Hydrocarbon Processing - December 2021 - GP-4

GAS PROCESSING NEWS
A. BLUME, Editor-in-Chief
China signs huge LNG deals with Venture Global
China has signed three
large LNG deals with U.S.
exporter Venture Global LNG,
as the world's second-biggest
economy looks to secure
long-term supplies amid soaring
gas prices and domestic power
shortages. The agreements with
China's state oil giant, Sinopec,
include two 20-yr deals for a
combined 4 MMtpy of LNG.
Those deals bring Venture
Global's planned, 20-MMtpy
plant in Plaquemines, Louisiana
one step closer to a final
investment decision (FID), which
is expected by the end of 2021.
For China, which has this
year overtaken Japan as the world's number-one LNG buyer, the deals will be its single-largest LNG trade
agreement in terms of volume without an equity stake. The deals will also double the volume of China's
imports from the U.S., its sixth-largest supplier in 2020, with volumes at 3.1 MMt.
Both of the 20-yr deals are sales-and-purchase agreements, according to the notice. One is for
2.8 MMtpy of LNG on a free-on-board (FOB) basis, and the other is for 1.2 MMtpy on a delivered-at-placeunloaded
(DPU) basis. Venture Global also signed a third deal with Unipec, the trading arm of Sinopec,
to supply 1 MMtpy of LNG from its Calcasieu Pass Facility for 3 yr from March 1, 2023.
Major Chinese companies are in advanced talks with U.S. exporters to secure long-term LNG supplies
as rocketing gas prices and domestic power shortages heighten concerns about the country's fuel security.
In addition, U.S. Henry Hub futures-linked pricing offers a hedge to Chinese buyers that are heavily exposed
to Brent-based pricing.
Venture Global is building or developing over 50 MMtpy of LNG production capacity in Louisiana,
including two 10-MMtpy phases at Plaquemines, with the first phase expected to enter commercial
service in 2024.
Israel considers pipeline
to boost gas to Egypt
Israel is considering the
Vietnam approves
$2.3-B LNG
power project
Vietnam has approved a
$2.3-B LNG power plant, due to
be co-developed by Vietnamese
and South Korean companies and
to start commercial operations in
2026 or 2027. The plant, which
will be based in the central
province of Quang Tri, will have
an initial capacity of 1,500 MW.
Vietnam's T&T group and
South Korea's Korea Southern
Power Corp., Hanwha Energy
Corp. and Korea Gas Corp. are
the project's main developers.
Vietnam's demand for
electricity is forecast to rise
10%/yr in the coming years, and
its LNG imports are expected to
increase to 10 metric MMt by 2030
and to 15 metric MMt by 2035.
The country plans to begin
importing LNG from 2022.
construction of a new onshore
pipeline to Egypt to quickly
boost natural gas exports
to its neighbor in the wake
of the recent tightening of
global supplies. The pipeline,
which would connect the
Israeli and Egyptian natural
gas grids through the north of
the Sinai peninsula, is estimated to cost around $200 MM and could be
operational within 24 mos.
A new onshore pipeline, coupled with plans to construct a second
subsea pipeline to Egypt within a few years, would further cement Israel's
position as a key energy hub in the eastern Mediterranean. The pipeline,
which is in the process of obtaining approval from local authorities, would
be owned by Israel Natural Gas Lines.
Israel became a key supplier of natural gas to Egypt in January
2020 after starting production from its Tamar and Leviathan offshore
gas fields. Around 5 Bm3
y of gas is supplied via a subsea pipeline
connecting Israel and the Egyptian Sinai peninsula. The new pipeline
would allow increased supplies into Egypt by an additional 3 Bm3
y. The gas will supply Egypt's power grid and also help boost LNG
y-5
Bm3
exports from Egypt to Europe and Asia.
Israel's export capacity is expected to increase to 8 Bm3
2023 from the present 5 Bm3
y by
y due to the debottlenecking of existing
infrastructure and the expansion of the giant Leviathan field, operated
by Chevron Corp. and Delek Group. Output will rise further when
Energean starts production from the Karish and Tanin gas development,
planned for mid-2022.
The onshore pipeline would not impact Israel and Egypt's plan to
construct a second subsea pipeline
to supply Egypt's Idku and Damietta LNG plants, from which fuel can
be reexported to Europe and Asia.
4 NOVEMBER/DECEMBER 2021 | GasProcessingNews.com
Russia targets
year-round shipping
via warming
Northern Sea
In 2022 or 2023, Russia plans
to begin year-round shipping
via the Northern Sea Route that
passes through the Arctic.
The country has invested
heavily in infrastructure to
develop the Northern Sea Route
and wants it to become a major
shipping lane as the Arctic warms
at a faster rate than the rest of the
world, due to climate change. It is
not presently used in winter due
to thick ice cover.
The route, which runs along
Russia's northern flank, is used
to ship hydrocarbons and other
resources for up to 9 months per
year. Officials want to increase
cargo volumes shipped through
the route to 80 metric MMtpy.
Last year, 33 metric MMt of cargo
were shipped on the route.
President Vladimir Putin
wants to start regular container
shipments through the shipping
lane. Russia also plans to build
icebreakers powered by LNG, as
well as heavy-duty icebreakers
to develop the route and make
it more suitable for year-round
navigation.
EU fl oats joint gas
purchasing plan
Amid high natural gas prices
in early autumn, the European
Commission outlined measures
that the EU could use to combat
surging energy prices: joint gas
purchasing among countries as a
way to cushion price spikes.
The EC intends to " explore the
potential benefits " of member
states jointly buying strategic
reserves of gas. Countries'
participation in such a scheme
would be voluntary.
Brussels is also investigating
" all allegations of possible
anti-competitive commercial
conduct " by gas suppliers,
following accusations from some
EU countries that say Russia's
Gazprom has withheld supply to
push up European gas prices.
Russian President Vladimir
Putin said electric power
shortages were behind the
October gas price increases
in Europe, and that Moscow
is willing to discuss additional
action, saying that there needed
to be agreement on how to
balance energy markets.

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Hydrocarbon Processing - December 2021

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