LNG

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.

US natural gas resources are so abundant even amid growing LNG exports and pipeline supplies to Mexico that the government says that the 
Lower 48 states will end the winter heating season with 12 percent more inventory than the previous five-year average.

Working natural gas in storage will end the 2019-2020 winter heating season from November 1 to March 31 at 1,935 billion cubic feet.

“This increase is the result of mild winter temperatures and continuing strong production,” said the Energy Information Administration in its latest short-term energy outlook.

The EIA then forecasts that net injections during the refill season from April 1 to October 31 will bring the total working gas in storage to 4,029 Bcf, which would be the largest monthly inventory level on record.

Year-over-year growth in dry natural gas production offset the growth in exports, especially of LNG, throughout 2019.

“On October 11, 2019, the total natural gas in storage surpassed the previous five-year average - an indicator of typical storage levels - for the first time since mid-2017,” added the report.

The report said it expected withdrawals from working natural gas storage to total 1,790 Bcf at the end of March 2020. 

“If realized, this would be the least natural gas withdrawn during a heating season since the winter of 2015-2016, when temperatures were also mild,” said the EIA.

Injections into and withdrawals from natural gas storage balance seasonal and other fluctuations in consumption. 

Natural gas demand is greatest in the winter months, when residential and commercial demand for natural gas for space heating increases. 

However, natural gas consumption in the power sector is greatest in summer months, when overall electricity demand is relatively high because of air conditioning.

The EIA expects the total working natural gas in storage will exceed the previous five-year average for the remainder of 2020, despite declines in dry natural gas production, increases in natural gas consumption in the electric power sector, and increases in natural gas exports. 

“Monthly natural gas production is expected to decline in 2020 from last year’s record levels as lower natural gas prices reduce incentives for natural gas-directed drilling and as lower crude oil prices reduce incentives for oil-directed drilling and associated gas production,” the report explained.

McDermott International and Zachry Group of the US, along with Chiyoda Corp. of Japan, say that Train 2 at the Freeport liquefaction and export plant on Quintana Island in Texas has begun producing LNG and its first cargo would be shipped soon as Gulf Coast output increases from the plant build-out.