LNG

Norwegian major Equinor and its partners in the Snøhvit Future project and Hammerfest LNG have awarded a construction and installation contract to domestic company Leonhard Nilsen & Sønner.

The project partners of Equinor are Norway’s Petoro, Fance’s TotalEnergies, UK-listed Neptune Energy and Germany’s Wintershall Dea.

The Snøhvit Future project includes onshore compression and electrification of the Hammerfest LNG export plant.

The regulators postponed the start of electrification by two years until 2030 compared with the original schedule and in the interim the plant will continue to run on gas turbines.

The gas turbines will also be maintained for back-up power from 2030 to 2033.

Exports

Hammerfest exports around 4.70 million tonnes of LNG per annum and most of the volumes are delivered to European destinations like France, Spain, the Netherlands and Lithuania.

Most feed-gas for Hammerfest comes from a total of 20 wells in the Snøhvit and Albatross fields.

This output is transported to land through a 143-kilometre (90-mile) pipeline and the plant processes around 18.4 million cubic metres (mcm) of natural gas per day.

The Leonhard Nilsen company is headquartered in Andøy in Norway’s Nordland county and the work is worth 1.5 billion Norwegian crowns ($143 million) and will generate local spin-offs for other areas including Finnmark and Troms.

“We are pleased to award this contract to a company in Northern Norway. For Equinor, it has been important that the Snøhvit Future project should create ripple effects throughout the region,” said Trond Bokn, Equinor’s Senior Vice President for Project Development.

Reliable supplier

“The Snøhvit Future project will strengthen Norway’s position as a reliable long-term supplier of gas produced with very low greenhouse gas emissions,” Bokn added.

The project will secure jobs in the North of Norway and guarantee energy supply to Europe through 2050.

Three large modules will be installed at the Hammerfest plant including a compressor, a substation and electric steam boilers.

“Extensive modification work will also be carried out. In addition, there will be a lot of activity around Hammerfest, including the construction of a tunnel and transformer substation allowing power to be transmitted from Hyggevatn to Melkøya,” Equinor explained.

Hammerfest LNG is a key company in the region with approximately 350 permanent employees, plus about 150 contractors and apprentices.

The LNG plant also pays 170 million crowns in property taxes annually to the Hammerfest municipality.

As specialists in tunnelling, the Leonhard Nilsen company has delivered several large-scale projects both in Norway and abroad, and construction work will start once the necessary approvals and permits have been received. This is the company’s first assignment for Equinor.

“They submitted the best bid overall, and we look forward to working with a new supplier in the region. Leonhard Nilsen also has a number of sub-suppliers, including Viggo Eriksen in Hammerfest, Alta Anlegg and Hörmann Norway in Tromsø,” said Mette H. Ottøy, Equinor’s Chief Procurement Officer.

NextDecade Corp., the company developing the Rio Grande LNG export plant on the north shore of the Brownsville Ship Channel in south Texas, has given an update on third-quarter business activities and progress on the joint venture.

INEOS Group, the global petrochemicals manufacturer with over 190 facilities in nearly 30 countries and whose Chairman Jim Ratcliffe is seeking a stake in soccer team Manchester United, has entered the LNG shipping fleet market for the first time to transport US export volumes.

Ratcliffe, who is a trained chemical engineer who used to work for ExxonMobil Chemicals and now has joint ventures with Chinese groups like Sinopec, was the first to import US shale gas into Europe. His other interests include soccer team investments.

INEOS Energy Trading signed agreements with the Japanese shipping company Mitsui OSK Lines (MOL) for two newbuild LNG carriers to be used for the importation of LNG into Germany from the United States.

Port Arthur LNG

These agreements are a significant shipping move by INEOS following the long-term Sales and Purchase Agreement signed with US utility Sempra for 1.4 million tonnes per annum of cargoes from the planned Port Arthur LNG export project in Texas.

Ratcliffe’s company purchased the volumes to ship to its long-term regasification capacity holding at Brunsbüttel, the proposed onshore German LNG import terminal on the Elbe River north of Hamburg.

The small Brunsbüttel port is currently operating a floating storage and regasification facility (FSRU) for LNG shipments to replace the cut-off supplies of Russian pipeline natural gas to Germany and the European Union via the North Stream routes.

“INEOS will capitalise on its experience as the largest transporter of ethane gas from the US to Europe and Asia, to develop a ‘pipeline’ of LNG into Europe to service its own demand, as well as that of select third parties,” explained INEOS.

The comoany said that both LNG vessels will have a capacity of 174,000 cubic metres and are being built at Daewoo Shipbuilding & Marine Engineering at Okpo in South Korea and would be equipped with the latest MAN Energy Solutions engines.

“It was extremely important that we selected modern, efficient vessels with environmental considerations embedded in the design,” said David Bucknall, Chief Executive of INEOS Energy Trading.

“We agreed an engine type and vessel specification with MOL that we believe is optimal for reducing carbon emissions and methane slip,” Bucknall explained.

Opportunities

“We will continue to work with MOL to identify further opportunities to reduce emissions as both companies work towards a net zero future,” the CEO stated.

Whilst INEOS has an extensive fleet of ethane and naphtha carriers, these two vessels signify their first entry into the LNG carrier market.

“We are delighted to be working with MOL, who have a great deal of experience shipping LNG and an excellent reputation,” Bucknall said.

“We look forward to developing the relationship, both during the charter period and beyond,” he added.  

Norwegian energy company Equinor said plans have been agreed to invest $1.33 billion in upgrading the Hammerfest LNG plant, Western Europe’s only baseload export facility, and to extend its lifespan towards 2050.

Fitch Ratings, the New York-based credit ratings agency and financial services company, has just published a report analysing the European Union’s efforts to mitigate the worst effects on gas markets of a cut-off of Russian imports and for their replacement with LNG and other types of energy.

Equinor, the Norwegian oil and gas major and main pipeline natural gas supplier to Europe amid diminishing Russian deliveries from Gazprom, will be an LNG trader with additional volumes supplied by the largest US LNG exporter Cheniere Energy.

Under a planned 15-year agreement Equinor will purchase around 1.75 million tonnes of LNG per annum from Houston-based Cheniere from 2026.

“This new Sales and Purchase Agreement (SPA) will add new volumes to Equinor’s already significant gas portfolio of pipeline gas and LNG,” stated Equinor.

The Norwegian company also disclosed that the expansion at Corpus Christi to add 10 MTPA to the current nameplate capacity of 13.5 MTPA will likely be followed by another boost in output.

“With global energy demand growing and increased focus on energy security, the LNG market is expected to grow significantly. US LNG can supply the European markets as well as cover demand in other markets,” explained Equinor.

The Stavanger, Norway-based oil and gas major has recently shipped the first cargo from the repaired Hammerfest in Northern Norway to re-established seaborne LNG supply link Europe.

New US volumes

It was the first cargo to leave the Hammerfest liquefaction and export plant since the September 2020 fire.

Once the Hammerfest is ramped up to full production of 4.8 MTPA, a ship will leave the facility on Melkøya island every five or six days and over the year will deliver 5 percent of Norway’s natural gas exports while the other 95 percent is delivered by pipelines.

Norway’s role as a key supplier to Europe has taken on more importance because of the Russian invasion of Ukraine and Western sanctions against Russian oil and gas.

The Hammerfest project gave Europe its first large-scale LNG supply when it came on stream in 2007, though the facility was originally planned and built to supply the US before the shale-gas boom.

“I am very pleased that we have entered into a long-term agreement with Cheniere, the largest US producer of LNG,” said Helge Haugane, Equinor’s senior vice president Gas & Power.

“Based on our production in Norway, Equinor is the second-largest supplier of pipeline gas to Europe. The new LNG agreement is a major building block in Equinor’s ambition to further strengthen our global gas position by adding more LNG to the portfolio,” Haugane explained.

Crucial role

“LNG will play a crucial role in providing energy security. By increasing our position in this segment, we will be even better positioned as a long-term reliable supplier of energy’ he stated.

Under the SPA, Equinor has agreed to purchase the volumes from Cheniere Marketing on a free-on-board basis whereby the Norwegians send their own ships.

Equinor said the deliveries under the SPA would start in the second half of 2026 and reach the full 1.75 MTPA in the second half of 2027.

“Half of the volume, or about 900,000 tonnes, is subject to Cheniere making a positive final investment decision to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-Train Corpus Christi Stage III Project,” stated Equinor.

This suggests that the Cheniere, which operates the Sabine Pass plant in Louisiana with 27 MTPA of production, is planning yet another expansion at the Texas facility.

The first cargo to leave the Hammerfest liquefaction and export plant in northern Norway since the September 2020 fire is on its way to re-connecting the Norwegian seaborne gas supply chain for the European Union.

Norwegian energy company Equinor has delayed the re-start of the Hammerfest LNG export plant in northern Norway by six weeks to mid-May 2022 as repair work continues after the 2020 fire at the facility.

Russian Foreign Minister Sergey Lavrov said that he explained to his German counterpart Annalena Baerbock that demands on Russian troop operations on the country’s own territory were unacceptable while Baerbock warned Moscow against weaponizing energy, including the Nord Stream II natural gas pipeline.

The main Continental European natural gas price and benchmark for LNG values, the Dutch Title Transfer Facility (TTF), has risen to a 2021 record high on demand in Europe as industry prepares for a full relaunch after the Covid-19 economic slowdown.