LNG

Mexico-Pacific LNG has signed a third long-term Sales and Purchase Agreement with ExxonMobil’s Asian trading unit for an additional 1.2 million tonnes per annum of LNG from a liquefaction and export venture under development in the Northwest Mexican state of Sonora.

Sempra Infrastructure, the subsidiary of California-based utility and energy company Sempra and with stakes in LNG plants and projects in the US and Mexico, has completed the sale of a stake in the Port Arthur LNG project in Texas to US asset management firm Kohlberg Karvis Roberts (KKR), which is already a stakeholder in Sempra Infrastructure.

Sempra said the sale was complete to KKR on a 42 percent indirect, non-controlling interest basis in the Port Arthur LNG Phase 1 project .

The transaction results in Sempra Infrastructure retaining a controlling 28 percent indirect interest in Phase 1 at the project level, and ConocoPhillips owning the remaining 30 percent interest.

“The closing of this transaction continues the positive momentum of our world-class Port Arthur LNG facility and highlights Sempra Infrastructure's ability to access capital to support the growth of its infrastructure business,” said Justin Bird, Chief Executive of Sempra Infrastructure.

“We remain committed to developing energy infrastructure projects with strong partners to continue growing our portfolio while advancing global decarbonization and energy security,” Bird added.

James Cunningham, a Partner at KKR, said the firm was pleased to proceed with the investment.

“Port Arthur LNG Phase 1 has continued its strong momentum and is on track to meet its objectives of helping to deliver energy security, economic growth and a near-term supply of reliable and cleaner energy,” added Cunningham.

Texas FID

Sempra Infrastructure reached a positive final investment decision for Port Arthur LNG Phase 1 in March 2023 and contracted US engineering firm Bechtel Energy to build the facility.

The company has additionally placed major long-lead time orders with equipment and technology companies Air Products and Baker Hughes.

The $13 billion total estimated capital expenditures for the Port Arthur project are being financed with $6.8Bln of non-recourse project-level debt and $6.2Bln of project-level equity.

The company noted that 100 percent of current contractable capacity for Port Arthur Phase 1 had been secured with long-duration contracts and high-quality counterparties.

“The expected commercial operation dates for Train 1 and Train 2 are 2027 and 2028 respectively,” Sempra said.

Progress also continues at Energía Costa Azul LNG Phase 1 on the Pacific Coast of Mexico where construction at the Mexican export project remains on track to reach commercial operations by the summer of 2025.

The San Diego, California-based company is also pursuing a Phase 2 development project at the Cameron LNG export plant in Louisiana. 

JGC Holdings Corp., which is involved in liquefied natural gas projects in nations such as Canada, Nigeria, Malaysia, Mozambique and Papua New Guinea, has become the first Japanese company using building information modeling (BIM) to receive the British Standards Institution (BSI) Kitemark certification.

Avenir LNG, the Norwegian-listed small-scale LNG project developer and vessel owner, has taken delivery of the “Avenir Achievement” as it expands its small-scale terminal and carrier business.

New Fortress Energy Inc., the New York-based LNG and power project company, has signed an agreement with a unit of the Mexican Federal Electricity Commission for the supply of regasified LNG from a new import facility within the next three months to two generating plants in the northwest state of Baja California Sur.

Under the agreement, New Fortress will provide the equivalent of an estimated 250,000-500,000 gallons of LNG (20,000-40,000 million British thermal units) per day to CFE’s CTG La Paz and CTG Baja California Sur power plants.

“We are pleased to support CFE’s transition to cleaner, more affordable and reliable energy,” said Wes Edens, Chairman and Chief Executive of New Fortress.

“This contract will help create significant fuel savings and emissions reductions for the benefit of the people of Baja California Sur,” added Edens.

The US company will supply regasified LNG to the plants to replace fuel oil via the company’s onshore receiving terminal facilities being completed in the port of Pichilingue in Baja California Sur.

The terminal is anticipated to come on line and begin the supply of natural gas to CFE in May 2021, though the company has released few details on LNG delivery and storage.

Pichilingue Port's LNG facility, located just north of La Paz, the Baja California Sur state capital, will be the third in Mexico when it enters service.

The two other Mexican LNG terminals are on the Gulf Coast at Altamira and south of Baja California on the Pacific Coast at Manzanillo.

The Pichilingue LNG facility will introduce natural gas to Baja California Sur for power generation for the first time. The state is in the lower part of the Baja California Peninsula and also currently lacks adequate onshore gas infrastructure.

New Fortress has a similar import facility in Jamaica in the Caribbean using floating storage that began operations in 2016 and another project in Puerto Rico.

The company is also working on a venture to supply regasified LNG to a 300 megawatts gas-fired power plant at Puerto Sandino in Nicaragua. 

TC Energy Corp., the leading North American pipeline company supplying natural gas to the US and Mexico and feed-gas for projects such as LNG Canada, has announced the retirement of President and Chief Executive Russ Girling.

The CEO will step down from his posts and the board of the Calgary, Alberta-based company at the end of December.

His replacement has been named as François Poirier, currently Chief Operating Officer and President of TC Energy’s Power & Storage and Mexican divisions.

Girling will assist Poirier with the transition through February 28, 2021.

One of TC Energy’s main current projects is building the Coastal GasLink Pipeline from Dawson Creek to the Royal Dutch Shell-led LNG Canada project at Kitimat in British Columbia.

Among its many other ventures in North America, the Canadian company is a shareholder in the South Texas-Tuxpan pipeline with Sempra Energy’s IEnova. The pipeline crosses part of the Gulf of Mexico from Texas and was built at a cost of $2.5 billion for US exports to Mexico.

“On behalf of all Board members, I would like to thank Russ for his invaluable contributions to the company,” said Siim Vanaselja, TC Energy's Board Chairman.

“Over the last decade, he has led TC Energy through a period of unprecedented growth and transformation, including the development of its Liquids pipelines footprint, expansion of its Mexican natural gas pipelines business, the successful US$13 billion acquisition of Columbia Pipeline Group and advancement of North American LNG,” stated the Board Chairman.

Vanaselja praised Girling for creating “a culture of excellence” focused first on the safety of employees and those in the communities where the company operates.

“It has been a privilege and honour to lead TC Energy over the past 10 years and to be part of the extraordinary TC team,” said Girling.

“With the wisdom and guidance of the Board and the skills and tenacity of our dedicated employees, we have accomplished many things, delivered the energy critical to millions of people safely and reliably every day, and created significant shareholder value,” stated Girling.

“I am grateful for the opportunity and confident in how the Company is positioned to prosper as global demand for energy continues to grow and transition in the years ahead,” Girling concluded.

Vanaselja said he was confident in the choice of François Poirier as Girling’s successor having seen his leadership over six years at TC Energy.

“He has had exposure to all aspects of our business and consistently shown unwavering commitment to the company’s long-term success. His integrity, strategic thinking, commercial acumen and bottom-line focus will serve the Company well in the years ahead,” stated the Chairman. 

Keynote speakers at the first Gastech Virtual Summit, including Ministers from Singapore and Canada and the head of Integrated Gas at Royal Dutch Shell, have voiced optimism about the future of LNG and natural gas and their managed role in the energy transition.

New Fortress Energy, the New York-based LNG developer in the Caribbean and Central America,  said it was progressing with construction of a Mexican liquefied natural gas import and regasification terminal in the port of Pichilingue on the Pacific Coast.

Energy Transfer, the US pipeline owner and shareholder with Royal Dutch Shell in the Lake Charles liquefied natural gas export project, reported solid fourth-quarter results as the LNG venture makes more progress.

The Dallas, Texas-based company said fourth-quarter net income attributable to partners amounted to $1.01 billion, primarily due to higher operating income.

It reported adjusted gross earnings of $2.81 billion, up 5 percent from the fourth quarter of 2018.

Energy Transfer said that among the quarterly highlights was the announcement in December 2019 with Shell US LNG of a comprehensive commercial tender package for engineering, procurement and construction contractors to submit final commercial bids.

“The proposed Lake Charles LNG liquefaction project being jointly developed by Energy Transfer and Shell on a 50-50 basis would modify Energy Transfer’s existing LNG import facility in Lake Charles, Louisiana to add LNG liquefaction capacity of 16.45 million tonnes per annum for export to global markets,” the company explained.

Energy Transfer also noted that in October 2019 that the Permian Express pipeline expansion went into full service.

The Lake Charles facility was the longest-serving US import terminal before the shale-gas boom and previously imported cargoes from Trinidad and Equatorial Guinea.

Under the transformation, Lake Charles will become an export facility and the successful EPC bidder is expected to be chosen after the second quarter of 2020.

The commercial tender focused on the technical scope of the project, specifically verifications of the engineering and design of the liquefaction facility.

Energy Transfer sees the Lake Charles project would capitalizes on “repurposing” the existing brownfield regas assets to achieve cost savings in the construction of the liquefaction facility.

It added that the project would also benefit from the unique strength of Energy Transfer as a leading natural gas pipeline operator with extensive connectivity to the Lake Charles facility.

Energy Transfer and Shell have signed a framework agreement designating Shell as the project leader and as construction manager and operator of Lake Charles LNG.

The Federal Energy Regulatory Commission has authorized a deadline for the Lake Charles plant to be completed by mid-December 2025.

Shell gained its stake in the Lake Charles facility from its takeover in 2015 of BG Group of the UK.

Energy Transfer began in 1995 as a small intra-state natural gas pipeline operator and is now one of the largest energy infrastructure firms in the US.

Lake Charles would be Shell's largest liquefaction foothold in North America, rivalling its LNG Canada joint venture in the province of British Columbia.

Protests are continuing across Canada in support of a minority of First Nation Indigenous peoples who are against the Coastal GasLink pipeline to bring feed-gas to the LNG Canada plant in British Columbia.

However, a majority of First Nations chiefs in Canada and British Columbia support the building of pipelines, LNG plants and other facilities on their traditional lands as they are given stakes, economic benefits and better job prospects.

Police arrested protesters occupying land of the First Nation band called, the Wet'suwet'en, over the construction of the Coastal GasLink pipeline while environmental activists disrupted ports and railway lines in other provinces.

The $6.6 billion Coastal GasLink pipeline will run for 670 kilometres, carrying natural gas from Dawson Creek in BC to the coastal town of Kitimat, located about 650 kilometres north of the province’s largest city Vancouver.

The pipeline route goes through traditional Wet'suwet'en territory and they are against it. However, other First Nations are backing the pipeline.

While some 20 elected band councils have signed agreements with Coastal GasLink Ltd., a subsidiary of North American pipeline company TC Energy, five hereditary chiefs have objected to the pipeline partially crossing the 22,000 square kilometres they say are under their jurisdiction. 

Ellis Ross, a BC member of the legislature and former chief councillor of the Haisla First Nation whose traditional lands are around Kitimat, said he sees the protests as meant for those who don't live in the affected areas and who don't understand Indigenous rights and title.

“It's geared for the coffee shops in Toronto, it's geared for the San Francisco crowd that have no idea,” said Ellis.

“They have no idea, or no interest, in why First Nations leaders were signing onto these major projects,” he added.

There has been an expansion in the protests that had previously been in isolated areas of the BC interior.

Protests took place in the centre of the city of Edmonton and in the province of Ontario there was a blockade of railway tracks near the town of Belleville.

There were also marches to Vancouver city hall and at the BC legislature building in in Victoria. 

The LNG Canada project is led by Royal Dutch Shell and is the largest private sector investment in Canada's history with spending of C$40 billion (US$30.2Bln).

Shell and its four partners, Mitsubishi Corp. of Japan, Malaysian energy company Petronas, Chinese major PetroChina and Korea Gas Corp., had agreed in October 2018 to start construction at the brownfield site near Kitimat that had been an energy products terminal before being acquired by Shell in 2011.

BC Premier John Horgan issued a statement about the protests at the Parliament Buildings in Victoria and in communities throughout the province.

“British Columbians have the right to peaceful protest. We support people in the exercise of their democratic rights - within the law,” said Horgan.

“That said, I understand the frustration of people who have been unable to go to work, who have been unable to enter government buildings or have been unable to get around in their communities,” he added.

“My government, represented by Scott Fraser, Minister of Indigenous Relations and Reconciliation, met on an urgent basis for two days in February in an effort to find a peaceful resolution to the impasse regarding the Coastal GasLink project. Regrettably, the talks were unsuccessful,” he explained.

“My government continues to be available to engage with the Wet’suwet’en Hereditary Chiefs,” said the BC Premier.

 “These events show us why meaningful reconciliation with Indigenous peoples is our shared responsibility and is critical to our province and our country,” he said.