LNG

Sempra Infrastructure, the owner of LNG assets on the US Gulf Coast and Mexico, has signed a preliminary supply accord with the Polish Oil and Gas Company for 3 million tonnes per annum of shipments from Louisiana and Texas.

A heads of agreement (HOA) was signed for a potential Polish deal with the cargoes delivered on a free-on-board bases from Sempra’s Cameron LNG plant at Hackberry in Louisiana, which is being expanded.

“The agreement underscores our commitment to help provide greater energy security to Poland and our global partners through long-term LNG sales,” said Dan Brouillette, President of Sempra Infrastructure, an affiliate of San Diego, California-based utility Sempra.

“Our relationship with PGNiG is core to this commitment, and we are excited to continue working closely with them to advance more reliable, secure and increasingly clean energy solutions,” added Brouillette.

Iwona Waksmundzka-Olejniczak, President of Polish Oil and Gas, said the accord paved the way for negotiations of detailed terms.

Commercial path

“LNG is already one of the cornerstones of our diversified strategy to enhance Polish energy security, as well as to strengthen the commercial potential of the PGNiG Group,” she added.

Sempra stated that the accord may result in the finalization of definitive 20-year LNG sale and purchase agreements (SPAs) for 2 MTPA from the Cameron LNG Phase 2 project expansion in Louisiana and 1 MTPA from the Port Arthur LNG project under development in Texas.

“The HOA also provides PGNiG the opportunity in 2022 to reallocate volumes from the Cameron LNG Phase 2 project to the Port Arthur LNG project,” explained Sempra.

Sempra's Cameron LNG Phase 2 expansion will be in the form of a single LNG Train with a production capacity of around 6.75 MTPA of LNG.

The plant will also be subject to a debottlenecking process to increase the efficiency and output of the existing three liquefaction Trains.

Sempra has now put the Port Arthur project in Texas back on the fast track route to development.

The proposed Port Arthur LNG plant has all its regulatory permits and will be constructed on a 3,000-acre site in Jefferson County in Texas and with an initial 13.5 MTPA of capacity.

The US Department of Energy has removed the requirement for long-term LNG export authorization holders to seek separate short-term permits to export volumes, boosting the flexibility of US companies in the spot cargo market.

By consolidating this authority in a single authorization without any increase in total approved export volumes, the DoE said it was a move to streamline its regulatory process.

“This policy is a sensible and concrete way DoE can remove unnecessary regulatory burdens for LNG exporters,” said Secretary of Energy Dan Brouillette.

“Those exports bring benefits to our economy, while also helping to reduce global emissions,” added Brouillette in reference to US shipments to Asia helping to enable the switch from coal to gas.

The DoE believes that this deregulatory measure would lead to administrative efficiency.

It would also remove a duplicative requirement for exports of LNG to have DoE authorization for the short-term market, where the authorization holder already has long-term export authority.

Concurrent with this policy statement, DOE added that it was amending several long-term LNG export orders to add short-term export authority to the long-term orders.

“We are increasingly seeing more sales of LNG on the spot market, and this action by DoE is allowing more flexibility for US LNG exporters,” explained Deputy Secretary of Energy Mark W. Menezes.

“With this policy, US LNG exporters can let the market - not our regulatory process - determine which LNG cargos will be exported under long-term or short-term agreements on the spot market,” stated Menezes.

Acting Under Secretary of Energy and Assistant Secretary for Fossil Energy Steven Winberg said LNG export policies should support the market aims of US companies.

“We want to have a sensible regulatory system that takes current market realities into account, and this policy statement does just that,” added Winberg.

At the start of January 2021, the DoE also issued its fourth set of LNG export authorizations through to 2050.

This action followed several LNG export term extensions issued since October 2020 pursuant to its global export policies.

The latest term extensions were given to the Southern LNG export facility operating in Georgia, the Elba Island plant, as well as Sempra Energy’s Cameron facility in Louisiana.

The new permits have also been given to the Annova LNG project proposed in Texas and Eagle LNG’s two small-scale facilities in Florida, including the Maxville facility currently in operation.

These issuances extended each project’s long-term LNG export authorization to non-free trade agreement (non-FTA) countries through December 31, 2050. 

Term extensions now apply to permits now held by 18 US LNG export projects, as well as the Costa Azul project in Mexico. 

The US Department of Energy has extended the terms of five long-term liquefied natural gas export authorizations through 2050 for plants in Louisiana, Texas, Georgia and Florida.

The US Department of Energy extended the terms of seven long-term liquefied natural gas export authorizations through 2050 to help preserve what it said was a vital energy source for its friends and allies.

The actions follow 10 LNG export term extensions previously issued in October pursuant to an export term policy statement finalized in July 2020 by the DoE.

“The success story of US LNG continues to be written, and these extended authorizations will ensure that the benefits from these exports continue for decades to come,” said US Secretary of Energy Dan Brouillette.

“The United States just set a new all-time high record for LNG exports in November 2020, and the monthly rate of LNG exports has now quintupled since the beginning of the Trump Administration,” added Brouillette

The term extensions issued include for the Golden Pass project owned by Qatar Petroleum and ExxonMobil whereby the terminal is currently being transformed into an export plant.

Other projects under development and on the extension list to 2050 are Texas LNG, proposed for Brownsville, Texas, as well as Magnolia LNG in Louisiana.

The Magnolia plant is proposed for a 115-acre site near the Calcasieu Ship Channel. It is designed to produce 8.8 million tonnes per annum of LNG from four Trains.

Both Texas LNG and Magnolia are controlled by Glenfarne, a New York-based fund specialising in energy infrastructure investment.

Tellurian Inc.’s Driftwood venture at Lake Charles in Louisiana and the Delfin LNG project, proposed for offshore Louisiana, are on the list as well.

The Delfin FLNG project is based on the deployment of floating liquefaction facilities with other moored production and storage vessels.

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

Delfin then asked the Federal Energy Regulatory Commission for a three-year and six-month extension until 28th March, 2023 to build facilities to connect up to the FLNG units 30 miles off the coast.

Sempra Energy, the owner of the Cameron LNG plant in Louisiana, also sees and extension linked to its Costa Azul project on the Pacific Coast of Mexico.

Costa Azul, which recently reached a final investment decision for its mid-scale project, has DoE authorization to import and liquefy US-sourced natural gas for export from Mexico.

“Critical to our Nation’s energy independence are the prospects presented by these long-term LNG export extensions,” said Deputy Secretary of Energy Mark W. Menezes.

“LNG is and will continue to be a vital energy resource for our friends and allies around the world,” added Menezes.

These issuances extend each project’s long-term LNG export authorization to non-free trade agreement (non-FTA) countries through December 31, 2050.

Acting Under Secretary of Energy and Assistant Secretary of Fossil Energy Steven Winberg said the move was necessary.

“It is important for DOE to do everything to assure a long-term future for US LNG exports, which will continue to meet global energy security and emissions reduction goals,” added Winberg.

Including the term extension applications just granted, long-term LNG export authorizations with export terms through 2050 are now held by 13 US LNG export projects, as well as the Costa Azul project in Mexico.

US President Donald Trump said during a speech in Midland, Texas, that the Department of Energy is issuing a final policy statement that allows for liquefied natural gas exports to Non-Free Trade Agreement countries to be extended through the year 2050.

Tellurian Inc. appears to be set to renew its preliminary liquefied natural gas supply and equity investment deal with Indian importer Petronet LNG as the US firm’s shares jumped by more than 56 percent on the Nasdaq global exchange after leaks by executives.

The US Secretary of Energy Dan Brouillette has issued a final long-term order authorizing the export of domestically produced liquefied natural gas from the proposed Jordan Cove LNG Terminal at Coos Bay in the northwest state of Oregon.

The export permit, which had previously been conditional, follows the approval by the Federal Energy Regulatory Commission announced March 2020 for the siting, construction, and operation of the Jordan Cove liquefaction plant and the related Pacific Connector Pipeline.

“The export authorization for Jordan Cove, the first US West Coast LNG project, will ease access to further position the US as a top supplier of LNG around the world,” said Secretary Brouillette.

“The issuance to Jordan Cove serves to further expand opportunities for US LNG abroad, particularly in the growing markets of Asia, and encapsulates what the Trump Administration has been working hard on for the past three years - providing reliable, affordable, and cleaner-burning natural gas to our allies around the world,” stated Brouillette.

The development company, the Jordan Cove Energy Project is owned by Canada’s Pembina Pipeline Corp. and it now has the authority to export up to 1.08 billion cubic feet per day of natural gas as LNG.

The DoE statement said the project’s natural gas will be sourced from both Canada and the United States and would be liquefied at the Jordan Cove facility for export to any nation worldwide, unless trade is prohibited by US law.

Calgary, Alberta-based Pembina acquired the Jordan Cove LNG project in late 2017 in its takeover of another Canadian company, Veresen Inc.

The project includes a 230-mile pipeline which would traverse four counties in Southern Oregon on the route to the liquefaction plant.

The liquefaction plant and other facilities are planned for a 200-acre site and comprise five small-scale Trains each with 1.5 million tonnes per annum of output for a total of 7.8 MTPA.

“As we work to overcome the Covid-19 pandemic, LNG exports are going to be one of the building blocks toward the United States’ economic recovery,” said DOE’s Assistant Secretary for Fossil Energy Steven Winberg.

“The US has exported LNG to 38 countries, with this authorization to Jordan Cove, the United States can look to increase that number with expanded geographic coverage for LNG exports into key importing markets in Asia, providing enhanced economic opportunities both here in the US and globally,” added Winberg.

Jordan Cove has multiple facilities, including two full-containment storage tanks with total capacity of 320,000 cubic metres, gas treating infrastructure, an export jetty and access to more than 25 billion cubic feet per day of gas supply from Western Canada and the US Rockies.

The project’s Pacific Connector pipeline will have a 36-inch diameter with capacity to transport up to 1.2 billion cubic feet of natural gas per day.

Feed-gas for Jordan Cove would be sourced at the Malin Hub, creating a new outlet for natural gas from areas such as the Rockies Basin.

The export plant is expected to be visited by about 120 LNG carriers per year and Pembina has signed preliminary accords with Jera Co. Inc. and Itochu Corp. of Japan for the supply of cargoes.

The seventh LNG Producer-Consumer Conference held in the Japanese city of Nagoya heard Qatar outline the positive benefits for the global trade of the production expansion planned by Qatar and of a new wave of export ventures in North America and in nations such as Mozambique.