LNG Unlimited 29 Jan_Layout 1 - LNG Journal

LNG JOURNAL PUBLICATION 29 January 2019

LNG Unlimited

The Papua New Guinea governmentand the owners of the licences forfeed-gas to enable liquefied natu-ral gas expansion in the Oceanianation are expected to give thego-ahead for the joint venture bythe end of March.

One of the shareholders, Aus-tralian Securities Exchange-listedcompany Oil Search outlined thelatest plans in its fourth-quarterearnings report.

SigningsAn accord was signed between thePetroleum Retention License 15joint venture and the PNG Govern-ment in November, detailing thekey terms and conditions to applyto the Papua LNG Gas Agreement.

“The Government and the PRL15 and PRL 3 joint ventures aretargeting to finalise both thePapua LNG and the P’nyang GasAgreements before the end ofMarch 2019, which will enable anintegrated Front-End Engineeringand Design (FEED) entry decisionto be taken for the proposedthree-Train LNG expansion,” saidOil Search.

“In the PNG Highlands, theMuruk 2 appraisal well commenceddrilling in early November and isexpected to reach the targetreservoir shortly,” it added.

“Muruk 2 aims to delineate theresource volumes in the Murukfield which, due to its proximityto existing infrastructure at Hides,could provide a valuable source ofgas for further LNG development,”stated Oil Search.

Oil Search also said that itstotal revenue for the quarter wasUS$503.1 million, a 6 percent risefrom the previous quarter.

“This reflected a 5 percent in-crease in hydrocarbon sales andstronger realised LNG and gasprices (up 5 percent), partly offsetby lower realised oil and conden-sate prices (down 15percent),”said the company whose assets arein PNG and the US state of Alaska.

Oil Search added that despitethe earthquake that struck PNG inFebruary 2018, revenues for thefull year were 6 percent higherthan in 2017 at US$1.54 billion.

Managing Director Peter Bottensaid that quake was one of themost challenging in the company’shistory due to the damage in thePNG Highlands.

However, the country has re-covered well as has Oil Search,which finished 2018 in a strong financial position with liquidity of US$1.5 billion.

Botten added that one of thecompany’s highlights was thememorandum of understandingsigned between Papua LNG andthe PNG Government.

“In November, during the APECSummit in Port Moresby, the PRL15 joint venture participants en-tered into an MoU with Papua NewGuinea for the development of thePapua LNG Project,” he said.

“Since the MoU was signed,good progress has been made onfinalising the more detailed GasAgreement,” added Botten.

“Well-defined plans are inplace to complete and sign thefull Gas Agreement, with all par-ties aiming for this to occur nolater than 31 March 2019, in linewith the MoU timeline,” statedBotten.

EngineeringOil Search also explained thatwhile the key focus during thequarter was on the Papua LNGAgreement, the P’nyang gas fieldagreement is also scheduled to befinalised before the end of March.

“This will enable an integratedfront-end engineering and designentry decision to be made on theproposed three-Train expansion at the PNG LNG plant site shortlyafterwards,” said Oil Search.

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Oil Search Managing Director Peter Botten has PNG in focus. He has just been awarded Australia’s highest honour, the Companion of the Order of Australia, for ‘eminent service’ to Australian-PNG relations

Oil Search has a base

in Port Moresby and is

listed on the Australian

Securities Exchange

LNG Journal editor

UNLIMITEDAGENDA

Santos sets recordfor LNG revenueafter plants ship232 cargoes in year

3

EARNINGS

STRATEGY

EXPORTS

Pipeline giant progresses on two LNG plants and moving gas

6

Sempra pushes Cameron plant tostart-up with somecommissioning

5

Australian Gas Infrastructure Groupstarts pipeline linkfor Pluto LNG

7

DEVELOPMENTS

ENGINEERING

JOINT VENTURESLNG Canada givesout US$770M in contracts and plans jobs boost

9

Papua New Guinea’s LNG plansset for rapid advance in March

Senegal appointsDoris Engineeringto advise on LNG and offshore energy

2

Japan’s costs jumpas shipments indecline amid morepower competition

11

IMPORTS

Doris Engineering, the Frenchenergy contracts company withglobal operations, said it wasawarded an advisory contract by the Senegalese Ministry ofPetroleum for developments off-shore the West African nation, including a BP-run floating LNGproject and an exploration andproduction venture operated byAustralian LNG producer Woodside.

This two-year contract consistsof reviewing plans focusing on theoptimization and the robustness ofproposals to develop the GrandTortue-Ahmeyim fields for the BPFLNG project and its partner Kos-mos Energy of the US, as well asthe venture relating to Woodside’sRufisque, Sangomar and SangomarDeep (RSSD) blocks within theSenegalese portion of the Maurita-nia-Senegal Basin.

Recognition“This award is the recognition bythe Senegalese Government ofDoris’s expertise in LNG and oil

and gas deepwater projects,” saidNicolas Parsloe, Chief Executive ofthe Doris Group.

“It is also the result of goodcommunication and understandingof their requirements. The con-tract is in line with the consul-tancy missions that we haveperformed alongside National OilCompanies in West Africa duringthe last 20 years,” added Parsloe.

“Our strategy is to work hand-in-hand with NOCs and the regula-tory authorities. We are proud tosupport Senegal in the develop-ment of its oil and gas sector,”stated the Doris CEO.

Doris said it would also be tak-ing the opportunity to train Sene-galese engineers on themethodology and operating stan-dards required for deepwater en-ergy projects.

BP and Kosmos recently de-cided to go ahead with their multi-billion dollars of investments indeveloping FLNG offshore Senegaland its neighbour Mauritania.

Their final investment decisioncovers the funds necessary tobring on stream the cross-borderGreater Tortue and Ahmeyim gasfields to produce LNG.

The project will produce gas

from a deepwater subsea systemand transfer it to an FLNG hull at a nearshore hub located on the Mauritania-Senegal maritimeborder.

The FLNG facility for Phase 1 isdesigned to produce around 2.5million tonnes per annum of LNGfrom recoverable gas in the fields,estimated to be around 15 trillioncubic feet.

First natural gas from the FLNGproject is expected in the firsthalf of 2022.

Woodside’s RSSD joint venturehas started front-end engineeringactivities following the award ofthe subsea contract for the SNEField Development-Phase 1 to aconsortium of leading offshorecompanies, OneSubsea, Schlum-berger and Subsea 7.

Woodside, which acquired theSenegal blocks from ConocoPhillipsin 2016, is a leading Asia-PacificLNG player and operates the NorthWest Shelf LNG export plant inWestern Australia, along with thenearby Pluto LNG facility.

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Senegal appoints Doris Engineering of France to advise on FLNG and its deepwater projects

l NEWS LNG Unlimited 29 January 20192

Mexicans expect to cancel tender for FSRU andterminal for Veracruz state to focus on domestic gasMexico is cancelling a tender for aliquefied natural gas floating stor-age and regasification unit origi-nally proposed for the Port ofPajaritos to alleviate gas shortagesin the southern Gulf of Mexicostate of Veracruz.

State energy companyPetroleos Mexicanos (Pemex) andits natural gas supply subsidiary,Mex Gas Supply, launched the ten-der in July 2018 and it attractedleading LNG FSRU sector players.

The tender was for the charter-ing and installation of an FSRU foran initial period of five years withregasification capacity of morethan 500 million cubic feet per day.

The FSRU at Pajaritos wouldhave required 2.5 million tonnes

per annum of LNG, while an addi-tional 2 MTPA of cargoes wouldhave been purchased on a quar-terly basis as needed.

Pemex executives haven beentold by the new Chief Executive ofPemex, Octavio Romero Oropeza,that LNG imports were no longer apriority as the company’s focusswitches to producing more do-mestic natural gas.

Domestic natural gas produc-tion in Mexico has fallen by about42 percent from its peak of 6.52billion cubic feet per day reachedin 2009.

Pemex is aiming to double pro-duction by 2024 to 5.7 Bcf perday, driven by associated gas, aspart of a plan to reduce reliance

on LNG and pipeline imports.Mexican LNG imports are re-

ceived at onshore terminals lo-cated at Altamira in the Gulf ofMexico and at Manzanillo on thePacific Coast.

A third onshore terminal atCosta Azul, also on the PacificCoast, is owned by Sempra Energyof the US.

However, Costa Azul importshave dropped off and Sempra isplanning an LNG export facility,using feed-gas from imports origi-nated in the US.

The Pajaritos FSRU had beenplanned to ease gas shortages inthe southeast of the country, espe-cially on the Yucatan peninsula,where the 485-mile Mayakan

pipeline supplies five Federal Elec-tricity Commission (CFE) combined-cycle gas-fired power plants.

The CFE has pointed to the im-minent start-up of new natural gaspipelines from the US, includingthe subsea Sur de Texas-Tuxpanline crossing the Gulf of Mexico.

The Sur de Texas-Tuxpan sub-sea pipeline is a joint venture be-tween North American companyTransCanada Corp. and the Sem-pra subsidiary Infraestructura En-ergetica (IEnova).

The pipeline runs from SouthTexas to the Mexican port of Tux-pan and is scheduled to come online in the first quarter of 2019with capacity of 2.6 Bcf per day.

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Feed-gas is in offshore Grand Tortue-Ahmeyim fields

LNG Journal editor

Chinese liquefied natural gas im-ports rose by 38 percent in 2018as winter shipments surged in thefinal two months as more naturalgas supplies were brought to thenorthern cities such as Beijing tohelp reduce coal use and improveair quality.

Among the final shipments of2018, cargoes were unloaded fromnations such as Qatar, Australia,Indonesia and Nigeria.

China imported a monthlyrecord total of 6.29 million tonnesof LNG in December 2018, accord-ing to data from the General Ad-ministration of Customs, withshipments 25 percent higher thanthe 5.03MT received in the samemonth of 2017.

Up until November, China hadimported a total of 47.52MT so theadditional December shipmentsgive the Chinese a 2018 total of53.81MT compared with just over39MT in 2017, second only toJapan and its 82.85MT total for 2018.

China had imported 5.9MT inNovember 2018, surpassing theprevious monthly record of 5.18MTset in January 2018.

The imports of LNG had risenat a slower pace in 2018 than in2017 when they increased by 46percent from the previous yearwhen shipments had amounted tojust over 27MT.

LNG carriers from Australia,the Middle East and Africa are still

heading in significant numbers forChinese import terminals withJanuary shipments for the networkof 20 import facilities.

In addition to its 19 onshoreterminals, China has also deployeda floating storage and regasifica-tion unit, the 170,000 cubic me-tres capacity “Hoegh Esperanza”,at Tianjin port in northeast Chinato serve Beijing.

Analysts said the Chinese gov-ernment had largely succeeded inits pledge to ensure abundant nat-ural gas supplies and stable pricesthis winter as previous large-scalecoal use was being replaced as faras possible by natural gas to im-prove air quality.

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29 January 2019 LNG Unlimited NEWS l 3Santos posts quarterly LNG revenuerecord after plants ship 232 cargoes

Santos, the Australian operator ofthe Gladstone liquefied naturalgas plant in Queensland and astakeholder in export plants inDarwin and Papua New Guinea,posted record quarterly LNG rev-enue as its annual income fromthe fuel jumped more than 23 per-cent and a total of 232 cargoesdeparted from the three facilities.

Santos said in its quarterly ac-tivities report that total LNG salesrevenue for 2018 amounted toUS$1.45 billion versus US$1.17Blnin 2017.

Prices Record overall quarterly sales rev-enue, including oil and other prod-ucts, rose by 7 percent toUS$1.04Bl, with record quarterlyLNG sales revenue of US$449 mil-lion, up 39 percent.

The company said its annualrealised LNG price was US$9.91per million British thermal unitscompared with US$7.31 per MMBtuin 2017.

Fourth-quarter LNG volumeswere sold at an average of

US$10.96 per MMBtu versus$US10.43 in the previous quarter.

Fourth-quarter production ofall products was higher than theprior quarter due primarily to thecompletion of the of acquisition ofAustralian company Quadrant En-ergy on November 27, partiallyoffset by completion of the sale ofSantos’s non-core Asian asset port-folio in September 2018.

Quarterly LNG cargoes shippedfrom Gladstone LNG on Curtis Island, whose other shareholdersare Petronas of Malaysia, France’sTotal and Korea Gas Corp.,amounted to 20 cargoes and 80shipments for the year comparedwith 89 in 2017.

“LNG production was lower

than the prior year primarily dueto the GLNG joint venture part-ners diverting about 40 PJ of gas(1 billion cubic metres) to the do-mestic market,” said Adelaide-based Santos.

“The diverted gas, originallyslated for export cargoes andequivalent to 700,000 tonnes of LNG, was sold to East Coast domestic customers,” added thecompany.

Quarterly LNG cargoes shippedfrom PNG LNG, operated by USmajor ExxonMobil, amounted to 30 in the last three months of theyear and 98 for all of 2018. Thenumber of PNG shipments that departed in 2017 was 110.

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Gladstone LNG sent 20 fourth-quarter cargoes to Asia

Indian imports in rebound underpinnedby Qatargas Indian liquefied natural gas im-ports rebounded on a year-on-year basis to jump 4.7 percentin December as more cargoesarrived from Qatar, West Africaand Australia after previousmonthly declines.

LNG deliveries to India’sthree main import terminals atDahej, Hazira and Dabhol nearthe West Coast port of Mumbaiin December totaled 1.57 mil-lion tonnes compared with1.50MT in December 2017.

For the first nine months ofthe fiscal year the shipmentsincreased by 7.7 percent fromApril to December when theyamounted to 15.33MT versus14.22MT in the same ninemonths of the year before, ac-cording to the figures from theIndian Ministry of Petroleumand Natural Gas.

Indian shipments haddropped by 17.8 percent inNovember to 1.56MT from1.90MT in November 2017, the second monthly declineafter six straight months of increases.

The cost of cargoes in De-cember was $800 million ver-sus $700M in the same monthof 2017.

LNG imports from April toDecember 2018 cost $7.5 bil-lion compared with $5.2Bln inthe same nine months of 2017.

Domestic production of nat-ural gas in December was 2.86billion cubic metres, which washigher by 4.2 percent com-pared with the 2.75 Bcmposted in December 2017.

Production of natural gas in the first nine months of the fiscal year came to 24.65Bcm compared with 24.68 Bcm in the nine months of fiscal2017-2018, a decline of 0.12percent.

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LNG Journal editor

Chinese LNG imports rose by 38 percent in 2018 in new surge

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29 January 2019 LNG Unlimited NEWS l 5

Sempra Energy, the California-based utility, is making goodprogress on the commissioningprocess for the first liquefactionTrain and other facilities at theCameron LNG export plant inHackberry in Louisiana, with al-most 8,700 workers currently onsite as activities increase.

“Construction continued in allareas with focus on abovegroundpiping installation, pressure test-ing, structural steel, electricalwork, insulation, and fire proof-ing,” said a report from the Fed-eral Energy Regulatory Commissionafter an inspection visit.

EconomicsThe Cameron plant is a former im-port terminal that is being trans-formed by the addition ofliquefaction Trains.

The project’s first phase in-cludes building three Trains at acost of $10 billion with export ca-pability of almost 15 milliontonnes per annum of LNG.

“On Train 1, CLNG is preparingfor the commissioning of the Hot

Oil System and the solo run forthe Mixed Refrigerant (MR) GasTurbine. Installation of the Train 2Main Cryogenic Heat Exchanger insulation, structural steel andabove ground piping continues,”said the FERC report.

“On Train 3, installation of un-derground and above-ground pip-ing continues” it added.

Cameron LNG is jointly ownedby Sempra, French major Total,Japanese trading house Mitsui &Co and Japan LNG Investment, aventure owned by Japan’s Mit-subishi Corp. and the shippingcompany Nippon Yusen KabushikiKaisha, known as NYK Line.

At least two of the three Trainsare expected to be producing LNGby the end of 2019.

“On average there are 8,680workers on the site daily, between650 and 750 of which work thenightshift. The construction work-force will decrease as commission-ing activities progress,” said theFERC report.

The FERC noted that the objec-tive of the project was to exportapproximately 14.95 MTPA of LNGwith a maximum operating capac-ity equivalent to pipeline receiptsof up to 2.33 billion cubic feet perday of feed-gas.

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Sempra pushes Cameron LNG plant to start-up with over 8,000 workers

NEWSNUDGES

LNG Journal editorPolish LNGtendersPolskie LNG, the operator ofthe Polish import terminal atthe Baltic port of Swinoujscie,said it had received environ-mental permits for its plannedexpansion of regasification ca-pacity, storage and loading, al-lowing it to complete contracttenders. The Polish terminalbegan operations in 2009 andcan currently receive almost 4 million tonnes per annum ofLNG. Two tender proceduresare currently in progress forthe terminal. “The objectiveof the first is the selection ofthe contractor for three keycomponents, construction ofthe third storage tank, processinstallations to increase regasi-fication capacity and the LNG-to-rail transhipment installationalong with a dedicated railwaysiding,” said the company.

Algeria awardto ChineseAlgerian state energy companySonatrach, a main supplier tosouthern European LNG im-ports in France, Spain andTurkey, said it awarded a con-tract to China Harbor Engineer-ing Co. to study, supply andbuild an additional marinejetty and port infrastructure atits Skikda LNG export plant onthe Mediterranean coast. TheAlgerians said the contract wasvalued at 53 billion Algerian dinars ($445 million).

East CoastIndia terminalIndian Oil Corp. is set to startthe commissioning process forthe first East Coast LNG importterminal at Kamarajar Portnear Chennai. India's four oper-ating import terminals are allon the West Coast at Hazira,Dahej and Dabhol near Mumbaiand at Kochi in the southweststate of Kerala.

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Sempra’s Cameron export plant site in Louisiana

Tellurian receives final EIS to start progressing with Driftwood LNGTellurian Inc., developer of theDriftwood LNG export project inLouisiana, said it expected to startconstruction near the Lake Charlessite in the first half of 2019 afterregulators issued a final environ-mental impact statement.

The final EIS was issued by theFederal Energy Regulatory Commis-sion to develop the liquefactionplant to produce around 27.6 mil-lion tonnes per annum of LNG andits associated 96-mile pipeline.

“Tellurian thanks the FERC fora thorough review and for remain-ing on schedule,” said TellurianPresident and Chief Executive Meg Gentle.

“We look forward to receiving

the agency’s order granting autho-rization to site, construct and op-erate our Driftwood project,”added Gentle.

“Tellurian will then stand readyto make a final investment deci-sion and begin construction in thefirst half of 2019, with the firstLNG expected in 2023,” stated the CEO.

Tellurian, founded by formerCheniere Chief Executive CharifSouki, continues to sign up cus-tomers and investors for its exportjoint venture.

The most recent was in Decem-ber 2018 when it signed a prelimi-nary accord with Swiss-basedinternational commodities firm

Vitol to supply 1.5 MTPA of LNGcargoes for 15 years.

The Tellurian-Vitol is based onthe Japan Korea Marker (JKM)price and cargoes on a free-on-board (FOB) basis whereby Vitolprovides its own shipping.

Under the MOU, Tellurian andVitol have agreed to negotiate afuture LNG sale and purchaseagreement subject to Tellurian’sreceipt of approvals from theFERC.

In addition to signing the ac-cord on cargoes, Vitol said it wasalso evaluating a potential equityinvestment in the Driftwood Hold-ings partnership.

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l NEWS LNG Unlimited 29 January 20196

Kinder Morgan said it expected toprovide about 40 percent of thevolumes for current and futureLNG and pipeline exports as it remained on schedule to bringsits own small-scale liquefactionfacility on stream in the firstquarter at Elba Island in Georgiaand eventually a second plant inMississippi.

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

ProductionKinder Morgan, based in Houston,had earlier given a start-up datefor Elba Island as the fourth quar-ter of 2018.

The Elba Liquefaction Projectis being built at a cost of just $2billion and will have feed-gasneeds equivalent to around 350million cubic feet per day.

“The project is supported by a20-year contract with Shell,” saidKinder in a presentation to in-vestors following its fourth-quar-ter results.

“The first of 10 units is ex-pected to be placed in service atthe end of the first quarter of2019, with the remaining nineunits to come online throughout2019,” it added.

Kinder’s partner in the jointventure, called Elba Liquefaction,

is the US equity fund EIG GlobalEnergy Partners, which holds 49percent. Elba Liquefaction willown the liquefaction units andother ancillary equipment.

“Certain other facilities associ-ated with the project are 100 per-cent owned by Kinder Morgan,”said the company.

“The newly constructed ElbaExpress Modification Project isnow in service, adding upstreamcompression facilities on the ElbaExpress pipeline to provide feedgas for liquefaction,” explainedKinder.

The company stated that natu-ral gas is critical to the Americaneconomy and to meeting theworld’s evolving energy needs.

“Objective analysts project USnatural gas demand, including netexports of LNG and exports toMexico, will increase from 2018levels by 32 percent to nearly

119 Bcf/d by 2030,” it said.“Of the natural gas consumed

in the US, about 40 percent moveson Kinder Morgan pipelines, androughly the same percentage holdstrue for US natural gas exports,”added Kinder.

“Kinder expects future naturalgas infrastructure opportunitiesthrough 2030 will be driven bygreater demand for gas-firedpower generation across the coun-try (forecast to increase by 15percent), net LNG exports (fore-cast to increase almost five-fold),exports to Mexico (forecast to riseby 39 percent), and continued in-dustrial development, particularlyin the petrochemical industry,” it said.

The existing LNG terminal onElba Island is about eight miles up-stream from the mouth of the Sa-vannah River. It was firstauthorized by the Federal Energy

Regulatory Commission in 1972 asan import facility.

The transformation project to turn the terminal into a lique-faction plant began in November2016.

Kinder and two equity fundsare also making progress on re-ceiving FERC permits to transformthe existing Gulf LNG import ter-minal in Pascagoula in Mississippiinto an export plant.

The proposed Gulf LNG exportfacility would consist of twoTrains, each with capacity ofabout 5 MTPA.

“The Gulf Liquefaction Com-pany, Gulf LNG Energy and GulfLNG Pipeline units are scheduledto have their final EnvironmentalImpact Statement in April 2019,and the final decision for issuanceof the FERC certificate is expectedin July 2019,” said Kinder.

Natural gas transport volumeson Kinder’s pipeline system for thefourth quarter were up 4.5 Bcf/dcompared with the same threemonths in the previous year.

“The group’s success mirrorsthe record-breaking year enjoyedby the natural gas sector as awhole. US natural gas demandrose to 90 Bcf/d from 81 Bcf/d in 2017, an 11 percent increase,”it said.

“This increase was driven by higher throughput on El PasoNatural Gas due to additional Per-mian capacity sales, on ColoradoInterstate Gas due to growing Denver-Julesburg Basin produc-tion, and on Tennessee GasPipeline due to power demand and projects placed in service,”said the company.

Kinder said its Texas intrastatenetworks also contributed to a risein transport volumes due to higherdemand from shippers servingMexico and the Texas Gulf Coastindustrial markets, and on NaturalGas Pipeline Company of Americadue to cold weather early in thequarter, increased Permian Basinreceipts and power demand.

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US pipeline giant progresses on two LNG plants and will move gas for 40 percent of US exports

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29 January 2019 LNG Unlimited NEWS l 7Australian Gas Infrastructure Groupstarts link to pipeline for Pluto LNG

The Australian Gas InfrastructureGroup (AGIG), one of the nation’slargest natural gas network andtransmission companies, has suc-cessfully commissioned the PlutoInlet Station, the new facility con-necting the Pluto LNG plant inWestern Australia to the Dampier-to-Bunbury Natural Gas Pipeline.

The Dampier-to-Bunburypipeline has been in continuousoperation in Western Australiasince 1984, linking the gas fields inthe Carnarvon Basin off the Pilbaracoast directly to mining, indus-trial, commercial and residentialcustomers throughout the State.

BoostedAGIG said the commissioning ofthe pipeline allows additional gassupply to reach Western Australianconsumers.

Woodside Petroleum, operator ofthe Pluto LNG plant near Karratha,had engaged AGIG’s developmentgroup to undertake a front-endengineering and design study toconvert an existing outlet meterstation to an inlet facility, along

with the required compression.Woodside is developing LNG

distribution and increasing domes-tic gas supplies to customers aswell as prolonging operations fromthe state’s oldest LNG plant, theNorth West Shelf facility that hasbeen in operation since 1989.

The completed inlet facilitynow has the capacity to supply upto 25 terajoules per day via theDampier-to-Bunbury pipeline todomestic customers.

Andrew Staniford, the ChiefCustomer Officer at AGIG, said hewas pleased to play a key role in

this latest project achievementfor Woodside, expanding increasedcapacity for natural gas.

“Delivering the successful com-missioning of the Pluto facility forWoodside demonstrates continuedproject success for AGIG and agreater diversification of gassources available to the WA mar-ket,” said Staniford.

AGIG was only formed in 2017through the merger of AustralianGas Networks (AGN), the Dampier-to-Bunbury Pipeline (DBP) andMultinet Gas Networks (MGN).

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French Fos LNG import facility set forcapacity saleElengy, the main French LNGterminal operator, said it waspreparing the launch in Febru-ary of a sale of 10-year accesscapacities for the Fos Tonkin im-port facility near the Mediter-ranean port of Marseille.

The capacity sale will coverterminal access for a period of10 years from 2021 to 2030.

“Within the sale process,Elengy will offer its potentialcustomers several types of services, including the conven-tional unloading of Medmax-type (75,000 cubic metres capacity) LNG tankers, thereloading of small-scale tankersfor LNG bunkering needs, aswell as LNG truck-loadings,”said Elengy.

“Detailed information con-cerning the services offered willbe provided in the informationmemorandum at the opening ofthe sale,” added the company.

Elengy owns the Fos Tonkinterminal and is a 72.5 percentshareholder in Fosmax LNG,owner of the Fos Cavaou termi-nal, also near Marseille.

The other shareholder in theFos Cavaou terminal is Frenchenergy major Total.

The Elengy company is itselfa subsidiary of French naturalgas network owner GRTgazwithin the large French utilitygroup Engie.

France has a total of fourLNG import terminals, with theother two located at Montoir-de-Bretagne on the AtlanticCoast and at the Channel portof Dunkirk.

The port of Marseille-Fos,which is France’s largest tradingport, is also developing plansfor the construction of LNGbunkering infrastructure in co-operation with the managers ofthe Fos Tonkin and Fos Cavaouterminals.

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LNG Journal editor

Galveston Bay LNG plans advance ahead of decisions on Rio Grande NextDecade Corp., the developerof the Rio Grande liquefied natu-ral gas export project in Texas,has held two public events togather support for its secondTexan export venture calledGalveston Bay LNG.

The Houston-based companyhas just held two open houseevents, one at Rosenberg in Texasattended by landowners who in-quired about the pipeline route,and a second at Texas City.

Galveston Bay LNG will includea 97-mile affiliated pipeline tomove 3 billion cubic feet of natu-ral gas per day from the Katy Hubin Waller County, while the lique-faction plant is proposed for a

550-acre site along the Texas CityShip Channel.

The Galveston Bay liquefac-tion plant would produce an ini-tial 5.5 million tonnes per annumof LNG.

“The Galveston Bay projectopen houses represent the first ofseveral opportunities throughoutthe regulatory and permitting pro-cess, led by FERC, for area resi-dents to learn more about theproposed project and to ask ques-tions,” said NextDecade.

The company is also near theend of the regulatory process forthe Rio Bravo Pipeline in SouthTexas and the Rio Grande exportplant at the Port of Brownsville to

produce around 27 MTPA of LNG.The Texas Commission on Envi-

ronmental Quality granted the RioGrande project and its Rio BravoPipeline a state permit in Decem-ber 2018, though federal regula-tors were not expected to make adecision about the projects untilJuly 2019.

The Rio Bravo Pipeline is ex-pected to transport 4.5 billioncubic feet per day from the AguaDulce area to the Rio Grande liq-uefaction plant in Brownsville.

NextDecade’s Rio Grande pro-ject remains subject to final re-view by the Federal EnergyRegulatory Commission.

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Woodside Pluto vice-president Mike Price, City of KarrathaMayor Peter Long, Pilbara MLA Kevin Michel and AustralianGas Infrastructure Group general manager for commercialJon Cleary at the Pluto pipeline ceremony (Photo: AGIG)

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LNG Canada, the export projectled by Royal Dutch Shell and fourAsian partners in the West Coastprovince of British Columbia, saidit had approved more than US$770million in contracts and subcon-tracts and expected to employaround 10,000 Canadian workersas activities develop.

Shell and its four partners, Mit-subishi Corp. of Japan, Malaysianenergy company Petronas, Chinesemajor PetroChina and Korea GasCorp., had agreed in October 2018to proceed with the joint ventureand with construction at a cost ofup to US$31 billion of the plantand its associated facilities.

BrownfieldThe liquefaction plant is to beconstructed at a brownfield sitenear Kitimat that had been an en-ergy products terminal beforebeing acquired by Shell in 2011.

The plant itself is expected tocost around US$11Bln using modu-

lar construction methods and willhave two large liquefaction Trainsinitially, with each producing 7million tonnes per annum of LNGby 2025. The plant would then be expanded.

Additional costs of up toUS$20Bln will include feed-gassupplies for TransCanada’s Coastal GasLink pipeline andother facilities.

“By the end of constructionphase, LNG Canada and the CoastalGasLink pipeline project that is

needed to transport natural gasfrom northeast BC to the LNG ex-port facility near Kitimat, expect toemploy approximately 10,000 Cana-dian workers,” said the company.

“As the project progresses,more contracts will be awarded tobenefit Canadian communities,” it added.

LNG Canada said its contractsinclude one for US$132M to localFirst Nations businesses and, withthe addition of contracts awardedto local firms in Kitimat, that total

increases to US$248M andUS$398M with the addition of BCbusinesses outside the local area.

“What these contracts andsubcontracts represent, is tremen-dous opportunity for individuals to find employment on the LNGCanada project through our con-tractors and subcontractors,” saidSusannah Pierce, LNG Canada'sDirector of External Relations.

“For First Nations communities,it is delivering on the opportunitieswe have committed to that will assist the Nations address issues ofpoverty, unemployment and skillsdevelopment,” added Pierce.

“For local communities, it isthe opportunity for young peopleto find employment that allowsthem to remain living in theNorth,” she stated.

During the first month of theconstruction phase of operationsin October 2018, there were 249workers from the local area, includ-ing First Nations, employed by LNGCanada or one of its contractors.

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LNG Canada awards around US$770M in initial contracts and expects to employ 10,000 people

Kwispaa LNG project considers pipeline corridordetails to transport northeast BC feed-gas to plantSteelhead LNG, developer of thenear-shore export plant proposedfor Vancouver Island, is currentlyinvestigating the pipeline route tobring feed-gas from the Chetwyndarea of northeast British Columbiato Sarita Bay on First Nation-owned land.

The pipeline is expected to runfor about 1,000 kilometres fromChetwynd to the Williams Lakearea, southwest to Powell River,across the Strait of Georgia andwould terminate at the proposedKwispaa LNG plant.

It is planned to run parallel toexisting rights-of-way for around50 percent of its route. A specificroute has not yet been selectedand is subject to ongoing commu-nity and First Nation consultations.

Steelhead LNG has said it plans

to select a preferred pipeline cor-ridor and enter British Columbia'senvironmental assessment processin the first quarter of 2019.

The company would then sub-mit environmental assessment ap-plications for the liquefaction andpipeline projects with combinedestimated costs of C$18 billion(UD$13.5Bln). A final investmentdecision is scheduled for 2020.

The construction phase wouldtake approximately four years andthe plant and pipeline could be onstream by 2024 if the permittingstage runs smoothly.

Steelhead LNG is in partnershipwith the Huu-ay-aht First Nationwhose traditional land will hostthe liquefaction plant on Vancou-ver Island.

Current plans are for construc-

tion of a facility with initial capac-ity of 12 million tonnes per annumof LNG, requiring 1.9 billion cubicfeet per day of feed-gas.

At the most recent January2019 meeting of the Peace RiverRegional District council in Daw-son Creek, executives of the LNGcompany made a presentation oftheir plans.

“We understand the impor-tance of engaging communities atthe earliest stage in the route ex-ploration,” said Corey Goulet, theSteelhead Vice President in chargeof the pipeline project.

Goulet joined Steelhead in June2018 and was most recently VicePresident of Integrity and Projectsat Tundra Energy Marketing.

He also spent nearly 20 yearsat TransCanada Corp., including in

senior leadership positions andeight years at Enbridge Inc.

“We're committed to buildingmutually beneficial relationshipswith communities, and developingprojects in an environmentallyresponsible manner,” he added.

The 48-inch diameter pipeline isexpected to transport around 2Bcf/d in its first phase, expandableto about 4 bcf/d at full build-out.

The project also plans to includemetering facilities and two com-pressor stations in the initial phase.

Goulet said that not all feed-gas production for the pipelinewould be new and it was likelythat existing output would betransported to the West Coast instead of going East through theneighbouring province of Alberta.

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From planning to reality: model of LNG Canada at Kitimat

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29 January 2019 LNG Unlimited NEWS l9

Japanese liquefied natural gas im-ports declined by 0.9 percent in2018 as coal and nuclear providedmore competition for power gen-eration, though the costs of theLNG shipments soared by morethan 20 percent and a fall in Asianshipments was partially offset by arise in Middle East cargoes.

The 2018 imports amounted to82.85 million tonnes, 0.9 percentless than the 83.63MT received in 2017.

Higher billThe nation’s latest import bill was20.8 percent higher than in 2018at 4,730 billion yen ($43.14Bln),according to the Finance Ministrydata. Japan had paid 19.3 percentmore in 2017 with an LNG bill of3,915Bln yen ($35.58Bln).

The December 2018 imports

were 7.25MT compared with7.95MT in December 2017.

Nine of Japan's nuclear powerplants, which numbered 54 on linebefore the Fukushima disaster in2011, have re-started to reduceLNG needs.

Annual thermal coal importswere down slightly by 0.6 percentto 113.67MT and cost 15.8 percent

more at 1,475Bln yen ($13.5Bln).The Ministry data for December

and the year showed that AsianLNG shipments from nations suchas Malaysia and Indonesia, PapuaNew Guinea and Brunei dropped17.9 percent last year to 20.67MT.

Imports from the Middle Eastregion rose 2.2 percent, with ship-ments from countries like Qatar,

the United Arab Emirates andOman totalling 17.97MT in November.

US shipments of LNG amountedto almost 2.49 million tonnes, upfrom under 1MT in 2017.

Japan will be importing morecargoes in 2019 from the CheniereEnergy-owned Sabine Pass plant inLouisiana and the Cove Point plantin Maryland operated by DominionEnergy, as well as the newestCameron LNG plant in Louisianaoperated by Sempra Energy.

Monthly Russian shipmentsfrom the Sakhalin Island plant inthe Far East fell 8.1 percent year-on-year to 6.67MT.

The balance of imports fromother nations amounted to35.05MT, with most volumes com-ing from Australia, as well as ship-ments from African nations andthe spot market.

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Japanese LNG imports declined in 2018 amid a 20 percent jump in costs and nuclear re-starts

Mitsui of Japan seeks to build Russian and US volumes and discusses plans with GazpromMitsui, the Japanese tradinghouse and liquefied natural gasmarket participant, has held talkswith Gazprom on progress madein two Russian plans to expandLNG output, on the existingSakhalin Island plant in the FarEast and at a planned facilitywest of Saint Petersburg.

Gazprom said a meeting washeld in Moscow between AlexeiMiller, Chairman of Gazprom, andhis Mitsui counterpart, MasamiIijima.

The Baltic LNG concept pro-poses the design, construction andoperation of an LNG productionplant on the coast about 110 kilo-metres from Saint Petersburg.

The facility would be located inthe port of Ust-Luga on the BalticCoast of the Leningrad Region andwould have capacity of 10 milliontonnes per annum.

“They considered avenues forfurther cooperation, paying par-ticular attention to the Baltic LNGproject,” said Gazprom.

“A joint design concept in theform of pre-front-end engineeringand design is currently being de-veloped for Baltic LNG,” addedthe Russian company.

Gazprom and Mitsui are alreadyshareholders in the Sakhalin II pro-ject where two Trains processmore than 10 MTPA of LNG.

Both companies are also con-

sidering construction of a thirdproduction Train at the Sakhalinplant. The other Sakhalin share-holders are Royal Dutch Shell andMitsubishi Corp.

“The parties discussed currentissues related to bilateral collabo-ration, including the Sakhalin II(LNG) project,” said Gazprom.

Sakhalin most recently had an-nual output of 10.9MT of LNG, ex-ceeding the design capacity byover 1.3 million tonnes. Most of thecargoes are delivered to Japaneseutilities and South Korea.

Gazprom noted that in Decem-ber 2016, Gazprom and Mitsuisigned an agreement of strategiccooperation, envisaging collabora-

tion in various areas, including theSakhalin II project expansion andLNG bunkering.

Gazprom and Mitsui signed amemorandum of understanding in2018 on the Baltic LNG project,which would also include bunker-ing facilities.

Mitsui is also a shareholder inUS LNG capacity through its stakein Cameron LNG in Louisiana.

The Cameron plant is owned bySempra Energy of California andother joint venture participantsare French major Total and theother Japanese companies Mit-subishi and the shipping line Nip-pon Yusen Kabushiki Kaisha, knownas NYK Line.

The Cameron plant is enteringthe commissioning stage and theproject’s first phase includesbuilding three Trains at a cost of$10 billion with export capabilityof almost 15 million.

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Bill for LNG cargoes was much higher at US$43.14Bln

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29 January 2019 LNG Unlimited NEWS l 11

A joint design concept in the form of pre-front-end engineeringand design is currently being developed for Baltic LNG“ ”- Gazprom