LNG

Egyptian Natural Gas Holding Co (EGAS) signed an agreement last week with US-based New Fortress Energy (NFE) to lease a second FSRU.

This agreement reflects Egypt’s Ministry of Petroleum and Mineral Resources’ commitment to meeting the growing domestic demand for natural gas, especially during peak summer periods, and aligns with directives to ensure stable electricity supplies from natural gas, EGAS said.

The second FSRU is fitted with updated technology and has an LNG storage capacity of 160,000 cu m and a regasification capacity of up to 750 mill cu ft per day.

The unit will be stationed at Ain Sokhna’s SUMED facility, with operations due to start in the second half of 2025.

This comes at a time when Egypt has been buying fuel oil to meet domestic demand requirements, due to high gas and LNG prices, compared to alternative fuels.

Although Egypt tendered for 20 LNG cargoes for the fourth quarter of this year and was expected to tender 15 to 20 cargoes for 1Q25, according to S&P Global Commodities at Sea, around 11 cargoes have been delivered to the country thus far.

In 2024 thus far, Egypt has imported 2.19 mill tonnes of LNG in 32 cargoes, with 20 cargoes arriving in 3Q24 alone.

Egypt was expected to procure a spot cargo on 6th December, followed by two more for December - one on 14th December and one on 22nd December - according to Commodity Insights data.

Traders said that some cargoes could be cancelled.

All three cargoes were due to arrive from the US, with the total volume amounting to 220,000 tonnes.

Lower residential and commercial demand - for cooling - over winter, coupled with lower demand from domestic industries, such as fertiliser and petrochemical plants, has led to Egypt not requiring as many LNG cargoes, traders added.

Mehrun Etebari, Commodity Insights Director, said that gas demand had previously been kept in check by increased gas-to-oil substitution for power generation in late 2021 and early 2023, when spot prices for LNG soared above fuel oil prices.

With weaker domestic gas production, Egypt increased the use of fuel oil in power generation to conserve gas for LNG exports, Etebari added.

However, the evaporation of LNG spot price premiums over fuel oil in early 2023 led to a decline in exports. 

Asian coal use and emissions from power generation in Asia will surge in the coming decades, unless there is significant new supply of US LNG.

Rising costs of building and equipping new US LNG plants will reduce the competitiveness of gas exports, LNG analysts at Poten & Partners said recently.

A few Chinese state-owned and second-tier oil and gas companies were seeking to sell LNG cargoes for January/February, 2025 to alleviate pressure from growing inventory and weak domestic demand, according to market sources talking with newswires.

Venture Global LNG has slammed a call for an additional environmental review of its planned Louisiana LNG project, saying this was unnecessary.

The LNG export plant developer claimed that it will be ready to begin construction once the project gets a final go ahead.

A couple of weeks ago, the US Federal Regulatory Energy Commission (FERC) repealed Venture Global LNG's authorisation to construct its CP2 export facility, saying it required an additional environmental review of the air quality impact.

This additional review followed a 6th August US Court of Appeals for the District of Columbia Circuit decision to quash FERC's approval of NextDecade's plant at the Port of Brownsville, Texas.

The Court ordered FERC to reconsider the project ramifications with a new environmental impact statement (EIS) and public comment period.

Venture Global’s CP2 project has been at the centre of a fight with environmentalists seeking to limit future LNG projects on the US Gulf Coast.

The 20 mill tonne per annum facility won FERC construction approval in June. However, the company did not reveal if the decision would delay its construction nor if it had already begun site work.

Engineering and construction concern, Worley had won the contract last year to build CP2’s first phase.

"CP2 LNG unquestionably meets or exceeds all required environmental air standards as determined by FERC in its July 2024 order and will be formally replying to the commission in the coming days," a Venture Global spokesperson told newswires.

FERC has also put on hold its approval for the construction of Commonwealth LNG's planned 9.5 mill tonnes per annum LNG export facility in Cameron, Louisiana.

Commonwealth said that it remained confident in its project and will be providing all requested input for the supplementary EIS. 

Watson Farley & Williams (WFW) has continued its recent success in the LNGC financing market by advising Bank of Communications Financial Leasing (BOCOM) on a lease transaction for three LNGCs earlier this month.

Shell, bp, Aramco and Glencore are among nearly two dozen companies to receive Bangladesh’s approval as spot LNG cargo suppliers.

Russia's resource base for future LNG projects is more competitive than other exporting countries, including Qatar and the US, NOVATEK CEO, Leonid Mikhelson claimed, Interfax reported.

Australia’s Woodside Energy Group has signed a contract with US engineering company, Bechtel for engineering, procurement and construction (EPC) of Louisiana LNG, formerly Driftwood.

A final investment decision (FID) is expected by the first quarter of 2025.

The EPC contract, re-assigned from Driftwood, will cover the foundation development for the project’s three production trains, with a total capacity of 16.5 mill tonnes per annum. The project has a total permitted capacity of 27.6 mill tonnes, Woodside said.

As the owner of the Louisiana LNG project, since taking over Tellurian, Woodside forecast that total expenditure on the project from December to the end of the first quarter of 2025 will climb to $1.3 bill.

The estimated cost for the project’s foundation development remained within the range of $900-$960 per tonne of LNG, consistent with the figures at the time of its acquisition, which came with the $1.2 bill deal to buy developer Tellurian in October.

Woodside is currently seeking to sell a 50% stake in the project. 

Houston-based gas processing and technology company, CryoSys has signed a contract with PIC Americas to deliver pre-treatment and liquefaction solutions for a planned LNG export facility.