Category Archives: LNG
George Weat, TX: OnQuest to Build Texas Micro-LNG Plant
OnQuest said it has been awarded a contract by joint venture partners Stabilis Energy and Flint Hills Resources (FHR) to provide a turnkey scope of engineering services and project management for a 100,000-gallon-per-day natural gas liquefaction and distribution facility in George West, Texas, that will address demand for a reliable and safe supply of high-horsepower fuel to oilfields in Texas’s Eagle Ford Shale.
OnQuest will provide a fully functioning LNG facility with scope that includes project execution, engineering, construction, buildings, power and utilities. OnQuest’s sister company James Construction Group is contracted with OnQuest to construct the plant. Work begins immediately.
“OnQuest, James Construction Group, and our parent company Primoris Services Corporation are extremely pleased to have won the competition for the work at George West,” said OnQuest president Randolph R. “Randy” Kessler.
“We’re encouraged that the market for providing turnkey engineering, procurement and construction project supervision on micro-LNG process plants continues to grow,” said Kessler. “This win reflects Stabilis and FHR’s confidence in OnQuest’s ability to deliver LNG facility projects profitably and on schedule.”
Stabilis Energy is a Beaumont, Tex.-based holding company focused on investments in developing liquefied natural gas (LNG) in North America. Flint Hills Resources is a leading refining, chemical and biofuels company. Chart Industries will provide cryogenic and liquefaction equipment for the project.
“OnQuest shares Stabilis Energy and Flint Hills Resources’ commitment to expediting a cost-effective solution for operations in the Eagle Ford basin,” added Kessler. “And we look forward to working as engineering partners with technology provider Chart Industries.”
OnQuest specializes in lump-sum, turnkey engineering, procurement and construction project management (EPC). In 2008, OnQuest and sister company ARB, Inc., completed a micro-LNG plant producing 160,000 GPD LNG in Boron, Calif., for Clean Energy Fuels Corporation.
Established in 2002, OnQuest has become a global leader in turnkey engineering, procurement and construction for small and mid-sized LNG production and distribution facilities — in particular for companies requiring purpose-built facilities or that have natural gas assets far from existing LNG terminals. The company also provides engineering feasibility studies and project cost estimates to companies considering investments in mid-scale process plants.
How to Convert the Country to Natural Gas, by T. Boone Pickens
It starts with getting into the transportation sector. When I started the Pickens Plan in 2008, there were about 200,000 vehicles on natural gas in the world; now there’s about 16 million. That growth’s coming from everywhere but the U.S. Places like Iran and Argentina. China’s already got 40,000 trucks on LNG [liquefied natural gas], and they import the stuff. And here we are in the U.S., with more natural gas than any other country in the world, and we aren’t doing a thing about it. It’s just amazing to me that these dumb f---s in D.C. don’t see this opportunity and try to capitalize on it.
The best thing to do is focus on heavy-duty trucks and give them a tax credit. It could work like a toll road, what you call a pay-for system. If you use it, you pay for it. So you give these guys a break upfront to convert to natural gas trucks, and then you tax the natural gas.
You don’t put natural gas in your corner gasoline station. You put natural gas in a truck stop. It’s a fuel that competes against diesel. There are about 8 million heavy-duty trucks in the U.S. If you convert them to natural gas, that boosts consumption by about 15 billion to 20 billion cubic feet a day. Right now we do about 70 billion cubic feet a day. So that extra demand would immediately boost the price and get drills moving again. Today natural gas is about $2.79 a gallon, compared with about $4.79 for diesel. That’s a huge advantage. But here’s the thing: If you take natural gas from about $4 (per thousand cubic feet) to $6, you only increase it by about 28¢ a gallon. So it’s cleaner by 30 percent and still cheaper by almost a half.
• Pickens is founder, chairman, and CEO of the hedge fund BP Capital. As told to Matthew Philips
USA: Stabilis Energy to Build Five LNG Plants
Stabilis Energy LLC plans to build five LNG liquefaction facilities to service the high horsepower oilfield, marine, and rail fuel markets.
Stabilis has contracted Chart Energy & Chemicals to perform advance engineering for five LNG production plants for implementation in North America. Stabilis has selected Chart’s C100N and C250IMR standard LNG liquefaction plants, which produce 100,000 gallons and 250,000 gallons per day of LNG, respectively. Advance engineering will commence immediately.
Stabilis placed a deposit to secure a manufacturing space reservation with Chart, to ensure that the first LNG plant can be online in the 1st quarter of 2015 or before. Stabilis is still analyzing the data to determine the ideal location for the first plant. The location priority analysis will consider a number of issues including local gas supply and quality, regional LNG demand, as well as state and local permitting requirements and timelines. The four remaining plants are scheduled to come online at regular intervals throughout 2015 and 2016.
“Stabilis Energy believes LNG will be a major contributor to North American energy independence. High quality locally produced LNG is the only reliable, clean and efficient alternative fuel to diesel. LNG is proven to be the most cost effective fuel solution for high horsepower applications. Stabilis will supply off-road engine fuel requirements while supporting on-highway motor fuel markets with strategic distribution partners,” commented Casey Crenshaw, President of Stabilis Energy.
“Chart is very pleased to support Stabilis in their drive to implement LNG fuelling infrastructure in North America, and we are very pleased they have chosen Chart to provide the underlying LNG production plants. Our standard LNG plant platform provides Stabilis the ability to get LNG to market quickly, reliably and cost efficiently. We look forward to our ongoing relationship with Stabilis as their build out progresses,” stated Mike Durkin, President of Chart E&C.
USA: Magnolia LNG Wins DOE Approval for FTA Exports
Liquefied Natural Gas Limited said that the Office of Fossil Energy of the Department of Energy (DOE), United States, has granted authorisation for Magnolia LNG to export up to 4 mpta of LNG, from its proposed LNG project site at the Port of Lake Charles, Louisiana.
The DOE authorisation is valid for LNG sales to commence within 10 years and is then for a period of 25 years from first LNG sales; which sales are permitted to all existing, and any future, countries that have, or enter into, a Free Trade Agreement with the Government of the United States.
The Magnolia LNG Project comprises the proposed development of an 8 mtpa LNG project on a 90 acres site, in an established LNG shipping channel in the La ke Charles District. The project is based on two 4 mtpa development phases, each phase comprising 2 x 2 mtpa LNG production trains, and will use the Company’s wholly owned OSMR ® LNG process technology.
The DOE authorisation, follows the Company’s recent si gning of a Site Option to Lease Term Sheet, with the Lake Charles Harbour & Terminal District (Port Authority. The Company is now:
- Negotiating a definitive and binding Real Estate Le ase Option Agreement with the Port Authority, together with the agreed form of Lease to be executed on Magnolia LNG, LLC exercising the site Lease Option;
- In discussion with a number of parties who have expr essed interest to enter in to a Tolling Agreement, under which the Tolling Party will be responsible for arranging gas suppl y to the Magnolia LNG Project and the LNG buyers and ships. The Magnolia LNG Project will treat and liquefy the gas, store the produced LNG and load the LNG onto the LNG buyer’s ships, in consideration of a Capacity Fee and Processing Fee; and
- Progressing work on the Magnolia LNG Project’s Pre File Application, which is required to be submitted to the Federal Energy Regulatory Co mmittee and represents the commencement of the project’s required permits and approvals process.
Managing Director Maurice Brand said “We are very pleased that the DOE authorisation had been received in accordance with the Company’s developmen t schedule. Our ability to meet key milestones will be a critical factor in discussions with potential Tolling Parties.”
USA: Magnolia LNG Wins DOE Approval for FTA Exports LNG World News.
USA: Weight Key Issue for LNG Trucks, Conference Concludes
With fuel savings between $1.50 and $2.00 per diesel gallon equivalent (dge), LNG-fueled trucks are being used by fleets for their most demanding routes: heavy haul, double-shift operations where truckers can consume 200 gallons per day, the World LNG Fuels conference concluded in January.
By using domestic LNG, operators can save as much as $75,000 annually in fuel costs, enough to pay for the cost of LNG equipment in 18 months.
Hindering this, however, is the higher weight of the LNG-fueled trucks, which weigh between 1,800 and 2,000 pounds (820 and 910 kg) more than their diesel counterparts. By law, most tractor-trailer combinations are limited to 80,000 pounds. Once the weight of the truck and trailer are deducted, payload capacity can be as little as 35,000 pounds. Thus, an increase in truck weight of 1,800 to 2,000 pounds can wipe away profits.
Truckers like Hoopes Transport President Preston Hoopes would like the U.S. DOT to consider waivers for the extra weight, given the benefits of the cleaner, domestic fuel.
“We need the government to allow extra weight. If the government wants us to use domestic LNG and CNG, they’ve got to give us weight help on our trucks,” Hoopes told World LNG Fuels 2013, held in Houston.
“We’re trying to get another trucking company in Pennsylvania to use LNG. They said ‘we can’t afford the extra weight, 2,000 extra pounds, which over a year’s time costs $20,000 in lost revenue,’” he said.
Hoopes operates some 50 trucks, 16 of which are LNG fueled, for a variety of cargos. In recent months, management has assigned their LNG units to their most fuel-intensive routes. They would like to move into the LNG-fuel supply business if the issue of weight can be resolved.
USA: Weight Key Issue for LNG Trucks, Conference Concludes LNG World News.
Experts Agree: U.S. Can Move Forward with Exporting LNG
Expert witnesses testifying during Tuesday’s House Energy and Commerce Committee’s Subcommittee on Energy and Power hearing agreed that the United States has plentiful supplies of natural gas, underscoring the ability and need to expand domestic use and move forward with exporting liquefied natural gas (LNG).
Here’s what they had to say:
Daniel Yergin, IHS: “While markets and economics will eventually determine the realistic scale of U.S. exports, one also has to take into account wider considerations in assessing policy regarding future LNG exports. For decades, the United States has made the free flow of energy supplies one of the cornerstones of foreign policy. It is a principle we have urged on many other nations. How can the United States, on one hand, say to a close ally like Japan, suffering energy shortages from Fukushima, please reduce your oil imports from Iran, and yet turn around and, on the other, say new natural gas exports to Japan are prohibited?”
Adam Sieminski, Energy Information Administration (EIA): “Cumulative production of dry natural gas from 2011 through 2035 in the AEO2013 Reference case is about 8 percent higher than in AEO2012, primarily reflecting continued increases in shale gas production that result from the dual application of horizontal drilling and hydraulic fracturing.”
Mary Hutzler, Institute for Energy Research and former energy analyst at EIA : “The outlook for natural gas production in the United States has dramatically changed over the last decade. Just a few years ago, U.S. manufacturing facilities were moving abroad to pursue more affordable gas. At the time, the U.S. had relatively high natural gas prices. Now … energy companies are considering building liquefied natural gas terminals to export natural gas and new manufacturing plants are springing up around the country. The boom in natural gas production has completely changed the natural gas landscape and has greatly lowered natural gas prices for consumers and industrial users.”
Experts Agree: U.S. Can Move Forward with Exporting LNG LNG World News.
- Japan’s TEPCO gears up for US shale gas imports (utsandiego.com)
- Canada gives OK to LNG exports (upi.com)
- US Department of Energy Grants Pangea LNG Export Authorization [REPORT] (gcaptain.com)
Corpus Christi, TX: Pangea Receives Permission to Export LNG
The U.S. Department of Energy has granted Pangea LNG Holdings, LLC, long-term, multi-contract authorization to export liquefied natural gas (LNG) to free trade agreement (FTA) nations from its South Texas LNG Project currently in development on Corpus Christi Bay.
Pangea LNG will be authorized to export up to 8 million metric tons per annum (mtpa) of LNG produced from domestic gas fields for a 25-year term commencing on the date of its first export. That amount is equal to 1.09 Bcf/day of natural gas.
Pangea LNG has also filed an application with DOE requesting authorization to export LNG to any country with which the U.S. does not have a free trade agreement in effect. That application, which was filed in December, is pending.
“Approval by the US DOE is a positive step forward for this project, which represents a significant investment in the development of the LNG market in the U.S.,” said John Godbold, Pangea LNG project director. “Exporting LNG will help stabilize U.S. natural gas prices, grow and sustain drilling and production jobs, and stimulate additional investment in developing the country’s gas reserves.”
DOE approval of FTA authorization is part of the regulatory process necessary to develop Pangea LNG’s new LNG export terminal on a 550-acre site. The site is located on the 45-foot deep La Quinta Ship Channel which is part of the Port of Corpus Christi, the sixth busiest U.S. seaport in terms of tonnage.
The South Texas LNG Project is subject to federal, state and local regulatory approvals with the Federal Energy Regulatory Commission (FERC) acting as the lead federal agency. Pangea will begin the FERC pre-filing process by the second quarter of 2013 and expects the project to be in operation by at least 2018.
FTA countries covered by the DOE authorization include Republic of Korea, Australia, Bahrain, Canada, Chile, Colombia, Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Panama, Peru and Singapore.
Pangea LNG B.V. is a holding company with two major LNG export projects under development – the South Texas LNG Export Project on the Texas Gulf Coast and the Tamar Project in the Eastern Mediterranean. Pangea LNG is a developer of liquefaction projects which are designed to accelerate and support the monetization of gas reserves.
USA: Pangea Receives Permission to Export LNG LNG World News.
Southwest Louisiana: Magnolia LNG Project to Boost Jobs
Gov. Bobby Jindal and Maurice Brand, Magnolia LNG Managing Director and Joint Chief Executive Director, announced the company’s plans to develop a $2.2 billion natural gas liquefaction production and export facility at The Port of Lake Charles.
The LNG project would create 45 new permanent jobs, with an average salary of $75,000 per year, plus benefits. LED also estimates the project would result in 175 new indirect jobs. In addition, the LNG project would require an estimated 1,000 construction jobs.
The company expects to make a final investment decision to move forward with the project in late 2014, after it secures permits and completes financing. The mid-scale LNG facility would be located on 90 acres at the port’s Industrial Canal, off the Calcasieu Ship Channel. Magnolia LNG would produce 4 million metric tons of liquefied natural gas per year, and construction would begin in 2015 pending the company’s attainment of permits and final financing.
Gov. Jindal said, “Magnolia LNG’s decision to move forward in developing a new LNG facility is great news for our state. Magnolia is the latest company that is choosing to invest in Louisiana because we have one of the best business climates in the country and we are continuing to foster an environment where companies want to create jobs.
“We’ve fostered a strong business climate because we have overhauled our ethics laws, revamped workforce development programs, eliminated burdensome business taxes, instituted reforms to give every child an opportunity to get a great education, and now we are taking on tax reform in order to make Louisiana the best place in the world for businesses to invest and create jobs for our people. In addition to our strong business climate, Louisiana’s abundance of natural gas, pipelines and accessible waterways, as well as our outstanding workforce, were key factors in Magnolia’s decision to choose our state. Facilities like these will help create and sustain thousands of jobs in the energy industry across our state and will ensure quality jobs for Louisiana families for years to come.”
Magnolia’s project would be positioned for direct access to several existing gas pipelines. Using its patented Optimized Single Mixed Refrigerant process, or OSMR™, Magnolia LNG would produce liquefied natural gas more efficiently with fewer emissions than other LNG processes. OSMR adds conventional combined heat and power technology with industrial ammonia refrigeration to enhance the performance of the liquefaction process. Magnolia LNG would distribute to domestic markets as well as countries that have free trade agreements with the U.S. The company also will explore a potential expansion to 8 million metric tons per year in the future.
“Southwest Louisiana’s attractive infrastructure and strong workforce made Lake Charles an ideal location for our planned facility,” Brand said. “We especially want to thank the Port of Lake Charles Commission for their partnership in identifying such an ideal location for this project. Whilst the company remains focused on securing the appropriate contracts, agreements and permits, we expect to commence construction of our first U.S. venture by 2015.”
Magnolia LNG will seek federal Department of Energy free trade agreement approval in 2013. The company will submit a pre-filing application to the Federal Energy Regulatory Commission in March, before it completes the selection of project partners by June 2013. The company plans to begin hiring in early 2015, with commercial operations to begin in 2018.
“The Port of Lake Charles has been able to provide a unique combination of location, infrastructure and transportation capabilities to help bring this project to the region,” said Port Executive Director Bill Rase. “Magnolia LNG will be a significant and welcome addition to Southwest Louisiana’s energy corridor. The Port’s staff and board of commissioners look forward to doing business with the company.”
LED began working with Magnolia LNG in late 2012. The company’s proposed 90-acre site would include a long-term lease with The Port of Lake Charles. When Magnolia decides to proceed with construction, the company is anticipated to make use of LED incentive programs, such as the Quality Jobs Program and Industrial Tax Exemption Program.
“This project is another demonstration of our capacity for strengthening Southwest Louisiana and the state to become a stronger energy producer,” said President and CEO George Swift of the Southwest Louisiana Economic Development Alliance. “We are appreciative of Magnolia LNG to make this investment in our region and for the Port of Lake Charles to once again to serve as the catalyst for this project. We look forward to their final investment decision next year.”
Magnolia LNG Project to Boost Jobs, USA LNG World News.
- $2.2 Billion LNG Liquefaction Facility Announced for Port of Lake Charles (gcaptain.com)
- Bechtel wins FEED contract for Mozambique’s first LNG project (transportationandstorage.energy-business-review.com)
- South Korea: STX Launches Ultramodern LNG Carrier VELIKIY NOVGOROD (worldmaritimenews.com)
- Critics of LNG Exports Undermining Domestic, Global Strategic Benefits (fuelfix.com)
- Demand for LNG to Outstrip Supply in 2013 (247wallst.com)