LNG

President Donald Trump formally opened the Cameron liquefied natural gas export plant at Hackberry in Louisiana and said the nation was heading for a great energy future with more security as he contrasted the hostile policies of Iran and Venezuela with that of America, which planned to provide power around the world from LNG.

“In Venezuela and Iran, we are now holding dangerous regimes accountable, denying them oil revenue to fund their corruption, oppression and terror,” said the President.

At the same time, he said LNG from the Cameron plant would soon be moving through the Gulf of Mexico and the Panama Canal to Asia to illuminate cities.

“The energy revolution you’re leading is an incredible story that could only be written right here,” he told the Cameron construction workforce and plant personnel numbering  several thousand who had gathered to hear his speech lasting just over 55 minutes.

“As we embrace the potential of our God-given abundance, we are not only strengthening our national security but reducing our dependence on foreign sources of energy,” he said.

Trump added that with increased US oil and gas production and LNG the nation had dramatically increased its power to confront adversaries, support its friends and fight for its interests.

“For example, American allies all around the world, in Poland and Lithuania, are now using American natural gas to reduce their dependence on countries who use energy as a weapon of coercion,” he said.

The Cameron plant, owned by California-based utility Sempra Energy, completed all major construction activities for Train 1 and has just started production of LNG, the final step before cargoes are exported.

The first phase of the Cameron project includes building the first three liquefaction Trains that will enable the export of around 12 million tonnes per annum of LNG, or about 1.7 billion cubic feet per day of natural gas.

Here are the other main extracts from President Trump’s speech, referring to France, the climate-change debate, radical Democrats in Congress and US energy economics.

In his speech, Trump devoted some time mocking opposition radical Democrats in the US Congress who want the nation to rely on windpower.

“Over 100 Democrat members of Congress have sponsored that ‘Green New Deal’, that radical plan to put you out of work,” Trump told the Cameron workers.

“They want to stop oil, to stop coal. They want to stop nuclear. On my watch we will never allow radical activists, special interests or out-of-control bureaucrats to wreck our economy, eliminate our jobs or destroy your future,” stated the President.

“Under the ‘Green New Deal’, they don’t like clean natural gas. They don’t like anything. They don’t know what they like. They certainly like wind, even though it kills all the birds,” he said.

“Do you want to see a bird cemetery? Go under a (power) windmill and you’ll see the saddest sight,” added Trump.

“You know, in California you go to jail for five years if you kill a Bald Eagle. You go under a windmill and you see them all over the place. It’s not a good situation,” he added.

“That’s what (the Green New Deal) is counting on, wind,” he added. “When the wind doesn’t blow you don’t watch television that night,” he said.

“We know that American energy workers like the ones here at Cameron LNG are the foundation of American strength. That’s what you are,” said the President.

“By unleashing American oil, natural gas and clean coal you are helping to fuel America’s historic economic boom,” he added.

“We have the greatest economy in the history of our country. Last month we created another 263,000 jobs,’ he said.

“Since the election we have created 6 million jobs, including 57,000 new oil and gas pipeline construction jobs,” declared Trump.

“In 2018 alone, America added 150,000 new energy jobs,” he said.

“The previous Administration tried to put America’s vast energy resources under lock and key. ‘We don’t want energy,’ they said. I don’t know what they were thinking. And they tried to put energy producers out of business,” said Trump.

The President was then widely cheered when he declared: “I withdrew the United States from the terrible, very expensive, one-sided Paris Climate Accord.

“You just take a look at Paris. The (French) President’s a friend of mine. Sometimes I’ll call him up. How are you doing over there? Not so good? The yellow vests! You know that was all to do with the Accord. Because they were charging people tremendous amounts of money (for diesel and gasoline) and sending it all over the world to countries that they’d never heard of. People get tired of it,” said Trump.

“I saved $1 trillion through not going with the Paris Accord,” stated the President. “I thought I would take a lot of heat for doing that. But instead we’ve been praised,” he added.

“The Paris Accord was an agreement that would have shut down clean energy production in America while allowing top foreign polluters to do whatever the hell they want,” he said.

“It was a restriction on America. It was almost made to hold us back,” he said.

“No longer will we allow other countries to tie America’s hands and take America’s jobs and hurt American energy,” he stated.

“This quarter, America produced record amounts of oil and natural gas. Since the election private companies have invested half a trillion dollars in the US energy industry,” added Trump.

“And it looks as if it’s going substantially up from there, including in this great state where there are many tremendous projects,” he said.

“The US has now been a net exporter of natural gas for two straight years and energy imports are at their lowest level for 60 years,” he added.

“In 2018, American energy exports alone brought down our trade deficit by $215 billion,” he added.

“We are pursuing a vision not just of energy independence but of American energy dominance,” stated the President.

“By next year America’s LNG capacity will more than double. What does it really mean? It means jobs, jobs, jobs. That’s what it means,” he said.

“In the past, politicians and pundits had said America was running out of oil and natural gas. They were saying it 10 years ago, five years ago. I was hearing it all the time. They said the United States would never again be an energy power house,” he said.

“They said Americans would have to learn to get by with much, much, much less,” added the President. "But you proved them wrong,” he said. “You silenced the critics and shattered the predictions.

“You are powering our cities, uplifting our nation and you are lighting up the world. You are building a better future for our families and our children and for every patriot, and you are true patriots,” said Trump.

“You’re making America safer, prouder and stronger than ever before. I just want to say it’s been a great honor to be with you today. It’s been a special day. This is your first day of many, many days of producing something that is very special,” he said.

“It’s a tremendous achievement. I want to congratulate everybody involved in the project. And most importantly I want to congratulate the state of Louisiana and all the work we’ve done together with the federal government and I want to congratulate the workers. It doesn’t work without the workers,” concluded the President.

Tellurian, the developer of the Driftwood LNG export plant near Lake Charles in Louisiana, is proceeding with its plans that now may include a fourth pipeline as it posted a larger quarterly net loss and gave more details of its costings and partnership plans.

The company said its first-quarter net loss widened to $34.12 million compared with $25.18M in the same three months of 2018.

Revenues was reported as $4.95M versus $6.80M in the same three months a year ago as Tellurian ended its first quarter with around $88.3M of cash and cash equivalents and about $57.3M of debts.

“Tellurian has a strong balance sheet consisting of approximately $384M in assets,” noted the company.

Tellurian estimates that its Driftwood LNG export plant proposed for 1,000-acre in Calcasieu Parish in Louisiana will cost around $28 billion, including construction costs, transaction expenses and contingencies, though excluding interest costs.

It intends to produce 27.6 million tonnes per annum at the Driftwood plant from 2023.

The facility will include up to 20 small-scale liquefaction Trains, three LNG storage tanks and three marine berths.

“We have entered into four lump-sum, turnkey engineering, procurement and construction agreements totaling $15.2Bln with Bechtel Oil, Gas and Chemicals Inc. for construction of the Driftwood terminal,” said the company.

Tellurian included in its quarterly highlights the signing of a heads of agreement with a subsidiary of French major Total for a $500 million equity investment in the project.

The French company also signed up for the right to purchase 1 MTPA of LNG and for a 15-year sales and purchase agreement to acquire an additional 1.5 MTPA at Japan Korea Marker (JKM) prices.

The company additionally furthered the sale of LNG and Driftwood partnership interests by completing preliminary agreements with other potential partners, including Petronet LNG of India.

“Tellurian is now permitted to construct, operate, and export LNG from the Driftwood project and has a fully articulated EPC plan in place with Bechtel,” said Chief Executive Meg Gentle.

“Our primary focus for the next quarter is finalizing the Driftwood partnership financing. Total has committed as the first partner of Driftwood and we expect to execute final agreements with them by mid-June,” added the CEO.

“We remain on schedule to produce LNG in 2023 and generate $8.00 of cash flow per share after ramp up,” stated Gentle.

Tellurian’s proposed pipelines are expected to consist of three projects, the Driftwood pipeline, the Haynesville Global Access Pipeline and the Permian Global Access Pipeline.

“We are also considering the potential development of a fourth pipeline, the Delhi Connector Pipeline, which would run approximately 180 miles from the Perryville-Delhi Hub in northeast Louisiana to Lake Charles,” explained Tellurian.

The Driftwood pipeline will be a 96-mile large diameter pipeline that will interconnect with 14 existing interstate pipelines throughout southwest Louisiana to secure adequate natural gas feedstock.

Tellurian estimates that the construction costs for the Driftwood pipeline will be $2.3Bln before other expenses.

The Haynesville Global Access Pipeline is expected to run for 200 miles from northern to southwest Louisiana.

The Permian Global Access Pipeline is expected to be 625 miles long and to run from West Texas to southwest Louisiana.

Each of these pipelines is expected to have a diameter of 42 inches and be capable of delivering approximately 2 Bcf/d of natural gas.

“We currently estimate that construction costs will be approximately $1.4Bln for the Haynesville Global Access Pipeline and $3.7Bln for the Permian Global Access Pipeline,” added Tellurian.

The US is increasing its domestic natural gas demand for gas-fired power plants as the number of facilities has now overtaken coal-fired plants and the power industry competes with liquefied natural gas export projects for abundant feed-gas resources.

Royal Dutch Shell and Energy Transfer, the US pipeline, storage and midstream company, have signed a framework agreement for the development of their large-scale LNG export project at the existing import terminal at Lake Charles in Louisiana.

Arup Group, the UK-based global engineering company, has been appointed by a US LNG export project planned for Cameron Parish to advise on the installation of the region’s first modular LNG storage tanks.

The Arup energy unit has been asked by Commonwealth LNG to provide specialist engineering services for the development of the storage tanks at its project site on the West Bank of the Calcasieu Ship Channel at the entrance to the Gulf of Mexico.

The innovative design of the modular tanks, an original concept by Arup, allows them to be constructed offsite at a dedicated fabrication yard in parallel with foundation construction at the site itself.

Arup said that this approach significantly reduces onsite labour and shortens completion time by up to one year.

“These benefits result in capital cost savings and overall project risk reduction,” said the engineering firm.

Commonwealth LNG has a schedule to construct its facility in Cameron Parish for exports to begin by 2024.

The plant will have a total liquefaction capacity of 8.4 million tonnes per annum and LNG storage capacity volumes of 240,000 cubic metres.

Arup is also supporting Commonwealth’s permit process with the Federal Energy Regulatory Commission by providing structural, mechanical and naval architecture engineering services in relation to the design of the modular storage tanks.

Once the FERC approves the latest Louisiana venture for LNG exports construction is expected to start in 2021.

“This is a great step for the LNG industry and could lead the way for new mid-scale storage options,” said Brian Raine, head of Arup’s Energy Structures unit.

“The innovative design brings great benefits and we look forward to working with Commonwealth throughout the project to make those benefits a reality,” added Raine.

Rob Powers, Senior Vice President for engineering at Commonwealth LNG, said he was pleased to have Arup on his team.

“Their broad experience, depth of resources, technical creativity and responsiveness to our requests have made them valued partners on our project,” stated Powers.

McDermott International, the energy and LNG engineering company, posted fourth-quarter earnings seriously impacted by $2.2 billion in charges and other items related to the Cameron LNG and Freeport LNG projects in Louisiana and Texas and the Calpine gas-fired power venture in Pennsylvania.

US regulators have prepared a draft environmental impact statement for the Plaquemines LNG export plant proposed for the banks of the Mississippi River and its associated Gator Express Pipeline system.

Tellurian Inc., developer of the Driftwood LNG export plant in Louisiana, said it advanced the sale of LNG and Driftwood partnership interests with around 35 customers and potential partners conducting due diligence and would announce the investor and buyer list by year-end.