LNG

RWE AG, the German utility that developed the existing Brunsbüttel floating terminal on the Elbe and also has a 10 percent stake in the German LNG Terminal onshore terminal joint venture being built at Brunsbüttel, has changed some management roles at RWE Supply & Trading ahead of the departure of RWE Chief Executive Andree Stracke.

Equinor of Norway has signed a new agreement starting immediately to supply German utility and LNG market participant RWE with pipeline natural gas.

RWE AG, the German utility with an LNG floating import facility at Brunsbüttel on the Elbe River, reported a drop in net income as it shut its last nuclear plant in Germany but still relies on coal to replace Russian energy supplies while renewables earnings have fallen.

The German Federal Government enjoyed full public support for floating LNG terminals fast-tracked in 2022 and early 2023 for North Sea, Elbe River and Baltic port projects, though is now facing opposition for a fifth out of six proposed floating storage and regasification units (FSRUs) to be deployed at Rügen, Germany’s largest island in the Baltic Sea.

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.

Jan 19 (LNGJ) - Höegh LNG Holdings has signed a second binding 10-year charter deal with the German Federal Government for a floating storage and regasification unit (FSRU) and has allocated the vessel “Hoegh Gannet” to the contract. “The vessel ‘Hoegh Gannet’ will be deployed for the Elbehafen LNG project in Brunsbüttel and operated by Deutsche Energy Terminal GmbH,” said Höegh.

   The Elbehafen LNG import project is being developed by Germany utility RWE. Another of the company’s vessels, the “Höegh Esperanza”, was allocated to the project at the North Sea port of Wilhelmshaven being operated by German utility Uniper. “We are proud to sign the second contract with the Federal Government of Germany for the new LNG import terminal in Brunsbüttel and look forward to starting operations together with RWE,” said Erik Nyheim, the President and Chief Executive of Höegh LNG.

Woodside Energy, the operator of two LNG export plants in Western Australia, has shipped an LNG cargo to the Dutch Gate import terminal in Rotterdam on behalf of Germany’s Uniper Global Commodities.

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. 

Germany said Chancellor Olaf Scholz would discuss energy supplies, including possible LNG shipments, when he begins a tour on September 25 of the Arabian Gulf states.

A statement said that Scholz was scheduled to visit three countries Saudi Arabia, Qatar and the United Arab Emirates.

“The gas offering is slowly broadening,” said German Economics Minister Robert Habeck while visiting the Baltic Coast town of Lubmin.

Lubmin is in the German state of Mecklenburg-Vorpommern and came to prominence in the gas business by being a landfall for the cancelled Nord Stream II natural gas pipeline under the Baltic from Russia.

Nord Stream II would have doubled German pipeline imports from Gazprom, though the completed project was blocked by the European Commission and also by Chancellor Scholz’s new coalition government that won the elections in September 2021.

Lubmin will now become one of four coastal hubs for LNG imports from the US, other European countries and possibly Qatar and the UAE.

“We must show that in times like these, we can plan, authorize and build faster than is usually the case in Germany,” said Habeck on the plan to site a floating storage and regasification unit at Lubmin.

Habeck is also Vice Chancellor and a member of the Green Party.

Start-ups

The operators of the Lubmin FSRU to be chartered by the German Government is aiming for an operational start-up by the end of 2023.

Germany’s opposition parties that won power before the events in Ukraine have mostly been against using natural gas.

The country was also one of the few leading European Union economies without LNG infrastructure, though one terminal was planned on the Elbe River but constantly opposed and demonstrated against as recently as last year by Habeck's Green Party and its supporters.

They quickly changed their minds on LNG after the gas crisis erupted and it was deemed to be a “transition” fuel by the panicked European Commission late in the day in 2022.

Other German LNG import terminal plans include a mixture of FSRUs and onshore facilities, though a final project list has yet to be published.

Among those advancing is an FSRU venture and a possible onshore facility at the port of Stade on the Elbe River backed by state government of Lower Saxony and by a development company, Hanseatic Energy Hub GmbH.

German is acquiring at least five FSRUs to move away as fast as possible from dependence on Russian pipeline natural gas from Gazprom.

The Stade seaport is situated on the Elbe sea-lane between Hamburg and the Elbe estuary at Cuxhaven and is close to the North Sea.

Chancellor Scholz said in a speech on September 13 that a series of planned new LNG import facilities would be ready for imports by the end of 2023.

He expected facilities to be developed quickly at the North Sea port of Wilhelmshaven and at Brunsbüttel, located south of Hamburg on the Elbe River and near the entrance to the Kiel Canal.

According to the German government, Wilhelmshaven will become the first LNG hub. Brunsbüttel will be the second to be completed and is backed by the Government, German utilities and the Dutch utility Gasunie.

German LNG Terminal GmbH, the developer of the Brunsbüttel import terminal on the Elbe River south of Hamburg, welcomed the planning status accorded by the Federal Minister for Economic Affairs and Climate Action Robert Habeck for the development of energy import infrastructure across northern Germany.