LNG

Bangladesh state energy company PetroBangla said the nation has reached agreement with the Sultanate of Oman for the supply of additional LNG cargoes from the Arabian Peninsula.

Under the latest Sale and Purchase Agreement (SPA) Oman will supply 250,000 tonnes per annum of shipments as early as 2025 and up to 1.5 million tonnes per annum from 2026.

A statement said the new agreement was signed by PetroBangla Chairman Zanendra Nath Sarkar.

Bangladesh has also recently renewed a long-term LNG supply deal with QatarEnergy for 1.8 MTPA for 15 years and starting in 2026.

The new volumes from Qatar will come from the North Field expansion projects that will take QatarEnergy’s output at Ras Laffan to 126 MTPA from the current 77 MTPA.

At present, Bangladesh has a 15-year import deal with Qatar for 2.5 MTPA of LNG.

FSRU terminals

Bangladesh has two floating LNG import terminals in the form of floating storage and regasification units (FSRUs) chartered from the US terminal specialists Excelerate Energy.

One FSRU is chartered by national oil and gas company PetroBangla and has been located offshore Moheshkhali Island in the Bay of Bengal since 2018.

The second is chartered by Summit Power International of Singapore and has been stationed since 2019 off the port of Cox’s Bazaar.

Summit Power has also said it was hoping to secure a charter on a second FSRU for 2026, with capacity to handle 4 MTPA.

Bangladesh also operates more than 20 natural gas fields and produces around 24 billion cubic metres per annum of domestic gas, though has to import at least 7 Bcm of LNG per annum to make up at least some of the shortfall.

Bangladesh depends on imported natural gas for power generation as the energy mix is made up of a high proportion of gas-fired power plants, about 60 percent of the total, while the balance comes mostly from coal.

Technip Energies, the leading Europe-based energy and liquefied natural gas project engineering company, forecast a strong LNG market in 2023 and beyond and reported high annual net profits as it advanced projects in Qatar and Mozambique and also planned to seek more mid-scale LNG plant contracts.

The France-based International Group of Liquefied Natural Gas Importers (GIIGNL) has issued its annual report with key export and import statistics and noted that 2022 would see a ‘‘paradigm shift” in the market with government and institutions getting involved after the Russian invasion of Ukraine.

“Price volatility was exacerbated in February 2022 by the Russia-Ukraine conflict, and the current European energy crisis proves to be a stark reminder of LNG’s vital role in ensuring energy security and economic stability,” said Jean Abiteboul, GIIGNL President in his introduction to the report.

“Governments and public institutions are becoming increasingly involved in the LNG business, and we will monitor the consequences of this paradigm shift over the course of the coming year,” he added.

Global regasification capacity rose last year by 46 million tonnes per annum to reach 993 MTPA as four new large-scale terminals were brought in operation in Brazil, Croatia, Indonesia and Kuwait and five expansion programmes were completed, four of which are in China and one in Japan.

“At least six new markets have started or are scheduled to join the sector as importers in 2022, including Ghana, Hong Kong, El Salvador, the Philippines, Senegal and Vietnam,” said the report.

“In the meantime, LNG production has been struggling to keep pace with demand, which sent spot LNG prices upwards,” it added.

The GIIGLN constitutes a forum for exchange of information and experience among its 90 members and they handle more than 90 percent of LNG imports worldwide.

The membership the GIIGLN comes from 27 countries and the body also aims to share experiences to enhance safety, reliability, efficiency and sustainability of LNG import activities and in particular the operation of regasification terminals.

Keeping pace

“During 2021, LNG imports returned to robust growth, reaching 372.3 million tonnes, a 4.5 percent increase over 2020. Asia remained the main demand center for LNG, growing by 7.1 percent,” it said.

The report added that LNG production has been struggling to keep pace with demand, which sent spot LNG prices upwards.

“While 7.4 MTPA of new capacity came onstream, 5 MTPA of which in the United States, global LNG exports were affected by unscheduled maintenance and shortfalls in feed gas,” the report added.

“Increased output from the US, Egypt, Malaysia and Russia was partly offset by lower exports from Angola, Indonesia, Nigeria, Norway, Peru and Trinidad,” said the GIIGNL.

The report said that in 2021, two important final investment decisions were taken for the North Field East expansion project in Qatar, which will add 33 MTPA of liquefaction capacity from 2025, and Pluto LNG Train 2 in Australia for 5 MTPA.

“By 2025, more than 120 MTPA of new liquefaction capacity will progressively come online, which should partly relieve tensions in the LNG market,” stated the report.

With 68 new vessels delivered during 2021, the report confirmed that the LNG fleet reached 700 vessels, including 48 floating storage and regasification units (FSRUs) and 31 LNG bunkering vessels, representing a 9 percent increase in cargo capacity.

“Freight rates remained very strong throughout the year and the order book at year-end was remarkably high, with 196 units to be delivered by 2025,” said the report.

Qatar Petroleum has signed the largest LNG shipbuilding agreements in history to secure more than 100 ships valued at around $20 billion to transport planned additional production volumes from the Arab Gulf North Field expansion.

Qatar Petroleum is finalizing plans to reserve berths for orders of at least 60 LNG carriers from Asian shipyards to give the sector a boost as nations emerge over the next two months from the economic disruptions of the coronavirus.

McDermott International, the US LNG and energy engineering company overhauling its finances after Chapter 11 bankruptcy protection proceedings, said it was moving forward with the previously agreed sale of its Lummus Technology business.

McDermott said it had received no higher bids for Lummus and would now execute the previously announced share and asset purchase agreement to sell all of Lummus to a joint partnership between The Chatterjee Group, the New York-based investment fund, and Rhône Capital, a global private equity firm with offices in London and New York.

“McDermott did not receive a higher or better bid during the solicitation period, and the auction previously scheduled for Monday, March 9, 2020, will not occur,” explained the Houston-based company .

Subsidiaries of McDermott had entered into an agreement in January 2020 to sell Lummus to The Chatterjee Group and Rhône Capital for a base purchase price of $2.72 billion, subject to higher or otherwise better bids received through the court-supervised auction process. 

Under the terms of the agreement, McDermott will have the option to retain or purchase, as applicable, a 10 percent common equity ownership interest in the entity purchasing Lummus Technology.

McDermott said the sale hearing to confirm the sale of Lummus Technology to the joint partnership will take place on Thursday, March 12, 2020, at 9:00 am.

The equity-for-debt plan agreed with the court would eliminate more than $4.6Bln of McDermott’s debt.

The restructuring transaction has been implemented through a pre-packaged Chapter 11 process, which under US law gives protection from bankruptcy.

It is being financed by a debtor-in-possession (DIP) financing facility of $2.81 billion. 

“Proceeds from the sale of Lummus Technology are expected to repay McDermott's DIP financing in full, as well as fund emergence costs and provide cash to the balance sheet for long-term liquidity,” said the company.

McDermott is involved in some of the world’s leading LNG construction projects, including several on the US Gulf Coast and the North Field Expansion in Qatar.

Currently McDermott is working with other firms on both the Cameron LNG project at Hackberry in Louisiana and the Freeport export facility at Quintana Island in Texas.

McDermott has additionally been engaged as a contractor on the Golden Pass LNG export project for Qatar Petroleum and ExxonMobil venture in Texas.

The company has suffered financial problems since it completed the $6 billion deal in 2018 to buy LNG rival engineering, procurement and construction company Chicago Bridge & Iron (CB&I).

The restructuring transaction will strengthen its balance sheet and normalize its trade debt.

All of McDermott's businesses have operated as normal during the financial restructuring.

Qatar Petroleum President and Chief Executive Saad bin Sherida Al-Kaabi said that the work in implementing the project to increase Qatar's production of liquefied natural gas from 77 million tonnes to 126 MTPA by 2027 was going well and rejected claims the expansion was delayed.

McDermott International, the company involved in some of the world’s leading LNG construction projects, including several on the US Gulf Coast and the North Field Expansion in Qatar, said it had been formally notified by the New York Stock Exchange that it was not meeting price requirements for future listing.

Five South Korean shipping lines are making a pitch to Qatar to be the operators of the 60 new LNG carriers the Gulf state has said it needs to transport cargoes worldwide from the North Field gas expansion and construction of four new liquefaction Trains at Ras Laffan.