LNG

A regulatory balancing act with reverberations throughout the Gulf Coast and beyond

Jacob Dweck, Principal, LNG Solutions Group, Bill Gwozd, Vice President, Ziff Energy,
David Wochner, Attorney, Sutherland Asbill & Brennan LLP

“The purpose of this proceeding is to determine appropriate natural gas quality and interchangeability standards to accommodate the introductions of re-gasified liquefied natural gas (LNG) into the Florida Gas Transmission (FGT) pipeline system,” wrote Judge Herbert Grossman of the Federal Energy Regulatory Commission (FERC) in his 65-page Initial Decision published 11 April in the AES Ocean Express v. Florida Gas Transmission case.

The Commission’s charge, stressed the Judge, is a delicate balancing act: “facilitate increased access to LNG supplies and simultaneously ensure that the introduction of gasified LNG into the FGT system will not have detrimental effects” on electric turbines, gas distribution systems, end-user appliances and other customers.

By A Correspondent

Vacuum insulation has been known in industry in the form of double-jacketed pipes of varying constructions for many years but had to be refined for use in the LNG sector

When oil first came on stream natural gas was considered to be a more or less irksome by-product.

Today it has become another major pillar of the world's supply of energy and raw material.

On all continents plants and installations for the extraction and processing of natural gas are being built, and the list of medium-term and long-term projects is long.

David Hayes in Mumbai

Natural gas demand is expected to grow rapidly in India over the next decade as overall energy use surges to keep pace with accelerating economic growth.

Gas will form an important part of the nation’s primary energy mix as part of efforts to develop clean power generation and provide expanding industries with a clean energy solution.

In spite of recent discoveries, indigenous gas reserves are insufficient to meet total demand and LNG and piped gas imports will fill the supply gap.

India currently is planning to build several new LNG import terminals to expand its LNG import programme that by 2012 is expected to account for about 35 percent of total supplies.

With more than 4,000 safe and timely deliveries of more than 200 million tonnes of LNG over the last 25 years, Malaysia’s MISC Berhad has grown from a humble player with a micro fleet of five to become the largest single owner-operator of LNG tankers in the world, with 21 LNG tankers and eight newbuilds expected to be delivered in 2008.

In terms of cubic capacity, MISC has approximately 10 per cent of the market share in the LNG segment.

MISC began its foray into the LNG transportation in 1983 with the delivery for Malaysian national energy group Petronas of its first LNG cargo to Tokyo Gas’s terminal in Sodegaura, Chiba.

From the 1980s up to 2002, MISC’s sole client has been PETRONAS, whose evolution into a major LNG producer and supplier has helped set in motion MISC’s own ventures into energy transportation.

This is part two of an article from US credit rating agency Standard & Poor’s on applying credit analysis in the LNG industry, particularly in relation to LNG carriers, and the financial and legal risks involved

Terry A Pratt, New York , Jan Willem Plantagie, Frankfurt, Karim Nassif, London, Michael K Vernier New York

LNG newbuild carrier prices have varied over time. The variation is due to a number of factors, mostly the price of material, especially steel, as well as exchange rates and yard utilization.

The steep fall in prices in the late 1990s was due to the Asian crisis, during which time South Korean shipyards offered favorable pricing and payment arrangements for newbuilds in order to attract foreign currency.

Linda Hutchinson-Jafar, Port of Spain, Trinidad

Jamaica, seeking to reduce dependency on fuel oil for the production of its electricity, plans to begin importing liquefied natural gas from Trinidad and Tobago by 2009.

The two Caribbean countries have signed a Memorandum of Understanding for the supply of 1.1 million tones of LNG per annum over a 20-year period for use by the Jamaican aluminium company ( JAMALCO) and the Jamaica Public Service Company (JPSCo) power plants.

Trinidad and Tobago has committed itself to offering Jamaica a “kind of pricing arrangement that is mutually acceptable,” said Patrick Manning, the prime minister of the oil and gas producing country.

A round-up of latest events, company statements, industry reports and people in the news

Michael L. Moore, an LNG fire protection engineer, explains some of his activities in Texas and elsewhere that have helped in the development of an LNG safety manual. His full test data will be published in the LNG journal in the coming months.

It is September 2004 and a unique opportunity presents itself. I am sitting in another crowded room of engineers and operations managers struggling through yet another hazard and operability (HAZOP) meeting on a proposed offshore LNG terminal.

The participants are discussing the mystifying qualities, properties and characteristics of LNG as part of Chevron Corp.’s LNG Terminals of Excellence Project that included Port Pelican in the Gulf of Mexico.

The US federal authorities approve new ventures and expansions in Louisiana, Texas and the East Coast

Flexible policy on natural gas quality is adopted as FERC also calls for increase in storage facilities to help LNG

John McKay

US energy regulators have pushed forward five key liquefied natural gas projects and have sought to address concerns about storage capacity and the specification of regasified LNG in the pipeline system to clear the way for increased LNG imports.

In its most positive move so far to back the LNG industry, the FERC this month approved plans to build or expand five receiving terminals in the states of Louisiana, Texas, New Jersey and Maryland to boost regasification and transportation capacity.

Jean Pierre Queau and Leen Poldervaart, Single Buoy Moorings Inc., Monaco

The Soft Quay Mooring LNG system combines known technology and operating experience to enable the offshore industry to affect the offshore transfer of LNG.

Single Buoy Moorings Inc. is experienced in the development, design, supply and operation of Single Point Mooring (SPM) terminals for large tankers and transferring crude oil without building port facilities, and also of Floating Production, Storage and Offloading (FPSO) units.

For the development of concepts for the LNG offshore business, with the standard manifold and mooring equipment on the LNG carrier, side-by-side (SBS) loading is the obvious choice.