CNOOC Cancels B.C.’s Aurora LNG Project
The Canadian Environmental Assessment Agency (CEAA) agreed to fund First Nations participation in the Aurora LNG project.
The Aurora LNG project, operated by Nexen Energy – a wholly-owned subsidiary of China National Offshore Oil Corp. Ltd. (CNOOC) – and INPEX Gas British Columbia jointly announced mid-September 2017 the partners had ended the project’s feasibility study and had ceased all activity.
“During the past four years, Aurora LNG has been conducting a thorough feasibility study on liquefying and shipping LNG from the northwest coast of British Columbia to Asian markets,” the partners announced. Through this feasibility study, Aurora LNG determined the current macro-economic environment did not currently support the partners’ vision of developing a large LNG business at the proposed Digby Island site.
“While disappointed in this outcome, Aurora LNG is proud of its work in northwest British Columbia over the past three years and the relationships it has built with local community members, Indigenous groups, stakeholders and government,” reported the partners. “We are committed to a responsible and orderly conclusion of their activities in the Prince Rupert region. Upstream operations from the partners’ Horn River natural gas assets in northeast British Columbia will continue, and the partners will also monitor the North American gas market to evaluate future upstream and downstream investments according to market conditions.”
Petronas Cancels B.C.’s $36.0 Billion Pacific Northwest LNG Project
Petronas had invested time and effort to build First Nations’ support through its youth outreach programs.
A few days after the solemn swearing-in session of B.C.’s new NDP and Green coalition government, led by Premier John Horgan, Malaysian-based multi-national energy giant Petronas announced the cancellation of its Northwest LNG project. The company and its partners had planned to build a 900 kilometre pipeline to ship natural gas from northeastern BC to a new processing facility and export terminal at Prince Rupert. It was supposed to be one of the largest foreign direct investments in Canadian history.
The project was supposed to produce 19.7 million tonnes/year of LNG and should have created $2.5 billion in new tax revenues annually, a boost of this country’s GDP by $2.9 billion/year. It was also supposed to created 5,000 jobs.
Petronas had invested time and effort to build First Nations’ support through its youth outreach programs.
Petronas and its partners politely blamed the cancellation on “depressed global market prices” but no one was fooled. It was just another international firm taking its $36-billion investment away from Canada and is expected to use that money on an LNG project in Australia.
Many northerners had identified this LNG site location as a major concern due to the impacts it posed to the Skeena salmon estuary. Decades ago a super-port proposal was put forward for this same area. At that time, a government environmental study found that the unique ecosystem around Lelu Island was essential to juvenile salmon survival and recommended the port not be built.
Shell’s Prince Rupert LNG & Westcoast Connector Gas Transmission Project Cancelled Spring, 2017
Shell’s proposed Prince Rupert LNG export terminal, located on Ridley Island.
Shell Group unit BG International Ltd. is discontinuing development of the Prince Rupert Liquefied Natural Gas (LNG) project, located on Ridley Island at the Port of Prince Rupert in B.C. Acquired as part of the Shell and BG Group merger in 2016, the project was reviewed along with other global assets prior to the decision to discontinue development.
The Prince Rupert facility, located on Ridley Island, was supposed to have been supplied by the Westcoast connector transmission project, with an initial capacity of 14 million tonnes/year and would have seen approximately 150 LNG tankers docking initially, and expected to double sometime afterward.
AltaGas Started Construction on Ridley Island LNG Summer, 2017
AltaGas started construction on its propane storage tank, in early June.
Construction of the Ridley Island Propane Export Terminal began in April using AltaGas’ self-perform model. Under this model, AltaGas is taking the lead as the manager and general contractor for the project and will utilize the supporting services of affiliate contractors to complete the work. This model has been successfully used over the past six years by AltaGas to build other projects such as the Northwest Hydroelectric Facilities and the Townsend Facility in British Columbia and the Pomona Energy Storage Facility in California.
Crews are currently working to pour the foundation for the propane tank and have assembled the two tower cranes that will be used in the civil construction works. Over the next few months the propane tank will start to take shape. This involves eight concrete pours with the final pour scheduled near the end of 2017. Installation of the roof section is scheduled in the first quarter of 2018. Once completed, the overall height of the tank to the top of the dome will be 45 metres.
LandSea was awarded the camp contract by AltaGas earlier this year following a competitive tendering process. Camp operations began on April 30, 2017. Located just outside Port Edward near the project site, the self-sufficient gated camp has a maximum occupancy of 214 guests and the capability to expand to 268 workers if needed. Camp occupancy will fluctuate month to month depending on construction activities. Currently there are approximately 40 workers in the camp. Workers are bussed to and from the project site daily. Camp amenities and services include: recreational facilities and a gym, in-room and communal TV’s, laundry facilities, medical facilities and on-site medic services, catering and on-site dining, secure dry luggage storage, housekeeping and janitorial services.
Veresen Files Application with FERC for Jordan Cove LNG + Pipeline
KBJ, a joint venture partnership comprised of Kiewit Energy Group Inc., Black & Veatch Construction, Inc., and JGC US Projects, LLC has been selected by Jordan Cove LNG to engineer and construct an LNG export terminal in Coos Bay, Oregon.
Calgary-based Veresen’s Jordan Cove LNG filed two applications with the U.S. Federal Energy Regulatory Commission (FERC) for the construction and operation of the export terminal in Coos Bay, Oregon and to build a related Pacific Connector gas pipeline to transport natural gas from the Malin Hub in southern Oregon to the LNG export terminal.
“Completing the pre-filing phase and submitting the formal applications to FERC is a major milestone for the projects,” said Don Althoff, Veresen’s president and CEO. He expects the design optimization, as well as LNG buyers support, should result in the receipt of the positive regulatory decisions required to build the Jordan Cove LNG project.
The Jordan Cove terminal includes an access channel from the Coos Bay navigation channel, a marine slip with one LNG berth, an emergency berth, and four tug boat berths, a loading platform and transfer pipeline, two LNG storage tanks, five liquefaction trains, several support buildings, and the Southwest Oregon Regional Security Center (SORSC). The SORSC will include multiple agencies, such as the Coos County Sheriff’s Office, Coos County Emergency Management, the Port of Coos Bay, and state, county, and municipal emergency planners.
The application includes the elimination of a 420 MW power plant, reflects more than 50 route adjustments of Pacific Connector, and the optimization of multiple water crossings to minimize environmental impacts via trenchless drilling techniques. The total engineering, procurement and construction cost of both the LNG export terminal and Pacific Connector is approximately $10.0 billion (US), FERC said. Jordan Cove and Pacific Connector are requesting that FERC issue a draft environmental impact statement in 2018, leading to FERC decisions by the end of 2018, positioning the project for a potential final investment decision in 2019 and an in-service date in 2024.
Shortage of Tanker Cars in U.S. Northwest
September 21, 2017 the U.S. National Propane Gas Association (NPGA) announced it was working with several railway companies in the northwest to mitigate the shortage of tanker cars in the area. Matt Solak, executive director of the Pacific Propane Gas Association (PPGA), the issue was more a case of “propane supply getting from point A to point B and not an issue of not have propane supply. Clearly the ability to move supply is just as important as having supply. The northwest region is very dependent on railcars for its supply.”
Trinidad and Tobago Draft Master LNG Routing Plan
It is no wonder BP PLC and Royal Dutch Shell PLC are miffed. The government of Trinidad and Tobago earlier hired consultants Poten & Partners, to “design a better solution for moving LNG along the Caribbean Island’s. The Natural Gas Master Plan calls for the routing of all future gas supply should be rerouted through its National Gas Company (NGC) to provide an efficient route for the island’s government to maximize its take from the LNG value chain.”
BP and Shell currently sell gas directly to Atlantic LNG and transport it through the island’s waterway to the terminal. This is expected to be a sore spot in the approaching negotiations as the partners (and largest owners of the Atlantic terminal) have by-passed NGC.
Poten’s recommendations were that NGC should: “continue to act as the monopoly buyer of gas from upstream, gas transporter, and wholesale suppliers of gas to the methanol and ammonia industries, expand this role to include gas supply to LNG on the expiry of the existing gas supply and LNG sales contracts, be forced to divest its non-core assets (upstream production), be forced to automatically dividend back surplus funds to the local government, and provide the necessary analysis and recommendations to the government on future downstream gas allocations.”
ExxonMobil Drops LNG Price from West Australia for Buyer Petronet
The Gorgon-Jansz project costs $54.0 billion to build and develop.
ExxonMobil agreed to lower the cost of LNG sales to Indian buyer Petronet from its West Australian Gorgon-Jansz project, by about $1.10 to $1.30 (US). The renegotiated agreement is worth about $90.0 million/year and is part of a previously signed in 2009, 20-year agreement which negotiated the purchase of 1.4 million tonnes/year. ExxonMobil holds a 25 per cent working interest in the $54-billion Gorgon-Jansz development.
Other Australian producers are now under pressure to also renegotiate their long-term contracts and offer discounts. Some want to only discuss shorter duration agreement. Buyers in Japan, South Korean, China, and Taiwan are eager to have concessions on the price and deliveries.
Novatek has started commissioning at its Yamal LNG project, in the Russian Arctic.
Russia’s Novatek Starts 1st Yamal LNG train
Novatek has started commissioning activities on the first liquefaction unit at its Yamal LNG export plant in the Russian Arctic. The first train is designed to produce about 5.5 mtpa. The company is the country’s largest independent natural gas producer. It reports the $27.0 billion (US) project is on track to start production at the LNG export plant, Russia’s second, by year-end. This was revealed during a meeting in Moscow attended by the Deputy Governor of the Yamal-Nenets Autonomous District, Alexey Sitnikov and Denis Khramov, Deputy Chairman of Novatek’s Management Board, according to a statement by the Yamal governor’s office issued in September.
The three-train Yamal LNG plant, designed to produce about 16.5 Mtpa, will liquefy natural gas from the South Tambey field on the Yamal Peninsula in Russia’s West Siberia. It will be built in three phases which are scheduled for start-up in 2017, 2018, and 2019, respectively. Shareholders in Yamal LNG are Novatek, as the operator with a 50.1 per cent stake, CNPC and Total with a 20 percent stake each and China’s Silk Road Fund with a 9.9 per cent stake.
Besides its Yamal LNG project, Novatek is also planning to build its second LNG export project to be located on the Gydan peninsula. The company has started the design works on the Arctic LNG-2 project, the statement by the Yamal governor’s office reads. It is expected to have the same output as the Yamal project.
South Korea has decided to switch from coal production to LNG its government announced in September.
South Korea boosts LNG use to reduce pollution
South Korea is looking to switch the coal-fired power plants currently under construction in the country to LNG-fueled turbines as the government has decided to reduce pollution. According to a joint statement by South Korean Ministry of Trade, Industry, and Energy, along with the Ministries of Environment, Transport and Finance announced government wants to reduce fine dust emissions by 30 per cent by 2022.
To cut the emissions further, the government will provide incentives for people switching to more environmentally friendly fuels. This will also include scrapping some 2.2 million diesel-powered vehicles by 2022.
According to the statement, four coal-fired power plants that are in the early stages of development will be switched to use LNG as fuel. The country has already shut down three older coal-fired power plants with seven more to follow by the targeted date. Earlier in September, it was reported the country will look to up its LNG imports as it phases out coal for power production. The government’s emissions reduction plan would cost about 7.2 trillion won ($6.3 billion US).
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