LNG

ENN Natural Gas, the leading Hong Kong-listed and independent Chinese LNG and city-gas company, has signed a supply accord for volumes from an LNG export project being developed at Al Ruwais Industrial City in the United Arab Emirates.

The Hong Kong floating LNG import terminal, the “Bauhinia Spirit” FSRU deployed to the east of the Soko Islands, is operating well after entering service in July 2023 and has been receiving diverse cargoes.

CLP Power Hong Kong and The Hongkong Electric Company are the charter owners of the facility and they have recently updated investors on the benefits of LNG imports for the former British colony handed back to China in 1997.

“The operation of the terminal has enhanced Hong Kong’s fuel supply stability by the addition of a new supply source for natural gas, facilitating the city’s energy transition,” they said.

The “Bauhinia Spirit” is the world’s largest FSRU and has an LNG storage capacity of 263,000 cubic metres. 

It is moored at the jetty of the terminal to receive, store and regasify LNG before the natural gas is sent by two separate subsea pipelines to CLP Power’s Black Point Power Station and HK Electric’s Lamma Power Station.

“The terminal gives the power companies direct access to international LNG markets and provides a long-term alternative fuel source to meet Hong Kong’s generation needs,” they added.

Reliability

“It also strengthens the companies’ supply reliability, and ability to source competitively-priced gas for the benefit of customers and Hong Kong as a whole,” the statement explained.

The CLP Holdings Chairman, Sir Michael Kadoorie, said that the construction of the offshore LNG terminal took place in the midst of the pandemic, exemplifying Hong Kong’s engineering prowess and the city’s can-do spirit. 

“Being the first of its kind in Hong Kong, the offshore LNG terminal bears great significance in supporting the city’s energy transition,” Kadoorie added.

“CLP Power and HK Electric have been serving Hong Kong for over a century. This new terminal signifies a proud collaboration between us to support Hong Kong’s energy development,” he explained.

“We would like to take this opportunity to express our greatest gratitude to the many parties who helped make this engineering wonder possible - our business partners, marine experts, engineers, technicians, construction workers and HK Electric and CLP Power colleagues,” Kadoorie stated.

John Lee, Chief Executive of the Hong Kong Special Administrative Region (HKSAR), said that the offshore LNG terminal was a great benefit to the people of Hong Kong.

“The terminal not only ensures a more reliable and diversified energy supply for Hong Kong, but also helps to promote more stable electricity prices,” Lee concluded.

May 19 (LNGJ) - Chinese LNG imports in April 2023 rose by 10 percent to 4.77 million tonnes compared with 4.34MT in April 2022, according to China’s General Administration of Customs.

   Analysts noted that the increase was from an already low base as the April 2022 deliveries took place during Covid-19 lockdowns in large cities like Shanghai when economic and industrial activity were curbed along with fuel demand. The Chinese LNG deliveries in April 2022 had also been the lowest total for more than two years.

The Hong Kong floating liquefied natural gas import project has begun commissioning for the start of commercial operations planned for June using the world’s largest floating storage and regasification unit, the “FSRU Bauhinia Spirit”.

The commissioning cargo, provided by Hong Kong stock exchange-listed Chinese major, PetroChina, was unloaded on May 15 and will contribute to cool-down operations along the specially built jetty, as well as the storage tanks and pipelines.

Two subsea gas pipelines are connected from the FLNG terminal to Hong Kong’s Black Point Power Station and the Lamma Power Station respectively.

The terminal trial processes are also part of the procedure before the senior project contractor, the China Offshore Oil Engineering Company (COOEC), a subsidiary of China National Offshore Oil Corp. (CNOOC), hands over the facility to the joint venture company Hong Kong LNG Terminal Ltd.

Owners

The owners of the terminal venture are the two local power utilities, Hong Kong Electric Power Co. and Castle Peak Power (CLP) Hong Kong Ltd..

They had initially proposed the terminal to Japanese shipping company, Mitsui OSK Lines, using MOL’s “FSRU Challenger”, now renamed “FSRU Bauhinia Spirit” and with 263,000 cubic metres capacity.

The FSRU had arrived offshore Hong Kong in the middle of April to prepare for the project launch at a site about 25 kilometres (15.5 miles) southwest of Hong Kong Island

HK Electric is the historic supplier of electricity to customers on Hong Kong and Lamma Islands.

CLP Hong Kong Limited (CLP Power) is a subsidiary of CLP Holdings, a company listed on the Hong Kong Stock Exchange and now one of the largest investor-owned power businesses in Asia.

The CLP Group has other power assets in Mainland China, Australia, India, Southeast Asia and Taiwan.

The Hong Kong project increases regasification facilities available to the Chinese to 25 and with half-a-dozen other projects planned on the mainland, not including the expansion of existing terminals.

Coal-to-gas

CLP Power said that it had substantially increased the proportion of natural gas in Hong Kong’s fuel mix to around 50 percent since 2020.

“Planning and construction of the offshore LNG terminal began a few years ago which underlines the importance of long-term planning to the energy industry,” added CLP Power.

HK Electric’s Managing Director Wan Chi-Tin said that the utility has always aimed to switch from coal-fired to gas-fired generation as natural gas is a fuel for the energy transition.

“The commissioning of the gas-fired unit L11 in 2022 at Lamma Power Station enabled us to generate over half of our electricity from natural gas,” he said.

“Another gas-fired unit, L12, is expected to commence operation in early 2024, which will further increase the share of natural gas in our fuel mix. The offshore LNG terminal, once in operation, will enhance supply security and cost effectiveness,” Wan added.

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.

June 8 (LNGJ) - Royal Vopak, the Netherlands-based global storage company with stakes in liquefied natural gas terminals and a new LNG import project for Hong Kong, has hosted its Capital Markets Day in Rotterdam and updated analysts on strategic priorities. “Vopak will grow its base in industrial and gas terminals by allocating €1 billion ($1.07Bln) to these activities by 2030. This will further support a long-term and steady cash flow generation. Vopak will continue to invest in the growing global gas markets and expand its network of LNG and LPG terminals at strategic locations,” said the company.

   “Vopak aims to further grow and maintain its position as market leader in industrial terminals and to improve the performance of the portfolio and targets an operating cash return of at least 10 percent by 2025. The company expects that the share of proportional capital employed in industrial and gas will further increase, while the share of oil and chemicals will gradually decline,” it added.

Hong Kong Electric, the former British colony’s main power company, said the first LNG import project in the territory now administered by China, including the world’s largest floating storage and regasification unit, will start operations in mid-2022.

Cosco Shipping Energy Transportation Co., China’s largest LNG shipping business and the world’s biggest operator of oil tankers, has outlined its future strategy and its fleet management efforts.

That’s as Cosco reported total annual revenues from operations of 13.72 billion Chinese yuan ($1.92Bln), a year-on-year increase of 13.4 percent.

Its gross profit (EBITDA) was reported as 5.29Bln yuan ($747.4M), representing an increase of 36.3 percent from the previous year.

Cosco’s latest earnings and strategy emerged in its annual report just released by the Hong Kong Stock Exchange.

The group’s LNG subsidiaries include Cosco Shipping LNG Investment (Shanghai) Co., a wholly-owned by the group, and China LNG Shipping (CLNG), in which the group holds a 50 percent stake.

The two are the only large-scale LNG shipping companies in China and have a combined fleet of 38 carriers with aggregate capacity of 5,900,000 cubic metres.

Three other LNG vessels under construction with aggregate capacity of 522,000 cubic metres.

Cosco posted LNG shipping revenue of 1.32 billion Chinese yuan ($186.5M), an increase of 11.9 percent compared with 2018 as its fleet slowly grows.
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The Shanghai-based company said that it planned to expand over time in the LNG sector, given the increasing global needs for cleaner fuel.

“The group has recognized the transportation of clean energy as the second development curve, and will seize market opportunities, give full play to competitive advantages and promote the development of potential LNG shipping projects,” it stated.

The company said it was working to improve its existing LNG fleet management system and the LNG vessels were becoming more competitive.

“Shanghai LNG, a subsidiary of the Group, passed the certification of Lloyd’s Shipping Register and obtained the first certificate for quality, health, safety and environment (QHSE) management system in China’s LNG shipping industry,” said Cosco.

“The accomplishment of the authoritative certification for the management system strengthened the Group’s position as a leader in China’s LNG shipping business,” it added.

Cosco said its overall transportation turnover for all vessels (excluding time charters) was 440.78 billion ton-nautical miles, a decrease of 19.2 percent year-on-year.

In terms of its oil fleet size, Cosco says it is the world’s largest tanker owner with a fleet of 151 crude tankers owned and controlled with a total capacity of 21.71 million dead weight tonnage (DWT).

The crude tanker fleet includes 142 self-owned vessels with a capacity of 19.25 million DWT, nine chartered-in tankers with a capacity of 2.46 million DWT and 17 new oil tankers on order with a capacity of 3.04 million DWT.

Cosco actively responded to the 2020 global sulfur limit overseen th by International Maritime Organization and will help promote the sustainable development of the industry.

Currently, all oil tankers of the group use low-sulfur fuel to meet the sulfur limit.

In addition, Cosco cooperated with Dalian Shipbuilding Industry Co. to develop the world’s first LNG dual-fuel Very Large Crude Carrier in compliance with phase III of the ship energy efficiency design index.

“With the international oil shipping market rebound in 2019, the group actively sought cargoes and reasonably raised voyage speeds, which caused a 11.7 percent year-on-year increase on unit bunker fuel consumption,” it explained.

“The company applied an efficiency optimization model in managing the voyage speeds and achieved the savings of 112.2 thousand tons of bunker fuels,” it noted.

During the reporting period, Cosco’s vessels in drydock increased by over 60 percent year-on-year.

This was due to the aging of vessels and the sulfur cap and spare parts replacement.

“Facing the rising demand for drydocking, the group actively communicated with shipyards to strictly control the non-operating period in arranging dry-docking schedules, which saved over 100 days and improved the fleet operating efficiency,” said Cosco.

China Offshore Oil Engineering Co. has been awarded a contract to build a second LNG import terminal at Tangshan in northeast Hebei province and the cost of the project is estimated at 8 billion Chinese yuan ($1.1Bln) for the first and second phases.

June 28 (LNGJ) - Japanese shipping company Misui OSK Lines (MOL) signed an accord to deploy a floating storage and regasification unit (FSRU) in Hong Kong to provide supplies for two gas-fired power plants. The company said it planned to deploy the “MOL FSRU Challenger”, the world’s largest FSRU completed in 2017 with a storage capacity of 263,000 cubic metres. The FSRU is expected to enter service around the end of 2020 and will supply the Black Point Power Station located in the New Territories and the Lamma Power Station on Lamma Island to improve air quality and the environment in Hong Kong, which was returned to Chinese sovereignty in 1997 after 156 years of British rule.