In this issue

 

Bogged down by persistent gas shortages, Ghana is fast-tracking alternative options to energise the country: importing LNG via two Floating Storage and Regasification Units (FSRUs) as well as generating electricity on barge-based gas power ships. In January, construction started on the $1.5 billion container terminal at Tema Port – groundbreaking for Quantum Power’s adjacent 3.4 mtpa Tema LNG import terminal took place in early March. Snapping up attractively-priced spot cargoes, including US LNG, seems the operators’ ultimate aim. 

In a world awash with LNG, the UK’s Brexit negotiations do not specifically focus on energy security, however “as the LNG supply and demand balance is forecast to tighten during the 2020s, the UK and Irish agendas should then be concentrated on security of supply,” warns Thierry Bros, senior research fellow at the Oxford Institute of Energy Studies (OIES). 

Gail India, the state-run gas supplier, has bought a second shipment of LNG from Cheniere Energy that has set sail from Sabine Pass in Louisiana and is due to reach India by the middle of April. The spot cargo is heading for the Dabhol regasification termial on India’s western coast. 

Canada’s first export of LNG is understood to be soon heading overseas from a port in Louisiana. Cheniere Energy is considering the liquefaction and export of natural gas sources as far off as the Montney shale play, straddling Canada’s Alberta and British Columbia provinces. 

Vivek Chandra and Langtry Meyer, co-founders of the Texas LNG Brownsville project have selected Samsung Engineering and KBR to provide a detailed engineering report – as the basis for deciding whether to take a final investment decision (FID).

Monday, 03 April 2017

Cleveland-based Chart Industries Inc. is about to carry out a series of management changes as part of a wider succession plan that will also see its corporate headquarters move to existing Canton, Georgia facility from Garfield Heights, Ohio.

A bipartisan bill, launched by US Congressman John Garamendi (D – CA), calls for up to 30 percent of exports for liquefied natural gas and crude oil to be transported on ships that are flagged under the law of the United States. 

‘Vaca Muerta’, Spanish for ‘Dead Cow’, is the name of a pilot shale gas project in Argentina’s Neuquen province that Shell agreed to develop together with the state energy company, Yacimientos Petroleiferos Fiscales (YPF). Once onstream the project could alter the LNG supply/demand balance in South America, limiting the potential of US LNG exports to the region. 

Reversing last year’s slight drop, the production of US dry natural gas is seen average 73.7 billion cubic feet per day (Bcf/d) in 2017, a rise of 1.4 Bcf/d year-on-year (yoy), the Energy Information Administration (EIA) forecasts. The average Henry Hub spot price fell by $0.45/mmBtu during February to a level as low as $2.85/mmBtu. 

Reluctance of buyers to commit to sign firm offtake agreements with project developers due to the abundance of supply has inevitable consequences, with today over 80% of new-build capacity being deferred. 

Grappling with opposing signals on gas supply security, the state of California and energy companies are starting to embrace a “new level of resourcefulness,” says Callie Kolbe, analyst at Point Logic. 

British Petroleum (BP) agreed to collaborate with Alaska LNG project partners and set out terms for a tolling structure with a view to attract project financing. An accord to that end has been struck between BP and Alaska Gasline Development Corp. (AGDC), the state company now in charge of the Alaska LNG. 

Dwindling resources in Trinidad & Tobago – once a stalwart LNG exporter – combined with attacks on Nigeria’s gas export infrastructure, have cut short supply into the Atlantic Basin. This is creating a short-term window of opportunity for American LNG exporters to supply cargoes to South America, not Europe. 

Investors fear that a proposed US border adjustment tax could slam earnings of oil and gas companies in the Canadian province of Alberta. Industry leaders are wary about a possible negative impact of President Donald Trump’s proposed tax on energy costs in the United States and future export volumes of oil products and natural gas from Canada. 

News Nudges

Rio Grande LNG gears up for stock market listing

Next Decade is following the trend of US Gulf Coast liquefaction projects to get their project companies listed on the stock exchange. Kathleen Eisbrenner’s NextDecade has signed a letter of intent for a business combination transaction that will allow the privately-held company to become a publicly-listed company. To that end, Eisbrenner is using the services of Harmony Merger Corp. The listing is meant to ease the fund-raising process for Next Decade’s 27 mpta Rio Grande LNG project that is currently advancing through the FERC permitting process. Tellurian Inc., meanwhile, recently completed a reverse takeover of a small oil and gas exploration firm to gain a Nasdaq-listing that is meant to boost the prospects for Driftwood LNG.


Driftwood LNG aims to raise $200m in Nasdaq listing

Preparing a first share offering, Tellurian in mid-March issued a prospectus proposing to sell shares valued up to $200 million on the Nasdaq Capital Markets stock exchange. Tellurian Inc., developer of the Driftwood LNG project in Louisiana, recently chose SG Americas Securities to provide a financial strategy for the venture. SG Americas is the US broker-dealer subsidiary of France's Societe Generale. Charif Souki, Tellurian founder and ex-Cheniere Energy chairman, completed a reverse takeover in February 2017 to get Tellurian listed in a move to efforts of ease fund-raising. Meg Gentle, president and CEO, said that with SG’s expertise at hand, financial structuring of Driftwood LNG would advance swiftly, hence “we anticipate construction in 2018 and first LNG from Driftwood in 2022.”


CB&I ‘optimistic’ for growth

Philip K. Asherman, President and CEO of US engineering and construction company Chicago Bridge and Iron (CB&I) said he was “optimistic” that stability in commodity prices and major capital programs, particularly in North America and the Middle East, “will result in resumption of substantial backlog growth by mid-year of 2017.” CB&I posted an operating loss of $665.6 million last year but Asherman stressed that all proceeds from the divestiture of the company’s Capital Services business will be spent to reduce debt to optimize the balance sheet. The firms Engineering& Construction (E&C) backlog was $9.9 billion in December 2016 versus $12.8 billion at the end of the previous year.


First gas for Kosmos-BP FLNG Train 1 eyed in 2021

Kosmos Energy is drilling an exploration well with total discovered resource of 25 Tcf of feed-gas. The US firm cooperates with BP on plans to produce LNG floating hulls offshore Senegal and Mauritania; to that end it successfully drilled the Teranga-1 exploration well in 2016. First gas from Kosmos-BP FLNG Train 1 is scheduled for 2021, the company said, and the start of FLNG Train 2 is set for 2023.


Sabine Pass Train 3&4 to come onstream in 2017

Cheniere Energy, owner of the Sabine Pass liquefaction plant in Louisiana, the first US LNG export facility, said transition and execution will remain central themes for Cheniere in 2017. “We expect Trains 3 and 4 at Sabine Pass to begin commercial operations, with Train 3 having produced its first commissioning cargo in January,” Jack Fusco, Cheniere's President and CEO stated when presenting the company’s annual report. Once all six Trains come on stream, Sabine Pass will have a have nameplate capacity of 27 mtpa. Corpus Christi LNG, Cheniere’s second venture on the Texas Gulf Coast, is designed to produce an initial 13.5 mtpa, with Trains 1 and 2 expected “to reach substantial completion in 2019.”