LNG

INEOS Group, the global petrochemicals manufacturer with over 190 facilities in nearly 30 countries and whose Chairman Jim Ratcliffe is seeking a stake in soccer team Manchester United, has entered the LNG shipping fleet market for the first time to transport US export volumes.

Ratcliffe, who is a trained chemical engineer who used to work for ExxonMobil Chemicals and now has joint ventures with Chinese groups like Sinopec, was the first to import US shale gas into Europe. His other interests include soccer team investments.

INEOS Energy Trading signed agreements with the Japanese shipping company Mitsui OSK Lines (MOL) for two newbuild LNG carriers to be used for the importation of LNG into Germany from the United States.

Port Arthur LNG

These agreements are a significant shipping move by INEOS following the long-term Sales and Purchase Agreement signed with US utility Sempra for 1.4 million tonnes per annum of cargoes from the planned Port Arthur LNG export project in Texas.

Ratcliffe’s company purchased the volumes to ship to its long-term regasification capacity holding at Brunsbüttel, the proposed onshore German LNG import terminal on the Elbe River north of Hamburg.

The small Brunsbüttel port is currently operating a floating storage and regasification facility (FSRU) for LNG shipments to replace the cut-off supplies of Russian pipeline natural gas to Germany and the European Union via the North Stream routes.

“INEOS will capitalise on its experience as the largest transporter of ethane gas from the US to Europe and Asia, to develop a ‘pipeline’ of LNG into Europe to service its own demand, as well as that of select third parties,” explained INEOS.

The comoany said that both LNG vessels will have a capacity of 174,000 cubic metres and are being built at Daewoo Shipbuilding & Marine Engineering at Okpo in South Korea and would be equipped with the latest MAN Energy Solutions engines.

“It was extremely important that we selected modern, efficient vessels with environmental considerations embedded in the design,” said David Bucknall, Chief Executive of INEOS Energy Trading.

“We agreed an engine type and vessel specification with MOL that we believe is optimal for reducing carbon emissions and methane slip,” Bucknall explained.

Opportunities

“We will continue to work with MOL to identify further opportunities to reduce emissions as both companies work towards a net zero future,” the CEO stated.

Whilst INEOS has an extensive fleet of ethane and naphtha carriers, these two vessels signify their first entry into the LNG carrier market.

“We are delighted to be working with MOL, who have a great deal of experience shipping LNG and an excellent reputation,” Bucknall said.

“We look forward to developing the relationship, both during the charter period and beyond,” he added.  

NextDecade Corp., the developer of the Rio Grande LNG export project on the Brownsville Ship Channel in Texas, has signed a 20-year sale and purchase agreement with ExxonMobil LNG Asia Pacific.

Under the SPA, the US major’s Asia unit will purchase 1 million metric tonnes per annum of LNG supplied from the first two Trains of the Rio Grande facility. The first Train expected to start commercial operations as early as 2026.

NextDecade mostly recently also signed a third supply agreement with a Chinese company since the start of 2022.

The Houston, Texas-based company signed a 20-year SPA with China Gas Hongda Energy Trading Co., a wholly-owned subsidiary of China Gas Holdings. This deal was also for 1 MTPA of LNG indexed to Henry Hub and delivered on a free-on-board (FOB) basis.

NextDecade in April 2022 signed a 20-year SPA with the Singapore trading arm of ENN Group of China and another with China’s Guangdong Energy Group Natural Gas.

“The signing of this long-term SPA with ExxonMobil, a global leader in the energy industry, represents another significant milestone for RGLNG and signifies the beginning of a mutually beneficial relationship,” said Matt Schatzman, NextDecade’s Chairman and Chief Executive.

Strategy

“This agreement highlights the success of NextDecade’s strategy to provide customers with low carbon-intensive LNG to help them meet their carbon reduction goals, while providing them access to secure energy supply,” added Schatzman.

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

“LNG will play an increasingly important role in helping society reduce emissions during the energy transition,” said Peter Clarke, Senior Vice President of LNG for the ExxonMobil Upstream Company.

“We look forward to working with NextDecade to continue growing ExxonMobil’s LNG portfolio and delivering the lower-emissions energy the world needs,” added Clarke.

NextDecade has said that based on current expected demand for LNG and assuming the achievement of further LNG contracting and financing, the company anticipated making a positive final investment decision on up to three Trains in the second half of 2022, with FIDs of its remaining Trains to follow thereafter.

Qatar Petroleum, the leading LNG producer and the developer of a huge expansion at Ras Laffan in the Gulf and the Golden Pass export project in the US, is increasing its upstream presence in the Americas by winning two exploration blocks offshore the tiny nation of Suriname.