Page 6 - NorthAmOil Week 43

NorthAmOil PIPELINES & TRANSPORT NorthAmOil
US regulators propose LNG-by-rail rules
US
THE US Department of Transportation (DoT) is moving ahead with a proposal to allow LNG to be shipped by rail in DOT-113 tanker wagons.
The DoT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) announced on October 18 that it would publish a notice of proposed rulemaking on the matter, in co-ordi- nation with the Federal Railroad Administration (FRA). The proposed rule will seek comment on changes to the Hazardous Materials Regulations (HMR) to authorise the transportation of LNG by rail.
Currently, the US only allows LNG to be transported in bulk by truck and ship. On a case- by-case basis, it may be transported by rail in a portable tank, which requires an approval from the FRA. But the US is now moving towards allowing a broader roll-out of LNG-by-rail after US President Donald Trump signed an executive order to expedite the process earlier this year.
LNG-by-rail is already authorised in Canada, and allowing it in the US as well would make it easier for LNG to be transported between the two countries. It is also thought that moving LNG by rail could prove to be a viable alternative to pipelines. DoT officials noted in a statement
that pipelines are not always able to meet the demand of – or reach – certain areas in the US that are accessible by rail.
“This major rule will establish a safe, reliable and durable mode of transportation for LNG, while substantially increasing economic bene- fits and our nation’s energy competitiveness in the global market,” the PHMSA’s administrator, Skip Elliott, said.
The proposed rule comes after the Associa- tion of American Railroads (AAR) submitted a petition to the PHMSA nearly three years ago, seeking authorisation for LNG rail shipments in DOT-113 rail tankers. The AAR argued that rail was safer than the use of trucks for transporting the fuel.
However, the petition received pushback from green groups, which argued the environ- mental impacts of LNG-by-rail had not been properly assessed.
The PHMSA has said the new rule would reduce the environmental impact of LNG transportation. However, environmental groups are likely to oppose its push into LNG- by-rail on safety grounds as well as on environ- mental concerns.™
INVESTMENT
Sempra, Mitsui sign MoU on LNG
GLOBAL
The MoU covers Mitsui’s participation
in the second phase
of Cameron LNG (pictured), as well as an expansion of the Energía Costa Azul LNG project in Mexico.
SEMPRA Energy announced on October 28 that it had entered into a memorandum of understanding (MoU) with Japan’s Mitsui & Co. The non-binding agreement covers Mitsui’s participation in the second phase of Sempra’s Cameron LNG project, as well as a future expan- sion of the Energía Costa Azul LNG project in Mexico.
Mitsui is already part of the consortium developing the first phase of Cameron LNG in Louisiana, which recently entered service and consists of three trains. Under the MoU, the two companies have agreed to help each other build two more trains as part of a second-phase expansion.
Train 1 at Cameron LNG began commer- cial operations in August, with Trains 2 and 3 expected to commence LNG production in the first quarter and second quarters of 2020 respectively.
Mitsui is already an equity participant in the development company for both phases of Cam- eron LNG.
Under the MoU Sempra and Mitsui also
agreed to help each other develop LNG export capacity at the already existing Energía Costa Azul import terminal on Mexico’s Pacific Coast.
Energía Costa Azul LNG is being developed in partnership with Sempra’s Mexican subsidi- ary, IEnova. Phase 1 of the project includes one liquefaction train with an export capacity of roughly 2.4mn tonnes per year (tpy). A future expansion of the terminal would include addi- tional trains with an anticipated export capacity of around 12mn tpy.
Sempra and Mitsui entered into a heads of agreement (HoA) in November 2018 and are currently finalising a definitive 20-year LNG sales and purchase agreement (SPA) for the potential purchase of 800,000 tpy of LNG from Phase 1 at Energía Costa Azul.
Under the newly signed MoU, Mitsui could become the offtaker for up to one-third of the available capacity from Cameron LNG’s second phase. The agreement also calls for the company to buy up to 1mn tpy of LNG from the Energía Costa Azul expansion, as well as buying into the project as an equity participant.™
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w w w . N E W S B A S E . c o m Week 43 29•October•2019