LNG JOURNAL PUBLICATION 27 March 2018

LNG Unlimited

The first cargo to be exportedfrom the new Cove Point liquefiednatural gas export plant on Chesa-peake Bay in Maryland has arrivedat the UK port of Milford Havenand is only the second US ship-ment to be sent to Britain since USLNG exports began in 2016, whilealmost 40 shipments have beensent to other European nations,mainly to southern Europe.

The 138,100 cubic metres ca-pacity vessel “Gemmata”, oper-ated by Shell Shipping, completedthe unloading of the shipment fromCove Point, owned by DominionEnergy, on March 21 at the DragonLNG terminal in Milford Haven,owned by Shell and Malaysian energy company Petronas.

TotalsThe US has shipped more than 300 cargoes since the first exportplant in the Lower 48 States beganoperations in February 2016 atSabine Pass in Louisiana

However, despite Northwest Eu-rope suffering from a cold snap andnatural gas shortages because ofpeak demand there was no surge ofshipments heading from the US asAsian and South American destina-tions are still the preferred option.

Analysts said that NorthwestEurope will grow in importance asa destination of last resort asmore North America volumes areproduced and inter-basin arbitragetrading becomes more regular.

At the same time Russian car-goes from the Yamal plant inSiberia, operated by Novatek and

in which Total is a stakeholder,have begun arriving in Europe fortrans-shipment, mostly at Frenchterminals.

With the unloading of the UScargo at the UK Dragon terminal,one of two import facilities in Mil-ford Haven port, just three ship-ments have been sold into thehigh-priced Northwest European gasmarket since the US exports began.

A Sabine Pass cargo was un-loaded in June 2017 at the DutchGate terminal in the port of Rot-terdam and in July 2017 a secondSabine Pass shipment arrived atthe UK Isle of Grain terminal,southeast of London and owned byNational Grid plc.

While northwest Europe hasseen few US shipments, 34 cargoeshave been sent to southern Euro-pean nations such as Portugal (8cargoes), Spain (11 cargoes), Italy(3 cargoes), Malta (1 cargo) andTurkey (11 cargoes).

East European nation Polandhas received one US cargo whilethe Baltic state of Lithuania hasunloaded two US shipments.

Cove Point plant owner Domin-ion began producing LNG at theend of January as it continued to put the facility through a com-prehensive round of testing and

quality assurance activities.Shell North America provided

the natural gas needed for lique-faction during the commissioningprocess and thus lifted the firstLNG produced.

Dominion in the weeks aheadwill produce LNG for the Japanesejoint venture comprising Sumit-omo Corp. and the utility TokyoGas, as well as for Gas Authorityof India (GAIL) under 20-year,take-or-pay contracts.

Single TrainCove Point is a relatively small op-eration with nameplate capacityof 5.25 million tonnes per annumof LNG from a single Train.

This compares with 18 MTPAbeing produced at Cheniere’sSabine Pass where four Trains out ofsix are completed and on stream.

Construction of the Cove Pointliquefaction facility began in Octo-ber 2014, following more thanthree years of federal, state andlocal permit reviews and approvals.

US LNG export capacity is setto increase to more than 70 mil-lion tonnes per annum by 2020-2022 as other new projects comeon stream in the Gulf Coast statesof Louisiana and Texas.

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UK terminals have handled only occasional US cargoes

Sabine Pass has sent

three cargoes to UK and

Dutch import terminals

and 34 to Med region

LNG Journal editor

UNLIMITEDAGENDA

Freeport LNG isawarded export permit for plant’sfourth Train

3

REGULATORS

PROJECTS

IMPORTS

Canadian projectoversubscribed withbids for pipeline to US on LNG exits

6

Indian importsdecline as costof LNG rises byover 25 percent

5

MAN Diesel plans Korean test centrewith dual-fuel andLNG capability

7

EQUIPMENT

LIQUEFACTION

ENGINEERING

Qataris plan fornew mega-Trains of 7.8 MTPA outputfrom around 2023

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Shipment to UK highlights US LNGblindspot for Northwest Europe

Sabine Pass in Louisiana is now largest daily US gas consumer

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With four liquefaction Trains infull operation, Cheniere Energysaid its Sabine Pass export plant inLouisiana was now the largestphysical consumer of natural gasin the US on a daily basis and itsfifth Train is now almost 85 per-cent complete.

Cheniere gave its update in itslatest presentation to investorsand said its own Creole TrailPipeline provides 1.5 billion cubicfeet per day of the total 3.9 Bcf/dcontracted inlet capacity intoSabine Pass.

Over 300 cargoesThe Houston, Texas based com-pany said its plant had deliveredcargoes to 25 countries and re-gions across the globe, amountingto 300 shipments exported.

A second US export plant hascome on stream in the Lower 48States, the Cove Point plant inMaryland.

About half-a-dozen industrial-scale plants, larger than CovePoint with its single train and 5.25million tonnes per annum of out-put, will come on stream inLouisiana and Texas over the nextfive years.

Cheniere’s 94-mile pipeline,whose bi-directional capabilitieswere completed in 2015, intercon-nects Sabine Pass with a numberof large interstate pipelines in-

cluding Kinder Morgan’s NaturalGas Pipeline of America (NGPL),Transco, Tennessee gas Pipeline,Florida gas Transmission, Bridge-line and Texas Eastern Transmis-sion Pipeline.

“A diverse and redundantpipeline network has allowed SPLto reach into almost every NorthAmerican supply basin,” said thecompany.

“SPL's redundancy on pipeline

deliverability to the terminal pro-vides the ability to adapt to chang-ing market conditions and manageupstream interruptions,” it added.

Its four processing Trains in op-eration have given steady outputof 18 MTPA. Train five will takeoutput to 22.5 MTPA and the sixthcoming on stream would take thetotal to 27 MTPA.

“Train 6 is fully permitted andready to be commercialized, withattractive expansion economicsleveraging existing infrastruc-ture,” stated Cheniere.

Cheniere said its “investmentthesis” provides long-term, stable,investment-grade cash flows.

“The company’s strategy isbased on long-term ‘take-or-pay’style of commercial agreements(Sales and Purchase Agreements)with investment grade off-takersfor approximately 80-95 percentof the expected aggregate produc-tion capacity under constructionor completed,” said Cheniere.

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Sabine Pass LNG plant in Louisiana is now thelargest daily consumer of natural gas in US

l NEWS LNG Unlimited 27 March 20182

US Gulf Coast LNG export developer posts $231M loss as engineer Bechtel joins roster of investorsTellurian Inc, developer of a USGulf Coast liquefaction and exportplant called Driftwood LNG, endedthe year with around $128.3 mil-lion in cash while remaining debtfree before having to invest up to$30 billion over the next fouryears to make their extensive con-struction, upstream feed-gas andpipeline plans a reality.

Tellurian Inc. reported an an-nual net loss of $231.5M thoughinsisted it had a strong balancesheet consisting of $276.8 millionin assets, of which $90.9M repre-sented proved natural gas reservesof around 327 billion cubic feetequivalent.

The Houston-based company’sreport consisted of a list of land-mark events during 2017 thatbought closer its plan to build anexport facility with six Trains andaround 27 million tonnes per

annum of output. Tellurian said itsDriftwood venture completed thepre-filing phase and submitted aformal application with the Fed-eral Energy Regulatory Commission(FERC) to construct and operatethe Driftwood terminal and Drift-wood pipeline.

A FERC authorization deadlinewas set for January 10, 2019, al-lowing Tellurian to make a final in-vestment decision and beginconstruction of the plant in thefirst half of 2019.

Tellurian said it was hoping toproduce LNG at a cost of around$550 per tonne, one of the lowestcost liquefaction projects world-wide.

Tellurian also acquired almost12,000 net acres of natural gasproducing assets in the core of theHaynesville shale and said it wastargeting delivery of gas for $2.25

per million British thermal units.It also revealed plans for the

Tellurian Pipeline Network to ex-pand natural gas supply alterna-tives for the growing demand insouthwest Louisiana.

“Tellurian was able to guaran-tee its project costs, gain a regu-latory scheduling notice, andobtain access to capital markets,”said company President and ChiefExecutive Meg Gentle.

“By integrating our business,we are recognizing the strength ofthe commoditized LNG market,and we are offering customers theopportunity to share in the bene-fits of the low-cost structure asour partners,” added Gentle.

“The experienced team at Tel-lurian is developing asset opportu-nities representing $29 billion ofnear-term investments that willdeliver natural gas to the growing

LNG hub in southwest Louisianaand enable exports to global mar-kets,” she stated.

Tellurian also announced thatits LNG engineering contractorBechtel had made a $50 million in-vestment in the company.

The investment by the US engi-neer and builder of liquefactionplants around the world was onthe basis of a preferred equity in-vestment with an implied Telluriancommon share price of $8.16 pershare.

“Tellurian management andBechtel have worked together formany years and we look forwardto continuing our success as equitypartners,” said Brendan Bechtel,Chairman and Chief Executive ofthe Bechtel Group, a privately-held company headquartered inSan Francisco.

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Creole Trail provides 1.5 Bcf per day of feed-gas

LNG Journal editor

Pivotal LNG, the US clean fuel sup-plier, has made its first delivery ofliquefied natural gas to the Na-tional Aeronautics and Space Ad-ministration (NASA) after earningthe contract award to serveNASA’s Marshall Space Flight Cen-ter in Huntsville in Alabama.

“We are proud to have earnedthe trust and confidence of NASAto serve the historic agency,” said Tim Hermann, President ofPivotal.

Pivotal won a tender in thethird quarter of 2017 for LNG supplies, strictly for ground fueluse, at the Marshall Space FlightCenter.

“It was a pleasure to workclosely with the John F. KennedySpace Center, who contracted the

solicitation, and the MarshallSpace Flight Center professionalsto understand the agency’s exclu-sive schedule of supplies, com-modity specifications, andcontracting terms,” said Hermann.

The Marshall Space facility is arocketry and spacecraft propulsionresearch centre set up by the fed-eral government in 1960 to helpwith the space program.

NASA has previously been in-volved in the LNG value chainthrough its Michoud Assembly Fa-cility in New Orleans, the agency'sonly large-scale advanced manu-facturing plant.

Lockheed Martin Corp., theaerospace and defence company,has drawn on Michoud plant andequipment to manufacture storage

tanks for LNG-fueled ships.Pivotal is part of Southern

Company, a leading US natural gas and electricity supplier whoseheadquarters are in Atlanta, Georgia.

Pivotal and Southern CompanyGas operate a network of LNG pro-duction facilities with the capacityto produce over 554,000 gallonsper day and the ability to storemore than 96 million gallons.

Pivotal, through its Jax LNGpartnership with NorthStar Mid-stream, is developing an addi-tional LNG production facility inJacksonville, Florida.

The Jax LNG facility is expectedto be in service by the secondquarter 2018.

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27 March 2018 LNG Unlimited NEWS l 3Freeport LNG is awarded export permit for plant’s fourth Train

Freeport LNG, the US export plantbeing constructed on Quintana Island in Texas, was granted a permit by the Department of Energy to export an additional 5 million tonnes per annum from a fourth liquefaction Train.

The Texas project, led by US energy entrepreneur Michael Smith,has already entered the authoriza-tion process of the Federal EnergyRegulatory Commission to constructthe fourth liquefaction Train.

Schedule“The proposed Train 4 is being de-signed with a nominal productioncapacity of 5.1 million tonnes perannum. Freeport LNG anticipatesbeing ready to commence construc-tion of Train 4 by the end of 2018,with operations starting as early as2022,” said the DoE statement.

Freeport LNG is progressing onbuilding the initial three Trainsand it has carried out other work,including dredging the originalmarine basin at the existing im-

port terminal to provide bettercarrier facilities.

The first three Trains will bebrought on stream in sequence,between the end of 2018 and thethird quarter of 2019, givingaround 15.3 MTPA of output.

About 13.4 MTPA of that pro-duction capacity from the firstthree Trains has been contractedunder use-or-pay liquefactiontolling agreements with Europeanand Japanese contract holders, BP of the UK, Germany’s Uniperand Japan’s Jera Co. Inc. andOsaka Gas.

The four Freeport customers

have also signed agreements forpipeline capacity on the CoastalBend Header pipeline project.

The pipeline is being con-structed by Gulf South PipelineCo. and is on scheduled to be inservice by November 2018.

Gulf South’s pipeline projectwill deliver feed-gas to theFreeport plant and expand andmodify a portion of its existingsystem in southeast Texas.

The project consists of 66 milesof pipeline located in Brazoria andWharton Counties in Texas and withadditional compressor facilities.

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Texas plant development is led by CEO Michael Smith

Hong Kongfirm grantedUS Fourchon LNG permitFourchon LNG, the US exportventure owned by a subsidiaryof Hong Kong-based EnergyWorld Corp. and planned forBelle Pass in Louisiana, wasgranted multi-year permits toship cargoes for 30 years tocountries with a Free TradeAgreement (FTA) with the USand for 20 years to any coun-tries without an FTA.

The Department of Energyawarded the multi-contractauthorizations for up to 260billion cubic feet a year of nat-ural gas.

The Fourchon project is al-ready in the pre-filing environ-mental review processoverseen by the Federal EnergyRegulatory Commission.

Fourchon’s developers, whoalso have offices in Houstonand Sydney, Australia, plan atwo-phase construction of theliquefaction facilities with ini-tial production of 2 milliontonnes per annum and a sec-ond phase expanding output toa total of 5 MTPA.

The Louisiana project alsoplans to reserve up to 500,000tonnes a year of LNG for do-mestic use, with the intentionof providing fuel for offshoresupply vessels powered by LNGand operating in the Gulf ofMexico.

Fourchon is being devel-oped by Energy World Corp.subsidiary Energy World (USA)Inc. EWC is engaged in thebusiness of infrastructure,power generation and energy-related projects mainly in theAsia-Pacific region.

The company recently com-pleted a small-scale LNG im-port terminal in the Philippineslinked to a power venture andis in the final stages of buildingLNG liquefaction and powerplants in Indonesia.

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27 March 2018 LNG Unlimited NEWS l 5

Indian liquefied natural gas im-ports decreased in February as thecost of the shipments soared morethan 25 percent compared withthe previous fiscal year and Indiaprepared to receive some less expensive volumes in the futurefrom US export plants in Louisianaand Maryland.

Shipments to India’s threemain import terminals, Dahej,Hazira and Dhabol near the WestCoast port of Mumbai amounted to1.56 million tonnes (2.11 billioncubic metres) last month, whichwas 1.0 percent lower than inFebruary 2017 when 1.57MT ofLNG was brought in.

VolumesThe LNG imports had jumped inJanuary by almost 47 percent to1.78MT compared with 1.21MT inthe same month of last year.

The total of imports for the 11months of the fiscal year from Aprilto February amounted to 17.69MTof LNG, an increase of 6.1 percentversus the 16.67MT imported in thesame period of the previous fiscalyear, according to the figures fromthe Indian Ministry of Petroleumand Natural Gas.

The shipments had cost India$6.9 billion compared with$5.5Bln in the same 11-month period of the previous fiscal year,a rise of 25.5 percent.

The decline in LNG imports forFebruary was matched by a fall indomestic natural gas productionfrom India’s own gas fields.

The Ministry said gross produc-tion of natural gas for the monthof February amounted to 2.48 bil-lion cubic metres compared with2.52 Bcm, down 1.5 percent com-pared with February 2017.

However, the cumulative 11-month production of natural gaswas 2.5 percent higher at 29.86Bcm versus 29.14 Bcm in the sameperiod of fiscal 2017.

Indian LNG imports could havebeen higher if East Coast destina-tions were available. A betterpipeline network nationwide is

being developed as a governmentpriority.

One Indian company, networkoperator Gas Authority of India(GAIL), will import more ship-ments in 2018 from the US andAustralia, where it has long-termsupply contracts now in force.

LNG volumes available to In-dian companies have edged higheroverall during this fiscal year fromTrains in Australia and the US inaddition to regular supplier Qatar.More shipments are also comingfrom Angola, Nigeria and Equato-rial Guinea.

Cheniere Energy, owner of theSabine Pass LNG export plant inLouisiana, recently marked thestart of regular LNG shipments toIndia with a ceremony for the firstcargo departing under a long-termsupply agreement with GAIL.

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Indian LNG imports decline as costs rise by over 25 percent

NEWSNUDGES

LNG Journal editorWood Groupposts lossWood Group, the energy ser-vices and LNG project companythat completed the US$2.8-bil-lion acquisition in October 2017of London-listed peer Amec Fos-ter Wheeler, posted a $30 mil-lion loss for the year. Wood saidoperating profit before one-time items was $212M comparedwith $244M the previous year, afall of 13 percent. Revenuesfrom continuing operationsamounted to $5.39Bln in 2017.“The acquisition of Amec FosterWheeler in October brought to-gether two businesses and threebrands to create Wood, a globalleader in project engineeringand technical services delivery,”said Robin Watson, Wood ChiefExecutive.

Kuwait LNGagreementKuwait Petroleum Corp. (KPC)has signed a new long-termagreement for supplies of lique-fied natural gas, said theKuwaiti state news agency. Itsaid the LNG volumes wouldhelp the Gulf nation meet risingnatural gas demand for thepower generation sector. Theagreement was signed with ShellInternational Trading and willstart in 2020. According to aprevious provisional agreement,it would involve volumes of upto 3 million tonnes per annumfor 15 years. Kuwait’s Mina Al-Ahmadi floating LNG import fa-cility was the first to be set upin the Gulf region in 2009.

Inpex givenoffshore permitJapanese energy company InpexCorp., the main stakeholder inthe Australian Ichthys LNG ex-port plant under construction atBladin Point near Darwin in theNorthern Territory, said it wasawarded an exploration permitfor WA-533-P as operator in Aus-tralia’s latest acreage release.

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Staff at the Dahej LNG import terminal near Mumbai

Japan’s LNG imports rise as more Australian cargoes offset Mideast fallJapanese liquefied natural gas im-ports rose 6.5 percent last month,led by a surge in Australian ship-ments as Asian cargo numbers alsorose and Middle East deliveries fell.

The nation’s February LNG de-liveries amounted to 8.29 milliontonnes compared with 7.79MT inFebruary 2017.

The cost of the shipmentsjumped by around 18.8 percent inFebruary 2018 to 427.53 billionyen ($4.04Bln) compared with359.99Bln yen ($3.40Bln) in Febru-ary 2017, according to the prelim-inary trade figures from theJapanese Finance Ministry.

Japan’s LNG shipment volumeshad edged lower in January to8.26MT while the cost of the ship-ments was 11.5 percent higherthan in the first month of 2017.

The cost of the shipments hadalso risen in January to 416.2Blnyen ($3.81Bln) compared with373.2Bln yen in January 2017.

Imports of thermal coal, a maincompetitor of LNG, also rose inFebruary 2018 to 9.49MT, a rise of6.6 percent versus February 2017.

Japan ended the year with an LNG import tally in 2017 of83.63MT, just 0.4 percent higherthan the 2016 total but with high

costs. Japan paid 19.3 percentmore in 2017 for its LNG with3,915 billion yen ($35.58Bln) of expenditure versus 3,281Blnyen ($29.81Bln) in 2016 for its83.34MT.

Japan's nuclear power plants,numbering more than 50, werelargely still offline in January withonly four currently operating.

The Ministry data for February2018 showed that Asian shipmentsfrom nations such as Malaysia andIndonesia, Papua New Guinea andBrunei increased by 15.2 percentfrom February 2017 to 2.55MT.

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l NEWS LNG Unlimited 27 March 20186

TransCanada Corp., the Canadianand North American pipeline andinfrastructure operator, has com-pleted its second binding capacityexpansion on its Nova Gas Trans-mission Ltd. (NGTL) system forpipeline commitments to the Em-press-McNeill export delivery pointonward to the US border for sur-plus volumes formerly expected tobe shipped as LNG from BritishColumbia to Asia.

NGTL offered 280 million cubicfeet per day of firm service, tar-geted to commence in November2021.

TermsTransCanada said the Open Seasonbidding closed on March 15, 2018,and was oversubscribed, with anaverage awarded contract term ofapproximately 22 years.

This pipeline capacity offeringfollowed a successful Open Seasonheld in January 2018 for 1.0 Bcf/dof expansion capacity at the samedelivery point, with service com-mencing between November 2020and April 2021, and underpinning arecently announced $2.4 billionNGTL System expansion.

TransCanada said this earlierOpen Season was also oversub-scribed, and industry had ex-

pressed strong interest for addi-tional market access.

“The success of this Open Sea-son reinforces the critical rolethat the NGTL System plays totransport clean-burning naturalgas out of the Western CanadianSedimentary Basin and expandmarket connectivity for produc-ers,” said Tracy Robinson, Trans-Canada's senior vice president forCanada Gas Pipelines.

“We are committed to workingcollaboratively with industry and

providing competitive options toconnect growing basin supply todownstream markets across NorthAmerica,” stated Robinson.

TransCanada said NGTL wasworking to finalize the scope ofexpansion facilities required tomeet the incremental service requirements resulting from thisOpen Season.

“Any expansion facilities willbe in addition to NGTL's existingcapital expansion programs to-talling approximately $7.2 bil-

lion,” said the Canadian company.TransCanada is facilitating eco-

nomic access for their natural gasto key export markets, includingaccess to Eastern Canada and theUS Northeast through Tran-sCanada’s Canadian Mainline anddownstream systems.

The NGTL contracts will con-nect new supply in the low-costMontney shale-gas of northeastBritish Columbia that was formallyexpected to be transported to LNGprojects on the Pacific Coast suchas those previously planned bycompanies like Petronas ofMalaysia.

It will also service as a routefor the Deep Basin and Duvernayplays to the NGTL system and pro-vide shippers access to variouslocal and pipeline export markets.

The pipeline expansion was pre-viously mostly linked to a final in-vestment decision on the PacificNorthWest LNG project of Petronasand to other plans for liquefactionplants on the BC coast.

TransCanada said the existingNGTL system was a strategic assetnow committed to providing ship-pers with timely and competitiveoptions to connect with growingbasin supply to downstream mar-kets throughout North America.

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TransCanada oversubscribed with bids for Nova pipeline to US after cancelled LNG projects

Tracy Robinson, TransCanada's head of gas pipelines.

LNG Journal editor

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27 March 2018 LNG Unlimited NEWS l 7MAN Diesel & Turbo plans Koreandual-fuel and LNG testing centre

MAN Diesel & Turbo, the Germanmaker of marine engines and tur-bomachinery, said it was buildinga new test facility in South Koreain partnership with Hyundai HeavyIndustries that will include im-proving LNG equipment and dual-fuel engines.

The test and gas facility will belocated at the Port of Ulsan inSouth Korea at Hyundai’s Engine &Machinery Division (HHI-EMD)works and is scheduled to beginoperation in early 2019.

Copenhagen link“It will be the first test engine

with online remote control, sup-porting MAN’s digitization strategy.In this respect, the test enginewill also be connected to MAN's re-search and control centre in Copen-hagen, enabling the company’sresearch engineers to closely followand enhance the testing of futureengine technologies,” said MAN.

The German-owned companywith operational facilities in Den-mark said the MAN-Hyundai ven-ture aimed to expand MAN Diesel& Turbo’s research and develop-

ment test capacity as part of itsstrategy to improve dual-fuel gasengines using LNG and other tradi-tional fuels.

MAN has chosen Hyundai as itspartner as it is among the leadingglobal shipbuilders for LNG carri-ers and also has plans to constructa new wave of gas-powered ves-sels for container, cargo and en-ergy companies to meetemission-control regulations.

MAN, based in Augsburg, Ger-many, said the new test engineset-up will also feature MAN ‘s ownelectronically-controlled, gas-in-

jection (MEGI) Pump VaporizerUnit (ME-GI PVU), a high-pressureLNG supply unit that makes instal-lations significantly more compact,reducing both cost and weight.

“The ME-GI PVU is designed topressurize and vaporize the LNGfuel to the exact pressure andtemperature required by ME-GI en-gines,” said the German company.

“Gas pressure is controlled viacontrol of hydraulic oil flow to thepump, ensuring a very quick andprecise control of the LNG supplyto the engine” it explained.

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Shell ends presence in NZ with assetsale to OMVRoyal Dutch Shell, one of theleading participants in theglobal LNG and natural gas mar-ket, is to end its 100-year pres-ence in New Zealand by sellingits shares in eight businesses forUS$578 million to Austrian en-ergy operator OMV, a companybeing helped by Shell to be-come an LNG importer usingthe Dutch port of Rotterdam.

Shell said its pull-out fromNew Zealand came after a two-year strategic review of theAnglo-Dutch company’s inter-ests in the country as it off-loads none-core assets.

“It is consistent with theShell Group strategy of divest-ing $30 billion of assets by theend of 2018 and is in line withShell’s drive to simplify the up-stream portfolio and re-shapethe company into a world-classinvestment,” said Shell.

OMV, or OsterreichischeMineralol Vervaltung as theAustrian company is known inGerman, has a growing inter-national portfolio and producesand markets oil and natural gasin Europe and is also involvedin the refining industry.

The Vienna-based companyadditionally operates the gaspipeline network in Austria andgas storage facilities in Austriaand Germany.

As part of the deal, the em-ployees of Shell Taranaki Ltdand Shell New Zealand will be-come part of OMV New Zealandupon completion of the deal.

The six other New Zealandbusiness stakes sold by Shellare: Shell Exploration NZ Ltd,Taranaki Offshore PetroleumCompany of NZ, EnergyPetroleum Taranaki Ltd (EPTL),Energy Petroleum Holdings Ltd(EPHL), Energy InfrastructureLtd (EIL) and Energy PetroleumInvestments Ltd (EPIL).

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MAN fuel-gas supply system for LNG-powered vessels

LNG Journal editor

Nordic supplier Skangas increasesEurope’s LNG bunkering operationsNordic LNG supplier Skangas, asubsidiary of Finnish natural gascompany Gasum, said it com-pleted 1,000 LNG bunkering oper-ations during a 12-month spell,representing a more than 60 per-cent increase over previous years.

Skangas said the driving forcebehind the rise rested in supply-ing to new LNG-powered vesselsboth on regular routes and in the spot market. Its number ofbunkering operation was both byship-to-ship and quayside fromtrucks.

LNG is the cleanest availablemarine fuel and is in growing usein Northwest Europe and the US topower all vessel types, including

ferries, passenger ships, tankers,bulk, supply and containerships.

Skangas explained that the fuelmarket had been awaiting special-ized LNG bunkering vessels to deliver to ships at sea.

It benefited during 2017 fromit use of the NG bunkering vessel“Coralius” for fuel operations inthe North Sea, the Skagerrak areaand Baltic Sea.

“As more and more operatorsconvert their ships to clean fuelwith LNG and dual-fuelled enginesto power them, demand has risensignificantly,” said Gunnar Hel-men, Sales Manager for the marine division of Skangas.

“This is particularly true in

European waters where, until recently, most of the traffic con-sisted of ferries and RoPax cruiseferries routinely traveling setroutes,” explained Helmen.

“The supply pattern is more diverse due to the use of a greatervariety of vessels that require dif-ferent types of bunkering solu-tions,” he added.

“We are responding directly byoffering a number of solutions forthis market,” said Helmen.

The European Union is promot-ing small-scale LNG distributionand more use of the fuel in truck-ing as part of its clean energypolicy.

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Qatar Petroleum is planning tobegin liquefied natural gas pro-duction from its North Field expansion by the end of 2023 to reach 100 million tonnes perannum of output from its current77 MTPA with three new liquefac-tion Trains and the possibility of afourth additional Train to takeoutput to 107.8 MTPA.

The company made this pointat the award to Japanese engi-neering company Chiyoda Corp. of the front-end engineering anddesign of the onshore facilities forthe expansion.

Joint ventureQatar Petroleum, whose Qatargassubsidiary operates the Ras Laffanliquefaction complex in the Gulfstate with joint venture partnersincluding US major ExxonMobil, isalso looking to form a joint ven-ture with international partners todeliver the North Field project.

The facilities will produce anadditional 23 MTPA from the addi-tional Trains to be planned byChiyoda and they will be the

largest in the world, surpassingQatar's current mega-Trains interms of output.

“The award of the front-end en-gineering and design contract toChiyoda Corporation, is a significantmilestone in our journey to deliverthe first LNG from this new projectby the end of 2023,” said SaadSherida Al-Kaabi, Qatar PetroleumPresident and Chief Executive.

“The addition of 23 MTPA ofLNG will not just enhance QatarPetroleum's position as the world'slargest LNG producer and exporter,but also its international image asa reliable and trustworthy energy

provider,” added the CEO.Al-Kaabi noted that the expan-

sion with feed-gas from the NorthField resources is part of the com-pany’s strategic growth plan.

“We are continuing discussionswith potential international jointventure partners for this strategicproject to determine an optimizedarrangement with the objective ofdelivering maximum value to theState of Qatar and contribute tothe optimal utilization of Qatar'snatural resources,” stated Al-Kaabi.

The Qataris said the scope ofwork will provide the basic designfor the addition of three liquefac-

tion Trains with 7.8 MTPA of out-put with associated pre-invest-ment to add a fourth LNG train inthe future.

“The onshore facilities will re-ceive approximately 4.6 billion stan-dard cubic feet per day of feed gasfrom the southern sector of Qatar'sNorth Field, which is the largestsingle non-associated gas field inthe world,” the company added.

Qatar has the southern portionof the North Field in the Arab Gulfand the other part is under the ju-risdiction of Gulf neighbour Iran.

The Qataris lifted their ownself-imposed 12-year moratoriumand is resuming development ofits North Field gas.

Qatar is still the world's largestLNG supplier 21 years after it firstbegan exporting LNG in 1997.Chiyoda was one of the main con-tractors on the various projectsthat constructed Qatar's existingLNG Trains.

However, the government hadhalted development of the NorthField, citing the need to study theimpact of rapid gas field develop-ment on reserves.

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Qatar seeks partner for LNG expansion plan from 2023 with new mega-Trains of 7.8 MTPA output

Russian carrier fleet owner Sovcomflot slips to net loss in year of LNG advancesSovcomflot posted a net loss forthe year as it made progress in theLNG shipping sector by startingdeliveries from the Russian YamalLNG plant and securing fuel for asmall fleet of LNG-powered, ice-class Aframax oil tankers underconstruction.

The Russian company reporteda loss of $113.0 million comparedwith a $206.8M profit the previousyear.

Gross annual revenue for freightand hire amounted to $1.43 billioncompared with $1.38Bln the previ-ous year, a rise of 3.4 percent.

However, time charter equiva-lent revenue was down 7.4 percentat $1.05Bln versus $1.14Bln in 2016.

Among the company’s highlightsin the fourth quarter, the world’sfirst ice-breaking LNG carrier, the172,000 cubic metres capacity Arc7-class “Christophe de Margerie” wasdelivered into long-term time-char-ter with Yamal LNG.

The “Christophe de Margerie”earlier completed her first com-mercial voyage, transporting LNGthrough the Northern Sea Routefrom Norway to South Korea, be-coming the world’s first merchantvessel to travel the full length ofthe NSR without an icebreaker escort.

The vessel then commencedloadings from the Siberian port ofSabetta in the Yamal Peninsula fol-

lowing the official start-up of theYamal LNG plant in December2017 by Russian natural gas com-pany Novatek.

Sovcomflot also previously an-nounced an agreement with Shellfor the supply of LNG to fuel thefirst of a new generation of gas-powered Aframax crude tankers.

The Russian company said itwould take delivery of six suchice-class vessels between the thirdquarter of 2018 and the first quar-ter of 2019.

“Despite the very strong head-winds seen in the conventionaltanker markets over 2017, withfreight rates down by almost 50percent reflecting one of the

worst years in a quarter of a cen-tury, we continued to implementour core strategy of industrialisingour business model,” said SergeyFrank, President and Chief Execu-tive of Sovcomflot.

“We achieved a significantmilestone with the decision topower with LNG our new genera-tion of ice-class Aframax tankers,setting new standards for emis-sions and making the tanker indus-try greener,” added Frank.

“Sovcomflot’s growing indus-trial portfolio (offshore servicesand gas transportation) enabled us to remain profitable opera-tionally,” he said.

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Qatar’s Ras Laffan processing complex will be expanded

LNG Journal editor

27 March 2018 LNG Unlimited NEWS l9