LNG

May 24 (LNGJ) - Equinor, the Norwegian LNG and pipeline natural gas supplier to Europe, said it was investing 12 billion crowns ($1.12Bln) to further develop the infrastructure underpinning the Troll West gas province on the Norwegian Continental Shelf.

   “This project will secure high gas production from the Troll field. The partnership’s decision is important in order for us to fully utilise the capacity of existing infrastructure. We've chosen to use solid, familiar suppliers, most of whom already have framework agreements with us,” said Geir Tungesvik, Equinor's executive vice president for Projects, Drilling and Procurement. The new infrastructure will accelerate production from the reservoir equivalent to about 55 billion standard cubic metres of natural gas.

Cheniere Energy, the owner of the Sabine Pass liquefaction and export plant in Louisiana and the Corpus Christi facility in Texas, has signed another long-term LNG sale and purchase agreement with Equinor, the Norwegian LNG and pipeline gas supplier to Europe.

Under the latest SPA, Equinor has agreed to purchase about 1.75 million tonnes per annum of LNG from the Cheniere Marketing unit of the Houston, Texas-based company on a free-on-board (FOB) basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.

Delivery of half of the volume associated with the SPA will commence in 2027 and delivery of the remaining half, which is subject to a positive Final Investment Decision with respect to the first Train of the Sabine Pass Liquefaction Expansion Project, will start at the end of the 2020s. 

The Sabine Pass deal follows an SPA signed with Equinor in June 2022, also for 1.75 MTPA of volumes, from the Corpus Christi LNG expansion.

Half of the Corpus Christi volumes, or about 900,000 tonnes, were subject to Cheniere making a positive FID to construct additional liquefaction capacity at the Corpus Christi facility beyond the seven-Train Corpus Christi Stage III Project

The terms of the Sabine SPA is 15 years from the commencement of delivery of the full 1.75 MTPA of LNG volumes to Equinor, which also operates its own LNG export plant in northern Norway at Hammerfest, supplying European import terminals.

The Equinor Hammerfest plant in Norway had initially been built and started in 2007 to send LNG cargoes to the US before the shale-gas boom began the liquefaction and export build-out in the Lower 48 states of the US.

Project

The Sabine expansion will comprise three large-scale liquefaction Trains, each with capacity of 6.5 MTPA, a boil-off-gas re-liquefaction unit with output of 750,000 tonnes a year and two 220,000 cubic metres capacity storage tanks.

Cheniere has engaged US engineering company Bechtel Energy to complete a front-end engineering and design study of the Sabine Pass project.

“We are pleased to expand our relationship with Equinor, one of Europe’s leading energy companies, building upon the SPA we executed last year,” said Jack Fusco, Cheniere’s President and Chief Executive.

“This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions,” Fusco stated.

“It will provide further commercial support to the SPL Expansion Project, which we continue to rigorously develop in order to meet the world’s growing demand for secure, long-term energy supplies and the economic and environmental benefits of Cheniere’s LNG,” the CEO added. 

Helge Haugane, Equinor’s senior vice president for Gas & Power, said he was very pleased to sign the long-term agreement with Cheniere.

“Europe will need natural gas to ensure flexible energy on demand to support the build-out of more intermittent renewables and LNG will play an important role. In other markets, for example in Asia, demand for LNG is expected to grow as a solution to energy security,” stated Haugane.

FERC process

The Cheniere group in May 2023 entered the pre-filing review process with respect to the Sabine expansion with the Federal Energy Regulatory Commission under the National Environmental Policy Act.

Cheniere has also recently signed a long-term SPA with the South Korean utility company, Korea Southern Power (KOSPO) for the Sabine expansion.

KOSPO agreed to purchase 400,000 tonnes per annum of cargoes, which will be delivered ex-ship whereby Cheniere will supply the transportation.

Cheniere said it would begin delivering a smaller amount to the Koreans in 2024, though the full SPA runs from 2027 through to 2046.

The Houston company is additionally progressing with the expansion at the Corpus Christi plant where three liquefaction Trains currently produce 15 MTPA.

The Stage 3 expansion is adjacent to the existing plant and consists of seven mid-scale Trains with an total production capacity of over 10 MTPA.

It is also proceeding with an additional Corpus Christi expansion known as the Corpus Christi mid-scale Trains 8 and 9 project.

Europe’s largest liquefied natural gas import terminal, the UK’s Isle of Grain facility on the Medway River in Kent, has launched a consultation to auction 9 million tonnes per annum of existing capacity.

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.

Denmark and Sweden, whose electricity systems have been interconnected for more than 100 years, have signed a natural gas supply agreement to be implemented in case of emergencies with the Danes pledging to supply Swedish essential services with gas.

The Nordic nations have entered into a “solidarity agreement “ on gas supplies signed by the Director General of the Swedish Energy Agency, Robert Andrén, and the Director of the Energy Agency of Denmark, Kristoffer Böttzauw.

“The agreement will come into force if an emergency situation arises, where the energy crisis escalates and gas shortages occur in the coming winters,” said a statement.

“In that case, Denmark will contribute to securing the supply of the protected customers in Sweden. This applies, for example, to households, hospitals, emergency services and other critical functions,” according to the agreement.

Small-scale LNG

While Sweden is a small-scale LNG importer of around 400,000 tonnes per annum for bunkering fuel and other uses, Denmark has the key pipeline links to North Sea natural gas supplies.

Andrén, the Sweden’s Energy Agency head, explained that their energy systems were complex and connected to several countries.

“The agreement shows the strength of international cooperation, especially for security of supply, where the benefits of cooperation are obvious,” added Andrén.

The backbone of the regional gas infrastructure is the Danish transmission system, which transport natural gas from the North Sea to distribution networks on land.

Danish state-owned firm Energinet operates the transmission system in Denmark and the system is also the route to Germany and Sweden and to the two Danish gas storage facilities, which are consolidated in a separate company owned by Energinet.

“The agreement we have signed reflects the great work and cooperation that has taken place in the wake of Russia's invasion of Ukraine - not just in the Nordic region, but throughout the European union,” said Kristoffer Böttzauw, director of the Danish Energy Agency.

Team work

“No country in the EU or the Nordics can solve the energy supply crisis alone. So we must cooperate and be in solidarity with our neighbours - both when it comes to supply chains and energy savings,” added Böttzauw.

The Danish and Swedish sides noted that Russia's invasion of Ukraine has strained gas supplies across Europe causing large fluctuations in energy prices.

“Although electricity and gas prices have fallen since the summer of 2022 and the European gas storages have a very high degree of filling, there is still a lot of work to be done to ensure security of supply,” they said.

“The solidarity agreement shows the effect of the strong Nordic cooperation to ensure security of supply, where both countries benefit from close cooperation in both the electricity and gas fields,” they added. 

Nordic natural gas company Gasum of Finland, the region’s biggest distributor of LNG, aims to change its strategy in the next five years to concentrate operations on biogas made from waste and the electricity business.

Excelerate Energy, the leading US provider of floating LNG import terminals, said its floating storage and regasification unit (FSRU), the “Exemplar”, arrived at the port of Inkoo, in Finland to become a Baltic regional supplier of natural gas.

The FSRU was previously loaded with a partial cargo of LNG which would serve as the initial commissioning cargo for the terminal.

The FSRU “Exemplar” has been chartered to Gasgrid Finland Oy for a period of 10 years.

“It will provide flexible, reliable, and secure delivery of regasified LNG to Finland and other Baltic countries,” said Excelerate.

Inkoo port is located on the Southern Coast of Finland and provides an optimal deepwater port at close proximity to the pipelines distributing the gas mainly to industrial end-users in the Baltic region.

The developer had made the move to enable independence from Russian pipeline natural gas.

The FSRU capacity alone is sufficient for the gas needs of both Finland and Estonia. Russian gas supplies through the Imatra entry point into Finland have been stopped since May 2022.

Finland already has two onshore LNG terminals at Pori and Tornio. They have been in operation since 2016 and 2018 respectively.

Infrastructure

“The arrival of the FSRU ‘Exemplar’ at the port of Inkoo represents an important milestone for Finland as it prepares to enhance its energy security and bring essential energy infrastructure to the region,” said Steven Kobos, President and Chief Executive of Excelerate.

“This is a tremendous accomplishment for everyone involved, and we are proud to have partnered with Gasgrid on this opportunity,” added Kobos.

In addition to providing regasification services under the time charter with Gasgrid, Excelerate said that through its recently formed Finnish gas marketing subsidiary, Excelerate Finland Gas Marketing, the US firm has executed an agreement for the sale of commissioning volumes and regasification capacity rights during the commissioning phase.

“Through this agreement, Excelerate Finland will be able to provide natural gas to downstream customers in Finland and other Baltic countries,” explained the Houston-based company.

Excelerate explained that the FSRU “Exemplar” departed drydock in Spain on December 6 where it underwent customer-requested winterization upgrades.

“The vessel subsequently procured its cargo from Excelerate’s global LNG portfolio via a ship-to-ship transfer with the FSRU ‘Excelsior’ near Gibraltar,” said the company.

“The ‘Excelsior’ recently completed its 10-year service in Israel and will go on charter to the Federal Republic of Germany in 2023,” it added.

The FSRU “Exemplar” is 291 metres long and 43 meters wide. It has a storage capacity of 150,900 cubic metres of LNG and can provide more than 5 billion cubic metres per annum of regasification capacity.

Oct 6 (LNGJ) - Stolt-Nielsen Limited, the Oslo-listed and London-headquartered storage, shipping and gas company with LNG assets, reported increased third-quarter net profit of $74.7 million with revenue of $744.0 million. The company with a stake in the Avenir LNG joint venture comprising small-scale carriers and an import terminal in Sardinia said overall group net profit for the first nine months was $185.6M with revenues of $2.04 billion, up from $43.8M and $1.59Bln in the first nine months of 2021.

   Niels G. Stolt-Nielsen, Chief Executive of the company, said net profit continued to improve in the third quarter with the benefit of the tightening tanker markets “The impact became evident during the third quarter when spot rates increased by almost 40 percent from the second quarter average, pushing our sailed-in revenue per day to an average of $24,341,” added Mr Stolt-Nielsen. “The tankers team has been actively building up our fleet adding 12 ships since 2020 for a total fleet of more than 160 ships, the largest in the company’s history as we enter the strong market,” he stated.

Shell UK has taken the final investment decision to develop the Jackdaw natural gas field in the UK North Sea following regulatory approvals granted earlier in 2022 and the gas volumes when brought on stream will slightly lessen LNG needs.

Equinor, the Norwegian oil and gas company, has initiated a safe shutdown of the Gudrun, Oseberg South and Oseberg East offshore fields in the North Sea because of a strike and prolonged action could lead to a reduction in pipeline natural gas exports to Europe.