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GLNG AFRICA GLNG
NLNG in 10-year supply deal Eni
PROJECTS & COMPANIES
THE Nigeria LNG (NLNG) consortium reported it has concluded another 10-year sup- ply deal with an international major. The latest deal, with Italy’s Eni, comes within days of the consortium striking a similar deal with France’s Total. (See GLNG Week 03) Both companies are members of the NLNG group.
The Eni agreement is similar to that with Total, as it calls for the delivery of 1.5mn tonnes per year (tpy) of remarketed LNG from Trains 1, 2 and 3 over a period of 10 years. This docu- ment was signed between NLNG and Nigerian Agip Oil Co. (NAOC), a subsidiary of Eni, the consortium said in a separate statement on Jan- uary 27.
This is not Eni’s first contract with NLNG. In December 2019, the Italian company signed another SPA that will see it take delivery of 1.1mn tpy of LNG from the group.
NLNG’s statements did not reveal when the consortium intended to begin deliveries to Total and Eni under the new contracts. The group
has said separately that it intends to make its first shipments of remarketed LNG to Vitol and Total in October 2021. (Vitol, a global commod- ities trader, signed its own SPA with NLNG in December 2019 and will receive 500,000 tpy.)
The consortium’s existing contracts with Total, Naturgy (Spain), Galp (Portugal) and Botas (Turkey) for 2.67mn tpy of LNG from Trains 1, 2 and 3 are due to expire in 2020 and 2021. As a result, the group has been working to remarket production volumes from the three trains.
NLNG has four shareholders. Nigeria National Petroleum Corp. (NNPC) has 49%, and the remaining 51% is split between Royal Dutch Shell (UK-Netherlands), Total and Eni. The part- ners recently made a final investment decision (FID) on the construction of a seventh produc- tion train at the Bonny Island plant. When com- plete, Train 7 will raise the facility’s production capacity from its current level of 22.5mn tpy to 30mn tpy.
AMERICAS
Enbridge, Annova LNG strike gas supply deal
PIPELINES & TRANSPORT
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 capac- ity 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 sustainable and reliable provider of LNG from the United States.”
Annova LNG and two other proposed pro- jects in the Port of Brownsville area – Rio Grande
Annova LNG and
two other proposed projects in the Port of Brownsville area are facing a comparatively high degree of local opposition.
LNG and Texas LNG – are facing local oppo- sition from a coalition of Rio Grande Valley 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.
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