LNG

July 8 (LNGJ) - Equinor, the Norwegian oil, gas and LNG producer and the main supplier of pipeline gas to Europe, said ahead of second-quarter earnings on July 24 that the company’s internal natural gas price for the three months rose to $8.47 per million British thermal units, up from $7.76 per MMBtu in the first quarter of 2024.

   Equinor’s internal transfer price for natural gas is a volume weighted average price calculated at the end of every quarter after deducting costs relating to bringing the gas from the processing plants to market and a marketing fee element. The price components include values of the Dutch Title Transfer Facility (TTF) amounting to 22.5 percent of the total, the UK National Balancing Point (NBP) with 30 percent input, Germany’s Trading Hub Europe (THE) price at 22.5 percent and the French Point d’Echange de Gaz (PEG) 25 percent.

Denmark has become a benchmark nation for measuring pipeline natural gas and power needs in the European Union as a bridge supplier of gas to Poland on the Baltic Pipe and being outside the LNG supply loop unlike Germany.

Royal Vopak of the Netherlands, the world’s leading independent tank storage company and LNG terminals shareholder, said it aimed to take a 50 percent stake in the floating LNG project at the Dutch port of Eemshaven though was pulling out of an LNG terminal venture in Hong Kong.

Vopak said it had agreed to acquire a 50 percent stake in the Eemshaven project from Dutch utility Gasunie.

“This transaction will be subject to a number of conditions, including the approval from the competition authorities. The transaction is targeted to be completed at the latest by 1 October 2023,” Vopak said.

The EemsEnergyTerminal is an LNG import terminal located in the seaport of the province of Groningen.

“Gasunie developed this new floating LNG terminal in the Eemshaven area in response to gas supply insecurities and a desire to reduce the dependency on Russian gas,” Vopak explained.

Vopak has additionally decided to no longer pursue the acquisition of a 49.99 percent stake in a floating storage and regasification unit (FSRU) owned by Japanese shipping company Mitsui Osk Lines and deployed in Hong Kong.

FSRU plans

“Vopak has been working with MOL for developing and commissioning the Hong Kong FSRU LNG terminal, and Vopak has contributed much to the establishment of a reliable system for the operation and maintenance of the terminal,” Vopak stated.

“Although the commercial start is expected later this year, the delay of the project has resulted in reduced attractiveness and made Vopak decide not to make use of the share right,” it added.

Vopak said it would remain involved in the commissioning of the terminal and would continue to provide support to the operation of the terminal as required.

The Eemshaven LNG facility has been operational since September 2022 and has a regasification capacity of 8 billion cubic metres per year. 

It comprises two FSRUs, the “Energos Igloo” and an FSRU barge built in China for Belgian shipping company Exmar.

Vopak said that the partners would explore ways of increasing capacity further.

Vopak and Gasunie are also partners in the main Dutch LNG import terminal, the onshore Gate facility at the port of Rotterdam.

Dutch security

“This agreement highlights the commitment of Gasunie and Vopak to jointly develop and operate open access LNG infrastructure in the Netherlands and to contribute to the energy security of Europe,” the statement added.

Ulco Vermeulen, director of business development at Gasunie, said he was pleased with Vopak’s decision to become a co-shareholder in EemsEnergyTerminal.

“By pooling our knowledge and experience we will offer a unique and reliable LNG import solution,” Vermeulen added.

Walter Moone, president New Energies and LNG at Vopak, said he was keen to build on the existing successful partnership with Gasunie.

“This fits very well with Vopak’s strategy to grow in LNG infrastructure and accelerate towards new energies,” Moone explained.

“We are proud to develop and operate reliable and open access infrastructure as this plays an important role both in the security of energy as well as in the energy transition,” added Moone.

The UK is the focus of Europe’s main LNG deliveries with 10 cargoes this week alone as prices increase in natural gas markets amid future supply and economic concerns and with the various assessments competing for price discovery, including the European Union’s one spot cargo price now issued daily.

The Netherlands said production at the Groningen natural gas field would be lowered to the minimal amount needed to keep wells operational in the coming 12 months and the field is still scheduled to be shut down in 2024 even amid gas shortages, while floating LNG terminals have begun operating offshore the Dutch province.

The Government said in a statement that the Groningen field, formerly the largest supplier to the Netherlands and which sent some volumes to Germany, will be capped at 2.8 billion cubic metres from the start of October 2022, down from 4.5 Bcm.

The Groningen field is operated by a joint venture comprising Shell and ExxonMobil and still holds huge reserves of natural gas.

Production at Groningen has gradually been reduced over the past 10 years because of complaints about earth tremors.

The Government said that all 11 production locations in the Groningen region would remain operational until at least April 2023 to enable an increase in production in case of an emergency.

More claims

The authorities added that more than 100 claims for structural damage had been filed since two earthquakes, the largest measuring 2.7 on the Richter scale, hit Groningen province on Saturday, September 24.

Most of the 1,000 tremors reported in Groningen since 1986 have been measured at 2.7 on the Richter scale or less.

Analysts note that such small tremors can be felt by some people though are unlikely to cause damage.

An investigation published by the Dutch financial newspaper, “Het Financieele Dagblad”, said that the Dutch Government had earned more than €360 billion ($349Bln) in revenues from the Groningen gas field since it came on stream.

“Total revenues from the gas region amounted to €428Bln when adjusted for inflation, of which €363.7Bln went to the government while €64.7Bln was split between Shell and ExxonMobil,” said the report.

Surge in costs

The report noted that Groningen production costs started to rise rapidly from less than €500 million a year in 2013 to a peak of €2.9Bln in 2018, as the government started to compensate people in Groningen who said their homes had been damaged by tremors.

A further €8.36Bln has been set aside by the Dutch Government for further compensation payments for Groningen residents.

The Dutch floating LNG facilities are sited at Eemshaven on the waterway between Eemshaven port in the province of Groningen and the North Sea. Analysts added that LNG imports would likely be less costly in the long run than the controversial Groningen gas field with its soaring compensation claims.

Eemshaven LNG comprises two floating storage and regasification units (FSRUs), the “Golar Igloo” vessel and a regasification barge provided by Belgian shipping company Exmar.

The FSRUs supply the Dutch system and most regasification capacity at Eemshaven has been reserved for the Dutch operations of Shell and the French utility and energy group Engie, while the main utility of the Czech Republic is also importing shipments. 

UK LNG imports increased by nearly 50 percent as the country's regasification infrastructure was used to increase natural gas supplies to Europe after the February invasion of Ukraine by Russia and the start of Western sanctions.

April 21 (LNGJ) - The Dutch Government has decided against increasing output from the Groningen natural gas field, once one of the largest in Europe. The plans remain gradually taking the field off stream because of complaints about earth tremors. “The Netherlands only extracts gas if it can be done safely and responsibly. And extracting more gas from the fields in the province of Groningen is not safe,” said the Dutch government on efforts to replace Russian gas volumes.

   “This should be considered only as a last resort, if, for example, gas deliveries to an entire region (including households and hospitals) are at risk. The government would only consider extracting more gas in Groningen if that would help prevent such a situation,” it added. The Dutch will try and boost LNG imports while keeping a minimal flow at Groningen from October 2022 of 1.5 billion cubic metres per annum, the equivalent of 16 LNG cargoes.

Uniper, the German utility and European liquefied natural gas capacity holder and cargo trader, said it had arranged increased capacity rights at the Dutch Gate LNG import terminal in Rotterdam.

Dutch liquefied natural gas fuel provider Rolande said it recently opened its 20th filling station for LNG as it expands in the Netherlands, Belgium and Germany.

Titan LNG, a Dutch supplier to the marine and industrial markets with quayside and ship-to-ship delivery of LNG to river barges and sea-going ships in the ports such as Amsterdam, Rotterdam and Antwerp has commissioned a short-term LNG truck-loading facility in the Belgian Port of Zeebrugge.

Titan said its “Project Bridge” has been designed to accommodate LNG truck-loadings as an interim solution during a four-week period in which the Dutch Gate LNG import terminal in Rotterdam is undergoing essential maintenance.

“The Titan LNG chartered ‘Green Zeebrugge’ is filling up trucks at the quay of the PSA terminal in Zeebrugge to serve bunkering customers in the ARA region, Zeebrugge, and surrounding areas,” explained Titan.

Equipped with two loading bays, the interim fuelling station was commissioned and developed by Titan LNG’s in-house team, in collaboration with small-scale LNG market participants to trial the project’s operations.

To ensure safety the HAZOP and HAZID sessions were performed at short notice.

The Port Authorities of Zeebrugge and the terminal were involved in initial plans for the project to ensure compliance for this temporary set-up, including the step-by-step protocols and designs.

The facility was assembled and is being operated by Rijlaarsdam Tech, Titan LNG’s project partners.

“Operator Rijlaarsdam and Titan LNG passed the vetting and approval process due to the preparation and robustness of the documentation and training of the crew on the quay, providing confidence to the Authorities that safe operations could be carried out for the duration of the four-week period,” said Titan.

“During normal operations, the GATE terminal loads some 600 trailers per month and the Fluxys terminal in Zeebrugge cannot fill this demand for extra slots, meaning it would not have sufficient capacity to ensure the demand for the downstream market,” added the Dutch company.

The project aims to handle additional LNG demand coming to Zeebrugge starting from mid-July of this year and is expected to fulfil up to 300 orders during its deployment.

“This is an immensely proud moment for the team at Titan LNG and for the LNG market sector,” said Michael Schaap, Titan LNG’s Commercial Director of Marine.

“It takes LNG terminals years to install this functionality, and we did it in a matter of months. I would like to thank all our project partners for the hard work and perseverance that went into this success,” stated Schaap.

Tom van den Akker, Project Manager at Titan LNG, said that “Project Bridge” required a broad range of competencies and resources from Titan LNG, including safety managers, operations, engineering, and the commercial department.

“The complexity of the project and the innovation required, in addition to the short deadlines certainly presented some challenges,” explained Akker.

“Our project team successfully hit the milestones that were planned, and we’re extremely proud to bring the solution to the market,” he added.

Current truck loadings are done daily during weekdays, while the “Green Zeebrugge” will load LNG from the Fluxys terminal in Zeebrugge on Saturdays and Sundays to replenish the FlexFueler bunker barges in the ARA area.

Following the completion of the “Bridge” project at Zeebrugge, Titan aims to deploy the same facility to other locations across the European Union.