LNG

Delfin LNG has secured a long-term offtake agreement for its second floating LNG vessel offshore Louisiana as British utility Centrica locks in more US LNG supply. Delfin recently reached financial close on its first $5 billion FLNG project, set to add 4.4 mtpa of liquefaction capacity with a targeted start-up in 2030.

Canada's Whitecap Resources has agreed to deliver 50,000 MMBtu/day – equivalent of five LNG cargoes annually – to Centrica starting from April 2028, with pricing linked to Europe’s TTF benchmark.

April 19 (LNGJ) - The UK’s North Sea Transition Authority has offered a 10-year licence to a company called dCarbonX to store natural gas in the depleted Bains Gas Field in the East Irish Sea. “Redeveloping Bains for gas storage could deliver a storage capacity equivalent to three to four days' supply for the UK with injection potentially starting in 2028,” said the Authority.

   The Bains gas field is in UK Block 110 and located about 17 miles (27km) west of Blackpool in northwest England. UK utility Centrica had developed it as a subsea tieback to the South Morecambe Field. The gas was transported through a subsea pipeline to the gas terminal at Barrow-in-Furness but production ceased in 2017.

Delfin Midstream, the US liquefied natural gas developer, and US oil and gas exploration and production company, Devon Energy, have entered into an LNG export partnership.

The companies agreed to a strategic investment deal and a Heads of Agreement that would give Devon up to 2 million tonnes per annum of liquefaction capacity.

The Delfin floating LNG project is based on the deployment of vessel-borne liquefaction facilities with other moored production and storage vessels and recently asked the Federal Energy Regulatory Commission to extend the deadline for the onshore completions of the venture to the 28th of September 2023.

The Delfin developers have already been awarded a deepwater port licence by the US Maritime Administration (MARAD) and the project has been approved by the US Coast Guard.

Delfin is additionally seeking to construct, operate and maintain certain onshore metering, compression, and piping facilities located onshore in Cameron Parish in Louisiana.

Offshore Louisiana

Delfin, based in Houston, Texas, said the HOA provided the framework for finalizing a definitive long-term tolling agreement representing 1 MTPA of liquefaction capacity in Delfin’s first FLNG vessel offshore Louisiana, with the ability to add an additional 1 MTPA in Delfin’s first or a future FLNG unit.

In addition to providing Devon with up to 2 MTPA of total liquefaction on a long-term basis, the HOA also provides opportunities for additional future equity investments in Delfin.

“We are delighted to execute this agreement with Devon, representing a truly strategic partnership between a US producer and a liquefaction provider,” said Dudley Poston, Delfin Chief Executive.

“We believe our unique liquefaction solution provides significant structural flexibility that allows producers to maximize the value of their natural gas, while providing a much-needed source of additional supply to the world LNG marketplace,” added Poston.

Devon is a leading independent E&P company in the US with a premier multi-basin portfolio and a world-class acreage position in the Delaware Basin of West Texas and southern New Mexico.

Investment

“Our decision to invest in Delfin was the result of a thorough process intended to create additional pricing diversification for our natural gas portfolio and deliver a sustainable and capital efficient return for our shareholders,” said Rick Muncrief, Devon’s President and CEO.

“Devon has a strong track record of finding best-in-class midstream and downstream solutions for our production and we are excited to partner with Delfin to meet the need for safe, clean and reliable energy,” stated Muncrief.

Delfin has additionally signed a binding SPA with global commodities company Vitol and an HOA on supply with UK utility Centrica.

As a modular project requiring only 2 MTPA to 2.5 MTPA of long-term contracts to begin construction, and with all necessary permits in hand, Delfin is on schedule to make its FID on its first FLNG vessel by the end of 2022.

In the Delfin-Devon deal discussions, Latham & Watkins LLP served as legal advisor to Delfin and Kirkland & Ellis LLP was legal advisor to Devon.

Equinor, the Norwegian major and the UK’s Centrica, owner of the British Gas utility, have signed a deal for the delivery of more Norwegian pipeline natural gas over the next three winters and the accord will slightly lessen the need for more LNG deliveries to UK terminals.

Sept 30 (LNGJ) - Centrica, the UK utility and LNG market participant, has agreed to sell LNG to China under a long-term contract. The binding 15-year Sales and Purchase Agreement is for 500,000 tonnes per annum of supplies to the Shenergy Group. Deliveries are expected to start in 2024.

“We are delighted to conclude this agreement with Shenergy. The roots of our shared history date back over 150 years, to when British Gas helped install gas lighting in the streets of Shanghai,” said Chris O’Shea, Centrica’s Chief Executive. “This deal is a new milestone for our companies and complements Centrica’s existing portfolio of LNG positions and contracts,” added the CEO.

Sept 4 (LNGJ) - UK LNG and natural gas player, Centrica plc, has agreed to acquire the energy supply customers of another company through its British Gas business. Centrica said the purchase for an undisclosed sum of Robin Hood Energy will add around 112,000 residential utility customers and 2,600 business customers across 10,000 sites. “Completion of the transaction is expected on 16 September with customers moving to British Gas over the next few months,” said Centrica.

   “As well as our actions to simplify and modernise our business, we are focused on returning to profitable growth in our core markets and investing in value generating opportunities,” said Chris O’Shea, the Chief Executive of Centrica. The UK utility receives LNG cargoes from producers such as Cheniere Energy’s US Sabine Pass plant and has booked volumes from Mozambique LNG.

Centrica plc, the UK utility and energy company with a growing LNG market presence including booked volumes from the US and Mozambique, has confirmed Chris O’Shea in his post of Chief Executive.

O’Shea, the former Chief Financial Officer, had initially been named as interim CEO on March 17 while a search got underway for a permanent successor to Iain Conn, who had stepped down as scheduled as CEO and from the Board.

A new Chairman, Scott Wheway, had also been named in March when incumbent Chairman Charles Berry, who has been on medical leave since the 12th of February 2020, tendered his resignation for health reasons.

Centrica, owner of the utility company British Gas, has established strong LNG capabilities over the past few years, including having a cooperation agreement with Japanese utility Tokyo Gas.

Centrica and Tokyo Gas have co-purchased offtake of delivered ex-ship (DES) supplies amounting to 2.6 million tonnes per annum for 20 years from the proposed Total-led Mozambique LNG export plant in southeast Africa.

Centrica additionally has a 20-year contract for volumes from Train 5 at Sabine Pass on a free-on-board (FOB) basis, giving it destination rights for the cargoes and a purchase price indexed to the US benchmark Henry Hub price.

The UK company holds regasification capacity at Europe’s largest import terminal, the Isle of Grain facility on the River Medway-Thames estuary in Kent.

In addition, LNG fleet owner GasLog recently received a newbuild carrier that will be chartered to Centrica for its growing LNG activities.

The 180,000 cubic metres capacity vessel, named “GasLog Windsor”, was constructed at Samsung Heavy Industries on South Korea.

“In the last few weeks since my appointment I have completed a review of both the internal and external candidates for this role and have come to the conclusion that Chris is comprehensively the best candidate for Centrica," said Chairman Wheyway in making the announcement.

"I’m delighted to appoint him to the role on a permanent basis,” he added.

“The Board is confident that he is the right leader to navigate Centrica through and beyond the present Covid-19 crisis focusing on the welfare of our colleagues and customers, the financial resilience of the company and the agility to move quickly when we emerge from these unprecedented circumstances,” said the Chairman.

O’Shea said it was a huge honour to be appointed to lead Centrica.

“The company has a long history of serving customers and having strong market positions. Over recent years it has built the capabilities to help our customers transition to a low carbon future,” he added.

“Beyond this present emergency our focus will be on creating value for all of our stakeholders through delivering growth in our customer-facing businesses, the structural simplification of the group, and building on the undoubted strengths and capabilities we have in our people and our businesses today,” stated the CEO.

O’Shea’s remuneration package will consist of a basic salary and variable incentive arrangements.

The key changes to his current arrangements are a base salary of £775,000 ($974,200) and a reduction from a 15 percent to 10 percent pension contribution.

The company has commenced a search for a new CFO since O’Shea won’t be returning to the post.

Anadarko Petroleum of the US said it would seek long-term charters for around 16 liquefied natural gas carriers to ship volumes to customers from its proposed liquefaction and export project in Mozambique in southeast Africa.

The US exploration and production company, whose main assets are in onshore shale and conventional basins in the US states of Arkansas, Texas, Colorado and Pennsylvania, is scheduled to make a final investment decision soon along with its partners on the $20-billion Mozambique joint venture.

The supply contracts signed so far are for shipments delivered on an ex-ship (DES) basis whereby the seller provides the sea transportation to deliver to the buyer’s preferred import terminal.

“The project needs approximately 16 LNG vessels to service the DES contracts,” said the US company.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains with total nameplate capacity of 12.88 MTPA with feed-gas coming from the Golfinho-Atum gas fields located within offshore Area 1 licence of the Rovuma Basin.

The Mozambique plant is being built near the port of Pemba in the northeast Cabo Delgado Province, about 900 kilometres north of Beira, the Mozambican city badly damaged by a cyclone in early March 2019 that caused many casualties.

Anadarko has supply deals with European utilities Centrica of the UK and French utility EDF, the Japanese utilities Tokyo Gas and Tohoku Electric and energy companies, Royal Dutch Shell, China National Offshore Oil Corp. and Bharat Petroleum of India.

The other stakeholders in the Anadarko-controlled Area 1 licence include Japanese trading house Mitsui and Co. and three Indian companies Bharat Petroleum, ONGC Videsh and Oil India Ltd., as well as Thailand’s national energy company PTTEP and the Mozambique state-owned oil and gas firm ENH.

Two other projects are planned in Mozambique from the separate Area 4 licence resources held by Italian energy company Eni and partners.

These include the Coral floating LNG joint venture with capacity of around 3.4 MTPA already under construction and scheduled to come on stream in 2022.

The Area 4 onshore Mamba LNG project is also expected to be sanctioned in 2019 and production is scheduled to start in 2024.

That consortium is formed by Mozambique Rovuma Ventures, comprising Eni 25 percent, ExxonMobil 25 percent and China National Petroleum Corp. (PetroChina) with 20 percent.

The remaining 30 percent of shares in the Area 4 licence are held in parcels of 10 percent by South Korean utility and energy company Korea Gas Corp., Galp Energia of Portugal and Mozambique’s ENH.

Indonesia, the Asian liquefied natural gas producing country, has signed an agreement to receive LNG shipments from the Mozambique export project in the southeast African nation being developed by Anadarko Petroleum of the US.