LNG

QatarEnergies is working towards restarting some LNG trains at Ras Laffan, as shipping disruptions are anticipated to ease by the end of April. If the Strait of Hormuz remains closed until July or beyond, however, analysts reckon prices at the Dutch TTF gas trading hub would need to rise to well above 2022-levels for Europe be able to refill storages.

French bank Société Générale has confirmed it was no longer an advisor to US energy company NextDecade Corp’s Rio Grande liquefied natural gas export project in Texas, which is nearing a final investment decision and has signed up a top list of global buyers from the US to China.

As the project's mandated financial advisor, Société Générale had been the lead bank in preparing financing for the LNG plant before exiting the role.

NextDecade had appointed Société Générale in May 2017 along with Australia’s Macquarie Capital to act as joint financial advisors for the debt and equity financing of the Rio Grande project at the port of Brownsville.

Société Générale and Macquarie have each played extensive roles in advising and participating in debt and equity financing for large-scale infrastructure and LNG projects in the US and elsewhere.

Engaged since 2017

France’s SocGen had been an advisor since just before the US Rio Grande LNG project listed on the US-based Nasdaq global stock exchange in July 2017 as NextDecade.

NextDecade was then run by former Shell senior executive, the late Kathleen Eisbrenner, who had organised the listing and taken the company forward.

Without commenting on the reason for this specific exit, SocGen said that energy sector commitments were set to end all reserve-based lending to US onshore projects by the end of 2023 and to only participate in financing LNG projects aligned with the bank's engagement in policies promoting a strict Net Zero doctrine.

“At Société Générale, we believe that banks have a key role to play in the positive transformations of the world and the sustainable development of economies. In line with our corporate purpose, we have placed sustainable development - and the energy transition in particular - at the heart of our strategy,” the bank states grandly, while noting it was a founder member in 2021 of the “Net-Zero Banking Alliance”.

The Paris-based bank has pledged to commit itself to aligning its portfolios to trajectories aimed at global carbon neutrality.

The bank has said recently it was reinforcing its objective to radically reduce exposure to the oil and gas production sector by 2025.

Confirmation

NextDecade said on March 28 that Australia's Macquarie is still a financial advisor of the company along with Japan’s largest bank, Mitsubishi UFJ Financial Group, and confirmed that Société Générale ended a five-year relationship with the Houston-based company in 2022.

NextDecade earlier in March 2023 amended its engineering contract agreement with US company Bechtel Energy to extend the price validity of the engineering, procurement and construction contract for the building of the first three liquefaction Trains to June 15, 2023.

NextDecade currently estimates the aggregate lump-sum EPC cost to construct Trains 1-3 of the Rio Grande Facility at approximately $11.5 billion

The final EPC lump-sum contract pricing for Trains 1-3 of the Rio Grande facility will be determined prior to an FID being announced.

NextDecade said that it was currently targeting a positive FID on Trains 1-3 of the Rio Grande project before the end of the second quarter of 2023, with FIDs on the remaining Trains to follow later.

Environmental permits

Next Decade has ultimate plans and permits to produce up to 27 MTPA of LNG from five liquefaction Trains at the Rio Grande facility.

NextDecade signed about half a dozen sales and purchase agreements (SPAs) in 2022, the most recent being a volume increase in December with ENN LNG of Singapore, a trading unit of the Chinese ENN Natural Gas Group.

Under the 20-year SPA, ENN will now purchase 2.0 MTPA of LNG. NextDecade said this was a 500,000 tonnes per annum increase from the original 1.5 MTPA SPA announced earlier in 2022.

NextDecade earlier in December 2022 signed an SPA with Galp Trading S.A. of Portugal.

This was its fifth deal of the year and the increase of volumes for ENN Group was its sixth volume sign-up.

NextDecade has made progress with other SPAs during 2022, including one with ExxonMobil Corp.

The US major signed a 20-year supply deal with NextDecade at the end of July 2022 through its trading subsidiary in Asia.

NextDecade has also signed three supply agreement with Chinese companies, including a 20-year deal with China Gas Hongda Energy Trading Co., a wholly-owned subsidiary of China Gas Holdings, the ENN Group and with Guangdong Energy Group Natural Gas.

Sea-LNG, a global coalition led by energy and shipping companies backing the increased use of liquefied natural gas as a maritime fuel, said the LNG and energy Port of Corpus Christi, the largest in the United States by total revenue tonnage, has become the latest member.

The Port of Corpus Christi in Texas is the fourth North American port to join the coalition but is the first port located on the strategic, energy-rich Gulf of Mexico.

Since launching in July 2016, Sea-LNG’s membership has grown from 13 to more than 40 members from leading global companies,
“The Port of Corpus Christi is one of the United States’ leading energy ports, and has been quick to appreciate the importance of LNG into its bunker offering,” said Peter Keller, Chairman of Sea-LNG.

“ We’re delighted to welcome this forward thinking and innovative port into our membership at a time when the maritime sector continues to aggressively work to decarbonise its operations as well as reduce local emissions harmful to human health,” added Kellner.

The Port of Corpus Christi’s decision to join Sea-LNG was a part of its commitment to environmental stewardship.

The Port purchases 100 percent of its power from renewable sources, is upgrading its vehicle fleet to electric and hybrid technology, and is creating a technological advancement programme for emissions control and decarbonisation.

“As the leading energy port in the Americas, the Port of Corpus Christi considers LNG indispensable in our energy export portfolio, with the expansion of local operations helping to propel the United States as a top global LNG exporter,” said Port of Corpus Christi Chief Executive Sean Strawbridge.

“By joining Sea-LNG, we’re sending a clear message that LNG as a marine fuel aligns with our ambition to strengthen our competitiveness in LNG as a leading fuel for the transport sector,” added

Sea-LNG has members across the entire LNG value chain including providers of the product, users, engine and asset suppliers, and class societies.

The group is already recognised as an international leader in LNG matters. Each member organisation commits mutually agreed human resources, data analysis and knowledge sharing.

Sea-LNG said it regarded itself as a driver in a multi-sector industry aiming for a global adoption of LNG to create cleaner shipping by 2025.

Sea-LNG’s other members include: ABS, Carnival Corp., Chart Industries, Clean Marine Energy, DNV GL, Eagle LNG Partners, Fearnleys, FortisBC, Gasum AS, GE Marine, GTT, JAX LNG, “K” LINE Group, Lloyd’s Register, Maritime and Port Authority of Singapore (MPA) and NYK Line.

The membership list additionally includes The Port of Long Beach, Port of Rotterdam, Port of Virginia, Qatargas, Shell, Société Générale, Sohar Port & Freezone, Stabilis Energy, Sumitomo Corp., Total, TOTE Inc., Toyota Tsusho, Uyeno Group of Companies, Vancouver Fraser Port Authority, Wärtsilä, and Yokohama-Kawasaki International Port Corp.

Sovcomflot, the Russian shipping line with 16 LNG carriers and an overall fleet of 147 vessels, said its revenues rose by 5.7 percent in the third quarter amid expectations more newbuilds will be ordered to deliver cargoes from the second Arctic LNG export plant proposed by Novatek and its international partners.

Sea-LNG, a global coalition of energy and shipping companies backing the increased use of liquefied natural gas as a maritime fuel, said it had appointed representatives of French bank and project financier Societe Generale and the Maritime and Port Authority of Singapore to replenish its 12-strong board.

Pieridae Energy, the Canadian company developing the Goldboro LNG project in the Atlantic Coast province of Nova Scotia, has posted widening losses at it advances with its plans for a Nova Scotia LNG export plant targeting European customers.

Tellurian Inc., the developer of the Driftwood LNG plant in Louisiana and founded by industry veterans Sharif Souki and Martin Houston, has outlined more details of its upstream acquisition plans and financing strategy as it considers acquiring more shale-gas assets in Northwest Louisiana or East Texas.

Tellurian Inc., the developer of the Driftwood LNG export project in Louisiana, has hired US investment bank Goldman Sachs and the US unit of French bank Societe Generale as financial advisors to help organize future funding requirements.

Excess growth in global LNG supply, notably through the ramp-up of US LNG through 2018 and into 2019, will make European gas prices “move through the coal floor [price]”. Fuel-switching in the Western European power market, according to Societe Generale, will ultimately be determined by short-term gas prices hinging at the variable cost of shipping a US LNG cargo to Europe.

NextDecade, the US LNG export project developer, has appointed French bank Societe Generale and Australia’s Macquarie Capital to act as joint financial advisors for the debt and equity financing of the Rio Grande project at the Texan port of Brownsville.