to the first Train of the Sabine Pass Liquefaction Expansion Project, will start at the end of the 2020s. 

The Sabine Pass deal follows an SPA signed with Equinor in June 2022, also for 1.75 MTPA of volumes, from the Corpus Christi LNG expansion.

Half of the Corpus Christi volumes, or about 900,000 tonnes, were subject to Cheniere making a positive FID to construct additional liquefaction capacity at the Corpus Christi facility beyond the seven-Train Corpus Christi Stage III Project

The terms of the Sabine SPA is 15 years from the commencement of delivery of the full 1.75 MTPA of LNG volumes to Equinor, which also operates its own LNG export plant in northern Norway at Hammerfest, supplying European import terminals.

The Equinor Hammerfest plant in Norway had initially been built and started in 2007 to send LNG cargoes to the US before the shale-gas boom began the liquefaction and export build-out in the Lower 48 states of the US.

Project

The Sabine expansion will comprise three large-scale liquefaction Trains, each with capacity of 6.5 MTPA, a boil-off-gas re-liquefaction unit with output of 750,000 tonnes a year and two 220,000 cubic metres capacity storage tanks.

Cheniere has engaged US engineering company Bechtel Energy to complete a front-end engineering and design study of the Sabine Pass project.

“We are pleased to expand our relationship with Equinor, one of Europe’s leading energy companies, building upon the SPA we executed last year,” said Jack Fusco, Cheniere’s President and Chief Executive.

“This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions,” Fusco stated.

“It will provide further commercial support to the SPL Expansion Project, which we continue to rigorously develop in order to meet the world’s growing demand for secure, long-term energy supplies and the economic and environmental benefits of Cheniere’s LNG,” the CEO added. 

Helge Haugane, Equinor’s senior vice president for Gas & Power, said he was very pleased to sign the long-term agreement with Cheniere.

“Europe will need natural gas to ensure flexible energy on demand to support the build-out of more intermittent renewables and LNG will play an important role. In other markets, for example in Asia, demand for LNG is expected to grow as a solution to energy security,” stated Haugane.

FERC process

The Cheniere group in May 2023 entered the pre-filing review process with respect to the Sabine expansion with the Federal Energy Regulatory Commission under the National Environmental Policy Act.

Cheniere has also recently signed a long-term SPA with the South Korean utility company, Korea Southern Power (KOSPO) for the Sabine expansion.

KOSPO agreed to purchase 400,000 tonnes per annum of cargoes, which will be delivered ex-ship whereby Cheniere will supply the transportation.

Cheniere said it would begin delivering a smaller amount to the Koreans in 2024, though the full SPA runs from 2027 through to 2046.

The Houston company is additionally progressing with the expansion at the Corpus Christi plant where three liquefaction Trains currently produce 15 MTPA.

The Stage 3 expansion is adjacent to the existing plant and consists of seven mid-scale Trains with an total production capacity of over 10 MTPA.

It is also proceeding with an additional Corpus Christi expansion known as the Corpus Christi mid-scale Trains 8 and 9 project.

Tellurian Inc., the developer of the Driftwood LNG export plant in Louisiana, was present at the India Energy Week conference and exhibition in Bangalore seeking replacement buyers after it cancelled two sales and purchase agreements in 2022 with UK major Shell and global commodities firm Vitol as it formulated a new financing strategy.

US energy company Sempra, operator of the Cameron LNG export plant in Louisiana, has signed an amended engineering, procurement and construction (EPC) contract with engineering firm Bechtel Energy for the Port Arthur LNG export project in Texas.

Bechtel and the Sempra unit, Sempra Infrastructure, have amended the EPC contract for the proposed Phase 1 liquefaction project in Jefferson County in Texas to a new price of approximately $10.5 billion.

“The execution of the final contract is a critical step in advancing Phase 1 of Port Arthur LNG toward a final investment decision,” said Justin Bird, Chief Executive of the Sempra Infrastructure unit.

“Based on robust customer interest, we know that Port Arthur LNG is highly attractive to the global market and we look forward to providing customers with access to secure, abundant and reliable US LNG,” added Bird.

Paul Marsden, President of Bechtel, said the firm was delighted to continue its partnership with Sempra after constructing the Cameron export plant at Hackberry.

“Alongside Sempra Infrastructure, Bechtel is ready to continue active construction in the Gulf Coast and bring more opportunities to the local region” added Marsden.

Contract scope

The Sempra EPC contract with Bechtel covers engineering, procurement, construction, commissioning, start-up, performance testing and operator training activities for Phase 1 of the new Texas plant.

The Port Arthur Phase 1 project has all its permits and is expected to include an initial two liquefaction Trains with a combined 13.5 million tonnes per annum of output.

Sempra said it was already working on a similarly-sized Port Arthur LNG Phase 2 project with “active marketing” taking place. This would take total production eventually to 27 MTPA.

California-based Sempra has signed a series of supply deals for Port Arthur Phase 1 involving four companies.

They are the Polish Oil & Gas Company, the German utility RWE Supply & Trading, UK chemicals company INEOS and US major ConocoPhillips.

The Sempra Infrastructure unit of Sempra also contains the other LNG assets like the Cameron plant and the Costa Azul export project in Mexico.

Earlier in 2022 Sempra agreed to sell a 10 percent interest in Sempra Infrastructure Partners to a subsidiary of the Abu Dhabi Investment Authority (ADIA), the wealth fund in the United Arab Emirates, for $1.78Bln in cash.

The San Diego-based utility business of Sempra includes San Diego Gas & Electric Co. and Southern California Gas Co. 

Bechtel Inc., the dominant US liquefaction plant and energy engineering company that once constructed three export facilities in Queensland in Australia alongside each other, said it would join with researchers from two American universities to develop technologies for living and working on the Moon.

The research awards were announced by the National Aeronautics and Space Administration (Nasa) after it selected proposals from the Colorado School of Mines and Missouri Science & Technology.

“Bechtel started as a frontier company more than 120 years ago,” said Mike Costas, general manager of Bechtel’s Defense and Space business line.

“Now, we’re thinking about the next frontier. What will it take to build permanent infrastructure on the Moon? What an exciting time,” stated Costas.

Most of the current LNG export plants being constructed or proposed along the US Gulf Coast are in the hands of Bechtel.

One of the company’s most notable feats was building the three Australian LNG export plants Queensland Curtis LNG, Gladstone LNG and Australia-Pacific LNG and bringing the six processing Trains onstream between 2014 and 2016.

Bechtel said its selected projects will receive up to $2 million over two years to develop their technologies and the company founded in San Francisco and with main offices in Houston, Texas, will serve as an industrial partner to both teams.

Autonomous construction

“Autonomous Construction - Humans living on the Moon will need structures like habitats and landing pads, which can be made more efficiently if they're constructed autonomously by robots,” explained Bechtel.

“Colorado School of Mines, led by principal investigator Christopher Dreyer, will develop tools and methods for autonomous landing pad construction on the Moon's surface,” it added.

The other award is for “Extracting Resources - Supplies for lunar astronauts” and could be created from what's already on the lunar surface, a process called in-situ resource utilization.

“Missouri S&T, led by principal investigator Leslie Gertsch, will use magnetic and electrostatic technologies to more efficiently separate calcium-containing and aluminum-containing minerals from the Moon's soil, called regolith, to extract materials suitable for construction on the lunar surface,” said Bechtel.

Bechtel said that this was the perfect opportunity to collaborate with the engineering schools.

“Tackling the challenge of building on the Moon will require the know-how of what’s already been done in Earth’s harshest environments, combined with new thinking and approaches,” said Costas.

Tellurian Inc., the owner of the Driftwood LNG export plant in Louisiana that has sealed supply deals with commodities trading firms Gunvor and Vitol, is transferring the listing of its own shares from the Nasdaq to the NYSE American, formerly known as the American Stock Exchange (AMEX) and now the third-tier exchange for US investors.

“Transferring our stock listing to the NYSE American allows us to leverage the exchange’s prestigious trading platform for our shareholders’ benefit,” said Tellurian Executive Chairman Charif Souki.

Tellurian said it expected its common stock to begin trading on the NYSE American on November 2, 2021 and will remain under the current ticker symbol “TELL”.

Trading of Tellurian shares on Nasdaq was expected to end at close of business on November 1, 2021.

The Houston, Texas-based company is moving towards the LNG plant construction phase after signing the Gunvor and Vitol LNG sales agreements in late May and early June 2021 for a combined 6 million tonnes per annum of cargoes from the Driftwood facility.

Each of the agreements is for a period of 10 years with the supply indexed to a combination of the Japan-Korea Marker for Asian spot cargoes and the European benchmark Dutch Title Transfer facility (TTF) price.

The engineering, procurement and construction contract has already been agreed with Bechtel Inc., the leading global builder of LNG export facilities.

The Driftwood plant with production capacity of around 27 MTPA and will be built on the west bank of the Calcasieu River, just south of Lake Charles.

Reasoning

In announcing the switch from Nasdaq to the NYSE American, Tellurian Chairman Souki said it comes at a time of “global natural gas shortages” and recent “history-making” prices

“This indicates the pressing need for additional liquefaction export capacity in the United States,” added Souki.

“Tellurian is poised to contribute to America’s status as an energy superpower, having achieved both regulatory permits and commercial success for Driftwood LNG phase one development,” he explained.

“We have turned our focus to putting together a world-class banking group and have started site preparation, in advance of giving our partner Bechtel notice to proceed with construction expected in the first quarter 2022,” stated Souki.

The Nasdaq and the NYSE American have different stock trading profiles.

Nasdaq (the National Association of Securities Dealers Automated Quotations) holds a higher trading volume per day than any other stock exchange in the world.

Nasdaq joined forces with AMEX in 1998 to create the Nasdaq-Amex Market Group. However, the merger was short-lived and the AMEX regained its independence in 2004.

Now called the NYSE American, the exchange includes the second-largest options trading market, though is now mainly regarded as a platform for small-cap and mid-cap stocks and derivatives.

“We’re excited to welcome Tellurian as it transfers to NYSE American and joins our community of innovators and disruptors,” said John Tuttle, Vice Chairman and Chief Commercial Officer of the NYSE Group.

“We look forward to working with Tellurian as it supplies the world with a reliable, clean energy supply,” added Tuttle.

Cheniere Energy, the largest US LNG exporter from the Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, told regulators that its Sabine Pass Train 6 project was now more than 44 percent complete in terms of construction amid continued progress by US engineers Bechtel Inc.

Sempra Energy, the California-based utility and operator of the Cameron LNG export plant in Louisiana, has filed a request to expand its Port Arthur project in Texas where the liquefaction Trains will be the largest in the US.

The Sempra processing Trains at Port Arthur would be the largest built in the US, each with capacity of 6.73 million tonnes per annum, though smaller than the world’s largest Trains of 7.8 MTPA of capacity operating at the Ras Laffan plant in Qatar.

Sempra has asked the Federal Energy Regulatory Commission to initiate a pre-filing environmental review to its original plan for two Trains, each with 7.73 MTPA of output, by adding two more Trains of the same capacity at the facility in Jefferson County in Texas.

The addition of Train 3 and Train 4 would double the facility’s output from the current 13.46 MTPA to a total of almost 27 MTPA.

The company plans to build the plant on a site along the west side of the Sabine-Neches Ship Channel, about five miles south of the city of Port Arthur.

The expansion will utilize the same liquefaction Train design as that put forward for the initial plant so that much of the initial engineering design is already complete.

Bechtel designed the original two-Train plant and has been retained as the project engineer.

Sempra said that it proposes to file its formal application for the expansion in January 2020.

“In that application, Sempra will request that the Commission issues authorization for the siting, construction, and operation of the expansion project by no later than January 2021,” the company explained.

“Sempra anticipates requesting authorization to begin construction in March 2022,” it added in its FERC request.

Sempra first received its environmental impact statement from regulators in October 2018 for the Port Arthur project.

The previous FERC review addressed the potential environmental effects of the construction and operation of the various proposed facilities. as well as the Texas Connector and Louisiana Connector pipelines.

The original filing covered two liquefaction Trains, three LNG storage tanks, each with a capacity of 160,000 cubic metres, a new marine terminal with two LNG vessel berths, an area for support vessels, an LNG transfer system and a truck-loading area.