LNG

NextDecade Corp., the company developing the Rio Grande LNG export plant on the north shore of the Brownsville Ship Channel in south Texas, has given a comprehensive update on strategic activities through the first quarter of 2024.

Texas LNG, the liquefied natural gas export project to be constructed by the New York-based Glenfarne Group, has selected Gulf LNG Tugs of Texas to assist LNG carriers arriving and departing from the fully permitted facility at the Port of Brownsville.

Texas LNG, the liquefied natural gas export plant to be constructed by New York-based Glenfarne Group in the Port of Brownsville, has received its last regulatory clearances opening the way for a final investment decision.

Nov 22 (LNGJ) - LNG cargoes are heading for Belgium and the Netherlands over the next week. The vessel “Maran Gas Troy” with 159,800 of capacity is scheduled to berth with a US cargo on November 23 at the Belgian import terminal at Zeebrugge. The shipment was lifted on November 10 from the Sabine Pass plant in Louisiana, according to shipping data. A Russian delivery is then scheduled at Zeebrugge on November 26 onboard the carrier “Boris Davydov” with 172,000 cubic metres capacity. The cargo was loaded on November 20 at the Sabetta terminal on the Yamal Peninsula of northern Siberia.

   A third cargo is then due at Zeebrugge on November 29 from Angola on the vessel “Sonangol Benguela” with 160,500 metres of capacity. The volumes were lifted on November 13 from the Soyo export plant in the southwest African nation. Two cargoes are heading for the Netherlands from Texas. The “Adamastos” with 174,100 cubic metres of capacity is scheduled to arrive at November 25 at the Eemshaven facility in Groningen with a cargo from the Corpus Christi plant in Texas lifted on November 10. The carrier “WilPride” with 156,000 cubic metres capacity will discharge a Texas cargo on November 29 at the Gate terminal in Rotterdam. The volumes were loaded at Corpus Christi on November 13.

Osaka Gas, a leading Japanese LNG importer, reported a 43 percent increase in consolidated net sales for the fiscal year to the end of March 2023, mainly due to higher prices for city-gas in Japan, though profits fell year-on-year because of the shut-down of Freeport LNG in Texas for most of the year from June and the higher cost of replacement cargoes.

Osaka Gas, which is part of the Daigas Group, increased annual sales to 2.27 trillion yen ($16.8 billion), up from 1.59 trillion yen ($11.8Bln) in the previous fiscal year.

The utility’s gross annual profits dropped to 282.2 billion yen ($2.09Bln) from 314.2Bln yen ($2.33Bln) in the 2021-2022 fiscal year.

Ordinary profits declined by 33.5 percent on the year to $74.65Bln yen ($560.8M) versus 113.52Bln yen ($841.5M) in the previous fiscal year.

“This was primarily due to the higher unit selling price of city gas under the fuel cost-adjustment system and an increase in sales from a rise in LNG prices and in the Domestic Energy Business and an increase in sales from the upstream project in the USA and Australia in the International Energy Business,” said Osaka Gas.

Negative impact

“In the Domestic Energy Business, although the negative impact of the time lag between fluctuations in raw material costs and their reflection in the unit selling prices diminished compared with the previous fiscal year, costs for LNG procurement increased,” the company explained.

Osaka Gas added that its number of consolidated subsidiaries was currently 154, with nine subsidiaries added and five removed since the fiscal year ended.

In its explanation of reduced profits from Freeport LNG, Osaka Gas noted that a fire broke out at the liquefaction plant of the Freeport LNG project, one of the Daigas Group’s investments and LNG sources.

“In response to the shutdown, we prepared to secure replacement LNG for the volumes the Group originally planned to procure from the project during the shutdown period and arranged modification regarding the contracts related to LNG procurement from the Freeport Project. The Project restarted operations at the plant in February of this year,” said Osaka Gas.

Global volumes

Osaka gas also has booked volumes from other global projects such as Oman LNG in the Arabian Peninsula, Gorgon LNG in Western Australia, the nearby Northwest Shelf Project and the Bintulu LNG plant in Malaysia.

Other Osaka Gas suppliers include Papua New Guinea LNG and the Sakhalin export plant in the Russian Far East.

In its future earnings forecast to March 2024, the utility said that consolidated ordinary profit was expected to increase by 83.3Bln yen ($607M) year-on-year to 159.0Bln yen ($1.78Bln) with Freeport back on stream.

“This is primarily due to an increase in profit in reaction to the absence of costs and losses associated with the Freeport fire in this fiscal year,” said Osaka Gas.

US Government forecasts in its latest short-term outlook that the LNG export market in 2023 will stay “relatively flat” before expanding in 2024 and expects a decline in domestic natural gas consumption.

Freeport LNG has updated the timing of the initial restart of its liquefaction facility on Quintana Island in Texas after repairs and refurbishment following the June 2022 fire.

“The company continues to make notable progress on its path towards the restart of liquefaction operations,” said Freeport.

“As of December 23rd, the reconstruction work necessary to commence initial operations is substantially complete, and the company is submitting responses to the last remaining questions included in the Federal Energy Regulatory Commission’s data request,” added the company.

Freeport explained that given the time needed for the regulatory agencies to review the company’s responses and to seek any necessary clarification, Freeport LNG now does not anticipate commencing the initial restart of its liquefaction facility until the second half of January 2023.

“The company continues to have close, collaborative engagement with the regulatory agencies and that engagement will continue as Freeport LNG works towards the safe restart of its facility,” stated Freeport.

When the explosion occurred, Freeport’s Chairman and Chief Executive Michael Smith and his team had been planning for an expansion from 15 million tonnes per annum of output from three Trains to 20 MTPA with the construction of a fourth Train.

Customers

Freeport LNG's main customers include Japan’s largest importer JERA Co. Inc., the Japanese utilities Kansai Electric and Osaka Gas as well as South Korean company SK E&S and buyers in Europe.

During the first quarter of 2022 before the accident, the Freeport plant exported 55 cargoes mainly to import terminals in Europe and North Asia

Freeport shut on June 8 after a pipe failure caused an explosion due to inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired by the company to review the incident and suggest action.

Even without Freeport volumes, the amount of gas flowing to US LNG export plants hit 13.0 billion cubic feet per day last week, the most since May 2022, 10 days before the Freeport shutdown.

The Freeport closure meant the nation’s other six large-scale export plants have been operating near full capacity.

Energy Transfer, the US company with natural gas midstream, intrastate and interstate transport and storage assets as well as owning the Lake Charles LNG export project, has received permission from regulators to put the Gulf Run pipeline in service as a provider of LNG feed gas and volumes for the domestic market.

The newly constructed 135-mile, 42-inch natural gas pipeline in Louisiana has a capacity of 1.65 billion cubic feet per day with potential growth opportunities.

The pipeline is owned by Gulf Run Transmission LLC, a subsidiary of Dallas, Texas-based Energy Transfer,

“The pipeline will deliver domestically produced natural gas from key US producing regions to meet the rapidly growing demand along the Gulf Coast and international markets,” said Energy Transfer.

Gulf Run receives natural gas from Energy Transfer’s extensive intrastate and interstate pipeline network, including production directly from the Haynesville Shale.

The company noted that volumes originating from all the major natural gas basins in the US have access to the Gulf Run pipeline, including the Permian Basin, the Barnett Shale, the Marcellus and Utica shales, East Texas, the Arkoma and the Anadarko basins.

Two zones

The pipeline consists of two zones for connections. They are Zone 1 connecting the Carthage Hub to the Perryville markets and Zone 2 extending south and connecting to the Golden Pass Pipeline and to Energy Transfer’s Trunkline system.

The Golden Pass Pipeline is 69 miles in length and is a central part of Golden Pass joint venture LNG project between QatarEnergy and ExxonMobil and with the first liquefaction Train scheduled to come on stream by 2024.

The three-Train plant is on the Sabine-Neches Waterway in Texas and will have around 16 million tonnes per annum of LNG output.

“The Zone 1 segment has bi-directional flow capabilities, providing the ability to deliver significant volumes to Perryville as well as to the Golden Pass and Trunkline systems,” explained Energy Transfer.

At Lake Charles in Louisiana, Energy Transfer is itself developing the Lake Charles LNG plant on the Calcasieu Ship Channel.

The project will convert Energy Transfer’s existing Lake Charles import and regasification terminal into a liquefaction facility with 16.45 MTPA of exports.

Energy Transfer has signed significant long term LNG offtake contracts and with more in preparation.

The company operates more than 8,800 miles of pipeline in Louisiana and owns and operates more than 110,000 miles of pipeline and related infrastructure across 40 other states transporting natural gas, crude oil, natural gas liquids and refined products.

Freeport LNG has provided an update on its re-start plants stretching into the first quarter of 2023  because of repairs and production and operational changes.

Excelerate Energy, the US floating LNG import terminal specialist, signed a five-year charter agreement in Berlin with the German Government for the floating storage and regasification unit (FSRU) “Excelsior”.