LNG

Nov 17 (LNGJ) - The European Commission, the executive arm of the 27-nation European Union, said it was suing LNG and pipeline gas importer Poland over additional costs the Poles have imposed for cross-border natural gas trading. Poland is facing the lawsuit at the European Court of Justice for imposing “restrictive measures” under its national legislation on energy companies not using Polish storage.

   Polish natural gas trading laws exclude the EU trading principle of “use it or lose it”. Instead, Poland requires gas importers and traders of gas stored outside Poland to ensure that they can deliver the total mandatory amounts of gas to the Polish national transmission or distribution network at all times, and to book firm transportation capacity into Poland just in case this may be needed. However, gas suppliers using Polish storage facilities are not subject to such restrictions and the Commission argues that this distorts the gas market.

Sempra Infrastructure, a subsidiary of California utility company Sempra, has signed a long-term LNG sale and purchase agreement (SPA) with a central European fuels group that recently acquired the Polish Oil & Gas Company.

The Sempra deal with the Poles is for the supply of 1 million tonnes per annum of LNG cargoes on free-on-board basis for 20 years from the first phase development of the Port Arthur export project in Texas.

The Port Arthur LNG first phase project located in Jefferson County, Texas, has all of its necessary permits and is expected to include two large liquefaction Trains, each with 6.75 MTPA of output, as well as LNG storage tanks and associated facilities for total production of 13.5 MTPA.

A similarly sized Port Arthur LNG second-phase project with another 13.5 MTPA of output is also under active marketing and development.

The SPA with the Polish company, Polski Koncern Naftowy Orlen (PKN Orlen), means that the first phase of the Port Arthur project is now fully subscribed for the limit Sempra has set itself.

In aggregate, the first phase of Port Arthur LNG is now subscribed for 10.5 MTPA under binding long-term agreements.

This leaves Sempra, which also operates the Cameron LNG plant in Louisiana, with room to supply own possible marketing operations.

The full Port Arthur development plan, the Texas facility is aiming for first cargo deliveries in 2027.

“We are excited to partner with PKN Orlen, Central Europe's largest energy group, as they continue to look for long-term, diverse supplies of secure energy sources,” said Justin Bird, Chief Executive of Sempra Infrastructure.

“With the long-term off-take capacity for Phase 1 now sold under binding agreements, we expect to reach a final investment decision later this quarter and commence construction,” added Bird.

Daniel Obajtek, CEO of PKN Orlen, said he was delighted to enter into this long-term agreement with Sempra.

“This is an important step towards strengthening PKN Orlen’s position as a cornerstone of crude and fuel supply security in Central and Eastern Europe,” declared Obajtek.

“Already last year, during a very tense situation on the EU energy market, the US became one of the main suppliers of natural gas to Poland,” he noted.

Sempra Infrastructure has previously entered SPAs with leading European energy and utility companies as well as the US major ConocoPhillips.

They include the German and French utilities RWE and Engie along with European chemicals company INEOS.

US energy company Sempra, operator of the Cameron LNG export plant in Louisiana, has signed an amended engineering, procurement and construction (EPC) contract with engineering firm Bechtel Energy for the Port Arthur LNG export project in Texas.

Bechtel and the Sempra unit, Sempra Infrastructure, have amended the EPC contract for the proposed Phase 1 liquefaction project in Jefferson County in Texas to a new price of approximately $10.5 billion.

“The execution of the final contract is a critical step in advancing Phase 1 of Port Arthur LNG toward a final investment decision,” said Justin Bird, Chief Executive of the Sempra Infrastructure unit.

“Based on robust customer interest, we know that Port Arthur LNG is highly attractive to the global market and we look forward to providing customers with access to secure, abundant and reliable US LNG,” added Bird.

Paul Marsden, President of Bechtel, said the firm was delighted to continue its partnership with Sempra after constructing the Cameron export plant at Hackberry.

“Alongside Sempra Infrastructure, Bechtel is ready to continue active construction in the Gulf Coast and bring more opportunities to the local region” added Marsden.

Contract scope

The Sempra EPC contract with Bechtel covers engineering, procurement, construction, commissioning, start-up, performance testing and operator training activities for Phase 1 of the new Texas plant.

The Port Arthur Phase 1 project has all its permits and is expected to include an initial two liquefaction Trains with a combined 13.5 million tonnes per annum of output.

Sempra said it was already working on a similarly-sized Port Arthur LNG Phase 2 project with “active marketing” taking place. This would take total production eventually to 27 MTPA.

California-based Sempra has signed a series of supply deals for Port Arthur Phase 1 involving four companies.

They are the Polish Oil & Gas Company, the German utility RWE Supply & Trading, UK chemicals company INEOS and US major ConocoPhillips.

The Sempra Infrastructure unit of Sempra also contains the other LNG assets like the Cameron plant and the Costa Azul export project in Mexico.

Earlier in 2022 Sempra agreed to sell a 10 percent interest in Sempra Infrastructure Partners to a subsidiary of the Abu Dhabi Investment Authority (ADIA), the wealth fund in the United Arab Emirates, for $1.78Bln in cash.

The San Diego-based utility business of Sempra includes San Diego Gas & Electric Co. and Southern California Gas Co. 

May 25 (LNGJ) - Klaipėdos Nafta, the Baltic oil storage company and operator of the Lithuanian LNG import terminal, the floating storage and regasification unit (FSRU), the “Independence”, has completed the annual LNG terminal capacity allocation for the final quarter of 2022. “Five customers will use the booked 9.66 terawatt hours TWh of LNG capacity,” said Klaipėdos Nafta. The fourth-quarter deliveries will amount to about 10 cargoes.

   “The capacity was allocated proportionally, giving priority to companies that have used the services of the terminal in the last three years,” explained Jurgita Silinskaite-Vensloviene, Head of KN LNG Commerce. “Five companies from Lithuania, Estonia and Poland have been awarded capacity for LNG carriers carrying at least 138,000 cubic metres of cargo,” she added.

Venture Global, the US LNG company developing three export plants in Louisiana, said it expected to install the seventh and eighth liquefaction Trains by April at the most-advanced Calcasieu Pass facility and praised the modular method of construction.

Venture Global, the US developer of three LNG export plants in Louisiana, said that US engineering firm KBR was awarded the engineering, procurement and construction contract for the first phase of the Plaquemines project on the banks of the Mississippi River.

Plans for the proposed Port Arthur LNG export project are still advancing, with US developer Sempra Energy replying to requests from regulators on details of the phase two expansion at the Texas plant.

Sempra Energy, the California utility developing LNG export plants in the US and Mexico, said its Port Arthur LNG project in Texas that will supply nations such as Poland received authorization from the Federal Energy Regulatory Commission to proceed with construction.

The European Commission has approved a grant of 128 million euros ($145M) to support the expansion of the Polish onshore liquefied natural gas terminal at the Baltic port of Swinoujscie to enable regular future deliveries of US LNG.

The expansion is scheduled to be completed by 2022 and is aimed at helping ensure gas supply security in Poland and the wider Baltic market.

Regasification at the terminal will be increased to handle 5.55 million tonnes per annum of LNG, or 7.5 billion cubic metres of gas.

A second phase of the expansion will be completed by 2023 and includes a third LNG storage tank along with trans-transhipment facilities for rail loading onto ISO containers.

It will include the construction of an additional jetty. This project will be implemented in collaboration with the Szczecin and Swinoujscie Seaports Authority.

The new jetty will enable the provision of small-scale tanker loading and bunkering activities.

Polskie LNG, the terminal operator, has awarded a technical consulting contract to the European engineering company Tractebel, based in Belgium, to help with the terminal expansion programme.

The funding from the European Commission, the executive arm of the European Union, comes from the European Regional Development Fund and the Cohesion Fund under the 2014-2020 Infrastructure and Environment Operational Programme, which has among its priorities the improvement of energy security in Europe.

“The project will contribute to ensuring security of gas supplies in Poland and in the Baltic countries by making supplies more diverse and promoting new gas transport routes in the region,” said an EU statement.

Poland's state-controlled oil and gas company is planning to increase its purchases of LNG to 7.5 MTPA, which is 2 MTPA more than the future handling capacity of the Swinoujscie terminal.

This will enable the company to conduct some cargo trading on the international market.

Under two US supply agreements, the Poles will receive 2 MTPA of LNG for 20 years from Sempra Energy’s Port Arthur plant planned for Texas and coming on stream in 2023, as well as volumes from Venture Global’s Calcasieu Pass export facility in Louisiana to be completed in 2022.

The main supplier to Poland is Qatargas under a long-term supply contract that started in 2016.

Venture Global LNG said it planned to expand the scope of its LNG development business on the US Gulf Coast to 60 million tonnes per annum of production based on customer demand, almost doubling current plans for 32 MTPA of output.