Tuesday, 18 February 2020 07:00

LNG Unlimited – 18 February 2020

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Houston company says more sales to Israel, Jordan, and Egypt are underway

LNG Journal editor

Noble Energy, the US company with natural gas and LNG interests in the East Mediterranean offshore Israel and in West Africa off Equatorial Guinea, said it would benefit from the Leviathan project coming onstream as it posted fourth-quarter results.

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Dominion Energy, the developer of the Cove Point LNG export plant in Maryland, reported fourth-quarter earnings of $1.1 billion compared with $641 million for the same period in 2018.

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Freeport LNG Chief Executive Michael Smith said he was hopeful of signing sufficient deals with buyers as the Quintana Island facility in Texas slowly expands, though suggested the second wave of plants may face difficulties.

However, Smith stated in an interview with pricing agency S&P Global Platts that the market had completely changed in 2019.

The Freeport project comprises four Train in all and the plant shipped its first cargo from the second liquefaction Train in mid-December 2019.

They cited a list of challenges, including record low prices and weaker than expected demand in Asia, oversupply concerns and the recent coronavirus outbreak in China.

He said this had created a perfect storm of headwinds for producers looking to construct new liquefaction plants or additional processing Trains.

“I don't think there's going to be a lot,” Smith said of additional sanctioned US capacity.

“The margins for everyone have come down,” he stated.

More than a dozen US developers are pursuing projects for new plants or additional production capacity and have yet to announce positive final investment decisions.

The first phase construction at Freeport will see the building of one more Train, bringing to total to three and 15 million tonnes per annum of output.

The original Freeport terminal was completed in 2008 as an import facility with one berth and two storage tanks, each of 160,000 cubic metres capacity.

A second loading berth and a 165,000 cubic metres capacity full containment LNG storage tank have been added. The Train 4 project will be the second phase of construction.

“We don't have anything signed up. Until we do have something signed, no one is going to hear from us,” said Smith about the Train 4 project at his Texas plant.

Freeport's current target is for a final investment decision on Train 4 by mid-2020 and a start-up scheduled for 2024.“We believe once we have the requisite capacity sold to reach our financing hurdles, we can close a transaction within a six-week time period, eight on the outside,” explained the CEO.

Smith declined in the interview with S&P Global to specify what range of prices Freeport was discussing with prospective buyers, though he said it was similar to the deals announced by other developers.

“We don't believe we are wasting our time,” said Smith. However, he stated that circumstances had changed since the first wave buildout of the six US plants currently operating.

LNG Journal editor

NextDecade Corp., the developer of the Rio Grande LNG export project, said the US Department of Energy issued an order granting authorization to export cargoes to non-free trade agreement countries.

New Fortress Energy, the owner of LNG facilities in Florida and in Jamaica and projects in Puerto Rico and the US northeast, said it signed a long-term LNG supply agreement for eight cargoes a year for 10 years through January 2030.

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US pipeline company Kinder Morgan has asked regulators for permits to construct a new pipeline section and compression infrastructure for its Tennessee Gas Pipeline to allow feed-gas to flow to the proposed Plaquemines LNG export project in Louisiana.

The Plaquemines project is being developed by Arlington, Virginia-based Venture Global and the company was requested permits from the Federal Energy Regulatory Commission for the facilities to provide around 1.1 billion cubic feet per day of feed-gas for liquefaction.

The FERC application is for the Tennessee Gas-led Evangeline Pass Expansion Project and comes as the Venture Global project makes progress with its plans to supply 20 million tonnes per annum of LNG.

The Evangeline Pass Expansion will add to the 11,750-mile pipeline system that transports natural gas in reverse from Louisiana, the Gulf of Mexico and south Texas to the US northeast.

The $262-million Evangeline pipeline project will include nine miles of 36-inch-diameter pipeline along the Tennessee Gas existing lateral in St Bernard Parish, plus four miles of a looping pipeline in Plaquemines Parish as well as a new compressor station.

The Plaquemines export plant in Louisiana will be built at river mile-marker 55 on the west side of the Mississippi River, 30 miles south of New Orleans.

The Mississippi River plant is one of three being developed by Venture Global.

The FERC has already given the go-ahead for the construction of the plant at Plaquemines Parish, along with its associated Gator Express pipeline inter-connected with the Tennessee Gas Pipeline and the Texas Eastern Transmission pipeline.

The project will be constructed in two phases, each phase designed with liquefaction and export capacity of 10 MTPA and a peak capacity of 12 MTPA under optimal operating conditions.

There will be 18 liquefaction blocks in the plant design with nine blocks constructed during each phase.

LNG Journal editor

The OPEC of natural gas, the GECF, held a meeting in Doha in Qatar to launch its annual outlook as the Qataris pledged to advance with their liquefied natural expansion plans and said the global buildout of renewable energy ventures would complement LNG as an alternative to coal.

Qatar has signed a new long-term sale and purchase agreement with Royal Dutch Shell to deliver 1 million tonnes per annum of liquefied natural gas to the neighbouring Gulf state of Kuwait starting in 2020.

LNG Journal editor

The US agency that helps the Federal Energy Regulatory Commission with the permit processing for export plants and pipelines has determined that the Alaska LNG liquefaction facility proposed for the eastern shore of Cook Inlet complies with siting requirements.