LNG

McDermott International posted a more than 23 percent rise in second-quarter revenues to 2.1 billion and a small net loss as it continued to make progress on two US Gulf Coast LNG export projects, the Cameron liquefaction plant in Louisiana and Freeport facility in Texas.

Engineering firms McDermott International and partners Chiyoda Corp. of Japan and the US Zachry Group said the first liquefaction Train at the Freeport LNG project on Quintana Island in Texas has reached the final commissioning stage.

This includes the introduction of feed gas into Train 1 of the natural gas import facility that is being transformed into a liquefaction and LNG export plant after several project delays.

“We are extremely proud of the Freeport LNG project team for reaching this major milestone at this unique LNG production facility,” said Mark Coscio, McDermott's Senior Vice President for North, Central and South America.

“First of its kind in the US, with the largest electric-motor driven refrigeration compressors, the Freeport LNG facility will significantly improve the energy export capabilities we have in the US, and McDermott is pleased to be part of its development from the ground up,” added Coscio.

Once Train 1 is fully operational, it will have the capacity to produce more than 5 million tonnes of LNG per annum.

Zachry Group, as the joint venture lead, engaged McDermott for the Pre-FEED in 2011, followed by FEED works to support the early development stage of the project.

Later Chiyoda joined the partnership and the joint team provided engineering, procurement and facility construction as well as commissioning and initial operations for the project.

It includes three liquefaction Trains with 15 MTPA of capacity, a second loading berth and a 165,000 cubic metres full containment LNG storage tank.

The orginal Freeport terminal was completed in 2008 with one berth and two storage tanks, each of 160,000 cubic metres capacity.

The Freeport project is led by oil and gas entrepreneur Michael Smith, who is Chairman and Chief Executive of the development company.

Freeport received regulatory approval in 2019 to build an additional Train 4 and permits from the US Department of Energy for the export of Train 4 volumes to Non-Free Trade Agreement countries, opening the way for marketing.

The Freeport Train 4 will take overall output to 20 MTPA. About 13.5 MTPA of this capacity has been contracted under 20-year tolling agreements to Japanese utilities Osaka Gas and JERA Co. Inc., BP of the UK, South Korea’s SK E&S, while a fifth deal with Toshiba Corp. was off-loaded in June 2019 by the troubled Japanese company to French energy major Total.

There is also a sixth deal, a sales agreement for 500,000 tonnes per annum contracted to international commodities firm Trafigura in the form of a three-year accord starting in 2020.

US pipeline company Kinder Morgan said it was still delaying the start-up of its Elba Island LNG export plant in Georgia after receiving regulatory permission in early March to introduce feed-gas into its systems comprising 10 small-scale liquefaction Trains.

Elba Island is an existing import terminal that has been transformed into an export plant to produce an initial 2.5 million tonnes per annum of LNG.

The Georgia terminal is among three US liquefaction facilities that are expected to begin service in 2019, adding to the country's growing energy export industry.

Kinder had initially expected the first Train to come on stream by the end of March and the remaining Trains following during the year.

However, the project had also been hit by minor construction delays and the original start-up day was gradually pushed back from the end of 2018.

“The start-up of Elba has been delayed due to additional common commissioning issues that are systematically being addressed on the first of the 10 liquefaction units,” said the company.

“We will issue a press release when we have resolved the issues and are in service,” it added. Kinder did not say how long the delay would last.

Kinder’s project near Savannah is utilizing Shell's Movable Modular Liquefaction System. The small-scale liquefaction trains were largely assembled off-site.

Kinder, based in Houston, will have feed-gas needs equivalent to around 350 million cubic feet per day.

Of the three plants set for start-up in 2019, only Sempra Energy’s Cameron LNG facility at Hackberry in Louisiana has shipped its first cargo after a series of delays.

When Elba Island begins commercial operations soon followed by the Freeport plant in Texas, the US will double the number of export plants in operation.

According to the Federal Energy Regulatory Commission, the liquefaction Trains 1-6 at Elba Island are expected to start entering service at one-month intervals.

Elba Island’s Trains 7-10 are then scheduled to come on stream in the third quarter of 2019.

The Georgia project is supported by a 20-year supply contract with Royal Dutch Shell.

The coming on stream of Elba Island on the East Coast would follow the shipping of the first cargo more than a year ago from the Cove Point in Maryland on Chesapeake Bay, operated by Dominion Energy.

The two Cheniere Energy plants on the Gulf Coast at Sabine Pass in Louisiana and Corpus Christi in Texas and Sempra’s Cameron plant give the US a current total of four plants in operation.

Kinder Morgan, the US pipeline and infrastructure company, has encountered minor issues relating to the commissioning of equipment at the facility near Savannah in the state of Georgia vying to enter the start-up phase ahead of the Cameron LNG plant in Louisiana.

Elba Island is an existing import terminal that has been transformed into an export plant to produce an initial 2.5 million tonnes per annum of LNG from 10 small liquefaction Trains.

Kinder had previously expected the first liquefaction Train to come on stream in April and the remaining Trains following in sequence.

However, the project has been hit by minor construction delays. The start-up had previously been expected by the end of 2018.

According to the Federal Energy Regulatory Commission, the mini liquefaction Trains 1-6 at Elba Island are expected to start entering service at one-month intervals.

Elba Island’s Trains 7-10 are then scheduled to come on stream in the third quarter of 2019.

The 10 units being installed at Elba mark the first time this specific technology is being deployed in the US.

The Elba plant is using Royal Dutch Shell’s Movable Modular Liquefaction System. These small-scale liquefaction Trains are mostly pre-assembled then brought to the site.

“Since this is the first project using this specific configuration of liquefaction technology, we have experienced some minor issues that are being resolved as part of the process,” said Kinder.

The Georgia project is supported by a 20-year supply contract with Shell and is the smallest of the three US plants being completed in 2019. Shell was a stakeholder in the Elba Island plant when it operated as an import terminal.

Start-ups for Elba Island, Sempra Energy’s Cameron LNG in Louisiana and the Freeport plant in Texas will double the number of US LNG export terminals in operation.

The Cameron facility is also set for production, ahead of Freeport, though both have suffered various holds ups and problems in construction.

Kinder and several equity fund partners are also developing the Gulf LNG export project proposed at the site of the existing import terminal at Pascagoula in Mississippi.

Toshiba Corp. of Japan said it had decided to cancel a plan to dispose of its US LNG business, including volumes from the Freeport liquefaction and export plant being constructed in Texas, to the Chinese ENN group and to relaunch the bidding process.

US pipeline company Kinder Morgan said it would start-up its Elba Island LNG export plant in Georgia in late April after receiving regulatory permission in early March to introduce feed-gas, back-up fuel and boil-off gas into its systems comprising 10 small-scale liquefaction Trains.

Kinder Morgan said it had expected the first train to come on line by the end of March and the remaining Trains following during the year.

However, the project has been hit by minor construction delays. The start-up had previously been expected by the end of 2018.

“Kinder Morgan has revised its initial in-service date expectations for the Elba Liquefaction Project as a result of delays during construction,” said the company.

“The first unit of the project is now expected to be in commercial service in late April,” it added.

Elba Island is an existing import terminal that has been transformed into an export plant to produce an initial 2.5 million tonnes per annum of LNG.

Kinder Morgan, based in Houston, has developed the plant at a cost of just $2 billion and will have feed-gas needs equivalent to around 350 million cubic feet per day.

The Georgia terminal is among three US liquefaction facilities that are expected to begin service in 2019, adding to the country's growing energy export industry.

Start-ups for Elba Island, Sempra Energy’s Cameron LNG in Louisiana and the Freeport plant in Texas would double the number of US LNG export terminals in operation.

The Cameron and Freeport projects have also been delayed by holds ups and problems in construction.

According to the Federal Energy Regulatory Commission, the liquefaction Trains 1-6 at Elba Island are expected to start entering service at one-month intervals.

Elba Island’s Trains 7-10 are then scheduled to come on stream in the third quarter of 2019.

The Georgia project is supported by a 20-year supply contract with Royal Dutch Shell.

The coming on stream of Elba Island on the east Coast follows the shipping of the first cargo a year ago from the Cove Point in Maryland on Chesapeake Bay, operated by Dominion Energy.

The two Cheniere Energy plants on the Gulf Coast at Sabine Pass in Louisiana and Corpus Christi in Texas give the US four operational export plants and five when Cameron LNG starts in the weeks ahead.

US regulators have approved the start-up of the Texas Eastern Transmission’s portion of the Stratton Ridge Expansion pipeline project designed to provide feed-gas to the Freeport LNG export plant at Quintana Island in Texas.