LNG

LNG Journal editor

CME Group, the world's leading derivatives market, reported an all-time daily volume record for oil and natural gas futures and options after markets plunged under the weight of the economic effects of the coronavirus and an oil price war, with trading levels in energy futures rising in all markets.

 LNG Journal editor

The US Government has issued its short-term energy outlook to take account of what it said was the second-largest daily oil price decline caused by the lack of an agreement between leading oil nations such as Saudi Arabia, Russia and other members of the Organization of Petroleum  Exporting Countries.

Saudi Aramco, the company with LNG plans and behind the global energy turmoil because of the Saudi government pledge to increase crude oil production, still has its shares trading at a high level of 30.90 riyals ($8.24) on the Saudi Tadawul stock exchange. 

The shares of Saudi Aramco have dropped just 8.2 percent since March 5 when they were at 33.15 riyals, while energy majors around the world have suffered double-digit drops.

The Saudi Aramco shares have also lost just 12 percent of their value since they traded at 35.20 Saudi riyals ($9.40) on the first day after an initial public offering of 1.5 percent of the company's shares.

That first day’s share trading after the IPO brought Saudi Aramco's value up to $1.88 trillion, but it has only briefly gone over the $2 trillion market value in 2020.

The value of Aramco is more than the top five energy majors who are also prominent LNG producers, ExxonMobil, Royal Dutch Shell, Chevron, Total and BP.

ExxonMobil shares dropped from $50 per share on March 5 after the Saudis announced a price war with plans to sell much more oil. ExxonMobil shares alter edged higher to $43.41 per share, valuing the largest US energy major at $183 billion.

BP of the UK saw its shares also recover on March 11 to 333.60 pence from 420 pence on March 5 before the global plunge. Anglo-Dutch company Royal Dutch Shell has UK and European shares and the Euronext value was 15.71 euros, still well down on the March 5 price of 19.67 euros.

Saudi Aramco is pursuing plans to be a supplier and trader of LNG and with its first customer expected to be Bangladesh.

It has recently issued an expression of interest to charter up to 12 LNG carriers from 2025, through its shipping subsidiary, Bahri.

Sempra Energy, the California-based utility and LNG developer, has also signed an accord for a Saudi Aramco subsidiary to take a stake in the proposed Port Arthur LNG project in Texas. Sempra shares were last at $130.60, down from $141.76 on March 5.

LNG Journal editor

Japanese spot liquefied natural gas cargoes contracted in February for imminent delivery reflected the combination of an over-supplied market and the first commercial effects of the coronavirus as contracted spot LNG prices dropped by $2.50 per million British thermal units in a week or two from an already low base.

The Baltic Exchange Escrow Service continues to gain traction, with new transactions completed in the fourth quarter of 2019 and the first three months of 2020.

Alaska Gasline Development Corp., the lead developers of the Alaska liquefied natural gas export project, said regulators had published the final environmental impact statement for the venture to monetize North Slope gas and ship it to Asia as LNG.

LNG Journal editor

The Rio Grande LNG export plant proposed for a 984-acre site in the Port of Brownsville in Texas has been issued with a notice to proceed by regulators with the implementation plan and site preparation as well as equipment mobilization. 

“Rio Grande LNG is authorized to mobilize equipment, trailers, and personnel to the Rio Grande LNG Terminal and commence full site preparation including site clearing and balancing, placement of imported material and rough grading of the terminal,” said the notice from the Federal Energy Regulatory Commission.

Lining up

Full construction of the Rio Grande facility by NextDecade Corp. is expected to commence shortly after the final investment decision and with commercial operations scheduled by 2024.

Rio Grande LNG will comprise liquefaction Trains to produce 27 million tonnes per annum of LNG in the Port of Brownsville with four storage tanks, each with of 180,000 cubic metres of capacity.

Marine infrastructure incudes deepwater port access with supporting facilities such as two jetties, a berth pocket and a turning basin.

Houston-based NextDecade, listed on the Nasdaq global exchange, can also proceed with the implementation of the projects Test Pile Program in Cameron County in Texas to lay out building methods and identify potential impacts that may occur when full construction begins.

The US Department of Energy has also authorized NextDecade to export LNG equivalents of natural gas to both Free Trade Agreement and non-FTA countries.

The plant at Brownsville is one of three plants planned for the area. The two others, Annova LNG and Texas LNG, are much smaller.

The FERC order also acknowledged the US Fish and Wildlife Service’s December 18, 2019 Endangered Species Act concurrence letter regarding the use of the Miradores Mitigation Site and the Loma Ecological Preserve as mitigation sites for Rio Grande LNG to support.

Rio Grande’s permit is confined for now to purely site preparation activities rather than full construction of the liquefaction plant and the associated Rio Bravo Pipeline.

The Rio Bravo Pipeline will transport 4.5 billion cubic feet per day of feed-gas from the Agua Dulce natural gas hub to the liquefaction plant.

LNG Journal editor

Gaztransport and Technigaz (GTT), the French technology firm for designs of systems for the maritime transportation and storage of liquefied natural gas, with Excelerate Energy of the US, a leading floating LNG terminal project company.

LNG Journal editor

Australian liquefied natural gas plant operator Santos reports progress on a coal-seam gas project in northwest New South Wales with up to 850 wells and which the Adelaide-based company said would be less expensive than LNG imports to meet gas shortages.

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.

Freeport already has two Trains in operation and when the third ships its first cargo the combined nameplate output will be 15 million tonnes per annum.

The first production unit sent out its first shipment in December 2019 while the second was placed into service in January 2020.

The schedule for the start of commercial operations on Train 3 is around the start of May 2020.

Freeport project engineers McDermott International, with its joint venture partners, Chiyoda Corp. of Japan and Zachry Group of the US, announced the Train 3 progress.

“This marks a significant accomplishment for the project as the team works to complete the final train,” said McDermott.

“The Freeport facility incorporates the largest electric motor-driven refrigeration compressors within the US and, once fully completed and commercially operational, will significantly improve North America's energy export capabilities,” added the Houston-based engineering firm.

Mark Coscio, McDermott's Senior Vice President for North, Central and South America, praised the engineering, procurement and construction team for upholding the high safety and quality standards.

“We have achieved substantial completion for Trains 1 and 2, and now focus on delivering Train 3 as it transitions from construction phase to start up,” added Coscio.