LNG

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, is seeking an immediate return to building work along with the owners to get Train 1 back on track.

Zachry Holdings, the lead contractor in the $10 billion project to transform the Golden Pass LNG terminal in Texas into an export plant for a joint venture comprising QatarEnergy and ExxonMobil has filed for Chapter 11 bankruptcy protection.

QatarEnergy, the leading global LNG produce, has signed a farm-in agreement with ExxonMobil Corp. to acquire a 40 percent participating interest in two exploration blocks offshore Egypt.

Under the terms of the agreement, which is subject to customary approvals by the government of Egypt, QatarEnergy will acquire a 40 percent working interest in each of the “Cairo” and “Masry” Offshore Concession Agreements, while operator ExxonMobil will retain the remaining 60 percent working interest.

“I am pleased with our entry into the Cairo and Masry offshore exploration blocks as they expand QatarEnergy’s presence in the Arab Republic of Egypt and extend our ambitious exploration program in-country,” said Saad Sherida Al-Kaabi, the President and Chief Executive QatarEnergy.

Partners

“We look forward to working with our valued long-term strategic partner ExxonMobil, as well as with the Egyptian Natural Gas Holding Company (EGAS) and the Egyptian Ministry of Petroleum and Mineral Resources, in this promising and prospective region,” explained Al-Kaabi.

“I would like to take this opportunity to thank the Egyptian authorities and our partners for their valuable support and cooperation,” he added.

Financial details of the latest QatarEnergy-ExxonMobil transaction were not disclosed.

The Cairo and Masry offshore exploration blocks were awarded to ExxonMobil in January 2023 and cover an area of around 11,400 square kilometres in water depths of 2,000 to 3,000 metres.

The QatarEnergy deal in Egypt was signed amid some concern about one of the main overseas LNG ventures involving QatarEnergy, the US Golden Pass export project and also involving ExxonMobil.

The Golden Pass LNG project has acknowledged ongoing discussions regarding the future role of the US Zachry group in the engineering, procurement and construction joint venture also including McDermott of the US and Chiyoda Corp, of Japan.

Golden Pass talks

“Golden Pass LNG acknowledges ongoing discussions regarding the role of Zachry within the venture,” said a statement.

“Work continues to diligently complete the project, but these discussions may impact site activity in the near term,” the statement added.

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

The three liquefaction Trains will have a nameplate capacity of around 16 million tonnes per annum of LNG and ExxonMobil and QatarEnergy are marketing their own volumes.

The Train 1 mechanical completion is still on track for completion at the end of 2024 with first LNG in the first half of 2025.

ExxonMobil Corp. has told investors about the latest schedules for its various liquefied natural gas projects worldwide including a delay in the “mechanical completion” of the Golden Pass LNG export plant on the Gulf Coast and with progress promised in 2024 on Mozambique LNG and on the expansion joint venture in Papua New Guinea.

ExxonMobil said it was making “great progress” on liquefied natural gas, with the Golden Pass project in Texas on track, and in energy projects around the world that will be critical to achieving its growth plans as it gave an overview of investment and delivery commitments.

QatarEnergy and ExxonMobil have agreed to independently market LNG produced at their joint venture Golden Pass LNG plant in Sabine Pass in Texas with the start-up set for 2024.

“By leveraging their unique customer insights, QatarEnergy and ExxonMobil will better serve their downstream customers while meeting increased global demand,” the companies said.

The Federal Energy Regulatory Commission formally approved the transformation of the existing Golden Pass import terminal located on the Sabine-Neches Waterway in Texas into an export plant back in December 2016.

The Qatar-ExxonMobil project has advanced at a slow pace because of doubts several years ago over market demand issues that have now been resolved and work is well underway to construct three liquefaction Trains with around 16 million tonnes per annum of output.

While the first Train is still scheduled to come on stream in 2024, the second Train is expected to follow six-to-eight months later and Train 3 six-to-eight months after that.

ExxonMobil said it would market 30 percent of Golden Pass LNG volumes.

Mutual growth

“We are continuing to build on our decades-long relationship with QatarEnergy and collaborating on mutual growth opportunities that help deliver the lower-emissions energy our world needs,” said Peter Clarke, head of ExxonMobil’s LNG business.

“Independently marketing these Golden Pass volumes will generate increased value and flexibility across ExxonMobil’s growing global LNG portfolio,” Clarke explained.

ExxonMobil affiliate ExxonMobil LNG Asia Pacific (EMLAP) has been provided the exclusive rights to market 30 percent of Golden Pass LNG volumes.

QatarEnergy Trading will market the remaining 70 percent.

“Previously, ExxonMobil and QatarEnergy used the Ocean LNG joint venture to market Golden Pass volumes to customers,” noted ExxonMobil.

ExxonMobil and QatarEnergy continued their investments in Golden Pass throughout the pandemic-related down cycle, keeping the expansion project on schedule.

“The project will add new LNG capacity, create thousands of jobs and generate billions of dollars of economic growth for the region,” said ExxonMobil.

ExxonMobil explained that it was planning for lower-emissions LNG to play an increasingly important role in its advantaged portfolio.

“The company plans to nearly double its LNG supply by 2030 as low-cost, capital-efficient projects like the Golden Pass expansion come online,” said the US major.

Shell has been selected by QatarEnergy as a fifth partner in the North Field East expansion project in Qatar, described by Shell as the single largest project in the history of the liquefied natural gas industry.

Shell said it would hold a 25 percent share in a joint venture company which will own 25 percent of part of the North Field East project, including the four mega-Trains for processing a combined nameplate LNG capacity of 32 million tonnes per annum.

Shell said its investment in this LNG expansion would support delivery of much-needed supplies of natural gas to markets around the world.

“I am honoured that Shell has been selected by QatarEnergy. Through its pioneering integration with carbon capture and storage, this landmark project will help provide LNG the world urgently needs,” declared Shell Chief Executive Ben van Beurden.

“This agreement deepens our strategic partnership with QatarEnergy which includes multiple international partnerships such as the world-class Pearl GTL asset,” added Van Beurden.

“We are committed to maximize the value of the LNG expansion for the State of Qatar and continue to be a trusted, reliable and long-term partner in Qatar’s continued progress,” he stated.

ExxonMobil role

ExxonMobil Corp., the long-standing partner of Qatar in oil and gas and LNG, was chosen in June to be the fourth signatory of a joint venture stake in the North Field East expansion.

ExxonMobil, like Shell, was awarded a 25 percent interest in the fourth North Field East joint venture that will take QatarEnergy’s overall output to 110 million tonnes per annum from 77 MTPA.

The US major has had a presence in Qatar since 1955 and has long supported the development of the country’s LNG industry and energy sector.

QatarEnergy and ExxonMobil are also partners in the current transformation of the Golden Pass LNG import terminal on the Sabine-Neches Waterway in Texas into an export plant.

The terms for Qatar's NFE expansion joint ventures with Shell and ExxonMobil are the same as those given to the other three shareholders named earlier, France’s TotalEnergies, Italy’s Eni and US major ConocoPhillips.

The expansion of North Field East and increased LNG export capacity is one of Qatar’s key energy objectives.

QatarEnergy is the operator and commenced the North Field East project in 2019. First LNG from North Field East is expected in 2026.

The upstream part of the project is already under way to develop the southeast area of the North Field via eight platforms, 80 wells and gas pipelines to the onshore liquefaction plant.

ExxonMobil Corp. has signed up with US plants developer Venture Global for two long-term Sales and Purchase Agreements amounting to volumes of 2 million tonnes per annum from Louisiana LNG export plants.

Venture Global, based in Arlington, Virginia said ExxonMobil LNG Asia Pacific (EMLAP), which has an LNG trading licence in Singapore, will receive 1 MTPA from the Plaquemines export plant being developed on the banks of the Mississippi River.

A further 1 MTPA will be lifted for the ExxonMobil unit from the CP2 LNG project being designed and constructed alongside the existing Calcasieu Pass plant in Cameron Parish where several mid-scale Trains are already operating.

“This is the second supply agreement for CP2, which is expected to commence construction in 2023,” said Venture Global.

This refers to a previous deal with New Fortress Energy, headquartered in New York, for 1 MTPA of LNG from the future CP2 plant. NFE is also taking 1 MTPA of LNG from Venture Global’s Plaquemines facility and both deals are for free-on-board cargoes for a period of 20 years.

Venture Global said that both of its new export facilities will replicate the same design seen in operation at Calcasieu Pass, where speed of execution resulted in the production of first LNG only 29 months after the final investment decision.

Fourth plant

The company is also developing a fourth plant on the Mississippi River called Delta LNG and would take its overall output to 60 MTPA.

“Venture Global is deeply honored that ExxonMobil has chosen to collaborate with our company across both of our next projects, Plaquemines and CP2,” said Miichael Sabel, Chief Executive of Venture Global LNG.

“As a global LNG leader, ExxonMobil’s support for Venture Global’s innovation and engineering execution is a defining moment for our combined teams and the wider LNG market,” Sabel declared.

ExxonMobil is developing its own LNG export plant along the Gulf Coast at Texas in partnership with QatarEnergy on the Sabine-Neches Waterway.

However, the Qatar-ExxonMobil project has advanced at a slow pace because of doubts several years ago over market demand issues that have now been resolved and work has gathered pace to construct three liquefaction Trains with around 16 million tonnes per annum of output.

ExxonMobil, based in Irving, Texas, is also a main partner of QatarEnergy in many of its existing Trains at the huge Ras Laffan complex in Qatar in the Arabian Gulf.

Commenting on the SPAs with Venture Global senior Vice President of LNG for the ExxonMobil Upstream Co., Peter Clarke, said LNG has an important role to play in helping lower emissions in the industrial sector.

“We look forward to working with Venture Global as we continue to grow ExxonMobil’s LNG portfolio and progress our plans to reliably deliver natural gas from the US Gulf Coast to global markets,” added Clarke.

The US Department of Energy (DoE) has issued two long-term orders authorizing additional liquefied natural gas exports from two projects of the US Gulf Coast, the QatarEnergy-backed Golden Pass LNG plant in Texas and the Magnolia LNG venture in Louisiana owned by the Glenfarne Group.

Golden Pass, an existing import terminal currently being transformed into an export facility, is a joint venture between QatarEnergy and ExxonMobil Corp. and the first liquefaction Train is scheduled to come on stream by 2024.

The Federal Energy Regulatory Commission formally approved the transformation of Golden Pass, located on the Sabine-Neches Waterway in Texas, back in December 2016.

However, the Qatar-ExxonMobil project has advanced at a slow pace because of doubts several years ago over market demand issues that have now been resolved and work has gathered pace to construct three liquefaction Trains with around 16 million tonnes per annum of output.

US regulators had previously approved construction of the Magnolia LNG plant proposed for a 115-acre site near the Calcasieu Ship Channel with 8.8 MTPA of output from four Trains.

Investment buyer

The Magnolia development had previously been owned by an Australian-listed company LNG Ltd that ceased trading amid financial difficulties.

Glenfarne, a New York-based fund specialising in energy infrastructure investment, then took over the project.

The DoE orders have authorized additional 0.5 billion cubic feet per day (Bcf/d) of natural gas flows to the plants. “The orders allow Golden Pass LNG to export the equivalent of an additional 0.35 Bcf/d and Magnolia LNG to export an additional 0.15 Bcf/d of natural gas as LNG to any country not prohibited by US law or policy,” said the statement.

The DoE had previously issued long-term non-free trade agreement export orders for the majority of the projects’ capacities, with Magnolia LNG’s authorization for 1.08 billion cubic feet per day in 2016 and an authorization for 2.21 billion cubic feet per day issued to Golden Pass LNG in 2017.

The statement explained that the two orders align the respective export authorizations to additional capacity that the FERC had approved for the projects based on optimized project designs.

“The United States is the largest global producer of oil and natural gas and a net exporter of energy. US fuel supplies, including LNG, continue to play a key role in global energy security, particularly due to Putin’s invasion of Ukraine,” said the DoE.

It noted that US LNG exports had recently reached new highs of about 12 billion cubic feet per day and are expected to grow to more than 13 Bcf per day by the end of this year as additional export capacity comes online from seven large-scale plants now operating. 

The US Golden Pass LNG export project on the Gulf Coast, owned by Qatar Petroleum and ExxonMobil, has requested immediate authorization from the Federal Energy Regulatory Commission to begin the work covered in the latest part of its implementation plan.