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Freeport LNG secures over $1bn for Train 4
PERFORMANCE
PRIVATELY owned Freeport LNG Develop- ment announced on September 9 that it has struck a deal with Westbourne Capital under which the latter and its co-investors will provide $1.025bn in the form of a mezzanine loan.
e funds, which will be received by a sub- sidiary of Freeport, will be used to support the development of a proposed fourth liquefaction train at the company’s LNG export terminal on Quintana Island, on the Texas Gulf Coast. Freeport said in a statement that this nancing, together with a bank facility it is considering, would be su cient to provide all of the capital required for building Train 4.
Freeport LNG has yet to reveal any firm offtake deals for Train 4, though it reached a heads of agreement (HoA) last year with Japan’s Sumitomo for 2.2mn tonnes per year (tpy) of LNG from the facility. Neither partner has yet confirmed whether the agreement has been nalised.
Freeport has received federal authorisations to build Train 4 and export LNG from the facil- ity. It has also awarded the engineering, procure- ment and construction (EPC) contract for the 5mn tpy train to KBR.
“We are happy to continue to progress our
Train 4 expansion with an eye towards FID in the next several months,” Freeport’s chairman and CEO, Michael Smith, said. “ e Westbourne-led consortium have all been very supportive inves- tors of Freeport in the past and we are excited to do more with them to grow the company.”
e announcement comes a week a er the Freeport LNG terminal shipped its commis- sioning cargo. e LNG Jurojin departed from the terminal on September 3. e captain’s des- tination log showed the tanker was headed to the port of Jebel Ali in the United Arab Emirates (UAE), where Excelerate Energy operates an LNG receiving terminal.
Market sources have been reported as saying Royal Dutch Shell is taking the commissioning cargoes from Freeport.
e same day it was reported that France’s Total had completed its acquisition of Toshiba’s stake in Freeport LNG for $800mn. However, Total will not begin buying LNG from the termi- nal until Train 3 enters commercial operation, which is anticipated to be around May 2020.
e primary long-term o akers from Train 1 at Freeport are Japanese utilities Osaka Gas and Chubu Electric, which control 2.2mn tpy of capacity each.™
ASIA
Petronas buys SK408 output for Bintulu LNG
PROJECTS & COMPANIES
MALAYSIA’S state-owned Petronas has agreed to buy natural gas produced from the o shore SK408 production-sharing contract (PSC), co-operator Sapura Energy has revealed.
Under the terms of the deal, output from the Gorek, Larak and Bakong elds will be supplied to Petronas’ lique ed natural gas (LNG) complex in Bintulu, Sarawak.
Sapura owns a 50% interest in SapuraOMV Upstream, which in turn holds a 40% stake in the block. Royal Dutch Shell and Petronas each own 30% of the block through respective units Sar- awak Shell and Petronas Carigali. SapuraOMV operates the Larak and Bakong elds, while Sar- awak Shell operates Gorek.
Production from SK408’s first phase of development is anticipated before the end of the year, Sapura president and CEO Tan Sri Shahril Shamsuddin said on September 6. Produc- tion will hit 400mn cubic feet (11.33mn cubic metres) per day this year, before rising to 1 bcf (28.32 mcm) per day by 2023. SK408 has 7-10tn cubic feet (198.24-283.2 bcm) of proven and probable (2P) reserves.
SapuraOMV’s CEO, Muhammad Zamri Jusoh, said his company had a 20-year reserve life index based on current reserve estimates
and production rate. He added that the eld had been delivered under budget and ahead of schedule.
“We have managed to bring the eld online in less than two years. e production of 400mn cubic feet per day is just from the rst phase and we are still making discoveries from the SK408 block,” said Zamri. e partners reached a nal investment decision (FID) on the project in March 2018.
Commenting on the gas sales agreement, Shahril said the field’s production start-up should help bolster his company’s financial position.
While Sapura Energy returned to the black in nancial year 2019, which ended on Janu- ary 31, its pro tability was driven solely by the MYR2.66bn ($638mn) sale of a 50% stake in its upstream business to OMV in November 2018. is saw the company post a net pro t of MYR207.5mn ($49.8mn), compared with a net loss of MYR2.5bn ($600mn) in the previous nancial period.
“I cannot say whether Sapura Energy will be pro table next year, but I believe that the pro- duction from SK408 will help with the situation,” said Shahril at a press conference.™
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w w w . N E W S B A S E . c o m Week 36 12•September•2019