Page 11 - GLNG Week 14 2022

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China’s GDG in long-term supply deal

with MPL’s Puerto Libertad LNG terminal

PROJECTS & CHINA’S Guangzhou Development Group to take delivery of 1mn tpy of LNG each from the
COMPANIES (GDG) reported on April 1 that it had signed a first and second phases of the facility.
long-term supply agreement for LNG from an The Houston-based company has said previ-
export terminal that Houston-based MPL plans ously that it wants to build the Puerto Libertad
to build at Puerto Libertad in Mexico’s Sonora LNG plant in three stages. The first stage would
State. involve the construction of a 4.7mn tpy pro-
In a statement, GDG explained that its sub- duction train, plus a storage tank and a marine
sidiary Guangzhou Development Natural Gas loading jetty, while the second would involve the
Trading had agreed to buy 2mn tonnes per year construction of another production train of the
(tpy) of LNG over a period of 20 years from Mex- same size and another storage facility. The third,
ico Pacific LNG Markets, a subsidiary of MPL, meanwhile, calls for the construction of a third
which is in turn controlled by the US investment production train of the same size.
firm AVAIO Capital. The deal calls for shipments MPL hopes to take a final investment deci-
to begin once the MPL subsidiary’s terminal sion (FID) on the first two stages of the project
starts commercial operations, the statement said. in the second half of 2022, GDG said in its April
The Chinese company did not reveal full 1 statement. This may put the company on track
details of its agreement with MPL. However, to begin production and exports in 2026, rather
it did say that the price of future LNG supplies than in 2025 as previously anticipated, LNG
would be linked to the Henry Hub index and Prime commented earlier this week.
that the contract would take effect once MPL If built, the Puerto Libertad LNG plant will
had secured financing and begun construction use gas imported into Mexico via pipeline from
work on its plant. Additionally, it said it intended fields in the US Permian basin as feedstock.™

Shell considers options for

expansion of LNG Canada

PROJECTS & SHELL is carrying out a feasibility study for a green light it would double LNG Canada’s export
COMPANIES major expansion of its LNG Canada project capacity to 28mn tonnes per year (tpy).
in Kitimat, British Columbia, amid growing LNG Canada is the first major Canadian LNG
demand for LNG. export terminal to proceed to construction. The
The super-chilled fuel was already benefiting initial phase of the terminal is expected cost
from Asian countries seeking cleaner alterna- CAD18bn ($14bn) to build, and shipments to
tives to coal. Now, as Europe scrambles to replace Asia are anticipated to begin in 2025. The facility
Russian gas imports in the wake of the war in will export 14mn tpy of LNG from its first phase.
Ukraine, global competition for LNG looks set Additional LNG exports from Canada to Asia
to intensify further still. could help free up supplies from Qatar, the US
“It raises the urgency for more LNG sup- and other producers to be shipped to Europe.
ply because Europe and the world desperately “In our mind, we always wanted to be able
needs it,” Shell’s head of integrated gas and to have that option to go into phase two,” Sawan
renewables division, Wael Sawan, told the said. “Now we need to be able to make sure that
Globe and Mail. “There is a lot of capacity that it makes sense on paper before we make that
has to be built up to be able to meet the growing investment commitment.”
LNG demand.” The BC government is encouraging LNG
Against this backdrop, the partners in LNG Canada to consider electric-drive technology to
Canada are conducting a cost-benefit analysis liquefy gas for Phase Two if it goes ahead. While
for Phase Two of the facility to potentially use there is not sufficient infrastructure yet to pro-
lower-carbon hydroelectricity from BC Hydro vide hydroelectric power for electric-drive tech-
to power the liquefaction process at the plant, nology at the site, Sawan said the LNG Canada
according to Sawan. If Phase Two is given the consortium would explore the possibility.™

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