LNG

July 25 (LNGJ) - A Texan bankruptcy court approved a settlement between US engineering firm Zachry Holdings and the Golden Pass LNG project developers, ExxonMobil Corp. and QatarEnergy, to appoint a new lead contractor. Zachry was the lead contractor in the $10 billion project to transform the Golden Pass LNG terminal in Texas into an export plant but filed on May 8, 2024, for Chapter 11 bankruptcy protection.

   The move effectively blocked the project at the site on the Sabine-Neches Waterway in Texas. However, the two remaining contractors Chiyoda Corp. of Japan and the CB&I subsidiary of US firm McDermott can now resume their work with Chiyoda in the lead role. The three liquefaction Trains at Golden Pass will have a nameplate capacity of around 16 million tonnes per annum of LNG with ExxonMobil and QatarEnergy owning 30 percent and 70 percent of the project respectively.

The Freeport LNG export plant on Quintana Island in Texas has asked regulators to place its third liquefaction Train into service by April 30 as the US Gulf Coast export buildout continues amid the global supply glut and economic slump.

The Freeport LNG export plant on Quintana Island in Texas was reached the final commissioning stage for the third Train with feed-gas now being introduced.

Golden Pass LNG, the US export project being developed in Jefferson County in Texas, has received a seven-year extension from regulators to complete construction. 

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.

McDermott International, the US energy and LNG project contractor, said it had entered into an agreement with lenders for access to up to $1.7 billion of additional financing, including letters of credit as it embarks on a company overhaul to regain profitability.

Engineering firms McDermott International and partners Chiyoda Corp. of Japan and the US Zachry Group said the first liquefaction Train at the Freeport LNG project on Quintana Island in Texas has reached the final commissioning stage.

This includes the introduction of feed gas into Train 1 of the natural gas import facility that is being transformed into a liquefaction and LNG export plant after several project delays.

“We are extremely proud of the Freeport LNG project team for reaching this major milestone at this unique LNG production facility,” said Mark Coscio, McDermott's Senior Vice President for North, Central and South America.

“First of its kind in the US, with the largest electric-motor driven refrigeration compressors, the Freeport LNG facility will significantly improve the energy export capabilities we have in the US, and McDermott is pleased to be part of its development from the ground up,” added Coscio.

Once Train 1 is fully operational, it will have the capacity to produce more than 5 million tonnes of LNG per annum.

Zachry Group, as the joint venture lead, engaged McDermott for the Pre-FEED in 2011, followed by FEED works to support the early development stage of the project.

Later Chiyoda joined the partnership and the joint team provided engineering, procurement and facility construction as well as commissioning and initial operations for the project.

It includes three liquefaction Trains with 15 MTPA of capacity, a second loading berth and a 165,000 cubic metres full containment LNG storage tank.

The orginal Freeport terminal was completed in 2008 with one berth and two storage tanks, each of 160,000 cubic metres capacity.

The Freeport project is led by oil and gas entrepreneur Michael Smith, who is Chairman and Chief Executive of the development company.

Freeport received regulatory approval in 2019 to build an additional Train 4 and permits from the US Department of Energy for the export of Train 4 volumes to Non-Free Trade Agreement countries, opening the way for marketing.

The Freeport Train 4 will take overall output to 20 MTPA. About 13.5 MTPA of this capacity has been contracted under 20-year tolling agreements to Japanese utilities Osaka Gas and JERA Co. Inc., BP of the UK, South Korea’s SK E&S, while a fifth deal with Toshiba Corp. was off-loaded in June 2019 by the troubled Japanese company to French energy major Total.

There is also a sixth deal, a sales agreement for 500,000 tonnes per annum contracted to international commodities firm Trafigura in the form of a three-year accord starting in 2020.

The delayed Freeport LNG export project at Quintana Island in Texas is moving forward on its expansion plans by selecting a preferred bidder for the fourth processing Train, even as it has still to complete its first Train and to start the plant.

Mitsubishi Corp. of Japan is planning to refinance the Japanese energy and LNG engineering company Chiyoda Corp. with a capital injection of at least $1.4 billion to help it recover from project setbacks and to secure some of the liquefaction plant work in a new wave of forthcoming contracts.

Baker Hughes-GE, the US energy services and equipment company, said it was awarded the contract to supply turbomachinery for the construction of the Golden Pass LNG export facility in Texas following the recent decision by Qatar Petroleum and ExxonMobil to go ahead with the venture.