July 2014
July 2014
• SKKMigas, Indonesia’s energy regulator, agreed to sell 18 LNG cargoes from its Bontang plant to BP Trading, comprising eight shipments this year and 10 in 2015. The agreed price is US$14.80 per million British thermal units (Btu).
• The Indonesian government and China National Offshore Oil Corp (CNOOC) agreed a higher ceiling price for the Tangguh gas sold to China. The Chinese firm will now pay a ceiling price of US$8/mBtu of LNG produced by the Tangguh plant in Papua. The earlier contracted price, which had been in place since 2006, was US$3.3/mBtu. According to the terms of the new arrangement, the Tangguh gas price is free to rise along with any increase in oil prices.
• Chile’s state oil company ENAP and BG Group signed a long-term gas sales and purchase agreement (SPA) under which LNG from the Sabine Pass terminal in Louisiana will be shipped to the Mejillones facility in Chile commencing in late 2015. No details on the price or volumes involved were revealed. BG has agreed to purchase 4.2 mta of LNG from the first two of up to six new liquefaction trains planned for Sabine Pass by Cheniere Energy and will distribute this offtake amongst a range of its customers.
• The Andhra Pradesh state cabinet approved a plan to establish an LNG import terminal at Kakinada on India’s southeastern coast. The 3.5 mta scheme, which will be based on the use of a floating storage and regasification unit (FSRU) in its initial phase, is being promoted by a group comprising AP Gas Distribution, GAIL, Shell and GDF Suez. Shell has recently joined the scheme, taking a 26 per cent stake. The FSRU would make imported gas available to the power, fertiliser, industrial and automobile sectors and also to city gas distribution grids in the state.
• Golden Pass Products, a 70/30 Qatar Petroleum/ExxonMobil company, applied to the US Federal Energy Regulatory Commission (FERC) for permission to export 15.6 million tonnes per annum (mta) of LNG from its existing import facility on the Texas side of the Sabine Pass shipping channel. The US$10 billion plan involves adding liquefaction facilities at the terminal to give it a bi-directional capability. Golden Pass Products is also seeking authorisation from the Department of Energy for LNG exports to countries with which the US does not have a free trade agreement (FTA). The company, which is targeting a final investment decision (FID) on the project in 2015 and a 2019 start for LNG production, awarded the scheme’s front-end engineering and design (FEED) study to Chiyoda Corp. CB&I will assist Chiyoda in carrying out the FEED work.
• Magnolia LNG, a unit of LNG Ltd, contracted SK E&C USA to carry out the engineering, procurement and construction work for its proposed four-train, 8 mta LNG export terminal on the Calcasieu Ship Channel’s Industrial Canal, near Lake Charles, Louisiana. The project will be developed in two phases, with the initial phase comprising two 2 mta trains, two 160,000m3 storage tanks and a marine jetty.
• CNOOC received preliminary approval from China’s National Energy Administration (NEA) for the construction of a new LNG import terminal in Maoming City’s Maoming Binhai New Area in eastern Guangdong province. China’s biggest LNG importer plans to spend US$1.82 billion on building the 3 mta facility and to have it in service in 2017. By then it will be the sixth LNG import terminal in Guangdong, four of which will be owned by CNOOC. The Maoming installation will feature three 160,000m3 storage tanks and a jetty able to accommodate LNGCs up to 266,000m3 in size.
• Turkey agreed to buy nine spot cargoes of Qatari LNG from the end of this year or the start of 2015. The shipments will augment contracted supplies of LNG from Algeria and Nigeria and help Turkey meet its gas needs this coming winter.
• Exelon Corp, operator of the largest US network of nuclear power stations, acquired a 96 per cent stake in Annova LNG, a startup company planning to build a US$1.3 billion, 2 mta LNG export terminal in Brownsville, Texas.
• The partners in the project to export Alaska North Slope gas in the form of LNG agreed to launch pre-front-end engineering design (pre-FEED) work on the construction of the 1,300km, 42 inch pipeline that will be required to transport the gas across the state to an LNG terminal planned for a location near Nikiski on the Kenai peninsula in southern Alaska. The companies involved – ExxonMobil, ConocoPhillips, BP, TransCanada and the state’s own Alaska Gasline Development Corp – also filed applications to DOE and FERC for the necessary authorisations permitting LNG exports. The scheme is based on exports of 20 mta for 30 years.
• Elengy reported that its three French LNG terminals – Fos Tonkin, Montoir and Fos Cavaou (Fosmax) – had received their 9,000th cargo since the country began purchasing LNG in 1965. That figure represents 275 million tonnes of cargo and 12 per cent of all the LNG shipments ever made. The first French deliveries were to a small terminal in Le Havre but that facility ceased operations in 1989. Elengy, a GDF Suez subsidiary, also announced a second milestone – the berthing of 150 different LNG carriers at the company’s terminals. This represents more than one-third of all LNG tankers ever built. The cargo reloading capabilities at Fos Cavaou have recently been upgraded, enabling reloads to LNG carriers to proceed at rates of 4,000 m3/hour, up from 1,250 m3/hour.
• Cheniere Energy made progress with Corpus Christi LNG, the second US LNG export project it is planning, with the announcement that the necessary output from Trains 1 and 2 at the proposed facility have now been contracted. The latest buyers are Pertamina of Indonesia and EDF. Pertamina doubled its earlier agreed volume to 1.5 mta while EDF signed up for 0.38 mta. Cargoes for both customers will be loaded on a free-on-board (FOB) basis for 20 years. The latest deals boost the volumes contracted from the two trains to 7.4 mta. Cheniere hopes to make an FID on the project in the first half of 2015 to enable Train 1 production to start in 2018 and Train 2 in 2019. Each train will have the capacity to produce 4.5 mta of LNG and Cheniere expects to market the remaining available volumes from the two trains itself. A third train is envisaged for the next phase of the project’s development and EDF has already agreed to purchase 0.38 mta from this liquefaction unit.
• The City of Prince Rupert in the Canadian province of British Columbia signed an exclusivity agreement with Watson Island LNG (WILNG) which calls for the transformation of Watson Island into a small LNG export terminal. An old pulp mill is being decommissioned to clear the way for the island’s new role.
• Woodside Energy applied to Canada’s National Energy Board to export 20 mta of LNG for 25 years from a proposed terminal at Grassy Point in British Columbia. Woodside holds exclusive rights to negotiate a long-term tenure for an LNG facility at the south side of Grassy Point. The company is considering both land-based plant and floating LNG production options for its project and is targeting 2022 for its first LNG exports. A new pipeline will be required to transport sourced gas to the proposed Grassy Point LNG facility.
• China offered Pakistan assistance with the construction of both a US$2 billion LNG import terminal at Gwadar Port in the western part of the country and a US$1bn pipeline to Nawabshah for onward distribution of the Gwadar gas. The Nawabshah connection could ultimately link with Iran’s gas distribution system. The project would be undertaken on the basis of a government-to-government arrangement with China and, as such, would not be open to international bidding.
• DESFA, operator of Greece’s gas transmission system, received government approval for the construction of a third LNG tank at the country’s Revithoussa LNG import terminal. The tank, which is expected to be completed by the end of 2016, will increase the facility’s storage capacity by 73 per cent and allow the import of LNG from more suppliers. The new tank is part of an upgrade at Revithoussa that will boost the facility’s regasification rate by 40 per cent and enable vessels up to 260,000m3 to be accommodated. The European Investment Bank (EIB) has authorised a grant of €80 million towards the cost of the terminal modification work.
• H-Energy, an India-based company, announced it has memorandums of understanding in place with customers for 50 per cent of the output from its planned 13.5 mta LNG export terminal in Melford, Nova Scotia. The company is also beginning pre-FEED work on the project and is poised to begin various permitting processes with the Canadian authorities.
• Downeast LNG submitted its pre-filing request to FERC to develop a US$2 billion bi-directional LNG facility at its proposed location in Robbinston, Maine. The Downeast project is targeting 2019-20 for the startup of a 3 mta export terminal. The scheme was originally conceived as an import terminal but the latest plan calls for the addition of a liquefaction train to the proposed regasification facilities, marine jetty and single LNG storage tank.
• Tokyo Gas signed a deal with Mitsui & Co under which it will buy 520,000 tonnes per annum (tpa) of LNG from the Cameron project in the US, starting in 2020. Mitsui has signed up for 4 mta of the offtake planned for the Cameron LNG export facility.
• LNG Ltd of Australia purchased a potential LNG export site near Port Hawkesbury, Nova Scotia from Anadarko Petroleum for US$11 million. Bear Head LNG was originally proposed as an import project and, although foundations were put in place for two LNG tanks, Anadarko mothballed its plans for an LNG receiving facility there seven years ago. LNG Ltd is in talks with several potential suppliers of the gas it intends to liquefy for sale to the world market.
• The state cabinet of Andhra Pradesh in India has approved the construction of the 5 mta LNG import terminal planned for Gangavaram. The project is being developed by Petronet LNG in tandem with Gangavaram Port Ltd. Use will be made of an FSRU initially to enable a fast-track start of LNG imports but a land-based terminal will be built to handle all planned LNG volumes later in the decade. Petronet aims to begin imports by the end of next year.
• Quicksilver Resources filed an application with Canada’s National Energy Board to export LNG for a period of 25 years from a planned site near Campbell River on Vancouver Island. The Quicksilver scheme, called Discovery LNG, envisages the construction of the terminal on the site of an old pulp mill. The Canadian firm’s assets include natural gas reserves in the Horn River Basin in northeastern British Columbia. At this early stage Quicksilver is looking to 2021 as a possible start date for LNG exports, which could ultimately reach 20 mta.
• GAIL in India launched a tender to buy up to eight LNG cargoes in 2015. The imports would be primarily for the Dabhol terminal but during the monsoon months of May-September cargo deliveries will be diverted to either the Dahej or Hazira import terminals in Gujarat state. A breakwater is under construction at Dabhol to deflect the ocean swells to which the terminal is prone. Until the facility is ready it will not be possible to discharge cargoes at Dabhol during the monsoon season.
• FERC in the US approved Freeport LNG Development’s proposal to build a liquefaction plant at its existing LNG import terminal in Texas. Freeport plans to build three 4.4 mta trains. The company will need to adhere to more than 80 conditions specified by FERC to reduce potential environmental harm. Global Infrastructure Partners recently agreed to buy a 25 per cent stake in Freeport LNG Development from a group of institutional investors managed by Hastings Funds Management USA and Zachry American Infrastructure.
• The Cyprus government signed a memorandum of understanding (MOU) with Eni and Kogas under which the principals agree to investigate the potential of the country’s gas resources, including by means of an onshore LNG export terminal. Cyprus has similar agreements in place with Total and Noble, other developers of offshore oil and gas concessions in the country’s territorial waters, and the aim is to channel and align all the efforts towards realisation of an LNG export project.
• SCT&E LNG, a subsidiary of Southern California Telephone & Energy, applied to the US DOE for permission to export up to 12 mta of LNG to non-FTA countries. The SCT&E LNG facility is planned for Monkey Island in Louisiana’s Cameron Parish, a location which has water frontage access on the Calcasieu Ship Channel and is only 5km from the Gulf of Mexico.
• The US DOE authorised Oregon LNG to export the equivalent of up to 9 mta of LNG to non-FTA countries for 20 years from a planned terminal at Coos Bay in Oregon. The provisional project timetable calls for an FID in late 2015 and the commencement of exports in 2019. Most of the gas processed at the facility, which will feature two 160,000m3 storage tanks, would be sourced from western Canada.
• Japan’s Hiroshima Gas signed an agreement to buy 50,000-130,000 tpa of LNG for 15 years from Osaka Gas, starting in 2016. Hiroshima Gas will receive partial cargoes at its Yokkaichi LNG terminal, delivered on an ex-ship basis.
August 2014
• Golar LNG signed a deal to provide Quantum Power Ghana Gas with an FSRU-based receiving terminal for siting offshore the port city of Tema in eastern Ghana. The vessel will supply gas directly to the state-run Volta River Authority (VRA) to boost power generation, and the project is due to start in mid-2016. Quantum Power requires at least 1.75 mta of LNG for the US$500m project and Golar will provide one of the FSRUs it currently has under construction at Samsung Heavy Industries in Korea.
• Tangguh LNG received approval from the Indonesian Environment Ministry to build a third 3.8 mta liquefaction train at its plant in the country’s eastern Papua province. Environmental clearance was also given to the Abadi LNG plan to mount a 2.5 mta export scheme based on the use of a floating production (FLNG) vessel. Inpex of Japan and Shell are developing the latter project, which is based on utilising gas from the Abadi field in Indonesia’s eastern territorial waters.
• Barcelona became Spain’s sixth terminal authorised to offer an LNG cargo reload service. The approval came shortly after Bilbao was given a similar clearance. All six Spanish LNG import terminals have now been modified to enable cargo reloads. Spain despatched 32 cargoes to world markets during the first half of 2014, up from 14 during the same period last year.
• The partners in Cameron LNG made a final investment decision (FID) to press ahead with their US$10bn, 12 mta export project after gaining all the necessary regulatory approvals.
• The Panama Canal Authority celebrated the waterway’s centenary. The Panama Canal is set to become a major conduit for LNG carriers when the new, wider locks are commissioned in late 2015. Many Asian buyers have agreed to purchase gas from the new LNG export facilities being developed on the US Gulf and East Coasts.
• GDF Suez signed up to buy 22,000m3 of LNG from the Montreal-based utility Gaz Metro and secured an option on an additional 23,500m3. The LNG will be trucked south from Canada to a range of New England storage sites from July to November 2014. The volume represents about 1,150 cryogenic road tanker loads. The deal is the second such annual arrangement with Gaz Metro. GDF Suez also trucks LNG throughout New England from its Everett LNG import terminal on the outskirts of Boston. Everett usually despatches about 10,000 road tanker loads per annum.
• The US began implementing a new policy governing the regulatory approval process for the country’s proposed LNG export projects. The revised regime requires project developers to secure environmental approvals from FERC before DOE will rule on their applications to export to countries that do not have FTAs with the US.
• Litgas, the gas trading arm of Lithuanian Energy, signed a preliminary five-year LNG supply deal with Statoil covering the supply of approximately 0.4 mta. The LNG will be delivered to the FSRU-based LNG import terminal that is due to commence operations in the port of Klaipeda this December. The Höegh LNG FSRU newbuilding Independence has been taken on a 10-year charter to serve this project.
• CNOOC’s Hainan LNG terminal on the island of Hainan received its inaugural commissioning cargo. The 90,000-tonne cargo was loaded at Ras Laffan in Qatar and delivered to the US$1.05bn facility by the 210,000m3 Q-flex ship Rasheeda. The vessel spent 10 days discharging to the facility’s two 160,000m3 tanks to ensure proper cooldown of the cryogenic facilities and a controlled start to regasification procedures. The 3 mta Hainan facility is CNOOC’s seventh LNG import terminal and boosts the company’s overall regas capacity to 27.8 mta. CNOOC is China’s biggest LNG buyer.
• Petronas agreed to give the Sabah state government a 10 per cent stake in the ninth liquefaction train being built at Malaysia’s Bintulu LNG export complex. The 3.6 mta train is due to come onstream at the end of 2015.
• Inpex of Japan finalised a deal which will transfer 1.2 per cent of its equity interest in the Ichthys LNG project in Western Australia to Kansai Electric Power Co.
• Singapore LNG awarded an engineering, procurement and construction contract for the Phase 3 expansion of its LNG import terminal to Samsung C&T Corp. The project involves the construction of a fourth storage tank and additional regasification facilities. The expansion will boost the terminal’s sendout capacity to around 11 mta, from the current 6 mta. At 260,000m3, the tank will be larger than any yet built but its days in the recordbook may be shortlived because Kogas is building three marginally bigger tanks at its new Samcheok receiving terminal. The new Singapore LNG regasification facilities are expected to be completed by 2017, while the fourth tank is due onstream in 2018. LNG
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