LNG

Dominion Energy’s Cove Point LNG export plant on Chesapeake Bay in Maryland has been closed for about three weeks for its annual maintenance and when it comes back on stream it will be closer to coming under the control of US investor Warren Buffett. 

The previous maintenance shutdown in 2019 lasted from September 20 to October 13.

Output

Cove Point produces around 5.2 million tonnes per annum from a single Train and has tolling agreements with Gas Authority of India and Sumitomo Corp and Tokyo Gas of Japan.

Dominion is currently finalizing the sale of a 25 percent operating stake in Cove Point to the Berkshire Hathaway Energy unit of Warren Buffett. The July 2020 deal between Dominion and Berkshire Hathaway Energy was valued at $9.7 billion and included gas transmission and gas storage assets as well as the Cove Point stake.

The Buffett company noted in its acquisition statement that the Cove Point plant was one of only six LNG export facilities in the US, the other five being Sabine Pass and Cameron in Louisiana, Corpus Christi and Freeport in Texas and Elba Island in Georgia.

The Dominion-Berkshire Hathaway transaction is expected to close in the fourth quarter of 2020. Business tycoon and philanthropist at the same time, Buffett was concluding his first big acquisition since 2015 and it happened to be in the natural gas and LNG business.

Buffett is considered one of the most successful global investors and has a net worth of $89Bln, making him the fourth-wealthiest person in the world. Earlier in 2020, Buffett made a move for an LNG and pipeline natural gas project in Canada. However, at the last minute he pulled out of the $6.7Bln LNG project deal in Quebec over concerns

Oslo based consultancy Rystad Energy lowered its forecasts for natural gas prices in Europe and Asian spot LNG last week amid concerns about the spread of the coronavirus.

India was set to import record volumes of LNG last month in an effort to take advantage of its price hitting all-time lows, due to the virus outbreak dampening demand in China. 

The country was expected to import about 2.36 mill tonnes in February, shiptracking data from Refinitiv Eikon showed, which would exceed India’s LNG imports in October of about 2.3 mill tonnes, the previous highest monthly total.

India’s annual LNG imports were expected to rise by 10 -15% this year, said Poorna Rajendran of consultancy firm FGE, talking with Reuters.

“The low spot prices are creating some downstream demand especially from the city-gas sector,” one source told Reuters.

Asian spot LNG prices have fallen to a record low after China’s top LNG buyer, PetroChina, declared force majeure on some LNG deliveries following the coronavirus outbreak.

As a result, some of the cargoes bound for China were diverted to India and also some Indian buyers issued tenders for spot cargoes, traders said. Some were even looking for cargoes for several months.

For instance, Reliance Industries issued a tender for five cargoes for April to June delivery, while Gujarat State Petroleum Corp (GSPC) sought nine cargoes for February to April, traders said.

The potential spike in demand also likely prompted Emirates National Oil Company (ENOC) to issue a tender seeking eight cargoes for delivery into India between April to November,  traders said.

However, infrastructure constraints will limit Indian buyers’ LNG purchases, FGE’s Rajendran said. “This remained a key bottleneck in 2019 when low spot prices struggled to boost India’s LNG demand significantly. The start-up of Mundra LNG terminal and H-Energy’s Jaigarh terminal and the completion of GAIL’s Kochi-Mangaluru pipeline will determine Indian LNG demand growth in 2020,” he stressed.

India wants to raise the proportion of gas used in its energy mix as it battles against high levels of pollution in many big cities and is working to expand the country’s pipeline network and build new terminals.

FGEN LNG Corp is seeking the Philippines Department of Energy’s (DOE) approval to allow it to start the construction of its planned LNG terminal.

The US Federal Energy Regulatory Commission (FERC) has prepared a final environmental impact statement (EIS).

This assesses the impacts of constructing and operating the Alaska LNG project proposed by the Alaska Gasline Development Corporation (AGDC). 

Tellurian has appointed two new executive leadership team members following an announcements regarding cutbacks.

Kian Granmayeh, formerly Director of Investor Relations, is now Tellurian’s CFO, responsible for financial strategy and liquidity, replacing Antoine Lafargue who will join the marketing group as Senior Vice President of LNG Marketing to advance commercialisation of the Driftwood project.

Korea Lines is to spin off its LNG transportation business into a separate company, according to reports from South Korea.

The 11 LNGCs — all chartered to South Korean state-owned Kogas — will now operate under Daehan Shipping LNG, using an English name of Korea Line LNG. 

Korea Lines' 23 bulk carriers, three tankers and one ferry will remain under the original entity.

Four of the LNGCs are owned by a consortium.

Local media said that Korea Lines will split the company on 1st May — pending approval by its shareholders — to try to make its LNGC and bulk transport businesses more efficient..

This will allow the new companies to react to developments in their respective markets independently, Korea Lines reportedly said, adding that it does not intend to re-list the new LNG entity on South Korea’s securities exchange, or seek new equity holders for it.

India's Gujarat State Petroleum Corp (GSPC) is seeking six LNG cargoes for delivery from March to November through two separate tenders, according to newswires.

One cargo is for delivery from 23^rd March to 31^st March on a delivered ex-ship (DES) basis, in a tender that closed on 3^rd March.

On 13^th March, Golar Power Limited signed a Protocol of Intentions with the Pernambuco State Government to develop an LNG import terminal at Suape, located in the northeast of Brazil.

On 12^th March, Grain LNG welcomed its 500^th LNGC since it opened for business 14 years ago.

The vessel involved was the ‘LNG Merak’, which berthed at the River Medway facility in Kent, UK. 

Simon Culkin, National Grid Grain LNG Importation Terminal Manager, said: “We’re delighted to confirm that on Thursday 12th March, 2020, we welcomed the 500th ship at our LNG importation terminal on the Isle of Grain.  

“The ‘LNG Merak’ berthed today delivering cargo from Zeebrugge, and is the 22nd ship to arrive at Grain this year.

“Since commissioning our terminal in 2005, we have taken delivery of LNG from 13 countries, further strengthening the diversity and security of UK gas supplies.

“LNG imports into the UK increased by about 64% in 2019 versus 2018, contributing to a decrease in the wholelsale (NBP) gas price of approximately 55%.

“LNG delivers much needed flexibility and energy reliability, enabling the integration of intermittent renewable energy and provides access to affordable energy.  

“We’re very proud that LNG, supported by our extensive infrastructure at Grain, will play a key role in enabling the UK to reach net zero carbon by 2050 by reducing carbon intensity across all segments of the energy system,” he concluded.