This week

Two Scots set to capitalize on major
natural gas find in Western Australia

Warrego Energy, along with its 50-50 joint venture partner, Strike Energy, has announced the spudding of its second well in the West Erregulla concession in the Perth Basin onshore Western Australia as other gas and LNG projects in the state have been paused because of the double economic slowdown.

Latest News
BG Group, one of the world’s leading LNG companies, said fourth-quarter LNG operating profits dropped 21 percent to 358 million pounds ($560M) from 456M pounds in the same…
Emerson Process Management said its Norwegian Roxar subsidiary will supply subsea wet gas meters for the Greater Gorgon gas fields ahead of the construction of the $40…
Royal Dutch Shell said fourth-quarter LNG sales volumes of 3.96 million tonnes were 18 percent higher than in the same quarter a year ago, but LNG revenues…
WorleyParsons, the Australian LNG engineering company, said its Transfield Worley Services joint venture won A$700 million (US$620M) of contracts to provide maintenance services to Woodside Energy’s offshore…
Gaz de Normandie, developer of the planned new Antifer LNG import terminal near the northern French port of Le Havre, is seeking new equity investors and shippers…
The US Center for Liquefied Natural Gas has defended the importation to the US of LNG from Yemen after a campaign for the deliveries, due to begin…
Golar LNG Energy, the LNG investment arm of Norwegian shipping tycoon John Fredriksen, announced the mutual ending of agreements with Thailand’s PTTEP Offshore Investment Co. to study…
Sakhalin Energy said its liquefaction plant in the Russian Far East shipped its 100th LNG cargo this week after just under a year in operation.
KBR, one of the world’s leading LNG engineering companies, announced plans to expand its presence in the downtown area of Houston rather than develop outside the Texan city…
Bechtel, one of the world’s leading LNG plant builders, said David J. O’Reilly, the former Chairman and Chief Executive of Chevron Corp., had joined its board of…

Novatek finance boost

Sept 25 (LNGJ) - Novatek, the Russian natural gas company and operator of the Yamal LNG plant in northern Siberia as well as lead developer of the Arctic LNG II project, said it had fulfilled all the conditions stipulated by the Yamal external bank financing package and debt service guarantees were now able to be lifted.

   “We have reached another significant milestone on Yamal LNG with the removal of the guarantees relating to the project’s financing,” said Leonid Mikhelson, Novatek Chairman. “The removal of the guarantees will allow Novatek to attract external financing for its new projects on more favorable terms, and equally important, removes the restrictions on our dividend payout ratio,” added Mikhelson.

Spot charter rates rise

Sept 24 (LNGJ) - Shipping charter rates for LNG carriers in the spot market increased over the past week by around $7,000 per day. Rates were quoted at an average of between $59,000 per day and $61,000 per day West of Suez and at rates of between $56,5000 per day and $58,500 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers. One-year time charter rates were little changed for the most modern vessels and were seen at around $47,000 per day.

US LNG for Hokkaido

Sept 23 (LNGJ) - Hokkaido Electric Power, the Japanese utility, said it received its first US LNG cargo delivered to the Ishikariwan Shinko Power Plant. The shipment originated at Freeport LNG in Texas and was based on a spot sales contract concluded between Hokkaido Electric and the largest Japanese LNG trader, JERA Global Markets.

   The shipment was delivered by the 177,000 cubic metres capacity LNG carrier “Shinshu Maru”, owned by Trans-Pacific Shipping, a joint venture comprising JERA and Nippon Yusen Kabushiki Kaisha (NYK Line). 

Burckhardt bond sale

Sept 23 (LNGJ) - Burckhardt Compression, the Swiss LNG equipment maker for the maritime market, said it successfully issued a bond valued at 100 million Swiss francs ($108.5M) on Switzerland’s capital market. “The bond is primarily intended to finance the recently announced acquisition of the remaining 40 percent stake in Shenyang Yuanda Compressor, based in Shenyang, China,” said the company. Burckhardt’s bond has a maturity of four years and a coupon of 1.50 percent. The issue was managed by Zürcher Kantonalbank and the bond will be listed on the Swiss Exchange.

Venture Global revamp

Sept 22 (LNGJ) - Venture Global, the US firm with advanced plans to develop three LNG exports plants in Louisiana, has changed its corporate management structure and founders Robert Pender and Michael Sabel will no longer be co-Chief Executives.

   The Arlington, Virginia-based company said that from October 1, Sabel alone will be CEO and Pender will serve the company as Executive Co-Chairman, a new position created to support the CEO on key strategic and financial matters. Both will continue to serve on the company’s board. “It has been an exhilarating decade working with Mike to create Venture Global LNG and to help reshape the global LNG industry,” said Pender. “There is no person I trust more than Mike to lead this company we created together into the future. I remain fully committed,” he added.

LNG for UK and Spain

Sept 21 (LNGJ) – LNG cargoes are heading for the UK and Spain with prevailing regional natural gas prices at the equivalent of around $3.95 per million British thermal units. The 266,000 cubic metres capacity Q-Max carrier “Mozah” is scheduled to discharge a cargo on September 26 at the UK South Hook terminal in Milford Haven in Wales from Ras Laffan in Qatar. The 210,100 cubic metres capacity Q-Flex carrier “Al Sheehanyia” was unloading a Qatargas shipment at the Isle of Grain terminal on the Medway-Thames estuary southeast of London, according to shipping data.

   The 155,900 cubic metres capacity carrier “Clean Ocean” is scheduled to deliver a cargo on September 25 to the Cartagena terminal in southeast Spain from the Russian Yamal plant at Sabetta in Siberia. The 162,000 cubic metres capacity vessel “Adam LNG” was expected to berth on September 29 at the Bilbao terminal in northwest Spain on arriving from the Caribbean plant at Point Fortin in Trinidad.

LNG ferry for Estonia

Sept 18 (LNGJ) - Tallink Group, the operator of a ferry service between the Baltic state of Estonia and Finland, said the keel was laid for the company’s latest  LNG-powered shuttle ferry, the “MyStar”, at the Finnish Rauma Marine shipyard. Delivery of the vessel is planned for January 2022. It will have a maximum speed of 27 knots and be able to carry 2,800 passengers and accommodate 750 vehicles on four car decks.

Ichthys LNG cuts

Sept 18 (LNGJ) - Inpex Corp., the Japanese energy company and owner of the Ichthys export plant at Bladin Point near the Australian port of Darwin, said it expected to cut jobs at the plant because of the economic slump. “The low oil price environment has accelerated the Inpex Australia review of its operations. The review will impact various roles across the operations division,” said Inpex. The Ichthys plant has 8.9 million tonnes per annum of capacity and shipped its first LNG cargo in 2018.

Pengerang LNG notes

Sept 17 (LNGJ) - Petronas Gas subsidiary Pengerang LNG plans to issue Islamic medium-term notes (Sukuk Murabahah) to raise up to 3 billion Malaysian ringgit ($724M) for phase two development of its LNG regasification terminal in the southern state of Johor. Petronas owns 65 percent of the project, the Dialog Group 25 percent and the Johor Government 10 percent.

   The issuer under the name Pengerang LNG II has lodged a programme for the 30-year notes with the Malaysian Securities Commission. Initial extra storage of 200,0000 cubic metres capacity is planned at the Pengerang regasification terminal development at the site of an integrated industrial complex comprising an oil refinery and the storage and distribution of oil and petrochemical products.

Croatia LNG progress

Sept 16 (LNGJ) - A Chinese shipyard near Shanghai has completed the conversion works on a floating storage and regasification unit (FSRU) and the vessel is expected to leave for the Balkan nation of Croatia at the end of September to be deployed at an island site in the northern Adriatic Sea.

   The vessel was converted at a subsidiary yard of Hudong-Zhonghua Shipbuilding from a conventional carrier, the “Golar Viking” with 140,205 cubic metres capacity, to an FSRU re-named “LNG Croatia”. The vessel is expected to become operational at the start of 2021 to make European Union member Croatia the latest LNG importing country.

Fluxys LNG by rail

Sept 15 (LNGJ) - Fluxys of Belgium said its Zeebrugge LNG import terminal would be organising more container loads by train after a first shipment was sent to Italy by rail operator Lineas in a Prima LNG container. “Intermodal LNG transport is an attractive proposition as it has several advantages. It reduces emissions of greenhouse gases and air pollutants while being more cost efficient and reaching new destinations across Europe,” said Fluxys.

   “The port of Zeebrugge offers particularly good connections with the four major rail hubs in Europe: Antwerp, Cologne, Rotterdam and Dourges. From there, LNG containers can be further dispatched across Europe,” added the Belgian company.

Shipments for UK

Sept 14 (LNGJ) - Two Qatargas LNG shipments are headed for the UK South Hook import terminal at Milford Haven in Wales over the next week. That's as the National Balancing Point natural gas price was staying firm at around the equivalent of $3.55 per million British thermal units. The 210,100 cubic metres capacity Q-Flex carrier, the “Al Ghariya”, is scheduled to arrive on September 19 followed on September 21 by the 210,100 cubic metres capacity “Al Sheehanyia”, according to the port authorities.

Asia price and cargoes

Sept 11 (LNGJ) - LNG cargoes were pointing at China and India with mid-September deliveries as the Japan-Korea Marker for spot cargoes was strengthening ahead of the winter season relative to values earlier in 2020. The JKM price for October deliveries was last at $4.310 per million British thermal units and November was at $4.475 per MMBtu, while December was quoted at $5.075 per MMBtu. Oil-linked long-term LNG prices are still at around the $7.000 per MMBtu mark with oil at $40 a barrel.

   The 160,000 cubic metres capacity “Asia Vision” was scheduled to deliver a cargo on September 14 to the Dapeng terminal on Guangdong province’s Pearl River Delta from the Woodside-operated Dampier terminal in Western Australia, according to shipping data. The 155,000 cubic metres capacity “GasLog Shanghai” was delivering a US cargo to the Dahej terminal in India in the coming week from the Corpus Christi plant in Texas. The 174,900 cubic metres capacity “LNG Abalambie” was scheduled to discharge a shipment on September 22 at the Chinese port of Tianjin from the Bonny Island plant in Nigeria.

Charter rates steady

Sept 10 (LNGJ) - Shipping charter rates for LNG carriers in the spot market remained steady over the past week. Rates were quoted at an average of between $51,500 per day and $53,500 per day West of Suez and at rates of between $49,000 per day and $51,000 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers. One-year time charter rates were little changed for the most modern vessels and were seen at around $47,000 per day.

Gas wells safety move

Sept 9 (LNGJ) - Equinor, the operator of the Hammerfest LNG export plant in northern Norway and a main pipeline gas supplier to Western Europe, said it had conducted an in-depth analysis of gas wells drilled at the Martin Linge field before the company took over as the operator from Total in 2018. This review concluded that several of the wells did not have the necessary barriers. “Equinor  therefore plans to drill new wells in order to ensure safe production,” it stated.

   Equinor said deficiencies were discovered in four gas wells that were drilled at Martin Linge before 2018 and make them inappropriate for safe production. “The wells are considered safe as they are now, but we will keep them plugged and under continuous monitoring until we have reduced the pressure in the formation by producing from other wells. Safety is always priority number one,” said Geir Tungesvik, acting Executive Vice President for Technology, Projects and Drilling at Equinor.    

Peru LNG for Asia

Sept 8 (LNGJ) - The Peru LNG export plant at Pampa Melchorita on the Pacific Coast shipped five cargoes to Asia in August, one to Japan, one to China and three to South Korea. The cargo shipped to Japan left on August 30 on the 170,000 cubic metres capacity carrier “Methane Julia Louise” at a price of $4.07 per million British thermal units, according to data from Peruvian national energy company, PeruPetro.

   The three shipments to South Korea departed on the 173,400 cubic metres capacity carrier “Sevilla Knutsen”, the 145,000 cubic metres capacity “Methane Nile Eagle” and the 174,000 cubic metres capacity “GasLog Genoa” at prices ranging from $3.30 per MMBtu to $4.07 per MMBtu. The cargo for China was delivered in late August by the 174,000 cubic metres capacity “Gaslog Gladstone” at a price of $3.30 per MMBtu.

Petronas loss options

Sept 7 (LNG) - Petronas, the Malaysian oil and gas company and leading Asian LNG exporter, said that there would be no reduction in the number of employees, though the group would trim capital costs and may cut pay to strengthen its resiliency after big losses. Petronas posted a first-half loss of 16.5Bln Malaysian ringgit ($3.97Bln) and a 23 percent year-on-year reduction in revenue to 93.6Bln ringgit ($22.5 billion) on the back of lower average realised prices and a drop in sales volumes for processed gas and LNG.

   Petronas President and Chief Executive Muhammad Taufik Tengku Aziz, said the company was considering pay cuts for its more than 47,000 employees in the light of the continued challenging market conditions. “The final deliberations are ongoing. Any decision on the matter will be conveyed to our employees first,” he said.

Centrica UK purchase

Sept 4 (LNGJ) - UK LNG and natural gas player, Centrica plc, has agreed to acquire the energy supply customers of another company through its British Gas business. Centrica said the purchase for an undisclosed sum of Robin Hood Energy will add around 112,000 residential utility customers and 2,600 business customers across 10,000 sites. “Completion of the transaction is expected on 16 September with customers moving to British Gas over the next few months,” said Centrica.

   “As well as our actions to simplify and modernise our business, we are focused on returning to profitable growth in our core markets and investing in value generating opportunities,” said Chris O’Shea, the Chief Executive of Centrica. The UK utility receives LNG cargoes from producers such as Cheniere Energy’s US Sabine Pass plant and has booked volumes from Mozambique LNG.

Spot charter rates rise

Sept 3 (LNGJ) - Shipping charter rates for LNG carriers in the spot market increased over the past week. Rates were quoted at an average of between $53,000 per day and $55,000 per day West of Suez and at rates of between $49,000 per day and $51,000 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers. One-year time charters were steady for the most modern vessels and were seen at rates of around $47,000 per day.

Tokyo Gas trading arm

Sept 2 (LNGJ) - Tokyo Gas, the utility and LNG importer, has formally launched TG Global Trading to lead the further development of the group’s liquefied natural gas trade activities.

   “TGT regards the global LNG demand growth centred in Asia and increased liquidity of the market as an opportunity to expand LNG trading by maximizing and optimizing assets such as storage tanks, LNG vessels and sales and purchase agreements,” said the company. Tokyo Gas has set the goal of expanding its LNG transaction volumes to 20 million tonnes and its traded volumes by 5 million tonnes per annum by 2030.

LNG firm JGC reforms

Sept 1 (LNGJ) - JGC Holdings Corp. said it had brought in structural reforms in JGC Holdings itself and JGC Corp., the unit that operates the overseas engineering, procurement and construction (EPC) business of the JGC Group.

   JGC Corp., based in Yokohama, has been an industry leader in the construction of LNG production plants in countries such as Australia, Malaysia, Qatar and Russia. “The corporate reforms aim to accelerate business-supporting global sustainability and to reinforce the use of digital transformation (DX),” said JGC. “The Group seeks to enhance competitiveness of comprehensive engineering operations by streamlining project execution,” it stated.

Cargoes for UK and Spain

Aug 31 (LNGJ) - Two early September cargoes are headed for the UK as European LNG price indicators improve. The 261,700 cubic metres capacity Q-Max carrier “Lijmilya” is scheduled to unload a cargo on September 2 at the South Hook terminal at Milford Haven in Wales from Ras Laffan in Qatar. The 210,100 cubic metres capacity Q-Flex carrier “Al Sadd” will discharge a Qatargas shipment on September 5 at the South Hook facility.

   US cargoes are pointing at Spanish import terminals. The 161,880 cubic metres capacity “BW Pavilion Vanda” will deliver a shipment on September 15 to Sagunto in southeast Spain from Cameron LNG in Louisiana. The UK’s National Balancing Point natural gas price was at the equivalent of $3.85 per MMBtu while the main Continental European benchmark price, the Dutch Title Transfer Facility, was slightly higher at the equivalent of $3.90 per MMBtu.

Elba’s Train 10 receives FERC nod

Kinder Morgan has received the okay to start exporting LNG from its 10th and final Train at Elba Island.

Yesterday, the US Federal Energy Regulatory Commission (FERC) authorised the operator to commence operations at the newly completed Train 10.

According to analysts, this marks the end of the first wave of US LNG export projects that kicked off in early 2016 when the first cargo left Cheniere’s Sabine Pass export terminal.

Elba Island was originally designed as an import terminal but shipped its first export cargo last December.

All 10 trains were built to a moveable modular liquefaction system design and as a result, are smaller and can easily be disassembled and moved.

Each train has a liquefaction capacity of 0.3 mill tonnes per year, capable of loading around three LNGCs per month

Train 2 remains closed following a fire in a mixed refrigerant compressor in May.

Shell has taken all of its tolling capacity.

Spot LNGC rates firming

The average LNGC rates continued to firm in the past week.

According to the latest Fearnleys figures issued yesterday, East of Suez spot LNGC charters were averaging $45,000 per day, while West of Suez averaged $49,000 per day.

The 12-month charter figure also edged up slightly to $45,000 per day.

LGM joins Newport Shipping’s network

Drydocking services provider, Newport Shipping has signed an agreement with LNG specialist, Gloryholder Liquified Gas Machinery (DL) Co, Ltd (LGM Engineering).

This agreement forms part of the company’s service offering to the LNG sector, it claimed and is part of its policy of co-operating with leading companies in their field.

LGM Engineering will supply Newport Shipping’s LNG retrofit projects with its gas solutions.

In June, LGM signed a contract to design and supply an LNG fuel gas supply system for two 13,000 dwt chemical tankers with Jiangsu New Yangzi Shipbuilding Co Limited (YZJ).

They are owned by Tarbit Tankers BV and are classed by Bureau Veritas (BV).

The complete LNG fuel gas supply system delivered by LGM includes the design and manufacture of double vacuum insulated LNG fuel tanks with integrated tank connection space (TCS), LNG bunkering station modules, water glycol system, ESD systems, gas detection system, installation guidance, commission, crew training, etc.

Gloryholder is an engineering company specialising in the design and EPC turnkey deliveries of marine LNG fuel gas supply systems and cargo handling systems for gas carriers and LNG bunkering

LGM Engineering’s services include system design, equipment manufacturing, full package of equipment delivery, installation & supervision, commissioning and crew training.

Newport Shipping UK LLP is registered in the UK and offers comprehensive drydocking services for shiprepair, purchase and delivery of owners’ extras (spare parts, paint supply), as well as specialist maintenance, equipment upgrades (BWTS, scrubbers, etc) and turnkey LNG retrofits.

The Group currently co-operates with a network of 12 shipyards with 28 docks available capable of handling all vessel sizes and handles around 2,100 dockings annually worldwide.

Newport Shipping is registered in London and has a presence in all major shipping centres – including Athens, Oslo, Istanbul, New York, Shanghai, Singapore and Hamburg. 

Pakistan Government looks at terminal’s idle capacity

The Pakistan government has formed a committee to take policy decision in consultation with LNG terminal developers to utilise their idle capacity.

Idle capacity utilisation of the existing LNG terminals by private companies was granted by the government in July, 2019 but ships could be used by the private sector, due to the monopoly held by the state-run companies.

According to local sources, the private sector has been keen to import LNG but has not been able to do so due to a number of reasons, including the long-term LNG supply contract with Qatar at a higher price.

Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) are the two state-owned companies that are importing LNG.

The private sector claimed it can import LNG at cheaper rates that the state-owned companies, as it does not have to comply with Public Procurement Regulatory Authority (PPRA) rules and can import the gas at anytime.

The private sector claimed that Pakistan has missed an opportunity, when LNG prices plunged to $2 per MMBtu following the Covid-19 outbreak, by denying them permission to import gas.

Private companies have conducted a study that said LNG prices would remain at around $3 per MMBtu for the next five years and, therefore, they should be allowed to reap benefits of low prices.

Mozambique LNG beefs up security

Following terrorist activity in Mozambique, Total E&P Mozambique Area 1, operator of the Mozambique LNG project, has signed a Memorandum of Understanding (MoU) with the Mozambique Government to create security for the project.

Under the MoU, a joint task force (JTF) will be set up to ensure the project’s safety. Mozambique LNG will provide logistical support to the JTF, while the Government has said that it will act according to the Voluntary Principles on Security and Human Rights (VPSHR).

Mozambique’s Minister of Mineral Resources and Energy, HE Ernesto Max Elias Tonela, said; “We are proud to continue working with the Mozambique LNG project to ensure the country benefits from its presence.

“The MoU bolsters security measures and endeavours to create a safe operating environment for partners like Total, which enables their ongoing investment in Mozambican industry, for small and medium enterprises and for our communities,” he said.

Ronan Bescond, Total’s Mozambique Country Chair, added: “In recognition of the benefits the Mozambique LNG project will bring to local communities, the country, and all parties involved in the project, Total and the Government of Mozambique are committed to enable steady progress towards a successful delivery of the project.

“In view of the security situation in the Province of Cabo Delgado, our priority is to ensure the security of our workforce, many of whom residing in neighbouring communities, and of the project operations. On behalf of our Area 1 partners, we appreciate the support provided by the Government of Mozambique for the secure delivery of the project,” he said.

Total E&P Mozambique Area 1 Limitada, a wholly owned subsidiary of Total, operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um SA (15%), Mitsui E&P Mozambique Area1 Limited (20%), ONGC Videsh Rovuma Limited (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique BV (10%), and PTTEP Mozambique Area 1 Limited (8.5%).

Höegh concludes top reshuffle

Höegh LNG Partners has concluded its senior leadership succession process.

Steffen Føreid gave notice of his intention to resign as the Partnership's CEO and CFO when the Höegh’s Board of Directors had approved a succession plan.

The effective date for that resignation will be 21st August, 2020, the company said.

As of today, Höegh LNG Holdings Ltd’s President and CEO, Sveinung JS Støhle, has become the Partnership's CEO and Håvard Furu, the CFO of Höegh LNG Holdings, will become the Partnership's CFO.

"I am very happy to take on the role as CEO for the Partnership as we continue to build our position as the preferred provider of FSRU services.

“At a time when the ability to import clean-burning LNG has never been in higher demand, the consolidation of management roles is part of our continuing efforts to streamline and optimise the Group to improve our results and the returns to unitholders.

“We remain dedicated to maintaining our reliable, attractive distribution and to sustaining the Partnership's presence in the US market, and I look forward to working alongside the Partnership's majority independent Board of Directors in the best interests of all HMLP unitholders," Støhle said.

Rates to remain low

Headline timecharter rates continued to firm slightly this week, according to broking sources.

As of 19th August, East of Suez rates were calculated at around $35,000 per day, west of Suez at $40,000, while the 12-month timecharter level was static at $44,000 per day on average.

Kristen Holmquist, Poten and Partners Short Term Forecasting head, thought that US LNG export volumes will increase in the next couple of months.

Speaking at a webinar, she said that the weather and economic activity would play a major part in determining the direction LNG would take going forward.

She said that September cargo cancellations were running at a much lower level than those seen for the past two to three months, giving rise to optimism.

However, she thought that the current storage levels would remain quite high going into 2021. European storage would not return to near normality until 2022.

India is seeing a strong rebound in demand and is forecast to import around 28 mill tonnes of LNG by 2022, while both Bangladesh and Pakistan were also experiencing huge growth.

In the US, she expected a ‘long’ market next year, due to excess supply, saying that it will take the exporters a long time to return to normal.

LNGC rates were forecast to stay soft not varying much from an average of $40,000 per day through November 2022 for a standard 160,000 cu m vessel.

Floating storage levels will remain high heading into this Autumn, meaning that these cargoes will be vying with fresh supplies to find a home, leading to lower spot prices out of the US.

If another lockdown scenario occurred this Autumn worldwide, this would be catastrophic for the LNG sector and for the worlds industrial sector as a whole.

However, Holmquist thought that the 2021 downside risks mainly lay in the world’s economic recovery not being as robust as forecast.

Finally, she said that the economies should hope for a ‘U’- shaped recovery pattern going forward.

Delta Offshore to open Houston office

Singapore-based LNG company Delta Offshore Energy is to open an office in Houston, Texas.

This office will be operational as Delta Offshore moves forward with plans to build an offshore LNG import terminal to feed a planned power plant in Vietnam.

According to local media, the company plans to have 20 employees in Houston by the end of next year, of which most will supervise contractors and construction activities for the Vietnamese project.

Once the terminal’s construction nears completion, the office will switch to LNG trading.

Houston-based oil-field services company, McDermott International is expected to build the offshore terminal and underwater pipeline for the project.

Delta had initially planned to buy LNG for Vietnam from the proposed Magnolia LNG export terminal in Louisiana, however, a memorandum of understanding between the two companies expired in May.

Magnolia’s parent company, LNG Limited, went through bankruptcy proceedings in Australia and in June sold the project to the New York conglomerate, Glenfarne Group.

Rainy season to hamper Louisiana Xpress project warning

Columbia Gulf Transmission (CGT) has urged the US Federal Energy Regulatory Commission (FERC) to act quickly on its certificate authorisation for the 493 mill cu ft per day Louisiana XPress project.

CGT warned that it was critical to begin construction in September to avoid the rainy season and meet the 1st February, 2022, operational target.

This project would create 493 mill cu ft per day of incremental mainline capacity on CGT's system, and combined with the utilisation of existing capacity, allow for the transportation of 850,000 tonnes per day - north-to-south - from its mainline pool to a primary delivery point at an inter-connection with Kinder Morgan Louisiana Pipeline in Evangeline Parish.

It will primarily provide additional supplies to Cheniere’s Sabine Pass LNG export facility.

US LNG feedgas demand in August to date has averaged nearly 4.4 bill cu ft per day, a utilisation rate of just over 40% as global demand rebounds from the coronavirus pandemic demand losses.

LNG feedgas demand is forecast to grow substantially by 2022 as global demand for LNG rebounds and more stable market conditions return, according to S&P Global Platts Analytics.

In a letter to FERC late last week, CGT said that it had received an environmental assessment from FERC on 6th February, finding no significant impact, provided that certain mitigating measures are implemented. However, the project has still not received a certificate.

FERC approves NextDecade’s cost cutting measures

The US Federal Energy Regulatory Commission has approved NextDecade’s plan to reduce the number of trains its proposed Rio Grande LNG export facility.

To save costs, the developer has put forward a plan to construct five trains instead of six.

In addition, FERC said it agreed that the developer could increase the liquefaction capacity of each of the five remaining trains to keep the total maximum export capacity at 27 mill tonnes per year.

The design modifications that would allow the changes were also approved.

However, sources said that it was not certain whether NextDecade would build all five trains, or whether the project would even go ahead.

Thus far, Shell 's 20-year agreement to buy 2 mill tonnes per year of supply from Rio Grande is the only firm offtake deal tied to the terminal announced.

NextDecade has said that needed to sell another 9 mill mill tonnes under long-term contracts to achieve FID on two or three trains at Rio Grande.

Rio Grande LNG was originally planned with six trains, each capable of producing 4.5 mill tonnes per year year of LNG.

Flex LNG to take delivery of eighth LNGC

Norwegian LNGC owner, Flex LNG is to take delivery of another gas carrier next week boosting the total number of carriers in operation to eight.

The 173,400 cu m ‘Flex Artemis’, due to be handed over by Daewoo on 17th August, will be the eighth LNGC to join the fleet.

Once delivered, she will commence a long-term charter with Clearlake, part of energy trading house Gunvor.

The timecharter is initially for a five year duration with an option for another five years.

Spot LNGC rates firm

Headline TFDE spot market rates have edged up slightly in the past few weeks.

On Wednesday, the average spot rates for an LNGC with a capacity of 155,000 - 165,000 cu m had risen by about $1,000 per day, Fearnleys said in its weekly freight assessments.

The day rate for East of Suez trip rose to $35,000, West of Suez was up to $39,000, while the 12-month timecharter estimate was static at $44,000 per day./p>

LNGC in milestone Panama transit

The Panama Canal’s 10,000 Neopanamax transit through the expanded canal was undertaken this week by the LNGC ‘SK Resolute’.

On voyage from the US to China, the 180,000 cu m LNGC transited the canal on 10th August.

Significant reductions in LNGC voyage times offered by the new locks helped to create a highly competitive route for US gas deliveries to major Asian importers, the Panama Canal Authority claimed.

The Neopanamax locks have handled 27% of transits and half of total tonnage using the canal. The LNG segment represents 12% of transits of the expanded canal.

"Reaching this mark just over four years after the opening of the expanded canal, reaffirms the competitiveness of the inter-oceanic highway, backed by the continuous, safe and reliable service that we have maintained in the midst of the current world situation," said the administrator of the Panama Canal, Ricaurte Vásquez Morales.

The pandemic’s impact on global trade, as well as the trade wars and the suspension of the cruise industry took their toll on the Panama Canal’s operations. In May, for example, a 21% drop in the number of ships making the transit was reported.

During that month, 937 ships transited the canal while an additional 260 transits were cancelled according to Vásquez. Nearly half of the cancelations came from LNG and LPG sectors.

Chinese interests take stake in Brazil's LNG-fuelled power projects

A Brazilian subsidiary of China’s State Power Investment Corp (SPIC) is to acquire a 33% stake in two Gas Natural Acu (GNA) plants - the largest LNG power project in Latin America.

The closing of the deal between SPIC Brasil and GNA, a Brazilian joint venture between BP, Siemens and Prumo Logística, is scheduled for the fourth quarter of this year, subject to the fulfilment of conditions, the companies said.

The complex located at the Port of Açu, in Rio de Janeiro, includes an LNG terminal, which is able to process 21 mill cu m of LNG per day. Brazil mainly uses imported gas for power generation.

SPIC Brasil has also entered into an agreement to participate in the future expansion of two other power plant projects, known as GNA III and GNA IV, which are expected to be fuelled by a combination of LNG and domestic gas from Brazil’s deep-water pre-salt fields.

Tellurian hit by charges

Another US LNG project developer to report its results this week was Tellurian.

The company said that it suffered a net loss of around $128.8 mill, or $0.53 per share (basic and diluted), for the three months ended June 30, 2020.

This loss included a one-time non-cash charge of about $81.1 mill for impairment of the book value of its natural gas properties, due to the impact of declining commodity prices.

Notable achievements during 2Q20 and thereafter included raising $57.5 mill in net proceeds through issuances of common stock. Pro forma cash and cash equivalents as at the end of the quarter would be about $122.9 mill after giving effect to financing transactions executed during July.

President and CEO, Meg Gentle, said, “Tellurian has used the last few months to streamline Driftwood LNG, which is one of the lowest cost projects available globally at approximately $1,000 per tonne.

“Driftwood LNG is an integrated project, including production of low-cost gas from the Haynesville shale, which supports a new US LNG pricing mechanism projected to enable equity partners to load LNG at about $3.50 per MMBtu.

“Tellurian continues working to secure equity partners from around the globe and looks forward to delivering reliable energy in 2024,” she said.

Tellurian ended the second quarter with around $88.3 mill in cash and cash equivalents and about $33.9 mill short-term borrowings.

Its balance sheet consisted of about $315.9 mill in total assets. Pro-forma for the financing transactions completed in July, Tellurian would have ended the quarter with around $122.9 mill in cash and cash equivalents, about $106.1 mill in long-term debt, and around $350.5 mill in assets.

GasLog announces Board changes

GasLog Ltd and GasLog Partners have announced senior management and board of director changes.

Following the Group’s decision to base its senior management in Greece, Andy Orekar has decided not to relocate and will therefore step down from his position as the Partnership’s CEO on 15th September, 2020.

GasLog Partners Board has appointed Paul Wogan, currently CEO and Director of GasLog, as CEO of the Partnership, effective 16th September, 2020.

In addition, GasLog Partners has made changes to the Board. Michael Gialouris, Pamela Gibson, Peter Livanos and Andy Orekar will step down as Directors, effective immediately. GasLog has appointed Julian Metherell, currently a Director of GasLog, and Paul Wogan as Directors of the Partnership. Metherell will also become a member of the Audit Committee.

Following these changes, the Board will be reduced in size to five from seven directors.

This will result in the closing of the Group’s Stamford (Conn) office and, in conjunction with the relocation of the Partnership’s CEO role to Greece and Board size reduction, are expected to generate a total annual net cost savings of around $3 mill beginning next year.

The Group’s Head of Investor Relations, Joseph Nelson, will continue to be based in the US.

USTDA backs Nigerian natural gas initiatives

The US Trade and Development Agency (USTDA) has awarded a grant to the Nigerian gas supply company, Green Liquified Natural Gas Limited (GLNG).

This grant is aimed at supporting Nigeria's increased use of natural gas for power generation, local industry and further economic growth

Thomas Hardy, USTDA’s acting director, explained, “This project will support the diversification of Nigeria’s economic development while creating opportunities for US companies to develop world-class infrastructure.

“It will also build on the commitment of USTDA to work with our Nigerian partners to develop and expand the natural gas options for the country.”

In particular, the grant from USTDA will assess the viability of an LNG liquefaction and distribution facility and associated regasification and distribution stations in southwestern Nigeria.

 

GLNG selected US-based NOVI Energy to conduct the study.

Anil Ahluwalia, GLNG director, said, “We are proud to announce our path-breaking LNG project in Nigeria, which will have a significant impact on Nigeria’s goal of pursuing a sustainable, environmentally friendly, alternate fuel-based economy.”

This project supports the US government’s Prosper Africa, Power Africa and Doing Business in Africa initiatives.

Russian gas condensate pilot production begins

NOVATEK-Tarkosaleneftegas, a wholly owned subsidiary of PAO NOVATEK, has started pilot production from gas condensate bearing layers of the North-Russkoye and East-Tazovskoye fields.

Together, they will have a total annual production capacity of 7.7 bill cu m of natural gas and 1 mill tonnes of gas condensate.

    

“Our production growth in the area of the unified gas supply system remains one of the key priorities of the company's strategy,” Leonid Mikhelson, NOVATEK’s Chairman of the Management Board, explained. “Natural gas produced in the North-Russkiy cluster is intended for the Russian domestic market, which has proved to be very stable, as compared to international markets in the recent months. Moreover, the additional volumes of gas condensate will ensure full utilisation of our processing facilities.”

OLT Toscana reaches 100 not out

Italian offshore receiving terminal OLT Toscana has handled its 100th LNG carrier cargo.

This was achieved on 31st July, 2020 when the TMS Cardiff Gas 2020-built LNGC ‘Bonito LNG’ arrived at the FSRU for a ship-to-ship transfer.

OLT Terminal has received LNG from the main exporting countries, such as - Algeria, Cameroon, Egypt, Equatorial Guinea, Nigeria, Norway, Peru, Qatar, Trinidad and Tobago and the US and from other European terminals (Spain, Belgium and the Netherlands).

The total amount of LNG discharged thus far is around 13.8 mill cu m. Since October, 2018, the Terminal has been working at 100% of capacity, OLT claimed.

US ships seven cargoes

July 31 (LNGJ) - US LNG exports amounted to seven cargoes for a second week from the five large plants in operation. Two departed from Sempra Energy’s Cameron facility in Louisiana, two from the Cove Point plant in Maryland and one each from Corpus Christi, Sabine Pass and Freeport, according to the Energy Information Administration. US net injections into storage totaled 26 billion cubic feet for the previous week versus the five-year (2015-2019) average net injections of 33 Bcf and last year's net injections of 56 Bcf during the same week. “Working natural gas stocks totaled 3,241 Bcf, which is 429 Bcf more than the five-year average and 626 Bcf more than last year at this time,” said the EIA.

Charter rates steady

July 30 (LNGJ) - LNG carrier charter rate discussions have increased in the West of Suez market as the fixing window progresses further into September. Brokers said that while traders argue that the economics of the arbitrage window are unsupportive of freight at such high levels, the available shipping still seems to be in short supply when considering the balance of the fleet across the East and West of Suez markets.

   Charter rates for LNG carriers in the spot market were steady over the past week. Rates were quoted at an average of between $35,000 per day and $37,000 per day West of Suez and at rates of between $32,000 per day and $34,000 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers. One-year time charters for the most modern vessels were seen at rates of around $44,000 per day.

Saipem reports loss

July 29 (LNGJ) - Saipem, the Italian energy engineering company whose projects include the subsea portion of the Mozambique LNG export project in southeast Africa, reported an operating loss of €534 million ($627M) in the second quarter and a first-half loss of €711M compared with a profit of €262M in the first half of 2019. Saipem is particpating in subsea work in the Area 4 licence in the Rovuma Basin offshore Mozambique under a multi-year drilling contract on behalf of Italian company Eni. Milan-based Saipem is also part of the joint venture for Russian company Novatek's Arctic LNG II project proposed for the Gydan Peninsula in northern Siberia.

Gorgon re-start plan

July 28 (LNGJ) - Chevron Corp. plans to re-start the second Train at the Gorgon LNG export plant on Barrow Island in Western Australia in September as repairs are carried out after  “weld quality issues” were discovered in the propane heat-exchangers. Gorgon has three Trains and produces a total of 15.6 million tonnes per annum. Chevron as operator has a 47.3 percent stake and the other two main shareholders are ExxonMobil Corp. and Royal Dutch Shell. The main customers are Japanese utilities.

   The second Train was first shut down on May 23 as part of a scheduled maintenance programme and a re-start of the Train was initially expected by mid-July. “Repairs are underway and we have the necessary personnel with skills and knowledge to conduct the work onsite,” said Chevron. “Once repairs are complete, we expect to safely commence LNG Train 2 restart activities around early September,” the company added.

Europe and Asia cargoes

July 27 (LNGJ) - The 266,000 cubic metres capacity Q-Max carrier “Bu Samra” will deliver a cargo on August 3 to the UK South Hook terminal at the Welsh port of Milford Haven from the Ras Laffan plant in Qatar, the port authorities said. The 155,000 cubic metres capacity vessel “British Sapphire” will deliver a shipment on August 4 to the Bilbao terminal in northwest Spain from the Point Fortin plant in Trinidad.

   The US delivery schedule for China and India is coming back on track, according to shipping data. The 155,000 cubic metres capacity “British Mentor” is scheduled to deliver a cargo on August 13 to the port of Tianjin in northeast China from the US Cove Point plant in Maryland. The 178,000 cubic metres capacity carrier “Castillo de Merida” lifted a cargo over the weekend from the Freeport plant in Texas and is headed for the Hazira plant in India with delivery expected around August 23.

NSR cargo for Japan

July 24 (LNGJ) - Novatek, the Russian natural gas company and operator of the Yamal LNG plant in northern Siberia, said its power and gas subsidiary shipped the first cargo of LNG from the Yamal facility to Japan eastbound via the Northern Sea Route.

   Novatek said the cargo was delivered by the 172,000 cubic metres capacity LNG carrier “Vladimir Rusanov” under a spot contract and unloaded at the Ohgishima import terminal at Tokyo Bay in Japan. “This LNG cargo is the company’s first successful experience of unloading an Arc-7 ice-class LNG tanker at a Japanese port,” said the Russian company.

Gorgon LNG inspection

July 24 (LNGJ) - The Australian Department of Mines, Industry Regulation and Safety said it planned to inspect the Chevron-operated Gorgon LNG export plant on Barrow Island in Western Australia after a labor union called for it to be shut down as soon as possible as a safety risk.

   “The Department is aware that Chevron discovered issues with propane kettles at its Gorgon LNG plant during routine maintenance and understands the company is investigating,” it said. “While DMIRS does not have any immediate concerns for worker safety, the department is taking the matter seriously and is in discussion with Chevron about the findings from its maintenance inspections and the assessment of the results to date,” it added. 

Charter rates edge up

July 23 (LNGJ) - Shipping charter rates for LNG carriers in the spot market increased slightly over the past week. Rates were quoted at an average of between $35,000 per day and $37,000 per day West of Suez and at rates of between $32,000 per day and $34,000 per day East of Suez for vessels of between 155,000-165,000 cubic metres capacity, according to various brokers. One-year time charters were steady for the most modern vessels and were seen at rates of around $44,000 per day.

Medgaz deal sealed

July 22 (LNGJ) - Naturgy Group of Spain, an importer of both US and Russian LNG volumes, said its first-half gross earnings came to €2.03 billion ($2.34Bln) down by around 11 percent on the 2019 figure despite the market challenges. Naturgy also completed negotiations with BlackRock, the world’s largest equity fund, to partner with the Spanish company in a joint venture that will hold 49 percent of the Medgaz subsea natural gas pipeline from Algeria to Spain. The deal provides Naturgy with joint control over the company without enlarging its operations or investing any additional sums.

   “For us, this deal is very attractive. BlackRock coming aboard the investment vehicle attests to the appeal and uniqueness of Medgaz as strategic infrastructure,” said Naturgy Chairman Francisco Reynés. Algerian state energy company Sonatrach holds the majority 51 percent of the shares in Medgaz, which is 210 kilometres in length and has capacity to transport 8.2 billion cubic metres per annum of natural gas.