Mexican LNG Terminals

• Marathon Oil Corporation has decided not to proceed with its planned LNG
  terminal at La Joya just north of Rosarito, after the Baja California state government stated that it was expropriating the site of the proposed terminal, which Marathon had an option to purchase, to utilize for public development projects. The terminal was part of Marathon's planned Tijuana Energy Centre. The LNG Terminal was the first, in May 2003, to receive a permit for construction and operation from Mexico's Energy Regulatory Commission.
  
• In February the Mexican authorities awarded Repsol land for the construction
  of an LNG reception terminal at Port Lázaro Cárdenas, on the Pacific coast of Mexico. The terminal will have an initial capacity of about 3 mta, and is planned to come into operation in 2008.

Delays for Trinidad train 4

It has been reported that a strike by construction workers, which ended in March, is likely to delay by two months until the end of 2005 the commissioning of the fourth train of the Atlantic LNG plant in Trinidad. The strike also briefly spread and delayed shipments of LNG from trains 1-3. Construction of the 5.2 mta train 4 is now some 30% complete, managed by Bechtel. The foundations and base of the new 160,000 m3 full containment LNG storage tank have been constructed by Dywidag of Germany, working in association with tank contractors TKK of Japan.

There has been a delay in Atlantic LNG signing the EPC contract with Bechtel, owing to protracted negotiations with the Trinidad and Tobago Government over the terms for the project. Atlantic LNG is a tolling facility: the participants (BP 37.78%, BG 28.89%, Repsol 22.22%, and NGC of Trindidad & Tobago 11.11%) separately market their share of the LNG produced. The Government negotiated vigorously to capture more of the upside when the four LNG marketers decide to change the destination of LNG shipments to more lucrative markets such as the USA. 

New Pneumatic Cryogenic Valve Actuator

Snecma Moteurs, Velan and SNRI of France have developed a pneumatic cryogenic actuator for use on remote control cargo valves on LNG carriers. Such valves traditionally have hydraulic actuators with a valve stem extension to keep the actuator at ambient temperature. The new actuators, which have nitrogen or dry air as the operating fluid, are claimed to have several advantages: they are simpler to operate and maintain; they reduce implementation costs; they allow a completely closed design with no moving parts exposed to the surrounding environment; by avoiding the valve stem extension they are more compact, fitting better into restricted spaces; and they avoid the hazards associated with oil as a hydraulic fluid. Specific seal technologies are used which enable operation without lubricant. They are also suitable for onshore LNG facilities in severe cold weather.

Bureau Veritas (BV) issued a basic approval in July 2003, and the aim is to get BV type approval by mid-2004 to allow immediate application on LNG carriers and terminals.

For further information contact : damien.feger@snecma.fr

North West Shelf Expansion

In mid-February the first gas flowed into the North West Shelf (NWS) venture's new 42-inch 130-km trunkline connecting the offshore gas production facilities to the onshore LNG plant at Karrutha, Western Australia.

It was announced on 18 March that Chevron Transport Corp. Ltd., an affiliate of ChevronTexaco Shipping Co., will be the operator of the NWS Venture's newest LNG Carrier, the 138,000 m3 Northwest Swan, built at the Daewoo Shipbuilding and Marine Engineering shipyard in Okpo, Korea. This is the first of the NWS venture's ships to have membrane containment. ChevronTexaco is one of the participants in the NWS project. The vessel will transport LNG to customers in Japan, Korea and China, and is required because of the increased NWS plant output when the 4.2 mta fourth train comes into operation in mid-2004.

New US LNG Terminals

• Tractebel North America is developing the Calypso LNG project, which would
  involve an LNG reception terminal in Freeport Harbour on Grand Bahama Island in the Bahamas, and a 96-mile 24-inch gas pipline to Florida, USA. The terminal would have an initial capacity of 5 mta, and two 180,000 m3 LNG storage tanks. On 25 March Tractebel announced that the Federal Energy Regulatory Commission (FERC) had issued its final environmental impact statement for the US portion of the pipeline, which found limited impact on the environment. Tractebel expects shortly to receive FERC authorisation for the project. Approval in Principle has been received from the Government of The Bahamas and their final approval of the environmental impact statement is awaited. First gas supply from the project is scheduled for 2007.
  
• TransCanada Corporation and ConocoPhillips announced in early March that
  they will suspend further work on the planned Fairwinds LNG reception terminal project in Harpswell, Maine. The residents of Harpswell have voted against leasing the former U.S. Navy Fuel Depot site for the purpose of building the LNG terminal.
  
• Calpine Corporation has decided not to proceed with its plans for an LNG reception terminal at Samoa Point, in Eureka, California, following lack of support from the local community and its representatives.

Sakhalin sells to Toho Gas

Sakhalin Energy Investment Company Ltd. (Sakhalin Energy) and Toho Gas of Japan in March signed an agreement for the supply of up to 0.3 mta of LNG from Russia's Sakhalin II project for a period of about 23 years, starting in 2010. This is the fourth sale from the Sakahlin to Japanese buyers, the total being 3.1 mta. Other buyers are Tokyo Gas, Tokyo Electric and Kyushu Electric. Construction of the two-train 9.6 mta LNG plant has begun; the first train is scheduled for completion in 2007, the second in 2008. The EPC contractors are Chiyoda and Toyo Engineering of Japan and their Russian partners KhinEnergo and Nipigaspererabotka. Sakahalin Energy is a venture of Shell (45%), Mitsui (25%) and Mitsubishi (20%).

Elliott expands compressor testing facilities

Compressor manufacturer Elliott completed in early 2004 a multi-million dollar expansion of its testing facilities at its Jeannette, PA, USA plant. The new facility is able to test Elliott's largest compressors and machinery strings for LNG applications in excess of 8 mta capacity.

Elliott has supplied refrigerant compressors for RasGas train 3 and train 4 in Qatar. Train 4 is currently being installed. Each train has three mixed refrigerant compressors and a propane refrigeration compressor, all using Elliott's EDGE multistage centifugal compressor technology. Each compressor string is driven by a GE Frame7A gas turbine. Before shipment the Train 3 strings received a full load factory test, complete with gas turbine, variable-speed starter-helper motor and auxiliaries. Elliott has also received an order from RasGas to upgrade its centrifugal compressors in trains 1 and 2 : the work is to be done during a scheduled shutdown in July 2004.

For further information contact : Elliott, Tel. 1-724-600-8280. e-mail: info@elliott-turbo.com

Plans for Film on LNG

The following organizations have decided to press ahead with the preparation of a general, public information film on the LNG industry : Society of International Gas Tanker and Terminal Operators (SIGTTO), the Gas Processors Association, the Gas Technology Institute, and the Institute for Energy Law Enterprise. The intention is that the film should be seen as impartial and an independent source of information to achieve the credibility required for public acceptance, rather than as a promotional tool for the industry.

New Durolight insulation

Röchling Engineering Plastics has developed a new insulating composite material - Durolight - especially designed to meet the thermal and mechanical requirements of load bearing supports. Its operating temperature range is -196 to 200 oC, and it has been selected by Statoil for use as LNG piping insulation in the Snohvit LNG plant.

Durolight is manufactured from a special formulation of selected synthetic resins in combination with high-strength glass reinforcements. It is claimed to be maintenance free, with very low thermal conductivity.

For further information contact Röchling, Tel. +49 59 34 701-0. e-mail: info@roechling-plastics.com

More LNG terminals for China

In early March China National Offshore Oil Corporation (CNOOC) signed an agreement with Zhejiang Provincial Government to jointly develop China's third LNG reception terminal in Zhejiang (on the east coast, between Shanghai and Fujian, the location of the planned second terminal). The planned capacity is about 3 mta, supplying a gas trunk line and a gas fired power plant. CNOOC is expected to take a 51% of interest in the project. Later in March CNOOC announced plans to develop a further 3 mta LNG terminal to be located in Tianjin city, in the north-east of China near Beijing.

At the LNG 14 Conference, a poster paper from the Institute of Refrigeration and Cryogenic Engineering of Shanghai Jiaotung University reviewed current LNG facilities in China. These are :

• n A peakshaving installation at Shanghai, which came into operation at the end of 1999. It has a plant capacity of 165 m3 of LNG per day, a 20,000 m3 capacity storage tank, and vaporization capacity of 120 m3/hr of LNG.
  
• n A small-scale LNG plant, capacity 15 Nm3/day (0.04 mta), at Zhongyuan in Henan province (west of Shanghai), which started up in 2001.
  
• Six LNG satellite installations, commissioned between 2001 and 2003, supplied by a total of 10 road tankers from the Zhongyuan plant.
  
• Two prototype LNG-fuelled buses and one technical demonstration refuelling station

Under construction, apart from the Guangdong LNG reception terminal, is a mid-scale base load LNG plant at Shan Shan in Xinjiang province in the far north west of China (see LNG Journal, November/December 2003 issue), and seven more LNG satellite installations.

SIGTTO - Liquefied Gas Fire Hazard Management

SIGTTO is about to publish "Liquefied Gas Fire Hazard Management". This brings together, in a single volume, the principles of liquefied gas fire prevention and firefighting. It covers a broad spectrum of the liquefied gas industry (LNG, LPG and other flammable liquefied gases), including large refrigerated and smaller pressurised storage terminals, ships, cylinder filling plant, and road and rail tanker loading. The book has been compiled for operational staff, such as plant supervisors and ships' officers, who are involved in the handling of flammable liquefied gases. It will also be of benefit to fire officers and emergency planners who have liquefied gas installations within their jurisdiction, or experience regular road or rail car traffic involving these products in their area.

An overview is given of the properties and hazards of flammable liquefied gases. The book addresses the importance of the commissioning, testing and maintenance of critical systems such as fire and gas detection equipment. Ignition prevention measures are discussed and guidance is given on the permit-to-work system. The book covers emergency response strategies and procedures, and the personal equipment necessary to protect responders from the effects of smoke, heat and gas. Guidance is given on training and also the need for joint exercises with local fire brigades, emergency planning departments and harbour authorities.

Although the book is not intended to give prescriptive guidance to designers of liquefied gas installations, it provides considerable background information, not least through the case histories of well-known liquefied gas incidents and the bibliography. It also considers many of the most commonly encountered design codes, standards and guidelines in use throughout the world and the differences between the prescriptive and risk-based approaches they contain.

For information about how to order a copy of "Liquefied Gas Fire Hazard Management" contact Roger Roue at SIGTTO : Tel. +44 20 7628 1124, e-mail: techa1@sigtto.org
 

Success for Petronet in finding customers

On 30 January the first ever LNG for India, from RasGas, was delivered in the LNG Carrier Disha to Petronet LNG 's Dahej terminal. After commissioning of the terminal, first gas was sent out in mid-February. A second LNG cargo arrived on March 1.

At LNG 14, Suresh Mathur, CEO and Managing Director of Petronet LNG, reported that the project's marketers had been successful in securing gas sales. Most had gone to general industrial customers, but power generation and fertilizer manufacturers were now showing an interest, and a new market had opened up in petrochemicals: ONGC were setting up a plant for C2 and C3 extraction using 1 mta of LNG. Because of the good market prospects, Petronet LNG were planning to expand the maximum terminal capacity from 5 mta to 10 mta in 2007.

Petronet is looking at making spot LNG purchases in the coming year, with an additional demand of 1 mta more than the initial throughput of 2.5 mta agreed with RasGas. IOC has sold all of its entitlement from the terminal and is to float a short-term tender to buy additional LNG. IOC has already agreed 5-year sales to major customers such as Gujarat State Petroleum Corporation, Haryana Sheet Glass, Hindustan National Glass Industries Limited, Surya Roshni Limited and Essar Steel.

Total joins Hazira

Total has signed an agreement with Shell to acquire a 26% stake in Shell's Hazira LNG reception terminal project in India. Hazira will be the first merchant LNG terminal in Asia. Total is a participant, along with Shell, in Oman LNG. Total's share in Hazira also opens opportunities for LNG supplies from other projects where it has a stake, such as Qatargas and Adgas. The terminal is scheduled to come into operation before the end of 2004.

Shipping News

• Gaz de France has now taken up its its option for a second 153,000 m3
  capacity LNG Carrier, with diesel-electric propulsion and the GTT CS1 membrane containment, to be built at Alstom's Chantiers de l'Atlantique shipyard in France. The vessel is identical to the ship ordered in September last year. Gaz de France is in partnership with NYK Line of Japan for the second ship; the construction contract is to be signed before the end of June 2004. Delivery is scheduled for the end of October 2006.
  
• Teekay Shipping Corporation, owner of the world's largest fleet of oil tankers,
  has agreed to acquire Naviera F. Tapias S.A. of Spain, an independent owner and operator of LNG carriers and crude oil tankers, for a total enterprise value of about US$810 million. Teekay has also entered into an agreement with the shareholders of Tapias to establish a 50/50 joint venture that will pursue new business in the oil and gas shipping sectors, focusing specifically on the Spanish market. Tapias owns four LNG carriers, which include two newbuildings scheduled for delivery in the second half of 2004.
  
• On 16 March IHI Marine United Inc. of Japan and Samsung H.I. of Korea
  signed a License Agreement which allows Samsung to build and sell LNG carriers and offshore LNG stuctures with IHI's SPB (self-supporting prismatic) stainless steel containment system. It is likely that Samsung's experience in LNG carrier construction at competitive prices will provide better prospects for the realisation in practice of the claimed advantages of the IHI SPB system (robustness and ease of inspection, compared with membrane containment, and a more efficient shape than spherical cargo containment).

IGU forms LNG Safety Study Group

The International Gas Union's Programme Committee D-LNG, chaired by Chawki Rahal (Algeria), has created three study groups for the 2003-2006 triennium. One of them is SG D2 : Safety and technology developments in LNG terminals and vessels, led by Mr. Bruno Larsen (Norway). Its mandate is "The development of new LNG import and export terminals and LNG vessels meets many environmental hurdles not least the perceived high safety and security risk. Criteria differ from one country to another. The efficiency improvements and development in LNG vessels technology and terminal concepts, including very large vessels and offshore regasification terminals, are moving the industry into the future. The study aims to deal with safety risk perceptions and support implementation of new technology by the industry."

The Study Group will report to the World Gas Conference in 2006 and will emphasise safety awareness throughout the LNG Industry.

The other two LNG Study Groups formed by the IGU are:

SG D1 : Standardardisation of LNG qualities, led by Mr. Rob Klein Nagelvoort (Netherlands). This is an increasingly important topic because of the planned increase in LNG imports to countries such as USA and UK with a leaner gas specification than the LNG imported by many other countries.

SG D3 : The future of the LNG spot market, led by Dr. Bo-Young Kim (Korea). This is another topical subject, with different views in the industry over the extent to which spot LNG trade will, or should, develop.

INLGA forms LNG Safety Task Force

The International LNG Alliance (ILNGA) has formed a "blue ribbon task force to examine LNG safety issues and make certain that best practices regarding LNG operations and procedures are in place throughout the industry". It is co-chaired by Howard Candelet, Vice-President of Operations of British Gas' LNG services and Ed Waryas, Vice President of Lloyd's Register Americas, Inc. It is not clear to what extent the task force can influence LNG activities outside the USA, as ILNGA is a pressure group which has stated that "in its international activities, ILNGA seeks to promote LNG trade into the US market; promote the participation of US companies in projects abroad; and serve as a spokesman for the US LNG industry".

Malaysia Tiga back to full production

In March full production resumed at Malaysia LNG Tiga's first train (train 7 at Bintulu), following the fire in the gas turbine exhaust on 18 August last year. Notification of force majure had been sent to the LNG buyers, including Korea Gas Corporation and Japan Petroleum Exploration Co.

LNG demand up in Korea

In the first two months of 2004 LNG sales in Korea reached 5.4 million tonnes, almost 25% more than in the same period of 2003. This is mainly due to increased demand for gas-fired power following temporay shut down of some nuclear power plants. Kogas has been purchasing extra spot cargoes of LNG.

Major Expansion of Qatar's LNG facilities

At LNG 14 there was further news of Qatar's plans for expansion of its LNG export facilities. At present a Chiyoda/ Technip joint venture is undertaking a debottlenecking project to increase the capacity of Qatargas' three existing trains from 6 mta to 9 mta.

Qatargas II is a joint venture of Qatar Petroleum and ExxonMobil which plans to develop two 7.8 mta liquefaction trains at Ras Laffan to supply the UK market. The FEED contract was awarded to Chiyoda in July 2003. Orders have been placed for long lead items, and tendering is underway for the EPC contract. Drilling of the first well has started in Qatar's North Field.

Recently it was announced that the liquefaction trains will be the first to use Air Products and Chemical's AP-X hybrid liquefaction process and GE Frame 9 gas turbines as refrigerant compressor drivers. The first train is scheduled to come into operation by the winter of 2007/2008.

Qatar Petroleum and ConocoPhillips signed a Head of Agreement in July 2003 for Qatargas 3, which plans to supply about 7.8 mta to the US market starting about 2008/2009. Appraisal drilling starts this year. Also, in October 2003 Qatar Petroleum and ExxonMobil signed a Heads of Agreement for RasGas II to develop two 7.8 mta trains to supply the US market.

Qatar - Shipping Requirements

To acquire shipping for the LNG supplies from RasGas trains 3 and 4 that are not going to India, RasGas II has concluded a series of time charter agreements with two shipping consortia for a total of six LNG carriers. All vessels will be built at Samsung H.I. in Korea. The first, the 138,000 m3 capacity Fuwairit, was delivered in January 2004. The second will also be 138,000 m3 capacity. The other four will be 145,000 m3 capcity, with the last planned for delivery in April 2006.

For the longer term expansions of Qatargas II and Rasgas II supplying the UK and US markets respectively, a Qatar Petroleum/ ExxonMobil team issued a tender to shipyards in December 2003, covering eight standard size (around 140-150,000 m3 capacity) LNG carriers for Qatargas II train 4, supplying the UK, and eight 200,000 m3 capacity ships for Rasgas II train 5, supplying the USA. Tenders are due to be submiotted by end of March 2004, and it is planned to award contracts for ship construction by the end of 2004.

Rasgas train 3 Inaugurated

On 23 March the Emir of the State of Qatar formally inaugurated the 4.7 mta RasGas II Train 3 at Ras Laffan. The train had come into operation in February, and is supplying LNG to Petronet LNG of India. Train 3 cost more than US$ 1.3 billion and is the largest LNG train in operation. It is claimed to hold the record for the lowest capital cost per tonne of LNG production capacity. The EPC contractors for the onshore facilities were a joint venture of Chiyoda Corporation, Mitsui & Company, Snamprogetti and Al Mana Trading Co. W.L.L. of Qatar. RasGas II was established in 2001 by Qatar Petroleum (70%) and ExxonMobil (30%). Train 4 is under construction and is already 80% complete: it is scheduled for start-up in mid-2005 and will produce LNG targeted for European markets.