NORTH AMERICAN LNG TERMINALS-Conclusion: Gulf Coast picture clearing; Mexico getting first terminal

Anticipating receipt of varying qualities of LNG from several sources, Trunkline LNG’s terminal near Lake Charles, La., will install an NGL-extraction plant that will enable capacity-holder BG Services to meet all pipeline-quality specifications. (Photograph from Southern Union Co.)

At an initial price tag of $750 million, the terminal was to have 1.5 bcfd of baseload sendout capacity and three 160,000 cu m, full-containment tanks (Fig. 1). In January 2006, the company received regulatory approval to expand the terminal’s baseload sendout to 2.65 bcfd and add a fourth, full containment 160,000-cu m tank.

Start-up of the initial phase targets late 2008; the $250-million expansion will begin construction in 2007 and start up in 2010, says the company.

Also proposed as a southern neighbor of the operating Lake Charles LNG terminal is the Creole Trail terminal and pipeline, one of several projects sponsored wholly or in part by Cheniere Corp., Houston.

Construction progresses earlier this year on Sempra LNG’s Cameron terminal on the Calcasieu Channel, south of Lake Charles, La. These three 160,000 cu m, full-containment tanks will be joined by a fourth in the second phase of construction. (Fig. 1; photograph from Sempra Energy, San Diego)

Creole Trail LNG LP received FERC approval on June 15, 2006, to proceed with a 3.3-bcfd terminal and associated pipelines (Creole Trail Pipeline LP). The terminal will sit at the mouth of the Calcasieu Channel, in Cameron Parish, with two unloading docks each capable of handling tankers of up to 250,000 cu m and four 160,000-cu m tanks with a combined storage capacity of 13.5 bcf of gas equivalent.

The 42-in. Creole Trail pipeline will interconnect with more than 12 bcfd of interstate and intrastate pipeline capacity in southwest Louisiana, originating at the Creole Trail LNG terminal, and extending northward about 117 miles through the Cameron, Calcasieu, Beauregard, Allen, Jefferson Davis, and Acadia parishes to terminate near Rayne, La.

A Cheniere spokesperson told OGJ the company expects to break ground on the project in 2007and begin operations in 2011.

In waters off Louisiana south of Cameron, Shell US Gas & Power LLC plans to build a gravity-based structure (GBS) terminal consisting of two concrete caissons to deliver 1 bcfd and scheduled to be operating in 2010.

Approved in February by the US Maritime Administration, Gulf Landing will deliver to as many as five major interstate pipelines serving Louisiana and parts of the US Southeast, Midwest, Northeast and Mid-Atlantic, says the company.

West of this activity, along Sabine Pass where Louisiana and Texas join, are three projects under construction or approved, one in Louisiana and two on the opposite bank in Texas.

In the same June 15 ruling that approved Creole Trail and Cove Point LNG’s expansion (discussed last week), FERC authorized another Cheniere project, the Sabine Pass LNG LP, to expand capacity at its LNG receiving terminal, already under construction in western Cameron Parish, La., to 4 bcfd from 2.6 bcfd. The Sabine Pass terminal is only a few miles west of Sempra’s Cameron LNG and Trunkline’s Lake Charles terminal.

Sabine Pass LNG LP is 100%-owned by Cheniere. It began construction in March 2005, suffered severely from Hurricane Rita in September 2005, but has recovered from its setbacks and is on schedule, according to the Cheniere spokesperson.

Construction is under way on the first phase, 2.6-bcfd Sabine Pass terminal (artist’s concept) with target start-up of 2008. The second, 1.4-bcfd phase will start up in 2009. (Fig. 2; photograph from Cheniere Corp., Houston)

Start-up of the initial phase will be 2008; expansion is to be completed in 2009 (Fig. 2). Sabine Pass LNG holds 20-year terminal-use agreements with Total LNG USA Inc. and Chevron USA Inc. to provide each with 1 bcfd of regasification capacity.

Natural gas from the terminal will pass through the Cheniere Sabine Pass LNG pipeline 16 miles to Johnson Bayou and connect with several interstate and intrastate pipelines. The pipeline is designed to move 2.6 bcfd.

Last month, Mitsubishi Heavy Industries, which already is building Sabine Pass’s three 160,000-cu m LNG storage tanks, announced it will build two more tanks for the Cherniere terminal. The $138-million contract covers EPC of two 160,000-cu m LNG storage tanks.

Mitsubishi will handle the engineering and construction of the tanks, while consortium partner Zachry Construction Corp. will handle the civil engineering of the site and tank installation.

Construction was scheduled to start this month and to be completed by spring 2009.

Texas

Two projects in Texas along the Sabine Pass area are planned but have not begun construction.

With its Cameron LNG terminal well under construction in Louisiana, Sempra LNG plans to build a terminal along the Port Arthur, Tex., ship channel, a part of the Sabine Pass waterway about 85 miles east of Houston.

The $800 million Port Arthur LNG project would have a baseload sendout capacity of 1.5 bcfd and be capable of expansion to 3 bcfd. It would include two unloading docks and three to six 160,000 cu m, full-containment LNG storage tanks. The LNG vaporization system would consist of 12 shell-and-tube LNG vaporizers (including two spares), each sized for 305 MMcfd. The heat source to the vaporizers would be heated water.

The company, following FERC approval on June 15, 2006, says first-phase commercial operation would begin in 2010.

The second planned terminal project, Golden Pass, proposes to construct and operate a new LNG import terminal in Jefferson County, Tex., about 10 miles south of Port Arthur. This terminal would deliver the vaporized LNG to 10 interconnections with existing interstate and intrastate pipeline systems and the ExxonMobil Beaumont, Tex., refinery.

The proposed LNG facilities would have a baseload sendout capacity of 2 bcfd with a peak capacity of 2.7 bcfd. The project would be built in two phases and be complete in about 60 months, according to the company’s environmental impact filings. The second phase would begin after start-up of the first phase and increase capacity to 2 bcfd from 1 bcfd.

Facilities would include ship unloading of two berths, each capable of accommodating LNG ships ranging from 125,000 cu m to 250,000 cu m; five 155,000 cu m, full-containment LNG storage tanks (three tanks constructed in the first phase; two during the second); and 10 shell-and-tube heat transfer fluid LNG heat exchangers to vaporize the LNG (5 installed during the first phase; 5 during the second).

Golden Pass LNG Terminal LP and Golden Pass Pipeline LP are affiliates of ExxonMobil Corp. The project’s terminal and pipeline were approved by FERC in July 2005, and on Aug. 1 Golden Pass LNG LLC awarded a lump-sum turnkey, $1-billion EPC contract to Chicago Bridge & Iron Co. NV for the terminal. And in mid-August, the FERC granted and EIS for planned expansion of Golden Pass pipeline project.

Golden Pass LNG LLC, owner of the Golden Pass LNG terminal, will be 70% owned by an affiliate of Qatar Petroleum, with affiliates of ExxonMobil and ConocoPhillips sharing ownership in the balance of the terminal. LNG for the terminal will come from Ras Laffan 3 and Qatargas 3 projects.

Roughly 100 miles southwest of Sabine Pass lies the third US Gulf Coast LNG terminal under construction. Freeport LNG Development LP is building and will operate an LNG terminal on Quintana Island, about 70 miles southwest of Houston near Freeport, Tex.

The site is about 6 miles from open water off a 45-ft deep ship channel. The company says this 6-mile approach is “one of the shortest of any LNG terminal currently operating or under construction in North America.” The channel as well as the berth, it says, can accommodate all current LNG carriers as well as the largest vessels planned for construction.

First phase of the regasification terminal began construction in January 2005, will have a peak sendout capacity of 1.75 bcfd, and begin operations in early 2008. A consortium of Technip USA Corp., Saipem Technigaz SA, and Zachry Construction Corp. is building the terminal under a lump-sum turnkey EPC contract.

The company says that after Sept. 30, 2009, first-phase capacity is fully contracted under two separate long term terminal-use agreements with ConocoPhillips Co. (1 bcfd) and Dow Chemical Co. (500 MMcfd).

As part of its arrangements with ConocoPhillips, however, Freeport retained 500 MMcfd of capacity from commercial start-up to Sept. 30, 2009. This is being marketed either as short-term capacity or as part of the planned expansion of the facility.

Phase-2 expansion, currently in the permitting process, will add up to 1.15 bcfd of marketable capacity plus additional peaking capacity.

This second phase will install a second marine berthing dock and associated unloading facilities, expanded vaporization, 7.5 bcf of underground storage, and a third 160,000-cu m LNG storage tank. The current schedule envisions construction of Phase 2 starting in early 2007 and coming on stream in 2009. Engineering and planning for this expansion are under way, including building a 7.5-bcf integrated underground salt cavern storage facility.

Some 40% of Phase-2 capacity is already sold to Mitsubishi Corp. and ConocoPhillips. Freeport says it is in the process of commercializing the remainder of Phase 2, about 7 MMcfd beginning in 2009.

Freeport LNG, a limited partnership, includes Freeport LNG Investments LLP (45%), Cheniere LNG Inc. (30%), Texas LNG Holdings LLC (15%), and Contango Sundance Inc. (10%).

In December 2005, Cheniere Energy’s Corpus Christi LNG LP received FERC approval to begin construction of a terminal near Corpus Christi, Tex., about 200 miles down the Texas Gulf Coast from Houston. The terminal will be adjacent the Sherwin Alumina plant along the La Quinta Ship Channel in San Patricio County (Fig. 3).

Site preparations and construction are under way in a $50-million contract; a company spokesperson would not speculate when full construction would begin. Operations are to begin in early 2010.

Initial baseload sendout capacity will be about 2.6 bcfd with peak sendout of 2.9 bcfd. The site will house three single containment 160,000-cu m tanks. The facility will have two docks capable of handling LNG carriers of up to 250,000 cu m of cargo.

Cheniere Energy is the general partner of Corpus Christi LNG LP and owns 100% of the limited partner interests.

Natural gas from the Corpus Christi terminal will move through the Cheniere Corpus Christi LNG pipeline 24 miles from the terminal to a connecting pipeline north of Sinton, Tex.

Yet another Corpus Christi-area LNG terminal is planned by Occidental Energy Ventures Corp., a subsidiary of Occidental Petroleum Corp. The Ingleside Energy Center will be on property adjacent Occidental Chemical’s existing Ingleside plant, west of Ingleside, Tex.

The project will include berthing and unloading for LNG carriers, two 160,000-cu m LNG storage tanks, vaporization and NGL-removal equipment, 26 miles of 26-in. natural gas pipeline; and up to 12 interconnects with existing intrastate and interstate pipelines.

The terminal would have nominal sendout of 1 bcfd and be integrated with the adjacent chemical manufacturing complex so that, according to the company, the two facilities can offset each other’s “respective heating and cooling needs.”

Use of the chemical manufacturing complex’s cooling water as a source of vaporization heat is intended to eliminate air emissions from the terminal and at the same time conserve about 2 million gpd of fresh water used at present in cooling-water evaporation.

Last month, the project awarded to a 50-50 joint venture of Aker Kvaerner and Ishikawajima-Harima Heavy Industries (IHI) a $665-million EPC contract for the terminal. Construction will take about 3 years, once Ingleside issues a notice to proceed, and could begin by first-quarter 2007.

Finally, another project for that area of the Texas Gulf Coast and another authorized by FERC in its June 15, 2006, action is yet another terminal proposed for Corpus Christi, the $600-million Vista del Sol LNG terminal to be located in an industrial area along the northeastern shore of Corpus Christ Bay with direct access to the La Quinta Ship Channel.

Vista del Sol LNG plans a baseload sendout of 1.1 bcfd and a peak-day sendout of 1.4 bcfd and three 155,000-cu m LNG storage tanks along with vaporization equipment with a proposed start-up in 2008-09.

Its dedicated slip, berth, and unloading facilities will be adjacent to the La Quinta Ship Channel.

The associated 25 mile, 36-in. Vista del Sol pipeline would have a capacity of 1.4 bcfd from the tailgate of the Vista LNG terminal to an interstate pipeline interconnection near Sinton. Along the proposed pipeline route, says the company, there are up to eight existing intrastate and interstate pipelines with which the pipeline may interconnect.

Vista del Sol LNG Terminal LP and Vista del Sol Pipeline LP are affiliates of ExxonMobil Corp.; the company had no updated information on the project available to the public through the beginning of third-quarter 2006.

Several more LNG terminals have been proposed for the US Gulf Coast but, as of Aug. 1, not approved by FERC. These include the 1-bcfd Calhoun LNG terminal near Port Lavaca, Tex., by Gulf Coast LNG Partners and expansions at Freeport LNG (2.5 bcfd) and Sempra’s Cameron terminal (1.15 bcfd).

Energy Bridge significance

Finally, mentioned last week was Excelerate Energy’s operational Gulf Gateway Energy Bridge offshore LNG terminal that started up in April 2005.

As important a development as that was at the time, the company has struggled since to evolve from and build on that beginning. It has even at least once in the last year used one of its innovative regas vessels simply as a conventional tanker, and a spokesperson said Excelerate had even chartered a conventional LNG carrier-hardly the business the company wants to be in.

An official with the influential Society of International Gas Tanker and Terminal Operators (SIGTTO) told OGJ late last year that the greater significance of the technologies associated with Energy Bridge, at least from an LNG shipping perspective, may well be the evolution of LNG shipping toward development of ship-to-ship LNG transfer, or “transshipment.”

A few service companies have been working on technologies; none has reported full-scale tests or operations.And, significantly, there is no public record of such transshipment taking place. To date only Excelerate Energy has reported full-scale field trials using off-the-shelf components, especially cryogenic hoses.

The first trials in November 2005 occurred without LNG because the vessels involved lacked quick-release couplings, according to Excelerate Energy Pres. Kathleen Eisbrenner, speaking to an industry function earlier this year.

On Aug. 24, however, Excelerate’s Excelsior transferred about 13,000 cu m of LNG to its sister ship Excalibur in a trial conducted in international waters in the Gulf of Mexico and before representatives of SIGTTO. The cargo was from Atlantic LNG in Trinidad, said a company spokesman.

SIGTTO is developing guidelines for procedures, he said, and the company’s goal is to have everything ready for routine use by yearend. In fact, the goal is to have procedures ready for the opening of the company’s planned Teesside, UK, offshore terminal by yearend.

Looking back at the evolution of the Weaver’s Cove, touched on last week, reveals how important the development and appropriate classification of LNG transshiping might be for terminals that, for one reason or another, are constrained from handling LNG carriers greater than a certain size.

West Coast

It remains to be seen whether California will allow an LNG receiving terminal of any configuration, on or off its shores. At least three have been advanced, one land based (Long Beach) and two off the state’s shores (Cabrillo Port and Clearwater Port). Two more land-based terminals have been proposed for Oregon-Coos Bay and Bradwood Landing-that may indirectly affect California supply. Nonetheless, terminal construction to serve, at least in part, California and Western US markets is under way.

Although mainly targeting power and industrial customers in northern Mexico, Sempra Energy’s Energía Costa Azul also expects to send natural gas into western US markets.

The $875-million LNG terminal is under construction on the Pacific coast of Mexico, about 14 miles north of Enseñada in Baja California. Construction began in 2005; completion and start-up are planned for 2008.

Initial sendout capacity will be 1 bcfd, expandable to 1.5 bcfd. The site holds two 160,000 cu m, full-containment tanks and two pads for additional tanks. The 820-ft long pier can accommodate the largest LNG tankers under design, 250,000 cu m.

In October 2004, Sempra reached a supply agreement with BP PLC’s Tangguh LNG project for a supply of 3.7 million tonnes/year (tpy) of LNG from the 7.6-million-tpy Indonesian project.

At about the same time, Sempra reached a supply agreement with Shell International Gas Ltd. for supply from Sakhalin II. The contract was for about 1.9 million tpy for 20 years. Sakhalin II targets start-up in 2008 with two trains producing 9.6 million tpy.

Also off Baja California, Chevron de México is planning to install a concrete gravity-based LNG import terminal. Front-end engineering work for the 700-MMcfd Terminal GNL Mar Adentro de Baja California was completed some time ago and major Mexican regulatory approvals have been obtained. A Chevron Corp. spokesperson said in early August that “final design and bid preparation work is being deferred to be line with the timing of securing gas supply agreements.”

The pipeline from the offshore terminal will connect with Baja California’s existing gas pipeline system and be available for distribution to markets in Baja California and throughout the US West Coast.

But Chevron de México has announced no supply contracts. The skyrocketing prices of raw materials in general and concrete in particular in the last 2 years, however, make that seem the least of Terminal GNL’s problems.

The project has said it sees the Australian Gorgon LNG project as a potential source. Given Gorgon’s ownership, that’s no surprise: Gorgon is being developed by Australian subsidiaries of Chevron (50%; operator), ExxonMobil (25%), and Shell (25%).

In Oregon, Bradwood Landing, proposed by Northern Star LNG, Houston, is clearing a site on the southern shore of the Columbia River in Clatsop County. The site will have a single berth capable of handling tankers up to 200,000 cu m, two 160,000-cu m insulated LNG storage tanks, and seven submerged combustion vaporizers. Installed capacity will be about 1.3 bcfd.

The company filed its application with FERC in June.

Other North America

Terminals are planned or under construction in Canada and Mexico, some of whose capacity aims at US markets.

Canada

North of Oregon, on the West Coast of Canada, Kitimat LNG Inc., a unit of Galveston LNG Inc., proposes an LNG terminal at Bish Cove near the Port of Kitimat, BC. The terminal will include marine off-loading, LNG storage, NGL recovery, regasification, and sendout. It will deliver gas through a 14-km pipeline lateral into the planned Pacific Northern Gas pipeline, which will then move the gas to an interconnection with Duke Energy’s Westcoast Energy Main gas transportation system.

Estimated cost of terminal is $500 million; sendout capacity will be 1 bcfd. Earlier this year Kitimat LNG received provincial environmental approval and a certificate for the terminal; it said this summer that it expects federal permits soon.

With third-quarter 2006 well under way, the company nonetheless says it will start construction this year. Operational start-up is set for early 2009.

Last month Pacific Northern Gas Ltd., Vancouver, and Kitimat LNG announced formation of Pacific Trail Pipelines LP, an equal partnership between Pacific Northern Gas and Galveston LNG. The new company is to develop the natural gas transmission pipeline system from Kitimat to Summit Lake, BC, to serve Kitimat LNG’s proposed LNG terminal.

The Kitimat-Summit Lake project will construct about 470 km of 30 or 36-in. pipeline and any required compression at an estimated cost of $900 million (Can.) or $1.2 billion (Can.), respectively.

Subject to construction start-up of the terminal and required regulatory approvals, Pacific Trail Pipelines will begin construction of the pipeline by first-quarter 2008.

Mexico

Commissioning was occurring last month on the first LNG terminal in Mexico after the arrival on Aug. 17 of its first LNG cargo aboard the Shell-owned and operated 138,000-cu m SS Gracilis.

Terminal de GNL de Altamira, in Mexico’s Tamaulipas state, will have an initial sendout capacity of 500 MMcfd, with possible expansion to 700 MMcfd, two 150,000 cu m, full-containment LNG storage tanks, and be able to accommodate ships up to 200,000 cu m in size.

Developer Shell has said, however, that it plans to import only enough LNG to meet its supply commitments to Mexican utility Comisión Federal de Electricidad, which has contracted for 5.2 billion cu m/year for power generation. Royal Dutch Shell PLC owns 50% of the venture, Total 25%, and Mitsui 25%. Construction began in 2003 with a target start-up of yearend 2006.

One mentioned source for LNG is Nigeria LNG’s Train 6, which is under construction and not expected to start up its 4.1-million tpy before late 2007.