Reliance Industries planning US$1.2 Bn LNG terminal

Reliance Industries Ltd (RIL) is considering putting up a US$ 1.2 Bn LNG import terminal on the east or west coast to meet demand at its refineries and petrochemical plants.

According to report, Reliance's requirement of the fuel is around 14 MMSCMD at its twin refineries at Jamnagar in Gujarat. It also needs gas at its petrochemical plants.

The company had first contemplated the facility back in 1997, but plans for a 5-MT per annum port terminal were later held back, the report said. The company had at that time envisaged receipt of LNG transported from overseas via cryogenic ships and a re-gasification of the liquid cargo. 

The company is now thinking of reviving the plan as it is not able to use the natural gas from the eastern offshore KG6-D6  field given that its twin refineries at Jamnagar have been allocated only 2.34 MMSCMD of the 60 MMSCMD of gas that the government has earmarked for various users.

Reliance is reported to be buying LNG from Royal Dutch Shell at prices that are in double digits as against a delivered price of US$7 per million Btu of KG-D6 gas.

The report said that Jamnagar was the natural choice, but Gujarat already has LNG terminals at Dahej, operated by Petronet LNG and another at Hazira owned by Shell India and Total of France.

According to the report, a third terminal was under planning stage at Mundra by the Adani Group and Gujarat government entity GSPC), and therefore a fourth one in the state looked unlikely.

One option is to set up the facility at Kakinada in Andhra Pradesh and transport the gas via the under-utilised East-West pipeline connecting the landfall point for gas from the eastern offshore KG-D6 field to Baruch in Gujarat.

The pipeline has the capacity to move 100 MMSCMD of gas. However only half the capacity is being used given the production constraints at KG-D6 field, which has an output of 54 MMSCMD at present.

Another option under consideration is using a floating LNG facility that would receive cryogenic ships at high sea and regasify the liquid cargo into natural gas before piping it to shore through a submarine pipeline.

According to the report Reliance's LNG terminal is expected to take 1 1/2 years as against 36-40 months for a normal LNG terminal.

It added that Reliance had also explored the possibility of picking up a stake in Adani's proposed LNG terminal at Mundra, but the two sides failed to reach an agreement.

In 2000 the company had also tied up LNG imports from Iran but then dropped the plan following the huge gas reserves it struck off the Andhra coast.

Meanwhile, the company has commissioned its business transformation plans for 2012 and has engaged AT Kearny, Booz & Co for the business transformation.

According to reports, Reliance would finalize its US$5 Bn investment plans at Jamnagar in 2011. The plans include new cracker and downstream expansion.

Also the assessment on building and LNG Terminal would only be taken in 2011.

RIL is also said to have revived its talks with British Petroleum to sell a stake in its E&P assets.

Approval for Masela LNG

Indonesia has approved a development plan for a LNG floating terminal project run by Japan's Inpex Corp.

The floating LNG project will have capacity of 2.5 MMTPA, lower than a previously proposed capacity of 4.5 MMT, said Evita Legowo, director general of oil and gas at the energy and mineral resources ministry.

The project will cost an estimated US$ 4.9 Bn.

Inpex has a majority stake in the Masela block in Maluku province while PT Energy Mega Persada , a unit of the Bakrie Group, has a 10% stake in the oil and gas block.

Former OPEC member Indonesia, which has far more gas than oil, has pushed companies to move faster in developing gas projects as the country badly needs the fuel for domestic industrial demand as well as for exports.

CH-IV International To Support U.S. LNG Export Project On Behalf Of Freeport LNG Expansion, L.P.

Freeport LNG Expansion, L.P. and Macquarie Energy to Jointly Develop LNG Export Project.
HANOVER, MD November 22 – Jeffrey P. Beale, President of CH-IV International (CH-IV) is pleased to announce that CH-IV International will continue its Owner’s Engineering support for Freeport LNG Expansion, L.P. (Freeport LNG) for their recently announced project with Macquarie. CH-IV International had previously been contracted by Freeport LNG to execute a Pre-FEED for the LNG Export Project, which included the evaluation and selection of the Liquefaction Technology. As part of the overall FEED for the expansion project, CH-IV will continue its support to Freeport LNG by managing and contributing to the preparation of the required Resource Report 13 (RR13) for the NEPA Pre-filing Process with the Federal Energy Regulatory Commission (FERC).

The Freeport LNG import terminal located on Quintana Island, Texas commenced commercial operations in June 2008. Since commercial operations began, the terminal has seen a limited number of import cargos due to higher global LNG prices relative to natural gas prices in the United States, and the significant increase in domestic gas supplies due to recent advancements in shale gas technology.

Mr. Beale stated, “CH-IV is excited to continue working with the Freeport LNG Team on such an important project. We look forward to adapting the current infrastructure to meet new commercial goals while maintaining the existing high levels of safety and operational proficiency.”

“We look forward to continuing the relationship we have developed with CH-IV in evaluating various potential opportunities for our terminal.” stated Charles Reimer, Freeport LNG President. “Supplementing our existing import terminal with the capability to produce and export LNG provides Freeport LNG with new opportunities to maximize the value of our assets on Quintana Island.”

Mr. Michael Diemert, of CH-IV’s Houston Office, will manage this project.

# # # #

CH-IV [read C - H - 4] International (www.ch-iv.com) is a joint venture corporation between MPR Associates, Inc. (www.mpr.com) and CH-IV Cryogenics, LP. CH-IV International provides engineering and consulting services in four overlapping areas involving LNG facilities: 1) Feasibility / Pre-FEED; 2) Front end engineering design (FEED); 3) Engineering oversight and consulting on all things LNG; and 4) Operational services relating to the training, commissioning, start-up and operations of LNG facilities.


Follow activities in the LNG industry and CH-IV
by clicking on http://twitter.com/LNGSpecialists

# # # #

CH·IV International to provide Consulting Services to Bangladesh LNG Project

Bangladesh is seeking solution to energy crisis due to the gas supply shortfall.



HANOVER, MD November 15 – Jeffrey P. Beale, President of CH·IV International (CH·IV), is pleased to announce that CH·IV International, in association with the Galway Group LP, will provide support to Bangladesh’s state-owned Petrobangla in acquiring firm LNG supply and design and construction of the country’s first LNG import terminal. Chief of the Bangladesh LNG Cell Md Muqtadir Ali said, “The company (CH·IV) was selected on the basis of its experience in negotiating LNG supply agreements, pricing, LNG shipping and development of LNG import terminals.” Mr. Muqtadir, who previously served as the acting chairman of Petrobangla, added “We have already issued a letter of intent to award the contract to the U.S firm.”

Mr. Beale pointed out that CH·IV emerged as the clear winner out of the 28 global companies that had participated in the Technical Advisor tendering process. Further Mr. Beale stated, “The Team of CH·IV and Galway provide the proper mix of strong talent to address the many dimensions of this world class LNG project.”

The Team’s support of Petrobangla is further strengthened by Galway’s recently announced expansion into Singapore and the addition of Mr. Veldanda V. Rao as the Managing Director of Galway's Asia energy consulting practice. Mr. H.J. Miller, one of the founding partners of Galway, said, "We are very pleased to have this opportunity to utilize our Asia based consulting strengths on behalf of this exciting new LNG project for Bangladesh."

# # # #

FERC imposes new vapor rules on Weaver's Cove LNG

FERC has informed Weaver’s Cove Energy that the company must comply with new vapor-gas exclusion zone requirements before moving forward with construction of the planned LNG terminal.

In a letter issued from FERC to Weaver’s Cove attorney Bruce F. Kiely, the director of FERC’s office of energy projects informed the company that it must receive written authorization from FERC before constructing any facilities associated with the project. That authorization, the letter states, “will only be granted following a determination that the facilities are in compliance with the interpretations issued by” the Pipeline and Hazardous Materials Safety Administration of the U.S. Department of Transportation.

The PHMSA issued two interpretations in July concerning the flammable vapor-gas exclusion zone requirements, saying that the interpretations apply to any LNG facility that is not yet in existence or under construction.

Two city residents raised objections with the U.S. Department of Transportation and FERC earlier this year in regards to Weaver’s Cove’s use of an outdated dispersion called SOURCE5 to show that vapor gas would not leave the company’s Fall River site.

Residents John Keppel and Michael Miozza argued the SOURCE5 model used by Weaver’s Cove resulted in a vapor dispersion model that showed vapors would remain within the company’s property. Keppel said at the time the SOURCE5 model creates “artificially small vapor zones.”

They argued that under different models the vapor dispersion would travel beyond the company’s boundaries, over private residences and possibly to Route 79.

In response to those concerns, the U.S. DOT informed the pair in July that the SOURCE5 model can not be used to comply with the agency’s vapor gas dispersion exclusion zone requirements. A similar determination was made in regards to the proposed Downeast LNG proposal for Robbinston, Maine.

KOGAS's Strategic LNG deals in Australia, Indonesia

Korea Gas Corp (KOGAS) is planning to acquire stakes in Australian and Indonesian LNG projects to secure stable supplies, the state-run utility said in a report.

The world's largest LNG buyer said it was in talks to acquire a 15% stake in a coal seam gas project led by Australia's Santos Ltd and a 9.8% stake in Indonesia's Senoro Toili project run by Japan's Mitsubishi Corp.

The company did not provide a financial value for either of the potential deals, but sources with knowledge of the Australian deal said in August that KOGAS would invest more than US$1 Bn in the Santos's Gladstone LNG (GLNG) project.

"The US $1 Bn fundraising report lends credence to the first report that KOGAS will take a larger 15% of GLNG, rather than the 10 percent commonly reported previously," said Benjamin Wilson, an analyst with JP Morgan in a note.

"We think this news implies Kogas is confident it will achieve Korean government approval to contract/purchase soon," Wilson said.

Total paid US$597.4 MN for 15% of the coal seam gas-fed LNG project in Australia's north east state of Queensland in September.

Santos currently owns 45% of Gladstone, Petronas has 35% and Total holds 20%.

In addition to buying a stake in the GLNG project, KOGAS has also been expected to sign an offtake agreement for 2 million tonnes per annum of LNG from the project.

The state-run utility sold 24.6 MMT of LNG in 2009 and said in February that it was planning to spend about US$895.4 MN this year on overseas resource development to secure energy supplies for Asia's fourth-largest economy.

LNG Report - International LNG market likely to balance in 2011 as demands grows

The International LNG market will likely come back into balance in 2011 as demand grows considerably this year and the next, absorbing the projected supply growth, BofA Merrill Lynch Global Research said in a report.

The bank said it was projecting total International LNG import growth of 18% for 2010, followed by 9% in 2011, with the bulk of the increase coming from Asia and Europe. "We believe the risk of an influx of LNG imports to the US is low," it added, since it expects US gas prices to remain "very weak."

The UK could become the world's fourth-largest LNG importer in 2010, after Spain, with imports up 120% year on year "potentially exceeding 11.6 MMT," it said. "In general, UK LNG utilization rates at regasifcation capacity still remains low, suggesting room for further liquid gas imports into the UK."

In Asia, China and India have expanded their import capacity, the bank said, while South Korean and Japanese imports had "surprised to the upside, though largely driven by a hot summer." And "new joiners" such as Argentina, Brazil and Chile would also soak up some of the expected growth in supply, it added.

Global LNG supply would likely grow 14% in 2010 and 9.6% in 2011, the bank said. It added, however, that a number of issues "are clouding the supply outlook of existing facilities." Those include rising use of domestic gas among some exporters, technical issues "as seen with RasGas Train 7 and Tangguh in Indonesia," and maintenance of LNG trains, particularly in Qatar.

"Combine the strong rebound in LNG demand with the startup delays at Qatargas Trains 6 and 7 into next year, and we get a global LNG market in 2010 that is less loose than commonly expected," the bank said.

As a result, it added, the market would "likely be able to rebalance over the course of 2011."In level terms," the bank added, the market would remain oversupplied in both 2010 and 2011 due to utilization rates at liquefaction terminals remaining below 90%, however.

LNG production reached a total of 181.7 MMT in 2009, according to independent consultant Andy Flower.

Roberto R. Vara returns to CH·IV International

HANOVER, MD July 14 – Jeffrey P. Beale, President of CH·IV International (CH·IV) is pleased to announce that Roberto Ruiperez Vara has returned full-time to our Hanover Maryland Corporate Office. Mr. Vara will provide technical consulting engineering services to clients involved in the pretreatment and liquefaction of natural gas and the transportation, importation, storage and re-gasification of Liquefied Natural Gas (LNG). Mr. Beale stated, “Roberto has played a very significant role in CH·IV’s success before leaving for Chile. I know, with his return, our clients will benefit from his wealth of experience and expertise.”



Mr. Vara took over the role of Operations Manager at the GNL Quintero LNG import terminal in Quintero Bay, Chile in May of last year. There he oversaw cooldown and start-up of the world’s first of its kind “Early Gas” LNG Import Terminal, where LNG transfers are batched into a small land-based tank (10,000 cubic meters) with a LNG carrier permanently connected to the jetty, until the complete terminal (2 x 160,000 cubic meter LNG tanks) construction could be completed. As Simultaneous Operations (SIMOPS) Coordinator, he established and managed a Permit to Work System that allowed approximately 200 construction workers to complete the LNG terminal constructions while day-to-day LNG sendout was taking place.


Construction of the entire terminal was completed in late Spring, at which time Roberto directed Operations through start-up. Mr. Vara completed his obligation in Chile upon establishment of normal operations of the GNL Quintero LNG import terminal.

The GNL Quintero LNG import facility is comprised of three LNG tanks (one x 10,000 cubic meter and two x 160,000 cubic meter); two x 175 mmscfd open rack vaporizer systems; one x 175 mmscfd submerged combustion vaporizer system; six first stage, in-tank LNG pumping systems; one recondenser and BOG recovery system, three x 1,600 gpm high pressure LNG pumping systems; a 6,000 foot long LNG Transfer System and a marine LNG carrier berth.



# # # #



CH·IV [read C - H - 4] International is a joint venture corporation between MPR Associates, Inc. and CH·IV Cryogenics, LP. MPR, founded in 1964, specializes in technical services for the development, design, construction and operation of power facilities and equipment for energy, industrial, pharmaceutical and government clients. CH·IV Cryogenics, founded in 1994, had been providing LNG engineering and consulting services to a wide base of clients ranging from international LNG trading to LNG vehicle fleets until the formation of CH·IV International in 2001.



# # # #