Page 8 - NorthAmOil Week 04

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Enbridge, Annova LNG strike gas supply deal
TEXAS
Annova LNG and
two other proposed projects in the Port of Brownsville area are facing a comparatively high degree of local opposition.
HOUSTON-BASED Annova LNG announced last week that it had signed a 20-year natural gas supply deal with pipeline operator Enbridge. Under the deal, the proposed Annova LNG pro- ject at the Port of Brownsville, Texas, will receive all of its feedstock gas from Enbridge’s Valley Crossing pipeline. The pipeline begins at the Agua Dulce Hub near Corpus Christi and passes through the port before crossing the US-Mexico border.
The companies did not disclose any addi- tional terms of the agreement.
A final investment decision (FID) on Annova LNG is yet to be reached. The company obtained federal approval to build a plant with a capacity of up to 6.5mn tonnes per year (tpy) of LNG in November 2019. However, Annova LNG is still seeking to lock in offtakers for the volumes it would produce. If the project goes ahead, the existing Valley Crossing would be expanded, and a roughly 9-mile (14.4-km) lateral would be built to connect the pipeline to Annova LNG’s facility.
“Annova LNG’s firm transportation arrange- ments will ensure security of supply and access to the most diversified, low-cost feed gas of any of the US LNG facilities,” said Annova LNG’s CEO,
Omar Khayum. “We will be the most sustaina- ble and reliable provider of LNG from the United States.”
Annova LNG and two other proposed projects in the Port of Brownsville area – Rio Grande LNG and Texas LNG – are facing local opposition from a coalition of Rio Grande Val- ley shrimpers, fishermen, environmentalists and nearby communities. All three projects received federal regulatory approval in November, but they remain contested by opponents seeking a second hearing.
If Annova LNG manages to circumvent these efforts by opponents to derail the project, it is currently scheduled to begin commission- ing in 2024 and commercial operations in early 2025.
Enbridge holds a 10.5% stake in the proposed Annova liquefaction terminal. Utility company Exelon is the majority-owner in the project, with 80.55%, while Kiewit and Black & Veatch each hold 4.475% stakes. The latter two companies bought into the planned facility in 2018 and were awarded the engineering, procurement and construction (EPC) contract for the project on a joint basis.™
PERFORMANCE
Hess announces quarterly loss, 2020 budget
AMERICAS
A 38% increase
in Hess’ Bakken production was not enough to offset the impact of low gas and NGL prices.
US independent Hess has announced a larg- er-than-expected loss for the fourth quarter of 2019 on lower prices for natural gas and natural gas liquids (NGLs). The company’s adjusted net loss widened to $180mn, or $0.60 per share, in the fourth quarter, from $77mn, or $0.31 per share, a year ago.
The company said average selling prices for natural gas fell by 27.8% in the last quarter, while NGL prices dropped by 34.5%, with these trends more than offsetting increased production from North Dakota’s Bakken play.
Hess’ Bakken output rose 38% year on year to 174,000 barrels of oil equivalent per day, push- ing the company’s total production up 18.4% to 316,000 boepd, from 267,000 boepd in the fourth quarter of 2018, excluding output from Libya.
The company said that its proven reserves at the end of 2019 were 1,197mn boe, while it achieved a reserve replacement rate of 104% last year – or 134% excluding price revisions.
Hess’ fourth-quarter results were posted a day
after the company announced its capital expend- iture budget for 2020. Its capex is set for $3.0bn this year, in line with previous guidance. The company is intending to spend 11% more than it did in 2019, with over 80% of funds allocated to the Bakken play and offshore Guyana.
“In the Bakken, we plan to maintain a six-rig programme through the year, which is expected to result in our net production growing to approximately 200,000 barrels of oil equivalent per day by the end of 2020,” Hess’ chief operating officer, Greg Hill, said. “Offshore Guyana, with the Liza Phase 1 development now on produc- tion, our focus in 2020 will be on the Liza Phase 2 development and on front-end engineering design [FEED] work to develop the Payara Field. We also will continue to invest in an active explo- ration and appraisal programme in Guyana on both the Stabroek and Kaieteur Blocks and in the deepwater Gulf of Mexico.”
Hess projects that its net production will average 330,000-335,000 boepd in 2020, exclud- ing Libya.™
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w w w. N E W S B A S E . c o m Week 04 29•January•2020