LNG

Chiyoda Corp, the Japanese LNG engineering company working on the Golden Pass project in Texas that has been hit by the bankruptcy of the US Zachry construction group, is seeking an immediate return to building work along with the owners to get Train 1 back on track.

Zachry Holdings, the lead contractor in the $10 billion project to transform the Golden Pass LNG terminal in Texas into an export plant for a joint venture comprising QatarEnergy and ExxonMobil has filed for Chapter 11 bankruptcy protection.

Gaztransport and Technigaz (GTT), the French liquefied natural gas storage technology company, said it received an order for tanks designs for 17 vessels from the South Korea shipyard HD Hyundai Heavy Industries on behalf of a leading LNG player, revealed earlier as QatarEnergy.

The US Department of Energy (DoE) has issued two long-term orders authorizing additional liquefied natural gas exports from two projects of the US Gulf Coast, the QatarEnergy-backed Golden Pass LNG plant in Texas and the Magnolia LNG venture in Louisiana owned by the Glenfarne Group.

Golden Pass, an existing import terminal currently being transformed into an export facility, is a joint venture between QatarEnergy and ExxonMobil Corp. and the first liquefaction Train is scheduled to come on stream by 2024.

The Federal Energy Regulatory Commission formally approved the transformation of Golden Pass, located on the Sabine-Neches Waterway in Texas, back in December 2016.

However, the Qatar-ExxonMobil project has advanced at a slow pace because of doubts several years ago over market demand issues that have now been resolved and work has gathered pace to construct three liquefaction Trains with around 16 million tonnes per annum of output.

US regulators had previously approved construction of the Magnolia LNG plant proposed for a 115-acre site near the Calcasieu Ship Channel with 8.8 MTPA of output from four Trains.

Investment buyer

The Magnolia development had previously been owned by an Australian-listed company LNG Ltd that ceased trading amid financial difficulties.

Glenfarne, a New York-based fund specialising in energy infrastructure investment, then took over the project.

The DoE orders have authorized additional 0.5 billion cubic feet per day (Bcf/d) of natural gas flows to the plants. “The orders allow Golden Pass LNG to export the equivalent of an additional 0.35 Bcf/d and Magnolia LNG to export an additional 0.15 Bcf/d of natural gas as LNG to any country not prohibited by US law or policy,” said the statement.

The DoE had previously issued long-term non-free trade agreement export orders for the majority of the projects’ capacities, with Magnolia LNG’s authorization for 1.08 billion cubic feet per day in 2016 and an authorization for 2.21 billion cubic feet per day issued to Golden Pass LNG in 2017.

The statement explained that the two orders align the respective export authorizations to additional capacity that the FERC had approved for the projects based on optimized project designs.

“The United States is the largest global producer of oil and natural gas and a net exporter of energy. US fuel supplies, including LNG, continue to play a key role in global energy security, particularly due to Putin’s invasion of Ukraine,” said the DoE.

It noted that US LNG exports had recently reached new highs of about 12 billion cubic feet per day and are expected to grow to more than 13 Bcf per day by the end of this year as additional export capacity comes online from seven large-scale plants now operating. 

ExxonMobil has explained its huge earnings turnaround and how it would be focusing on upstream development, LNG projects like Coral South in Mozambique and Golden Pass in Texas while building a larger natural gas trading platform and increasing production from the Permian Basin shale assets.

ExxonMobil Corp. has proposed a huge public-private carbon storage project at the centre of the Gulf Coast LNG industry that would collect carbon-dioxide emissions from petrochemical plants and refineries in the area and bury them under the Gulf of Mexico.

The US Golden Pass LNG export project on the Gulf Coast, owned by Qatar Petroleum and ExxonMobil, has requested immediate authorization from the Federal Energy Regulatory Commission to begin the work covered in the latest part of its implementation plan.

McDermott International, the LNG and energy engineering company, has secured around $560 million in new capital through a series of transactions expected to close by the end of 2020, just a year after filing for Chapter 11 bankruptcy protection.

McDermott has secured commitments from certain existing lenders and shareholders for these transactions, as well as approval from a steering committee comprised of certain existing letter of credit and term loan lenders.

“The transactions are designed to further strengthen the company's balance sheet, increase liquidity and fund future growth opportunities,” said McDermott.

The Houston, Texas-based company said the support reflected their confidence in the long-term business strategy and competitive position.

Analysts noted that many companies in the US and global oil and gas sector have experienced difficulties in the past year, though McDermott's problems were essentially caused by an ill-timed take-over deal.

McDermott is involved in some of the world’s leading LNG construction projects, including on the US Gulf Coast and the North Field Expansion in Qatar and at Ichthys LNG in Australia.

McDermott has additionally been engaged as a contractor on the Golden Pass LNG export project for Qatar Petroleum and ExxonMobil.

“Following on the heels of a successful restructuring earlier this year, this additional capital will further solidify our liquidity position, enabling us to continue to deliver superior project execution for our customers and consistently pursue new growth opportunities as demand for our expertise and capabilities increases,” said
David Dickson, President and Chief Executive of McDermott.

Kirkland and Ellis LLP is serving as legal counsel to McDermott, AP Services, LLC, an affiliate of AlixPartners, is serving as operational advisor and Centerview Partners is serving as the company's financial advisor.

McDermott first received approval for a comprehensive restructuring plan in January 2020, supported by more than two-thirds of all its funded debt creditors.

The equity-for-debt plan eliminated more than $4.6 billion of McDermott’s debt.

The restructuring was implemented through a pre-packaged Chapter 11 process.

The process resulted in a comprehensive balance sheet restructuring and transformed into equity nearly all of McDermott's funded debt.

The company had suffered financial problems since it completed the $6Bln deal in 2018 to buy LNG rival engineering, procurement and construction company Chicago Bridge & Iron (CB&I).

The restructuring transaction managed to strengthen its balance sheet and normalize its trade debt.

All of McDermott's businesses operated as normal during the restructuring.

McDermott also completed the sale of Lummus Technology to a joint partnership between Haldia Petrochemicals, a flagship company of The Chatterjee Group, and equity fund Rhone Capital, having received all required regulatory approvals under the reorganization.

McDermott emerged from the crisis with a newly constituted board of directors.

McDermott International, the US LNG and energy engineering company, said it sent out the second shipment of topside modules for a floating production storage and offloading (FPSO) unit for Japan’s MODEC Inc to operate for oil and natural gas production in the Gulf of Mexico.

The departure comes just weeks after the first shipment of modules sailed away from McDermott's Altamira fabrication facility located in Mexico,, near the Altamira LNG import terminal.

The FPSO will be located in the Area 1 block, approximately six miles (10 kilometres) off the coast of Mexico in the shallow waters of the Campeche Bay at a water depth of approximately 105 feet (32 metres).

“Our MODEC project fabrication team at McDermott's Altamira Fabrication Yard continues to deliver for our customer with this latest shipment of modules," said Mark Coscio, Senior Vice President of Mcdermott for North, Central and South America.

“Our strong, local team remains focused on safety and execution excellence as we work to complete the modules needed for the EPCI fixed platform,” he explained.

The MODEC project scope of work consists of five FPSO topside modules, which will be delivered to the client in two shipments.

This second shipment includes modules that will provide inlet separators, oil separation, a flare KO Drum and sand clean-up materials for the FPSO.

The modules will travel from McDermott's Altamira fabrication facility to Singapore where integration will be performed at the Dyna-Mac Fabrication Yard.

MODEC is responsible for the engineering, procurement, construction, mobilization, installation and operation of the FPSO, including topsides processing equipment as well as hull and marine systems.

SOFEC, Inc., a MODEC group company, will design and supply the disconnectable tower yoke mooring system of the FPSO.

The FPSO will be capable of processing 90,000 barrels of crude oil per day, 75 million cubic feet of natural gas per day, 120,000 barrels of water injection per day and have a storage capacity of 900,000 barrels of crude.

The first oil and natural gas production by the FPSO is planned for 2021.

Vietnam said it was in talks with US major ExxonMobil Corp. on the possibility of investing in new projects to develop liquefied natural gas imports for the southeast Asian nation to meet increasing power needs and it was seeking US shipments.

The government in Hanoi issued a statement that Vietnam welcomed ExxonMobil’s interest in the provision of new investment.

It issued the statement after a phone call between Prime Minister Nguyen Xuan Phuc and Irtiza Sayyed, President of ExxonMobil LNG Market Development Inc.

“Prime Minister Nguyen Xuan Phuc welcomed ExxonMobil’s plan to invest in Vietnam in many areas, including natural gas exploration and LNG, petrochemical refining and electricity production from LNG,” said the government.

“The Prime Minister affirmed that ExxonMobil's cooperation is very important, contributing to the joint cooperation between Vietnam and the United States, especially this year to celebrate the 25th anniversary of establishing diplomatic relations between the two countries,” it added.

The statement mentioned in particular ExxonMobil possibly investing in the development of the LNG-for-power chain with a capacity of about 3,000 megawatts in Long An in the Mekong Delta region of southern Vietnam.

“For this, ExxonMobil will ensure a continuous supply of LNG directly from the United States and from several other countries. LNG import will contribute to creating a harmonious trade balance between Vietnam and the US,” said the Vietnamese.

The government added that another possible project was the 4,000-MW LNG-for-power plant in the northern port city of Haiphong, adding that this could be completed between 2025 and 2030.

ExxonMobil’s main US LNG export interests are as a shareholder in the Qatar Petroleum-led Golden Pass export project in Texas.

Qatar Petroleum owns 70 percent of the Golden Pass joint venture and ExxonMobil holds 30 percent.

Originally built as an import facility on the Sabine-Neches Waterway in Texas before the shale-gas revolution, Golden Pass will be reconfigured to export up to 15.6 million tonnes per annum of LNG.

An engineering consortium comprising McDermott and Zachry Group of the US and Japan’s Chiyoda Corp. has been awarded the contract to build the plant.

The Qatar state energy company and ExxonMobil have also been running a joint marketing company called Ocean LNG, created in 2016.

Ocean LNG is responsible for placing all of the offtake from the Golden Pass liquefaction facility.

Following a final investment decision for Golden Pass made on the 5th of February 2019, the companies have been focusing on marketing US LNG volumes in the Asia-Pacific region.

ExxonMobil has been engaged in Vietnam offshore activities for several years, though progress has been slow.

Vietnam Oil and Gas Group (PetroVietnam) and Vietnam Exploration and Production Corp. (PVEP) are parties to a production-sharing agreement for offshore blocks 117-119.

However, no significant progress has been made since pre-front-end engineering and design was completed in 2018 on the Ca Voi Xanh field, also known as the Blue Whale field.

ExxonMobil has said that the Blue Whale field natural gas resources are large enough to provide power for a city the size of Hanoi for more than 20 years.