LNG

Gaztransport and Technigaz (GTT), the French LNG storage technology company for shipping and onshore, said the Supreme Court of Korea rejected GTT's appeal on licence and technical assistance deals with South Korean shipyards.

The Paris-based company had appealed against the decision of the Seoul High Court confirming the company's obligation to separate, in whole or in part, the “Technology License and the Technical Assistance” agreements if requested by the South Korean shipyards it has dealings with.

GTT had filed its appeal against the Korea Fair Trade Commission (KFTC) decision in December 2022.

“GTT acknowledges this very surprising decision, which comes only three months after the decision of the same Supreme Court of Korea to suspend the effects of the decision of the Seoul High Court,” said GTT.

The French company said it considered that its provision of technical assistance and engineering services “were essential to ensure the safety and performance” of its solutions and that its “unique expertise” was crucial to the safety of LNG maritime transport.

Defending interests

“Convinced of the sound basis of its contractual provisions, GTT is still committed to defending its interests and those of the entire LNG industry, and is considering the most appropriate actions to be taken in order to maintain its rights,” stated the Paris-based company.

“The company does not anticipate any significant financial impact in the short or medium term,” it added.

The KFTC in December 2022 had ordered GTT to allow the Korean shipyards, upon their request, to perform all or part of the technical assistance services currently included in the technology licenses and to pay €9.5 million ($10.40M) as an administrative fine.

The loss of the Korea appeal comes as GTT continues to expand its relationships with Chinese companies and shipyards where it has similar accords and is building the LNG tanks storage technology business.

On the occasion of the visit of French President Emmanuel Macron’s to Beijing on April 6, 2023, PipeChina Engineering Technology Innovation Co. signed a cooperation agreement for the evaluation and further promotion of GTT’s membrane containment tank technology for LNG projects in China.

PipeChina Group is currently operating seven LNG receiving terminals in China and three new LNG import projects are under construction.

As the largest operator of LNG infrastructure in China, PipeChina said it was keen to expand its cooperation with GTT.

Adnan Ezzarhouni, General Manager of GTT China, explained that GTT had already delivered onshore tanks to the Chinese.

These were for a peak-shaving project at Hejian in Hebei province, operated by Huagang Gas, as well as Phase I of the giant Beijing Gas Tianjin-Nangang onshore LNG terminal and the company was seeking additional contracts.

GTT has major collaborations with major Chinese shipyards such as Hudong-Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corp., and Jiangnan Shipbuilding located northeast of Shanghai on Changxing Island at the mouth of the Yangtze River.

The Ghana LNG import project in West Africa is expecting to complete the venture by around March 2021 with work now focused on the onshore portion after the floating regasification unit arrived off the Ghanaian coast from a Chinese shipyard.

Jiangnan Shipbuilding, a subsidiary of China State Shipbuilding Corp., built the FRU and the vessel left the Chinese yard at the end of November 2020 for the voyage to African waters for deployment.

A venture called Access LNG comprising Helios Investment Partners, a leading Africa focused private investment firm, and Gasfin Development, an LNG infrastructure company, is developing the facility.

Helios established Tema LNG Terminal Co. (TLTC) to develop, construct and operate sub-Saharan Africa’s first LNG import terminal.

The companies involved now say that the Tema LNG terminal venture is expected to achieve mechanical completion by around March 2021 and thereafter plans would be made for the first cargo delivery.

Gasfin has led the design of the project and the fabrication of the floating infrastructure with capacity to deliver 2 million tonnes per annum of LNG.

The Tema project is designed around the FRU working in conjunction with an upgraded 127,500 cubic metres capacity LNG carrier, which will act as floating storage, to deliver 250 million standard cubic feet per day of gas.

The Tema project will also have bunkering, reloading and break-bulk capabilities.

The terminal will receive some LNG from Royal Dutch Shell under an agreement with Ghana National Petroleum Corp.

The TLTC project company said the other current priority was the mechanical completion of the onshore works, including an 8-kilometres pipeline and a gas conditioning station.

“We forecast mechanical completion for March and then we’ve got a commissioning period with more performance testing,” said the statement.

Spain’s Reganosa Servicios has the contract for the operational and maintenance (O&M) side of the FRU. The Spanish firm will also oversee the pipeline.

The Emerging Africa Infrastructure Fund (EAIF) committed to providing a US$31 million loan to Access LNG in November 2020, filling in the final part of the project and guaranteeing final finance.

The EAIF is backed for development financing by the governments of the Netherlands, the UK, Sweden and Switzerland as well as finance institutions, private banks and institutional investors.

It said $31M was being lent to the Access LNG project at Tema, near where several power stations are located and are switching from light cycle oil (LCO) and heavy fuel oil (HFO) to natural gas.

The fixed infrastructure portion of the project has been in the construction phase since 2018 and was funded under a separate financing package, covering a breakwater, mooring facilities, a subsea pipeline and the onshore pipeline to take the gas from the port to Tema’s industrial area.