LNG

Vitol’s head of LNG, Pablo Galante Escobar, has warned the halt in Middle Eastern supply could develop into a food crisis, unless transits through the Strait of Hormuz resume. Longer term, the Gulf market could lose 20 mtpa of LNG supply growth in 2027 and 2028, because of damage to Qatari capacity and delays to new regional projects.

LNG imports to the Philippines are forecast to jump 508% through to 2029, spurred by the fast-depleting Malampaya field which forces gas power plant operators to source fuel from abroad. Projections from the Philippine Energy Plan (PEP) show the transition to LNG could cost $3.9 billion (PHP218 bn) over the next four years.

Starting in 2026, Oman LNG will partner with Vitol Asia under a newly signed agreement covering the optimization of up to 0.8 million metric tonnes per annum (mtpa) of LNG on a delivered ex-ship (DES) basis. The cooperation enhances Oman LNG’s flexibility from DES commitments and allows it to better align with buyers demand for more adaptable contracts.

Swiss-based Vitol – a trusted partner of Oman LNG and a key portfolio trader – is meant to help Oman LNG unlock new value by helping the state-run Middle Eastern LNG exporter to enhance its portfolio’s flexibility and responsiveness to shift in a global gas market, said Mahmoud al Baloushi, Chief Commercial Officer of Oman LNG.

The cooperation agreement was signed in Muscat in the presence of Oman’s energy minister Salim bin Nasser al Aufi.

“This agreement with Vitol highlights our agility and ability to adapt to changing market conditions,” said Hamed al Naamany, CEO of Oman LNG. He pointed out there was a “continued positive market response to Oman’s gas and LNG strategy.”

Prioritising RES to sell more LNG abroad

Oman’s domestic energy mix has been shifting towards renewables as the government seeks to free up more volumes of natural gas for liquefaction and sale abroad.

As a consequence, Oman Electricity Transmission Company (OETC) is prioritising dispatch of renewables and other clean power sources over conventional gas-based output. Operational are currently a 50 MW wind farm in Dhofar and 500 MW solar PV capacity at Ibri, but over the next six years some 1.5 GW of solar projects along with 1 GW of wind capacity are slated for development.

Lowering the reliance on gas-fired power, frees up fuel for export: Oman LNG in April last year signed a sales and purchase agreement (SPA) with BOTAS of Turkey to supply 1 mtpa of LNG to Botas over a 10-year period, starting from mid-2025.

Vitol, the world’s largest independent commodity trader and owned by several hundred partners, earned $13 billion in net profits for a second year, much higher than other global commodities traders.

Feb 22 (LNGJ) - Vitol Bunkers, the maritime fuelling unit of the global commodities firm, has taken delivery of the “Marine Future”, its first specialised bunker barge in Singapore, strengthening its position in Asia’s expanding biofuel bunker market. “The addition of this specialised IMO-type 2 notation bunker tanker to the V-Bunkers fleet will uniquely make it possible to supply biofuel blends including B24, B30 and up to B100,” said Vitol Bunkers. Biofuel sales in Singapore reached 520,000 tonnes in 2023, an increase on the previous year when volumes were 140,000 tonnes. 

   Built in China, the “Marine Future” is 102.6 metres in length and has the capacity to carry about 7,000 million tonnes of biofuels. “The current fleet of bunker tankers in Singapore are classified as ‘oil tankers’ and are therefore restricted to a maximum of 25 percent bio component in biofuel blends. This new bunker tanker has no such restriction, hence can deliver bunker fuels consisting of 100 percent bio component (B100),” the company said.

The Philippines has entered the LNG importer list in a low-key way after years of planning as a cool-down cargo was delivered to Subic Bay for the Floating Storage Unit (FSU) “Ish” as part of the commissioning of the first LNG terminal in Batangas Bay and a second vessel for a separate project is scheduled to arrive in July.

Vitol, the world’s largest independent energy and commodities firm, said its traded liquefied natural gas volumes increased slightly to 17.6 million tonnes during 2022 and with 67 percent sold to Europe in the fourth quarter.

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.

Feb 22 (LNGJ) - Qatar Petroleum signed a long-term Sale and Purchase Agreement (SPA) with global commodities company Vitol for the supply of 1.25 million tonnes per annum of LNG for delivery to Bangladesh. The shipments will begin later in 2021. “We are pleased to sign this SPA with Vitol, and we look forward to commencing deliveries to further contribute to meeting Bangladesh's energy requirements,” said Saad Sherida Al-Kaabi, President and Chief Executive of Qatar Petroleum. “We are proud to continue to be the supplier of choice for our customers and partners around the globe,” added Al-Kaabi.

Tellurian Inc. appears to be set to renew its preliminary liquefied natural gas supply and equity investment deal with Indian importer Petronet LNG as the US firm’s shares jumped by more than 56 percent on the Nasdaq global exchange after leaks by executives.