LNG

Freeport LNG is continuing the restart of the Texas plant at Quintana Island on a phased basis after Hurricane Beryl damaged some plant equipment while the local Texas power company is hoping to re-connect all customers by July 19.

“We are completing initial repairs on the damage sustained to our fin-fan air-coolers in the hurricane,” said a Freeport spokesperson.

The Freeport plant is located 40 miles to the northeast of the hurricane’s landfall at Matagorda in Texas on July 8.

The company said it was restarting its first LNG Train and intended to re-start the two other liquefaction Trains shortly afterwards for output to progress to the nameplate capacity of 15 million tonnes per annum.

Reduced rates

However, output is expected to be at reduced rates at the plant that is experienced in re-starts after an explosion and fire at the facility in November 2022.  Most of 2023 was then spent carrying out repairs and having them approved after testing.

Regulatory and energy safety bodies are against quick re-starts until full safety checks have been carried out.

The Freeport plant has also had to await the lifting of port restrictions by the US Coast Coast and actions by other state bodies in the hurricane aftermath.

Power supplies across the state are expected to be 98 percent restored by July 17.

CenterPoint Energy, headquartered in Houston, Texas, is the main energy delivery company in the area responsible for electric transmission and distribution and natural gas supplies and has still to fully restore power.

CenterPoint said it had now restored power to 92 percent of impacted customers and remained on track to restore electricity to around 98 percent of impacted customers by the end of the day on Wednesday, July 17.

The company said it then expected to restore power to all customers who can receive it by Friday, July 19.

“We are grateful to our crews who have restored power to our customers at a stronger pace than we have been able to in any hurricane in our history, despite the difficult conditions,” explained Lynnae Wilson, Senior Vice President, Electric Business.

Work teams

“We continue to work around-the-clock to get our remaining customers back online,” she stated.

In addition to damaging CenterPoint's electric infrastructure, the company said that Hurricane Beryl may have caused damage to customer-owned equipment.

Specifically, customers in Texas were being asked to check their weatherhead, the point where power enters the home through an electric service drop, which is often a pipe located on the side of the residence or building.

“If the weatherhead is damaged, crews cannot safely restore service to the home until a licensed electrician has made the necessary repairs,” CentrePoint added.

Cheniere Energy, the operator of the Sabine Pass LNG export plant in Louisiana and Corpus Christi LNG in Texas, swung to a third-quarter profit of $1.7 billion compared with losses of $2.38Bln in the prior-year quarter as 152 cargoes were shipped in the three months and 468 cargoes in the first ninth months of the year.

Venture Global LNG, owner of the newest US export plant at Calcasieu Pass in Louisiana and with three other projects in development, has signed two long-term supply agreements with a German utility with cargo deliveries starting in 2026.

Venture Global LNG, owner of the newest US export plant at Calcasieu Pass in Louisiana and with three other projects in development, has signed up Malaysian energy company Petronas for a 20-year supply deal.

US LNG plant developer Tellurian issued a limited notice to proceed to Bechtel under its engineering, procurement and construction contract to begin building phase one of the Driftwood LNG export facility near Lake Charles, Louisiana.

Cheniere Energy has announced the “substantial completion” of Train 6 at the Sabine Pass liquefaction plant in Cameron Parish in Louisiana and formally taking nameplate capacity to 27 million tonnes per annum.

“Commissioning is complete and Cheniere’s engineering, procurement and construction partner, Bechtel Oil, Gas and Chemicals has turned over care, custody and control of Train 6 to Cheniere Energy Partners LP,” said a statement from the Houston, Texas-based company.

“With the achievement of substantial completion, financial results of LNG sales from Train 6 going forward will be reflected in the statement of operations of Cheniere Partners and its applicable affiliates,” added the company.

The work on Cheniere’s Sabine Pass Train 6 started in June 2019 and the peak workforce on the project reached 1,800 workers who installed 12,250 tons of steel, poured 48,500 yards of concrete and laid 2,500,000 feet of cable.

“The accelerated completion of Train 6 once again reflects the world-class standard of execution consistently achieved by the Cheniere and Bechtel teams, and we are proud to have the six-Train vision of Sabine Pass completed safely, ahead of schedule and on budget,” said Jack Fusco, Chairman, President and Chief Executive of Cheniere Partners.

Nine Trains

“With nine total Trains across both the Sabine Pass and Corpus Christi projects, the Cheniere liquefaction platform is the second largest in the world, reliably providing our global customer base with clean, secure and affordable energy,” explained Fusco.

“We look forward to opportunities to build upon our platform with disciplined, brownfield growth at both sites in the future,” stated the CEO.

Brendan Bechtel, Chairman and CEO of Bechtel, said Cheniere plays a vital role in delivering reliable and safe energy to communities around the world.

“For us to be involved in supporting the development of these extraordinary projects is a great source of pride and we’re honored to help bring Cheniere’s vision to reality,” declared the Bechtel Chairman.

Cheniere Partners also owns the Creole Trail Pipeline, which interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines.

Cheniere can now turn its focus to the Texas Corpus Christi plant expansion, known as Stage 3 and comprising the construction of seven mid-scale liquefaction Trains adjacent to the existing facility.

The mid-scale Trains will add nameplate capacity of almost 10 MTPA to the 13.5 MTPA from the three larger existing Corpus Christi Trains, each producing 4.5 MTPA.

Cheniere is aiming to reach a final investment decision on the Texas plant expansion project in 2022.

Tellurian Inc., the developer of the Driftwood plant in Calcasieu Parish in Louisiana, said it would begin construction work in April on its large-scale liquefaction and export plant whether or not a final investment decision has been taken and all project financing is in place.

Executive Chairman Charif Souki outlined his views in a video commentary covering the Phase 1 financing of the venture near Lake Charles with permits to produce 27.6 million tonnes per annum of LNG.

The Driftwood project proposes to construct 20 processing Trains, each with 1.38MTPA of capacity, and built as five blocks of four Trains to reach the maximum planned capacity.

The Phase One development would include the first two of these blocks with 11 MTPA of output and two of three planned 235,000 cubic metres storage tanks and the first of three planned loading berths for LNG carriers.

“We will start construction in April in earnest. We have enough capital, or access to enough capital to make sure we get through the first year of construction,” stated Souki.

“People normally like to talk about FID or things like this, it doesn’t apply here,” added the Chairman.

“The second issue is, have we continued to completely de-risk the project? It’s not completed de-risked. What is really critical is putting the financing together,” he stated.

Bechtel ready

Souki pledged that Bechtel Inc., which has signed lump-sum, fixed-price contracts worth a total of $15.2 billion for engineering, procurement, and construction of Driftwood LNG, would be on the site in April.

Tellurian has 10-year offtake agreements in place totalling 9 MTPA with Shell North America and global commodities firms Vitol and Gunvor.

The Chairman said that he himself urged people to look at the Japan-Korea Marker price for LNG spot cargoes and the US benchmark Henry Hub because ‘they will determine everything” on the financing front.

“Well today, the commercial reason for doing the deal like this is very obvious. It started a year ago when winter prices around the world started becoming very, very high and it continued through recent weeks and is now so critical that President Biden is doing is best to find gas, for in particular for Europe, but also for the rest of the world and that is a major challenge,” said Souki in his commentary.

“We are now in a situation where we have signed non-disclosure agreements with 45 different financial institutions,” explained Souki.

“Should we rush to the process, no, because 45 different financial institutions would have a lot of different criteria and a lot of different things that we would look for in a final financing and it is critical to get it right for the value for the shareholders,” he added.

Proper financing

Souki explained that it was crucial to get the proper financing package in place.

“So we're not going to rush through that process. We are very comfortable starting the construction program without being completely sure that the financing would be put in place,” he added.

“But the board felt comfortable enough that we would get the financing in short order and possibly before we have to start construction but we will not rush that process. We will make sure that we get the right financing put in place,” continued Souki.

As regards the final financing Souki said he was looking for “two pieces of paper” and one would be a normal bank debt that is “kind of run of the mill” and he had a number of banks in place for this.

He added that he was also dealing with most of the large private infrastructure equity financing groups to have an equity-like instrument that will come in on top of the bank debt to finish building the financing.

Venture Global has applied to regulators to increase activities at the Plaquemines liquefied natural gas export project on the west bank of the Mississippi, about 30 miles south of New Orleans.

The Freeport LNG plant on Quintana Island in Texas was unable to produce LNG on September 14 as all three liquefaction trains were knocked off stream by power issues caused by tropical storm Nicholas, which hit the Gulf Coast..

The Freeport plant is located in Brazoria County, south of Houston, and widespread power outages were reported in the county.

“Nicholas moved slowly across the Houston metropolitan area,” said the US National Oceanic and Atmospheric Administration’s Hurricane Center.

“Life-threatening flash floods are expected across portions of the Deep South during the next couple of days,” added the statement.

The storm made landfall along the coast west of Quintana where Freeport LNG is sited.

A statement from Freeport said the situation was continuing to be assessed and no other damage was reported at the plant,

The Freeport facility is the only one in the US that uses exclusively electric motors instead of natural gas turbines to drive the liquefaction compressors.

In addition to the three Trains currently constructed, it has proposed adding a fourth, though it has yet to sanction the investment until commercial support is finalized.

Maintenance

Hours before the storm hit, the Freeport facility was operating normally and continuing to produce LNG.

Before the current temporary outage, Freeport had just returned one liquefaction Train to service in the first week of September after a brief spell of maintenance.

Analysts note that high demand for US LNG from nations like China, Japan and South Korea as well as Brazil in South America has meant very high utilization rates at all six US liquefaction terminals.

The Freeport operating company, whose Chief Executive is the energy entrepreneur Michael Smith, produces around 15 million tonnes per annum of LNG.

It has use-or-pay liquefaction tolling agreements for most of the output from the three Trains with customers including European and Japanese contract holders, BP of the UK, Germany’s Uniper and Japan’s Jera Co. Inc. and Osaka Gas.

Cheniere Energy, the largest US LNG exporter from the Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, told regulators that its Sabine Pass Train 6 project was now more than 44 percent complete in terms of construction amid continued progress by US engineers Bechtel Inc.