LNG

July 25 (LNGJ) - A Texan bankruptcy court approved a settlement between US engineering firm Zachry Holdings and the Golden Pass LNG project developers, ExxonMobil Corp. and QatarEnergy, to appoint a new lead contractor. Zachry was the lead contractor in the $10 billion project to transform the Golden Pass LNG terminal in Texas into an export plant but filed on May 8, 2024, for Chapter 11 bankruptcy protection.

   The move effectively blocked the project at the site on the Sabine-Neches Waterway in Texas. However, the two remaining contractors Chiyoda Corp. of Japan and the CB&I subsidiary of US firm McDermott can now resume their work with Chiyoda in the lead role. The three liquefaction Trains at Golden Pass will have a nameplate capacity of around 16 million tonnes per annum of LNG with ExxonMobil and QatarEnergy owning 30 percent and 70 percent of the project respectively.

Indian liquefied natural gas imports rebounded by more than 11 percent in June even at higher prices after last month’s decline as internal gas demand also increased along with domestic production.

LNG imports for the month of June amounted to 1.96 million tonnes, or 29 cargoes, compared with 1.76MT, or 26 cargoes, in June 2023, an increase of 11.3 percent, according to preliminary data from the Ministry of Petroleum and Natural Gas.

LNG imports for the month of May had also come to 1.96MT compared with 2.11MT in May 2023, a decrease of 7.2 percent.

The deliveries for the first three months of the fiscal year so far from April to June edged higher by 0.7 percent to 5.77MT versus 5.73MT in the prior-year period.

Data showed that LNG deliveries in June 2024 cost $1.1 billion which was 10 percent higher than the $1Bln paid in June 2023.

Deliveries of LNG to India’s growing number of regasification terminals come from Qatar, which provides over one-third of volumes, as well as West Africa, the US, Russia Asia-Pacific nations and the spot market.

India’s eighth LNG import terminal, the Chhara facility in the West Coast state of Gujarat, received its commissioning cargo in April 2024.

The Chhara terminal has 5 million tonnes per annum of capacity and has been developed by Hindustan Petroleum Corp.

Domestic gas

The Indian Ministry data showed that India’s domestic natural gas production for the month of June rose by 2.9 percent to 2.993 billion cubic metres versus the 2.910 Bcm reported in June last year.

In the three months of the current fiscal year so far, natural gas output increased by 5.7 percent to 9.056 Bcm, up from 8.564 Bcm in the same period of 2023.

Reliance Industries, the Indian group with significant energy interests, started up a third gas field in the Krishna Godavari Basin KG-D6 block on the East Coast a year ago in a joint venture with BP of the UK. 

India’s production of coal-bed methane (CBM), which in Australia is used to produce LNG, also increased in June to 59.63 Bcm, up from 58.60 Bcm in May 2024 and was at 173.10 Bcm for the first three months of the fiscal year.

The Ministry also gave average capacity utilization rates for seven LNG terminals and with data covering the period from April 2024 to May 2024.

The total capacity of existing terminals has now risen to 52.7 MTPA from the eight facilities. 

However, the Chhara LNG terminal will take several months to appear in the Ministry regasification data book.

Regasification

The largest Indian terminal at Dahej, located north of Mumbai and operated by Petronet LNG, has capacity of 17.5 MTPA and had the highest utilisation rate of 107.2 percent of nameplate capacity in the period, up from 101 percent in May.

At the Hazira facility, operated by Shell India, the utilisation rate increased to 38.3 percent from 28.6 percent in May for 5.2 MTPA of capacity.

The GAIL (India) terminal at Dabhol, south of Mumbai, reported 73.8 percent usage, up from 69.9 percent last month for its 5 MTPA.

The West Coast terminal at Mundra belonging to Gujarat State Petroleum Corp. had regas levels at  34.4 percent up from 33.8 percent in MTPA and its highest ever for 5 MTPA.

At the Kochi facility owned by Petronet in the southwest state of Kerala usage edged lower to 20.6 percent from 20.9 percent last month for 5 MTPA of regas capacity.

The Kamarajar (Ennore) terminal owned by Indian Oil on the East Coast, saw capacity rise to 25.8 percent from 25.6 last month for 5 MTPA.

At the second East Coast terminal, owned by the Adani group and TotalEnergies and located at Dhamra in the state of Odisha, the utilisation rate was 25 percent in the April-May period, down from 26.9 percent for its 5 MTPA.

The Ministry data also showed that the nation had a total of 23,560 kilometres of natural gas pipelines in operation and another 5,630km was currently under construction.

GAIL India had the longest network of 15,916km of pipelines and a distant second place was occupied by the Gujarat State pipelines group and its 2,722km of pipelines.

Consumption

India’s natural gas consumption for June was 5.594 Bcm, an increase of 7.1 percent from 5.224 Bcm in June 2023.

Consumption for the April-to-June period was 16.707 Bcm, up by 3.8 percent compared with the 16.101 Bcm logged in the same period of 2023.

The major Indian consumers of natural gas are the fertilizer industry with around 34 percent of consumption, city-gas 22 percent, power generation 15 percent, refineries 9 percent, petrochemicals 5 percent and others 15 percent.  

Chiyoda Corp., the Japanese LNG engineering company working on the Golden Pass project in Texas that has been hit by the bankruptcy of the US Zachry construction group, has had to take a hit on its earnings for the fiscal year just ended.

Chiyoda, based in Yokohama, Japan, said it was revising full-year consolidated financial forecasts and was publishing its earnings late.

Zachry Holdings, the lead contractor in the $10 billion project to transform the Golden Pass LNG terminal in Texas into an export plant, filed on May 8, 2024, for Chapter 11 bankruptcy protection.

Chiyoda said its earnings adjustments were because of the withdrawal of Zachry, one of the engineering partners, and amid efforts by Houston, Texas headquartered subsidiary, Chiyoda International Corp (CIC), to reorganise an operational structure with remaining partner, the McDermott unit CB&I LLC.

Earnings forecast

“Under the circumstances, the cost required to complete construction was forecast and recalculated with sufficient margin based on the currently effective contracts,” Chiyoda explained.

“Consequently, sales and operating income are expected to decrease from the previous forecast,” said Chiyoda.

Ordinary income is expected to drop to 5.5 billion Japanese yen ($34.5 million) from 28Bln yen ($175.37M) in the previous forecast.

This is down from the 20.32Bln yen ($127.2M) logged in the previous 2022-2023 fiscal year.

“Short-term and long-term plans to complete construction will be agreed among the three parties Chiyoda, CBI and the Golden Pass (GPX) project) soon after Zachry’s official and formal withdrawal from the project,” said Chiyoda.

Chiyoda stated that it would strive to successfully negotiate a contract with GPX and restore its equity capital by counting the contract money in its financial results to re-estimate reserves for losses on construction contracts in or after the fiscal term of the second quarter of the fiscal year 2024.

Chiyoda's secure finances

“Chiyoda’s cash and cash equivalents on its consolidated financial statements after the end of March 2024 up to the present day is about 100 billion yen ($627M) and there is no risk of harm to its business operations,” the company declared.

The Golden Pass liquefaction facilities are being constructed at the existing terminal located on the Sabine-Neches Waterway in Texas.

Three liquefaction Trains are planned with a combined nameplate capacity of around 16 million tonnes per annum of LNG.

ExxonMobil and QatarEnergy own 30 percent and 70 percent respectively of the venture.

The Train 1 mechanical completion had been scheduled for the end of 2024 and with first LNG in the first half of 2025.

The Italian Adriatic LNG import terminal has launched the accreditation phase for a 2024 open season to offer long-term regasification capacity to natural gas market operators.

Italian floating LNG terminal company, OLT Offshore LNG Toscana controlled by Italian natural gas grid and LNG terminals operator Societa Nazionale Metanodotti (SNAM), said the “FSRU Toscana” has completed the first phase of maintenance at a shipyard in Italy’s northwest port of Genoa.

May 30 (LNGJ) - The UK is due to receive an LNG delivery next week from Qatar as prices on the UK National Balancing Point virtual natural gas market were at around $10.40 per million British thermal units.

   The Greek-flagged carrier “Maran Gas Leto” with 174,200 cubic metres capacity is scheduled to deliver a cargo from Qatar that was lifted on April 29 from the Ras Laffan export terminal in the Arabian Gulf. Shipping data shows that the vessel was now scheduled to arrive on June 4 at the South Hook terminal at Milford Haven in Wales after a voyage via the Spanish island of Tenerife.

US major ConocoPhillips has agreed to acquire Marathon Oil Corp., the US company and main shareholder in Equatorial Guinea LNG in West Africa as well as a key operator in the major US shale basins.

Excelerate Energy Inc., the specialist US company for LNG floating storage and regasification projects from South America to the Nordic region and South Asia, reported steady earnings after a quarter marked by further deals in Qatar and Brazil.

Qatar Gas Transport Company, known as Nakilat and a global leader in liquefied natural gas shipping that is expanding its fleet, reported increasing net profits and revenues amid regional and global logistical and security disruptions.

April 11 (LNG) - The UK is scheduled to receive a second cargo in the next week from Qatar. The Qatari Q-Max carrier “Al Dafna” with 262,000 cubic metres capacity is scheduled to berth at the UK South Hook terminal on April 16 after lifting a cargo on March 13 from the Ras Laffan plant in the Arabian Gulf and sailing round the southern tip of Africa to deliver it.

   The “Tangguh Palung” with 154,800 cubic metres capacity is scheduled to discharge a cargo on April 13 at South Hook, according to shipping data. That shipment was loaded on March 15 at QatarEnergy’s Ras Laffan export terminal.