Prelude’s Back in Business
Shell’s Prelude FLNG barge has restarted LNG exports. Shipments from the world’s largest floating LNG plant ceased in December last year, once again due to issues with its power supply. Since the start of commercial shipments in 2019, the complex offshore project has suffered from several setbacks, one of which was a period of low hydrocarbon prices in 2020.
Market Tracker Supplement - 4 April 2022
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Market Tracker - April 4, 2022
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El Salvador Receives First LNG Cargo
El Salvador has joined the ranks of LNG importers in early April with the arrival of its inaugural cargo aboard the Shell-controlled Bilbao Knutsen on 2 April. The cargo was transferred onto the BW Tatiana FSRU, a conversion of Shell’s former Moss-type LNG carrier Gallina. The BW Tatiana FSRU is an integral part of the Energía del Pacífico power project, which is an important step in El Salvador’s energy transition away from heavy fuel oil.
El Salvador joined the ranks of LNG importers as the FSRU that forms part of the Energía del Pacífico project in Acajutla received its maiden cargo.
The Shell-controlled Bilbao Knutsen delivered roughly 0.06mmt to the project via the FSRU BW Tatiana in the early hours of 2 April, our data show. The cargo was originally loaded at Atlantic LNG on Trinidad & Tobago on 3 March and took the long route around Cape Horn instead of going through the Panama Canal.
Moss-type for safety
The BW Tatiana previously served in Shell’s LNG fleet as the Gallina, a Moss-type LNG carrier, before being converted into an FSRU at Singapore’s Keppel Shipyard in 2020/21.
Moss-type cargo systems are less exposed to damage from sloshing due to their spherical shape and self-supporting structure. The FSRU is exposed to the open sea.
First of its kind
The FSRU is the first of its kind deployed in El Salvador and has a capacity of roughly 0.50mmt per year, according to our calculations.
The vessel has a storage capacity of 137,000m3. The permanently moored BW Tatiana is part of the Acajutla FSRU project built for exclusive use by 378MW Energía del Pacífico power plant and jointly owned by BW LNG and power infrastructure specialist Invenergy Investment.
Energy transition
Both BW-Group and Invenergy highlight the project’s role in El Salvador’s transition from heavy fuel oil to cleaner natural gas in its energy economy, thus enabling a significant reduction in the country’s carbon dioxide emissions.
El Salvador also uses hydroelectric power. Together with the new power plant, Energía del Pacífico aims to be ‘the lowest cost thermal generator in the country’ whilst also reducing El Salvador’s energy imports from 25pct to 5pct by 2023, according to BW-Group.
High prices
South American LNG import levels have been rising even after Argentina tried to transition from an LNG importer into an exporter but the current high-price environment is likely to weigh on demand.
Shell won the long-term contract to supply the Energía del Pacífico project with LNG, according to Invenergy’s statement, and delivered LNG will be regasified by the FSRU and pumped to the power plant via a subsea pipeline.
With an annual capacity of around 0.50mmt, we estimate the project will receive around eight cargoes per year. Neither Shell nor the Energía del Pacífico project partners disclosed pricing for delivered LNG.
Substantial investment
With nominal project CAPEX of roughly US$1 billion, the project is El Salvador’s ‘largest ever foreign direct investments in El Salvador’, Invenergy said in a statement announcing the project’s close on financing in December 2019.
Its capacity is designed to meet around 30 pct of the country’s energy demand.
The project’s legal advisers specify the project comprises the power plant, FSRU (permanently moored through a modified spread mooring system), subsea pipeline and a 44-km, 230-kilovolt transmission line and related substations to connect the power plant to El Salvador’s electrical grid.
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