LNG

Europe’s largest liquefied natural gas import terminal, the UK Isle of Grain facility located southeast of London, handled its highest ever send-out of natural gas in a single day on November 13.

US energy regulators have completed the Final Environmental Impact Statement (EIS) for the proposed Jordan Cove liquefied natural project being developed by Pembina Pipeline Corp. of Canada at Coos Bay in the northwest state of Oregon. 

The EIS was issued by the Federal Energy Regulatory Commission and concluded that while constructing and operating the project would result in “temporary, long-term, and permanent impacts” on the environment, many would not be significant and would be reduced to less than significant levels with mitigation measures.

“However, some of these impacts would be adverse and significant. Specifically, the final EIS concludes that constructing the project would temporarily, but significantly impact housing in Coos Bay,” said the FERC report.

The regulator also stated that constructing and operating the project would “permanently and significantly impact” the visual character of Coos Bay and the surrounding area.

“The project could have a significant impact on the Southwest Oregon Regional Airport operations and further, constructing and operating the project is likely to adversely affect 18 federally-listed or proposed threatened and endangered species,” it added.

The liquefaction plant and other facilities are planned for a 200-acre site and comprise five small-scale Trains each with 1.5 million tonnes per annum of output for a total of 7.8 MTPA.

The Jordan Cove venture's other facilities would include two full-containment LNG storage tanks with total capacity of 320,000 cubic metres, gas treating facilities, an export jetty and access to more than 25 billion cubic feet per day of gas supply from Western Canada and the US Rockies.

The US Coast Guard has already issued a Letter of Recommendation indicating that the Coos Bay Federal Navigation Channel would be considered suitable for the LNG marine traffic associated with the project.

The plant would be visited by about 120 LNG carriers per year and Pembina has confirmed that it had signed preliminary accords with Jera Co Inc. and Itochu Corp. of Japan for the supply of LNG.

The project’s affiliated Pacific Connector pipeline would be around 230 miles in length and have a 36-inch diameter with capacity to transport up to 1.2 billion cubic feet of natural gas per day.

The pipeline would originate at interconnections with existing pipeline systems in Klamath County, Oregon, and would span parts of Klamath, Jackson, Douglas, and Coos Counties before connecting with the export plant.

LNG Journal editor

The US Department of Energy has authorised two small-scale LNG export projects to ship ISO containers of the fuel overseas after being delivered by trucks to cargo vessels at various ports in the states of Alabama, Louisiana, Mississippi and Texas.

The two companies given the go-ahead are Blue Water Fuels, based in the town of Center in Texas and a subsidiary of NuBlu Energy, and a Houston-based and Delaware-registered firm called SpotX Energy.

Papua New Guinea said it was preparing to start talks with ExxonMobil Corp. and partners in one of two feed-gas projects to negotiate better terms for the government and its holdings in the development of the PNG LNG expansion.

LNG Journal editor

Noble Energy of the US said it was still actively exploring a floating LNG export project using East Mediterranean resources from the Leviathan gas field offshore Israel while its LNG production venture in Equatorial Guinea in West Africa was progressing.

LNG shipping rates have surged to $130,000 per day from around $80,000 per day at the end of September due to tight vessel supply and seasonal firmness in demand.

In the light of the burgeoning LNG market, Italian broking and research concern Banchero & Costa has taken a look at the state of play. 

Looking at the last 10 years, global LNG trade grew at an average of +5% year-on-year.

The rate of growth, however, was irregular - strong until 2011, mainly flat for the following four years (averaging +0.5%) and from 2016, rising.

Between 2016 and 2019, growth in global LNG trade averaged a very healthy +9% y-o-y, reaching almost 350 mill tonnes last year.

The irregular development was mostly down to the complexity of liquefying the natural gas before shipment and the regasification process following shipment to ensure that the LNG is available for consumption.

Rather than pure supply and demand, the bottlenecks were mostly at the infrastructure level, ie at the beginning and the end of each voyage.

In particular, the major constraint of the last 10 years was the the liquefaction capacity available, which was unable to produce enough LNG for export. However, with new liquefaction capacity entering into service, the trade is now flourishing.

On the supply side, the two largest exporters are Qatar and Australia, which together account for almost half of the total volumes exported worldwide.

As new projects came onstream, Australia’s exports increased 23% y-o-y last year to reach 69.2 mill tonnes almost matching the 77.9 mill tonnes exported by Qatar, the world’s largest producer and exporter of LNG. Last year, Qatar announced plans to increase its liquefaction capacity to 100 mill tonnes by the mid-2020s.

In addition, global LNG supply is set to rise thanks to the additional capacity coming from the US and Russia. For example, the US is expected to hold half of the incremental new global supply capacity in the next few years, the Genoa-based broker said.

In 2018, US LNG exports increased by 54% y-o-y to 22 mill tonnes, from 14.3 mill tonnes recorded in 2017.

Tonne/mile boost

Further US export developments are expected to provide a huge boost to tonne/mile demand. The EIA has forecast that the country will be the world’s third largest LNG exporter by 2020 behind Australia and Qatar, overtaking Malaysia.

In the first nine month of this year, based on Refinitiv vessel tracking data, global LNG seaborne exports increased by 11.2% y-o-y to 260.3 mill tonnes. During this period, LNG exports from Australia increased by 13.4% y-o-y to 56.2 mill tonnes, just shy of Qatar’s 56.9 mill tonnes.

As a result, Australia now accounts for 21.6% of global LNG supply, almost matching Qatar’s 21.9% share. LNG exports from the US increased by 54.9% y-o-y in the first nine months of this year to 24.2 mill tonnes, amounting to 9.3% of global LNG supply.

Also this year, LNG imports to China increased by 18.9% y-o-y to 43 mill tonnes. However, imports to India increased by only 0.9% y-o-y in the same period, to 16.4 mill tonnes.

In addition, Europe saw a significant increase in imports. For example, Spain imported 12.6 mill tonnes to the end of September, up 57.3% y-o-y. Japan and South Korea, on the other hand, saw declines of 7.5% and 8%, respectively, thus far, Banchero Costa concluded.

The US is forecast to contribute around 73% of global newbuild LNG liquefaction capacity growth by 2023.

State-owned Pakistan LNG was said to have cancelled a tender to buy LNG over a 10-year period.

South Korean owners are co-operating in a bid to win a large tranche of LNGC orders set to be placed by Qatar Petroleum.