Page 7 - NorthAmOil Week 34

NorthAmOil COMMENTARY NorthAmOil
solutions to projects such as Calcasieu Pass, BHGE is continuing to help unlock the poten- tial of natural gas. We are proud to be a strategic partner for such an innovative and important project for the US LNG market,” BHGE’s pres- ident and CEO of turbomachinery and process solutions, Rod Christie, said in a statement. “As global energy demand continues to grow and with it an increasing focus on energy transition in the coming decades, we will see more adop- tion of gas solutions in the energy mix, making the availability, flexibility and cost of natural gas important factors in shaping the future of energy.”
BHGE said the modularised system o ered a “plug and play” approach, which allows for faster installation and lower construction and operational costs. The services provider will manufacture, assemble, test and transport the modules from its facilities in Italy. BHGE will also supply a power island system (PIS) that will include power generation and electrical distribu- tion equipment for Calcasieu Pass. It anticipates equipment deliveries beginning in the second half of 2020.
Venture Global LNG and BHGE have a master supply agreement in place for a total of 60mn tpy of production capacity. e deal was initially struck with GE Oil & Gas, a division of the General Electric conglomerate, before the latter took over Baker Hughes. It was subse- quently expanded to cover 60mn tpy of capacity in March this year. Venture Global has proposed two further – and larger – LNG export plants in Louisiana. e Plaquemines and Delta LNG
facilities each have a planned capacity of 20mn tpy. BHGE can be expected to supply liquefac- tion technology for both if they also reach FID.
Racing ahead
e way forward looks relatively clear for Calca- sieu Pass LNG, which has received all necessary permits, including authorisation to export gas to countries with which the US does not have a free trade agreement (FTA). e project also has 20-year LNG sale and purchase agreements (SPAs) in place with Royal Dutch Shell, BP, Italy’s Edison, Portugal’s Galp Energia, Spain’s Repsol and Poland’s PGNiG.
Venture Global’s FID is a step forward for the second wave of US LNG developments. It is the second FID on a new project to be announced this year a er ExxonMobil and Qatar Petroleum (QP) said in February that they would proceed with Golden Pass LNG. Some existing terminals are undergoing expansions, and a number of other propos- als are slowly moving forward as well, with a steady stream of regulatory approvals being announced in recent months. But other developers of new projects may nd it harder than Venture Global to secure nancing and o ake agreements. e US’ trade war with China continues to restrict the ow of ris- ing US LNG exports to a market where gas demand is booming. And concerns have been expressed about the economics of certain other plants. Nonetheless, Venture Global’s FID illustrates that it is still possible to secure o akers and nancing.™
PIPELINES & TRANSPORT
Nebraska court affirms new Keystone XL route
NORTH AMERICA
A court in Nebraska has a rmed an alternative route through the state for the Keystone XL oil pipeline being developed by TC Energy – for- merly known as TransCanada. e ruling brings the project closer to construction a er almost 10 years of regulatory and legal delays, removing one of the last outstanding legal hurdles holding up the pipeline.
On August 23, the Nebraska Supreme Court affirmed the alternative route that had been approved by the state’s Public Service Commis- sion (PSC) in November 2017. e alternative was not TC Energy’s preferred route for the pipe- line, and the PSC’s decision to approve it resulted in a legal challenge by landowners and indige- nous groups. e opponents argued that the PSC only had the power to approve the route that had been applied for, rather than an alternative one. But the Nebraska Supreme Court ruled against the challenge, and said that the PSC did have the power to approve a route that TC Energy had not applied for a er all.
“The Supreme Court decision is another important step as we advance toward build- ing this vital energy infrastructure project,” TC Energy’s CEO, Russ Girling, said in a statement.
e 830,000 barrel per day (bpd) Keystone XL will run from Alberta’s oil sands to Steele City, Nebraska, where it will connect to an exist- ing pipeline network through which oil can be shipped on to the US Gulf Coast. e project’s cost has escalated over the years that it has been delayed. It is currently estimated to cost around $8bn but energy investment bank GMP First- Energy said this gure would likely need to be updated.
TC Energy has yet to make a nal invest- ment decision (FID) on Keystone XL. Mean- while, one more court hearing relating to the pipeline is scheduled for October 9, with envi- ronmental groups seeking to block the federal permit issued for the pipeline by US President Donald Trump.™
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