LNG

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.

The US Mexico-Pacific Ltd (MPL) LNG project company based in Houston has joined with LNG engineering firm Bechtel Inc. on developing a Mexican liquefaction and export facility on the Pacific Coast using US natural gas as the feed gas and processing technology from ConocoPhillips.

Columbia Gulf Transmission, the natural gas pipeline along the US Gulf Coast, has received authorisation from the Federal Energy Regulatory Commission that will enable the supply of feed gas to the Venture Global Plaquemines LNG export plant being built on the west bank of the Mississippi River.

Pieridae Energy, the Canadian LNG plant developer with plans to export cargoes to Germany, has engaged leading energy engineer Bechtel to replace another US firm KBR and to review its export project in Nova Scotia and come up with a construction price.

The US Freeport LNG export plant at Quintana Island in Texas has been given three more years by the Federal Energy Regulatory Commission to complete its Train 4 expansion at the facility by May 2026.

Freeport had previously delayed its own final investment decision on building a fourth Train until 2021 because of the depressed energy markets and low prices and demand.

“As with most LNG projects around the world, Covid-19 and other market challenges have negatively impacted our development efforts,” Freeport said at the time.

Now the FERC has granted Freeport’s recently filed request for a formal delay to completion of the fourth Train at the project, led by the company’s Chief Executive, the energy entrepreneur Michael Smith.

Freeport began commercial operations in May 2020 for its third Train with liquefaction services for French major Total and South Korean utility and energy company SK E&S under their tolling agreements.

Previously, Freeport CEO Smith had said he was unsure when he would advance the Train 4 expansion as he had no firm long-term contracts in place for the fourth Train.

A preliminary agreement signed in 2018 by Japanese trading house Sumitomo Corp. for 2.2 million tonnes per annum from Train 4 expired without being finalized.

Smith cited a list of challenges facing FIDs in February 2020 before the Covid-19 shutdowns, including record low prices and weaker than expected demand in Asia. At the time Covid-19 had been confined to China.

He said this had created a perfect storm of headwinds for producers looking to construct new liquefaction plants or additional processing Trains.

The FERC said that it had issued public notice in August 2020 of the applicant’s request for an extension of time to build Train 4 and noted that no comments were filed from the public against such a move.

“Based on the facts presented in the request, the applicants are granted an extension of time until and including May 17, 2026, to complete construction of the project and make it available for service,” the FERC said in its statement.

Freeport LNG Development will now be able to go ahead in its own time to construct the additional facility in Brazoria County, Texas.

“The proposed Train 4 Project will allow the applicants to liquefy for export an additional 5.1 metric tonnes per annum of LNG or the equivalent of approximately 0.74 billion cubic feet per day of natural gas,” the FERC order stated.

More than a dozen US developers are pursuing projects for new plants or additional production capacity and have yet to announce positive FIDs.

Only Venture Global has been moving to the construction stage with two new projects in Louisiana, Calcasieu Pass and the Plaquemines facility.

The first phase construction at Freeport saw the building of three Trains and 15 MTPA of output.

The original Freeport terminal was completed in 2008 as an import facility with one berth and two storage tanks, each of 160,000 cubic metres capacity.

A second loading berth and a 165,000 cubic metres capacity full containment LNG storage tank were added. The Train 4 project is the scheduled second phase of construction.

About 13.4 MTPA of Freeport production capacity from the first three Trains has been contracted under use-or-pay liquefaction tolling agreements with customers including European and Japanese contract holders, BP of the UK, Germany’s Uniper and Japan’s Jera Co. Inc. and Osaka Gas.

The first three Trains were built by a consortium including McDermott International and Zachry Construction Corp. of the US, along with Chiyoda Corp. of Japan.

However, US engineering company KBR was selected by Freeport as the preferred bidder for the engineering, procurement, construction, and commissioning contract for the fourth-Train expansion.

Under the terms of the contract, KBR would provide EPC, commissioning and start-up of a nominal 5 MTPA LNG Train and associated gas pre-treatment plant.

There is now a question mark over that Train 4 EPC contract as KBR has said it is pulling out of lump-sum LNG and energy construction projects.

The selection of KBR was made following completion of a nine-month front-end engineering and design verification, execution planning and EPC proposal process.

KBR, the US engineering company with a strong energy and LNG presence, has been awarded a master service agreement and feasibility study by Japanese resources company JX Nippon Oil & Gas Exploration Corp.

Baker Hughes Company, the US energy services and LNG equipment supplier, has signed an agreement with Oman LNG for the turbomachinery scope as part of a de-bottlenecking project in the Arabian Peninsula nation.

Japanese LNG engineering company JGC Corp. said it was moving forward with its contracts in the southeast African nation of Mozambique and with the LNG Canada joint venture.

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.

Lake Charles LNG, the US export project being pursued by pipeline and midstream company Energy Transfer and Royal Dutch Shell, has issued a tender package for engineering, procurement, and construction and for contractors to submit firm bids.