NextDecade Selects GE Oil & Gas for LNG Export Project in Texas

NextDecade, LLC announced today that it has entered into an agreement with GE Oil & Gas to advance its LNG export projects and associated pipelines in Texas. NextDecade has named GE Oil & Gas as the exclusive supplier of gas turbine and compressor equipment for the liquefaction trains of the Rio Grande LNG project and the associated Rio Bravo Pipeline. Rio Grande LNG is a proposed LNG export facility at the Port of Brownsville, Texas.

The gas turbine and compressor equipment supplied to NextDecade will come with long-term services, life-cycle maintenance agreements, and GE performance guarantees. In addition to technology and services, GE Oil & Gas is providing NextDecade with a common equity investment, and is granted the right to invest up to a specified amount in project-level equity and debt financing for Rio Grande LNG at the time of final investment decision.

“NextDecade is delighted to welcome GE Oil & Gas as both a shareholder and exclusive supplier to its Rio Grande LNG and Rio Bravo Pipeline projects,” said Kathleen Eisbrenner, NextDecade Chief Executive Officer. “We believe GE will add significant value as we work to make Rio Grande LNG one of the most competitive liquefaction projects in the world. The addition of GE Oil & Gas reaffirms our commitment to use proven technology to provide our customers with low-cost, reliable LNG.”

U.S. DOE Order Authorizing Golden Pass to Export LNG to any Non-Free Trade Country

Today the U.S. Department of Energy issued an order authorizing Golden Pass Products LLC (Golden Pass) to export domestically produced LNG to countries that do not have a free trade agreement with the United States.  Golden Pass is authorized to export LNG up to the equivalent of 808 billion cubic feet (Bcf) per year (2.21 Bcf/day) of natural gas to any non-free trade country not prohibited by U.S. law or policy from the Golden Pass Terminal near Sabine Pass, in Jefferson County, Texas.  

Golden Pass has requested authorization from the U.S. Federal Energy Regulatory Commission to construct, modify, and operate an export project and pipeline expansion project in Texas and Louisiana with three liquefaction trains. Each train with a liquefaction capacity of 5.2 mtpa of LNG, for a total liquefaction capacity of 15.6 mtpa.

The Golden Pass LNG Terminal is a joint venture formed by affiliates of Qatar Petroleum (70%), ExxonMobil (17.6%) and ConocoPhillips (12.4%).

With the issuance of this order, the U.S. Department of Energy has now issued final non-free trade authorizations in a cumulative volume of exports totaling 19.2 Bcf/d of natural gas, or 7.01 trillion cubic feet per year, for the 25 final authorizations issued to date. 

Kimmo Rahkamo appointed CEO of Skangas

The Skangas Board of Directors has appointed Kimmo Rahkamo, 54, as the company’s new CEO according to a company statement released today. He will take up his new role on May 15, 2017. Kimmo Rahkamo has been a member of the Skangas Board of Directors since 2014.

Rahkamo will start in his new position at Skangas after having served as the Managing Director of Fenniarail since 2010. Rahkamo has held several senior positions at Neste, including Executive Vice President at Neste Oil. Rahkamo has also served as Vice President for Supply and Oil Refining at Fortum.

“Kimmo Rahkamo is highly experienced and has an impressive track record in business management and in the oil and gas business. As a member of the Skangas Board of Directors he is very familiar with the company and has a clear vision about the future of Skangas. He is in an excellent position to lead Skangas and secure continued positive growth for the company,” says Johanna Lamminen, Chair, Board of Directors, Skangas.

The current CEO Tor Morten Osmundsen will continue in his role until May 15, 2017. 

Alaska Gasline Development Corporation Files Applications to Develop Alaska LNG Project

The Alaska Gasline Development Corporation (AGDC) filed an application yesterday with the U.S. Federal Energy Regulatory Commission (FERC) to obtain a permit for its Alaska LNG project.

FERC will prepare an environmental impact statement (EIS) for the project as well as coordinate permit applications with other federal agencies. AGDC is an integrated gas infrastructure development with three major components: a gas treatment plant located at Prudhoe Bay, an 800-mile pipeline to Southcentral Alaska with up to five offtakes for in-state use, and a natural gas liquefaction plant in Nikiski to produce LNG for export.

“Today’s FERC filing marks a major milestone in moving the Alaska LNG project forward,” said AGDC President Keith Meyer. “This is the culmination of over one million man hours invested in project engineering and design, more than 193,000 acres mapped, over 300 streams surveyed, thousands of boreholes drilled along the proposed route, and approximately 50,000 pages of material submitted to FERC.”

The liquefaction plant project plans to process 20 million tons of LNG per year for export. With the filing, AGDC also filed permit applications with four additional federal agencies, including the Pipeline and Hazardous Materials Safety Administration (PHMSA), Army Corps of Engineers, Bureau of Land Management, and National Marine Fisheries Service.

NextDecade to become a publicly listed company

Privately held NextDecade and Harmony Merger Corp. jointly announced today that they have signed an agreement for a business combination transaction.  The result would be NextDecade becoming a publicly listed company. NextDecade is a privately held LNG development company focused on natural gas export projects and associated pipelines in Texas. Harmony is a publicly traded special purpose acquisition company whose objective is to take a company public via a reverse merger.

“We believe a transaction with Harmony will strengthen our ability to bring competitively priced, U.S.-produced LNG to the world market in the early part of the next decade,” said Kathleen Eisbrenner, NextDecade Founder and CEO. “Our choice of proven technology and strategic South Texas project location combined with our experienced management team and strong industry relationships are some of the many reasons that both potential customers and investors have demonstrated interest in NextDecade.”

The all-stock transaction is expected to yield a combined entity with a value of more than $1.0 billion at closing, with up to an additional $200 million of contingent stock consideration to be paid to NextDecade’s members upon the achievement of specified milestones.

 “Following confirmatory due diligence activities, we believe that NextDecade’s commercial, regulatory, and engineering standing affords the company key competitive advantages and brings a unique opportunity for Harmony stockholders to participate at the development stage in an investment in the U.S. LNG export market,” said Eric Rosenfeld, Harmony Chief Executive Officer. 

Vice President Pence meets with Alaska Gasline Development Corporation

On Saturday, April 15th U.S. Vice President Mike Pence met with Alaska Governor Bill Walker and Alaska Gasline Development Corporation (AGDC) President Keith Meyer. Vice President Pence made a stop in Alaska as part of his trip to Asia.

"We had an excellent briefing and discussion with Vice President Pence about the Alaska LNG project," said Meyer. The project will be the United States' largest energy export project and will help fortify the nation's ability to export LNG to the Asia-Pacific region.

The AGDC is an independent, public corporation of the State of Alaska. The top priority of AGDC is advancing the development and construction of a North Slope natural gas pipeline and LNG export terminal. The Alaska LNG project is expected to create 9,000 to 12,000 jobs for design and construction, with approximately 700 to 1,000 jobs for long-term operations

"Our meeting was a perfect precursor to the vice president's trip to Asia," said Meyer. Over the past few days Vice President Pence met with leaders in South Korea as well as Japan – two primary markets for Alaska LNG. 

Alaska Gasline Development Corporation President Keith Meyer Discusses the Alaska LNG Project with US Vice President Mike Pence.

Above: Alaska Gasline Development Corporation President Keith Meyer Discusses the Alaska LNG Project with US Vice President Mike Pence. Source: AGDC

International Gas Union 2017 World LNG Report

The International Gas Union (IGU) today released its 2017 World LNG Report.

Global LNG trade in 2016 reached a record 258 million tonnes (MT) – an increase of 5% from 2015, and the largest ever year for LNG trade. This increase is particularly noticeable when compared with the average 0.5% growth rate of the previous four years.

This jump can primarily be attributed to a significant increase in new supply, due largely to the start of exports from the US Gulf of Mexico, as well as the start of commercial operations in Australia Pacific LNG, among others.

The most pronounced increase in demand comes from Asian markets, with China’s LNG consumption increasing by roughly 35% to 27 million tonnes per annum (MTPA).

In 2016 global liquefaction capacity reached 339.7 MTPA – building on the 2015 measurement of 301.5 MTPA and growing at a consistent rate. This growth includes new projects such as Sabine Pass LNG, as well as Gorgon LNG and Australia Pacific LNG. Global liquefaction capacity is expected to grow significantly over the next few years, with 114.6 MTPA of capacity under construction as of January 2017.

The World LNG Report was first published in 2010 and provides key insights into LNG industry developments through the end of calendar year 2016. The full report can be downloaded in PDF format here.

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Image Source:  International Gas Union (IGU)

Driftwood LNG files formal FERC application

Tellurian announced today that its wholly owned subsidiaries, Driftwood LNG and Driftwood Pipeline LLC have completed the pre-filing phase and collectively submitted a formal application with the U.S. Federal Energy Regulatory Commission. The application calls for plans to build and operate an approximately 26 million tonnes per annum LNG export facility near Lake Charles, Louisiana and a 96-mile pipeline connecting the facility to interstate pipelines (the Driftwood LNG project). Tellurian expects to begin construction of the Driftwood LNG project in 2018 and produce first LNG in 2022, with full operations beginning in 2025.

Tellurian President and CEO Meg Gentle said, "Throughout the pre-filing phase, the representatives at FERC, the Department of Energy and the US Coast Guard have been well-organized, thorough, and proficient in ensuring that Driftwood LNG is designed and permitted with a priority on safety, reliability, and efficiency. We look forward to continuing to work with FERC and other agencies on a timely approval process and beginning construction in 2018."

Tellurian Investments was founded as a private company on February 23, 2016 by Charif Souki and Martin Houston. On February 10, 2017, it merged with Magellan Petroleum and became a public company known as Tellurian Inc.

100th LNG Cargo Shipped from Sabine Pass Liquefaction Facility

Cheniere Energy announced today the 100th cargo of liquefied natural left the company's Sabine Pass liquefaction facility on Saturday, April 1st, 2017. Including the 100th cargo, Cheniere has delivered cargoes to 18 countries on five continents since the first shipment on February 24, 2016.

"This milestone for Cheniere is a testament to the global demand for American LNG, the hard work and dedication of Cheniere's workforce, and our unique business model that enables customers large and small to access this fuel," said Jack Fusco, Cheniere's President and CEO. "Our entire workforce shares in this milestone and in Cheniere's future success."

In February 2016, Cheniere became the first company to ship LNG from the contiguous United States in over 50 years. Cheniere has three operational LNG trains at Sabine Pass, train four has entered the commissioning process and is expected to reach substantial completion in the second half of 2017. Train five is currently under construction, and is expected to become operational in 2019, and train six is fully permitted and being commercialized.

Information from the February 2017 Sabine Pass Liquefaction Project Progress Report can be found here.

Cheniere Energy also has two trains under construction at its liquefaction project near Corpus Christi, Texas. Operation of both trains there is expected to begin in 2019.

Sabine Pass Liquefaction Project Progress Report February, 2017

On March 27th, 2017 Cheniere Energy submitted a monthly construction progress report to the Federal Energy Regulatory Commission for the Sabine Pass Liquefaction Project in Cameron Parish, Louisiana.

The report covered activities for the Sabine Pass Liquefaction Stage 2 (Trains 3 and 4) and Sabine Pass Liquefaction Stage 3 (Trains 5 and 6) projects that occurred during the month of February 2017.

The report noted stage 2 Engineering and Procurement are 100% complete. Subcontract and direct hire construction work are 82.8% and 95.9% complete, respectively. Overall project completion for Stage 2 is 96.7% against the plan of 99.9%.

Stage 2 support to construction activities were continuing. Subcontracted activities continue (e.g. piping insulation, paving, and heat tracing). With first cargo achieved, the Train 3 team is preparing for the performance test and subsequent Substantial Completion. Train 3 achieved RFSU and first LNG on January 13th with a first cargo on January 24th. Train 3 substantial completion is estimated to occur within the first quarter of 2017, based on actual construction progress realized. Train 4 is projecting November 2017 for substantial completion.

Activities in Train 4 continue with a focus on the installation of A/G piping, pipe testing, pipe restoration and compressor fit-out activities. In the Train 4 compressor area, the team has cold cranked both ethylene machines, and one methane machine. Mineral and synthetic lube oil flushes are also ongoing in the compressor area.

Stage 3 Engineering is now 98.6% complete. Procurement is now 90.3% complete. Subcontract and direct hire work are 44.3% and 16.0% complete, respectively. Stage 3 overall project completion is 60.5% against the plan of 55.4%. Stage 3, engineering completed interlock and shutdown narratives control set points and completed the revisions to the IFC P&IDs. Procurement completed delivery of the refrigeration compressors and air cooler deliveries continue. Stage 3 subcontract formation activity continued. 

Images below from Sabine Pass Liquefaction Project Progress Report February, 2017

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International Group of Liquefied Natural Gas Importers 2017 LNG Industry Report

The International Group of Liquefied Natural Gas Importers (GIIGNL) released their GIIGNL 2017 LNG Industry Report yesterday. 

In 2016, global LNG trade reached 263.2 MT, compared with 245.2 MT in 2015 (+18 MT). 19 countries exported LNG to 39 importing countries. 4 new countries joined the ranks of LNG importers during the year and 11 new regasification terminals were commissioned, with 5 terminals based on floating solutions. The shipping fleet reached 478 vessels at the end of the year according to the GIIGNL 2017 LNG Industry Report.

The combined new liquefaction capacity of 36 MT worldwide starting up in the course of the year added 18MT of actual new supply in 2016 mostly from new Australian projects. The Pacific Basin was in the top position among producing regions with 45% of global supply, followed by the Middle-East (35.5%) and the Atlantic Basin (19.5%).

In the Atlantic Basin, declines in Algeria, Nigeria and Trinidad were offset by the restart of production in Angola and Egypt and by the start-up of Sabine Pass Train 1 and 2 in the United States. 

Chinese LNG imports experienced a rally in 2016, with 36.9% growth. Indian imports also jumped (+30%), confirming the country’s rank of 4th largest LNG buyer worldwide.

Emerging importers recorded strong gains in 2016. Growth was led by Egypt, who almost recorded a threefold increase in LNG imports compared to 2015 via spot and short-term imports. 

Demand in markets such as Japan, South Korea and Europe remained sluggish. In Japan, LNG imports declined for the second year in a row to 83.3 MT (-1.7 MT). 

The share of “pure” spot trades, defined by GIIGNL as trades whereby cargoes are delivered within 3 months from the transaction date, was estimated for 2016 at approximately 18% of total LNG volumes, up from a share of about 15% in 2015. 

Download the GIIGNL 2017 LNG Industry Report in PDF format here.

GIIGNL is a non-profit organization whose objective is to promote the development of activities related to LNG: purchasing, importing, processing, transportation, handling, re-gasification and its various uses.

The Group constitutes a forum for exchange of information and experience among its 78 members to enhance safety, reliability and efficiency of LNG imports activities and the operation. 

Cameron LNG Monthly Construction Progress Report for February 2017

On March 17, 2017 Cameron LNG submitted a monthly progress report to FERC for the Cameron LNG Liquefaction Project in Hackberry, Louisiana. Construction on the project began in October 2014, with commercial operations expected to begin in 2018.

The report noted construction activities continued through the month of February. The activities consisted of civil works, structural steel erection, fireproofing work, installation of equipment, tanks and piping, electrical and instrument works, and tie-in works within the existing facility. Welding of Pipe-In-Pipe continued on the 24” diameter Liquefaction rundown line.

cameron 1 feb

Above: Train 1 – looking north 

Train 1 Activities

Continued miscellaneous foundation work and area paving

Continued to erect structural steel and install above ground and underground piping

Continued fireproofing work in the pipe racks

Continued installing equipment installation including internals

Continued to install cable trays, conduits, junction boxes, instrument panels and duct banks

Continued testing of South Powerhouse

Started installation of permanent drainage system

Major Equipment Set:  S1-3001 Waste Heat Recovery Unit, RIE1-00002 North Power House

Train 1 Next Month Look Ahead

Continue paving and fireproofing, installing structural steel and piping works and electrical & instrument works

Set LP MR Suction KO Drum and auxiliary equipment for PR MR Compressor Packages

Start fireproofing on equipment

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Above: Train 2 – looking north

Train 2 Activities

Continued foundation works, area paving and LNG trench installation

Continued backfill and compaction

Continued to erect structural steel and piping

Continued installation of above ground and underground piping

Continued installation of cable trays, duct bank, conduit and grounding

Train 2 Next Month Look Ahead

Continue foundation works, backfill and compaction, area paving, equipment installation, structural steel installation and piping and electrical works

Set MCHE, PR MR Compressors

cameron 3 feb

Above: Train 3 Looking North

Train 3 Activities

Continue installation of underground piping

Continue foundation works, backfill and compaction, paving

Continued installation of duct bank and grounding

Train 3 Next Month Look Ahead

Continue foundation works, backfill and compaction, area paving, , structural steel installation and piping and electrical works

cameron 4 feb

Above: Existing Facility – looking south

Existing Facility Activities

Completed outage activities on Tank T-202 modifications; T-202 pump discharge piping reinstated into service

Commenced warm-up of T-203 pump discharge piping (CLNG Operations) in order to start piping modifications

Continued structural steel works and piping erection in pipe rack

Continued structural steel activities T-201 (platforms and supports)

Continued installation of internal walls, electrical and plumbing in the Control Room Maintenance Warehouse (CMW) building

Erected foundations for new laboratory and chemical storage buildings

Continue firewater tie-in works and underground piping

Continue foundation works for the North and South Jetty in preparation for installation of Surge Drums Continued welding 24” dia. Pipe-In-Pipe rundown line

Completed concrete pours of table-top slabs for BOG Compressors A, B & C

Tellurian engages Societe Generale as financial advisor for Driftwood LNG

Tellurian Inc. announced today that they have selected SG Americas Securities to provide general financial strategy and planning for the development and financing of Driftwood LNG, their 26 million tonnes per annum LNG export project near Lake Charles, Louisiana.  SG Americas is the US broker-dealer subsidiary of Société Générale Corporate and Investment Banking.

Tellurian President and CEO Meg Gentle said, "The advisory team at SG is a leader in LNG financing. With their expertise at hand, we will move forward with the financial structuring of Driftwood LNG. We anticipate construction in 2018 and first LNG from Driftwood LNG in 2022."

Tellurian Investments Inc. was founded as a private company on February 23, 2016, by Charif Souki and Martin Houston. On February 10, 2017, it merged with a wholly owned subsidiary of Magellan Petroleum Corporation. Upon close of the merger, Magellan Petroleum Corporation changed its name to Tellurian Inc. and is listed on the Nasdaq under the symbol TELL. 

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