A roundup of key developments in the world of LNG carriers in the two months since the last edition of LNG World Shipping
A roundup of key developments in the world of LNG carriers in the two months since the last edition of LNG World Shipping
• Iberdrola of Spain acquired 1 billion m3/year of Chevron’s regasification capacity at the Sabine Pass LNG import terminal on the US Gulf Coast at the Louisiana/Texas border. The agreement enables Iberdrola to supply, on average, one LNG carrier load per month to US consumers, according to its needs, and provides the gas operator with direct access to a market that boasts high liquidity and demand.
• Yemen LNG exported its first LNG cargo on 7 November. The 149,000m3 shipment was loaded on board Hyundai Ecopia for carriage to Korea on behalf of Korea Gas Corp. When operating at full capacity, probably by mid-2010, the US$4.5 billion, two-train Yemen LNG export complex will have the capacity to despatch 6.7 million tonnes of LNG per annum (mta).
• China Petroleum & Chemical Corp (Sinopec ) signed a heads of agreement (HOA) with ExxonMobil for the purchase of 2 mta of LNG from the proposed PNG LNG project in Papua New Guinea. The LNG will be supplied to Qingdao in Shandong province where Sinopec will build an LNG receiving terminal. Japan's Tokyo Electric and Osaka Gas also have HOAs in place with the ExxonMobil-led PNG LNG project covering long-term gas purchase arrangements.
• Hess LNG acquired Crown Landing LLC, the company behind the proposed Crown Landing LNG import terminal in New Jersey, from BP. As proposed by BP, Crown Landing would have had a regasification capacity of 8 mta of LNG as well as a 600m LNG carrier jetty extending out from the facility into the Delaware River. The project ran into a major roadblock in 2008 when the US Supreme Court ruled that Delaware had the right to reject a proposed terminal that would be partially built in its waters. Hess views Crown Landing as a long-term investment and will investigate alternative ways of developing the facility.
• Gaz de Normandie applied to the French authorities for permission to operate the proposed Antifer LNG import terminal near Le Havre. The facility would have the ability to accommodate the largest LNG carriers in service, i.e. the 265,000m3 Q-max vessels. Owned 73.29 per cent by Poweo SA and 26.71 per cent by CIM SNC, Gaz de Normandie hopes to make a final investment decision on the proposed 7 mta receiving terminal in 2011 and to have the facility in operation by early 2015.
• Inpex of Japan decided to delay the final investment decision on its proposed US$20 billion Ichthys LNG project in Western Australia by 12 months. As envisaged by Inpex, Ichthys would involve the piping of gas from the offshore Ichthys field in the Browse Basin some 800km to a new two-train, 8 mta LNG liquefaction plant in Darwin. The Western Australian authorities have suggested that an export terminal near Kimberley, closer to the offshore field, might make better commercial sense. Inpex now expects to make a decision either late in 2010 or early in 2011.
• Qatargas named its final four 266,000m3 Q-max LNG carriers at a special ceremony at the Geoje Island shipyard of Samsung Heavy Industries. Shagra, Zarga, Aamira and Rasheeda will eventually serve the Qatargas 4 project operated by Qatar Petroleum and Shell when that LNG export facility becomes operational late in 2010. The four newbuildings mark the near completion of a large fleet of LNG carriers, either fully or partially owned by Nakilat of Qatar, built over the last decade to carry Qatari LNG exports. That fleet comprises nine conventional size LNG carriers, 34 Q-flex size ships of 216,000m3 and 14 Q-max vessels. A total of 32 of the 54-ship fleet are chartered by Qatargas while RasGas has chartered the remaining 22.
• Australia's competition watchdog announced it will allow natural gas from the Chevron-led Gorgon LNG export project in Western Australia to be marketed jointly by the project partners. The decision was taken in light of the relatively small number of customers that comprise the bulk of demand; the preference of market participants to sign long-term contracts; the near absence of the short-term trading of gas; and limited storage facilities. The project participants recently agreed to proceed with Gorgon and the aim is to have the new three-train, 15 mta export plant on Barrow Island in operation by 2014.
• The US Maritime Administration (MARAD) approved the construction of the deepwater Port Dolphin LNG import project that Höegh LNG is seeking to develop off the coast of Florida. The Port Dolphin facility will be located in the Gulf of Mexico, approximately 45km southwest of Tampa Bay, and will comprise two submerged turret loading (STL) buoys that will be served by LNG regasification vessels capable of discharging regasified cargo. Höegh LNG hopes to commission the facility in 2013.
• Adria LNG awarded a contract to Sofregaz covering the provision of engineering support services and a front end engineering and design (FEED) study for Adria’s proposed LNG import terminal on Croatia’s Krk Island.
• RasGas despatched its first LNG cargo to South America when Celestine River departed Ras Laffan with a spot cargo purchased by BG LNG Trading and earmarked for discharge at the Quintero LNG import terminal in Chile. A few days earlier RasGas sent a cargo to the Montoir terminal on board its 216,000m3 chartered vessel Al Utouriya. The shipment, which had been purchased by EDF Trading, represented the first LNG delivery to France by a Q-flex ship.
• KBR was awarded a contract by Woodside to carry out the FEED study covering the provision of trains 2 and 3 for the Pluto LNG export project now under construction in Western Australia. The contract also includes an option for early engineering, procurement and construction management (EPCM) services. Like the first train now being built on the Burrup peninsula, trains 2 and 3 would each have a capacity of 4.3 mta. Pluto train 1 is due to commence producing LNG early in 2011.
• Petrobras, Brazil’s state oil and gas company, and its partners in a joint venture to build a 3 mta floating LNG production (FLNG) vessel to develop presalt gas fields in the offshore Santos Basin signed three agreements for the completion of FEED studies for the unit. The studies will be undertaken by Saipem SpA of Italy, a Swiss-Japanese group comprising SBM Offshore NV and Chiyoda Corp and a French-Japanese team made up of Technip, JGC Corp and Modec Inc over the coming year. Petrobras will then make a decision in 2011 on the best option for developing the offshore gas. The aim is to be producing gas, through either an FLNG or by pipeline deliveries, by July 2015. The Petrobras partners in the proposed FLNG venture are BG Group, Repsol and Galp Energia.
• Total, one of the companies participating in the project, announced that LNG from the proposed Shtokman scheme in the Russian Barents Sea will not now become available until 2016 at the earliest, at least two years later than previously envisaged. The delay reflects the escalating costs, the project’s major logistical challenges and the uncertain outlook for gas now facing the Shtokman partners – Total, Russia’s Gazprom and Statoil of Norway.
• Work commenced on the conversion of two spherical tank Golar LNG carriers into floating storage and regasification units (FSRUs) at their respective repair yards. They are the third and fourth FSRU conversion projects. The 137,000m3 Golar Frost is being transformed into an FSRU by the Drydocks World yard in Dubai on behalf of Saipem and for servicing Italy’s OLT Offshore LNG Toscana project near Livorno. At the same time Keppel Shipyard is converting the 125,000m3 Golar Freeze in Singapore to serve as an FSRU in Dubai on behalf of Dubai Supply Authority (DUSUP). Golar Freeze is Keppel’s third FSRU conversion. Both yards will complete the conversions in 2010. The first two FSRUs, both in operation in Brazil, are also former Golar LNG carriers.
• ConocoPhillips sold an LNG cargo it had purchased and had delivered to the Freeport LNG terminal in Texas in summer 2009 to Citigroup for re-export. Citigroup, having entered the LNG market as a trader in August 2009, chartered the 150,000m3 Clean Force to lift the cargo and transport it to a customer willing to pay a higher price for the gas than that paid by either ConocoPhillips or Citigroup itself. Freeport LNG received regulatory approval to re-export foreign-sourced LNG from its terminal in May 2009.
Macquarie Bank also confirmed a similar re-export deal involving a cargo to be lifted at the Freeport LNG terminal toward the end of the year.
• BP and Eni SpA launched a consortium to convert natural gas found in Indonesian coal beds to LNG for export. The consortium then signed a production-sharing contract with the Indonesian government covering 1,700km2 of territory on the Sanga-Sanga block in East Kalimantan where BP and Eni are already producing conventional natural gas for liquefaction at the Bontang LNG export terminal.
• Japan Petroleum Exploration announced it will build a new small-scale LNG receiving terminal at Tomakomai on the island of Hokkaido in northern Japan. The US$65 million facility, which will feature a 3,000m3 storage tank, will help meet the projected growth in Hokkaido’s winter demand for gas, especially from the industrial sector. The new terminal will be served by coastal LNG carriers and is scheduled to be completed by November 2011.
• An international arbitration court ruled that the Spanish energy companies Repsol and Gas Natural will not receive any compensation for investments made in Algeria's Gassi Touil LNG export project. The companies had been awarded a licence to develop the project in 2004 but Sonatrach, Algeria's state-owned oil and gas company, terminated the contract in 2007. Sonatrach then also demanded compensation from Repsol and Gas Natural due to alleged delays in the project's progress. The international arbitration court also rejected those claims. Repsol will write off Gassi Touil-related assets of about E105 million from its financial statements while Gas Natural’s write-offs will amount to E60 million. However, the court ordered Sonatrach to buy the Spanish companies' share in a joint venture in charge of the project's liquefaction process for a price similar to the consortium's current liquid assets.
• The 216,000m3 Q-flex size LNG carrier Murwab carried the first shipment of LNG to the US from Qatar since June 2008. Delivered to the Sabine Pass LNG terminal, it was also the largest ever shipment of LNG to the US.
• The UK Environment Agency lifted stop notices preventing the laid-up 35-year old, 87,600m3 LNG carrier Margaret Hill (ex-Hoegh Galleon) sailing from Southampton. Having been sold by Fortress Credit to Waller Marine Inc of the US, the ship then departed for Drydocks World in Dubai where it is due to be converted into a floating LNG export terminal.
* An area just south of James Price Point on the Dampier Peninsula was identified as the location for the proposed Browse LNG export project in Western Australia. Several weeks later, on 31 December, Woodside Petroleum, the project’s lead developer, announced that the heads of agreement it had signed with PetroChina, covering the purchase of 3 mta of LNG, had lapsed.
• Following up on its earlier HOA, Sinopec Corp signed a sales and purchase agreement (SPA) to buy 2 mta of LNG from the ExxonMobil-led Papua New Guinea LNG project for a period of 20 years. The LNG will be shipped to Qingdao in China's Shandong province where Sinopec will build an LNG import terminal. The Shandong terminal will initially have a capacity of 3 mta, expandable to 6 mta in a second phase. The deal is Sinopec's first LNG SPA.
• China National Offshore Oil Corp (CNOOC) decided to treble the capacity of its Ningbo LNG receiving terminal in Zhejiang province. The facility, which will be China’s fourth LNG import terminal, is now under construction and will have a capacity of 3 mta upon completion in 2012. The second phase of the construction work will boost overall capacity to 9 mta.
• Pertamina, the Indonesian state oil and gas company, and Tohoku Electric Power Co signed a deal under which the Japanese utility will purchase 125,000 tonnes of LNG per annum from the Tangguh export plant in West Papua.
• Barclays Capital entered the field of LNG trading with the establishment of its Barclays Capital LNG Services division and the signing of its first deal, with Excelerate Energy. Under this arrangement Barclays will market LNG arriving at Excelerate's offshore Northeast Gateway located off the coast of Massachusetts near Gloucester. Barclays Capital is offering hedging services and risk management to the LNG market.
• Having traded 2 million tonnes (mt) of LNG in 2009, Gazprom Global LNG announced that it aims to pass the 10 mta mark within a few years. Gazprom, the Russian state gas company, set up its LNG arm in November 2008 to extend its presence in the global gas market through both a long-term supply portfolio and the spot trading business.
• Jamaica's cabinet approved the use of an FSRU to enable the Caribbean island nation to commence LNG imports, following the determination by the state-run Petroleum Corp of Jamaica that such a unit would be more suitable than a land-based terminal to meet immediate needs. Jamaica is seeking to assess proposals and to make a final decision on the project by April 2010. The FSRU will be stationed at Port Esquivel.
• Chevron signed an HOA with Tokyo Electric Power Co (TEPCO) covering the purchase of 4 mta of LNG over a period of 20 years from the proposed Wheatstone LNG project in Western Australia. The two-train 8.6 mta Wheatstone scheme is scheduled to come onstream in 2016.
• RasGas of Qatar began supplying 2.5 mta of LNG to Petronet’s Dahej import terminal under a previously agreed term contract. The inaugural cargo was loaded on board Petronet’s new 154,800m3 LNG carrier Aseem at Ras Laffan on 30 December. The new volume supplements the 5 mta which RasGas already supplies to Petronet. On top of these contracts India is seeking to purchase a further 5 mta of LNG from Qatar on a long-term basis. The additional gas would be supplied to Dahej and Petronet’s second LNG terminal, now under construction at Kochi, as well as to GAIL’s Dabhol facility which is currently being readied for LNG imports.
• The European Commission accepted commitments proposed by GDF Suez in July 2009 under which agreed capacities at the French LNG terminals of Montoir and Fos Cavaou will be made available to third parties. As of 1 October 2010 and for a period of 25 years, up to 30 per cent of the throughput capacity at Montoir will become available to outside interests while approximately 40 per cent of the GDF Suez capacity at Fos Cavaou will be open to third parties, starting in January 2011 and lasting for a period of 20 years.
• ExxonMobil and its partners in the proposed US$15 billion Papua New Guinea LNG (PNG LNG) export project agreed to proceed with the scheme. PNG LNG will produce 6.6 mta of LNG for export and shipments, from a terminal near Port Moresby, are due to begin in late 2013 or early 2014. A consortium comprising Chiyoda Corp and JGC Corp secured the contract to build the terminal. TEPCO, Osaka Gas and Sinopec have 20-year SPAs covering the purchase of 1.8 mta, 1.5 mta and 2 mta, respectively.
• Following a final investment decision (FID) on the PNG LNG, the Papua New Guinea government granted approval for the Interoil project, the country’s second planned LNG export scheme. The Interoil-led project calls for a two-train, 8 mta plant to be built at Napa Napa, near the company’s existing refinery in the Port Moresby district, and the commencement of exports by late 2014 or early 2015. An FID on this second scheme is expected by the end of 2010.
• Chevron signed an SPA with Chubu Electric Power covering the provision of 1.44 mta of LNG from the Gorgon project in Western Australia for 25 years. In association with the agreement Chubu Electric will purchase 0.417 per cent of the equity in the Gorgon project from Chevron's stake.
• The US Federal Energy Regulatory Commission approved the proposed Jordan Cove LNG import project in Oregon and its associated Pacific Connector Gas Pipeline. The project’s Coos Bay terminal will have a capacity to receive 7.5 mta of LNG and the pipeline will be utilised to supply gas to markets in the Pacific Northwest, northern California and northern Nevada.
• Toyota Tsusho Corp, a Japanese trading company partly owned by Toyota Motor Corp, purchased a 15 per cent stake in the proposed BG Group-led LNG export project in Australia's Queensland state. The scheme will use coal seam gas as feedstock and the gas will be liquefied at a new export terminal near Gladstone. The two-train BG project calls for the production of 7.4 mta of LNG and shipments commencing in 2014.
• Tenders were issued to engineering firms seeking to bid for the pre-FEED study to be carried out for the prospective Cameroon LNG export project. The scheme is envisaged as an onshore LNG plant with a production capacity of up to 3.5 mta, to be located near Kribi on Cameroon’s southern coast. GDF Suez and Cameroon's Societe Nationale des Hydrocarbures are leading the project development.
• Vopak, the Dutch bulk liquids terminal operator, and the Zamil Group of Saudi Arabia signed a memorandum of understanding which states their intention to establish a joint venture company for the Middle East and North Africa (MENA) region. The new operation will focus on the development of independent bulk liquid and LNG terminal facilities across the MENA region for use by oil and chemical majors, trading companies and natural gas suppliers.
• Nippon Oil of Japan announced it will build a new LNG receiving terminal at Hachinohe in northern Japan’s Aomori Prefecture. Construction could start as early as April 2010 to enable the planned US$550 million facility to enter into service in 2014 or 2015. The intention is to import LNG from Malaysia and Indonesia for customers in the vicinity of the terminal. Nippon Oil already operates a small-scale LNG plant in Hachinohe. The new facility, which will feature a 160,000m3 storage tank, will be Japan’s 30th large-scale LNG import terminal.
• Tokyo Gas Co, Japan’s largest gas utility, confirmed it will build its fourth LNG import terminal in the Tokyo Bay area. To be located at Hitachi and to be linked to the company’s grid via a 90km pipeline, the new US$1.1 billion facility will feature a 200,000m3 storage tank. Tokyo Gas is working to bring the new facility onstream in fiscal year 2015, two years ahead of the date originally envisaged.
• LNG exports from the Snøhvit LNG terminal on Melkøya island near Hammerfest in northern Norway resumed after a four-month plant closure for major repairs, upgrading and maintenance. Although the maintenance shutdown was completed in early November, the restart was delayed by problems affecting one of the facility’s electric motors used in the liquefaction process. Replacement of the defective motor has enabled operation of Snøhvit LNG at its design capacity. LNG