LNG

Kinder Morgan Inc. (KMI), the leading US pipeline feed-gas company for liquefied natural gas plants and a key energy infrastructure operator and developer, has issued increased financial forecasts for 2024.

Chart Industries Inc., the liquefied natural gas equipment-maker and industrial gas technology company, has signed an accord with US company Koch Engineered Solutions (KES) aimed at providing full carbon-capture solutions to key customers in the energy sector and other industries.

China Gas Holdings, one of the leading non-state controlled companies in the Chinese city-gas and LNG sectors, said one of its subsidiaries signed a US LNG supply agreement with Venture Global for cargoes from Louisiana.

The Chinese company said its trading unit China Gas Hongda Energy Trading Co. signed two 20-year LNG Sales and Purchase Agreements (SPAs) for free-on-board (FOB) cargoes.

Under the deals, China Gas will buy 1 million tonnes per annum (MTPA) of LNG from the Plaquemines LNG project and another 1 MTPA from the CP2 LNG export facility to be constructed near Venture Global’s existing Calcasieu Pass export plant.

China Gas is involved in more than 600 projects in cities and towns with city-gas pipeline concessions, 17 natural gas pipeline transmission projects and operates over 550 LNG and compressed natural gas filling stations for vehicles.

“As a major participant in China’s energy market, we are committed to providing reliable and low-carbon LNG to Chinese customers,” said Liu Minghui, Chairman and President of China Gas.

Strengthens portfolio

“These two SPAs increase additional volumes for our LNG portfolio and strengthen China Gas’s supply ability,” stated Liu.

Michael Sabel, Chief Executive of Arlington, Virginia-based Venture Global said he was pleased to have the Chinese firm as a customer.

“Through relentless execution and innovation, our company will continue to bring much needed new capacity to the global LNG market, supporting energy security and environmental progress both in Asia and Europe,” declared Sabel.

China Gas has many subsidiaries and one of them was behind one the worst gas pipeline accidents in China in recent years and China Gas took full responsibility.

The explosion occurred in an area in Shiyan City in the northeast province of Hubei Province on the 13th of June 2021 and killed 25 people and left 27 others with serious injuries.

The pipeline system in Shiyan was the responsibility of one of the subsidiaries of China gas, Shiyan Dongfeng Zhongran City Gas Development Co.

However, China Gas accepted the blame and pledged to improve safety standards in the gas industry after an investigation by the provincial government exposed serious safety flaws.

The accident occurred when leaked natural gas from a pipeline gathered in the confined space underneath buildings and caused an explosion when coming into contact with sparks in fumes from nearby catering outlets.

The investigation into the incident exposed problems in the Chinese gas sector exacerbated by illegal construction, long-term failure to investigate gas leaks, chaotic property management and inefficient emergency responses to major incidents.

US LNG exporter Venture Global has received permission from regulators to commission liquefaction blocks five and six at the Calcasieu Pass LNG export plant in Louisiana.

The Calcasieu Pass plant in Cameron Parish in Louisiana, south of the city of Lake Charles, shipped its first cargo at the start of March 2022.

Calcasieu Pass comprises 18 small-scale modular liquefaction Trains each with 0.626 million tonnes per annum of capacity and configured in 9 blocks for total nameplate output of 11.26 MTPA.

Using modular Trains that were built in Italy and shipped to Calcasieu Pass to be installed, Venture Global was able to cut construction costs and to bring forward the start-up schedules.

After the latest FERC authorisation for blocks five and six, the project will be two-thirds complete.

Success

“Given the success of (previous) commissioning operations, Calcasieu Pass respectfully requests authorization to place Blocks 5-6 in service,” said the request from Venture Global which was granted by FERC.

In total, Venture Global has about 70 MTPA of LNG export capacity under construction or development in Louisiana.

The Arlington, Virginia-based company’s three other projects are each expected to have nameplate capacity of around 20 MTPA.

Two of the other plants are called Plaquemines and Delta LNG and are on the banks of the Mississippi River south of New Orleans.

The fourth project, called CP2 LNG, will be built on a 540-acre site in Cameron Parish, adjacent to the existing Calcasieu Pass facility.

Venture Global has host of long-term agreements with customers for its various projects.

The list includes Shell, BP, Chevron, ExxonMobil, Italy's Edison, Portugal's Galp, Spain's Repsol, Polish Oil and Gas Company, Chinese major Sinopec, German utility EnBW and Malysia's Petronas.

Commonwealth LNG, the export venture proposed for Cameron Parish in the US Gulf Coast state of Louisiana, has overhauled its management and named the former Chief Executive of Sempra’s Cameron LNG project, Farhad Ahrabi, to serve as Commonwealth’s new President and CEO.

Ahrabi joins Commonwealth following a seven-year tenure at Cameron during which he oversaw the development, construction and subsequent operations of a 14.5-million tonnes per annum liquefaction and export facility at Hackberry in Louisiana.

Commonwealth’s plan is for an export plant consisting of six liquefaction Trains, each with a nominal production capacity of 1.4 MTPA and totalling 8.4 MTPA.

The project is also proposing to construct six LNG storage tanks, each with capacity of 50,000 cubic metres and one marine berth capable of accommodating vessels of up to 216,000 cubic metres capacity.

The liquefaction plant requires about 182 acres to construct and would occupy about 107 acres during operations.

The Commonwealth project’s founder and Chairman, Paul Varello, said he was delighted to recruit Ahrabi to head the team.

Leadership

“The depth of Farhad’s leadership experience, both at Cameron and the preceding 28 years with BG Group, will be of immeasurable value to our team as we move through the final stages of development and into construction and operation,” said Varello.

“Projects of this magnitude involve a complex convergence of technical, financial, political and community support elements that require the kind of high-level thinking and pragmatic solutions that Farhad can bring,” Varello added.

Ahrabi said he was particularly attracted to the Commonwealth opportunity because of the company’s engineering-focused approach.

The new CEO said that Commonwealth’s advantage is that it will keep liquefaction costs low and ultra-competitive in the global market at a time when there is a growing demand for US-sourced gas.

“Commonwealth has staked its ground by securing an excellent location, developing a highly modularized approach to provide clean and affordable energy, and offering creative and flexible commercial terms,” said Farhad.

“I’m humbled and excited to have the opportunity to lead the organization in delivering its promise in a way that not only serves the interests of this company, its employees, the local communities and all other stakeholders, but is part of the overall advancement of the next generation US LNG facilities,” he stated.

BG veteran

In addition to his prior roles at Cameron LNG and BG Group of the UK, Ahrabi has also served over the past two years as an Independent Director at ARC Resources Ltd, a leading Canadian energy company with a diverse asset portfolio focused on responsible energy development.

Ahrabi holds a PhD in Reservoir Engineering from the University of Exeter (England) and a Bachelor of Science degree in Chemical Engineering from the University of Wales.

Commonwealth said its remaining pre-final investment decision activities were underway for a projected start of construction in 2023.

The project is expected to have an accelerated schedule that will allow building to be completed in three years using a predominantly modular approach for a projected start of commercial operations in 2026.

Kinetrex Energy, a company acquired by US pipeline giant and LNG stakeholder Kinder Morgan Inc., has started the construction of three renewable natural gas production facilities to make RNG from waste in the state of Indiana.

The three sites are located at the Twin Bridges Landfill in Danville, the Prairie View Landfill in Wyatt and the Liberty Landfill in Monticello.

Upon completion, they are expected to produce a total of 3.5 billion cubic feet each year of RNG, derived from sources such as organic waste in landfills, wastewater treatment plants and agricultural operations.

By capturing methane produced from the decomposition of organic waste, the RNG production process also reduces or eliminates greenhouse gas emissions.

Kinder Morgan said commercial operations are expected to begin in the fall of 2022, pending required permits and certifications.

The Kinder Morgan Kinetrex unit expects to invest $146 million to construct the RNG facilities, which it will operate to process gas purchased from Wabash Valley Power Alliance (WVPA) Waste Management, owner of the landfills.

WVPA is a not-for-profit electric generation and transmission cooperative based in Indianapolis.

The G&T provides wholesale electricity to 23 retail electric distribution cooperatives in Indiana, Illinois and Missouri.

Collectively, these cooperatives supply electricity to more than 321,000 homes, schools, farms and businesses.

Kinetrex, also based in Indianapolis and which was an affiliate of the Parallel 49 equity fund before being acquired by Kinder Morgan in July 2021, also has an interest in the largest RNG facility in Indiana.

“Once operational next year, total annual RNG production from the for sites is estimated to be over four billion cubic feet,” said KMI.

Assets growth

Houston, Texas-based KMI, which owns an interest in or operates 83,000 miles of US pipelines carrying natural gas oil and other products and 144 terminals, is now participating in what will be a small but very “green” part of its business.

KMI’s US pipeline and storage assets are spread throughout the US and the company is a key supplier of LNG feed gas to exporters of clean energy to Asia as well as being a main stakeholder in the Elba Island LNG export plant in Georgia.

KMI’s Indiana RNG will be sold pursuant to long-term contracts to Kinetrex’s vehicle transportation customers located throughout the eastern half of the US.

“We are pleased to join WVPA, which has a long history in the landfill gas space, on this initiative to bring additional renewable fuels and low-carbon solutions to the marketplace,” said Aaron Johnson, KMI President of Renewable Natural Gas.

“We expect these facilities will produce renewable fuels that will ultimately replace approximately 28 million gallons of traditional diesel each year, lowering GHG emissions by about 280,000 tons,” added Johnson.

“The opportunity to work with Kinetrex has truly created a win-win for our membership,” said WVP Alliance Executive Vice President of Engineering and Operations Brian Fitzgerald.

“As a result of this project, Kinetrex becomes a cooperative member and WVPA’s involvement affords the production of alternative energy resources that will benefit our environment,” added Fitzgerald.

Kinder Morgan Inc., the US pipeline company, reported a small decline in fourth-quarter net income as revenues were underpinned by the growing LNG feed-gas requirements on the Gulf Coast and praised the performance of the Texas Intrastate systems, Natural Gas Pipeline of America (NGPL) and Elba Island LNG.

The Cheniere Energy-owned Corpus Christi LNG export plant in Texas is the first of the four US Gulf Coast-based facilities to recommence cargo liftings since activities were temporarily halted as Hurricane Laura approached last week, while seven LNG carriers are standing by in the Gulf to load.

The Corpus Christi plant began loading cargoes again just two days after the hurricane made landfall farther north in the Gulf of Mexico near Lake Charles on the Louisiana-Texas border.

The first cargo was loaded on August 30 onto the 177,200 cubic metres capacity “Sohshu Maru”, with another cargo being taken by the 140,645 cubic metres capacity “Golar Arctic” and a third on August 31 by the 155,000 cubic metres capacity “Gaslog Shanghai”, according to shipping data.

Renewed cargo liftings helped to boost Gulf Coast LNG cargo futures to their highest levels in 2020. These are settled derivatives contracts available through to October 2022 and based on the average free-on-board (FOB) cargo prices.

The value of a US GCL cargo for October 2020 rose to $3.600, up from $3.250 per MMBtu on August 31, while November jumped to $4.486 from $4.347 per MMBtu.

The December GCL contract increased to $4.973 per MMBtu from $4.905 per MMBtu on August 31.

Before the Corpus Christi plant began cargo liftings the last cargo loaded in the GoM had been on August 23, the shipping data showed.

There were also seven unladen LNG carriers on September 2 either in a holding pattern offshore or entering the Gulf.

Other plants were also on the way back. Cheniere said that a comprehensive facility and operational assessment of its Sabine Pass plant in Louisiana, the largest facility in the US with 22.5 MTPA of nameplate capacity, had revealed no significant damage as a result of the hurricane.

“Cheniere has started to execute on its plan to restart LNG production at Sabine Pass,” said the company.

Sempra Energy, the owner of the Cameron LNG export plant in Louisiana, said its teams had been able to conduct preliminary visual inspections of the Cameron facility and the site of the proposed Port Arthur LNG project in Texas and of other infrastructure in the region.

“The initial evaluation indicates minimal flooding and no catastrophic wind damage,” said Sempra.

“Thorough inspections are planned pending confirmation of sufficient site safety and security. The team at Cameron LNG is committed to the restoration of full operations as soon as safely practicable,” added the company.

Venture Global, the Virginia-based company developing three liquefaction and export plants in Louisiana, said its Calcasieu Pass facility under construction in Cameron Parish had sustained minimal impacts from the hurricane, which passed directly over the project site.

“A walk-through inspection of most areas of the site following the storm confirmed that the project site’s robust storm protection system, including a perimeter wall and storm water pumping system, performed as designed,” said Venture Global.

“While we are relieved by the minimal impacts to Calcasieu Pass LNG, we are mindful that the surrounding communities of Cameron and Lake Charles have suffered significant damage from this powerful and historic storm,” the company added.