LNG

Freeport LNG is continuing the restart of the Texas plant at Quintana Island on a phased basis after Hurricane Beryl damaged some plant equipment while the local Texas power company is hoping to re-connect all customers by July 19.

“We are completing initial repairs on the damage sustained to our fin-fan air-coolers in the hurricane,” said a Freeport spokesperson.

The Freeport plant is located 40 miles to the northeast of the hurricane’s landfall at Matagorda in Texas on July 8.

The company said it was restarting its first LNG Train and intended to re-start the two other liquefaction Trains shortly afterwards for output to progress to the nameplate capacity of 15 million tonnes per annum.

Reduced rates

However, output is expected to be at reduced rates at the plant that is experienced in re-starts after an explosion and fire at the facility in November 2022.  Most of 2023 was then spent carrying out repairs and having them approved after testing.

Regulatory and energy safety bodies are against quick re-starts until full safety checks have been carried out.

The Freeport plant has also had to await the lifting of port restrictions by the US Coast Coast and actions by other state bodies in the hurricane aftermath.

Power supplies across the state are expected to be 98 percent restored by July 17.

CenterPoint Energy, headquartered in Houston, Texas, is the main energy delivery company in the area responsible for electric transmission and distribution and natural gas supplies and has still to fully restore power.

CenterPoint said it had now restored power to 92 percent of impacted customers and remained on track to restore electricity to around 98 percent of impacted customers by the end of the day on Wednesday, July 17.

The company said it then expected to restore power to all customers who can receive it by Friday, July 19.

“We are grateful to our crews who have restored power to our customers at a stronger pace than we have been able to in any hurricane in our history, despite the difficult conditions,” explained Lynnae Wilson, Senior Vice President, Electric Business.

Work teams

“We continue to work around-the-clock to get our remaining customers back online,” she stated.

In addition to damaging CenterPoint's electric infrastructure, the company said that Hurricane Beryl may have caused damage to customer-owned equipment.

Specifically, customers in Texas were being asked to check their weatherhead, the point where power enters the home through an electric service drop, which is often a pipe located on the side of the residence or building.

“If the weatherhead is damaged, crews cannot safely restore service to the home until a licensed electrician has made the necessary repairs,” CentrePoint added.

The US was taking hurricane protection measures for July 7 and July 8 as the first major storm of the season, Hurricane Beryl, blew past Jamaica and Mexico and entered the Gulf of Mexico as a severe Tropical Storm headed for Texas and Louisiana, the centres of oil and gas and LNG and feed-gas supplies.

The American Bureau of Shipping, the US maritime classification society, as issued its 2023 strategy message at the annual ABS Advisory Council Meeting which also included presentations from the US Maritime Administration (MARAD) and the US Coast Guard.

US liquefied natural gas export projects have to file with regulators very detailed responses to possible emergency scenarios in or around their terminals including offshore incidents with LNG carriers or serious accidents at the production plant.

Freeport LNG Development has confirmed that initial production of the fire-damaged facility will not restart until early to mid-November, a month later than earlier predicted.

The US Delfin floating LNG export project proposed for offshore Louisiana has finalized a binding sale and purchase agreement with the US subsidiary of global commodities firm Vitol.

The deal was between Delfin Midstream Inc. and Vitol Inc. and also includes “strategic investment” by Vitol in the US export project.

Under the SPA, Delfin will supply 500,000 tonnes per annum of LNG on a free-on-board (FOB) basis for 15 years at the Delfin Deepwater Port to be established 40 nautical miles off the coast of Louisiana.

“The SPA is indexed to Henry Hub benchmark. The agreement is valued at approximately $3 billion in revenue over 15 years,” said a statement.

Dudley Poston, Chief Executive of Delfin, said that recent events had accelerated the need for a wider array of potential buyers to source reliable low-cost energy from the safety of the US at “compelling” prices.

“After evaluating multiple projects and running an extensive diligence process, Vitol’s decisions to invest demonstrates the strong trust they have in our ability to deliver a reliable source of LNG,” added Poston.

Delfin added that it had signed other accords and term sheets that are being finalized into fully termed supply agreements.

Modular project

The company declared that as modular project requiring between 2 MTPA and 2.5 MTPA of long-term contracts to begin construction, Delfin is on schedule to make final investment decision on the first FLNG vessel by the end of 2022.

“We are delighted to conclude this agreement with Delfin,” said Pablo Galante Escobar, Global Head of LNG and European Gas and Power at Vitol.

“Global LNG demand is experiencing tremendous growth and Vitol continues to strengthen its position to safely and reliably deliver cost effective, flexible solutions to our customers around the world,” added Escobar.

Vitol’s commitment and investment grade rating will help Delfin on its path to financial close of this exciting project,” he stated. 

Delfin has completed the engineering and design phase of the venture for the vessels being built at South Korea’s Samsung Heavy Industries shipyard and the liquefaction equipment and technology is being provided by Kansas-based company Black & Veatch.

UTOS pipeline

At the outset of the project planning Delfin had purchased the UTOS pipeline, the largest natural gas pipeline in the Gulf of Mexico, and submitted its deepwater port licence application way back in 2015.

The UTOS pipeline is the only 42-inch pipeline in the GoM and was formerly owned and operated by Enbridge Inc.

Delfin then proposed to activate the formerly abandoned offshore pipeline for the FLNG project and construct new connecting pipelines, a compressor station and associated facilities.

Wouter Pastoor, Chief Operating Officer of Delfin, explained that the company had completed permitting work with a positive record of decision from the Maritime Administration and had been granted its Department of Energy export licence.

“Delfin has completed front-end engineering and design with Samsung and Black & Veatch which puts us on pace to execute our project this year and to commence operations in 2026,” he stated.

Freeport LNG, the operating company for the liquefaction and export plant at Quintana Island in Texas, issued a long-awaited update to the June 8 incident and said most of the plant was expected to be closed for three months.

An investigation is under way into the explosion at the Freeport liquefied natural gas export plant at Quintana Island in Texas that could reduce US Gulf Coast cargo shipments for up to three weeks, though the overall damage was now said to be limited.

Freeport LNG, the exporter of around 20 percent of US cargo volumes from three Trains on Quintana Island in Texas, has been hit by an explosive incident inside the facility and will shut for at least three weeks, affecting deliveries particularly to Japan.

Delfin LNG, the US floating liquefaction and export project proposed for offshore Louisiana, has filed with the Federal Energy Regulatory Commission for a third extension of permits to complete the venture.