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Gunvor to market all LNG from Louisiana’s Commonwealth project
LOUISIANA
EUROPEAN-HEADQUARTERED Gunvor Group agreed this week to double the maximum amount of LNG that it would buy from the pro- posed Commonwealth LNG project in Lousiana, on the US Gulf Coast.
The commodity trader said in a Novem- ber 25 statement that it had agreed to help Commonwealth LNG to secure binding LNG offtake and gas supply agreements for the full capacity of the planned facility. It will also buy up to 3mn tonnes per year of LNG from the project, which would have a total capacity of 8.4mn tpy itself.
A final investment decision (FID) could be made on the $4bn Commonwealth LNG in the first quarter of 2021, with exports then starting in the second quarter of 2024.
The deal with Gunvor allows Common- wealth to shift the burden of finding buyers on to a third-party marketer, differentiating the pro- ject from other LNG export facilities. It comes as developers are increasingly willing to explore new models for securing enough offtakers to justify building new projects. Competition in the market is intensifying as new supply comes
online, while buyers are pushing for more flexi- bility in how they secure volumes.
Meanwhile, commodity traders are becom- ing more prominent in the LNG trade, with the fuel being increasingly commoditised. Com- monwealth’s president and CEO, Paul Varello, described Gunvor as the most active LNG trader in the world. Indeed, Gunvor is on course to lead LNG ship charters this year. The combination with Gunvor “ultimately differentiates Com- monwealth from every other US LNG project currently chasing FID”, Varello added.
“In this highly competitive market, it is crit- ical for companies – particularly ones pursuing an LNG greenfield project – to recognise their core competencies and strengths,” Gunvor’s co-head of LNG trading, Kalpesh Patel, said in a statement. “Commonwealth LNG’s engineering and procurement team is best in class. And now, with the comprehensive support of Gunvor’s LNG and US Gas marketing team, Common- wealth LNG will excel not only at controlling costs and project execution, but also at commer- cialising their project and creating the lowest cost offering on the US Gulf Coast.”
NuStar building up infrastructure in Texas
TEXAS
PIPELINE operator NuStar Energy is in the pro- cess of expanding its infrastructure in Texas as it seeks to accommodate rising volumes of crude and products.
The company exited Europe a year ago, and sold off its Caribbean operations in July this year, with proceeds of about $500mn from these asset sales. In an investor presentation from last week, the company said it was investing the majority of this amount into new expansion projects. NuStar now projects that its capital spending in this year will be about $485-515mn.
As part of this budget, NuStar is spending about $160mn to expand its Permian Basin crude-gathering pipeline network. The compa- ny’s West Texas gathering system connects to three transmission pipelines bound for the port city of Corpus Christi on the Gulf Coast – the EPIC crude pipeline, Cactus II and Gray Oak, which is in the process of starting up.
NuStar is also investing $105mn this year to expand and improve its docks at the Port of Corpus Christi, allowing supertankers to load
up larger cargoes. The company is investing $145mn to expand capacity of its Mexico-bound refined products pipelines from Corpus Christi.
Separately, NuStar announced on November 20 that it had launched a binding open season to support an expansion of Midland trunkline, which forms part of the company’s Permian crude system.
NuStar is proposing to increase the capacity of the 20-inch (508-mm) Midland trunkline, which runs from its Stanton terminal to Mid- land Junction, by adding pump upgrades at the terminal. If the expansion goes ahead, it will offer around 60,000 barrels per day (bpd) of addi- tional capacity to the EPIC pipeline at Midland Junction. Up to 90% of the expanded capacity is being offered to shippers making long-term, ship-or-pay commitments, while at least 10% will be available for walk-up shippers. The open season runs until December 20, with the expan- sion due to enter service in the first quarter of 2020 if the proposal receives sufficient shipper commitments.
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w w w . N E W S B A S E . c o m Week 47 27•November•2019
