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Mexico Pacific Ltd awards FEED contract for Puerto Libertad LNG plant
PROJECTS & COMPANIES
HOUSTON-BASED Mexico Pacific Ltd (MPL) has awarded Technip USA a contract for work on a proposed LNG plant in Mexico’s Sonora State.
In a statement dated March 9, MPL said that Technip USA, a Houston-based subsidiary of London-headquartered TechnipFMC, would provide front-end engineering design (FEED) services for the project. It did not reveal the value of the deal or when work might begin. But it did say that the contract award was “one of the final milestones” on the road toward launching con- struction and commercial operations.
MPL has said it wants to establish a gas lique- faction plant capable of turning out 12mn tonnes per year (tpy) of LNG in Puerto Libertad, a port city in Sonora. The company already owns the 1,100-acre (4.5-square km) site where the facil- ity will be built. It will eventually task its engi- neering, procurement and construction (EPC) contractor to build the facility using proven equipment sourced from the US-based service provider Baker Hughes.
Douglas Shanda, MPL’s president and CEO,
said the signing of the FEED contract served as evidence of the company’s progress. “With major permits in hand and the FEED award completed, MPL is on track to take FID and establish a world-class North American LNG export facility on the west coast of Mexico,” he said.
“With this unique project, we will address global energy needs while providing substantial cost advantages for our partners,” he said. “We look forward to continuing our momentum as we work toward taking FID in early 2021 and bringingthefacilityintoservicein2024.”
Meanwhile, Josh Loftus, MPL’s chief devel- opment officer, talked up the company’s plans to make the proposed LNG plant into the base of a major new hub for exports of natural gas piped in from the Permian Basin in Texas and New Mexico. “We are excited to take this important step with our partners, as MPL continues on its path to becoming the leading West Coast pro- vider of US LNG,” he said. “We look forward to strengthening our relationships with all current and future global partners as we become a top supplier in the growing LNG market.”
Freeport LNG makes progress towards Train 3 start-up
PROJECTS & COMPANIES
THE third liquefaction train at the Freeport LNG export project on the Texas coast has reached the final stage of the commissioning process, one of its engineering, procurement and construction (EPC) contractors has announced.
In a March 11 statement, Japan’s Chiyoda – which partners with McDermott International and Zachry Group on the EPC work for Freeport – said this stage included the introduction of feed gas into Train 3. This comes after Trains 1 and 2 came online in quick succession in December 2019 and January 2020 respectively, after initial delays in starting up the terminal.
Production from Train 3 is scheduled for later in the first quarter of 2020 and remains on track, Chiyoda said. Once the third train is online, Freeport LNG will have the capacity to produce roughly 15mn tonnes per year (tpy) of LNG.
Chiyoda’s announcement comes days after Freeport LNG said it was been given the green light by federal regulators to bring the project’s
second export dock into service. This dock will allow for more LNG tanker activity at the termi- nal just as the company prepares to put Train 3 into operation.
However, the ramp-up in Freeport’s activ- ity comes as the coronavirus outbreak – now declared a pandemic – continues to depress LNG demand globally, exacerbating a global glut of the fuel that had already been worsened by a mild winter. The glut has caused spot prices for LNG to collapse in Asia, falling below $4 per 1,000 cubic feet ($113.28 per 1,000 cubic metres). Analysts from Bernstein said recently that this was below the cash cost of supply and was therefore “not sustainable”.
The analysts warned that unless spot prices rise, some US liquefaction capacity would have to shut down sooner rather than later. If this plays out as Bernstein expects, it will also threaten a number of future capacity expansions, including efforts underway by Freeport to commercially sanction a fourth 5mn tpy train.
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