LNG

Feb 22 (LNGJ) - Gulfstream LNG, a proposed mid-scale LNG export project located on the shore of the Mississippi River in Plaquemines Parish in Louisiana plans to request that the Federal Energy Regulatory Commission (FERC) begins a pre-filing process after completion of the company’s current initial equity funding round. The Gulfstream project plans to start exporting volumes by 2029 from its mid-scale facility with 4 million tonnes per annum of output.

   The Gulfstream Chief Executive is Vivek Chandra who previously founded Texas LNG, an export project still under development . Under Chandra’s leadership as CEO, Texas LNG completed multiple funding and technical rounds and received its FERC permit. That project then then found engineering partners and was reported to be progressing towards its final investment decision.

The US Federal Energy Regulatory Commission said it was awaiting further information from the Freeport LNG plant in Texas for the process to begin for a partial re-start during November and a full ramp-up in production by March 2023.

The FERC said in a statement that it required further information to allow the facility to come back on stream in November as planned.

Freeport was shut down on June 8 due to a pipeline explosion and the company has said that it expected the plant to return to at least partial service by mid-November and for supplies of 2.1 billion cubic feet per day to be received by pipeline.

The Quintana Island facility must also follow more safety orders issued by the Pipeline Hazardous Materials Safety Administration (PHMSA).

The PHMSA and the FERC have been discussing with Freeport LNG management “ongoing damage assessments, repair work plans and plans for restart” since the June 8 events.

Time for review

“FERC reiterates the need for Freeport to provide the status and schedule of implementing the findings, recommendations, and lessons learned resulting from the root cause investigation and assessments as soon as possible to allow sufficient review time,” the regulator has said.

Freeport LNG said it aimed to restore more than 85 percent of pre-fire processing capacity in November and to ramp-up the facility to 100 percent of capacity by March 2023.

“We continue to progress our work towards achieving the November restart of our liquefaction facility,” said Freeport LNG in a statement.

“That work includes completing the final repair and restoration efforts, completing required work plans and obtaining the necessary regulatory approvals required before the facility's restart,” added Freeport LNG.

The June 8 incident occurred in pipe racks that support the transfer of LNG from the facility's LNG storage tank area to the terminal's dock facilities located on the north side of the dock basin.

None of the liquefaction Trains, LNG storage tanks, dock facilities nor the LNG process areas were impacted and there were no injuries reported.

Expansion plan

Freeport LNG was founded by billionaire Michael Smith who is Chairman and Chief Executive. When the explosion occurred, Smith and his team were planning for an expansion from 15 million tonnes per annum of output from three Trains to 20 MTPA with the construction of a fourth Train.

The plant is the joint second-largest liquefaction facility in the US, from seven existing facilities, along with Cameron LNG and Corpus Christi LNG, and is surpassed in output only by the six-Train plant at Sabine Pass in Louisiana, owned by Cheniere Energy.

Freeport LNG's main customers include Japan’s largest importer JERA Co. Inc., the Japanese utilities Kansai Electric and Osaka Gas as well as South Korean company SK E&S and buyers in Europe.

During the first quarter of 2022 before the accident, the Freeport plant exported 55 cargoes mainly to import terminals in Europe and North Asia.

Venture Global has applied to regulators to increase activities at the Plaquemines liquefied natural gas export project on the west bank of the Mississippi, about 30 miles south of New Orleans.

The Federal Energy Regulatory Commission (FERC) has appointed a new Commissioner, Willie L. Phillips, who has been sworn in and now takes the agency to its full complement of five sitting members.

Phillips was nominated by President Joe Biden in September 2021 and confirmed by the Senate in November.

He replaces Republican Neil Chatterjee for a term expiring on June 30, 2026, and gives the left-wing Democratic Party a 3-2 FERC majority.

“He most recently serving on the Public Service Commission of the District of Columbia (DC), where he has been chairman since 2018 and a commissioner since 2014,” said FERC.

“Before being appointed to the DC commission, Phillips served as the assistant general counsel for the North American Electric Reliability Corp.,” added the statement.

“He has also worked as a private lawyer, advising clients on regulatory compliance and policy matters and assisting in litigation and administrative proceedings at both the federal and state levels,” it added.

Glick agenda

Phillips was awarded a doctorate from Howard University School of Law and a bachelor of science from the University of Montevallo in Alabama.

With Phillips officially sworn in, FERC will now move ahead and use its 3-2 majority to pursue FERC Chairman Richard Glick left-wing agenda to impose curbs on the US oil and natural gas industry.

Glick has pushed for change at the agency on a number of issues, including greenhouse-gas emission regulations and what the left-wingers call “environmental justice“ in which they take any term and add the word “justice“ to the end. This policy will allow people outside of jurisdictions to hold up projects for years.

Glick is also leading Biden Administration efforts to revise and tighten policies before according new permits for natural gas infrastructure.

The other Democratic Party-supporting commissioner is Allison Clements, while Commissioner James Danly and Commissioner Mark C. Christie were Republican appointees.

Sempra Infrastructure, a new subsidiary of Californian utility Sempra Energy, said it was planning a second liquefied natural gas export plant on the Pacific Coast of Mexico.

Pembina Pipeline Corp., developer of the now blocked Jordan Cove LNG export plant in the US northwest state of Oregon, took a hit in its fourth-quarter earnings after the project was the first hydrocarbon venture stopped by the Biden Administration, though Pembina said Jordan Cove and two other ventures remained in its strategy.

One of the three liquefaction Trains at the US Freeport LNG export plant at Quintana Island in Texas remained shut down on October 27 after a recent fire incident presumed to have been caused when a compressor tripped at the facility.

Plans for the proposed Port Arthur LNG export project are still advancing, with US developer Sempra Energy replying to requests from regulators on details of the phase two expansion at the Texas plant.

The US Golden Pass LNG export project on the Gulf Coast, owned by Qatar Petroleum and ExxonMobil, is requesting authorization from the Federal Energy Regulatory Commission to begin the work covered in the latest part of its Implementation Plan and including the foundations of the first liquefaction Train by mid-October 2020.

The FERC formally approved the transformation of the Golden Pass import terminal located on the Sabine-Neches Waterway in Texas into an export plant in December 2016.

The Qatar-ExxonMobil project is building three liquefaction Trains with around 16 million tonnes per annum of output.

The first Train is still scheduled to come on stream in 2024, with Train 2 expected to follow six-to-eight months later, and Train 3 six-to-eight months after that.

Golden Pass has continued to progress its site development activities since 2019 and has now submitted the next chapter of the Implementation Plan to expand work at the site.

The project’s engineering, procurement and construction contractor is a joint venture comprising Chiyoda Corp. of Japan and US companies McDermott International and Zachry Group.

The EPC companies have been making sure that local businesses received priority consideration for work and has awarded 34 local sub-contracts since actual construction began in May 2020.

The part of the Implementation Plan referred to in the latest FERC filing includes the installation of the foundations in the LNG Train 1 Area.

“While Southeast Texas perseveres through the Covid-19 crisis, many companies and residents are getting a boost from opportunity brought to the area by the Golden Pass LNG export project,” the developers have said.

The EPC contractors said they had already committed over $245 million to local businesses so far, and more than 650 local residents were working on the construction site as of the start of August 2020.

The companies noted that the schedule for the Golden Pass Project remains the same as the schedule that was provided in the Implementation Plan.

Part of the latest information exchange with the FERC covered the foundation calculations for the steel piperack (Pipe Bridge) in Train 1

“Golden Pass shall file with the Secretary the following information, stamped and sealed by the professional engineer-of-record in the state of Texas: a. site preparation drawings and specifications; b. LNG liquefaction facility structures and foundation design drawings and calculations (including prefabricated and field constructed structures); c. seismic specifications for procured equipment; and d. quality control procedures to be used for civil-structural design and construction,” it explained to the FERC.

Golden Pass requested that the information in this part of the plan (Volume II) be treated as “privileged and confidential”, and that it not be released to the public.

“This information contains proprietary information that is customarily treated as privileged and confidential and disclosure of this information could result in commercial and competitive harm to Golden Pass,” the developers told the FERC.

Qatar Petroleum owns 70 percent of the project and 30 percent is held by ExxonMobil.

The US major is also Qatar’s main partner in the existing Trains in Qatar itself which produce 77 MTPA and will be expanded to 110 MTPA.

ExxonMobil has said that the Golden Pass project is building on the other successful international relationship between the two in exploration and development activities in nations such as Argentina, Brazil and Mozambique.

The US Freeport LNG export plant at Quintana Island in Texas has been given three more years by the Federal Energy Regulatory Commission to complete its Train 4 expansion at the facility by May 2026.

Freeport had previously delayed its own final investment decision on building a fourth Train until 2021 because of the depressed energy markets and low prices and demand.

“As with most LNG projects around the world, Covid-19 and other market challenges have negatively impacted our development efforts,” Freeport said at the time.

Now the FERC has granted Freeport’s recently filed request for a formal delay to completion of the fourth Train at the project, led by the company’s Chief Executive, the energy entrepreneur Michael Smith.

Freeport began commercial operations in May 2020 for its third Train with liquefaction services for French major Total and South Korean utility and energy company SK E&S under their tolling agreements.

Previously, Freeport CEO Smith had said he was unsure when he would advance the Train 4 expansion as he had no firm long-term contracts in place for the fourth Train.

A preliminary agreement signed in 2018 by Japanese trading house Sumitomo Corp. for 2.2 million tonnes per annum from Train 4 expired without being finalized.

Smith cited a list of challenges facing FIDs in February 2020 before the Covid-19 shutdowns, including record low prices and weaker than expected demand in Asia. At the time Covid-19 had been confined to China.

He said this had created a perfect storm of headwinds for producers looking to construct new liquefaction plants or additional processing Trains.

The FERC said that it had issued public notice in August 2020 of the applicant’s request for an extension of time to build Train 4 and noted that no comments were filed from the public against such a move.

“Based on the facts presented in the request, the applicants are granted an extension of time until and including May 17, 2026, to complete construction of the project and make it available for service,” the FERC said in its statement.

Freeport LNG Development will now be able to go ahead in its own time to construct the additional facility in Brazoria County, Texas.

“The proposed Train 4 Project will allow the applicants to liquefy for export an additional 5.1 metric tonnes per annum of LNG or the equivalent of approximately 0.74 billion cubic feet per day of natural gas,” the FERC order stated.

More than a dozen US developers are pursuing projects for new plants or additional production capacity and have yet to announce positive FIDs.

Only Venture Global has been moving to the construction stage with two new projects in Louisiana, Calcasieu Pass and the Plaquemines facility.

The first phase construction at Freeport saw the building of three Trains and 15 MTPA of output.

The original Freeport terminal was completed in 2008 as an import facility with one berth and two storage tanks, each of 160,000 cubic metres capacity.

A second loading berth and a 165,000 cubic metres capacity full containment LNG storage tank were added. The Train 4 project is the scheduled second phase of construction.

About 13.4 MTPA of Freeport production capacity from the first three Trains has been contracted under use-or-pay liquefaction tolling agreements with customers including European and Japanese contract holders, BP of the UK, Germany’s Uniper and Japan’s Jera Co. Inc. and Osaka Gas.

The first three Trains were built by a consortium including McDermott International and Zachry Construction Corp. of the US, along with Chiyoda Corp. of Japan.

However, US engineering company KBR was selected by Freeport as the preferred bidder for the engineering, procurement, construction, and commissioning contract for the fourth-Train expansion.

Under the terms of the contract, KBR would provide EPC, commissioning and start-up of a nominal 5 MTPA LNG Train and associated gas pre-treatment plant.

There is now a question mark over that Train 4 EPC contract as KBR has said it is pulling out of lump-sum LNG and energy construction projects.

The selection of KBR was made following completion of a nine-month front-end engineering and design verification, execution planning and EPC proposal process.