Enbridge Line 3 Replacement Project Receives MPCA Approvals and Remaining DNR Permits

 

Today Minnesota Pollution Control Agency announced approvals for Enbridge's Line 3 project, including the 401 Water Quality Certification. Also, today the Minnesota Department of Natural Resources released the final eight permits for the project. 

 "Clearly this is a big day for Line 3 in Minnesota," said Leo Golden Vice President of Line 3 Execution. "These authorizations and approvals are an important step towards construction for this safety and maintenance focused replacement project which comes at an important time for Minnesota."

 This decision from the Minnesota Pollution Control Agency, including the project's 401 Water Quality Certification clears the way for a determination from the US Army Corps of Engineers regarding federal permits. The Line 3 project has been designed to avoid and minimize impacts to sensitive streams and wetlands.  Enbridge pipelines have coexisted with the nation's most productive wild rice waters for 70 years. 

 The authorizations and permits approved today by the Minnesota DNR range from a license for utility crossing of state land and public water, to water appropriation for dust control, hydrostatic testing and horizontal directional drilling. Enbridge has now received all ten of the DNR permits and authorizations for the safety and maintenance focused Line 3 Replacement Project. 

 The project still needs final permits and authorizations before construction can begin. The thorough, robust, science-based review of the project over the past six years has led to evidence-based approvals. Enbridge recognizes that the permit conditions required by the PCA and DNR are essential for protecting Minnesota's sensitive streams and wild rice waters during construction and planning for post-construction restoration and enhancement. 

 At Enbridge safety is our top priority. Enbridge implemented an effective COVID-19 testing and screening program that has proven effective during our recent Line 3 construction in North Dakota. We will continue to follow the latest guidance provided by local, federal and international public-health and government authorities to protect workers and communities. The project will provide significant economic benefits for counties, small businesses, Native American communities, and union members. Line 3 is a shovel-ready, $2.6-billion private investment that will bring 4,200 family-sustaining construction jobs, millions of dollars in local spending and tax revenues at a time when Northern Minnesota needs it most.

McDermott Earns Next Phase of Russian Ethane Cracker Project from CC7

 McDermott International, Ltd today announced it has secured the next phase of the ethane cracking project from China National Chemical Engineering & Construction Corporation Seven, Ltd (CC7). In 2019, McDermott was awarded a contract for the extended basic engineering on the project. This has now been expanded to include the provision of the engineering and procurement early works package for all schedule critical equipment.

The project is the largest ethylene integration project in the world. Located near Russia's shores at the Gulf of Finland, the natural gas processing chemical plant, owned by Baltic Chemical Plant (BCP), will be comprised of two ethylene cracking trains with an annual capacity of 1.4 million tons each.

"The expansion of this award is a direct result of our execution performance to date and we will continue to drive excellent results to support CC7 and BCP in the development of this world-class project," said Tareq Kawash, Senior Vice President, Europe, Middle East and Africa. "From concept design to commissioning and start-up, McDermott is uniquely positioned to execute fully integrated ethylene projects."

Lummus Technology was previously awarded the Process Design Package Engineering on the project and the license for its olefin production and recovery technology. McDermott and Lummus work jointly on projects through a strategic agreement that leverages their respective strengths for customers.

The early works package will be executed from McDermott's offices in The Hague, the Netherlands and in Brno, Czech Republic.

Odfjell Drilling enters letter of intent for Breidablikk development with Deepsea Aberdeen

 Equinor has today awarded a letter of intent to Odfjell Drilling for the drilling and completion of the Breidablikk project with Deepsea Aberdeen.The letter of intent is subject to finalization of contract.

 

The contract is set to commence during spring 2022 with a scope of fifteen (15) firm wells and an estimated duration of 2.5 years.  In addition, there are nine (9) optional wells. The approximate contract value for the firm scope is USD 290 million (excluding any integrated services, modifications/upgrades and mobilisation/demobilisation fees). In addition, a notable performance incentive rate will apply when wells are delivered ahead of target. The rate for the optional wells will be mutually agreed based on performance and market benchmarks.

 

Simen Lieungh, CEO Odfjell Drilling AS, says: “We are delighted to secure another long term development project with Equinor and build upon our successful relationship by adding the Deepsea Aberdeen to the Equinor fleet.  The Breidablikk development presents a specific set of technical challenges which shall require innovative and creative technologies to overcome.  This award is further recognition of Odfjell Drilling’s continuous drive to meet our clients’ requirements and deliver the most efficient wells in the industry. With the development of cutting edge drilling solutions tailored for the Breidablikk development we are confident that together with Equinor and the wider One Team, the Breidablikk development will be a success. ”

The Breidablikk field ready for development

 Equinor and partners Petoro, Vår Energi and ConocoPhillips Skandinavia have decided to develop the Breidablikk field in the North Sea. Today the partnership will submit the plan for development and operation to the Minister of Petroleum and Energy, in addition to awarding contracts for subsea facilities and upgrading of the Grane platform.

The expected production from the field is about 200 million barrels, investments totalling about NOK 18.6 billion.

“The Breidablikk field is one of the largest undeveloped oil discoveries on the Norwegian continental shelf (NCS). Field development will create substantial value for the Norwegian society and the owners. We are also pleased to award two key contracts today at a total value of NOK 3.3 billion, including options. The contracts will contribute to important activity for the supply industry and secure jobs for many years,” says Geir Tungesvik, Equinor’s acting executive vice president for Technology, Projects and Drilling.

The development concept chosen for the Breidablikk field is subsea development with 23 oil producing wells from four subsea templates that are controlled from Grane. Breidablikk will be tied in to the Grane platform for oil processing prior to being brought ashore at the Sture terminal. The production from Grane will be monitored with advanced digital tools from Equinor's integrated operations centre (IOC) at Sandsli to ensure optimal production and value creation from the wells.

“I am pleased that we together with our partners have matured the Breidablikk field to development. Breidablikk shows how the industry’s combined competencies create high value and returns from a world-class infrastructure on the NCS,” says Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway.

“Breidablikk will contribute significantly to maintaining profitable production in one of our core areas on the NCS,” Nylund adds.

Geir Tungesvik (left), acting executive vice president for Technology, Projects and Drilling, and Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway.

The Breidablikk development will include a control cable system for electricity and communication (DC/FO). This is a relatively new technology that can reduce the costs associated with further development of the field, in addition to facilitating the use of docking stations for subsea drones on the seabed. The phase-in of Breidablikk will reduce the CO2 intensity on the Grane field.

Securing jobs in the supply industry
The contract for subsea production facilities is awarded to Aker Solutions. The contract covers the delivery of four subsea templates and up to 23 subsea trees and associated components. The contract value is estimated at about NOK 2.5 billion, including options. Around 300 man-years in Norway will be associated with the project for the supplier, with project management and engineering at Fornebu and Tranby, fabrication in Egersund and Sandnessjøen and service organisation in Ågotnes. In addition, there will be deliveries from the UK, Malaysia and Brazil.

Wood, the maintenance and modification supplier for Grane, has performed studies for the Breidablikk project, and an option for engineering, procurement, construction and installation (EPCI) will now be exercised for the company. The work scope includes equipment installation on the Grane platform in order to receive oil from the Breidablikk subsea facility. Existing processing equipment and water purification system on the platform will be upgraded. With an estimated value of about NOK 800 million the contract is expected to create over 500 man-years in Norway. The engineering work will be performed in Sandefjord and the fabrication will take place in Stavanger.

Earlier this year TechnipFMC won a contract for pipelaying in the Breidablikk project with options for subsea installation.  The award contributes to sustaining workplaces for TechnipFMC in Norway, including the Orkanger spool base, where the pipelines will be fabricated before they are reeled onto the installation vessel.

All contracts have not been awarded, however about 70% of the value creation in the development phase is expected to go to Norwegian companies. The contracts are subject to government approval of the plan for development and operation.

Oil will be transported through the Grane oil pipeline to the Sture terminal in Øygarden municipality for storage and shipping. The field will be operated from Equinor’s Sandsli facilities in Bergen. Breidablikk is being phased in during a period of declining oil production at Grane and will help maintain the activity level on the platform.

First oil from the field is scheduled for the first half of 2024.

TechnipFMC Awarded a Significant EPCI Contract for the Equinor Breidablikk Pipelay and Subsea Installation

 TechnipFMC has been awarded a significant(1) Engineering, Procurement, Construction and Installation contract by Equinor for the Breidablikk Pipelay, including option for the Subsea Installation scope located in the area close to the Grane Field, North Sea.

The Breidablikk project is a tie-back to the existing Grane platform. TechnipFMC’s scope includes provision of flexible jumpers and rigid pipelines as well as pipeline installation work.

Jonathan Landes, President Subsea at TechnipFMC, commented: “We have collaborated closely with Equinor in order to optimize the solutions and methodology for the pipelay installation. We are honored to once again be selected by Equinor to create value with our products and services offering.”

The Breidablikk development is subject to final approval by the Norwegian authorities.

BHP to acquire an additional 28 per cent working interest in Shenzi from Hess

 BHP today announced that it has signed a Membership Interest Purchase and Sale Agreement with Hess Corporation (Hess) to acquire an additional 28 per cent working interest in Shenzi, a six-lease development in the deepwater Gulf of Mexico. Shenzi is structured as a joint ownership: BHP (Operator, 44 per cent interest); Hess (28 per cent interest) and Repsol S.A. (28 per cent interest).

 

BHP and Hess have agreed to a purchase price of US$505 million, subject to customary pre and post-closing adjustments.

 

The acquisition would bring BHP’s working interest to 72 per cent and immediately add approximately 11,000 barrels of oil equivalent per day of production (90 per cent oil).

 

This transaction is consistent with our strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets. While our strict Capital Allocation Framework tests ensure all investments are resilient to low points in the commodity cycle, we also recognise the potential for price upside over the medium term given the global slowdown in development activity, and we are well positioned to participate in that upside. We continue to believe that the fundamentals for oil and advantaged gas will be attractive for the next decade and likely beyond.

 

BHP President Petroleum Operations, Geraldine Slattery said: “This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deepwater assets and the continued de-risking of our growth options. We are purchasing the stake in Shenzi at an attractive price, it’s a tier one asset with optionality, and key to BHP’s Gulf of Mexico heartland. As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest.

Refining NZ finalises plans for simplified refinery operations in 2021

 On 25 June 2020, Refining NZ announced completion of the first phase of its Strategic Review, taking forward a near-term proposal to simply refinery operations and in parallel explore with customers a possible future staged transition to an import terminal.

The Company has now finalised its proposal to operate the refinery in 2021 under the current Processing Agreement, which will enable it to extend cash neutral operations in a low-margin environment at the Fee Floor.

This proposal includes:

·       Reducing refinery throughput to 90,000 bbls/day (equivalent to levels at the time of commencement of the Processing Agreement in 1995) and the cessation of bitumen production;

·       c$20M reduction in opex compared with 2020 primarily through lower labour and other costs;

·       Undertaking the deferred 2020 turnaround of Crude Distillation Unit 1 and the CCR Platformer. Total capex for 2021 is forecast at $50M; and

·       Estimated restructuring costs in 2020 of c$5M, which will be funded using proceeds from asset sales.

The simplification proposal for 2021 follows the action already taken in 2020 to reset the cost base to Fee Floor levels through $70M in opex and capex cost reductions.

During the last quarter, the Company has also progressed import terminal discussions with customers. These discussions are ongoing and any decision to proceed with a conversion to an import terminal will ultimately be a decision voted on by non-customer shareholders.

Refining NZ chairman Simon Allen said: “We are pleased we have been able to find a way to continue operating the Marsden Point refinery in the most challenging environment Refining NZ has faced since deregulation of the oil industry in 1988. Our focus at this time is on operating the refinery safely and on our people who are impacted by the changes we need to make. We are working closely with local, regional and national authorities and agencies to ensure that the proposed transition is smooth and the impact on our people and the region is minimised.”

Rosneft and GNPC arrange LNG supply to Ghana and sign a cooperation agreement

 25 May 2018

 

As part of the XXII St. Petersburg International Economic Forum, Rosneft and the Ghana National Petroleum Corporation (GNPC) signed the package of documents assuming the delivery to the port of Tema (Ghana) over 12 years of the liquefied natural gas (LNG) in the volume of ca. 1.7 mmtpa (or 250 mln standard cubic feet per day), its regasification using the processing capacities of Tema terminal in order to subsequently supply the natural gas to GNPC. The obligations of the parties arising from the above documents will come into effect once they are approved by the Boards of Directors of the parties.

 

Rosneft gas supplies will allow to satisfy a quarter of Ghana's energy demand, strengthen its energy security and reinforce the country's position as the key LNG hub in the region.

 

During the forum Rosneft and GNPC also signed a framework cooperation agreement that envisages a joint study of high-priority directions of mutually beneficial cooperation in development of oil and gas fields, oil and oil product supplies.

 

Rosneft Chief Executive Officer Igor Sechin noted: "The signed documents open a new stage in the development of cooperation between Russia and the Republic of Ghana. Today, Ghana has placed itself among dynamically developing world economies with the energy demand growing year on year. Being a global energy company, Rosneft is capable of meeting this demand including also through LNG and natural gas supplies. Further, the documents open up wide exploration, production and trading possibilities for the Company."

Agreement For Construction Of Tema LNG Terminal Project Signed

 02 September 2018

Tema LNG Terminal Company Ltd., an entity controlled by Helios Investment Partners, the world’s largest Africa-focused private equity fund, on Sunday, 2nd September, 2018, signed an agreement with China Harbour Engineering Company, for the construction of a Liquefied Natural Gas (LNG) Terminal to be sited in Tema.

The LNG Terminal is being constructed on the back of a 12-year gas supply agreement that was executed between the Ghana National Petroleum Corporation (GNPC) and Rosneft, a global LNG trader and the world’s largest listed oil producer. Rosneft subsequently engaged Tema LNG Terminal Company for the provision of the regasification services.

The LNG Terminal, which will be completed in 18 months, will be Sub-Saharan Africa’s first regasification terminal, strengthening Ghana’s position as a regional trade and energy hub.

The project, which will generate some 1,600 jobs, is estimated to provide about two million tonnes of liquefied natural gas every year. This would mean that the facility would supply about 30% of Ghana’s total electricity generating capacity, displacing crude oil and crude derivatives as fuel sources for the generation of power.

In addition, a concession agreement signed between the Ghana Ports and Harbours Authority (GPHA) and Tema LNG Terminal Company Ltd, to allow for the siting and operation of the facility within the Tema port, will deliver an annual revenue in excess of $6 million to GPHA throughout the total concession period.

Witnessing the signing of the agreement, in Beijing, China, as part of his official visit to that country, President Akufo-Addo indicated that the Tema LNG Terminal Project is testament to the efforts his government has put in place over the last 19 months to encourage private sector participation in the growth of the economy.

The President noted that the construction of the terminal is in line with the commitment of his government to providing Ghana with constant, reliable and affordable power supply.

He stressed that “if we are going to succeed in pushing the industrial development of our country rapidly, the supply of gas, which will mean even more affordable rates of power, to our country is now a matter of very great importance for us.”

The Tema LNG Terminal Project is a private sector funded and driven project, led by established international sponsors, such as Rosneft, the world’s largest listed producer of crude oil, and Helios Investment Partners, the world’s largest Africa-focused private equity fund. As such, there was no requirement for capital from Government.

The cost of the project is estimated in excess of some $350 million, of which $200m would be spent directly in Ghana over the next 18 months.

 

China Harbour Engineering Company, which is already involved in the current Tema port expansion project, is constructing the marine facilities, whilst Jiangnan Shipyard of China will be constructing the floating regasification facility.

 

The contract was signed by Ogbemi Ofuya, the Director, Tema LNG Terminal Company Ltd, and Lin Yichong, Chairman, China Harbour Engineering Company

 

Present at the signing ceremony were the Minister for Roads and Highways, Hon. Kwasi Amoako-Atta; Minister for Railways Development, Hon. Joe Ghartey; Minister for Agriculture, Hon. Owusu Afriyie Akoto; Minister for Information-designate, Hon. Kojo Oppong Nkrumah; and the Chief Executive Officer of the Ghana Investment Promotion Centre, Mr. Yofi Grant, amongst others.

Axens Awarded Complete Residue Hydrocracking Solution Towards Naphtha Production For Shenghong

 

APRIL 24 - 2019

Shenghong Refining & Chemical (Lianyungang) Co., Ltd has selected Axens’ ebullated-bed residue hydrocracking technology H-Oil® for a capacity of 3,200,000 tons per year in combination with a 3,450,000 tons per year tons distillates hydrocracking technology HyKTM as the key units of its residue valorization for its petrochemical complex in Lianyungang, Jiangsu, China.

 

The project aims at increasing naphtha production capacity by 3,600,000 tons per year in single train units. Beyond vacuum residue, the Axens’ solution will handle steam cracker py-oil as feed to the H-Oil® unit and effluents of existing Coker to the HyK™ unit.

 

The solution proposed by Axens features the following units:

 

• H-Oil® (ebullated-bed residue hydrocracking) technology originally developed by Axens. The H-Oil® will apply supported catalysts from Shell Catalysts & Technologies in conjunction with HTI’s HCAT technology to maximize performances. The high quality unconverted residue will feed the existing coker unit.

• Maxi naphtha Distillate HyK™ (Hydrocracking) technology originally developed by Axens and applying advanced catalytic solution in combination with high efficiency heat integration thanks to ZPJE spiraled tube heat exchangers technology.

“The routing optimization between the distillate hydrocracking HyK™ unit and the H-Oil® unit allows delivering superior naphtha yields and improving coker’s feed quality. This project demonstrates superior and energy efficient technology solutions offered by Axens to support those highly integrated refinery- petrochemical complexes”, said Jacques Rault, middle distillates & Conversion Business Line Director.

 

Since 2014, the Axens’ ebullated-bed residue hydrocracking H-Oil® technology has been adopted by several Chinese refineries, public as well as private demonstrating the H-Oil® ability to cope with several refining environment and to be an energy efficient and cost effective solution.

 

This brand new state-of-the-art residue hydrocracking unit will allow Shenghong to further improve their economic resilience and competitiveness while producing highly valuable petrochemical prone feeds.

 

Axens will also supply HyK catalysts, equipment and full services offer from plant personnel training to plant start-up.

Shenghong Petrochemical to Use Honeywell UOP Hydrogen Technology for New China Complex

 April 2, 2020 – Honeywell UOP announced today that Shenghong Petrochemical Group will use five Honeywell UOP Polybed™ pressure swing adsorption (PSA) units to supply high-purity hydrogen for a new refinery complex in Lianyuangang, Jiangsu Province in China.

 

“Petrochemical manufacturers including Shenghong Petrochemical increasingly need extremely pure, reliable and economical supplies of hydrogen, and UOP’s PSA technology continues to be among the most advanced and efficient source of pure hydrogen in the industry,” said Bryan Glover, vice president and general manager, Petrochemicals & Refining Technologies at Honeywell UOP. “Hydrogen purification is an essential component for making clean transportation fuels, remove contaminants and improve the quality of fuels and petrochemicals.”

 

Polybed PSA systems are skid-mounted, modular units complete with hardware, adsorbents, control systems and embedded process technology, enabling quick and efficient installation to reduce cost and downtime.

 

The PSA process uses proprietary UOP adsorbents to remove impurities at high pressure from hydrogen-containing process streams, allowing hydrogen to be recovered and upgraded to more than 99.9% purity to meet refining needs. In addition to recovering and purifying hydrogen from steam reformers and refinery off-gases, the Polybed PSA system can be used to produce hydrogen from other sources such as ethylene off-gas, methanol off-gas and partial-oxidation synthesis gas.

 

Since its introduction in 1966, UOP has improved Polybed PSA technology with new generations of adsorbents, enhanced cycle configurations, modified process and equipment designs and more reliable control systems and equipment. Today, Honeywell UOP has installed more than 1,100 Polybed PSA units in more than 70 countries. As a result, Polybed PSA is a proven technology with dozens of large-scale unit references globally.

DuPont Clean Technologies has been awarded contracts to supply Shenghong Petrochemical Group Co., Limited with a STRATCO® alkylation technology license, engineering, and proprietary equipment.

 

July 10, 2019 – DuPont Clean Technologies (DuPont) has been awarded contracts to supply Shenghong Petrochemical Group Co., Limited (Shenghong) with a STRATCO®alkylation technology license, engineering, and proprietary equipment. Shenghong is undertaking a project to design and construct a new alkylation unit as part of its grassroots petrochemical and refining facility with crude oil capacity of 16 million mtpa (320,000 bpsd) located in Lianyungang City, Jiangsu Province, China. The STRATCO® alkylation unit at the Shenghong Petrochemical and Refining facility will be designed to produce 440 kmta (10,987 bpsd) of alkylate product.

The STRATCO® alkylation unit will enable the Shenghong Petrochemical and Refining facility to generate low-sulfur, high-octane, low-Rvp alkylate, with zero olefins, that meets the criteria of upcoming China VI standards which will take effect prior to the startup of the Shenghong facility in 2021.

“DuPont looks forward to working with Shenghong on this exciting, new opportunity, as the company sets out to build a world-leading petrochemical industry park,” says Kevin Bockwinkel, Global Licensing Business Manager, STRATCO® alkylation technology. “We were very pleased an alkylation unit had been included in the complex configuration as Shenghong is looking for the most efficient way to make high quality fuels in its cutting-edge crude-to-chemicals plant. DuPont has a rich history of providing technology that enables customers to produce high quality alkylate, with high octane value and zero olefins or aromatics, in an extremely reliable and energy efficient way. We look forward to continuing to develop the relationship between DuPont and Shenghong – one that will last the lifetime of the alkylation unit.”

STRATCO® alkylation technology is the established global leader in the industry with over 100 units licensed worldwide and more than 33,300 kmta (850,000 bpsd) of installed capacity. STRATCO®alkylation technology is a sulfuric acid catalyzed process that converts low-value olefins into high-value alkylate, a key desirable component for clean fuel. With currently operating units dating back as far as 80 years, the STRATCO® alkylation technology is a highly effective, reliable solution for producing clean-burning fuel with high octane, low Rvp, low sulfur and zero olefins.

Samsung Engineering wins the Sonatrach Hassi Messaoud Refinery in Algeria

January 2020

 Samsung Engineering, one of the world’s leading engineering, procurement, construction and project management (EPC&PM) companies, announced today, that it signed about 3.7 billion USD contract for the Sonatrach Hassi Messaoud (HMD) refinery project in Algeria at an official signing ceremony. The project was awarded with Técnicas Reunidas(TR) of Spain as joint venture partner and is located at Hassi Messaoud, 600km southeast from the Algeria’s capital Algiers. The signing ceremony was attended by Kamel Eddine Chikhi, Sonatrach President & CEO, Juan Lladó Arburúa TR Vice Chairman & CEO and Sungan Choi, Samsung Engineering President & CEO.

The refinery plant will process 110,000 barrels of crude oil per day and will be executed on an Engineering, Procurement, Construction and Commissioning (EPCC) lump-sum turn-Key basis for approximately 52 months.

The scope of work includes Process & Utility Unit, Crude Distillation Unit (CDU)/ Vacuum Distillation Unit (VDU), Continuous Catalytic reforming (CCR) Unit, Isomerization, Naphtha Hydro-treating(NHT) Unit, Hydrodesulfurization(HDS) Unit, Hydrocracker Unit (HCU) as well as Utility Systems.

Sonatrach roadmap is to invest heavily in petrochemicals as well as in oil and gas development, which will give Samsung Engineering the opportunity to be part of Sonatrach’s value chain from the very beginning of the process.

Samsung Engineering is confident that the HMD refinery project will be completed with excellence, since refinery is one of the company's flagship products. Samsung has successfully completed many refinery projects globally in the UAE, Saudi Arabia, Bahrain, Kuwait and Algeria with excellent experience and superior technology.

In addition, Samsung Engineering will execute the HMD refinery project with TR as JV partner, who is also cooperating in other on-going project. The mutual familiarity with TR reduces risk and maximizes synergy for the HMD refinery project.

Samsung Engineering’s President & CEO Sungan Choi stated:” Samsung Engineering is honored to be trusted again by Sonatrach as contractor. Our expertise in refinery projects and know-how of the region, will secure a state of the art refinery for Algeria.”

Shanghai LNG celebrates Yangshan terminal expansion milestone

28 Nov 2019

At the recent inauguration of the Yangshan LNG terminal’s new gasification facilities, our client, Shanghai LNG, had good reason to mark the occasion. As Shanghai’s main source of natural gas supply, the doubling of the terminal’s hourly export capacity, from 1.04 million to 2.14 million cubic meters, the city’s winter gas consumption is now more strongly guaranteed. An important objective of this major expansion project on which Tractebel is providing Project Management Consulting services and technical expert back-up.

Begun in 2017 and expected to complete in 2020 with the construction of two new build LNG storage tanks of 200,000m³/each, the project will also greatly enhance the safety reserve capacity of Shanghai natural gas. With the challenge of such projects being a need for highly experienced planning and management of expansion works in terminals which must remain operational during new construction, it’s also likely to enhance Tractebel’s reputation for large LNG terminal expansion expertise in this region.

For Tractebel LNG experts, who first proved their worth in China on the Shanghai Wuhaogou LNG terminal expansion in Pudong (2013 – 2016), the Yangshan contract, is also a milestone. But as we like to say; there’s room for expansion yet.

German LNG Terminal launches Open Season

 January 17, 2018

 Gasunie LNG Holding B.V., Oiltanking GmbH and Vopak LNG Holding B.V. are in the process of establishing the joint venture “German LNG Terminal GmbH”. The purpose of the joint venture is to build, own and operate an LNG (Liquefied Natural Gas) import terminal in northern Germany. The terminal will also provide LNG distribution services. To attract interest from the market and to gain detailed insight in customer demand, an Open Season will be launched. The Open Season starts on January 17, 2018. The terminal offers the opportunity to further diversify Germany’s sources of gas supply and facilitates access to LNG as an alternative low-emission fuel for ships and trucks. The development of German LNG Terminal is currently focusing on the location Brunsbüttel. The presence of the adjacent port of Hamburg and the industrial companies located in the region represents an attractive business environment. Via the Kiel Canal, in the direct proximity of the intended terminal, the Scandinavian countries and the Baltic States can easily be reached. The start of the Open Season marks an important milestone in the development of Germany’s first LNG terminal. The aim of the facility is to offer the following services: discharge and loading of LNG ships, storage of LNG, regasification and send out into the natural gas network and LNG distribution via trucks and barges.  In July 2017, the three companies received EU antitrust approval to establish a joint venture. Subject to, among others, the outcome of the Open Season start of construction of Germany’s first LNG terminal is envisaged after the final investment decision in 2019, to be ready for operations in Q4 2022.  

German LNG Terminal shortlists Spanish-German Partnership to complete EPC tender process

 June 25th, 2020 

German LNG Terminal GmbH has selected the Spanish-German partnership COBRA Instalaciones y Servicios S.A., SENER Ingeniería y sistemas S.A.and TGE Gas Engineering GmbH as an exclusive candidate for the final phase of the tender procedure for the EPC (Engineering, Procurement and Construction) contract.  This final phase will consist of a comprehensive value-improvement exercise and a detailed price actualization to make the project more cost efficient and aims at concluding a binding EPC contract by the end of 2020. It is expected that the detailed design and engineering work, necessary to develop purchase orders of long-lead products, can then be started soon after the finalization of the contract. German LNG started the international prequalification process for the selection of an EPC contractor in June 2019. The selection of a potential partner for the final development of the EPC contract is a further milestone for the project. At the same time, German LNG Terminal is in the process of completing the permit application for the planning of the port infrastructure, including the waterside facilities. The selected partnership members have extensive long-term experience in electricity, oil and gas projects worldwide. Between them they share a design and construction history of involvement in a number of LNG terminal projects, such as Sines (Portugal) / Sagunto and Bahía Bizcaya (Spain) / Gate (The Netherlands) / Dunkerque (France) / and Zeebrugge (Belgium).  

Royal Vopak acquires stake in LNG import facility in Colombia

 12 September 2019

Royal Vopak announces the acquisition of a 49% shareholding in Sociedad Portuaria el Cayao (“SPEC”) in Cartagena, Colombia. SPEC is the only LNG import facility in Colombia and has been in operation since 2016.

The LNG import facility consists of an LNG jetty, onshore infrastructure and a 9.2 km gas pipeline which connects SPEC to the national gas grid. A chartered FSRU is receiving the LNG and sending the gas on shore. SPEC holds long term contracts with three local gas-fired power plants. 

The shareholders in SPEC are Promigas (51%) and Royal Vopak (49%).

Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak, said “We are very much looking forward to this partnership with Promigas and to enter into the growing Colombian LNG market. This is another growth step in our LNG portfolio and it fits very well in our ambitions to grow and diversify our service offering in LNG.”

Promigas is a private company in the natural gas sector in Latin America with 45​​ years of experience providing mass access to natural gas. For more information, please visit promigas.com.

 

Zeebrugge LNG terminal celebrates its 30th birthday

 12/10/2017

Exactly 30 years ago today, Zeebrugge LNG terminal was officially opened in the presence of the then prime minister Wilfried Martens. The terminal was originally intended to diversify Belgium's gas supply but it has since developed, together with the Zeebrugge area as a whole, into a central crossroads for North-West Europe's gas market.

In the wake of the oil crisis of the 1970s, the Belgian government decided in 1977 to build an LNG terminal with a view to diversifying Belgium's gas sources. Construction of the peninsula, which spans over more than 30 hectares, began in 1978, after the idea was rejected of building the terminal on floating pontoons. It took four years to build the peninsula, after which construction of the actual terminal could begin.

Five years later, on 12 October 1987, the terminal was officially commissioned in the presence of numerous public figures. The LNG terminal was much maligned as a megalomaniacal project by the press in the 1980s. Views of the terminal have since changed completely: thanks to the terminal, the notion of Zeebrugge as a European hub for natural gas has taken root and the dream of Zeebrugge serving as a European energy port has now, to a large extent, become a reality. 

he terminal has proven to be a magnet for new infrastructure projects. The 1990s saw major pipelines connect to Zeebrugge, with the Zeepipe being commissioned in 1993, connecting the Norwegian gas fields to Zeebrugge, followed five years later by the Interconnector, which links Bacton, UK with Zeebrugge. Pipelines also run from Zeebrugge to France, the Netherlands and Germany, further distributing the natural gas supplied. The area has also been connected to supplies from Dunkirk LNG terminal since late 2015. Together, all this infrastructure has turned the area into a crossroads for natural gas, with a supply capacity that can cover over 10% of the EU's demand for natural gas.

Expansion of the terminal first began in 2004. A market survey showed that demand for capacity to unload LNG at Zeebrugge had risen significantly. That same year, Fluxys signed long-term contracts with three customers for use of the terminal. To be able to offer the necessary capacity, a fourth storage tank and additional regasification facilities were commissioned at the terminal in 2008. 

Vessels have been able to both load and unload LNG since 2010. At the same time, the terminal took its first steps towards small-scale LNG services with a view to supplying small volumes of LNG from the terminal. As a result, a small vessel was loaded for the first time. And companies were also able to load LNG trucks at the terminal: trucks deliver LNG to a range of destinations in Belgium and Europe, namely to industrial companies not connected to the natural gas network, to ports to bunker LNG-powered inland vessels, and to LNG filling stations for trucks. Over 6,000 LNG trucks have been loaded at the terminal since 2010. 

The Open Rack Vaporiser was commissioned in 2013. This facility uses heat from seawater to regasify LNG, which significantly reduces the terminal's energy consumption and emissions. 

he terminal became even more versatile with the commissioning of the second jetty in late 2016. The jetty was specially designed to receive LNG carriers ranging from the smallest ships with a capacity of 1,000 cubic metres of LNG up to large vessels with a capacity of 217,000 cubic metres of LNG. The second jetty also enables the terminal to respond flexibly to demand for simultaneous or consecutive berthings, as using both jetties allows two LNG carriers to be unloaded and/or loaded at the same time. 

We are now building a fifth storage tank and additional process facilities. These new facilities are needed to provide for transshipment services as part of the Yamal project. Fluxys concluded a 20-year contract to transship LNG transported by ice breaker/LNG carrier from the new production terminal in Yamal in northern Siberia onto conventional LNG carriers to be conveyed to its final destination. 

A second loading station for trucks will be opened next year. The number of loading operations is rising and thanks to the additional station the terminal will be able to continue to swiftly fulfil growing demand in the future.

The Snam, Enagás, Fluxys consortium awarded the tender for the acquisition of 66% of the Greek operator DESFA

 19/04/2018

The European consortium consisting of Snam, the majority shareholder with an interest of 60%, together with Enagás (20%) and Fluxys (20%), confirms that it has been awarded the tender arranged by the Greek Agency for privatization (TAIPED) for the purchase of a 66% stake in DESFA, the national operator in the natural gas infrastructure sector.

DESFA manages, under a regulated regime, a high pressure transport network of approximately 1,500 km, as well as a regasification terminal at Revithoussa. Snam, Enagás and Fluxys, shareholders of the TAP project, will be able to boost the development of the Greek gas infrastructure system in the coming years, fully realizing the potential of Greece as a natural gas hub, which will further leverage the development of the domestic market as well as other transit initiatives.

Furthermore, the consortium will be able to transfer technical and operational capabilities to DESFA and develop new uses and sources of natural gas (such as methane for transport and biomethane) to make a crucial contribution to the country's emission reduction process.

Thanks to its strategic position in the Mediterranean, Greece could represent an important crossroads for the diversification of supplies and the opening of new natural gas routes in Europe.

TAIPED accepted an offer of 535 million euro for 66% of DESFA share capital presented by the consortium last week. Discussions have started with a pool of Greek and international banks to secure a non-recourse financing package for the acquisition.

In 2017, DESFA reported significant growth compared to the previous year, with an EBITDA of approximately 177 million euro, also benefiting from non-recurring tariff items, and a positive net financial position of around 5 million euro (including available cash of approximately 228 million euro).

The signing of the agreements for the acquisition is subject to the completion of the further steps envisaged by the tender procedure and by local legislation on privatization, while the closing of the transaction is expected in the second half of the year, following the required authorizations including antitrust clearance.

Commercial commissioning of the Dunkirk regasification terminal

 On 1 January 2017, commercial operations started up at the Dunkirk regasification terminal. This commissioning draws a line under one of the largest industrial construction sites in France. 

The Dunkirk terminal is used to import, store and regasify liquefied natural gas (LNG) before delivery with the transmission systems to the places of consumption.

Ideally sited to serve a range of markets
The Dunkirk regasification terminal is the second largest in mainland Europe and is the only one in Europe to be directly connected to two consumption markets: France and Belgium. Its annual regasification capacity of 13 billion m3 accounts for more than 20% of French and Belgian natural gas consumption. 

Due to its industrial design, the regasification terminal provides its customers with safe, flexible and extremely reliable services. Its siting in Dunkirk is the ideal position at the crossroads of the seaways between the Channel and the North Sea close to natural gas consumption markets in France and North-Western Europe. 

Cutting edge facilities
The regasification terminal is located within the enclosure of the Dunkirk harbour on a site of 56 hectares and is composed of:

• a jetty that can receive up to 150 LNG tankers per year: from the largest LNG tankers in the world (Qmax tankers with capacity of 267,000 m3) to low-capacity tankers (65,000 m3) for the regional markets. Five articulated arms are installed to unload the ships at maximum flow rate of 14,000 m3/h;
• three isothermal LNG storage tanks, that can each contain 200,000 m3;
• a regasification unit made up of 10 heat exchangers, supplied with tepid water by the neighbouring nuclear power plant in Gravelines with an underwater tunnel 5 km long. This industrial innovation thus provides energy savings that are equivalent to the annual gas consumption of the Dunkirk community.
  
  

Natural gas, essential for energy transition
Due to reduced greenhouse gas emissions and absence of fine particles, natural gas has lower environmental impact than other types of fossil fuel, such as oil and coal.

It contributes to energy transition providing a useful complement to carbon-free nuclear power and renewable energies, especially during peak consumption. This increasing complementarity is also revealed in domestic applications, whose technology is being completely overhauled. 

Natural gas also has a promising future as transport fuel. In liquefied form at -162°C, its volume is reduced by 600 times, thus facilitating transport and storage. LNG is the choice alternative for long-haulage trucks and maritime navigation, where stricter standards are applied in certain seas, such as the Channel, North Sea and Baltic Sea. 
 
Marc Benayoun, Executive Director of the EDF Group, in charge of the Gas Sector and Italy, stated: I am delighted that commercial operations have started up at the Dunkirk regasification terminal, thus creating a new point of gas importation in France and strengthening security of supply in Europe. It also contributes to the development of the gas supply market, on which the Group already operates with its Italian subsidiary, Edison, and wishes to further strengthen its share. I would especially like to thank the EDF, partners and contractors teams who have worked together since 2012 to complete this strategic asset. 

Pascal De Buck, CEO of Fluxys, said: I would like to congratulate and thank all the teams who have contributed to the success of this extensive infrastructure project. At Fluxys, we are especially proud to have been able to contribute by bringing our 30 years of expertise in the field of LNG to the construction of this terminal. In addition, direct connection of the Dunkirk LNG terminal to our Belgian network provides users with easy and flexible access to the natural gas consumption markets in North-Western Europe.

NOTICE ON ADOPTION OF FINAL INVESTMENT DECISION

 1 February 2019 - In accordance with planned deadlines for the construction of the floating LNG terminal on the Island of Krk, a Final Investment Decision was adopted on 31 January 2019. 

The Final Investment Decision on the construction of the floating LNG terminal project on the Island of Krk was adopted based on the results of the binding Open Season procedure which determines future revenues of the project, the projection of capital expenses in relation to the conducted procurement procedures for FSRU vessel and EPC works (construction of jetty with auxiliary facilities and high-pressure connecting gas pipeline for the receiving LNG terminal) and the projections of required investment by the shareholders of LNG Croatia LLC. 

The procurement procedure of the floating, storage, and regasification unit (FSRU vessel) was carried out in November 2018. The bid from company Golar was evaluated as the most economically advantageous, which offered a new conversion of the existing LNG tanker to the FSRU vessel worth EUR 159,6 million. It is an LNG carrier, which was built in 2005 and which sails under the name "Golar Viking". At the time of delivery, which is scheduled between 30 September and 30 October 2020, the FSRU vessel will be delivered to the LNG terminal location from the shipyard as a new FSRU conversion in accordance with the highest technical and environmental protection standards. 

The procurement procedure for the engineering, procurement and construction of jetty with the auxiliary facilities and connecting high-pressure gas pipeline for the receiving LNG terminal was carried out in January 2019. The bid from the consortium Pomgrad, GP Krk and STSI in the amount of EUR 58,442,409.03 was evaluated as the most economically advantageous. According to the deadlines for construction, the expected start of the works is end of March / beginning of April this year. 

LNG Croatia LLC finished the binding process for booking the capacity of the LNG terminal (Open Season procedure), which resulted in capacity booking of the terminal in the amount of 0,52 bcma. An economic test on the 0,52 bcma capacity booking is positive by keeping the indicative tariffs on the level indicated in the binding Open Season procedure. In the Methodology of tariff item calculation, the grants are not shown as part of the capital expenses of the project, therefore the economic test made on a lower capacity booking than initially planned, using the same indicative tariff, is positive. In addition to the grant received by the European Commission in the amount of EUR 101.4 million, additional grant of EUR 100 million was obtained as per Government's Decision on financing the first phase of the project for the floating LNG terminal on the Island of Krk which was adopted on 30 January 2019. 

In accordance with the conducted procurement procedures the total capital expenditures of the project have been reduced to EUR 233.6 million (the initial planned investment amounted to EUR 383 million). In addition to already approved grant from the European Commission in the amount of EUR 101.4 million, the Government of the Republic of Croatia has made a Decision on financing the first phase of the project for the floating LNG terminal on the Island of Krk with which a grant in the amount of EUR 100 million was provided. The remaining part of the required capital expenses in the amount of EUR 32.2 million will be provided by the shareholders of LNG Croatia LLC through increase in equity. Based on the 0.52 bcma capacity booking, in accordance with the allowed income regulated by the Methodology adopted by the Croatian Energy Regulatory Agency, the investment will have a positive return on investment for the shareholders of LNG Croatia LLC.

LNG Hrvatska awards Golar LNG contract for FSRU

 27   Feb   2019

Golar Viking is currently serving a short-term contract, due to expire in 1Q 2020. Golar has also entered into binding agreements with a Croatian project developer, LNG Hrvatska d.o.o., to convert the 2005 built Golar Viking into an FSRU, sell the converted vessel, and then operate and maintain the FSRU for a minimum of 10-years. Conversion capex will be funded by stage payments under the agreement. Commencement of this project is subject to certain conditions precedent, including confirmation of project funding and receipt of a Notice to Proceed from LNG Hrvatska d.o.o.

State aid: Commission approves public support for Croatian LNG terminal at Krk island

 31 July 2019

The European Commission has found Croatian plans to support the construction and operation of a liquid natural gas (LNG) terminal at Krk island to be in line with EU State aid rules. The project will contribute to the security and diversification of energy supplies without unduly distorting competition.

Commissioner Margrethe Vestager, in charge of competition policy, said: "The new LNG terminal in Croatia will increase the security of energy supply and enhance competition, for the benefit of citizens in the region. We have approved the support measures to be granted by Croatia because they are limited to what is necessary to make the project happen and in line with our State aid rules."

The measures approved today will support the construction and operation of a floating LNG terminal, consisting of a floating storage and regasification unit (FSRU) and the connections to the national gas transmission network. The LNG terminal is designed to transport up to 2.6 billion cubic meters per year (bcm/y) of natural gas into Croatia national transmission network as from 2021.

The total investment costs to build the terminal amount to €233.6 million. This will be financed through:

• a direct equity contribution of €32.2 million from the LNG terminal company shareholders;
• a contribution of €101.4 million from the Connecting Europe Facility, which is centrally managed by the European Commission, through the Innovation and Networks Executive Agency (INEA);
• a direct financial contribution of €100 million from the Croatian State budget.

In addition, Croatia will grant a tariff compensation called ‘security of supply fee', which is financed by levies charged by the gas transmission system operator to gas users along with gas transmission tariffs, in case revenues from the terminal fees are not sufficient to cover operating expenses.

Croatia notified the Commission of the €100 million direct financial contribution, as well as of the security of supply fee. Both support measures involve State aid under EU rules.

The Commission assessed these support measures under EU State aid rules, in particular under the 2014 Guidelines on State Aid for Environmental Protection and Energy. The Commission found that:

• the aid measures are necessary, as the project would not be carried out without them. In this respect, the Commission's financial analysis has shown that the revenues originating exclusively from the tariffs charged to the users of the LNG terminal would not be enough to recoup the investment costs and ensure a sufficient remuneration of the LNG promoter;
• the aid measures are proportionate and therefore limited to the minimum necessary, as they will only cover the "funding gap", that is the difference between the positive and negative cash-flows over the investment lifetime, discounted to their current value (using the cost of capital).

Therefore, the Commission concluded that the measures are in line with EU State aid rules, as they contribute to further key strategic objectives of the EU, including diversifying gas supply sources and increasing the EU's security of gas supply, notably in the Central and South-Eastern regions, without unduly distorting competition.

Background

The KrK LNG Terminal has been included in the lists of European Projects of Common Interestsince 2013, given its strategic importance for the diversification of natural gas supplies into Central and South-Eastern Europe.

The LNG terminal will deliver gas to the Croatian national transmission network, connected with Slovenia, Italy and Hungary, as well as with other EU countries via non-EU Member States such as Serbia and Montenegro.

The beneficiary of the aid measures is the terminal promoter, LNG Croatia d.o.o. (LLC), owned by Hrvatska Elektroprivreda (HEP) d.d., the Croatian state-owned gas and electricity incumbent, and Plinacro d.o.o., the national gas transmission system operator (TSO), with 85% and 15% respectively.

The fees applied by the terminal to its users are fully regulated (set by the Croatian Energy Regulator) and the terminal is subject to third-party access, in line with internal market legislation.

The Commission notes that this State aid decision is taken without prejudice to the obligation of Croatia to comply with other EU law provisions, notably to ensure that the project meets all the requirements of the EU environmental legislation (including Environmental Impact Assessment Directive).

The Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy allow Member States to support the production of electricity from renewable energy sources, subject to certain conditions. These rules aim to help Member States meet the EU's ambitious energy and climate targets at the least possible cost for taxpayers and without undue distortions of competition in the Single Market.The non-confidential version of the decision will be made available under the case numbers SA.51983 in the State Aid Register on the Commission's competition website, once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.