LNG

ABS has awarded Approval in Principle (AIP) to Samsung Heavy Industries (SHI) for its X-Reli LNG Boil Off Gas Expander, part of SHI’s Expansion Re-Liquefaction System.

LNG Journal editor

US LNG exports received a regulatory boost when Cheniere Energy Corpus Christi expansion was approved along with three other development projects in Texas proposed by NextDecade Corp., Texas LNG Brownsville and Annova LNG. With other projects under construction, the US is on track to be the world’s No. 1 exporter by 2025 and beyond with output of over 120 million tonnes per annum. 

Cheniere’s Stage 3 expansion of its Corpus Christi export facilities will take the Houston-based company to 52 million tonnes per annum of output by around 2024 at the same time as three other Texas projects cleared their final regulatory hurdles for a total of 37 MTPA of output.

Proposals

The Federal Energy Regulatory Commission approved Cheniere’s Stage 3 project comprising seven mid-scale liquefaction Trains adjacent to the Corpus Christi plant, each with an expected nominal production capacity of around 1.4 MTPA of LNG.

The total expected nominal production capacity of the seven mid-scale Trains is around 10 MTPA.

“The Corpus Christi Stage 3 site is adjacent to the three liquefaction Trains operating or under construction at the Corpus Christi Liquefaction Project, and together the two projects are expected to have a total nominal production capacity of approximately 25 MTPA,” said Cheniere.

With the 27 MTPA from the completed six Trains at Sabine Pass and the Corpus Christi Trains, Cheniere's output rises to 52 MTPA, making it the third-largest in the world behind the nations of Australia currently with 80 MTPA and Qatar with 78 MTPA, though ahead of Malaysia with 24.5 MTPA.

The only other US company with comparable plans to Cheniere is California-based Sempra Energy with Cameron LNG in Louisiana, the Port Arthur venture in Texas and the Costa Azul project in Mexico with targeted volumes of 45 MTPA.

Cheniere’s President and Chief Executive Jack Fusco said his company was pleased to receive regulatory approval from the FERC, opening the way to a positive final investment decision for the Stage 3 venture.

“Our continued progress on Corpus Christi Stage 3, including the regulatory approval and our continued commercial success, is a testament to the global competitiveness of the project and reinforces our confidence in our ability to expand our world-scale liquefaction platform in Corpus Christi,” stated Fusco.

The other export projects around the Texas Port of Brownsville also moved forward
comprising multiple liquefaction Trains and almost $39 million of investment to create thousands of jobs on the Gulf Coast.

Texas LNG Brownsville, Annova LNG and NextDecade’s Rio Grande project, as well as its associated Rio Bravo Pipeline, were all approved by the FERC and represent a huge investment in the Rio Grande Valley.

The largest plant approved was the Rio Grande LNG export facility in Brownsville with 27 MTPA of production and its associated Rio Bravo Pipeline with 4.5 billion cubic feet per day of transport capacity from the Agua Dulce natural gas hub to the plant.

“Issuance of the FERC order marks an extremely important milestone for our project,” said Matt Schatzman, Chairman and Chief Executive of Rio Grande LNG development company NextDecade.

NextDecade said it anticipated finalizing commercial deals from the fourth quarter of 2019 prior to an anticipated final investment decision in the first quarter of 2020.

The smaller Texas LNG Brownsville venture with 4 MTPA of output said the approval vote by the FERC followed comprehensive environmental, safety and other reviews of extensive engineering and design information.

“With the Texas LNG Brownsville project, we are developing a mid-sized LNG export facility to better connect abundant and low cost US natural gas with the world’s growing appetite for clean fuels, and we are so pleased to have reached this important milestone that paves the way for a final investment decision,” said Texas LNG Chief Executive Vivek Chandra.

The third project moving forward is the Annova LNG venture that made several voluntary conservation measures to satisfy the US Fish & Wildlife Service during the FERC approval process.
These included expanding its lease and modifying its project layout to establish a 185-acre environmental conservation corridor, where existing dense thorn-scrub and other habitats, including over 100 acres of wetlands, would be preserved.

“Our mission is to be the most sustainable US provider of LNG, and this official opinion reflects our close consultation with the Wildlife Service over the past several years to protect and conserve habitat in the Rio Grande Valley,” said Omar Khayum, CEO of Annova.

The Annova liquefaction plant will process 6 MTPA of LNG at the Brownsville site.

The development company also has investment-grade equity owners, including Chicago-based power company Exelon Corp., LNG equipment provider Black & Veatch Corp. of Kansas and US plant construction company Kiewit Corp.

Hoegh LNG, the Norwegian shipping and project company, said the global market continued to grow as it was selected for three floating storage and regasification unit (FSRU) contracts and with various tenders also being processed as lower natural gas prices are helping import infrastructure demand in Asia.

LNG Journal editor

Siem Industries, the company run by Norwegian Kristian Siem and whose interests include shipping and offshore oil and gas engineering and services through the Subsea 7 company and Siem Offshore Inc., has attended the naming ceremony for its two LNG-powered car carriers at the Chinese Xiamen Shipbuilding yard in southeastern Fujian province.

The two roll-on-roll-off vessels, each with 7,500 parking spaces, were named “Siem Confucius” and “Siem Aristotle” and will be part of the Siem Car Carriers fleet delivering vehicles from Europe to North America, according to the bunkering deal set up.

Shell fuel

Siem Car Carriers has already signed an LNG supply agreement for the newbuilds with Royal Dutch Shell.

“Fueled with LNG, each ship has safety features, is environmentally friendly and is energy-saving in performance,” said Li Zhenjun, deputy general manager of Fujian Shipbuilding Industry Group, the parent of Xiamen Shipbuilding, at the shipyard ceremony.

The ships are almost 200 metres in length and 38 metres wide and with 13-storey car decks.

Siem Car Carriers currently operates 11 vessels, two under its ownership, seven chartered and two owned by affiliate Siem Shipping.

Parent company Siem Industries is based in Grand Cayman in the Cayman Islands and noted in the most recent earnings report that the car carrier sector is well supplied by vessels available from owners “who have no operating capabilities” and the market charter rates are favourable compared to the cost of ownership.

“We see the need for ocean transport of cars to continue for the foreseeable future, but with less growth than has been experienced historically,” said Siem.

Shipping companies such as Siem are adapting to tougher pollution regulations and choosing cleaner fuel such as LNG.

This follows the creation in recent years of Emission Control Areas (ECAs) in regions such as Northwest Europe and North America and the International Maritime Organization's sulfur cap on marine fuel coming into force from 2020.

Shell said in October 2017 that two of its fuel subsidiaries had signed long-term agreements with Siem Car Carriers to supply LNG for the new vessels to be used to transport German vehicles from Europe to North America.

The fuel deals were signed with Shell LNG and Shell Western units.

Shell said at the time that the two car carriers would be the first such vessels to be powered by LNG and the first to operate trans-Atlantic on the commercial trade route between Europe and the US.

Shell plans to refuel the vessels in Northwest Europe and at a second supply point in the US.

Rockies LNG, a firm set up by a group of Canadian natural gas exploration and production companies, is considering developing its own barge-based export project on the Pacific Coast of British Columbia as an outlet for abundant gas resources. 

Rockies LNG Chief Executive Greg Kist said that the nine companies in the group were considering a project that could produce around 12 million tonnes per annum of LNG.

The Canadian E&P consortium hired experienced executive Kist in 2018 as a consultant. He is the former President of the Pacific NorthWest LNG project company formed by Petronas of Malaysia.

Petronas eventually cancelled the Pacific Northwest venture planned for BC and instead joined the LNG Canada project led by Royal Dutch Shell.

There were more than 20 LNG proposals in BC just six years ago from a range of different companies to build projects on Canada’s West Coast.

However, LNG Canada is the only industrial-scale plant making progress and announced a final investment decisions in October 2018.

The Rockies LNG group is “a collaboration amongst competing producers” that collectively produce 20 percent of Canada’s natural gas and 40 percent of natural gas products such as propane, butane and ethane.

The group is made up of Calgary, Alberta-based producers including Advantage Oil & Gas Ltd. and Peyto Exploration & Development Corp. and first came together in 2018 to seek new outlets for their gas, now competing with the US shale glut and pipelines bottlenecks in Canada.

The Rockies venture expects to select a potential site for the planned near-shore barge project by the first quarter of 2020.

Sea-LNG, a global coalition of energy and shipping companies and other sector participants backing the increased use of liquefied natural gas as a maritime fuel, has signed up US LNG equipment-maker Chart Industries as the newest member.

LNG Journal editor

Mitsui Osk Lines, the Japanese shipping company with an operating fleet of almost 100 liquefied natural gas carriers, said it planned to order the first two LNG-powered ferries for Japan from Mitsubishi Shipbuilding.

Australian LNG producer Woodside is advancing with its boosted seven-Train integrated LNG and gas hub in Western Australia and with overseas projects, including its offshore Myanmar gas venture to supply Rangoon and Thailand.

LNG Journal editor

Sonatrach, the Algerian national energy company now under a new chief executive, said it signed medium-term and long-term LNG and pipeline natural gas contracts with French utility Engie, the last of its European customers to renew delivery agreements. 

“Through these agreements, both parties confirm and consolidate their long-term partnership,” said a statement.

Deliveries

“Sonatrach will deliver volumes of natural gas on the Trans-Mediterranean gas pipeline as well as in the form of LNG cargoes delivered to the Fos Tonkin import terminal,” it added.

The accords were signed several days after Sonatrach appointed a new Chief Executive, Kamel-Eddine Chikhi, on November 17.

The Sonatrach-Engie agreements were signed in Algiers by Ahmed Mazighi, Vice-President of Sonatrach, and Edouard Neviaski, Engie’s Global Energy Management Business Director.

New Sonatrach CEO Chikhi and Pierre Chareyre, joint director-general of the Engie group, were present at the signing.

Sonatrach has already renewed its LNG and pipeline contracts with other European customers, Naturgy of Spain, Galp Energia of Portugal, Botas of Turkey and Eni of Italy.

Algerian LNG exports have been falling and last year they dropped by 18.2 percent to 10.10 million tonnes compared with 12.34MT the previous year at its two liquefaction plants at Skikda and Arzew on the Mediterranean Coast.

Analysts said that Sonatrach faces a twin challenge in natural gas, as it does in oil, of aiming to maximise its exports while also meeting growing domestic demand.

The arrival of the new CEO comes as the Algerian state company is attempting to overhaul operations and reform its activities.

Sonatrach CEO Chikhi in his inauguration speech said that he would focus his efforts in exploration and production operations to increase the level of reserves that have been dwindling year by year and to guarantee long-term energy security for Algeria.

“It will be for us to focus our efforts on making better use of our production potential to better respond to growing national needs, and to keep our traditional international markets, especially those of LNG,” said the CEO.

LNG Journal editor

TC Energy, the Canadian pipeline company building feed-gas links to LNG projects in North America, is planning huge investments to transport more Appalachian shale gas and constructing the Coastal Gaslink in British Colombia as well as the natural gas “infrastructure backbone” of Mexico.