Page 12 - NorthAmOil Week 28 2022

NorthAmOil PROJECTS & COMPANIES NorthAmOil

Delfin signs SPA for planned

offshore LNG project

US DELFIN Midstream finalised a sale and pur- contracts in place in order to begin construction,
chase agreement (SPA) this week with com- according to the company’s statement. Delfin
modity trader Vitol for offtake from its planned said it was on schedule to make a final invest-
floating LNG (FLNG) export terminal in the US ment decision (FID) on its first FLNG vessel by
Gulf of Mexico. the end of 2022.
Under the terms of the agreement, Delfin will The project is designed to accommodate
supply 500,000 tonnes per year (tpy) of LNG to up to four vessels in total, each with a capacity
Vitol from the FLNG facility, which would be to produce 3.5mn tpy of LNG. Feedstock gas
located 40 nautical miles (74 km) off the coast of would be supplied to the vessels using existing
Louisiana. The purchase price will be indexed to offshore pipelines. Earlier this year, Poston said
the Henry Hub natural gas benchmark and the the vessels would cost around $2bn each, with
deal will cover a period of 15 years. According to the first anticipated to enter service around 2026.
Delfin’s statement, the agreement has been val- However, those comments came before the war
ued at around $3bn in revenue over the 15-year in Ukraine upended global gas markets and led
period. to new inflationary pressure on costs. However,
“Recent events have only accelerated the need the war has also added to a sense of urgency to
for a wider array of potential buyers to source secure long-term sources of supply among buy-
reliable low-cost energy from the safety of the ers of LNG, reviving the prospects for US export
US at compelling prices and Delfin is perfectly projects – including Delfin’s FLNG scheme – that
positioned to serve this growing need,” stated had previously seen little interest from offtakers.
Delfin’s CEO, Dudley Poston. According to this week’s statement, Vitol has
The FLNG project’s design is modular and also finalised an investment in Delfin in addition
Delfin only requires 2.0-2.5mn tpy of long-term to the SPA.™

Suncor CEO steps down after new fatality

US SUNCOR Energy’s president and CEO, Mark Little’s resignation was included, activists had
Little, has stepped down from his role follow- also been pushing for a leadership change at
ing another worker fatality at a site operated by Suncor, though ultimately it had come sooner
the company. The fatality, involving a worker at than expected.
Suncor’s oil sands base plant in Alberta, was the Analysts at other institutions broadly agreed
fifth for the company since Little became CEO in that major changes were needed at Suncor if the
2019 and the thirteenth since 2014. This repre- company is to fix its safety record and regain
sents by far the worst safety record among Cana- investor confidence.
dian oil producers. “This is not just the CEO’s fault,” wrote Eight
Little did not make a statement, but Suncor’s Capital analyst Phil Skolnick. “Ultimately, we
board chair, Michael Wilson, commended him believe a meaningful overhaul will be needed;
for his “professionalism and the exceptional and we see that taking time and money.”
work he did to guide Suncor through the pan- And National Bank analyst Travis Wood said
demic and lead our sector’s progressive approach a long-term cultural shift was needed across
to the energy transition”. Suncor’s workforce, which totals around 17,000
Suncor’s executive vice president of down- people. He wrote in a note that additional exec-
stream, Kris Smith, has been named interim utive changes would likely be required, with
CEO and the company’s board has formed a National Bank not believing the blame should
CEO search committee to conduct a “global fall on one person alone.
search” for a permanent replacement for Little. Nonetheless, McDermott sees a major oppor-
Morgan Stanley analyst Devin McDermott tunity for the company to unlock value via oper-
believes an external candidate would be best ational improvements. According to Morgan
received, given the duration of the operational Stanley’s note, if this is achieved, it could drive
and safety issues at Suncor. According to a Mor- a roughly 70% upside to Suncor’s current stock
gan Stanley note in which McDermott’s take on price.™

P12 www. NEWSBASE .com Week 28 15•July•2022