LNG Unlimited 24 Jul Layout 1

LNG JOURNAL PUBLICATION 24 July 2018

LNG Unlimited

Australian LNG producer WoodsidePetroleum made progress in thesecond quarter on a plan to pro-cess third-party feed-gas throughthe North West Shelf LNG plant inWestern Australia as the ramp-upof the new Wheatstone facilitycontinued along with other expan-sion and distribution plans.

Woodside Petroleum’s quarterlyrevenue rose 9.7 percent toUS$1.14 billion compared withUS$924.3M in the same threemonths of 2017.

Big earnerThe biggest LNG revenue earnerfor Woodside in the second quar-ter was the Pluto LNG plant withUS$540.4 of quarterly income, upmore than 26 percent versus theUS$427.8M logged in the 2017quarter.

Pluto LNG is 90 percent-ownedby Woodside and is underpinnedby 15-year sales agreements withKansai Electric and Tokyo Gas,which each hold a 5 percent inter-est in the project.

During the quarter the averageLNG prices realized from the vari-ous Woodside assets were PlutoLNG-US$9.4 per MMBtu, Wheat-stone-US$8.8 per MMBtu and theNWS plant-US$7.9 per MMBtu.

Woodside said that the secondTrain at the Chevron-operatedWheatstone plant in the Pilbararegion of Western Australia suc-cessfully started production inJune 2018 and was ramping upoutput as planned.

Construction of the domestic

gas plant at the Wheatstone sitenear the town of Onslow is 90 per-cent complete, with productionexpected to commence in the sec-ond half.

Woodside CEO Peter Colemansaid the start-up of LNG produc-tion from Wheatstone Train 2 wasthe highlight of the period, whichalso saw another strong quarter ofperformance at the Pluto plant inWestern Australia.

“Since starting up in June,Wheatstone Train 2 has achievedhigh production rates, building onthe continuing operational successat Train 1,” said Coleman.

“Pluto LNG again turned in anoutstanding result for the quarter,achieving 100 percent reliabilityand an annualized production rateof 5.2 million tonnes per annum,”he said.

Coleman also explainedprogress made on the proposedScarborough gas field developmentoffshore Western Australia thatwould boost Pluto production.

“Woodside has accelerated thetarget date ready for start-up to2023 for the upstream componentand 2024 for the downstream tomaximize the market opportu-nity,” said Coleman.

He said the design capacity ofthe proposed Pluto Train 2 wouldbe up to 5 MTPA.

Woodside said that agreementhad been reached between theWestern Australia North West ShelfLNG plant participants on non-binding key commercial terms andpricing for processing third-partygas through NWS infrastructure.

Tolling accord“A preliminary tolling agreementis expected between the NWS Pro-ject participants and Browse JointVenture in the third quarter,” saidColeman.

Woodside said production waslower during the quarter at theNWS plant due to execution of aplanned onshore and offshoreturnaround involving LNG Train 1,LNG Train 2 and the Goodwyn-Aplatform. A maintenanceturnaround of LNG Train 3 isscheduled in September 2018.

Among the other Pluto planthighlights, construction of thetruck-loading facility commencedin April 2018. The facility will pro-vide LNG for distribution to cus-tomers in Western Australia’sPilbara region from 2019.

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Woodside’s Pluto plant on the Burrup Peninsula of Australia

Perth-based company

benefits from Pluto

plant and stakes in

NWS and Wheatstone

LNG Journal editor

UNLIMITEDAGENDA

Kinder Morgan’sElba Island plantwill delay itsplanned start-up

3

PROJECTS

EXPORTS

CORPORATE

Peru plant shipsfour cargoes ahead of its plannedJuly 27 shutdown

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US gas industry equipment-makerChart sees annualsales around $1.2Bln

5

Finland’s Gasumregisters profitgrowth in NordicLNG and biofuel

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FUEL MARKET

EARNINGS

REGULATORY

US reassuresproject ownersand importers onexport permits

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Woodside LNG earnings boosted amid expansion and varied prices

Oil Search postsrevenue dropamid more talkson PNG expansion

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Papua New Guinea LNG stake-holder Oil Search posted lowerrevenues from liquefied naturalgas and other sales because of theeffects of recovering from theearthquake that struck PNG inFebruary, though production wasnow back to normal amid progresson LNG expansion.

Oil Search, based in PNG andlisted on the Australian SecuritiesExchange, said total revenue for thesecond quarter dropped 11 percentto US$262.8 million versus US$295Min the previous three months.

LowerHowever, the drop amounted to 21 percent compared with theUS$332.5M of revenue in the sec-ond quarter of 2017.

“Product sales were 9 percentlower than in the first quarter,due to the rebuilding of inventoryand the timing of LNG shipments,with three LNG cargoes on thewater at the end of the quarter,”said the company.

Oil Search stated that duringthe quarter, activities intensifiedon the proposed LNG expansion atthe ExxonMobil-operated LNGplant, located northwest of PortMoresby, where two Trains cur-rently produce around 8.5 milliontonnes per annum.

The PNG LNG expansion envis-ages doubling output with twonew liquefaction Trains.

Oil Search said total productionin the second quarter was 5.40million barrels of oil equivalent(mmboe), 12 percent higher thanin the first quarter, reflecting therecommencement of production

following the earthquake.Since coming back fully online

in late April, the PNG LNG planthas performed strongly.

“Production rates have bene-fited from planned modificationsto the Hides Gas ConditioningPlant and maintenance of the LNGTrains in Port Moresby, undertakenwhile PNG LNG operations wereshut down following the earth-quake, as well as high levels of re-liability,” said Oil Search.

“While the average realised oiland condensate price was 3 percenthigher than in the first quarter, thesecond quarter LNG and gas price

was 4 percent lower, due to ahigher proportion of LNG cargoessold on the spot market followingthe earthquake,” it explained.

As regards earthquake insur-ance, Oil Search said the com-pany’s insurance loss adjustorundertook a second visit to its affected locations, accompaniedby geotechnical and structural engineers and two lead insurers.

“There has been no change tothe estimate of US$150-250 mil-lion (gross) insurance recoveriesfor earthquake-related damage toOil Search-operated assets,” saidthe company.

“More than US$50M in progresspayments have been receivedfrom the Oil Search insurance pro-gramme’s insurers, with furtherpayments to flow as repair costsare incurred,” it added.

Oil Search Managing DirectorPeter Botten said formal negotia-tions are ongoing on the PapuaLNG expansion project and cover-ing the terms for access to the existing PNG LNG plant.

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Oil Search posts revenue drop amid expansion progress for stakeholders in Papua New Guinea

l NEWS LNG Unlimited 24 July 20182

Santos of Australia sees earnings rise even as PNG and Darwin liquefaction plants have outagesSantos, the Australian stakeholderin three Asia-Pacific LNG produc-tion plants, reported strong first-half revenue growth even as anearthquake in February shut theExxonMobil-run Papua New Guineaplant and scheduled maintenanceclosed the Darwin facility, oper-ated by ConocoPhillips.

Santos said first half sales rev-enue rose 16 percent to US$1.7billion due to stronger commodityprices and higher oil sales.

First-half LNG sales revenuerose 6.5 percent to US$599M com-pared with US$562M in the sameperiod of 2017.

LNG revenues amounted toUS$323M in the second quarter of2018 versus US$290M in the samethree months of 2017. The second-biggest Santos quarterly earner

was domestic natural gas andethane at US$254M with oil inthird place at US$225M.

Santos earnings were helped byhigher LNG prices. The companysaid its average realized LNG pricein the past three months wasUS$9.74 per million British ther-mal units compared with US$8.19in the first quarter of 2018 andUS$7.32 per MMBtu in the secondquarter of 2017.

The strong increase in revenuewas achieved despite the PNG LNGoutage and a planned shutdown atDarwin LNG and its Moomba fieldin southern Australia which re-duced first half production byabout 2 million barrels of oilequivalent and sales revenue byaround US$80M

The Barossa natural gas field

offshore northwest Australia is thelead candidate to underpin thelong-life extension of Darwin LNGand would more than double San-tos’s regional production as Bayu-Undan field output is replaced.

The Barossa gas field is located300 kilometres north of Darwinand is one of the Australian com-pany’s core long-life, natural gasassets. A final investment decisionis scheduled for the end of 2019on developing the field.

In PNG, Santos said it was stillin discussions regarding a proposalreceived for Santos to farm-in tothe P’nyang gas field that willform part of the Papua LNG ex-pansion project that could amountto two new processing Trains fromthe current two producing 8.5 mil-lion tonnes per annum.

“The PNG Highlands earth-quake in February was a majordisruptive event for the people ofPNG and we were deeply sad-dened by the loss of life and per-sonal injuries suffered by our localcommunities,” said Santos ChiefExecutive Kevin Gallagher.

“It is a testament to the greatwork of the ExxonMobil team thatthe gas plant maintained integritythroughout the earthquake periodand there were no releases of hydrocarbons and no significantinjuries to personnel,” stated Gallagher.

“Production was safely re-started within two months of thefirst earthquake and full rateswere achieved by the end ofApril,” he added.

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Natural gas well-pad in Highlands of Papua New Guinea

LNG Journal editor

Cheniere Energy has formally ap-plied to US regulators for permitsto expand the liquefaction and ex-port plant in Corpus Christi inTexas with the addition of sevenmid-scale Trains with 9.5 milliontonnes per annum of production,taking the total output of 23 MTPA.

The three larger Trains cur-rently being developed at the Cor-pus Christi site located on the LaQuinta Channel on the northeastside of Corpus Christi Bay will havetotal production of 13.5 MTPA.

Cheniere is seeking authoriza-tion from the Federal Energy Reg-ulatory Commission to site,construct and operate the expan-sion project comprising the sevenTrains each with around 1.35 MTPA

of output. The expansion includesone additional LNG storage tankand an extra interconnectedpipeline to the existing project.

That’s as the first two Trains ofthree currently being developedand built at the site at a cost of$13 billion are making progress,with the first gas being introducedto Train one in June.

However, the commercial start-up of the Texan plant with itsthree storage tanks and jetties tohandle two LNG carriers at a timeis still several months off. Thefirst LNG cargo from Corpus Christicould be expected as early asNovember 2018.

The new facilities of sevenmid-scale Trains will be built

on land behind the three largerTrains that are closer to the ex-port jetties.

Trains one and two are offi-cially scheduled to enter serviceat the 1,500-acre site in the firstand second halves of 2019 respec-tively, according to Cheniere.

Train three received its finalinvestment decision in May 2018.The three-Train project will alsohave three storage tanks and twomarine berths for the largest carriers.

Around 8.4 MTPA of CorpusChristi production has been con-tracted to third parties on a long-term, free-on-board basis wherebythey provide their own shipping.

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24 July 2018 LNG Unlimited NEWS l 3Kinder Morgan’s Elba Island LNG project in Georgia delays start-up

Kinder Morgan, the US pipeline andterminals company, said its LNGexport project at Elba Island nearSavannah in the state of Georgia isrunning slightly behind schedule,though a start-up is anticipated forthe fourth quarter of 2018.

Elba Island is an existing importterminal being transformed intoan export plant to produce an ini-tial 2.5 million tonnes per annumof LNG.

ShellRoyal Dutch Shell was the formerpartner of Kinder in the Elba is-land project and while it sold itsstake, it remains the main cus-tomer for the completed venture.

The Elba Island project involvesthe installation of 10 small-scaleliquefaction units and modificationsto the terminal infrastructure.

Kinder’s new partner in theLNG project since 2017 is the in-vestment fund EIG Global Energy.EIG purchased a 49 percent jointventure participation in Elba Liq-uefaction Co. for an upfront cash

payment of $385 million andagreed to fund its share of futurecapital expenditures.

“The project is supported by a20-year contract with Shell. Initialin-service is expected in the fourthquarter of 2018 (a delay of onequarter) with final units coming on-line by the third quarter of 2019,”said Kinder Morgan in its second-quarter earnings statement.

“Additionally, construction iscontinuing as planned on the ElbaExpress Modification Project,which will add upstream compres-

sion facilities on the Elba Expresspipeline to provide feed gas forliquefaction,” stated Kinder.

The existing terminal on ElbaIsland is about eight miles up-stream from the mouth of the Savannah River. It was first autho-rized by the Federal Energy Regu-latory commission in 1972 as animport facility.

The transformation project toturn the terminal into a liquefac-tion plant began in November2016.

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Feed-gas tie-in at the Elba Island plant near Savannah

Cove Point’sowner Dominionhas Scana deal approved Dominion Energy, owner of theCove Point liquefied natural gasliquefaction facility on Chesa-peake Bay in the state of Mary-land, has had the transactionfor its acquisition of ScanaCorp. and its South Carolinanatural gas and power assetsapproved by the Federal EnergyRegulatory Commission.

Dominion first put forwardits takeover bid in January fortroubled US energy companyScana in an all-stock transactionwith a total value of about$14.6 billion just as it was set tobecome the second US LNG ex-porter with its Cove Point plant,now in commercial operation.

The Dominion bid is seen by analysts as helping Scana absorb some of the costs of afailed South Carolina nuclearproject.

The FERC has now found thecombination of the two compa-nies was “consistent with thepublic interest” and authorizedthe deal.

“We are pleased by theFERC's considered and timelyaction,” said Thomas F. Farrell,Dominion Energy Chairman,President and Chief Executive.

“It brings us closer to pro-viding a brighter energy futurefor customers, communities andothers served by the Scanacompanies,” he added.

“We will continue workingtoward achieving the other re-quired regulatory approvals andcompleting our transaction bythe end of this year,” stated theDominion CEO.

The merger has previouslyreceived the approval of theGeorgia Public Service Commis-sion and early termination bythe FERC of the 30-day waitingperiod under the federal Hart-Scott-Rodino Antitrust Improve-ments Act.

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LNG Journal editor

Cheniere advances with expansionat Corpus Christi to total 23 MTPA

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24 July 2018 LNG Unlimited NEWS l 5

Chart Industries, the US manufac-turer of engineered equipment forthe industrial LNG, natural gasand energy industries reported a34 percent rise in second-quartersales and the orders included air-cooled heat-exchangers for a largeLNG project.

Orders in the second quarteramounted to $360.3 million, a 12percent rise on the previous quar-ter as the Georgia-based companyposted its sixth consecutive quar-ter of sequential growth.

LNG orderThe company also booked a $28million LNG order through its newsubsidiary Hudson Products that ispart of Chart’s Energy & Chemi-cals division.

The earnings are the firstunder new Chief Executive Jillian

C. Evanko who took over fromWilliam C. Johnson who departedin June.

Evanko had served as VicePresident, Chief Financial Officer,Chief Accounting Officer and Trea-surer of Chart since March 2017.

Chart said net income was$12.3M for the quarter, or $0.38per diluted share.

The earnings would have been$0.55 per diluted share excluding$1.4M of transaction-related andrestructuring costs, $3.75M of costsassociated with a cryobiologicalaluminum tank recall and $1.4M ofnet severance costs associated withthe departure of Johnson as CEO.

“Strength in Asian orders wasdriven by packaged gas applicationsas well as respiratory and cryobio-logical product lines,” said Chart.

“LNG vehicle fueling demandcontinued to increase, and indus-

trial CO2 activity is driving increased volumes of Bulk and MicroBulk products in the UnitedStates for our D&S segment, whilenatural gas processing in our E&Csegment continued to be strong,up 9.8 percent over the first quar-ter of 2018 and up 47.2 percentfrom the second quarter of 2017,”added Chart.

The company said that sales of$319.9M for the quarter were anincrease of 14 percent over thefirst quarter.

Gross profit for the secondquarter was $84.5M, or 26.4 per-cent of sales, compared with thefirst-quarter gross profit at 27.6percent of sales.

“Our second-quarter results re-flect the past three quarters’ orderstrength,” said CEO Evanko, who isalso President of the company.

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US gas industry equipment-makerChart sees full-year sales at $1.2Bln

NEWSNUDGES

LNG Journal editorEnagas reportsnet profitEnagas, the Spanish natural gasnetwork and LNG terminal oper-ator, posted a net profit for thefirst-half of 219.8 million euros($258M), a slight rise of 1 per-cent on the same period of2017. The company reportedthat demand for natural gas inSpain grew by 5.9 percent inthe first six months of 2018.“This growth is mainly due tothe positive evolution of con-ventional demand, which roseby 7.8 percent as the conse-quence of lower-than-normaltemperatures at the start of theyear,” said Enagas.

LNG playerwins caseKosmos Energy, the Dallas-basedpartner of BP of the UK in thedevelopment of floating LNGprojects offshore Senegal andMauritania in West Africa, hasbeen successful in an arbitra-tion case brought by its sub-sidiary in another West Africancountry, Ghana, against Tullowof the UK. The dispute was overresponsibility for expenditurestemming from termination ofthe West Leo drilling rig con-tract in Ghana. The tribunal’sfinal award in the arbitrationwas delivered to the parties bythe International Chamber ofCommerce.

Greeks orderfour shipsSouth Korean shipbuilderHyundai Heavy Industries said itreceived an order amounting toUS$745 million to build four liq-uefied natural gas carriers for aGreek shipping group, accordingto a filing with the Korean StockExchange. The world's biggestshipbuilder by sales said it ob-tained the order to build fourLNG carriers for the Greek-owned Marinakis Capital GasCarrier Corp.

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Japanese LNG imports drop with only Mideast and Russia holding upJapanese liquefied natural gas imports plunged last month alongwith imports of thermal coal forpower generation with only LNGshipments from the Middle Eastremaining stable as all other regions except Russia showed adecline in cargoes.

LNG shipments dropped by 10.3percent to 5.54 million tonnes inJune from 6.18MT in the samemonth of last year, according tothe preliminary trade figures fromthe Japanese Finance Ministry.

The LNG imports had amountedto 6.40MT in May compared with6.23MT in May 2017,

Imports of the LNG competitorfuel for power generation, ther-mal coal, fall by an even biggermargin of 18.3 percent to 8.25MTas electricty demand fell andpower-saving measures bore fruitto alleviate the high costs of im-ported energy.

The June imports cost 309.73billion yen ($2.74Bln) compared

with 296.16Bln yen ($2.62Bln) inJune 2017. Japan's nuclear powerplants, numbering more than 50,were largely still offline in Junewith only four currently operating.

The Ministry data for Juneshowed that Asian shipments fromnations such as Malaysia and In-donesia, Papua New Guinea andBrunei dropped 10.1 percent fromJune 2017 to 1.46MT.

Imports from the Middle Eastregion edged down by just 0.7percent with shipments fromcountries like Qatar, the UnitedArab Emirates and Oman totalling

1.42MT in June. Russian monthlyshipments from the Sakhalin Islandplant in the Far East rose 11.1percent to 523,000 tonnes.

Imports from the US amountedto 180,000 tonnes with no corre-sponding shipments in June 2017.

However, Japan will be im-porting US cargoes at more eco-nomic prices in the months aheadfrom both the Cheniere Energy-owned Sabine Pass plant inLouisiana and the Cove Pointplant in Maryland operated by Dominion Energy.

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Russian Sakhalin plant supplied more LNG to Japan in June

l NEWS LNG Unlimited 24 July 20186

Peru LNG has shipped four cargoesso far in July to three separatepricing areas of the Atlantic andPacific Basins from its liquefactionfacility at Pampa Melchorita, theonly LNG export plant in SouthAmerica.

National energy company Peru-Petro said one cargo was deliveredto the Manzanillo import terminalon the Pacific coast of Mexico onthe 134,425 cubic metres capacitycarrier “Galea” with a value basedon the US Henry Hub market priceof around $2.85 per million Britishthermal units.

SpainThe second cargo of the monthwas shipped to Spain on the170,000 cubic metres capacityvessel “Methane Becki Anne” withthe value based on the UK Na-tional Balancing Point price of$7.60 per MMBtu.

A third shipment was deliv-ered into the Japan-Korea markerprice zone with a prevailing valueof $10.24 per MMBtu in North

Asia and was to be unloaded inJapan from the 173,400 cubicmetres capacity carrier “Sevilla Knutsen”.

The four shipment left the Pa-cific Ocean terminal on July 15bound for South Korea on the145,000 cubic metres capacitycarrier “Methane Alison Victoria”.

PeruPetro said its referencevalues for each of the four cargoeswas $7.71 per MMBtu.

The four July shipments comeahead of a suspension of opera-tions on July 27 for three weeks

because of a scheduled round ofroutine maintenance.

The Pampa Melchorita facilityhad sent out five cargoes in June,four to Spain and one to SouthKorea.

Shipments from Pampa Mel-chorita were temporarily sus-pended in February 2018 becauseof a fracture on the feed-gaspipeline, whose biggest share-holder is Spanish transmission op-erator Enagas.

The single-Train facility, whichcame on stream in 2010 and is lo-

cated about 170 kilometres southof the capital Lima, is operated byHunt Oil of the US.

It produces about 4.5 milliontonnes per annum of LNG from gasprovided from the Camisea gasfields.

The plant receives its gas via a408-kilometre pipeline owned byTransportadora de Gas de Peru SA.and built across the inland Cuscoregion to the Pacific Coast facility.

The other shareholders in addi-tion to Hunt Oil are Japanesetrading house Marubeni Corp., SKGroup of South Korea and RoyalDutch Shell, which purchased thestake previously held by Spain'sRepsol in 2013.

Hunt Oil, a privately held com-pany based in Texas, is also ashareholder in the Yemen LNGplant at Balhaf on the Gulf ofAden that has been closed be-cause of the Yemeni conflict.

Pipeline company Transporta-dora de Gas de Peru counts Spain'sEnagas as its biggest shareholderswith a 28.9 percent stake.

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Peru export plant sends out four cargoes ahead of its planned July 27 maintenance shutdown

Peru LNG’s Pampa Melchorita liquefaction and export plant

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24 July 2018 LNG Unlimited NEWS l 7Gasum of Finland registers profitgrowth in Nordic LNG and biofuel

Gasum, the state-owned naturalgas company in Finland whose sub-sidiaries include Norwegian lique-fied natural gas market participantSkangas, reported increased first-half revenues and profits amid fur-ther development of the market inthe Nordic countries.

Gasum revenues in the periodrose 18 percent to 597.5 millioneuros ($700M) compared with 506Meuros in the first half of 2017.

Gas roleThe company’s half-year sales inthe LNG business were 116.8 mil-lion euros versus 98.5M euros inthe same half-year of 2017.

“As a low-emission fuel, therole of gas will increase, particu-larly in maritime transport andheavy-duty road transport,” saidGasum in its earnings outlook.

“Gas also offers industrial op-erators an excellent alternative intheir efforts to achieve their emis-sion targets,” it added.

Gasum said its investments inthe Nordic gas system will facili-

tate the company’s growth and itsnewest businesses of LNG and bio-gas have already gained a goodposition in the market and wereexpected to grow significantly inthe future.

Overall natural gas sales in thefirst six months of the year were455.7M euros compared with382.5M euros in the 2017 half-year.

Operating profit from Januaryto June increased 15.8 percent to76.3M euros compared with 65.9Meuros in the year-ago period.

Among LNG highlights, Gasumsubsidiary Skangas and Finnish en-ergy company Porin ProsessivoimaOy signed an agreement for the de-livery of LNG for steam and heat

production in the Kaanaa industrialzone in Finland’s port of Pori.

LNG is delivered to the com-pany in regasified form by con-necting a pipeline from theSkangas import terminal in Pori.

Gasum reported that progresswas also made in the joint ventureconstructing Finland’s second LNGterminal at Roytta Harbor in thePort of Tornio in northern Finland.

The facility is almost mechani-cally complete and will start com-mercial operations by the end ofthe year. The Skangas partners inthe LNG project are regional com-panies Outokumpu, SSAB Europeand EPV Energia.

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Chevron winskey court casefor industry onGHG emissionsChevron Corp., the US majorand leading LNG plant operator,was granted a motion to dismissa global-warming lawsuit filedagainst it by the City of NewYork because it is the responsi-bility of Congress and the exec-utive branch of government tooversee greenhouse-gas emis-sions rather than individualcompanies.

This New York decision fol-lowed the June 25 order by theUS District Court for the North-ern District of California, whichdismissed substantively identicalcomplaints that the same plain-tiffs’ lawyers had filed againstChevron on behalf of the citiesof San Francisco and Oakland.

The lawsuits have come asmajor oil and gas companiesworldwide have been addressingissues of pollution at facilitiesfor many years.

Judge John Keenan’s deci-sion said the claims in the law-suits, filed under New Yorkstate law, were governed byfederal common law.

“The City’s claims are ulti-mately based on the trans-boundary emission of greenhousegases, indicating that theseclaims arise under federal com-mon law and require a uniformstandard of decision,” said thejudge.

The court also ruled federalcommon law provided no rem-edy for climate change-relatedinjuries because, under bindingUS Supreme Court precedent,“the Clean Air Act displaces suchfederal common law claims.”

This is because “Congresshas expressly delegated to theEnvironmental ProtectionAgency the determination as towhat constitutes a reasonableamount of greenhouse-gas emis-sion under the Clean Air Act,”said the court.

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LNG Journal editor

Korean LNG imports jump with volumes from US and MalaysiaSouth Korean liquefied natural gasimports rose by 8.8 percent inJune compared with a year ago asshipments arrived from main sup-plier Qatar and other nations, in-cluding Australia, the US, Oman,Indonesia and Malaysia, which de-livered a cargo from its floatingplant offshore Sarawak.

The six Korean import facilitiesreceived 3.76 million tonnes ofLNG last month compared with3.45MT in June 2017.

South Korea paid an average of$9.80 per million British thermalunits for its shipments versus$7.85 per MMBtu in the samemonth last year.

Qatar, the world’s largest LNGexporter, remained the mainsource of Korean shipments with

1.15MT unloaded at the terminalnetwork of the third-largest im-porter after Japan and China.

Australia was the second-biggest LNG supplier to Korea inJune with 625,033 tonnes. The remaining volumes came fromMalaysia, Russia, Peru, Brunei,Nigeria and Papua New Guinea.

In the January-June period,South Korea imported 22.7MT ofLNG compared 19.6MT in the sameperiod last year.

Four of Korea’s import termi-nals at Incheon, Pyeong-Taek,Samcheok and Tong-Yeong are op-erated by state-controlled KoreaGas Corp.

Two other terminals are ownedby a utility and an industrial com-pany. The Boryyeong terminal is

operated by GS Energy and theKwangyang facility by the steel-maker POSCO.

Among the early June ship-ments to Korea, the 150,000 cubicmetres capacity carrier “Seri Cen-derawasih” unloaded a cargo onJune 1 at the Kogas Incheon termi-nal from Malaysia’s “PFLNG Satu”FLNG plant offshore Sarawak.

The 216,000 cubic metres capacity Q-Flex carrier “Al Thu-mama” unloaded a shipment fromQatargas on June 3 at the Pyeong-taek terminal, also operated byKogas.

The 145,700 cubic metres ca-pacity vessel “Tangguh Jaya” deliv-ered an Indonesian cargo on June 5to the Pyeongtaek terminal.

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Storage tank at the Skangas terminal in the Port of Tornio

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15ON - FLOOR RECEPTIONS

US LNG export project investorsand potential foreign importers ofthe fuel have been informed by theUS government that non-Free TradeAgreement permits are valid fortheir whole 20-year terms and theywould never be revoked as long asAmerica believes in capitalism.

The Department of Energy hasissued a policy statement that re-sponds to concerns that have beenexpressed about the DOE and itsOffice of Fossil Energy rescindingnon-FTA export authorizations inthe future.

ResponseAnalysts said this is a response tosuggestions that trade could be affected between the US and othercountries by diplomatic jousting on the international stage or by ex-ceptional policies enacted at homethat could override the rule of lawand constitutional rights that havebeen tested in Federal courts.

The DOE-FE said it had beenasked by some parties what poten-tial “developments” in the US LNGmarket could rise to the level of“such significant consequence asto put the public interest at risk”such that the DOE would unilater-ally rescind one or more non-FTAexport authorizations or take

other action to protect the publicinterest.

“In this policy statement, DOE-FE affirms its commitment to allexport authorizations issued underthe Natural Gas Act, includinglong-term authorizations approv-ing the export of LNG to non-FTAcountries,” it stated.

“In granting each application,DOE-FE concluded that exports ofUS LNG will generate net economicbenefits to the broader US econ-omy and will provide energy secu-rity and environmental benefits tothe global community,” it added.

“The DOE-FE stands firmly be-hind these factual findings and legalconclusions, many of which havebeen challenged and upheld in fed-eral court,” said the statement inthe government’s Federal Register.

“Authorization holders, as wellas any interested stakeholders,

thus should have the utmost confi-dence in the validity of the DOE-FE’s LNG export authorizations forthe full term of each non-FTAorder,” it added.

“Indeed, as noted above, DOEhas never rescinded a non-FTA ex-port authorization for any rea-son,” it said, except when one UScompany concerned ended its ownbusiness activities.

As a matter of law, the DOEadded that it preserved its author-ity to take action as necessary orappropriate to carry out its dutiesunder the NGA.

“However, DOE does not fore-see a scenario where it would re-scind one or more non-FTAauthorizations,” it stated.

“The United States governmenttakes very seriously the invest-ment-backed expectations of pri-vate parties subject to its

regulatory jurisdiction. “In partic-ular, DOE understands the far-ranging economic investments andnatural gas supply commitmentsassociated with these authoriza-tions over their full term, affect-ing both US and global interests.

“DOE emphasizes that it re-mains committed to the durabilityand stability of the export autho-rizations it has granted under theNGA, as well as to supporting theapproved export of US natural gasaround the world,” it said.

To date, the DOE has issued 29final long-term authorizations toexport LNG and compressed natu-ral gas to non-FTA countries in acumulative volume totaling 21.35billion cubic feet per day of natu-ral gas, around 7.79 trillion cubicfeet per year.

Each of these authorizationshas a term of 20 years, with addi-tional time provided for LNG ex-port operations to commence.

“The DOE/FE has never re-scinded a long- term non-FTA export authorization for any rea-son,” it stated.

“Further, DOE has no record ofever having vacated or rescindedan authorization to import or ex-port natural gas over the objec-tions of the authorization holder,”it explained.

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US government reassures LNG project ownersand potential importers on export permits

US LNG equipment-maker Air Products to build its new HQ in Lehigh Valley in Pennsylvania US LNG equipment-maker and in-dustrial gas operator Air Productshas confirmed that its new globalheadquarters would be built inLehigh Valley in Pennsylvania nearwhere it is currently based.

Air Products Chairman, Presi-dent and Chief Executive SeifiGhasemi told a staff meeting thatthe main global corporate build-ing would be constructed not farfrom the company’s existingheadquarters around Allenstownin Pennsylvania.

The sprawling HQ, reminiscentof a university campus was built inthe mid-1950s, about 15 yearsafter the company was founded inDetroit, Michigan, by LeonardParker Pool.

Air Products said a ground-breaking at the 50-acre site wasexpected in March 2019 with occu-pancy scheduled for around mid-2021.

The new location will be thebase for around 2,000 Air Productsemployees with capacity for

growth. “From the beginning ofthis process to develop a newheadquarters facility, we havenever wavered in our commitmentto remain in the Lehigh Valley,”said CEO Ghasemi.

“Now, we have made the loca-tion decision and we begin ourpreparations to build facilitiesthat represent our world-classcompany,” he added.

“This is a very exciting time forAir Products as we evolve our head-quarters environment to be more

beneficial to our employees andtake advantage of sustainable tech-nologies to lessen our footprint andreduce operating costs,” he stated.

Air Products has made the deci-sion to build its new headquartersfacility a little over one mile fromits existing location.

The new headquarters site will include new administrationoffices, a research and develop-ment facility and enclosed parkingfor employees.

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Energy Secretary Perry and FERC respect investors

LNG Journal editor

24 July 2018 LNG Unlimited NEWS l9