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Shell, Energy Transfer ask for extension on Lake Charles LNG
LOUISIANA
ROYAL Dutch Shell and Energy Transfer have asked US regulators for more time to complete the Lake Charles LNG export project. The part- ners in the venture are seeking a five-year exten- sion to the completion deadline for the facility, asking for it to be pushed back to December 2025.
In their request to the US Federal Energy Regulatory Commission (FERC), the compa- nies cited an “unforeseen delay in the originally projected construction schedule”.
The delay was attributed by Energy Transfer to complex international contract negotiations. These are related to Shell’s $53bn acquisition of BG Group in 2016, as the latter had agreed to buy of all Lake Charles LNG’s output before being taken over.
After that takeover closed, re-negotia- tions were required that ended with Shell and Energy Transfer each owning 50% in the pro- posed export terminal. The companies have noted that the project plans have not changed but that Shell is now committed to taking 50% of the export capacity. The new deal was only signed in March this year, and included a new
timetable for construction.
“The project sponsors are eager to continue
to move forward with the project and receipt of the requested extension is a necessary step,” Energy Transfer’s chief regulatory officer, Michael Langston, wrote in an August 30 letter to the FERC.
Langston went on to say that a final invest- ment decision (FID) on Lake Charles LNG was not expected until early 2020 but that the project had progressed in the meantime. According to him, Energy Transfer has spent $300mn on Lake Charles LNG so far and anticipates spending another $150mn before the FID is taken.
Steps that have been taken so far include Energy Transfer and Shell inviting engineering, construction and procurement (EPC) compa- nies to bid on Lake Charles LNG in March. But although some front-end engineering and design (FEED) work has been awarded, a general con- tractor has yet to be selected.
The 16.45mn tonne per year (tpy) export project is anticipated to cost $12-16bn to build. It involves conversion of an import facility to liquefaction.
PROJECTS & COMPANIES
Renewable diesel refinery proposed for Texas
TEXAS
VALERO Energy and Darling Ingredients said on September 9 that they are planning to build a renewable diesel refinery in Port Arthur, Texas, through their 50:50 Diamond Green Diesel joint venture. The plant would be the first ever renew- able diesel facility to be built in Texas.
The partners are currently in the engineering and cost review stages of the project, on which a final investment decision (FID) has yet to be made. The partners anticipate making an FID in 2021, with start-up set for 2024.
Valero’s CEO, Joe Gorder, said he expected more political mandates for low-carbon fuels across the globe to continue to drive demand growth for renewable diesel fuels.
“The demand for a low-carbon fuel solution continues to grow, as markets move to reduce their carbon intensity. Leveraging its proven technology, [Diamond Green Diesel] continues to adapt and expand production to address that need for the benefit of our environment, our customers and our shareholders,” said Darling’s CEO, Steve Randall.
The proposed project would be located at an undisclosed location in Port Arthur, pro- ducing 400mn gallons (1.5bn litres) per year of renewable diesel, or 1.1mn gallons (4.2mn litres) per day. The plant will also produce 40mn gallons (151mn litres) of renewable naphtha per year.
Valero and Darling first partnered on build- ing a small renewable diesel plant outside New Orleans, Louisiana, and are also now expanding that refinery.
Renewable diesel is considered to be a much cleaner fuel than standard diesel, as it does not require fossil fuels for feedstock. Instead, renew- able diesel is made out of waste animal fats and waste vegetable oils, including used cooking oil and inedible corn oil. Despite this, it is chemi- cally identical to conventional diesel fuel.
The announcement comes as US biodiesel producers are urging the government to increase blending volumes in the 2020-21 biofuel man- date to compensate for lost demand from waiv- ers granted to small oil refiners.
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w w w . N E W S B A S E . c o m Week 36 10•September•2019
