LNG

Baker Hughes Company, the US energy services and LNG equipment supplier, has signed an agreement with Oman LNG for the turbomachinery scope as part of a de-bottlenecking project in the Arabian Peninsula nation.

Japanese trading house Mitsui is emerging as a key partner in the liquefied natural gas projects being built up on the US Gulf Coast and on the Pacific Coast of Mexico by California-based utility Sempra Energy.

French energy major Total said it paid $3.9 billion to close the acquisition of Anadarko Petroleum’s 26.5 percent operated interest in the Mozambique LNG project from Anadarko purchaser Occidental Petroleum.

French energy major Total will make a final investment decision on the Nigeria liquefied natural gas expansion project to build a seventh Train by the end of the year and said that its acquisition of Mozambique LNG assets fits well into its growth strategy.

Japanese shipowner NYK Line said it signed a new long-term charter contract to supply a liquefied natural gas carrier to French energy major Total.

French energy major Total plans to develop liquefied natural gas imports in the tiny West African nation of Benin, whose neighbour Nigeria is the world’s fifth-largest LNG exporter.

Total said it signed a Gas Supply Agreement and the Host Government Agreement for the development of a floating LNG import facility to supply 500,000 tonnes per annum to Benin for 15 years, starting in 2021.

Total will develop and operate the floating storage and regasification unit (FSRU) and its associated infrastructure.

“It will include an offshore pipeline connection to the existing and planned power plants in Maria Gléta,” said Total.

The Benin government has signed a contract for a second power plant with financial backing from Denmark and to be located at Maria Gléta in the outskirts of the country’s largest city, Cotonou.

Total said its FLNG import project was in line with its strategy to develop new gas markets by unlocking access to LNG for fast-growing economies.

“We are very pleased to have been entrusted by the Benin authorities to develop LNG imports and support a broad adoption of natural gas in the country,” said Laurent Vivier, Senior Vice President Gas at Total.

“Access to LNG will help Benin to meet growing domestic energy demand and add more natural gas to the country’s current energy mix, hence reducing its carbon intensity,” added Vivier.

West African nations have mixed fortunes on the energy front with countries like Benin and Ghana seeking pipeline gas supplies or access to LNG while others such as Nigeria, Cameroon, Senegal and Mauritania have adequate reserves to have current or developing LNG export projects.

Nigeria, which borders Benin, exported 19.68 million of LNG last year from its onshore plant at Bonny Island in the Niger Delta, making it the fifth-largest exporter in the world behind Qatar, Australia, Malaysia and the US and just ahead of Russia and Indonesia.

The Minister of Energy of Benin, Dona Jean-Claude Houssou, thanked Total for helping to build energy supplies for the power connections.

“I congratulate the Total Group on its willingness to support the revitalization of the energy sector, which is at the heart of the Government's Action Plan as evidenced by the signing of the gas import contract,” explained Houssou.

“I would like to highlight the Government's efforts to restore Benin's energy independence, which is the foundation of the country's ambitious economic and social development,” he added.

Benin has been putting in place a legislative framework to welcome participation of private capital in the energy sector with independent thermal, solar and hydroelectric power generation projects.

“The gas import project will supply plants in Benin, such as the new 127 MW power station at Maria Gléta, with imported LNG on preferential terms and will position Benin, capital of the WAPP (West African Power Pool), as the crossroads for gas and electricity in the subregion,” said Minister Houssou.

TechnipFMC, the Franco-US energy and liquefied natural gas engineering company, said it was awarded a number of subsea contracts by Anadarko Petroleum, the licence holder of the Area 1 Rovuma Basin feed-gas resources for the Mozambique onshore LNG project.

The TechnipFMC contracts focus on the development of reserves in the Golfinho-Atum fields offshore the southeast African nation.

TechnipFMC was awarded a major contract for the engineering, procurement, construction and installation (EPCI) of the subsea hardware system through its wholly owned United Arab Emirates-incorporated subsidiary, Technip Middle East FZCO.

The company gave no specifics on the value of the Mozambique contract save to say it was worth more than $1 billion.

The onshore Mozambique project will have phase one output of almost 12.9 million tonnes per annum of LNG from two liquefaction Trains, as well as all necessary associated infrastructure, storage tanks and export jetty facilities.

Anadarko is proceeding with its Mozambique LNG commitments after agreeing earlier in 2019 to be taken over by US peer Occidental Petroleum, while its LNG assets will be sold to French major Total.

The TechnipFMC award followed the granting in May 2019 of the onshore engineering, procurement and construction contract valued at around $6 billion to a consortium comprising Saipem of Italy and its main partner McDermott International of the US, while Chiyoda Corp. of Japan will fill an advisory role.

The TechnipFMC subsea work will be carried out in cooperation with offshore vessel and platform owner and consortium partner Van Oord of the Netherlands and its Mideast subsidiary in cooperation with another European-based subcontractor, Allseas.

In support of these awards, TechnipFMC is increasing its presence in Mozambique and has had a new office in the capital Maputo since February 2019.

TechnipFMC has also been awarded separate contracts under its wholly owned US incorporated subsidiary, FMC Technologies Inc., to provide subsea hardware in support of well construction.

“We are extremely pleased to have been selected for the majority of the Mozambique LNG subsea scope,” said Arnaud Pieton, President of the Subsea division at TechnipFMC.

“TechnipFMC will highlight our industry leading subsea capabilities to help maximize Anadarko’s overall project value,” added Pieton.

“This award is a testament of our 25-year partnership with Anadarko and will further expand our presence in Mozambique,” he said.

Anadarko is still operator of the Mozambique project until the Occidental deal is completed and has a 26.5 percent stake and operatorship of the Area 1 reserves that underpin the LNG venture.

Other shareholders in the Area 1 licence and LNG project include the Japanese trading house Mitsui & Co. and three Indian companies, Bharat Petro Resources, ONGC Videsh and Oil India Ltd., as well as Thailand’s national energy company PTTEP and the Mozambique state-owned oil and gas firm ENH.

French energy major Total has signed an agreement with Toshiba Corp. to take over the troubled Japanese group’s interests in the Freeport liquefied natural gas export project at Quintana Island in Texas for a sum of $800 million.

Total has signed an agreement with Toshiba to take over its 20-year tolling agreement for 2.2 million tonnes per annum of LNG from Freeport LNG’s Train 3 and the corresponding gas transportation agreements on the pipelines feeding the plant.

The Freeport facility’s Train 3 is expected to come on stream by the second quarter of 2020.

Under the transaction, Total will acquire all the shares of Toshiba America LNG for a consideration of $15M to be paid by Total to Toshiba and will be assigned all contracts related to their LNG business for a consideration of $815M to be paid by Toshiba to Total.

The agreement means that Total will receive from Toshiba a net cash consideration of $800M payable at the closing date of the transaction, expected by the end of 2019.

Toshiba’s energy business began to decline in 2017 when it decided to withdraw from the nuclear business outside Japan after huge losses forced its Westinghouse Electric unit to file for bankruptcy.

The Japanese group entered the LNG market in 2013 by signing its agreement with Freeport. Its tolling and pipeline deals meant financial commitments in the future it wanted to avoid as it restructured, hence its willingness to pay a third party to take over its agreements.

Toshiba had previously discussed a deal with ENN Group for China, an expanding player in the LNG business, before opting for Total.

“The takeover of Toshiba’s LNG portfolio is in line with Total’s strategy to become a major LNG portfolio player,” said Philippe Sauquet, President of Gas, Renewables and Power at Total.

“Adding 2.2 MTPA of LNG to our existing positions in the US, in particular Cameron LNG, will enable optimizations of the supply and operations of these LNG sources,” added Sauquet.

“Already an integrated player in the US gas market, Total is set to become one of the leading US LNG exporters by 2020 with a 7 MTPA portfolio,” he stated.

The Freeport transaction gives the French group a portfolio of around 40 MTPA of LNG through its stakes in leading export ventures in about a dozen countries, including Australia, Nigeria, Russia and Qatar.