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Calcasieu Pass in Louisiana nearing start of LNG production
U.S. LNG project developer Venture Global LNG is nearing production of the first amount of liquified natural gas at its new Calcasieu Pass export facility in Louisiana.
Venture Global is developing an LNG export facility in Cameron Parish, Louisiana, south of the city of Lake Charles. The project site is at a location that features deep-water access, proximity to gas supplies, and ease of transport for buyers. Once complete, the facility will export 10 million tonnes per year (mtpa) of LNG.
The company states the official start of operations as the first quarter of 2023.
However, Reuters reports citing energy traders, that the facility is close to producing its first LNG. This came after the amount of feed gas to the facility increased rapidly this week. The amount of gas flowing to Calcasieu rose to 88 million cubic feet per day (mmcfd) on 21 January; from an average of about 38 mmcfd during the prior week.
In December, Venture Global and Louisiana goverment announced the company will invest more than $10 billion to develop Calcasieu Pass 2 (CP2) LNG, a fourth LNG export facility in Louisiana. It will build, own and operate an LNG terminal with a liquefaction capacity of 20 mpta of LNG.
Furthermore, the company signed a sales and purchase agreement with China’s CNOOC. Under this, China will buy 1.5 million tonnes of LNG from the Calcasieu Pass facility.
U.S. LNG export project developer Venture Global and a subsidiary of China National Offshore Oil Corporation (CNOOC) have signed two new deals to supply the Chinese market with LNG.
The U.S. LNG exporter and CNOOC Gas & Power Group Co. announced the execution of a 20-year sales and purchase agreement (SPA). It marks the first LNG supply deal inked by the company with CNOOC, China’s largest importer of LNG.
Under the deal, Venture Global will supply 2 million tonnes per annum (MTPA) of LNG on a free on board basis from its Plaquemines LNG export facility in Louisiana.
In addition, CNOOC Gas & Power will purchase 1.5 million tonnes (MT) of LNG from Venture Global’s Calcasieu Pass LNG facility for a shorter duration.
“Venture Global is pleased to announce the expansion of our footprint in Asia through two new deals to supply the Chinese market with clean, low-cost US LNG,” said Mike Sabel, CEO of the company. “China is critical to global climate efforts, and LNG supplied by VG will serve as an important addition to their low carbon energy mix for decades.”
“As China’s largest LNG importer, CNOOC is committed deeply (…) to the climate goals of building a carbon-neutral China by 2060,” said Shi Chenggang, chairman of CNOOC Gas & Power. “By signing the SPAs with Venture Global, CNOOC will be able to further improve its ability to meet China’s increasing gas demand, whilst provide solid support for China’s energy transition pathway to build a more “beautiful China”.
Golar LNG: CoolCo wraps up $250m private placement
Bermuda-based LNG shipper Golar says its newly-formed company CoolCo, which will acquire its eight LNG carriers, has successfully closed an upsized private placement of $275 million in new shares.
In December, Golar LNG announced the separation of its eight TFDE LNG carriers into the new company called Cool Company.
Earlier this month, the company scored a $570 million bank facility that will finance the acquisition of six of LNGCs. The existing lease financing on two vessels will remain and go to CoolCo. The total debt on CoolCo’s assets will be approximately $810 million at inception.
Then, based on investor feedback, CoolCo decided to launch a book building process of a private placement of $250 million.
The shares will list on the N-OTC immediately following the completion of the private placement. CoolCo will then apply to list the shares of the company on Euronext Growth Oslo during February 2022.It will also target an additional listing on an internationally recognized stock exchange during 2022.
The company targets to become a growth vehicle and consolidator of modern LNGCs. It will do so by continued strength in the LNG freight market.
BUSINESS DEVELOPMENTS & PROJECTS
Karl Fredrik Staubo, CEO of Golar and CoolCo, said: “The company will target to become a leading player for an expected continued strengthening of LNG shipping fundamentals, driven by new liquefaction capacity coming on stream, increasing distances and effective supply reductions from new environmental regulations effective from 1 January 2023.”
Cyril Ducau, CEO of EPS, added: “The strong market support for this transaction creates a solid foundation for CoolCo. (…) The company is well equipped to realize value from an enviable market position and build on favorable dynamics for LNG shipping.”
Houston Ship Channel awarded $142.5 million infrastructure project
JANUARY 25, 2022 9:18 AM
The U.S. Army Corps of Engineers (USACE) released its FY22 Workplan for the Infrastructure Investment and Jobs Act (IIJA). The Houston Ship Channel's Project 11, the deepening and widening channel improvement program, was allocated $142,515,000.
This funding is specifically designated to complete Segment 3 of Project 11, which will focus on the Barbours Cut Container Terminal section of the Houston Ship Channel.
“Thank you to our United States Senators Cruz and Cornyn; our Congress members Garcia, Fletcher, Jackson Lee, Green, McCaul, Babin, Weber, Allred, Crenshaw, and Nehls; and to the many Port stakeholders who advocated for this critical investment in the future of our national economy and security,” said Port Houston Commission Chairman Ric Campo. “With this funding, we are one step closer to building a better Port for the next generation of Texans and Americans.”
As the only port in Texas to receive construction funding in the IIJA, this represents a milestone win for the Houston Ship Channel and will enable the Port and the USACE to keep the $1 billion Project 11 moving forward.
“This federal funding is essential to keep Project 11 on track and bring to fruition a safer, faster, and cleaner ship channel for all users,” said Port Houston Executive Director Roger Guenter. “This investment and continued partnership with the USACE will enable our ship channel to keep leading the way in supply chain efficiencies and meet the demands of new markets and supply chains. Thank you to all those involved in bringing these funds back to Houston.”
“The Houston Ship Channel remains the crown jewel of the Texas economy and today’s announcement that the Army Corps will be funding a segment of the project is a victory for our state,” stated U.S. Senator Ted Cruz. “Funding this project will not only help ensure that the port continues to have the necessary capacity to make Texas and the United States the energy leader of the world, but also help address current and future supply chain disruptions.”
“Access to safe and efficient infrastructure is critical as more goods come in and out of Texas ports each day,” said U.S. Senator John Cornyn. “I applaud this announcement and look forward to seeing the positive impact this investment for the Port of Houston will have on commerce.”
Completion of Segment 3 will facilitate handling of larger container vessels at this terminal, a critical step to increasing the efficiency of the nation's logistics infrastructure. US total container volumes surged 8% in 2021 while Port Houston container volumes grew 15% year over year. Segment 3 also connects to the Enterprise Morgan's Point Terminal, a logistics hub that supports the U.S. oil and gas exploration and chemical sectors.
“I am thrilled that the U.S. Army Corps of Engineers will award $142,515,000 from the Infrastructure Investment and Jobs Act (IIJA) to the Port of Houston,” said Congresswoman Lizzie Fletcher. “This investment in the Port of Houston will strengthen our nation’s largest port for waterborne tonnage, providing increased cargo handling efficiency and capacity, allowing for bigger ships and more cargo to pass through the channel, and ensuring the Port of Houston remains a strategic gateway for trade. I was glad to vote for the IIJA to fund critical projects like this one, and I was glad to advocate for this project’s inclusion in this round of funding. This investment will benefit our city, our state, and our country, cementing Houston’s leadership in trade, strengthening our country’s supply chain, and building for our future.”
“This critical funding of $142 million to the Houston Ship Channel is the kind of investment that is needed to build resiliency and capacity for the future of our supply chain”, said Congresswoman Sylvia Garcia. “I am proud that these federal dollars from the bipartisan infrastructure bill are going to spur our local Texas economy and make the busiest cargo waterway in the nation even better. Our ship channel and our port are key to keeping our economy growing and sustaining over 3.2 million jobs across our nation.”
“I am glad to have helped with the tough negotiations to move the Infrastructure Investment and Jobs Act to passage, which is now bringing $142,515,000 to the Port of Houston,” stated Congresswoman Sheila Jackson Lee. “I am glad the Army Corps of Engineers moved forward quickly to provide this funding to the Port of Houston that will be used for dredging, construction, port resiliency, and other improvements that will create new jobs. The Port of Houston is one of the largest ports in the world. It encompasses a 52-mile ship channel and sustains nearly 200 private businesses. The $142,515,000 of Federal dollars to the Port of Houston will benefit the City of Houston and Harris County residents.”
Congressman Al Green responded to the news of this historic funding stating, “As the #1 Port in the nation, the Port of Houston plays an invaluable role in spurring economic growth and making the City of Houston, Harris County, and the United States top contenders in the global market. It allows international goods to flow in and out of our country, generates millions of job opportunities, and brings in billions of dollars in tax revenue annually. I am delighted the Port has been the recipient of over $140 million awarded by the U.S. Army Corp of Engineers as part of their Fiscal Year 2022 Workplan for the Infrastructure and Investment Jobs Act. These funds will allow the Port of Houston and its ship channels to continue handling its freight with maximum efficiency, manage the increasing volume of cargo, and operate with a higher degree of sustainability. I look forward to continue supporting the Port and helping maintain its competitive edge as a leading hub for international trade.”
“After receiving a New Start designation just last year, I am exceedingly proud that the Houston Ship Channel made another huge step forward by securing more than $142 million in the U.S. Army Corps of Engineers FY 2022 Work Plan to complete construction of Segment 3 – Barbours Cut Channel,” responded Congressman Brian Babin. “Funding this construction will make the nation’s most strategic waterway more efficient and will have a great impact on this country’s future economic growth. It has always been a top priority for me to ensure we secure the funds necessary to complete this project, and I am proud of the hard work that has helped push this forward.”
According to the Army Corps press release, key port projects were selected to strengthen the nation’s supply chain and provide significant new economic opportunities nationwide.
“We are excited to see the Administration rely on the U.S. Army Corps of Engineers and the Port of Houston to deliver a modern Houston Ship Channel,” said Galveston District Commander Col. Timothy Vail. “This sophisticated coordination between USACE and Port Houston has been successful in delivering this project faster than any other project of its kind for the federal government. The economic, safety, and environmental benefits from this project will guide the future of not only the Houston Ship Channel, but the entire region as well.”
At the end of December, Port Houston was also awarded a federal grant of $18,267,600 by the Maritime Administration of the Department of Transportation (MARAD) to develop and expand the Port’s Bayport Container Terminal as well. This grant will help create an additional 39 acres of the container yard, building upon the increased capacity of the expanded ship channel to accommodate deeper draft vessels carrying more cargo containers.
TUESDAY, DECEMBER 7, 2021
Venture Global announces $10 billion investment in Cameron LNG facility
Gov. John Bel Edwards and Venture Global LNG CEO Mike Sabel announced the company will invest more than $10 billion in a new liquefied natural gas facility in Cameron Parish that will employ carbon capture and sequestration technology (CCS) to reduce carbon dioxide (CO2) emissions. The project will result in at least 200 direct new jobs, with average annual salaries of $120,000, plus benefits. Louisiana Economic Development estimates the project will result in 867 indirect jobs, or a total of 1,067 jobs in Southwest Louisiana. At the peak of construction, an average of 2,300 construction jobs will be created.
Venture Global’s new facility, named CP2, will have a nameplate capacity of 20 million metric tonnes per annum (MTPA) of LNG. The CCS process will be used to capture and store underground an estimated 500,000 tons of CO2 emissions from the facility annually. The complex will be located on 650 acres in Cameron, including 170 acres on Monkey Island, providing CP2 with direct access to the deep-water Calcasieu Ship Channel.
“Venture Global has invested significantly in Louisiana’s economy, and I am proud to celebrate this exciting new project with them,” Gov. Edwards said. “The CP2 facility in Cameron will create more than 1,000 new permanent jobs and thousands of construction jobs in the area, which will have a significant impact on our economy. And it is incorporating clean energy technology that reduces the amount of CO2 released into the atmosphere, which is significant for our environment. As Louisiana pursues a goal of net-zero emissions by 2050, projects that feature carbon capture and sequestration allow our state to sustain industry without sacrificing our long-term carbon-reduction goals.”
The site will be constructed in two phases, and will include 18 liquefaction blocks, four 200,000 cubic-meter full-containment LNG storage tanks, two marine loading berths, and two on-site combined cycle gas turbine power plants. Administrative offices, an on-site fire station and maintenance structures are also planned for the site. The CP Express pipeline will deliver natural gas to Venture Global’s CP2 facility in Cameron.
“CP2 will be located in Cameron Parish, adjacent to our existing Calcasieu Pass terminal,” Sabel said. “These two projects, combined with our Plaquemines LNG facility now under construction, represent over $20 billion of investment in the State of Louisiana, and will create thousands of good paying jobs. With two major LNG export projects currently under active construction, Venture Global is on a mission to produce the cleanest low-cost LNG in North America. We are proud to partner with Louisiana in these efforts and in developing carbon capture and sequestration for our facilities. Under the leadership of Governor John Bel Edwards, Louisiana is enhancing its status as an international hub for innovation to tackle the energy and climate challenges of our time.”
Headquartered in Arlington, Virginia, Venture Global LNG is a global provider of U.S. LNG. Venture Global’s wholly owned subsidiaries, Venture Global CP2 LNG, LLC and Venture Global CP Express, LLC will build, own and operate the CP2 LNG project. Venture Global is constructing or developing several other facilities in Louisiana, including the Calcasieu Pass facility, also in Cameron, and the Venture Global Plaquemines LNG project in Plaquemines Parish.
“We are fortunate to have growing industry in Cameron Parish and value our partnership with Venture Global,” said Cameron Police Jury Vice President Thomas McDaniel. “This is a standout project and we are grateful for their investment in our community. CP2 is the kind of private-public partnership that means we can leave Cameron Parish better than we found it.”
To facilitate the project in Louisiana, the company is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs.
“Southwest Louisiana welcomes Venture Global's new mega-project,” said George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance. “We are excited that it includes carbon capture and sequestration capacities. This major investment will further strengthen our region as a global leader in LNG exports. The jobs created will grow Cameron Parish's workforce significantly and make Cameron Parish the largest LNG exporter in the world.”
Foran Energy and Cheniere ink long-term LNG SPA
November 24, 2021, by Sanja Pekic
U.S. LNG exporter Cheniere and Chinese city gas supplier Foran Energy have signed a 20-year LNG sale and purchase agreement (SPA).
To be precise, Cheniere‘s subsidiary Cheniere Marketing has entered into this binding 20-year LNG SPA. The SPA follows the heads of agreement that subsidiaries of Cheniere and Foran signed back in November 2020.
Under the new deal, Foran will buy approximately 0.3 million tonnes per annum of LNG from Cheniere Marketing. This is on a delivered ex-ship basis for a term of 20 years beginning in January 2023.
The purchase price for LNG under the SPA is indexed to the Henry Hub price, in addition to a fee.
“This long-term LNG solution supports Foran’s goals and provides additional supply as China continues to seek cleaner, lower-carbon natural gas to meet its economic and environmental goals,” said Jack Fusco, Cheniere’s CEO.
“This SPA once again demonstrates the strength of the global LNG market today, particularly in China, and underscores the value of Cheniere’s leading ability to tailor solutions to help our customers advance their long-term energy and environmental priorities.”
TGE scores storage tank job for Yangjiang LNG
November 22, 2021, by Sanja Pekic
German-based LNG storage contractor TGE Gas Engineering has signed a tank engineering, procurement, and construction (EPC) contract for the Yangjiang LNG storage project.
Courtesy of TGE
Specifically, the consortium of TGE Gas Engineering and China Chengda Engineering signed this EPC contract for the project.
The Yangjiang LNG Peak Shaving Storage Project is a proposed LNG terminal, located in China’s Guangdong Province.
It is jointly established by PO&G and Guangdong Yudean Natural Gas under a 50/50 partnership.
The company has started the LNG tank piling works previously, on 30 September 2021.
The project includes two 160,000 cubic metres prestressed concrete full containment LNG storage tanks. In addition, there are also:
Processing facility of 175,000 cubic metres LNG Jetty;
Sea water drainage system;
12 LNG truck loading stations;
LNG gasification facilities and auxiliary facilities.
The scale of the Yangjiang LNG project is 2.8 million tonnes per annum, while the total design scale is six million tonnes per annum
Energy trio join in on reporting on GHG-neutral LNG cargoes method
November 18, 2021, by Sanja Pekic
Singapore-based Pavilion Energy, state-owned QatarEnergy, and U.S. oil major Chevron have jointly published a reporting methodology to produce a statement of GHG emissions for delivered LNG cargoes.
Courtesy of QatarEnergy
A team of representatives from all three companies developed the statement of greenhouse gas emissions (SGE) methodology. Also, the global sustainability consultancy Environmental Resources Management (ERM) supported the team.
The companies say this is the first such published methodology that will apply to sales and purchase agreements (SPAs). Specifically, this concerns the executed SPAs by Pavilion Energy with QatarEnergy and Chevron.
The methodology provides a calculation and reporting framework for GHG emissions from wellhead-to-discharge terminal, based on industry standards.
The goal is to create a common standard for the reporting and verification of the GHG emissions associated with producing and delivering an LNG cargo. This is to drive greater transparency and enable stronger action on GHG reduction measures.
Independent academic experts, commercial institutions, and verification bodies have reviewed the SGE methodology. It also complements key industry efforts developed in parallel; specifically the Monitoring, Reporting and Verification (MRV) and GHG Neutral Framework by the International Group of LNG Importers (GIIGNL).
Platts: Asia-Pacific LNG shipping rates surge to all-time high
November 19, 2021, by Sanja Pekic
According to Platts, Asia-Pacific LNG shipping day rates have reached an all-time high of around $300,000 a day for a standard LNG carrier due to winter demand.
On 18 November, Platts assessed Asia-Pacific LNG shipping day rate at nearly six times more than at the start of the month.
The region’s last achieved a record high of around $175,000 a day in mid-January. In other words, it has been mostly between $50,000 and $70,000 a day for most of the year.
The Atlantic LNG shipping day rate also surged to around $245,000 a day this week. However, it hit a record high in January with nearly $300,000a day.
The LNG shipping demand was strong from the start of 2021 due to the energy crisis, as European and Asian LNG prices climbed. Now, most charterers have secured their short positions in advance. So, LNG vessels have been busy on longer voyages to Asia.
The supply of ships in the Pacific is extremely constrained, Platts says. Considering this and the fact that winter is coming, charterers of short positions might have to pay more.
Some charterers felt the latest high-priced deal may not repeat for subsequent fixtures. Others said the LNG shipping market was harsh since it had no independent owners with ships available for charter. This is because charterers secured winter tonnage from March till July 2021.
In mid-October, the volume of LNG cargoes on the water had hit a new record. This amounted to above the five-year average level. The reason is a steep contango in the LNG price structure. Because of the situation, traders booked more vessels which lead to a surge in demand for LNGCs that are yet to return to the spot market.
Freight rates for January 2021 loading will be dependent on the severity of winter in north Asia, said Platts in conclusion.
TUESDAY, JULY 27, 2021
Chennault Airport breaks ground on $4M cargo facility
Chennault International Airport has broken ground on a $4 million facility that represents its entry into the air cargo sector.
The air cargo pass-through facility is anticipated to be certified for international cargo by U.S. Customs and Border Protection.
The new facility will be the centerpiece of Chennault’s latest effort to provide economic diversity and ultimately create new jobs at the airport, which is recognized as an emerging aerospace hub.
The project is propelled by $3 million in capital outlay funding from the Louisiana Legislature with the balance of the funding paid by the Chennault International Airport Authority.
“The willingness to change and look for opportunities outside of the norm is critical to remaining relevant in our dynamic world today,” Chennault Executive Director Kevin Melton said in making the announcement. “Chennault remains a game-changer for Southwest Louisiana—and we’re excited to offer this new opportunity for more development and more jobs.”
Chennault has retained air cargo consultant David Whitaker to help identify potential industry partners in the time ahead.
“Chennault is a very robust airport with enormous potential and Southwest Louisiana is a cargo-rich region of the world,” said Whitaker, who has more than 30 years of airport and air cargo operations experience.
Construction of the 10,000-square-foot warehouse will take 12-18 months. Contractor Trahan Construction was selected to build the facility; the contract was executed June 7.
As the warehouse is being built, ongoing discussions are planned with potential ground handling partners on such related issues as ramp handling, warehouse operations and securing unique ground equipment to service large aircraft.
“Much of the industry is already familiar with Chennault and the Lake Charles Region, given its first-class MRO tenants—including Northrop Grumman, Million Air, LandLocked Aviation Services and Citadel Completions,” Whitaker said. “Chennault offers relief to airlines and freight forwarders who need space and attention.”
“We believe there is value for companies to move goods through Chennault,” said Melton. “We provide a low-cost alternative to the larger markets where expense, ground delays, and airspace delays affect the efficient flow of goods.”
Denise Rau, president of the Chennault International Airport Authority’s board of commissioners, cited the airport’s legacy of public-private partnerships, saying that Chennault’s potential to become a Gulf Coast location for air cargo operations will rest in the same kind of partnerships.
Chennault International Airport, a center of aerospace activity based in Lake Charles, serves the needs of civilian and military aircraft from around the world with world-class infrastructure, state-of-the-art facilities and an array of tenant partners. Its runway is 10,700 feet long, 200 feet wide and built with 17-inch-thick concrete, with a newly refurbished parallel taxiway that has runway capabilities as well.
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