Page 12 - NorthAmOil Week 20 2021

NorthAmOil PROJECTS & COMPANIES NorthAmOil

Two Gulf Coast LNG

projects inch forward

US GULF COAST THE developers of two new LNG export pro-
jects on the US Gulf Coast have said during the
past week that they are making progress towards
final investment decisions (FIDs) that are sched-
uled for later this year.
At the Citi Global Energy & Utilities Virtual
Conference last week, Tellurian’s executive chair-
man, Charif Souki, said the company was now
“just weeks” from finishing the commercialisa-
tion of Phase One at its Driftwood LNG terminal
in Louisiana.
Separately, NextDecade said in a new inves-
tor presentation on its website that it was pro-
gressing commercial negotiations with “multiple
counterparties” to enable an FID in 2021 on two
trains at Rio Grande LNG.
This comes after both NextDecade and Tel-
lurian had to push back FIDs in 2020 amid the
coronavirus (COVID-19) pandemic. Both com-
panies have also suffered setbacks in talks with
potential buyers. In Tellurian’s case, a memo-
randum of understanding (MoU) with India’s
Petronet LNG expired without a deal being
finalised, while NextDecade saw France’s Engie
pull out of talks, reportedly under pressure from
the French government over the use of shale gas CCS project, meanwhile, are estimated at $63-74
as feedstock. per tonne of carbon dioxide (CO2) prior to the
Now both companies are hopeful that their application of tax credits, and $13-24 per tonne
fortunes will turn around. Souki said he expected of CO2 net of such credits.
Tellurian to sell 12-15mn tonnes per year (tpy) of NextDecade has said that it believes installing
supply “totally on Zoom”. He has also been cited CCS infrastructure as part of a greenfield pro-
by media as saying Tellurian is in advanced talks ject will be 60-80% less capital-intensive than
with four or five LNG buyers for volumes that retrofitting an existing LNG plant. It also added
it is marketing on its own – not including those that it expects the costs of the CCS facility to
volumes that would be covered by equity part- decrease over the course of Rio Grande LNG’s
Souki said he ners the company has been soliciting. full development.
To date, the only offtake agreement Tellurian
The Rio Grande terminal will have a capac-
expected Tellurian has announced is with Total – also a partner ity of 27mn tpy of LNG from five liquefaction
to sell 12-15mn in the terminal – covering 1mn tpy of partner trains. NextDecade noted in its presentation
volumes and 1.5mn tpy of marketing volumes. that its lump-sum turnkey (LSTK) engineering,
tonnes per year However, Souki was quoted by S&P Global Platts procurement and construction (EPC) agree-
as saying the agreement with Total would not go ments with Bechtel had been updated in March,
(tpy) of supply ahead in its current form and would need to be with the new pricing valid until the end of 2021.
amended. He added that whether or not Drift-
NextDecade and Bechtel have completed all pre-
“totally on wood proceeds to construction was no longer FID engineering and procurement work for Rio
Zoom”. dependent on the Total deal. Grande LNG, which the operator said would
NextDecade, meanwhile, has been seeking to enable the placement of major equipment orders
bolster its environmental credentials, and now and the award of sub-contracts immediately fol-
touts Rio Grande LNG as the “greenest LNG lowing an FID.
project in the world” thanks to a plan to develop NextDecade said Rio Grande would be the
carbon capture and storage (CCS) infrastructure lowest-cost per tonne greenfield LNG project
for the facility’s emissions. built on the US Gulf Coast under a LSTK EPC
The company’s latest investor presentation contract, and even with the CCS facility factored
provides further details of this plan. NextDecade in it would have the lowest costs among green-
estimates that the breakeven cost of adding CCS field projects in the region. It is worth noting,
infrastructure to Rio Grande LNG is $0.05-0.09 though, that Corpus Christi LNG is the sole
per million British thermal units ($1.38-2.49 greenfield liquefaction terminal to have been
per 1,000 cubic metres). The all-in costs of the built on the Gulf Coast to date.™

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