LNG

Dec 6 (LNGJ) - JGC Holdings Corp., one of the leading energy and LNG project engineering company, said its JGC Corp. unit for overseas engineering ventures has been selected by the Japan Aerospace Exploration Agency (JAXA) for its proposal-based competitive-bidding project for a conceptual study of a Lunar In-Situ Resource Utilization (ISRU) Plant. The facility will be capable of extracting water from lunar soil (regolith) and produce liquid hydrogen and liquid oxygen, which can be used as fuel for manned lunar landers and excursion vehicles or spacecraft.

   “Amid the currently accelerating global trend of lunar exploration, as exemplified by the Artemis program led by NASA, JAXA aims to realize the utilization of lunar water resources,” said JGC. “The scenario lays out JAXA's plans to study the concept of the entire system of a lunar ISRU plant along with element technologies and conduct ground demonstrations,” the Yokohama-based company explained. A Lunar demonstration plant is expected to be built in the 2030s and a full-scale launch of an operational ISRU plant is scheduled by 2040.

JERA Co. Inc, Japan’s biggest liquefied natural gas importer and utility company, said it expected the LNG demand-supply imbalance to be less serious this winter season than last because the forecast milder weather, the high storage held in Europe and the delayed resurgence of the economy in China.

JERA, which buys around 35 million tonnes per annum of LNG and is Japan’s biggest fossil-fuel electricity generator being owned jointly by Tokyo Electric Power and Chubu Electric, the two largest power companies, gave the LNG market forecast in a company earnings presentation

The presentation in Tokyo was led by JERA President and Chief Executive Hisahide Okuda.

JERA, which currently oversees the operations and provides fuel for a total of 26 power plants in Japan and imports LNG into 11 of Japan’s network of 37 terminals, said the only issue to be concerned with was that of the unexpected.

Potential issues

“Since overall global supply has not grown, there is the potential for LNG production issues on the supply side - a problem at any LNG plant could cause prices to jump. We believe, therefore, that the environment for LNG procurement remains unpredictable,” Okuda explained.

“Turning to LNG fundamentals, although demand for LNG is growing, particularly in Europe, LNG supply is not expected to catch up to that demand until around 2025, leading to a tight supply-and-demand situation,” the CEO said.

“However, at JERA, in addition to building an LNG portfolio that combines long-term, short-term, and spot contracts, we also secure a stable fuel supply by flexibly optimizing procurement and resale through JERA Global Markets,” Okuda added.

He noted that the company was also following the “Strategic Buffer LNG (SBL)” plan proposed by the Ministry of Economy, Trade, and Industry (METI) whereby at least one LNG carrier-load of surplus LNG per month between December and February can be supplied to any domestic operators as determined by METI.

According to METI and its Policy Subcommittee on Electricity and Gas, Japan will have a winter’s reserve margin exceeding the 3 percent minimum necessary to ensure stable supply.

“JERA, however, is taking nothing for granted. We will be doing our utmost to secure both kilowatts and kilowatt hours in order to ensure stable power supply,” CEO Okuda stated.

Older plants

“JERA is moving steadily forward in replacing older thermal power plants with state-of-the-art facilities. Six units, totaling 4.32 million kilowatts, whose replacement has already been completed, have begun commercial operation,” he added.

The CEO declared that looking to 2024, JERA would continue moving forward with an additional 2.99 million kilowatts in power plant replacement.

“We believe that moving decisively in this way to upgrade power sources is an important part of ensuring safety,” Okuda said.

In addition, given the smooth progress of trial operations at Yokosuka Thermal Power coal-fired power plant’s Unit 2, we will be moving its start of commercial operation forward from February 2024 to December 2023, which will also contribute to this winter’s supply capacity,” the CEO said.

The Yokosuka coal-fired plant is described by JERA as a “high-efficiency coal-fired power station that uses an ultra-supercritical (USC) power generation” system.

“Its generating capacity of 650 megawatts will contribute to a stable electricity supply,” Okuda added.

The JERA CEO said that the company was also moving forward with carbon-capture and storage projects in Asia.

JERA is carrying out joint research with Japanese LNG and energy engineers JGC Holdings Corp. and the Indonesian state electricity company Perusahaan Listrik Negara (PLN) on a project to introduce and commercialise CCS for thermal power.

“With these projects and others, we are collaborating on decarbonisation with a growing number of Asian countries including Bangladesh, Thailand, Malaysia, the Philippines, Vietnam, Indonesia and Singapore,” Okuda said.

JGC Corp., the overseas engineering, procurement and construction business of Japan’s JGC Group, said it would head a consortium with South Korea’s Samsung Heavy Industries for construction of a nearshore floating liquefied natural gas (FLNG) project in Malaysia planned by Petronas.

JGC Corp. Holdings, the leading Japanese LNG engineering company that has just been awarded a contract for floating LNG in Nigeria, said it expected the US Cameron LNG terminal expansion project in Louisiana and the Freeport LNG Train 4 venture in Texas would move forward with engineering contracts in 2023.

The American Bureau of Shipping, the US maritime classification society, has granted approval for an innovative concept for floating liquefied natural gas projects to use storage tanks from older LNG carriers.

The FLNG design was jointly developed by two Japanese companies, the shipping line Kawasaki Kisen Kaisha (K-LINE) and LNG and energy engineer JGC Corp.

ABS awarded an approval in principle (AIP) for the joint project which was also supported by Japan’s Ministry of Land, Infrastructure, Transport and Tourism.

The design essentially involves transferring and reusing LNG storage tanks from spherical Moss-type LNG carriers into the hulls of new FLNG facilities.

By re-using existing LNG vessels and their Type B storage tanks, the potential number of shipyards globally able to build FLNG units is increased.

The new Japanese design if it moves to production would support the forecast increase in demand for fast-track FLNG solutions.

“In many areas of the world, FLNG represents a potential solution to the challenge of meeting increasing demand for natural gas without the need for an export pipeline to shore and the associated infrastructure,” explained Tor Ivar Guttulsrod, the ABS Director for FLNG and FSRU vessels.

“ABS is committed to supporting development of FLNG globally while retaining a laser focus on safety,” stated Guttulsrod.

Expertise

Satoshi Kanamori, an Executive Officer at K-Line, said the design had potential to leverage shipping expertise and existing LNG assets.

“K-LINE will continue to make relentless efforts and generate new values to meet the diversifying needs of our customers,” added Kanamori.

JGC executive Hiroyuki Ishizaki agreed with the K-Line assessment as it was based on technical capabilities accumulated in FLNG and engineering, procurement and construction projects.

“This results in the enhancement of the customer's FLNG business since it is potentially an optimized CAPEX solution. JGC will continue to develop FLNG technologies for open seas and nearshore,” added Ishizaki. 

JGC Holdings Corp., the Japanese energy and LNG projects engineer, with LNG contracts in Canada and Mozambique and elsewhere, reported a fall in nine-month profits amid engineering slowdowns in some areas caused by Covid-19 while sales increased in the period.

Nigeria’s Department of Petroleum Resources (DPR) has awarded a licence for a project to establish the West African nation’s first floating liquefied natural gas production plant and run by a Nigerian oil and gas company rather than an international energy major.

JGC Corp said a lawsuit has been filed against it and engineering partners, Chiyoda Corp. and KBR of the US, in the Yokohama District Court by the Ichthys LNG project in Australia, led by Japan’s Inpex Corp., claiming around A$758 million (US$595M) in a long-running dispute.

JGC had formed a joint venture company with Chiyoda and KBR, called JKC Australia, and was awarded a project for the engineering, procurement and construction (EPC) services of the onshore LNG plant at Bladin Point near Darwin in the Northern Territory in 2012 by Ichthys LNG, led by Inpex.

“All plant facilities were completed and delivered,” explained JGC.

“However, in the course of the execution of the project, sub-contractors requested additional payments to cover their increased costs,” it added.

JGC said that a funding deed for the sum of A$757.7M was agreed and payment was made by the Plaintiff (Ichthys LNG-Inpex) to the EPC joint venture for the additional costs.

Subsequently, a dispute concerning the settlement of the additional costs arose, and an arbitration process was conducted in Singapore.

Analysts said that the Yokohama court showdown follows on from the failed arbitration and previous legal cases.

During the course of the arbitration, the Plaintiff (Ichthys LNG-Inpex) demanded that the joint venture returns the full amount of the funds by the end of December 2020, but the JGC, KBR, Chiyoda joint venture refused on the grounds that the correct settlement procedures under the signed deed had not been followed and the arbitration award to determine this had not been made.

Having considered this, the Ichthys LNG-Inpex delivered a letter to the joint venture in January 2021.

The letter requested that the JGC, KBR and Chiyoda venture repay the full amount to the Plaintiff.

However, the EPC joint venture declined the request. The liability share of the partners in the venture are JGC 40 percent, KBR 30 percent and Chiyoda 30 percent.

In the lawsuit just filed in Yokohama by the Plaintiff seeks “subrogation” against the EPC firms for the full amount of the funds provided by the Plaintiff, plus legal costs.

JGC said it was examining the details of this lawsuit and would take appropriate action.

LNG Canada, the largest current global liquefaction and export joint venture under construction, is aiming to get back on schedule for a 2025 commercial start-up after work interruptions caused by the Covid-19 pandemic at the site near the town of Kitimat on the Pacific Coast of British Columbia.

McDermott International, the US energy and engineering company, said it had received approval for a comprehensive restructuring plan supported by more than two-thirds of all its funded debt creditors.