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GLNG AFRICA GLNG
Total signs 10-year supply deal with Nigeria LNG
PROJECTS & COMPANIES
Total also owns a 15% stake in Nigeria LNG.
FRANCE’S Total has struck a deal to buy 1.5mn tonnes per year (tpy) of LNG from the Nigeria LNG (NLNG) terminal on Bonny Island. Under the agreement, the volumes will be supplied to Total from trains 1, 2 and 3 of the Nigerian facil- ity. An NLNG spokeswoman told Reuters that deliveries were due to begin in October 2021. The LNG will be supplied on a delivered ex-ship (DES) and free on board (FOB) basis
The deal comes after the NLNG consortium – in which Total also holds a 15% stake – embarked on a push to remarket some of the volumes from the first three trains in 2018 as some of the early offtake deals for those trains came up for expiry.
According to the International Group of LNG Importers (GIIGNL), NLNG’s contracts with Turkey’s Botas, Portugal’s Galp Energia, Spain’s Naturgy and Total, covering a total of 2.67mn tpy, will expire in 2020 and 2021.
NLNG said in a statement that the deal with Total was in line with the consortium’s “drive to continue to deliver LNG globally in consolida- tion of its position as one of the top-ranking LNG
suppliers in the world”.
The latest offtake deal follows another agree-
ment that NLNG signed with commodity trader Vitol in December 2019 for the supply of 500,000 tpy of LNG over a 10-year period. These volumes will also comprise remarketed gas from trains 1, 2 and 3, with delivery on a DES basis, starting in October 2021.
NLNG has also been seeking buyers for vol- umes from Train 7, on which it made a final investment decision (FID) in December 2019, more than a year behind schedule. Start-up of the seventh train will push the consortium’s output capacity above 30mn tpy, up by 35% on the cur- rent level of 22.5mn tpy. According to Italy’s Eni, which owns 10.4% in NLNG, Train 7 itself will be able to turn out 4.2mn tpy, while the debottle- necking of existing trains will add another 3.4mn tpy.
Apart from Eni and Total, the other partners in NLNG are Nigerian National Petroleum Corp. (NNPC) with a 49% interest and Royal Dutch Shell with 25.6%.
AMERICAS
McDermott files for bankruptcy protection
PERFORMANCE
McDermott’s recent losses are linked to cost overruns at the Cameron and Freeport LNG projects.
ENGINEERING and construction firm McDer- mott International has filed for Chapter 11 bank- ruptcy protection after reaching an agreement with its creditors.
According to the filing, in the Southern Dis- trict of Texas, the company has estimated liabil- ities of $1-10bn. McDermott’s debt ballooned following its acquisition of Chicago Bridge & Iron (CB&I) in an all-stock deal valued at around $6bn, including nearly $4bn in debt. Following the merger, McDermott’s total liabilities rose to $7.86bn at the end of June 2018, from $1.36bn in the previous quarter. As of November 4, 2019, the company’s debt stood at $9.86bn, Reuters noted.
McDermott announced this week that it had the support of two-thirds of the holders of its funded debt in a restructuring agree- ment that would eliminate more than $4.6bn of debt by swapping it for equity. The com- pany also agreed to sell its Lummus Tech- nology unit for at least $2.725bn to a joint partnership between the Chatterjee Group and Rhône Group.
The company said it planned to finance its bankruptcy with a $2.81bn debtor-in-posses- sion (DIP) loan, adding that it had secured exit financing of over $2.4bn. McDermott expects to emerge from bankruptcy with about $500mn in debt.
McDermott’s business has come under pres- sure in recent years as low oil and gas prices have discouraged the construction of new megapro- jects. The company was one of the joint ven- ture contractors on the Freeport and Cameron LNG projects on the US Gulf Coast, which both entered service last year. But construction on the projects was hit by cost overruns, which con- tributed to the $1.9bn loss on $2.1bn of revenue that McDermott reported for the third quarter of 2019.
McDermott said in its statement that it expected all of its businesses to continue oper- ating as normal for the duration of the restruc- turing process. However, it anticipates being delisted from the New York Stock Exchange (NYSE) in the coming days as a result of its Chapter 11 filing.
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