LNG JOURNAL PUBLICATION 1 October 2019

LNG Unlimited

French energy major Total isstrengthening its global position inthe liquefied natural gas marketswith expected profit growth fromnew joint venture stakes fromSouthern Africa to Northern Siberia.

The company said it would makea final investment decision on theNigeria LNG expansion project tobuild a seventh Train by the end ofthe year and said that its acquisi-tion of Mozambique LNG assets fitswell into its growth strategy.

Market changesTotal said it expects first LNG by2023 from the expansion in Nigeriaat a time of changing energy mar-kets when the fastest growth isseen in the LNG and renewablessectors.

Speaking in New York duringthe company’s Investor Day, thecompany’s head of production Ar-naud Breuillac said the expansionin Nigeria would add 7 milliontonnes per annum to an existingliquefaction capacity at the plantof 22 MTPA.

Breuillac said the group aimedto grow its share of natural gas out-put to 22 percent of its portfolio by2025 from 14 percent in 2018.

Nigeria LNG Ltd., the operatorof the world’s fifth-largest LNGexport plant at Bonny Island, is intalks with major banks for the $10billion in project financing.

The West African nation hasproduced LNG since 1999 and themain shareholders in the existingsix Trains along with Total areRoyal Dutch Shell and Eni of Italy

and Nigeria National PetroleumCorp., which owns 49 percent ofthe venture.

The French company also con-firmed progress after its acquisi-tion of Mozambique LNG assetsfrom Occidental Petroleum of theUS, which completed its takeoverof US peer Anadarko Petroleumfor $38 billion on August 8.

Anadarko was operator of theMozambique project as part of its26.5 percent stake and operatorshipof the Area 1 Rovuma Basin reservesthat underpin the onshore LNG ven-ture at Pemba in the African na-tion's Cabo Delgado province.

Total said that that its signingof an agreement with Occidentalto acquire Anadarko’s assets inAfrica for $8.8Bln, including itsLNG stake in Mozambique, capital-izes on its strengths.

“The acquisition of Anadarko’sAfrican assets fits perfectly intothe strategy and improves visibil-ity on the Group’s future,” Totaltold its investors in New York.

Other speakers at the event in-cluded Patrick Pouyanné, Chairmanand Chief Executive, Jean-PierreSbraire, Chief Financial Officer andHelle Kristoffersen, President ofStrategy and Innovation andPhilippe Sauget, President of Gas,Renewables and Power.

Sauget said in his presentationthat the first LNG from the Mozam-bican Pemba plant was expectedin 2024 and Total’s share would be13 MTPA.

He said that currently two LNGTrains were being developed inthe southeast African nation andtwo more would be the subject offront-end engineering and designstudies in 2020.

Sauget stated that the com-pany’s equity production wouldrise to 30 MTPA in 2025 from itsworldwide portfolio (see graphic).

Apart from its Mozambique andNigerian LNG ventures, Total isalso a shareholder in Yamal LNGand Arctic LNG II in Russia as wellas the Papua New Guinea expan-sion and Ichthys LNG in Australia.It additionally has a long-standingportfolio of LNG volumes from theMiddle East and Asia.

In North America, the Frenchcompany is cooperating with Sem-pra Energy on the Cameron plantat Hackberry in Louisiana and theCosta Azul liquefaction project inMexico.

“The energy transition leads to a growing role for both naturalgas (mainly LNG) and electricity in the energy mix,” said PatrickPouyanné in his speech.

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Mozambican licence stake alone would give Total 13 MTPA

French major buoyed by

Occidental Petroleum

African assets and

growing equity LNG

LNG Journal editor

UNLIMITEDAGENDA

McDermott tosell Lummus as part of effortsto avert crisis

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CORPORATE

REGULATION

UPSTREAM

Eagle Partners authorized forsmall-scale Florida plant

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Kosmos drilling success can boostLNG project plansfor Senegal

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Construction ofLNG carriers for Arctic backed by GTT tank

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STORAGE

SHIPPING

PIPELINESAmerican GasAssociation praises rules forenhanced safety

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LNG growth outlined by Totalfrom acquisition and stakes

CMA CGM sees launch of firstlarge vessel withLNG propulsion

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IMPORTSFluxys Belgium doubles trafficat Zeebrugge andgets long-term deal

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The French CMA CGM shippinggroup, one of the world’s largestcontainer vessel operators withover 500 ships, has attended thelaunching of the first of its seriesof nine 23,000 twenty-foot equiva-lent unit (TEU) vessels powered byliquefied natural gas to meet newemission requirements and withtechnology additions on the bridgeand elsewhere.

The first of the ultra-large con-tainerships took to the water atthe Shanghai Jiangnan-ChangxingShipyard at an event attended byRodolphe Saadé, Chairman andChief Executive of CMA CGM,French and Chinese officials andsome of the company’s customers.

CommemorationThe first of the new class of23,000-TEU LNG-powered contain-erships was named “CMA CGMJacques Saade” after the shippingline’s Beirut-born founder whodied in June 2018.

The Marseilles-based company

said that to further improve theenvironmental performance of the“CMA CGM Jacques Saade” and theother ships in the series the hullform has been hydrodynamicallyoptimized.

“The exceptionally large ves-sels are 400 metres in length and61 metres wide and will be distin-guished from the rest of the fleetby a special livery proudly display-ing an “LNG POWERED” logo, at-testing to the major worldwideinnovation that LNG propulsionrepresents on ships of this size,”

said CMA CGM. “The bulb has alsobeen seamlessly integrated intothe hull profile and the bow isstraight,” said the company.

“The propeller and rudderblade have also been improved,along with the Becker TwistedFin,” it added.

These new vessels will join the Group's fleet in 2020 on theFrench-Asia route sailing betweenAsian and Northern European portsand will be registered in theFrench International Register, con-firming the Group's commitment to

operating under the French flag. CMA CGM added that the first

vessel features a state-of-the-artbridge design, the world’s firstship to deliver four major innova-tions to assist the Captain andcrew and these will be installed inthe eight sister ships.

They bridge design includes: atactical display offering enhancedmap views for more dynamic navi-gation briefings; a path predictionsystem optimized to display theship’s predicted position in thenext three minutes; a smart eyesystem projecting a bird’s-eyeview of the ship’s surrounding areaand augmented reality screens of-fering the crew precise informa-tion on the ship's rate of rotation,distance from the wharf and trans-verse speeds.

“Through this strategic choice,the CMA CGM Group reaffirmedits assertive commitment to safe-guarding the environment andleading the industry’s energytransition,” said CEO Saadé at theceremony.

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French containership giant CMA CGM sees launch of first ultra-large LNG-powered vessel

l NEWS LNG Unlimited 1 October 20192

Japan to cooperate on trans-shipment stationsfor Russian LNG at Kamchatka and MurmanskNovatek, operator of the YamalLNG plant and lead developer ofthe Arctic II LNG project, has signedan agreement with Japanese ship-ping company Mitsui OSK Lines tocooperate on the construction ofLNG trans-shipment stations onthe Kamchatka Peninsula in theRussian Far East and near the Barents Sea port of Murmansk.

The proposed trans-shipmentprojects would be partly financedby the Japan Bank for InternationalCooperation (JBIC) as they help insecuring LNG cargoes for Asia viathe Northern Sea Route from theYamal facility and the Arctic projectplanned for the Gydan Peninsula.

“We have already started suc-cessful cooperation with Japanesecompanies in large LNG projects,

including Yamal LNG and ArcticLNG II, and accordingly we seegreat potential in expanding fur-ther this mutually beneficial coop-eration,” said Leonid Mikhelson,Novatek Chairman.

“The construction of the Kamchatka and Murmansk trans-shipment complexes will help tooptimize logistics and maximizethe efficiency of LNG deliveriesfrom Yamal and Gydan to key LNGmarkets in the Asia-Pacific region,including Japan,” he added.

“We think we will reach finalarrangements for these projectsby year-end,” stated Mikhelson.

The Arctic LNG project, match-ing Novatek’s Yamal plant in North-ern Siberia, will cost around $20billion and includes Russian, French,

Japanese and Chinese investors.The Japanese investors in Arc-

tic LNG are the state body, JapanOil, Gas and Metals National Corp.and the trading house Mitsui & Co.

As with Yamal LNG the Arcticproject will require year-round ship-ments, even when the NSR to theFar East is closed to LNG carriers.

Arctic output will continue to bedelivered to international marketsby a fleet of ice-class LNG carriers.

The vessels will be able to usethe NSR and the trans-shipmentterminals in Kamchatka for car-goes destined for Asia and the Mur-mansk station for those cargoesdestined for Europe and beyond.

During 2018 and early 2019 No-vatek and its partners used an areaoffshore the Norwegian port of

Honningsvag as a trans-shipmentpoint for several million tonnes ofLNG transferred from ice-class car-riers to conventional vessels andshipped south and west.

The last LNG tanker left Hon-ningsvag at the start of July 2019and when the NSR is closed at thestart of the next winter season, re-ports suggest that a temporary Rus-sian re-loading site will open nearKildin Island in Kola Bay, thoughthis has yet to be confirmed.

The Norwegian privately-heldlogistical and ship managementcompany, Tschudi Shipping, hadhandled the reloading operationsfor Russian LNG off Norway after itsigned an agreement with Novatekin September 2018.

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‘CMA CGM Jacques Saade’ named after company founder

LNG Journal editor

MISC Berhad, the Malaysian ship-ping line with an LNG fleet of morethan 30 vessels, said it signed anagreement with Japanese shippingcompany Nippon Yusen KabushikiKaisha (NYK) and trading houseMitsubishi Corp. to co-own twonewbuild LNG carriers to mainlyserve the LNG Canada export pro-ject in British Columbia.

MISC said both LNG carrierswould have a capacity of 174,000cubic metres and are currentlybeing built by the Hyundai SamhoHeavy Industries shipyard in SouthKorea.

The vessels will feature XDFpropulsion pioneered by WinterturGas and Diesel and a partial re-liquefaction facility for higher ef-

ficiencies. Both LNG carriers willserve Diamond Gas International, anLNG marketing arm of Mitsubishi,under 18-year charter contracts.

MISC's main client for chartersis the Malaysian energy companyand prominent LNG market partic-ipant Petronas, a shareholder inLNG Canada along with Mitsubishi.

The LNG Canada project, led byRoyal Dutch Shell, has an esti-mated cost of C$40 billion(US$31.2Bln), making it the biggestever energy investment in Canada.

The project engineering con-tractors are Fluor Corp. of the USand JGC Corp. of Japan.

The first phase of the projectwill be built on a 400 hectares sitein the industrial area of Kitimat,

located about 650 kilometresnorth of Vancouver.

It will comprise two LNG lique-faction Trains, each with 7 milliontonnes per annum of output andtwo LNG storage tanks, each of225,000 cubic metres capacity inaddition to other facilities. Theplant would then be expanded in asecond phase of building.

Shell and its four joint venturepartners, Mitsubishi, Petronas,Chinese major PetroChina andKorea Gas Corp., agreed in Octo-ber 2018 to start construction atthe brownfield site near Kitimatthat had been an energy productsterminal before being acquired byShell in 2011.

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1 October 2019 LNG Unlimited NEWS l 3McDermott to sell Lummus unit for around $2.5Bln to start overhaul

McDermott International, said it hadreceived unsolicited approaches tosell all or part of its Lummus Tech-nology business with a valuation exceeding $2.5 billion and analystssaid this could be the starting pointfor a corporate overhaul.

“Based on the receipt of theseapproaches, McDermott is explor-ing strategic alternatives to unlockthe value of Lummus Technologywhile maintaining the strategic rationale of engineering, procure-ment and construction (EPC),”said McDermott in a statement.

LicensorMcDermott's Lummus Technology isa leading licensor of proprietarypetrochemicals, refining, gasifica-tion and gas-processing technolo-gies and a supplier of proprietarycatalysts and related engineering.

It was noted that the Lummuscompany has a heritage encom-passing around 3,100 patents andpatent applications.

After the news McDermottshares continued their recovery to

jump by 22 percent to $2.64 pershare on the New York Stock Ex-change from a recent low of $2.16per share on September 18 amidthe speculation about its futureafter it appointed an advisory firmto seek new direction.

“Lummus is an excellent busi-ness, with incredibly impressiveemployees, that has earned a rep-utation for expertise, innovationand reliability in the refining andpetrochemical industries,” saidDavid Dickson, President and ChiefExecutive of McDermott.

“The process of exploringstrategic alternatives is part ofour ongoing efforts intended to

improve McDermott's capital struc-ture, and we plan to use the pro-ceeds from any transactioninvolving Lummus Technology tostrengthen our balance sheet,”stated Dickson.

“While Lummus is an importantbusiness within McDermott, wehave decided to undertake a pro-cess to fully realize its strategicand financial value,” he added.

Separately, McDermott's previ-ously announced processes to sellthe remaining portion of its pipefabrication business and its indus-trial storage tank business are ongoing.

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CEO David Dickson taking cash-raising measures in crisis

Chart orderfor LNG fueltanks placedby SwedesChart Industries, the maker ofequipment for the liquefiednatural gas and industrial gasindustries, said it was awardedthe contract to supply four LNGfuel tanks for the marine fuel-gas systems of two LNG-pow-ered chemical tankers beingbuilt at the Wuhu Shipyard onthe banks of the Yangtze Riverin China.

Chart said the contract wasawarded on behalf of the own-ers of the two 22,000 dead-weight-ton vessels, Rederi AB Donsotank from Swedenthrough project company LGMEngineering.

“Each of the 300 cubic me-tres capacity cryogenic tankscomprise double stainless steelshells with vacuum and perliteinsulation,” said Chart.

The US company explainedthat the tanks would be de-signed and manufactured atChart’s Changzhou facility inChina and approved by the Eu-ropean maritime classificationsociety, DNV GL.

“Chart’s technology is inte-gral to the increased number ofLNG-powered ships on interna-tional waters and the bunkeringinfrastructure required to fuelthem,” said Robert Chen, Presi-dent of Chart’s distribution andstorage division for Asia.

Chart, whose headquartersare in the suburbs of Atlanta,has said it continued to see rev-enue and orders strengthen inparticular in the liquefaction,storage and transport marketsfor global LNG, industrial gasinfrastructure and small-scaleventures.

The company is a supplier ofequipment to US LNG exportprojects on the Gulf Coastbeing developed by CheniereEnergy, Tellurian Inc. and Ven-ture Global.

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LNG Journal editor

Malaysian shipping line signs deal for LNG Canada vessels

1 October 2019 LNG Unlimited NEWS l 5

Kosmos Energy, a stakeholder inseveral floating liquefied naturalgas projects offshore West Africa,said that the latest drilling in theoffshore Yakaar-Teranga fields en-countered world-scale resourceswith the potential to support another LNG project.

Kosmos, based in Dallas, Texasand a partner of BP in the plannedFLNG ventures offshore Mauritaniaand Senegal, said that the Yakaar-2well encountered around 30 metresof net gas pay in a similar high-quality reservoir to the previouslydrilled Yakaar-1 exploration well.

Extension“Yakaar-2 was drilled approxi-mately nine kilometers fromYakaar-1 and proved up the south-ern extension of the field,” explained Kosmos.

“The results of the Yakaar-2well underpin our view that theYakaar-Teranga resource base isworld-scale and has the potentialto support an LNG project thatprovides significant volumes ofnatural gas to both domestic andexport markets,” stated Kosmos.

“Development of Yakaar-Teranga is expected in a phasedapproach with Phase 1 providingdomestic gas and data to optimizethe development of futurephases,” added the US company.

Kosmos Chairman and Chief Executive Andrew G. Inglis saidthe latest Yakaar-2 drilling under-lined the quality of the fields.

The partners in the Yakaar-Teranga gas project are BP, Kos-mos and the Senegalese state oiland gas company Petrosen.

“The Yakaar-2 appraisal welldemonstrates the scale and qual-ity of the Yakaar resource base,”added Inglis.

“Senegal is one of the fastestgrowing economies in the world

and Kosmos is excited to be work-ing alongside BP and Petrosen tosupport the country’s growing energy needs,” said the CEO.

Kosmos added that the Yakaar-2 well offshore Senegal wasdrilled in approximately 2,500 me-tres of water to a total measureddepth of around 4,800 metres.

The company said that the“Valaris DS-12” rig, working on be-half of the operator BP, would nowmove to the Orca-1 explorationwell in Mauritania.

Kosmos, BP and other partnersare already developing theGreater Tortue-Ahmeyim field offMauritania and Senegal and twoFLNG projects.

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Kosmos drilling success can underpin third Senegal project

NEWSNUDGES

LNG Journal editorPNG terms onexpansionPapua New Guinea said at theannual LNG Producer-ConsumerConference in Tokyo that thenation was hoping for a gooddeal from ExxonMobil for theP’nyang Gas Agreement, one of the two feed-gas venturesthat will underpin the PNG LNGexpansion to take output to almost 20 million tonnes perannum from around 9 MTPA currently. A consortium led byFrench major Total and calledPapua LNG, holders of the Elk-Antelope gas field licence, havealready agreed to improvedterms for the government.

Petronet dealwith TellurianUS company Tellurian Inc., theHouston-based developer of theDriftwood LNG export project inLouisiana, has signed an initialagreement with Petronet ofIndia under which the companyand its affiliates would negoti-ate to buy up to 5 milliontonnes per annum of US vol-umes. The deal was signed dur-ing a visit to Texas by IndianPrime Minister Narendra Modi.“Petronet will take an equity investment in Tellurian’s Drift-wood project in Louisiana,” saidTellurian without giving finan-cial details. Both companiessaid they would try to finalizethe deal by March 31, 2020.

Santos gasoptimismSantos, the Adelaide-based Aus-tralian energy company and LNGstakeholder and operator, saidthat flow testing of the Doradofield in the Bedout Basin, off-shore Western Australia, had con-firmed excellent productivity andfluid quality from the Baxter gasand condensate reservoir. Thenow completed Baxter formationflow test was the first of twoplanned for the Dorado field.

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CEO Andrew Inglis outlined plans for Yakaar-Teranga fields

Barossa project to supply Darwin LNG chooses Allseas Australian LNG and energy com-pany Santos said that the Barossanatural gas field joint venture aim-ing to supply backfill feed-gas forDarwin LNG has taken another steptowards a final investment decisionin early 2020 with the award of thegas pipeline contract.

The contract for the engineer-ing, procurement, constructionand installation of the 260-kilome-tre gas pipeline was awarded toAllseas Group, a global companyheadquartered in Switzerland.

The Barossa project is cur-rently in the front-end engineer-ing design phase and includes afloating production, storage andoffloading (FPSO) facility, subsea

production system and gas exportpipeline.

The gas export pipeline will tiethe Barossa gas field, 300 kilome-tres north of Darwin, into the existing Bayu Undan-to-DarwinPipeline and extend the lifespan ofthe ConocoPhillips-operated facil-ity that came on stream in 2006.

Santos Chief Executive KevinGallagher said the pipeline con-tract follows the award of thesubsea production system and in-stallation support contract in May.

“Evaluation of tenders for theFloating Production Storage andOffloading (FPSO) platform anddevelopment drilling contracts areprogressing,” added Gallagher.

The Barossa field sits withinSantos’ northern Australia portfo-lio, one of the company’s corelong-life, natural gas asset regions.

The project area encompassespetroleum permit NT-RL5 locatedin Australian waters offshoreNorthern Territory.

Santos holds a 25 percent inter-est in the Barossa joint venturewhile ConocoPhillips holds 37.5percent and is the operator and SK E&S of South Korea owns 37.5percent.

Adelaide-based Santos has an11.5 percent stake in Darwin LNGin Australia’s Northern Territory.

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l NEWS LNG Unlimited 1 October 20196

Eagle LNG Partners said the USFederal Energy Regulatory Com-mission had granted authorizationfor the siting and construction ofits second proposed small-scaleLNG export facility at the Port ofJacksonville in Florida.

The LNG plant will have a pro-duction capacity of around 1.65million gallons per day with 12million gallons of storage and withmarine bunkering and truck-load-ing capabilities.

Equity fundEagle LNG is privately held by theUS Energy and Minerals Group, anequity fund firm with $14 billionunder management.

“The FERC authorization forthe Eagle LNG’s Jacksonville ex-port facility has been many yearsand countless hours in the mak-ing,” said Sean Lalani, Presidentof Eagle LNG.

“As one of only a handful ofgreenfield LNG project proponentsto obtain their FERC order and the

only project devoted to provision-ing small-scale LNG projects in theCaribbean basin, Eagle LNG is onelarge step closer to deliveringclean-burning, affordable, domes-tically produced US natural gas.”added Lalani.

Eagle said the new plant wouldadd to its portfolio of LNG assetsin Florida, namely its existingMaxville LNG facility and its Tal-

leyrand LNG Bunker Station inJacksonville, whose customers include Crowley Maritime Corp.’sLNG-powered vessels servingPuerto Rico.

“Numerous independent stud-ies have shown that sourcing LNGfor power generation allowsCaribbean island nations to sub-stantially reduce power costs andsimultaneously reduce carbon-

dioxide emissions by 30-40 percentas compared to fuel oil and coal,”stated Lalani.

Eagle said that it acknowledgedits project would not have beenpossible without the continuedsupport of the people of Jack-sonville and key stakeholders inNorth Florida.

The company estimates that itssmall-scale plant will cost around$500 million to build and have acontinuing positive economic andemployment impact for the Stateof Florida.

“Exports in small volumes fromour existing Maxville LNG facilityare already providing low cost, domestically produced US naturalgas as an early, stable fuel sourcefor the Caribbean,” explained CEO Lalani.

“The proposed Jacksonville fa-cility will not only drive and cre-ate economic growth in Floridaand the US, it is crucial for the ex-pansion of new US-Caribbean LNGtrade opportunities,” he added.

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Eagle Partners authorized for small-scale FloridaLNG plant and export plans for the Caribbean region

Facility will have marine bunkering and truck-loadingcapabilities and add to Eagle's other Florida assets

LNG Journal editor

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backed by real data to increase feel for the market

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The whole LNG Market at your fingertips

1 October 2019 LNG Unlimited NEWS l 7Construction of LNG carriers for Arctic backed by GTT tank

Gaztransport and Technigaz (GGT),the Paris-based LNG maritime con-tainment tank system designer, hasreceived approval in principle forits Mark III Flex system fromFrench classification society, Bu-reau Veritas, for LNG carriers op-erating in Arctic waters.

The approved system is a modi-fied version of the GTT Mark IIIFlex tanks specifically designedfor Arctic operations.

GTT’s technology is sold toshipyards to install in new Ice-class LNG carriers and over adozen vessels have been built toservice the existing Yamal LNGplant in northern Siberia, oper-ated by Russian natural gas com-pany Novatek.

A second plant is being con-structed called Arctic LNG II withthe same shareholders, Novatek,French energy major Total andChina National Petroleum Corp.,though also now including ChinaNational Offshore Oil Corp. andthe Japanese state body, JapanOil, Gas and Metals National Corp.as well as Japanese trading houseMitsu & Co.

The new Arctic LNG project

will require additional ice-break-ing LNG carriers with Arctic nota-tion to operate in the NorthernSea Route eastwards from Russianwaters to Asian ports.

Bureau Veritas said that the ap-proval in principle covers im-proved GTT Mark III Flex tanksthat may be used in ice-breakingLNG carriers to be ordered for fu-ture projects in the Arctic.

“Approval was based on vibra-tion-acceleration calculations per-formed to simulate the behaviourof the system when an LNG carrieris involved in ice-breaking opera-tions,” explained the French classsociety.

The approval certificate for the

GTT Mark III Flex was handed toPhilippe Berterottière, GTT’sChairman and Chief Executive byMatthieu de Tugny, the Presidentof the Bureau Veritas Marine andOffshore division.

“It is always a pleasure to handover such a certificate and withGTT it is a regular occurrence astheir systems continue to evolveand develop to meet the perfor-mance requirements of today’smarket,” said De Tugny.

“We are proud to continuehelping the development of theircontainment systems and of Arc-tic-related technologies and theirapplication,” he added.

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AustralianIndian importsrise with African andUS cargoesIndian liquefied natural gas im-ports jumped for a fifth month ofthe current fiscal year as volumesreceived rose more than 10 per-cent with supplies coming fromAtlantic Basin countries such asthe US, Nigeria and Angola andtraditional suppliers like Qatar.

LNG imports for the monthof August came to 2.02 milliontonnes (2.74 billion cubic me-tres), a rise of 10.3 percent onthe August 2018 total of 1.83MT.

The import total for the firstfive months of the fiscal yearwas 8.1 percent higher andamounted to 9.98MT comparedwith 9.24MT in the same periodof the previous year according tothe Indian Ministry of Petroleumand Natural Gas.

The main operating terminalson India’s West Coast are atDahej, Hazira and Dabhol, nearMumbai, and there is one EastCoast terminal at Kamarajar, 25kilometres north of Chennai Portin Tamil Nadu.

The Ministry said that the Au-gust shipments of around 25 car-goes had cost about $800 millionversus $900M in August 2018.

LNG imports in the five-month April to August period cost$3.9 billion for 9.98MT comparedwith $4.3Bln for 9.24MT in thesame period of 2018.

India’s July 2019 imports hadalso come to 2.02MT, which was9.1 percent higher than the1.85MT delivered in July 2018.

Production of domestic natu-ral gas for August was 2.68 bil-lion cubic metres versus 2.78Bcmin August 2018, a fall of 3.3 percent.

For the first five months of the fiscal year the outputfrom India's own wells came to13.43Bcm, which was 1 percentdown on the 13.57Bcm posted inthe year-ago period.

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LNG Journal editor

Korean charter deal with H-Line gives Vitol more ship optionsVitol, the global commoditiescompany, has signed a 10-yeartime charter agreement withSouth Korean company H-LineShipping for a newbuild liquefiednatural gas carrier as its portfolioexpands with the recent joint ven-ture signed for Mozambique LNGtrading.

Vitol said the 174,000 cubicmetres capacity vessel is to bebuilt at Korea’s Hyundai SamhoHeavy Industries and is due for delivery in late 2021.

Vitol also holds extension op-tions and the ability to secure ad-ditional LNG carriers to support its

further growth in the industry.The commodities firm has set

up a joint venture with the Na-tional Hydrocarbons Company ofMozambique (ENH) to help marketits LNG volumes.

The venture called ENH EnergyTrading will initially be owned 51percent by ENH and 49 percent byVitol.

Vitol had around 7.8 milliontonnes per annum of LNG deliv-ered in 2018 and this is expectedto rise this year to 10 MTPA fromits portfolio, including supplydeals with Angola LNG in south-west Africa and Cheniere Energy

of the US. Pablo Galante Escobar,Vitol’s head of LNG said he wasexcited by the South Korean ship-ping deal.

“We have concluded this con-tract with H-Line, a top class Ko-rean shipowner, which representsVitol’s second long-term charterof a modern 174,000 cubic metrescapacity carrier,” added Escobar.

“This allows us to optimize ourLNG portfolio that includes in-creasing FOB volumes from differ-ent areas that we are activelymarketing to our global clients,”he explained.

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The 172,600 cubic metres capacity carrier ‘Christophe deMargerie’ has been operating in Arctic since 2017

Where no natural gas pipeline exists Chart offers complete solutions for LNG as a

primary fuel for power generation, or as a secondary fuel where natural gas pipeline

capacity is constrained.

• Diesel, propane, LPG and oil displacement

• Remote locations and islands

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Email: LNG@ChartIndustries.com

www.ChartLNG.com

Powering the Energy Future through LNG

1 October 2019 LNG Unlimited NEWS l9

Fluxys Belgium reported recordactivity levels at the Zeebruggeliquefied natural gas import termi-nal in its first-half earnings for itsregulated business and pointedout that the recent signing of anew capacity agreement withQatar guarantees long-term stabil-ity in LNG carrier traffic.

Fluxys said regulated turnoverfor the six months rose 3.9 per-cent to 260.0 million euros ($285M)compared with 250.1M euros inthe same period of 2018.

Profits riseNet profit increased by more than29 percent to 31.4M euros versus24.3M euros in the first half of2018 as investment in LNG termi-nal capacity was reflected inhigher returns.

“The number of ships dockingat the Zeebrugge LNG terminalwas more than double the numberthat did so in the first half of2018,” said Fluxys.

“A total of 36 ships came tothe terminal to unload their LNGand 10 for trans-shipment ser-

vices, while 12 small vesselsdocked to be loaded with LNG,”it added.

Zeebrugge activities have beenboosted by Russian LNG volumesfrom the Yamal plant in northernSiberia being transferred to othervessels from the Belgian facility.

Most other large carriers un-loaded at Zeebrugge and Fluxysstated that the volume of naturalgas sent out into the transmissionsystem from the terminal wasmore than three times the levelthan the gas send-out in the samesix months of 2018.

“The commissioning of a sec-ond LNG-truck loading station also

had a positive impact, with 1,081trucks being loaded comparedwith 650 in the first half lastyear,” said Fluxys.

The company noted that themonth of May 2019 was an all-timerecord month with 13 ships dock-ing at the terminal and 194 trucksloading LNG.

Fluxys said its most recentspending on terminal infrastruc-ture amounted to 45.2M euros,mainly on the fifth storage tank at Zeebrugge.

“By managing its operatingcosts and continuing its efficiencydrive, the Fluxys Belgium groupachieved its regulatory objectives

and benefitted from incentives,”said the company in reference tothe regulated tariffs regime.

Fluxys said that the agreementsigned with Qatar in early Septem-ber for all the unloading slots forthe existing capacity at the Zee-brugge terminal as current agree-ments expire will give long-termsecurity through to 2039 and canbe extended until 2044.

“This new contract makes amajor contribution to securing thelong-term future of the Zeebruggeterminal and further strengthensits position as a versatile LNGgateway into Europe offering cus-tomers optimum destination flexi-bility,” said Fluxys.

Natural gas transmission forthe Belgian market increased by4 percent, led by Belgian marketconsumption in the first half of2018 of 101.5 terawatt hours, upfrom 98TWh in the same sixmonths of 2018.

“There was also a 17 percentincrease in transmission volumesfor natural gas-fired power plants,taking these volumes to 23.5TWh,” added the company.

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Fluxys of Belgium doubles Zeebrugge trafficwhile Qatar deal secures future income

Belgian terminal is welcoming carriers large and small

LNG Journal editor

Italian network SNAM and equity fund acquirecontrol of LNG FSRU offshore Tuscany coastItalian natural gas network com-pany Societa Nazionale Metan-odotti (SNAM) has agreed toacquire a controlling stake in theOLT Offshore LNG Toscana com-pany which operates the floatingregasification terminal off theWest Coast of Italy.

SNAM said it signed an accordto acquire 49.07 percent of theshare capital of OLT from Italianutility company, the Iren Group,and take joint control of the ter-minal with the global equity fundFirst State Investments.

The equity fund First State alsobought German utility Uniper’s48.24 percent stake in the facilityin May 2019.

The only remaining originalshareholders from the start-up ofthe LNG import project offshoreTuscany in 2013 appears to be ves-sel owner Golar LNG with 2.69percent.

Since operations began, theFSRU has handled LNG cargoesfrom 10 different countries, Alge-ria, Cameroon, Egypt, EquatorialGuinea, Nigeria, Norway, Peru,Qatar, Trinidad & Tobago and theUnited States.

SNAM will now be in charge ofthe “FSRU Toscana”, moored 22kilometres off the Italian coast between the cities of Livorno andPisa and connected to the Italiannational gas transmission grid

through a 36.5-kilomtre pipelinefrom the shore to the regasifica-tion vessel already operated bythe new owner’s subsidiary, SNAMRete Gas.

The OLT Offshore facility isproviding national peak-shavingservices for the sixth consecutiveyear to Italy with LNG cargoes.

“SNAM’s acquiring of OLT willguarantee industrial expertise inmanagement and in future invest-ments into vital infrastructure forthe Italian energy system’s securityand flexibility and will consolidateour position in the MediterraneanLNG market,” said SNAM Chief Executive Marco Alvera.

“This acquisition is in line with

our growth strategy in infrastruc-ture for LNG, a sector that is fun-damental to enabling energytransition and promoting sustain-able mobility, as global demand isdestined to double between nowand 2035,” added Alvera.

The “FSRU Toscana” is expectedto work at 100 percent of its ca-pacity with 41 slots being used forthe Gas Year 2019-2020 and totalallocated capacity amounting to6.3 million cubic metres.

The operations offshore theport of Livorno will also be in-creasing the small-scale servicesavailable once modifications arecompleted.

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The American Gas Association haswelcomed the new natural gastransmission pipeline safety rulesfrom the Pipeline and HazardousMaterials Safety Administration(PHMSA) as representing a con-sensus approach to enhancing thesafe transportation of America’sabundance of natural gas to do-mestic customers and LNG plants.

The PHMSA released three rulesintended to continue to improvethe safety and resilience of thevast US energy delivery infrastruc-ture to keep pace with increasedsupply and demand.

Significant“This significant update to pipelinesafety regulations is the culmina-tion of years of work by govern-ment, industry and pipeline safetyadvocates,” said AGA President andChief Executive Karen Harbert.

“We applaud PHMSA and every-one who participated in the processfor a final rule that brings certaintyto our industry and everyone thatworks to deliver natural gas to cus-tomers throughout the country thatwant it,” stated Harbert.

The AGA pointed out that theGas Pipeline Advisory Committee

provided PHMSA with recommen-dations on the technical feasibil-ity, reasonableness,cost-effectiveness and practicabil-ity of the proposed rule and recom-mendations to support finalizingthe rule.

The PHMSA said the three sig-nificant final rules published inthe Federal Register will strengthenthe safety of more than 500,000miles of onshore gas transmissionand hazardous liquid pipelinesthroughout the US.

The rules will also enhance thePHMSA’s authority to issue anemergency order to address un-safe safety conditions or hazards

that pose an imminent threat topipeline safety.

“These are significant revisionsto federal pipeline safety laws andwill improve the safety of our na-tion’s energy infrastructure,” saidUS Transportation Secretary ElaineL. Chao.

The US pipelines deliver tril-lions of cubic feet of natural gasand hundreds of billions of ton-miles of liquid petroleum productseach year.

The pipeline regulator said thegas transmission and hazardous liq-uid pipeline safety rules would mod-ernize federal pipeline safetystandards by expanding risk-based

integrity management require-ments, enhancing procedures toprotect infrastructure from extremeweather events, and requiringgreater oversight of pipelines be-yond current safety requirements.

The regulator said that finalrules address significant Congres-sional mandates from the PipelineSafety Act of 2011 and recommen-dations from the National Trans-portation Safety Board.

“The tremendous growth in USenergy production will requiregreater anticipation and prepara-tion for emerging risks to publicsafety,” said PHMSA AdministratorSkip Elliott.

“These forward-looking ruleswill help ensure pipeline operatorsinvest in continuous improvementsto pipeline safety and integritymanagement,” Elliot added.

The gas transmission rule re-quires operators of gas transmis-sion pipelines constructed before1970 to determine the materialstrength of their lines by recon-firming the Maximum AllowableOperating Pressure (MAOP).

In addition, the rule updatesreporting and records retentionstandards for gas transmissionpipelines.

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American Gas Association praises natural gaspipeline rules for domestic gas and LNG

US natural gas pipeline network is most dense in LNGstates of Louisiana and Texas along the Gulf Coast

LNG Journal editor

Gazprom will try to resolve issue of ownerless gasnetworks and pipelines around Russia FederationGazprom of Russia, the world’slargest natural gas company and amain pipeline supplier to Westernand Central Europe, is facing aphenomenon dating from the col-lapse of the Soviet Union 28 yearsago and economic upheavals anddifficulties that followed. That iswhat can be done with “owner-less” gas facilities and networksaround the Russian Federation.

Gazprom said its board has justreviewed the information on themeasures undertaken to make aninventory of “ownerless gas facili-ties in the Russian regions” as well

as to “optimize the procedure oftheir transfer to specialized orga-nizations” for further operation inline with Russian law.

It was noted by Gazprom thatproper operation and timely tech-nical maintenance of the gas net-works is the responsibility of theirlawful owner but when no suchentity can be traced what can be done?

“Technical works at the facili-ties of this kind are to be per-formed by specialized organizationsin order to ensure reliability andsafety,” said Gazprom.

“At the same time, the lengthof gas networks with no knownowner (ownerless networks) andno proper maintenance within thearea of operation of the GazpromGroup's gas distribution organiza-tions totaled 6,651 kilometres asof March 1, 2019,” explained thecompany.

“The issue being especiallyacute in the North Caucasus Fed-eral District, which accounts for 48percent of said ownerless net-works,” stated Gazprom in refer-ence to areas wedged between theBlack Sea and the Caspian Sea.

“Gazprom actively participatesin the efforts carried out to iden-tify ownerless networks,” it stated.

“In particular, Gazprom's gasdistribution organizations are in-ventorying gas distribution net-works within the areas of theirresponsibility and informing localauthorities of any ownerless prop-erty detected,” Gazprom added.

Gazprom said that jointly withthe federal authorities, it waspreparing proposals for updatingthe existing legislation to settle theissue of ownerless gas pipelines.

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l NEWS LNG Unlimited 1 October 201910