LNG

Cheniere Energy, the largest exporter of US LNG from two plants in Louisiana and Texas, reported third-quarter revenue of $8.85 billion and nine-month income of $24.34Bln in the first nine months of 2022, though posted quarterly and nine-month non-cash losses of $2.385Bln and $2.509Bln because of derivatives.

Equinor, the Norwegian oil and gas major and main pipeline natural gas supplier to Europe amid diminishing Russian deliveries from Gazprom, will be an LNG trader with additional volumes supplied by the largest US LNG exporter Cheniere Energy.

Under a planned 15-year agreement Equinor will purchase around 1.75 million tonnes of LNG per annum from Houston-based Cheniere from 2026.

“This new Sales and Purchase Agreement (SPA) will add new volumes to Equinor’s already significant gas portfolio of pipeline gas and LNG,” stated Equinor.

The Norwegian company also disclosed that the expansion at Corpus Christi to add 10 MTPA to the current nameplate capacity of 13.5 MTPA will likely be followed by another boost in output.

“With global energy demand growing and increased focus on energy security, the LNG market is expected to grow significantly. US LNG can supply the European markets as well as cover demand in other markets,” explained Equinor.

The Stavanger, Norway-based oil and gas major has recently shipped the first cargo from the repaired Hammerfest in Northern Norway to re-established seaborne LNG supply link Europe.

New US volumes

It was the first cargo to leave the Hammerfest liquefaction and export plant since the September 2020 fire.

Once the Hammerfest is ramped up to full production of 4.8 MTPA, a ship will leave the facility on Melkøya island every five or six days and over the year will deliver 5 percent of Norway’s natural gas exports while the other 95 percent is delivered by pipelines.

Norway’s role as a key supplier to Europe has taken on more importance because of the Russian invasion of Ukraine and Western sanctions against Russian oil and gas.

The Hammerfest project gave Europe its first large-scale LNG supply when it came on stream in 2007, though the facility was originally planned and built to supply the US before the shale-gas boom.

“I am very pleased that we have entered into a long-term agreement with Cheniere, the largest US producer of LNG,” said Helge Haugane, Equinor’s senior vice president Gas & Power.

“Based on our production in Norway, Equinor is the second-largest supplier of pipeline gas to Europe. The new LNG agreement is a major building block in Equinor’s ambition to further strengthen our global gas position by adding more LNG to the portfolio,” Haugane explained.

Crucial role

“LNG will play a crucial role in providing energy security. By increasing our position in this segment, we will be even better positioned as a long-term reliable supplier of energy’ he stated.

Under the SPA, Equinor has agreed to purchase the volumes from Cheniere Marketing on a free-on-board basis whereby the Norwegians send their own ships.

Equinor said the deliveries under the SPA would start in the second half of 2026 and reach the full 1.75 MTPA in the second half of 2027.

“Half of the volume, or about 900,000 tonnes, is subject to Cheniere making a positive final investment decision to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-Train Corpus Christi Stage III Project,” stated Equinor.

This suggests that the Cheniere, which operates the Sabine Pass plant in Louisiana with 27 MTPA of production, is planning yet another expansion at the Texas facility.

The US Department of Energy has revealed that US liquefied natural gas exporter Cheniere Energy has signed a firm medium-term supply deal with French utility Engie from volumes produced at the Corpus Christi plant in Texas.

The DoE outlined the agreement as lasting for 11 year and amounting to between 400,000 tonnes and 1.2 million tonnes per annum on a free-on-board (FOB) basis whereby the French company pays for the shipping.

Analysts say the secrecy could be because the French government under President Emmanuel Macron had resolved to curb imports of LNG produced from hydraulic fracturing for shale gas.

Cheniere had previously announced away back in 2015 that its unit, Cheniere LNG Marketing, had signed a five-year deal with Engie for the delivery of LNG cargoes to the Montoir-de-Bretagne facility on the Atlantic Coast of France.

Cheniere also signed a deal in early November 2021 to supply cargoes to China’s Sinochem Group, the state-owned producer of fertiliser products and agrochemicals.

Under that deal, Sinochem agreed to purchase an initial volume of around 900,000 tonnes per annum beginning in July 2022 and which then increases to 1.8 MTPA.

The SPA has a term of 17-and-a-half years and Sinochem will purchase the LNG volumes like Engie on a FOB basis.

Cheniere said the Sinochem purchase price was indexed to the Henry Hub natural gas benchmark plus a fixed liquefaction fee.

Cheniere also recently executed two other long-term sale and purchase agreements with ENN Group of China and UK-listed global commodities firm Glencore.

The new agreements coincide with Cheniere's planned expansion with a new sixth Train coming on stream at Sabine Pass in Louisiana and a final investment decision coming up for a mid-sized production project at the Corpus Christi plant in Texas.

Cheniere will start commercial operations on Train 6 in the first quarter of 2022, about a year ahead of the guaranteed completion schedule.

Cheniere produces a nameplate 22.5 MTPA from the Sabine Pass facility in Louisiana and with Train 6 in operation output will jump to 27 MTPA.

The Corpus Christi plant will expand with seven mid-scale liquefaction Trains adjacent to the existing facility and adding almost 10 MTPA to the 13.5 MTPA from the three larger Trains, each producing 4.5 MTPA.

Qatari liquefied natural gas fleet owner and operator, Nakilat, has taken delivery of a newbuild carrier called “Global Sea Spirit”, its 22nd conventional-sized vessel and taking Qatar’s overall LNG fleet size to 74 ships.

The 174,000 cubic metres capacity “Global Sea Spirit” will be commercially and technically managed by Nakilat affiliate Nakilat Shipping Qatar Ltd (NSQL).

The latest LNG carrier was built by South Korean shipyard Daewoo Shipbuilding and Marine Engineering (DSME) and is the third of four LNG newbuild carriers to be delivered to Global Shipping Co. Ltd., a joint venture owned 60 percent by Nakilat and 40 percent by Greek company Maran Ventures Inc.

The first two LNG carriers newbuilds of the series have high-pressure M-Type Electronically Controlled-Gas Injection (ME-GI) engines.

They were delivered in May 2020 and January 2021 respectively and are currently in service.

The “Global Sea Spirit” is the first Nakilat vessel with X-DF propulsion, a slow-speed diesel engine with a direct drive to the propellers, enabling a substantial reduction in the vessel’s fuel consumption.

The fourth in the current DSME series will also have X-DF engines and delivery is scheduled for early 2022.

Advantages

“Like the ME-GI system, vessels running with X-DF engines propulsion are proven to be more fuel efficient, reduce greenhouse emissions and are more environmentally friendly due to their lower carbon emissions,” said Nakilat.

The “Global Sea Spirit” is chartered to Cheniere Marketing, a unit of Houston, Texas-based Cheniere Energy, owner of the Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas.

The newbuild is the optimum size preferred for sending US Gulf Coast cargoes via the Panama Canal to North Asia.

The delivery of all four newbuild LNG carriers by 2022 will bring Nakilat’s fleet to 74 vessels, which is just under 12 percent of the current global LNG fleet based on carrying capacity.

Of these, there are 24 LNG carriers, four liquefied petroleum gas (LPG) carrier and one floating storage regasification unit (FSRU) vessel being managed in-house by NSQL. 

Cheniere Energy has entered into a binding liquefied natural gas sale and purchase agreement with a subsidiary of global commodities firm Glencore Plc.

Under the SPA, Glencore has agreed to purchase about 800,000 tonnes per annum of LNG from Cheniere Marketing on a free-on-board basis for a term of around 13 years beginning in April 2023.

The purchase price for the cargoes under the accord is indexed to the Henry Hub price with a fixed liquefaction fee.

“We are pleased to announce this long-term SPA with Glencore, one of the world’s largest producers and marketers of commodities and a significant player in the global LNG market,” said Jack Fusco, Cheniere’s President and Chief Executive.

“This agreement once again reinforces Cheniere’s position as a leading global LNG provider, and we look forward to a successful long-term relationship with Glencore,” added Fusco.

Fusco states that he saw the latest deal as further building commercial momentum in contracting capacity ahead of a final investment decision being taken on the expansion of the company's plant at Corpus Christi in Texas.

Mid-scale Trains

The Corpus Christi facility is being developed to include up to seven mid-scale liquefaction Trains with a total expected nominal production capacity of around 10 MTPA and has received all necessary regulatory approvals.

The Cheniere LNG supply deal is the first for London-listed Glencore since it signed a Heads of Agreement in June 2021 for 500,000 tonnes per annum of Arctic LNG from Russian company Novatek.

Glencore’s Novatek volumes would be delivered to a number of locations in East Asia.

Novatek is operator of the existing Yamal LNG export plant and is constructing the Arctic LNG II joint venture on the Gydan Peninsula at a cost $21 billion.

The new Russian plant will produce 19.8 MTPA of LNG as well as gas concentrate from the principal feed-gas resources, adding to Yamal’s output of 17.5 MTPA.

Cheniere Energy, the largest US LNG exporter from the Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, said the global LNG market had strengthened significantly and it hoped to increase shipments to China as it reported mixed earnings while still posting $9.58 billion of annual revenues and shipping 391 cargoes in 2020.

Foran Energy Group, the Chinese natural gas distribution company in the south of the country, has signed a framework liquefied natural gas supply agreement with US exporter Cheniere Energy, owner of the Sabine Pass plant in Louisiana and Corpus Christi facility in Texas.

An Australian liquefied natural gas cargo is heading to an import terminal in Mexico, reflecting the unbalanced state of regional markets hobbled by high inventories and low prices.

US government forecasts expect the nation’s liquefied natural gas exports will average 5.6 billion cubic feet per day in the second quarter of 2020 and they will decline further through the end of the Northern Hemisphere summer as a result of reduced global demand.

Cheniere Energy, the leading US LNG export company through its Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, reported annual revenues approaching $10 billion and more than 400 cargo shipments even amid the industry’s current short-term headwinds.