Page 11 - NorthAmOil Week 28 2021

NorthAmOil PROJECTS & COMPANIES NorthAmOil

Tellurian, TotalEnergies terminate agreement

LOUISIANA US-BASED Tellurian said in a federal filing likely have to choose between a business model
this week that it had terminated stock and that seeks equity partners or one in which it sells
LNG purchase agreements that it had previ- LNG to buyers such as Vitol and Gunvor.
ously signed with France’s TotalEnergies for “This news is about trying to get this project
the proposed Driftwood LNG export terminal built, because Tellurian is trying to get to final
in Louisiana. investment decision on this project,” Clearview
Tellurian said in the filing that the agreements Energy’s managing director, Jacques Rousseau,
had been terminated because they were “not was quoted by Reuters as saying. “They must feel
consistent” with commercial agreements it had the best way to get this project built is by selling
reached with other counterparties through its the offtake to traders, rather than [gas-produc-
Driftwood LNG subsidiary. ing] companies.”
The company had previously been seeking to TotalEnergies had initially agreed to buy a
finance Driftwood by having partners purchase 19% stake in Driftwood, though in August 2020
equity in the facility. In TotalEnergies’ case, the it said in a regulatory filing that this had been cut
French company – then known simply as Total – to 17.4%. The investment was conditional on Tel-
agreed in 2019 to make a $500mn equity invest- lurian reaching a final investment decision (FID)
ment in Driftwood, as well as buying 2.5mn by July 10, 2021. This has not happened, though
tonnes per year (tpy) of LNG from the project. the company has reported on various steps being
But Tellurian appears to have since moved to taken towards the start of construction, which is
simply selling LNG without bringing in new now being targeted for early 2022.
partners, striking two separate 10-year sales and TotalEnergies had been set to invest up to
purchase agreements (SPAs) with commodity $700mn into Driftwood. There is speculation
traders Gunvor and Vitol in recent weeks for that the French company’s withdrawal frees Tel-
3mn tpy each. lurian to sell the LNG that TotalEnergies would
Analysts have said that the company will have bought to other companies.™

Chevron reportedly considers

closing Pasadena refinery unit

TEXAS CHEVRON is reported to be considering per- A hydroskimming refinery usually consists of
manently shutting down the fluidic catalytic an atmospheric crude distillation unit (CDU), a
cracker (FCC) at its 112,229 barrel per day (bpd) reformer and a hydrotreater. According to the
refinery on the Houston Ship Channel in Pas- sources, idling the FCC could lead to closure of
adena, Texas. The move is being considered as 40% of the units at the refinery.
part of a possible reconfiguration of the plant, Chevron acquired the refinery in 2019 from
sources familiar with the matter told Reuters last Brazil’s Petrobras for $350mn plus working cap-
week. ital. Comments from company executives show
The 52,000 bpd FCC was shut on June 1 fol- that the super-major was already considering a
lowing a malfunction that took it out of opera- shift to hydroskimming for the facility prior to
tion. Chevron is now assessing whether it makes the FCC outage.
sense to repair the unit, one of the sources said. “We continue to test alternatives for cap-
If the FCC were to shut permanently, it would ital-efficient ways to expand our light-tight
happen as part of a process to convert the refin- oil processing capability,” Chevron’s executive
ery to a simpler hydroskimming configuration, vice-president of downstream and chemicals,
according to the sources. They added that a deci- Mark Nelson, said in March during an investor
sion on the unit’s future is expected this month. day presentation in response to an analyst’s ques-
The FCC outage is the latest setback for the tion about the Pasadena refinery. “We’re leaning
refinery, after it was shut in mid-February as a towards a hydroskimming focus in that regard,”
result of the winter storm that hit the US and had Nelson said. “Again, a capital-efficient approach
a particularly severe impact on Texas. Chevron because we’re in search of high returns.”
restarted the refinery in March, but the catalytic Last week, a Chevron spokesman, Tyler Kru-
reformer, FCC and light cycle oil hydrotreater zich, confirmed that the super-major was con-
were not brought back online until April. tinuing to “test those alternatives”.™

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