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NorthAmOil PROJECTS & COMPANIES NorthAmOil
Texas approves Annova LNG project
TEXAS
Annova is one of
three LNG projects proposed for the Port of Brownsville.
THE Texas Commission on Environmental Quality (TCEQ) has issued a state permit to the proposed Annova LNG project at the Port of Brownsville, in South Texas. The permit marks a step forward for a project in a region where such developments are attracting more opposi- tion than terminals elsewhere along the US Gulf Coast.
Indeed, Annova LNG’s state permit was granted despite objections from the nearby cities of Port Isabel and South Padre Island, which had requested a hearing over possible pollution from the facility. The two cities cited concerns about the LNG industry’s impact on the tourism and fishing industries, as Annova is one of three LNG projects proposed for the Port of Brownsville.
In a virtual meeting last week, the TCEQ’s three commissioners denied the hearing request from the two cities, saying it had not been filed in a timely manner. They also rejected several requests for a hearing made by nearby residents, saying they all lived too far from the facility to qualify.
Annova LNG, which is majority-owned by
utility Excelon, has been steadily making pro- gress towards a final investment decision (FID) over recent months. Federal authorisation for the project was granted in November 2019. In January 2020, Annova LNG signed a gas sup- ply agreement with pipeline operator Enbridge, which also owns a stake in the terminal. In Feb- ruary, the US Department of Energy (DoE) authorised Annova to export LNG to countries that do not have a free-trade agreement (FTA) with the US.
However, the 6.5mn tonne per year (tpy) project has yet to secure any firm offtake agree- ments for its output. And given the collapse of demand as a result of the coronavirus (COVID- 19) pandemic in an already oversupplied market, finding buyers will become even difficult for pro- posed LNG facilities.
Annova LNG officials previously said they hoped to announce an FID by the end of this year, but given the unprecedented changes in market conditions, delays to the schedule are likely, assuming the project goes forward at all.
ENERGY TRANSITION
Orsted completes Texas wind farm that will supply ExxonMobil
TEXAS
DENMARK’S Orsted announced last week that it had completed its Sage Draw wind project, which straddles Texas’ Garza and Lynn coun- ties. The majority of the output from the 120- wind turbine project will be sold to super-major ExxonMobil to help power its operations in the Permian Basin.
Orsted announced in late 2018 that it had signed two long-term power purchase agree- ments (PPAs) with ExxonMobil, under which it would supply the company with 500 MW from new wind and solar projects. The 338-MW Sage Draw wind farm accounts for 250 MW of this, while the remaining 250 MW of the contracted capacity is set to come from the 350-MW Per- mian solar photovoltaic (PV) complex. The solar project is due to enter service in the second quar- ter of 2021.
ExxonMobil’s move into using renewables was more likely a result of rising demand for power and the increased availability of low-cost
renewable energy, rather than an attempt to boost its environmental credentials. But it none- theless illustrates a growing trend, particularly in the Permian Basin, where rising production has led to surging power demand and has led some operators to diversify their supply to include renewables. Occidental Petroleum and Apache are among the producers to turn to solar for powering some of their Permian operations.
Orsted itself is illustrative of the energy transi- tion in progress. The company has gone through several changes, having started life as Dansk Naturgas, managing oil and gas resources in the Danish North Sea. It was renamed to Dansk Olie og Naturgas (DONG), and began to diversify into electricity in the early 2000s. The company’s merger with several Danish electric power pro- ducers and utilities in 2005 led to the creation of DONG Energy, which subsequently sold its oil and gas business in 2017 and was renamed Orsted, with a focus on renewables.
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