LNG

Equinor, the Norwegian major that is now the leading pipeline natural gas supplier to Europe, has just signed a 15-year agreement to deliver LNG cargoes to India with shipments starting in 2026.

Equinor’s growing global LNG portfolio is based on output from the Equinor-operated Hammerfest liquefaction plant on Melkøya island in northern Norway and additional cargoes booked mainly from the US.

Equinor said that the new Indian partner, Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL), would use the regasified LNG mainly as feedstock for production of ammonia in its newly commissioned plant for manufacturing fertilisers and petrochemicals.

The Equinor-Deepak agreement covers an annual supply of around 650,000 tonnes per annum of LNG for 15 years starting from 2026.

Equinor said that it was delighted with the Deepak agreement as ammonia was a “key building block for the society, being crucial for agriculture and food security” in the Asian nation.

“The ammonia which Deepak will produce from the natural gas will be for domestic use,” added Equinor.

New plant

The Deepak fertilisers facility is located at Taloja in the West Coast state of Maharashtra.

“Deepak’s new ammonia plant has created new gas demand in the growing Indian market,” explained Helge Haugane, Equinor’s Senior Vice President for Gas and Power.

“I am very happy that we have landed this agreement with Deepak Fertilisers. The agreement is another proof of how we use our position in the Atlantic Basin to strengthen our relationship with key players in the growing Indian market,” he added.

“We look forward to developing our relationship with Deepak and to exploring avenues for further collaboration on petrochemicals feedstocks such as propane and ethane and on low-carbon ammonia in the future,” stated Hauge.

Sailesh C. Mehta, Chairman and Managing Director, of DFPCL, said he was delighted with the Norwegian LNG deal.

“The agreement will provide reliable supplies of feedstock which will further strengthen Deepak Fertilisers’ value-chain from gas to ammonia, the key ingredient in fertilisers,” Mehta explained.

“The agreement will help us absorb global volatility as well as enhance overall margins,” he added.

“We also look forward to exploring with Equinor further collaboration on feedstock and carbon footprint reduction initiatives,” stated Mehta.

Equinor, the operator of the Hammerfest LNG export plant in northern Norway, said that a gas leak occurred at the facility on Melkøya Island on May 31 and had been stopped, though it was too early to say when production would resume.

“Equinor’s emergency response organisation has been demobilised and the emergency services have left Melkøya,” said Equinor.

“The leak occurred in connection with a valve in one of the plant’s cooling circuits,” Equinor explained.

“The gas that leaked is used for cooling during production of LNG,” the company added.

Equinor’s emergency response organisation was immediately mobilised to face the incident and it was handled in collaboration with emergency services.

“Relevant authorities were notified. There were 98 people present at the plant when the incident occurred. All personnel are accounted for and no injuries were reported,” stated Equinor.

“It is too soon to say when production at the plant can be resumed,” Equinor added.

Fire recovery

A fire had previously occurred at the Hammerfest plant on September 28 in 2020 and led to a prolonged closure for repairs until mid-2022.

No one was hurt in the 2020 fire and much of the damage to the plant was caused by the sustained use of high-powered hoses to suppress the fire and stop it re-igniting.

Equinor concluded shortly afterwards that a fire had started in the filter housing of a gas turbine generator.

The fire investigation noted that the cause of the fire was spontaneous ignition in the filters in the turbine’s air inlets, caused by excessively high temperatures over a long period of time.

Feed-gas for the single-Train Hammerfest liquefaction facility comes from the Snøhvit gas field in the Barents Sea.

Hammerfest exports around 4.70 million tonnes of LNG and most of the volumes are delivered to European destinations like France, Spain, the Netherlands and Lithuania.

Most feed-gas for Hammerfest comes from a total of 20 wells in the Snøhvit and Albatross fields.

This output is transported to land through a 143-kilometre (89-mile) pipeline.

Equinor has 37 percent of the Snøhvit field and the LNG plant and the other large partners include French major TotalEnergies and Germany’s Wintershall Dea.

Norwegian energy company Equinor said plans have been agreed to invest $1.33 billion in upgrading the Hammerfest LNG plant, Western Europe’s only baseload export facility, and to extend its lifespan towards 2050.