Excelerate Energy News

EXCELERATE ENERGY ANNOUNCES THE SIGNING OF A TERM SHEET FOR A NEW LNG IMPORT PROJECT AT ESCOBAR, ARGENTINA

2010-09-20T09:19:00.000-05:00

THE WOODLANDS, TX, September 20, 2010 – Excelerate Energy L.P. today announced the signing of a Term Sheet with a consortium formed by Argentina’s ENARSA S.A. and YPF S.A. to develop a second Argentinean liquefied natural gas (LNG) importation facility in Escobar, approximately 30 miles north of Buenos Aires.

The Escobar LNG import facility, complementary to the existing GasPort® operation south of Buenos Aires in Bahia Blanca, will allow delivery of up to an additional 500 million cubic feet of natural gas per day to Argentina’s market. Due to its favored location, the GasPort facility in Escobar will have a significant impact on the supply to Buenos Aires and the north of Argentina, adding flexibility and fast response to these growing markets.

“We are pleased to begin a project in partnership with ENARSA S.A. and YPF S.A.” said Rob Bryngelson, President and CEO of Excelerate Energy. “Excelerate Energy’s GasPort facility design has proven again to be an ideal solution for markets needing diverse energy sources, increased supply to meet growing demand, low capital investment and prompt project completion. The overwhelming success of the Bahía Blanca GasPort demonstrates the clear advantages and opportunities afforded by our Energy Bridge™ technology”

The Escobar facility, scheduled for completion in May 2011, will be fully integrated with Argentina’s existing gas transmission utilities. The year-round facility will accommodate an Excelerate Energy 150,900m³ Energy Bridge Regasification Vessel (EBRV®) receiving and regasifying LNG cargos via conventional LNG carriers utilizing Excelerate Energy’s proven Ship to Ship Transfer (STS) process alongside the jetty. In addition to providing basic engineering and design support, Excelerate will provide modular equipment and process control components based on its proven GasPort technology.

Excelerate Energy’s first Argentine project, in collaboration with YPF, was to design a facility in the port city of Bahía Blanca. The Bahía Blanca LNG import terminal required minimal additional land-based infrastructure while providing flexibility, optimal storage and deliverability. The project took less than 12 months to design, permit and construct, at a fraction of the cost of a traditional onshore LNG terminal.

Energy Bridge, Excelerate Energy’s proprietary floating LNG regasification and delivery system, combines the purpose-built EBRV® with a connection to a receiving facility. Excelerate’s specially designed EBRVs allow LNG to be vaporized onboard the ships so that it can be directly fed into natural gas pipelines. The EBRVs can load and unload liquid cargo in the same manner as standard LNG tankers yet also retain the flexibility to discharge the LNG as high pressure natural gas through the use of two independent methods. In an offshore, deepwater application, these vessels are specially equipped to discharge natural gas through the EBRV’s connection with a Submerged Turret Loading (STL™) buoy system (Gateway). When dockside, the EBRVs discharge natural gas through a high pressure gas manifold located forward of the vessel’s LNG loading arms (GasPort).
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About Excelerate Energy®
Excelerate Energy, L.P, based in The Woodlands, Texas, is a liquefied natural gas (LNG) importer and marketer that is redefining the way LNG moves around the globe. With the proven ability to apply its proprietary regasification technology to a growing network of market access points worldwide, Excelerate Energy can connect LNG suppliers and customers in a way that minimizes costs for both while maximizing the value of each delivery. Excelerate Energy’s fleet of state-of-the-art, environmentally friendly, Energy Bridge Regasification Vessels (EBRVs®) compliment the company’s downstream investments in dockside GasPorts® and deepwater port Gateways™. To further enhance the capabilities of the existing vessels and their cargoes, Excelerate Energy has developed and implemented the first commercially viable program of LNG transshipment via ship-to-ship transfer. This combination of expertise, innovation, and strategic physical assets give the company the equivalent of a flexible, global “pipeline” that can transport LNG from virtually any point to any other point – facilitating delivery to the highest value markets around the world. For more information please visit www.excelerateenergy.com .

Excelerate Energy performs unique ship-to-ship transfer

2010-05-25T10:13:00.000-05:00

Excelerate Energy® performs unique ship-to-ship transfer

42nd Ship-to-Ship transfer is both successful and groundbreaking

THE WOODLANDS, TX, May 25, 2010 - Excelerate Energy L.P. continues to prove the commercial viability of Ship-to-Ship (STS) transfers of LNG. Excelerate has completed more than 40 LNG STS operations, transferring more than 5 million cubic meters of LNG. Excelerate achieved another first while completing its 42nd STS operation by utilizing its own Energy Bridge Regasification Vessel (EBRV®) Express to complete the gassing-up and cooling down of the new build EBRV Expedient with a STS transfer operation off Dubai (U.A.E).

Gassing-up and cooling down typically takes place at a conventional LNG terminal as a ship comes out of dry dock or ship yard in preparation for receiving a cargo. Often this operation is an expensive and time consuming procedure due to scheduling constraints with availability for LNG shipping and terminal access.

Gassing-up is an operation that displaces the inert gas atmosphere in the cargo tanks and piping systems with gaseous natural gas prior to cooling down the containment. Cooling down is the process of slowly reducing the temperature of the cargo tank atmosphere and surrounding containment prior to loading LNG. Together this process can take approximately 34-72 hours before loading a full LNG cargo.

Jonathan Cook, Excelerate's Chief Operating Officer stated, "Excelerate's new operation provides an efficient, flexible and cost effective solution for placing a vessel into commercial service."

Excelerate Energy's specialized vessels are equipped with both an onboard regasification system as well as normal LNG discharge capability, enabling the vessels to offload at conventional LNG terminals, Excelerate's own facilities and via STS transfer. Excelerate Energy pioneered commercial LNG transshipment with STS; a system using flexible cryogenic hoses, 'dry-break' emergency release couplings and other control systems which replicate, in all respects, the conventional LNGC-LNG Terminal cargo transfer. The ability to carry out STS transfers of LNG from standard LNG carriers (LNGCs) to Excelerate Energy’s EBRVs prior to or during the delivery of natural gas into local distribution systems, whether via a Gateway™ or GasPort® facility, optimizes the regasification capabilities of the EBRVs.

Excelerate Energy Announces Asset Optimization Plan

2010-04-09T16:45:00.019-05:00

THE WOODLANDS, TX, April 09, 2010 - Excelerate Energy L.P. announced today it is accepting value propositions from LNG counterparties to participate in asset optimization discussions centered around its Gulf Gateway Deepwater Port. Excelerate will explore creative asset structures including capacity slots, regasification, options, swaps and discretionary dedicated shipping to maximize natural gas value within the strategic Atlantic basin.

"Excelerate Energy currently benefits from several successful value-chain partnerships with cooperative arrangements, and this plan represents a natural extension. We expect these proactive efforts to continue to strengthen our position in this dynamic global LNG market," said Rob Bryngelson, CEO of Excelerate Energy.

Gulf Gateway enjoys a competitive advantage over conventional land-based LNG receiving terminals due to its inherent flexibility, storage and reliability. This facility discharges natural gas directly into a substantial number of interstate and intrastate pipelines. This direct access to the NYMEX-traded Henry Hub provides arbitrage opportunities within the U.S natural gas pipeline grid. Additionally, Gulf Gateway can accept virtually all qualities of LNG due to the presence of downstream processing.

Beyond traditional arbitrage, Gulf Gateway provides international gas marketers with incremental value from oil-based pricing derived from several processing facilities. Furthermore, it provides unique on-ship floating storage as well as access to affordable high-turn salt-dome. Gulf Gateway demonstrated its reliability during Hurricane Katrina. Excelerate's Energy Bridge Regasification Vessel (EBRV^®), Excellence, continued to discharge natural gas supplies into the market long after other natural gas producers were forced to evacuate and shut-in.

At present, Excelerate Energy is involved in collaborative discussions to develop and evaluate high-level structures with LNG supply chain candidates.

Andree Stracke, CCO of Excelerate Energy stated, "We are optimistic during this early stage of discussions and are looking forward to these and other dialogues progressing toward advanced stages."

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About Excelerate Energy
Excelerate Energy, L.P., based in The Woodlands, Texas, is a liquefied natural gas (LNG) importer and marketer that is redefining the way LNG moves around the globe. With the proven ability to apply its proprietary regasification technology to a growing network of market access points worldwide, Excelerate Energy can connect LNG suppliers and customers in a way that minimizes costs for both while maximizing the value of each delivery. Excelerate Energy's fleet of state-of-the-art, environmentally friendly, LNG Regasification Vessels (LNGRVs) compliment the company’s downstream investments in dockside GasPorts and deepwater port Gateways. To further enhance the capabilities of the existing LNGRVs and their cargoes, Excelerate Energy has developed and implemented the first commercially viable program of LNG transshipment via ship-to-ship transfer. This combination of expertise, innovation, and strategic physical assets give the company the equivalent of a flexible, global "pipeline" that can transport LNG from virtually any point to any other point - facilitating delivery to the highest value markets around the world. For more information please visit www.excelerateenergy.com .

Media contacts
Cheryl Floyed
Manager - Marketing and Communication
Tel: (832) 813.7685
Email: cheryl.floyed@excelerateenergy.com

Excelerate Energy Announces Agreement To Deliver 4 Cargoes into Argentina's Winter LNG Import Facility

2010-03-31T13:45:00.006-05:00

Excelerate Energy Announces Agreement To Deliver
4 Cargoes into Argentina's Winter LNG Import Facility

Bahia Blanca Facility Enters its Third Year of Operations

THE WOODLANDS, TX and BUENOS AIRES, ARGENTINA, March 31, 2010 - Excelerate Energy L.P. today announced the sale of four cargoes of liquefied natural gas (LNG) to be delivered into Argentina's first LNG importation facility located in the port city of Bahia Blanca, approximately 400 miles south of Buenos Aires. Excelerate Energy will deliver the cargoes from their own fleet of purpose-built Energy Bridge® Regasification Vessels (EBRVs).

Argentina's State-owned utility company ENARSA issued two tenders in March, 2010, seeking a total of 14 cargoes of LNG for delivery in 2010. The first tender was for 12 cargoes and the second one for two cargoes. Excelerate Energy's four cargo agreement is being supplied from their own trading portfolio. Excelerate will start delivering these cargoes in April and will deliver the last cargo in July.

"Excelerate Energy considers the four cargo agreement from these two tenders a significant achievement for the company," said Andree Stracke, CCO of Excelerate Energy.

Jointly-developed with YPF, Bahia Blanca GasPort® was the fourth of Excelerate's five LNG facilities and second of three dockside GasPorts. The facility is capable of delivering up to 400 million cubic feet of natural gas per day to Argentina's market. Each of the four LNG cargoes to be delivered contains an equivalent of approximately three billion cubic feet of natural gas. The Bahia Blanca GasPort will begin its third year of service with the delivery of these cargoes during Argentina's high demand winter season.

At the Bahia Blanca GasPort, one of the company's EBRVs will dock alongside a dedicated jetty where it will connect to the onshore facility, and feed regasified natural gas directly into Argentina’s gas distribution system. The LNG cargoes will be supplied to the docked EBRV utilizing ship-to-ship transfer procedures.

Excelerate Energy's specialized vessels are equipped with both an onboard regasification system as well as normal LNG discharge capability, enabling the vessels to offload at conventional LNG terminals, their own facilities and from ship to ship. Excelerate Energy pioneered LNG transshipment via ship-to-ship transfer.

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About Excelerate Energy
Excelerate Energy, L.L.C., based in The Woodlands, Texas, is a liquefied natural gas (LNG) importer and marketer that is redefining the way LNG moves around the globe. With the proven ability to apply its proprietary regasification technology to a growing network of market access points worldwide, Excelerate Energy can connect LNG suppliers and customers in a way that minimizes costs for both while maximizing the value of each delivery. Excelerate Energy's fleet of state-of-the-art, environmentally friendly, LNG Regasification Vessels (LNGRVs) compliment the company’s downstream investments in dockside GasPorts and deepwater port Gateways. To further enhance the capabilities of the existing LNGRVs and their cargoes, Excelerate Energy has developed and implemented the first commercially viable program of LNG transshipment via ship-to-ship transfer. This combination of expertise, innovation, and strategic physical assets give the company the equivalent of a flexible, global "pipeline" that can transport LNG from virtually any point to any other point – facilitating delivery to the highest value markets around the world. For more information please visit www.excelerateenergy.com.

Media contacts
Cheryl Floyed
Manager – Marketing and Communication
Tel: (832) 813.7685
Email: cheryl.floyed@excelerateenergy.com

Excelerate Energy successfully delivers seven winter cargos

2010-03-24T13:35:00.004-05:00

Excelerate Energy Successfully Delivers Seven Winter Cargos
Consecutive deliveries support high demand during New England's peak season

The Woodlands, Texas and Salem, Massachusetts, March 24, 2010 - With the departure of the liquefied natural gas (LNG) carrier Exquisite on March 8, 2010, Excelerate Energy, L.P., (Excelerate Energy) owners / operators of Northeast Gateway (NEG) Deepwater Port, today confirmed successful completion of seven LNG cargos through the Port with the first delivery in November 2009.

The facility was designed and constructed specifically to support the anticipated high demand for natural gas from the New England area during their peak winter heating seasons. The facility received the first cargo for the most recent winter heating season on Nov 19th 2009 with the arrival of Excelerate Energy's Energy Bridge® Regasification Vessel (EBRV™) Excellence. Delivering natural gas at sendout rates varying between 180 and 500 million standard cubic feet per day (MMscfd), the NEG Port received a new delivery approximately every 10 days from Excellence, Explorer, Express, Exquisite and Excelerate. These LNG cargos were sourced from Egypt, Trinidad and Qatar and the volumes were marketed to customers in the Northeast by Barclays Capital.

The regasification system developed by Excelerate Energy allows its purpose-built EBRVs to regasify its cargo of LNG and deliver vaporous natural gas through its two submerged turret loading buoys (STL™) located approximately 90 feet below the water surface when not in use. With this technology they can achieve optimal sendout rates, maintain consistent flow and avoid interruption. The successful completion of seven consecutive deliveries through the NEG Port further demonstrate Excelerate Energy’s ability to deliver reliable base-load natural gas supplies into the New England market.

The NEG facility commenced commercial operations in 2008 and is located approximately 15 miles east of Boston in Massachusetts Bay. Excelerate Energy contracted with Algonquin to extend a 16-mile pipeline lateral from Spectra Energy's HubLine to the Deepwater Port.

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About Excelerate Energy, L.P.:
Excelerate Energy, L.P. (Excelerate Energy), based in The Woodlands, Texas, is a liquefied natural gas (LNG) importer and marketer that's redefining the way LNG moves around the globe. With the proven ability to apply its proprietary Energy Bridge technology to a growing network of market access points worldwide, Excelerate Energy can connect LNG suppliers and customers in a way that minimizes costs for both while maximizing the value of each delivery. Excelerate Energy's fleet of state-of-the-art, environmentally friendly, Energy Bridge Regasification Vessels (EBRVs) compliment the company's downstream investments in dockside GasPorts and deepwater port Gateways. To further enhance the capabilities of the existing EBRVs and their cargoes, Excelerate Energy has developed and implemented the first commercially viable program of LNG transshipment via ship-to-ship transfer. This combination of expertise, innovation, and strategic physical assets give the company the equivalent of a flexible, global "pipeline" that can transport LNG from virtually any point to any other point – facilitating delivery to the highest value markets around the world. For more information please visit www.excelerateenergy.com

Tel: (832) 813-7100
Email: info@excelerateenergy.com

Media contacts
Cheryl Floyed
Manager – Marketing and Communication
Tel: (832) 813.7685
Email: cheryl.floyed@excelerateenergy.com

NECN Exclusive: Inside Boston's offshore LNG terminal

2010-01-15T14:39:00.002-06:00

See The Video

(NECN: Peter Howe, on Massachusetts Bay) It's a crucial -- but controversial -- energy source New England can't do without: liquefied natural gas. As controversy rages in Boston about LNG tanker shipments into Boston Harbor, in an NECN exclusive, reporter Peter Howe and videographer Mike Bellwin on Thursday got to be the first journalists aboard a new offshore LNG terminal that keeps fuel deliveries 18 miles offshore.

Boston Mayor Thomas M. Menino, House Speaker Robert DeLeo (D-Winthrop), and other officials are alarmed by reports that the Distrigas LNG facility in Everett could as soon as next month begin receiving LNG shipments from a plant in Yemen, an Arabian Peninsula nation known as a hotbed for Al Qaeda terrorists. DeLeo convened a summit meeting at the State House Wednesday night with Senator Paul Kirk and others to evaluate the dangers of Yemeni shipments.

As the controversy continued Thursday, an unexpectedly calm and warm January day, sister ships Excelerate and Excellence were quietly pumping millions of cubic feet of LNG into an undersea pipeline, helping keep warm thousands of homes, schools, and offices in Greater Boston.

"We started deliveries about mid-December,'' said Rob Bryngelson, CEO of Excelerate Energy LLC. "Since then things have been going well. We've delivered on average about 20 percent of New England's gas needs into the market.'' Excelerate, based near Houston, finished what it calls the "Northeast Gateway" project in late

2008. It consists of two buoys with pipes feeding into a 16-mile pipeline that in turn feeds the Hubline natural gas pipeline that extends from Danversport to Weymouth. After four years working to get Northeast Gateway built, Thursday was the first time Bryngelson was on board a ship at the site.
A quick primer on LNG: It is the same natural gas that fuels stoves and heating systems and hot-water heaters, but chilled to negative-259 degrees Fahrenheit. That shrinks the gas to 1/600th of its vapor volume, making it feasible to transport natural gas by ship to the U.S. from producing countries like Trinidad, Algeria, and Egypt.

Nothing about the Excelerate or its sister ships is small. It's a ship that's three football fields long, as wide as a football field, with its own helicopter landing pad, and carrying enough natural gas to heat 21,000 average New England homes for a year. It's a ship that costs $250 million, weighs 200 million pounds, and is powered by 36,000 horsepower worth of engines that drive the ship and warm liquid gas to vapor -- and can also produce electricity equivalent to the demand of 11,000 homes.

You don't walk on and off by a gangway. You get hoisted by crane, holding -- as you dangle seven stories over the ocean -- onto a grid of ropes in a contraption called a "Billy Pugh," named for the man who invented it for use on Gulf of Mexico oil and gas platforms. But for all the ships' sprawling size, Bryngelson said, "We designed Northeast Gateway to be as environmentally friendly and have the minimum environmental footprint possible,'' through technologies that recover waste heat, function like a catalytic converter removing pollutants from exhaust, and virtually eliminate the need for using sea water in the vaporization process.

Boston already sees plenty of LNG tankers, sometimes two a week, headed to the 39-year-old Distrigas plant in Everett, Mass. Ever since the Sept. 11, 2001, terrorist attacks, many officials have worried about terrorists targeting an LNG tanker in Boston Harbor. Those fears grew after news broke about the expected shipments from a new gas terminal in Yemen, which raised the specter of Al Qaeda operatives potentially stowing away on tankers or devising time-delayed attacks on ships once they got close to Boston. While scientists say an LNG tanker is highly unlikely to explode in a fireball if hit by a bomb or missle, much is unknown about how a large cloud of gas fed by slowly vaporizing LNG might ignite and what that could do to the densely packed waterfront neighborhoods of downtown Boston, Charlestown, East Boston, and Chelsea. House Speaker Robert A. DeLeo said officials want to be confident all measures are being taken to ensure Yemeni shipments are 100 percent safe.

Carol Churchill, a spokeswoman for Distrigas, said in a statement: "LNG is as safe if not safer to transport and store than most other liquid fuels. LNG tankers are among the sturdiest and most sophisticated on the seas today. The LNG cargoes from Yemen will be delivered on the same ships and by the same officers and crews that have called on the Everett terminal in the past. The only thing that will change is the point of origin, a new state-of-the-art facility in Yemen that is one of the most secure in the world. Distrigas has been in discussions with the U.S. Coast Guard concerning this new terminal for more than six months. And we continue to have discussions with them as well as other government officials and key stakeholders to ensure the safe and timely deliveries of these cargoes. Safety and security have always and will continue to be the primary focus of Distrigas. We have earned and maintained an excellent safety record since we began importing LNG into the Everett terminal in 1971. The security regime surrounding our LNG shipments into Everett is the most robust of any cargo imported into the U.S.''

While it stands by the safety of the Everett Terminal, Distrigas is also building its own offshore delivery terminal, about six miles north of the Excelerate site and 10 miles south of Gloucester. It's expecting the Neptune terminal to be ready for service by the middle of next month.

Even here at the Excelerate Northeast Gateway site, 13 miles away from Gloucester and 18 miles from Boston, Excelerate's senior vice president, Captain Mark K. Lane, stresses they are safety obsessed. He spent 28 years at sea before becoming the company's top official overseeing its crew of captains who operate Excelerate's eight ships that can hook up to facilities like Northeast Gateway.

"We do vet people that come on board. We look and actually restrict who comes on board and what comes on board. A certain percentage of people are searched,'' Lane said. He stresses that both on land and sea, since the first shipment of LNG was made in 1959 from Lake Charles, Louisiana, to England, it's been extraordinarily safe. "Out of the history of LNG, there's been in excess of 100,000 round trips or round voyages, over 100 billion tons of cargo carried, and over 100 million miles travelled without loss of any cargo and without any loss of life that's cargo-related.''

With offshore delivery proven, could Boston ever shut down the controversial Everett Distrigas plant? Bryngelson says, probably not. "I know there are some requirements for liquid trucking and other power plant supply of the gas from the LNG facility out of Everett, so I don't think you can completely displace it. But certainly, for incremental volumes, for what we're delivering, offshore is a viable alternative.''

Asked whether Excelerate might ever consider adding more buoys to expand the capacity of gas that could be pumped into Boston from offshore, Bryngelson said, "Right now, what we're constrained by is the amount of gas the system can absorb. And with the two buoys, we have more than adequate capacity.''

"Not a lot of people realize that we're out here, we're delivering gas consistently, and that's a good thing for us,'' Bryngelson said. "We're out of sight, we're out of mind for most people. We keep the operations well offshore and away from densely populated areas.'' An extraordinary operation few New Englanders will ever see -- but will feel in a cozy home or office on a chilly winter day.

Natural Gas Intelligence: Excelerate Energy Pursuing Floating Liquefaction Opportunities

2008-11-11T12:12:00.002-06:00

Excelerate Energy's niche in the natural gas supply chain puts it in good standing as it attempts to carve out a place in the emerging world of floating natural gas liquefaction, or floating LNG (FLNG), Anthony Schiller, Excelerate director of upstream development, told NGI.

"We think because of our downstream asset base with the regasification technology and our buyer network and our ability to access downstream markets, that Excelerate together with Black & Veatch and Exmar provides the capability to really advance a source-to-market solution," Schiller said. "I don't know that you'll see our gas end up in all of our assets. But...we're taking on the molecule. We're taking ownership of the gas. As part of that certainly what we think differentiates us from other people who are advocating for floating liquefaction is that we do indeed have a solid history of creating proven floating solutions. As part of that there is the downstream network and a group of buyers out there."

Earlier this month Excelerate announced the formalization of its relationship with LNG shipping partner Exmar NV and with Black & Veatch, a provider of gas processing and liquefaction technology.

Excelerate has constructed two offshore LNG receiving terminals in U.S. waters. Its Gulf Gateway Energy Bridge Deepwater Port, located offshore Louisiana in the Gulf of Mexico, received its first LNG cargo in April 2005 (see Daily GPI, April 7, 2005). It was the world's first offshore receiving facility and the first new LNG regasification facility in North America in more than 20 years. In May Excelerate's Northeast Gateway terminal off the coast of Massachusetts received its first LNG cargo (see Daily GPI, May 20). Excelerate also owns and manages the Teesside GasPort LNG facility in the United Kingdom. In June RWE Group completed the acquisition of a 50% stake in Excelerate (see Daily GPI, June 3).

For FLNG, Excelerate is looking at a modular design for its facilities that will allow for vessels capable of liquefying anywhere from 1.5 to four million metric tons per year; however, the sweet spot is about three million tons, Schiller said. "We've had prospective customers who have expressed interest in solutions for up to four million, but because we're building it on a series of liquefaction trains there is that inherent flexibility in the design.

"We don't want to do the one-ship-build-many concept. But on the other end of it you don't want to build a ship that's so tailored that you have to wait until you've identified a specific opportunity before you can go out there...We think the three million tons probably puts us in the position to commercialize most of the reserves we're looking at."

Schiller said geographically Excelerate is looking at opportunities around the globe, similar to other FLNG players. He named Australia, West Africa, South America and Southeast Asia as prospects. "There are certainly areas that I'm hyper-focused on, but it's all the same as everybody else," he said. "We're looking at everything. What we're saying internally at this point is nothing is off the table."

Excelerate said FLNG can be competitive on a cost basis with land-based liquefaction facilities of similar size. The company is not alone in pursuing FLNG. Royal Dutch Shell is pursuing FLNG, among others.

In September Kathleen Eisbrenner, executive vice president for global LNG with Shell Gas & Power International, told NGI that FLNG would be cost-competitive with land-based liquefaction (see Daily GPI, Sept. 9). Eisbrenner was Excelerate's chief executive before she joined Shell.

At a conference in Bangkok in March, Jon Chadwick, Shell Gas and Power executive vice president, said the company had adopted a "generic approach" to its technology, "design-one-build many" approach. "Key dimensions are a 3.5 million tons per annum LNG facility, with additional hydrocarbon liquids capacity, 450 meters long by 75 meters wide..."

Shell is expected to have a floating LNG terminal operating off the coast of Dubai by the end of 2010, according to Shell's John Mills, regional vice president for gas and power, as reported by Bloomberg. Shell is considering FLNG facilities off the coasts of Egypt, Iraq and Australia. Another company, Flex LNG Ltd., is expected to have a 1.7 million-metric-ton facility operating off the coast of Nigeria in 2011, according to Bloomberg.

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Excelerate Discusses Floating Liquefaction Plans

2008-11-07T16:02:00.001-06:00

November 7, 2008
Platts LNG Daily
Ron Nissimov

Houston--Excelerate Energy and its partners in a proposed floating liquefaction venture would build floating liquefaction vessels only if agreements have been reached to monetize specific gas reserves with those vessels, an Excelerate official told Platts Friday.

"This is not going to be like regas, where we speculatively built vessels," said Excelerate Director of Upstream Development Anthony Schiller. "We will identify an opportunity and engage in a study to identify the value for the particular reserve or owner."

The venture plans to own the LNG and market it, but it does not plan to seek ownership of gas reserves and develop them, Schiller said. Rather, it plans to buy gas from producers for liquefaction, he said. The supplies would not necessarily have to be delivered by Excelerate's onboard regasification vessels or delivered to the company's terminals, he said.

Excelerate announced earlier this week that it formed an alliance with Belgian shipper Exmar and US engineering firm Black and Veatch to develop floating liquefaction solutions, but it did not provide details.

The venture plans to use a modular system that would allow it to successfully monetize reserves of various sizes, with possible production ranging from 1.5 million mt/yr (192,000 Mcf/d) to 4 million mt/yr, Schiller said. He declined to comment on cost projections for vessels or liquefaction, but said the unit cost would be comparable to onshore liquefaction plants with similar sizes. Larger onshore liquefaction projects would likely be able to produce LNG more cheaply because of economies of scale, he said.

Although floating liquefaction projects have been discussed for a number of years, until relatively recently they were viewed as uneconomical. But technological advances have made it possible to liquefy gas using vessels at prices comparable to onshore plants, which often require large investments for pipelines to the liquefaction facilities.

Some other companies are further advanced in their floating liquefaction plans. For example, Flex LNG has contracted with South Korea's Samsung Heavy Industries to build its fourth floating LNG production vessels, each with capacity of 1.7 million mt/yr, and plans to open the world's first floating liquefaction plant in 2011 offshore Nigeria. The total cost of the vessel for that project, which is slated to produce 1.5 million mt/yr for 15 years, is at least $1 billion. Japan's Mitsubishi, an equity partner in the project, would buy the entire output.

Nevertheless, the Excelerate venture is confident it could compete in the growing floating liquefaction sector because of its track record in floating LNG storage and regasification, as well as its access to markets worldwide, Schiller said.

"A lot of things make Excelerate different," he said. "We've got a pretty substantial downstream asset base. We're not simply a technology provider, as Flex LNG might be. We're trying to advance the capacity we have to market (LNG), to the extent we can take ownership of the molecules and maximize the value of the reserve owner's gas."

Black and Veatch would not have equity in the vessels, but only provide its proprietary liquefaction technology that has been used for onshore facilities, Schiller said.

He said it is too soon to comment on possible timelines or on whether Exmar would have equity in the vessels. Exmar has significant equity in the fleet of onboard regasification vessels that Excelerate operates.

Excelerate was the first company to build and operate onboard regasification vessels. It opened its first terminal offshore Louisiana in March 2005 and in December 2006 opened a terminal in Teesside, England. But because of the company's inability to secure long-term LNG contracts in the ongoing tight liquefaction market, many industry experts said last year the company was in deep financial trouble.

Excelerate's technology was originally developed by El Paso, but Oklahoma businessman George Kaiser bought the rights to the technology and formed the company with some former El Paso employees.

Earlier this year, Germany's RWE bought 50% of Excelerate for $500 million. The infusion of cash from RWE and increasing demand for onboard regasification vessels have seemingly benefited the company. This year, Excelerate was hired by Argentina to provide an onboard regasification vessel and deliver supplies during the South American country's dry season, and next year Excelerate will start providing an onboard regasification vessel to Kuwait. It is unclear if Argentina plans to hire Excelerate next year, as officials have said they hope to not import LNG then because it is much more expensive than pipeline gas. Schiller said he could not comment on the matter.

In addition, increasing diversions of Atlantic Basin LNG supplies to Asia has provided Excelerate with more opportunities to charter its vessels. RWE owns gas assets offshore Egypt, but Schiller said those would not be used for floating liquefaction projects. He said the areas Excelerate is exploring for floating liquefaction are the same as the areas being explored by other companies. Those areas include offshore West Africa, Australia and Southeast Asia, he said.

Excelerate to Take Production Plunge

2008-11-07T12:18:00.002-06:00

November 7, 2008
LNG Unlimited
Lucy Hine, London

Regas company unveils plans to build a floating LNG contender

Regasification specialist Excelerate Energy is running its slide rule over large-size floating liquefaction units as it plots a move into the upstream arena.

The company signed an agreement on Wednesday with its longstanding shipping ally Exmar and gas processing specialist Black & Veatch to pursue floating LNG.

The partners are targeting units with capacities ranging from the 1.5 million tonnes per annum to 3 million tpa.

Excelerate president and chief executive Rob Bryngelson said even a 4 million tpa vessel is "not out of range" for the partners, revealing the company has received expressions of interest for this size.

Bryngelson said the partners have already got a basic design for what they are calling a floating liquefaction storage and
offloading (FLSO) unit.

He said the design packages together proven technology but is also being developed in modular fashion to suit any given gas field.

Bryngelson said he and his colleagues at Excelerate have been working on floating liquefaction since around 2001 when they were with El Paso Corporation.

He said Excelerate, which is backed by its two key shareholders RWE Group and oil tycoon George Kaiser, will be the driving force behind the FLSO partnership and will retain commercial control.

The company has brought in Anthony Schiller as upstream development director. He joins from oil and gas magnate Tom Tatham’s LNG Partners, which is developing the Newfoundland LNG project.

Bryngelson said there are "a lot of discussions going on" with prospective clients, adding: "We are talking to people where the gas reserve makes sense."

He is adamant an FLSO will not be built on speculation. However, he said: "The first one will set the benchmark for how we are going to do it."

Bryngelson is also certain the FLSO will be more cost competitive than a like-size onshore liquefaction plant.

He said it will take around four years from pulling the trigger on a project to LNG production.

Exmar chief executive Nicolas Saverys said 2012 remains a realistic date for the first FLSO to be in operation.

Saverys said the partners' existing expertise on issues such as sloshing, product processing and discharge via ship-to-ship transfer will be key to the FLSO projects.

Bryngelson is clear about the motives for the move into the offshore liquefaction sector.

"We are not trying to be an asset player. We want to integrate further up the chain and gain access to the molecules," he said.

Excelerate Energy Announces Successful Delivery of First LNG Cargo to South America's First-Ever LNG Import Facility

2008-06-09T13:28:00.001-05:00

Excelerate Energy Announces Successful Delivery of First LNG Cargo to South America's First-Ever LNG Import Facility
Argentina's GasPort is the world’s second dockside regasification facility

THE WOODLANDS, TX and BUENOS AIRES, ARGENTINA, June 9, 2008 - Excelerate Energy L.L.C. today announced the successful delivery of Argentina's first liquefied natural gas (LNG) cargo to the newly constructed importation facility at the port city of Bahía Blanca, approximately 400 miles south of Buenos Aires. Vaporized natural gas was successfully delivered through the Bahía Blanca GasPort directly into Argentina's gas distribution system.

The Bahía Blanca GasPort LNG facility is South America's first-ever LNG receiving facility and the world's second dockside regasification facility.

At the Bahía Blanca GasPort, the company's LNG Regasification Vessel Excelsior is docked alongside a dedicated jetty where it connects to the onshore natural gas pipeline via Excelerate's specially designed dockside high-pressure gas off-loading arm, and feeds natural gas directly into Argentina's gas distribution system. LNG cargoes will be supplied to the docked vessel via traditional LNG carriers utilizing Excelerate's ship-to-ship LNG transfer protocol.

"We at Excelerate Energy are pleased that our unique onboard regasification and GasPort technology have played a pivotal role in the successful completion of this historic project," said Rob Bryngelson, President and CEO of Excelerate Energy. "We have forged a strong partnership with YPF S.A. and congratulate them on their efforts to ensure Argentina’s future energy security."
In August of 2007, YPF S.A. selected the Bahía Blanca location as ideal to quickly allow for additional imports needed to bring more natural gas to the Argentina market to meet projected supply shortfalls.

It has taken less than six months to construct the Bahia Blanca GasPort and commence operations. Excelerate Energy is currently the only LNG company in the world using GasPort technology. The company's first GasPort at Teesside in the UK was commissioned in Feb. 2007. Designed to accommodate the proprietary technology of the company's specialized regasification vessel fleet, these GasPort facilities allow for much lower capital costs and a greatly expedited development and construction timeline - much shorter than that of an onshore LNG facility.

The jointly-developed Bahía Blanca GasPort, Excelerate's fourth operational LNG facility and second dockside GasPort, will allow delivery of up to 400 million cubic feet of natural gas per day to Argentina's market. The facility has the initial capacity to import up to three LNG cargoes per month, each of which will contain approximately three billion cubic feet of natural gas.

The commissioning cargo for the Bahia Blanca GasPort was sold to Repsol/YPF by Excelerate Energy and loaded onto the Excelsior by Ship-To-Ship (STS) transfer on May 4th. This cargo was delivered from another of Excelerate's regasification vessels the Excellence, marking the fifth transfer of LNG between two ships for commercial purposes. Excelerate has been the pioneer in STS transfer and continues to use this process to provide additional flexibility for scheduling and fleet utilization.

Excelerate Energy's specialized vessels have three distinct ways of discharging LNG cargo. The cargo can be discharged as liquid at a traditional LNG regasification terminal, as gas via Excelerate's Energy Bridge subsea buoy based system for offshore applications and via the onboard high pressure gas manifold that connects to Excelerate's dockside off-loading arm.

Excelerate Energy Finalizes Partnership with RWE

2008-06-02T11:13:00.003-05:00

Excelerate Energy Finalizes Partnership with RWE
German utility completes acquisition of stake in Excelerate

THE WOODLANDS, TEXAS, June 2, 2008 - Excelerate Energy today announced that the RWE Group has completed the acquisition of a 50-percent stake in the company for approximately $500 million. RWE is a major European integrated electricity and natural gas company, and the acquisition combines RWE's upstream equity gas assets with Excelerate's growing market access points, LNG infrastructure and proprietary technology.

Excelerate Energy, owned by George B. Kaiser, was formed in 2003 to utilize proprietary technology allowing LNG to be regasified onboard specially designed regasification vessels. Based on this technology and in the five short years since its inception, the company has built three LNG receiving facilities, including the first on the US East coast in 25 years; pioneered commercial ship-to-ship transfer of LNG; and operates a fleet of five LNG ships of which four are capable of onboard regasification. The company will add an additional three LNG regasification vessels to the fleet by 2010 and has an option on a ninth ship. Excelerate Energy's management and staff will remain in place as the company will continue to develop and operate its business as usual, with strong support from its shareholders. Mr. Kaiser will continue to own the remaining 50 percent of the company.

About Excelerate Energy
Excelerate Energy, L.L.C., based in The Woodlands, Texas, is a liquefied natural gas (LNG) importer and marketer that is redefining the way LNG moves around the globe. With the proven ability to apply its proprietary regasification technology to a growing network of market access points worldwide, Excelerate Energy can connect LNG suppliers and customers in a way that minimizes costs for both while maximizing the value of each delivery. Excelerate Energy's fleet of state-of-the-art, environmentally friendly, LNG Regasification Vessels (LNGRVs) compliment the company's downstream investments in dockside GasPorts and deepwater port Gateways. To further enhance the capabilities of the existing LNGRVs and their cargoes, Excelerate Energy has developed and implemented the first commercially viable program of LNG transshipment via ship-to-ship transfer. This combination of expertise, innovation, and strategic physical assets give the company the equivalent of a flexible, global "pipeline" that can transport LNG from virtually any point to any other point - facilitating delivery to the highest value markets around the world. For more information please visit www.excelerateenergy.com.

About RWE Supply & Trading GmbH
RWE Supply & Trading GmbH results from the merger of the two companies RWE Trading GmbH and RWE Gas Midstream GmbH. RWE Supply & Trading is the market leader in Europe for energy trading and ranks number 6 in the European gas business (procurement volume around 40 bcm per annum). RWE Supply & Trading is in charge of managing all of RWE's international energy procurement activities and wholesale energy trading. It serves as the European hub for all tradeable commodities such as power, emissions certificates, gas, coal and oil (physical and derivatives) as well as optimizing the entire gas portfolio of the RWE Group, from short- to long-term procurement and delivery responsibilities. RWE Supply & Trading has its headquarters in Essen (Germany) and offices in Swindon (UK), London (UK) and Prague (CZ). The company's CEO is Peter Terium.

Media contacts
Bronwyn Wallace
Hill & Knowlton (for Excelerate Energy)
713.752.1929
bronwyn.wallace@hillandknowlton.com

Excelerate Energy delivers first LNG cargo to Northeast Gateway Deepwater Port

2008-05-20T10:03:00.003-05:00

Excelerate Energy delivers first LNG cargo to Northeast Gateway Deepwater Port
(First new East Coast LNG facility in more than 30 years)

IN MASSACHUSETTS BAY - With the arrival of the vessel Excellence at the new Northeast Gateway (NEG) Deepwater liquefied natural gas (LNG) Port, Houston-based Excelerate Energy L.L.C. announced today that the NEG facility has commenced commercial operations. Operating approximately 18 miles east of Boston in Massachusetts Bay, Excellence is currently off-loading its cargo of natural gas into the existing HubLine natural gas pipeline system operated by Spectra Energy, also headquartered in Houston.

"This delivery is a milestone in efforts to bring a new, safe, clean, affordable energy source to the New England region in record time," said Rob Bryngelson, Excelerate Energy CEO. "During the course of this project it became extremely clear that our ship-board regasification technology is the quickest, least expensive and most environmentally responsible way to bring new natural gas supplies to markets."

Excelerate Energy and Spectra Energy teamed up to extend a 16-mile, 24-inch pipeline lateral from Spectra Energy's HubLine to the Deepwater Port. Regional energy studies show that New England’s demand for natural gas will increase considerably in coming years, and call for new supplies to ensure price and supply stability.

"The Northeast Gateway project brings an important new natural gas supply to the heart of the New England market area," said Bill Yardley, group vice president, Spectra Energy Transmission. "Spectra Energy looks forward to its continuing partnership with Excelerate to provide greater supply diversity and reliability to the region. We also extend our joint appreciation to state and federal agencies for the thorough review and timely approvals of this project."

Since introducing the concept of the NEG project in the summer of 2004, Excelerate Energy began the permitting process in June 2005 and received its license for the facility in May 2007. Construction began immediately upon receipt of the license and was completed in December 2007. The completion and commissioning of NEG marks the first new LNG receiving facility to be built on the U.S. east coast in more than 30 years.

The regasification system developed by Excelerate Energy allows its purpose-built vessels, referred to as Regasification Vessels, to regasify its cargo of LNG using existing technology in a new application and deliver vaporous natural gas through one of two turret loading buoys located approximately 90 feet below the water surface. The vessel draws one of the buoys into a specially designed compartment and connects it to the onboard regasification equipment. The buoys not only act as a conduit for the gas delivery, but also act as a mooring for the vessels, eliminating the need to anchor the ships at the Deepwater Port. This robust system, designed and tested with crude oil in the North Sea, has been used in the US Gulf of Mexico by Excelerate Energy – even providing natural gas supplies throughout Hurricane Katrina in 2005.

With its inaugural delivery, Excellence will offload about one billion cubic feet of gas in order to test all of the port and pipeline systems. The delivery follows preliminary commissioning activities conducted in February, 2008. Ultimately, the system is capable of supplying up to approximately 20 percent of New England’s natural gas demand.

In addition to their ability to regasify LNG through its on board system, Excelerate Energy's vessels also retain their conventional LNG discharge capability, enabling the vessels to offload at standard land-based LNG terminals as well as into Excelerate Energy's proprietary receipt points around the world. Additionally, Excelerate Energy pioneered LNG transshipment via ship-to-ship transfer, further increasing the flexibility of its operations. These ships are by far the cleanest LNG tankers in the world due to the use of state-of-the-art technology that reduce both air and water emissions to nominal levels. While operating at NEG, the vessels are able to reduce their NOx emissions by nearly 90 percent and their water consumption and discharge by nearly 98 percent, a phenomenal accomplishment.

Aside from the Northeast Gateway Deepwater LNG Port, Excelerate also operates the Gulf Gateway Deepwater Port in the Gulf of Mexico about 116 miles south of Louisiana. The company has also pioneered GasPort technology comprising dockside LNG regasification facilities. The company’s first GasPort at Teesside in the United Kingdom was commissioned in February 2007. Excelerate also is developing similar facilities in South America and the Middle East.

As part of the federal environmental review process, certain mitigation measures were recommended by the National Oceanographic Atmospheric Administration (NOAA) to protect the endangered North Atlantic right whale from potential impacts caused by the construction and operation of the NEG facility. Excelerate Energy endorsed these recommendations and entered into a partnership with the Cornell University Bioacoustic Research Program (Cornell) and the Woods Hole Oceanographic Institution (WHOI) to develop a system of auto-detection buoys (ABs) equipped with passive acoustic hydrophones with sensors specially tuned to pick up the characteristic vocalizations of right whales, as well as other marine mammals. Advanced software developed by the Cornell team translates the whale calls into automated alerts that can be relayed through the web and maritime radio networks. Ten of these ABs have been installed along a nearly 50-mile segment of the recently re-aligned Boston Traffic Separation Scheme (TSS) leading to the Northeast Gateway Port.

Excelerate Energy also has established operational procedures to further reduce the risk of striking whales while approaching Northeast Gateway.

"Excelerate takes its responsibility to environmental stewardship very seriously," said Jonathan Cook, Excelerate’s COO. "We have adopted operational procedures such as reducing the vessels' speed and posting additional lookouts who have received special training in marine mammal identification."

Excelerate Energy Announces Agreement to Develop Argentina's First-Ever LNG Import Facility

2008-05-19T13:23:00.001-05:00

Excelerate Energy Announces Agreement To Develop Argentina’s First-Ever LNG Import Facility
New Facility to Leverage Unique GasPort Technology

THE WOODLANDS, TX and BUENOS AIRES, ARGENTINA, May 19, 2008 – Excelerate Energy L.L.C. today announced the signing of definitive agreements with Argentina's YPF S.A. to develop a liquefied natural gas (LNG) importation facility at the port city of Bahía Blanca, approximately 400 miles south of Buenos Aires. Upon completion this month, the facility will mark South America's first-ever LNG receiving facility and the world’s second dockside regasification facility.

"This facility marks yet another milestone for Excelerate Energy and further demonstrates how the unique ability of our onboard regasification and GasPort technology can quickly and cost-effectively deliver LNG supplies and connect markets globally," said Rob Bryngelson, President and CEO of Excelerate Energy.
"We are pleased to partner with YPF S.A. and applaud their forward-thinking in leveraging our advanced technology to help secure Argentina's future energy needs."

In August of 2007, YPF S.A. selected the Bahía Blanca location as ideal to quickly allow for additional imports needed to bring more natural gas to the Argentina market to meet projected supply shortfalls. The first cargo is expected to arrive in the newly built GasPort by the end of May 2008.

The jointly-developed Bahía Blanca GasPort, Excelerate's fourth operational LNG facility and second dockside GasPort, will allow delivery of up to 400 million cubic feet of natural gas per day to Argentina's market. The facility was built with the initial capacity to import up to three LNG cargoes per month, each of which contains approximately three billion cubic feet of natural gas.

Excelerate Energy is currently the only LNG company in the world using GasPort technology. The company's first GasPort at Teesside in the UK was commissioned in Feb. 2007. These facilities are designed to accommodate the proprietary technology of the company's specialized Energy Bridge vessel fleet. At the Bahía Blanca GasPort, the company's Energy Bridge vessel Excelsior will dock alongside a dedicated jetty where it will connect to the onshore facility, and feed natural gas directly into Argentina's gas distribution system. LNG cargoes will be supplied to the docked vessel via traditional LNG carriers utilizing ship-to-ship transfer procedures.

The commissioning cargo for the Bahia Blanca GasPort was sold to Repsol/YPF by Excelerate Energy and loaded onto the Excelsior by Ship-To-Ship (STS) transfer on May 4th. This cargo was delivered from another of Excelerate's regasification vessels the Excellence, marking the fifth transfer of LNG between two ships for commercial purposes. Excelerate has been the pioneer in STS transfer and continues to use this process to provide additional flexibility for scheduling and fleet utilization.

"One major advantage of GasPort facilities is that our capital costs are much lower and our development and construction timeline is much shorter than that of an onshore LNG facility, which enable us to very quickly and competitively add to our growing network of market access points around the world," noted Bryngelson.

Excelerate Energy's specialized vessels are equipped with both an onboard regasification system and a normal LNG discharge capability, enabling the vessels to offload at conventional LNG terminals, their own facilities and from ship to ship. Excelerate Energy pioneered LNG transshipment via ship-to-ship transfer.

Excelerate Energy Takes Delivery of Next-Generation LNG Vessel

2008-04-09T14:48:00.004-05:00

Excelerate Energy Takes Delivery of Next-Generation LNG Vessel
The Explorer to showcase advanced shipping technology

THE WOODLANDS, TEXAS, April 09, 2008 - Excelerate Energy L.L.C. today announced it has taken delivery of the advanced technology LNG Regasification Vessel (LNGRV) Explorer under a 25-year time charter. The Explorer is the first of Excelerate Energy's second-generation LNGRVs, which combine advanced environmental technologies with the company's proprietary regasification system. This combination allows LNG to be revaporized onboard the ship and fed directly into natural gas pipelines in a manner that minimizes environmental impacts and facility costs.

"We are excited to welcome the Explorer to the Excelerate fleet" said Rob Bryngelson, Excelerate Energy President and CEO. "Expanding the fleet is critical as we look to serve our growing network of market access points and trading operations around the world. We are also pleased to be the first to incorporate new technologies on our vessels that will help minimize our environmental footprint through reduced air emissions and water usage."

The Explorer was ordered in 2005 and was built by Daewoo Shipbuilding & Marine Engineering Co. Ltd (DSME) of South Korea. Excelerate Energy and Exmar NV of Belgium own the vessel through a joint venture company where each company holds a 50 percent equity interest. Exmar ShipManagement NV of Belgium will be the technical managers of the ship.

The vessel has several unique features that set it apart from the rest of the operating LNG fleet, including emissions control equipment that reduce NOx emissions by more than 95 percent during regas operations, and a heat recovery system that nearly eliminates the use of seawater in the LNG vaporization process. The ship has cargo capacity of 150,900 cubic meters, is 291 meters in length and has a deadweight tonnage of 82,500 metric tonnes.

The addition of the EXPLORER brings Excelerate's fleet count to four LNGRVs and one conventional LNG carrier in service; an additional vessel is under construction and slated for delivery in Spring 2009. In addition, the agreement between Exmar and Excelerate Energy includes two more ships ordered by Exmar in 2006 plus another ship ordered in 2007. These three ships will be delivered between the third quarter of 2009 and the second quarter of 2010 and be named EXQUISITE, EXEMPLAR, and EXPEDIENT.

"We are very impressed with the new vessel. DSME has shown their passion toward innovation during its design and construction, and we look forward to Exmar's professionalism and attention to detail in the operation of the ship," added Bryngelson.

Excelerate Energy will employ the vessel under a 25-year time charter to serve its proprietary market access points as well as its global trading operations. To date, Excelerate Energy has established receiving facilities at Northeast Gateway off the shores of Boston, Massachusetts, Gulf Gateway in the U.S. Gulf of Mexico, and Teesside GasPort in northern England, with additional projects under construction and development around the world. Its diverse and innovative technology allow Excelerate to offer customized solutions for bringing LNG to markets in a timely and cost efficient manner.

Excelerate Energy to Form Partnership with RWE

2008-02-14T10:09:00.003-06:00

14 February 2008

Excelerate Energy to Form Partnership with RWE
German utility to acquire 50-percent stake in leading LNG innovator

THE WOODLANDS, TEXAS, Feb. 14, 2008 – Excelerate Energy L.L.C. today announced that the RWE Group has signed an agreement to acquire a 50-percent stake in the company for approximately $500 million. RWE is a major European integrated electricity and natural gas company, and the partnership will combine RWE's upstream equity gas assets with Excelerate’s growing market access points, LNG infrastructure and proprietary technology.

"Together, we believe we can grow the LNG business significantly over the coming years," said Rob Bryngelson, President and Chief Executive Officer of Excelerate Energy. "This partnership aligns both companies' strengths in a way that will support the growth of the business, enable us to more fully leverage the flexibility our technology provides along the LNG value chain and to maintain our innovative leadership in offshore LNG."

Excelerate Energy, owned by George B. Kaiser, was formed in 2003 to utilize proprietary technology allowing LNG to be regasfied onboard specially designed regasification vessels. Based on this technology and in the five short years since its inception, the company has built three LNG receiving facilities, including the first on the US East coast in 25 years; pioneered commercial ship-to-ship transfer of LNG; and has options to expand its portfolio of regasification vessels to eight.

RWE AG is the listed holding company of the RWE Group, which operations are focused on Germany, the United Kingdom and Central Eastern Europe. The company's activities include power generation, distribution, transmission and sales, and natural gas exploration, production and sales. RWE Gas Midstream, the non-regulated gas wholesale, transport and storage subsidiary, will cooperate with Excelerate on an operational level.

Dr. Juergen Grossmann, CEO of RWE AG: "Linking Excelerate's business with RWE’s gas activities provides a platform for strong growth in the gas market. We are active both in the pipeline and the LNG business. Our partnership is of strategic importance." RWE and Excelerate have been co-operating on a number of joint projects since 2006.

Mr. Kaiser will continue to own the remaining 50 percent of the company. Excelerate Energy's management and staff will remain in place, as the company will continue to develop and operate its business as usual, with strong support from its shareholders.

About Excelerate Energy
Excelerate Energy, L.L.C., based in The Woodlands, Texas, is a liquefied natural gas (LNG) importer and marketer that is redefining the way LNG moves around the globe. With the proven ability to apply its proprietary regasification technology to a growing network of market access points worldwide, Excelerate Energy can connect LNG suppliers and customers in a way that minimizes costs for both while maximizing the value of each delivery. Excelerate Energy's fleet of state-of-the-art, environmentally friendly, LNG Regasification Vessels (LNGRVs) compliment the company's downstream investments in dockside GasPorts and deepwater port Gateways. To further enhance the capabilities of the existing LNGRVs and their cargoes, Excelerate Energy has developed and implemented the first commercially viable program of LNG transshipment via ship-to-ship transfer. This combination of expertise, innovation, and strategic physical assets give the company the equivalent of a flexible, global "pipeline" that can transport LNG from virtually any point to any other point – facilitating delivery to the highest value markets around the world. For more information please visit www.excelerateenergy.com

About RWE Gas Midstream
With RWE Gas Midstream GmbH, which was founded on 1 January 2007, RWE has further improved its competitive position on the European gas market. RWE Gas Midstream is responsible for the economic optimisation of the entire, non-regulated gas business of the RWE Group with respect to procurement, transport and storage. To fulfil its remit, the company is intensifying existing business contacts to pipeline and LNG providers and is developing new procurement options taking into full account the strong growth of the gas exploration and production business of RWE Dea. The establishment of RWE Gas Midstream strengthens the entire RWE gas portfolio. RWE Trading remains responsible for the gas trading activities and for their further development. RWE has already announced that RWE Gas Midstream and RWE Trading will merge.

Media contacts
Bronwyn Wallace
Hill & Knowlton (for Excelerate Energy)
713.752.1929
bronwyn.wallace@hillandknowlton.com

EXCELERATE ENERGY SELECTS DB ENERGY TRADING AS ITS NORTH AMERICAN DOWNSTREAM ASSET MANAGER

2008-01-16T10:49:00.001-06:00

HOUSTON, January 16, 2008 - Excelerate Energy today announced it has entered into a revaporized LNG off-take purchase arrangement with DB Energy Trading LLC, a subsidiary of Deutsche Bank AG. The agreement entitles DB Energy Trading to sell Excelerate Energy's revaporized LNG delivered via Excelerate's specially designed Energy Bridge System at the Gulf Gateway Deepwater Port (Gulf Gateway) and the Northeast Gateway Deepwater Port (Northeast Gateway) for an undisclosed tenor. The Energy Bridge vessels vaporize LNG on board and deliver natural gas through specially designed subsea buoys to seabed pipelines and into the natural gas grid.

Gulf Gateway is located off the coast of Louisiana and is capable of delivering natural gas at a baseload rate of 500 MMcf/d, with peak rates of up to 690 MMcf/d. Its robust design, which was tested and proven with deliveries throughout Hurricane Katrina, provides reliable and ready access to United States markets on both a short- and long-term basis. Northeast Gateway, located off the coast of Massachusetts, recently completed construction and will take its first cargo deliveries in early 2008. Its physical infrastructure will accommodate peak sendout of up to 800 MMcf/d and a baseload rate over 400 MMcf/d. Both Gateways will have the ability to increase throughput as future generations of Energy Bridge vessels with increased regasification capacity are delivered.

"We are pleased to be working with DB Energy on the downstream marketing of our natural gas deliveries through Gulf Gateway and Northeast Gateway," said Jonathan Cook, Chief Operating Officer at Excelerate Energy. "DB Trading has the experience and expertise that will ensure efficient and effective deliveries of our cargoes."

"We are proud to partner with Excelerate for our first LNG off-take management agreement in the United States, and pleased to facilitate Excelerate supply to our growing customer base in the Northeast and Gulf Coast regions," said Nicole Jasper, Americas Head of Commodity Sales at Deutsche Bank in Houston. "Our participation in the physical commodities markets marks our global commitment to providing Deutsche Bank clients the full spectrum of products."

For further information please call:

Renee Calabro +1-212-250-5525
Deutsche Bank, Media Relations

Judy Goldberg +1-713-752-1931/ judy.goldberg@hillandknowlton.com
Hill & Knowlton (for Excelerate Energy)

Construction has been completed on Excelerate Energy's Northeast Gateway

2008-01-14T17:22:00.000-06:00

14 January 2007
Natural Gas Intelligence
(Industry Briefs)

Construction has been completed on Excelerate Energy's Northeast Gateway deepwater liquefied natural gas (LNG) port off the coast of Massachusetts and the company is awaiting its final operating permits from the U.S. Coast Guard. Excelerate Energy expects to "realistically" have all of its operating permits by mid-January, said Edward Scott, vice president of development. He declined to say when LNG shipments would be off-loaded at the facility, explaining that the Houston-based company was in the "middle of fairly sensitive negotiations" with respect to LNG cargo. The Northeast Gateway facility, located 18 miles east of Boston, was completed in December, becoming the first new LNG terminal built on the East Coast in three decades. With peak deliveries of up to 800 MMcf/d, Northeast Gateway will be able to deliver about 500 MMcf/d into the New England market during normal operations, or approximately 20% of that market's current annual consumption. The deepwater port will be operated by Skaugen Offshore and will accommodate Excelerate's proprietary Energy Bridge Regasification Vessel fleet. In early December Algonquin Gas Transmission LLC got the green light to begin operating a 16-mile pipeline lateral connecting the company's New England-area natural gas system to the Northeast Gateway LNG port (see NGI, Dec. 10, 2007). Vaporized gas will flow from the terminal through Algonquin's HubLine pipe facilities in Massachusetts Bay to the Northeast gas market. The pipe facilities have the capacity to deliver up to 800,000 Dth/d of incremental supply.

Jan 21 Import Slot At UK's Isle Of Grain LNG Terminal Free

2008-01-14T17:16:00.000-06:00

14 January 2008
Dow Jones News Service
LONDON (Dow Jones)--The Jan. 21 berthing slot at the U.K.'s Isle of Grain liquefied natural gas import terminal won't be used by capacity holders and has been offered to the wider market, LNG Grain Agency's Web site said Monday.

This is the second successive berthing slot to be released by capacity holders BP PLC (BP) and Algeria's state-owned energy company Sonatrach. The Jan. 15 slot was released last week. A U.K.-based gas trader said the cargo was diverted to Turkey, whose gas supplies from Iran were cut off.

The Isle of Grain terminal, operated by National Grid PLC (NGG), is able to import 4.4 billion cubic meters of gas a year.

Gaz de France signs partnership deal with Qatar

2008-01-14T17:15:00.000-06:00

14 January 2008
Reuters News

PARIS, Jan 14 (Reuters) - Gaz de France on Monday said it has signed a long-term partnership agreement with Qatar Petroleum International and the country's authorities.

"This memorandum of understanding plans the development of cooperation between the two groups at an international level, in particular in the areas of exploration-production, liquefied natural gas (LNG), gas storage and downstream activities," Gaz de France said in a statement.

State-owned Gaz de France said the agreement would help it enhance its presence in Qatar, the world's top exporter of LNG.

Gaz de France also said it had been pre-selected by Qatar Petroleum to take part in an upcoming tender for the allocation of new offshore licences in Qatar.

The agreement coincides with a visit by French President Nicolas Sarkozy to saudi Arabia, Qatar and the United Arab Emirates, which has yielded numerous deals and agreements for French companies such as EDF and Areva . (Reporting by Marie Maitre; Editing by Quentin Bryar)

Further Zeebrugge LNG Terminal Expansion Faces Delays

2008-01-14T17:14:00.000-06:00

14 January 2008
Global Insight Daily Analysis
Zoe Grainge

The further expansion of the LNG terminal at Zeebrugge in Belgium, due online early this year, is not yet ready for commissioning, European Spot Gas Markets reported. According to reports, a spokeswoman for grid operator Fluxys reiterated the new capacity would be commissioned in the “near future”, as was announced in mid-December. Long-term contracts are already in place with Qatar Petroleum and ExxonMobil (55 slots), Distrigas (33 slots), and—entering into the terminal’s capacity for the first time—Suez LNG Trading (22 slots). The expansion is set to double capacity at the terminal from 4.5 bcm/year to 9.0 bcm/year. At present, Belgium's Distrigas and France's EDF Trading have signed deals with Rasgas to bring cargoes into the terminal. Data from Lloyd’s Maritime Intelligence show Distrigas is receiving regular fortnightly cargoes, but that EDF Trading has used fewer of its slots.

A new Internet-based platform to trade secondary capacity at the Zeebrugge hub, including the expanded LNG terminal, the Zeebrugge Platform Service, is also still expected to come onstream “early this year”, the Fluxys spokeswoman said. Originally, the platform was scheduled for a 2007 start-up.Significance: Fluxys announced last October it was considering further expanding the LNG import terminal in Zeebrugge. The terminal is already in the middle of a project to double capacity to 9 bcm/year. The group planned to conduct a survey at end-2007 to assess interest in reserving any expanded capacity. A pre-feasibility study already showed that, in line with the strategic plan for the port of Zeebrugge, the LNG terminal's capacity could be increased even further after the current expansion. In the 20 years the LNG terminal has been receiving ships, natural gas consumption in Belgium has nearly doubled from 8 bcm/year to 17 bcm/year (see United Kingdom-Belgium: 8 October 2007: ).

Gas Terminal Gets Nearer to Approval

2008-01-12T16:24:00.000-06:00

12 January 2008
The New York Times

HARTFORD -- A liquefied natural gas terminal proposed for Long Island Sound moved a step closer to approval on Friday with a finding by the staff of the Federal Energy Regulatory Commission that it would have no major environmental impact on the region.

The impact statement included 86 recommendations for mitigating any harm caused by the proposal, known as the Broadwater LNG project, which would be situated nine miles from Long Island and 10 miles from the Connecticut shoreline, and would be linked to the Iroquois gas pipeline.

The findings now go before the commission's five members, who can either reject the project, approve it with the staff recommendations or set hearings before an administrative law judge.

The report drew immediate criticism from Gov. M. Jodi Rell of Connecticut, who called the conclusions ludicrous and said the state would challenge in court any approval of the terminal.

''An enormous and potentially flammable industrial facility floating in the middle of Long Island Sound would be as shockingly out of place as a steel plant in a state park,'' Mrs. Rell said.

Messages were left seeking comment from New York State officials.

John Hritcko Jr., the senior vice president of Broadwater Energy, said the company was pleased that ''this stage of the regulatory review'' was complete. He added that in the coming months, we ''look forward to the commissioners' decision on Broadwater's proposal.''

Broadwater officials say the terminal is needed to meet a growing demand for natural gas.

About half of the gas from the terminal would go to New York City, from 25 percent to 30 percent to Long Island and the rest to Connecticut.

Mass.: Coast Guard exceeds standards to safeguard tankers carrying liquefied natural gas

2008-01-11T16:48:00.000-06:00

11 January 2008
Associated Press Newswires
Mark Jewell

BOSTON (AP) - The Port of Boston exceeds federal standards to safeguard tankers carrying liquefied natural gas and crude oil, the port commander of the Coast Guard's Boston office said Thursday after congressional auditors reported vulnerabilities at some U.S. ports.

Capt. Gail Kulisch called a harborside news conference a day after a Government Accountability Office report indicated some ports the agency's auditors visited were hindered by a lack of resources to meet security duties including vessel escorts and boarding.

Tanker safety has become a major Boston area concern in part because of an LNG terminal at Everett in Boston Harbor. The terminal is one of five such facilities operating in the U.S., and the only one in a densely populated area.

Kulisch said the Coast Guard escorts every LNG tanker entering Boston Harbor, and conducts "numerous" harbor security patrols daily, with assistance from local law enforcement agencies. Tanker escorts include a Coast Guard craft on the water, as well as State Police helicopter crews who scan rooftops and docks for potential threats.

"In the Port of Boston, we exceed safety and security requirements, and we lead the nation as a model port for safety and security of LNG tankers," Kulisch said.

Stephen Caldwell, the GAO's head of maritime security, said Thursday that Kulisch's portrayal of the situation in Boston was "generally consistent with what the GAO found."

The report did not publicly identify ports where it found security problems.

Kulisch said authorities are "very well prepared" in case of a terrorist attack targeting a tanker in Boston Harbor, which handled 22 billion gallons of petroleum shipments including LNG and crude oil last year.

Authorities have plans to restore petroleum shipments and minimize disruption to businesses and residents after any attack, she said.

The GAO report to Congress said any attack at Everett during a cold winter could "result in natural gas shortages or price spikes," because of the terminal's importance as the Northeast's only LNG facility, and limited extra capacity for the region's pipelines during cold weather.

LNG is natural gas that has been cooled to minus 260 degrees, so that it becomes a liquid that can be transported in a tanker. Once brought ashore it is warmed so that it again becomes natural gas.

Various government studies have found that fire from a terrorism attack against a tanker carrying LNG could ignite so fiercely it would burn people one mile away.

The LNG safety issue also has generated controversy in Massachusetts because of proposed LNG terminals -- including a pair offshore from Gloucester, and one in Fall River -- to meet rising demand for natural gas. Nationwide, federal regulators have approved construction of at least 11 new facilities, and dozens more have been proposed.

Kulisch said the Coast Guard in Boston is prepared to take on the added responsibilities of ensuring safe tanker shipments off Gloucester when that site goes online. She declined to comment on the proposed terminal off Fall River, which falls outside the boundaries of her office's territory.

The Coast Guard's office for southeastern Massachusetts and Rhode Island has rejected plans for the Fall River terminal, saying tankers would not be able to safely navigate the river leading to the site. The company proposing the terminal has said it will continue to appeal.

LNG: N.Y. terminal plan poses minimal environmental risk -- FERC

2008-01-11T16:35:00.000-06:00

11 January 2008
Environment & Energy News (E&E news)
Katherine Ling

A proposed liquefied natural gas terminal in Long Island Sound poses minimal environmental and safety risks, federal regulators said in a final environmental impact statement released today.

The Broadwater Energy project would be built 9 nautical miles offshore and provide 1 billion cubic feet per day of natural gas to New York City, Long Island and Connecticut. The floating terminal would be anchored to the seafloor and serviced by about 118 LNG carriers a year.

The Federal Environmental Regulatory Commission's report recommends 86 mitigation projects -- such as repairing disturbed seabeds -- that the company should undertake to reduce environmental impacts.

The project is aimed at boosting supplies of natural gas in the New York metropolitan area whose consumption has increased by 100 billion cubic feet over the past 10 years and is expected to grow even more as air quality standards are expected to become increasingly stringent and preclude the use of other energy sources, FERC said in a statement.

Environmentalists and some politicians oppose the project, calling it a target for terrorists and questioning its potential impact on aquatic life, commercial and recreational fishing. The plan calls for establishing a 2-mile zone around the terminal in which boaters would not be allowed.

FERC said the terminal's remote location makes attacks unlikely and also allows boaters to easily avoid it.

"The proposed project would result in fewer environmental impacts than any alternatives considered, and many alternatives could not meet the proposed purpose and need of the project," the FERC statement said.

FERC's report will be used by the Coast Guard and other federal and state agencies as they decide whether the project can proceed. The five-member FERC commission must also vote to authorize the project.

The New York Environmental Conservation Department told Broadwater last month the project had a "significant adverse impact" and gave it a "notice of incomplete application." Other state agencies are expected to decide on the project soon.

Connecticut Sens. Joe Lieberman (I) and Christopher Dodd (D) wrote a letter to FERC last May opposing the project. Lieberman added his disappointment with FERC's decision in a statement today. "I still do not believe a strong case has been made that this terminal could be made safe, environmentally sound, and nondisruptive without costly measures," he said.
Broadwater is hoping to open the terminal by late 2010.

Study doubts ports' security / With imports of volatile LNG likely to rise, GAO fears greater risks

2008-01-10T17:06:00.000-06:00

10 January 2008
Houston Chronicle
David Ivanovich

WASHINGTON - The Coast Guard lacks the resources to meet its own security standards to protect against terrorist assaults at American ports, even as the nation is to dramatically expand imports of liquefied natural gas, the Government Accountability Office has found.

The GAO, in a report made public Wednesday, noted that while U.S. intelligence officials know of no specific threat to American ports, captured terrorist training manuals have cited seaports as potential targets.

And terrorism trainees are instructed to try to obtain surveillance information on ports for use in a possible attack.

However, "despite considerable efforts to protect ports and the energy traffic in them, the level of protection is not where the Coast Guard believes it should be," the report said. "At some ports, Coast Guard units are not meeting their own levels of required security activities."

To date, the nation has experienced no terrorist attacks on tankers or loading facilities in U.S. waters.

In October 2002, terrorists rammed the French tanker Limburg in a suicide attack off the coast of Yemen, killing one crewman, injuring another 17 and causing a spill of about 90,000 barrels of oil.

Ports are inherently vulnerable, the report said, because they are often sprawling facilities, close to major urban centers like Houston, and with access by both land and sea.

Ships are likewise targets, since they travel along known routes, often through waters that do not allow room to maneuver away from potential threats, the report noted.

"We know that terrorists are looking for the weakest link in our security efforts, and this GAO report is a timely reminder that LNG and oil tankers are serious targets," said Rep. Edward Markey, D- Mass., whose district includes an LNG terminal.

At stake, experts say, is not just human life but the U.S. economy.

An attack on a tanker or terminal "could have "significant economic, environmental and public safety consequences, which would result in even higher gasoline and heating oil prices," said House Energy and Commerce Committee Chairman John Dingell, D-Mich.

Safety experts are concerned the terrorism risk will only increase as the U.S. imports more LNG, which the report notes has the potential to catch fire or even explode.

LNG currently accounts for about 3 percent of the nation's natural gas supply, with tiny Trinidad and Tobago accounting for about 70 percent of those shipments.

But the Energy Information Administration estimates LNG will account for 17 percent of the nation's gas supplies by 2015.
Five LNG terminals are currently operating in the United States, and federal regulators have approved construction of 11 onshore and two offshore terminals.

Projects under way

Among the projects already in the works is a facility in Freeport being built by a partnership backed by ConocoPhillips, Dow Chemical, Cheniere Energy and others. The facility is expected to have a capacity of 1.5 billion cubic feet per day.

Others include Exxon Mobil Corp.'s 2 billion-cubic-foot pro- ject near Port Arthur, Cheniere's twin 2.6 billion-cubic-foot projects near Sabine Pass and Corpus Christi, and Sempra Energy's 1.5 billion- cubic-foot project in Cameron, La.

Bill Cooper, executive director of the Center for Liquefied Natural Gas, a Washington-based trade group, noted that the Coast Guard is an integral part of the permitting process when regulators are evaluating proposals to build terminals.

The Coast Guard has to provide assurances that it can provide adequate security for a new facility, Cooper said. And if it cannot, "the project won't go forward."

The worldwide fleet of LNG carriers is expected to reach 400 by 2010, double the 200 in 2006, the report said.

Industry officials point out that the existing fleet of vessels has operated 33,000 voyages without suffering a major spill, the report said.

"LNG shipments have an excellent record for safety," noted Rep. Joe Barton of Ennis, ranking Republican on the House Energy and Commerce Committee, adding: "That's good, and it's also the minimum that we should expect."

Barton says the GAO report lends weight to the argument the U.S. should expand its own domestic energy production.

"Then we won't need to spend billions of taxpayer dollars turning the Coast Guard into a shallow-water navy to shield Middle Eastern fuel from Middle Eastern terrorists," Barton said.

Balancing needs

Among its recommendations, the GAO urged the Department of Homeland Security - which includes the Coast Guard - to develop a national plan to balance the need to meet its new LNG security burdens while also handling all of its existing security responsibilities.

Homeland Security officials, in response, said they concurred with that recommendation, although they noted: "LNG is just one of a number of certain dangerous cargoes that add risk to the maritime environment. ... We recognize the need to plan for new facilities pro- jected to come on line."

The GAO report was first issued in March 2007 but was not publicly released until Wednesday to allow officials to remove security-sensitive information.

Boston offshore LNG port nears clearance to open

2008-01-09T17:22:00.000-06:00

9 January 2008
Reuters
HOUSTON, Jan 9 (Reuters) - The U.S. Coast Guard expects to finish by the end of January preparations for start-up of Excelerate Energy's offshore liquefied natural gas terminal near Boston, a Coast Guard official said Wednesday.

The agency and company were in final negotiations for approval of a security plan and operations manual for the Northeast Gateway LNG terminal, Lt. John Kousch of the Coast Guard said.

"We're very close to coming to agreement," Kousch said. He predicted completion of talks by the end of January.
Construction of the $300 million terminal, twin submergible buoys located in Massachusetts Bay 13 miles south of Gloucester and connected to a pipeline to shore, was finished late last year.

Start-up of Northeast Gateway is key to German utility RWE AG (RWEG.DE: Quote, Profile, Research) buying 50 percent of privately held Excelerate, a source close to the talks said.

Closure of the RWE-Excelerate deal was expected as early as February, but RWE has asked that Northeast Gateway be operational before the sale can close, the source said.

Excelerate has operated a similar offshore LNG terminal in the Gulf of Mexico off Louisiana since 2005.

Suez SA of France has announced plans to build a similar offshore LNG terminal off Boston, with construction starting this year and operations targeted for the end of 2009, Kousch said. (Reporting by Bruce Nichols; Editing by Walter Bagley)

Safety zones established around Northeast Gateway LNG

2008-01-08T17:29:00.000-06:00

8 January 2008
Energy Current

USA: The U.S. Coast Guard is establishing two temporary safety zones 1,640 feet (500 m) around two independent submerged turret loading buoys of Excelerate Energy's Northeast Gateway Deepwater Port in the Atlantic Ocean offshore Massachusetts and its accompanying systems. The temporary safety zones are being established to protect vessels and mariners from the potential safety hazards associated with deepwater port facilities. All vessels, with the exception of deepwater port support vessels, are prohibited from entering into or moving within either of the safety zones. The safety zones, which were announced in the Jan. 8 edition of the Federal Register, will be in place from Jan. 8 until May 7 of this year.

Work has been completed on the Northeast Gateway Energy Bridge liquefied natural gas (LNG) port and the facility will begin offloading tankers as soon as the U.S. Coast Guard issues an operations permit, the Gloucester Daily News reported. It is not yet known when the permit will be issued.

Northeast Gateway will be the first new LNG importation facility to serve the U.S. East Coast in more than 25 years. Excelerate Energy constructed the Northeast Gateway deepwater port 18 miles (29 km) east of Boston. Spectra Energy, formerly Duke Energy, will build the 16-mile (26 km) subsea pipeline from its existing HubLine, which traverses Massachusetts Bay from Beverly to Weymouth, Mass., to the deepwater port site to transfer natural gas from the vessels into New England's gas pipeline network.

East Coast LNG Project Completed, Awaits Operating Permits

2008-01-08T17:24:00.000-06:00

8 January 2008
NGI's Daily Gas Price Index

Construction has been completed on Excelerate Energy's Northeast Gateway deepwater liquefied natural gas (LNG) port off the coast of Massachusetts and the company is awaiting its final operating permits from the U.S. Coast Guard, a spokesman said Monday.

Excelerate Energy expects to "realistically" have all of its operating permits by mid-January, said Edward Scott, vice president of development. He declined to say when LNG shipments would be off-loaded at the facility, explaining that the Houston-based company was in the "middle of fairly sensitive negotiations" with respect to LNG cargo.

The Northeast Gateway facility, located 18 miles east of Boston, was completed in December, becoming the first new LNG terminal built on the East Coast in three decades.

With peak deliveries of up to 800 MMcf/d, Northeast Gateway will be able to deliver about 500 MMcf/d into the New England market during normal operations, or approximately 20% of that market's current annual consumption. The deepwater port will be operated by Skaugen Offshore and will accommodate Excelerate's proprietary Energy Bridge Regasification Vessel fleet.

In early December Algonquin Gas Transmission LLC got the green light to begin operating a 16-mile pipeline lateral connecting the company's New England-area natural gas system to the Northeast Gateway LNG port (see Daily GPI, Dec. 7, 2007). Vaporized gas will flow from the terminal through Algonquin's HubLine pipe facilities in Massachusetts Bay to the Northeast gas market. The pipe facilities have the capacity to deliver up to 800,000 Dth/d of incremental supply.

Contango Announces The Sale Of Its Limited Partnership Interest In Freeport LNG Development, LP For Approximately $68 Million

2008-01-08T17:09:00.000-06:00

8 January 2008
Dow Jones News Service

Contango Oil & Gas Co. (MCF) said Tuesday that it agreed to sell its 10% limited partnership interest in Freeport LNG Development LP to a major Asian utility company for about $68 million.

The Houston natural gas and oil company said it will use the proceeds to prepay the outstanding $20 million term loan from the Royal Bank of Scotland, with the remaining funds available for working capital.

The company said it owns the 10% limited partnership interest in Freeport through its wholly owned unit, Contango Sundance Inc.

The sale is subject to the purchaser's board approval.

Freeport is involved in developing a liquefied natural gas receiving and gasification terminal on Quintana Island, near Freeport, Texas.

Shares of Contango Oil & Gas were up $1.23, or 2.3%, at $55.06 in recent trading.

Russian move on Nigerian gas sector bodes ill for west.

2008-01-07T17:19:00.000-06:00

7 January 2008
Financial Times
Matthew Green and Dino Mahtani

Russia's moves to tap Nigeria's huge energy reserves will send shivers through western governments already concerned about a shortage of global gas supplies.

Gazprom, Russia's state-owned energy giant, has offered to invest billions of dollars in developing the gas sector in Nigeria, where western majors have traditionally put most of their efforts into extracting oil.

Nigeria, Africa's biggest oil exporter, is believed to have some of the largest untapped gas reserves in the world.

Gazprom's move, revealed in Saturday's FT, comes at a time when North American and European governments are increasingly turning to gas imports to meet rising demand as domestic production falls.

Western nations are also particularly keen on securing supplies of liquefied natural gas (LNG) - gas cooled to a liquid so it can be transported by tankers around the globe - to reduce their dependence on vulnerable pipelines.

Demand for LNG is set to reach 16 per cent of global gas demand by 2015, but supply conditions are tightening.

Delays in implementing LNG plants in Egypt, Australia, Indonesia, Russia and Iran could give Nigeria, with its giant gas reserves and accessibility for US and European markets, even more strategic importance.

Gazprom has yet to submit detailed proposals to the Nigerian government for developing its gas industry, but the company says it is willing to help capture gas currently burned as waste during oil production in the Niger Delta.

Nigerian energy officials say Gazprom executives have tabled no specific proposals to build a new LNG plant in Nigeria, which currently has a single LNG export facility.

But Nigerian officials believe that ultimately the Russians will aim to export gas through their own LNG plant, or perhaps via Nigeria's planned TransSahara pipeline.

" Gazprom is talking about co-operating across the whole spectrum of Nigeria's gas industry," said a senior Nigerian energy industry official. "But their ultimate aim is to export gas to the market in Europe and America, and that would presumably be through LNG."

Analysts say Gazprom has also signed an accord to help develop an LNG plant in Nigeria's neighbour, Equatorial Guinea, which might also provide a potential route for exporting Nigeria's gas reserves to the west.

Concerns over cost, security, political risk and the environment as well as problems sourcing raw gas supply have hindered oil multi-nationals in meeting growing LNG demand.

"Because you have a multiplicity of factors it's not that there is a silver bullet out there that could solve these problems," said Frank Harris, an LNG expert at Wood Mackenzie, energy consultants.

Consuming countries had some cause to celebrate late last year, when a group of major companies including Chevron, Total, BP and Eni decided to build an LNG plant in Angola.

But out of 11 LNG projects thought by industry analysts to be ready for an investment decision last year, only two, in Angola and Australia, have come through. Together they should add 10m tonnes per year of production capacity - 80m less than if all 11 projects had been sanctioned.

Three projects in Nigeria are falling behind schedule because of security concerns. Gazprom's offer to generate power in Nigeria from gas also raises questions about how much will be left for export.

"The Russian government wants Gazprom to anchor the expanding relationship between Nigeria and the Russian Federation," a Nigerian oil official said.

"They now have to come down to the detail of what they want to do. We are waiting for them."

Woodside says may have to delay LNG shipments

2008-01-07T17:17:00.000-06:00

7 January 2008
Reuters News

SYDNEY, Jan 8 (Reuters) - Woodside Petroleum Ltd , Australia's second-largest oil and gas producer, said it may have to delay deliveries of liquefied natural gas (LNG) cargoes, after an electrical outage last week halted output at its gas plant.

LNG operations at the Karratha plant in Western Australia restarted on Sunday, after they were halted last Wednesday, and production is being progressively ramped up, Woodside spokeswoman Kirsten Stoney said on Tuesday.

"We are working closely with customers to agree to a revised delivery schedule and minimise any impact. We anticipate there will be a deferral of LNG output as a result of the outage but its too early to determine the exact volume," Stoney said.

The Karratha gas plant is part of the North West Shelf venture, the country's largest LNG project, and provides over 60 percent of the state's gas supply.

Domestic gas production resumed on Friday.

Woodside's Karratha plant produces about 12 million tonnes of LNG each year and delivers about 50 LNG cargoes each quarter to customers in Japan, South Korea and China.

Stoney said the shutdown would not materially affect Woodside's 2008 production forecast.

The Perth-based company in November estimated 2008 production to be between 80-86 million barrels of oil equivalent (boe).

Consider new regasification technology for natural gas transport

2008-01-04T17:33:00.000-06:00

4 January 2008
Hydrocarbon Processing
R. Bryngelson, Excelerate Energy, Houston, Texas

A_s global demand for energy continues to increase, the energy industry is being driven toward finding new solutions to deliver efficient and environmentally responsible fuels. Natural gas (NG) has become the fuel of choice to meet this growing energy need. While NG does provide significant benefits, it is not without its challenges. With the US, UK and other nations experiencing declines in domestic gas production, and developing nations entering the global energy markets with new demands, energy suppliers must find creative solutions to meet changing needs.

This surge in energy demand has resulted in a renewed focus on liquefied natural gas (LNG) as a means to satisfy the global hydrocarbon appetite. For more than 40 years, the point-to-point model of delivering LNG from remote liquefaction plants to onshore regasification terminals in key demand centers has been the de facto solution. Given the cost for these facilities and the dependence of downstream markets on the NG supplies, capital recovery and supply security rely on long-term fixed sales contracts. As a result, the LNG market has not seen the commoditization that other petrochemical products such as crude oil have seen, resulting in reduced flexibility and market inefficiencies.

Wellhead to consumer. In addition, the high cost of entering the LNG business, along with the historic requirement for an integrated supply chain from wellhead to consumer, have resulted in an industry largely dominated by the super majors. This creates significant barriers to entry by market innovators. As with any good monopoly, change is painfully slow. However, as the benefits of new ways of doing business become evident, momentum will build, resulting in sweeping changes.

Consumers are searching for new ways to secure NG supplies and are motivated by requirements not previously achievable with an LNG-based solution. A conventional land-based regasification terminal can take three years to construct. It also requires several years of planning, design and permitting and can cost upward of $1 billion. Clearly, it is not the solution for every situation. Among the requirements NG suppliers must meet are:

-- Satisfying short to intermediate-term NG needs ahead of a significant development, e.g., pipeline construction or prove-up of reserves

-- Meeting demand in markets that see significant seasonal swings in consumption

-- Developing market access in regions where future overall load growth is uncertain, or where there is political or economic instability

-- Allowing delivery into congested, densely populated or environmentally sensitive areas.

Cost, timing (speed to market) and location are the essential driving factors. Meeting increasing energy demands while addressing the needs of consumers means thinking outside the proverbial box. Previously, delivering NG consisted of "point A to point B" transfers of LNG into high-cost facilities on a 20-plus year time frame. Without a doubt, transporting LNG and delivering it in safe, secure, economical and environmentally responsible ways is challenging (Fig. 1). However, by using new technologies and taking an innovative approach, these goals can be achieved while providing markets what they need.

Fig. 1 Increasing demand for NG requires transport by ocean vessels to move supplies to consumer regions.

New regasification approaches. More reliability in LNG transport is being demonstrated through new regasification technologies. New floating LNG regasification technology is specially designed regasification vessels. For example, purpose-built LNG tankers incorporating onboard vaporization equipment provide more flexibility to receiving terminals. The new regasification vessels not only transport LNG to its destination, but also serve as floating terminals to vaporize the LNG and deliver NG gas to downstream markets. These vessels are loaded in the same manner as standard LNG tankers at traditional liquefaction terminals (Fig. 2). However, the new onboard regasification process provides flexibility to discharge LNG in three distinct ways. These are:

-- As a liquid at a conventional receiving terminal

-- As vaporous NG through a deepwater submerged turret load (STL) system with a subsea buoy in the hull of the ship

-- As vaporous NG through a high-pressure gas manifold located forward of the vessel's LNG loading arms.

Fig. 2 New floating regasification technology is constructed onboard LNG vessels and provides more flexibility to receiving terminals as well as to transport ships.

The maximum discharge rate from the LNG vessel to the deepwater port will be determined by a combination of the availability of capacity on downstream pipelines and the onboard regasification capabilities of the facilities.

The technology is fully compliant with or exceeding US and international regulations. This system is a robust solution and can operate in hostile environments and extreme sea states.

Along with this flexibility, LNG vessels with onboard regasification retain the ability to load at a standard liquefaction plant and do not have increased draft, beam or other characteristics that would constrain their operation.

Deepwater transfer methods. One of the latest and most technologically advanced answers to the problems associated with NG gas delivery is an innovative deepwater port regasification system. By using a subsea buoy system, LNG vessels dock well offshore, vaporize the LNG and deliver NG to market through a subsea pipeline—thus, eliminating the need for onshore infrastructure. In this system, the subsea buoy submerges to a depth of 80 to 100 feet (Figs. 3 and 4). The only infrastructure above the water is a small marker tethered to the buoy so that it does not present any navigational obstacle. The subsea buoys are anchored to the seabed by chains, wire rope and suction anchors and serve as the vessel mooring.

Fig. 3 The deepwater regasification system is a subsea buoy that is located offshore.

Fig. 4 The deepwater regasification unit is capable of handling extreme states with high reliability and safety.

The first subsea (submerged) turret loading (STL) unit in an LNG application was designed and constructed for a deepwater LNG port, Gulf Gateway, located 116 miles off the Louisiana coast in the Gulf of Mexico. This project will be followed in January 2008 by the completion of the Northeast Gateway deepwater port installation located 13 miles offshore in Massachusetts Bay (Fig. 5). The STL units can be constructed in roughly one-sixth the time of a conventional land-based LNG terminal and with much less capital investment.

Fig. 5 Installation of the deepwater regasification system 13 mi offshore in the Massachusetts Bay.

In the design of a deepwater port STL, proprietary technology was adapted from the turbulent North Sea. The STL buoys, flexible risers and manifolds are designed to accommodate NG deliveries in the most extreme sea states.

Dockside developments. New developments for dockside installations improve operations and reliability for receiving terminals. Vessels with onboard regasification technology were also the basis for the development of a dockside LNG regasification system. This system uses a new or suitable existing jetty with a high-pressure gas connection to directly offload LNG from the vessel into the onshore NG grid, thus minimizing onshore infrastructure and environmental impacts (Fig. 6). The first dockside unit, Excelerate Energy's Teesside facility (Fig. 7), was placed into service in February 2008. The unit was constructed and placed in-service in one year and at a cost of roughly 10% of a conventional land-based LNG terminal.

Fig. 6 The dockside regasification system uses a high-pressure connection to directly unload LNG vessels.

Fig. 7 Teesside facility uses the dockside regasification system to receive LNG.

New regasification technologies provide different options to receiving terminal operators. New solutions address the issues of cost, timing and location. More important, they can increase operations flexibility.

Northeast Gateway Deepwater Port project. The Northeast Gateway Deepwater Port located in the Massachusetts Bay, 13 miles southeast of the city of Gloucester, Massachusetts, is an example of a well-executed project that was developed and implemented, taking all stakeholder concerns into consideration. The process, from start to finish, has not been without obstacles and challenges that needed to be overcome. However, the key to success was doing the appropriate homework. By fully understanding market needs, issues and concerns, this project will become a safe, reliable and secure part of New England's energy supply portfolio.

Building an offshore LNG importation facility can make sense for a number of reasons. It provides relatively easy access to NG pipeline infrastructure and does so with a minimum impact to the environment. In addition, it eliminates the need for onshore infrastructure and keeps the entire LNG delivery and regasification process well away from population centers and critical infrastructure. To make the project a reality, however, the facts needed to be proven and properly communicated to the various stakeholders and communities involved.

Stakeholder and community outreach. From the outset, the terminal development team realized that, by locating offshore the problems associated with a traditional new land-based LNG facility might be avoided. Still, it was recognized that the project would not be without some controversy. For that reason, education and dissemination of information were among the highest priorities for the project team. More than a year before a single piece of paper was filed, the terminal development team began a series of meetings with regional stakeholders in Boston and on the North Shore of Massachusetts Bay (the closest point of land). These discussions not only included federal and state regulatory agencies, but also commercial fishing groups, city and town governments, business groups and essentially any other group that wanted more information about the project.

During these initial key communication sessions, information was gathered that allowed a decision to be made regarding the location of the Northeast deepwater regasification system. Eventually, a location was selected near the Massachusetts Bay Disposal Site (MBDS)—an ocean dumping area now limited to dredge tailing disposal—to minimize impacts on fishing interests. Given that the MBDS is off-limits to commercial fishermen, siting the project close to it resulted in a minimized impact. This location also had the benefit of being outside of two state marine sanctuaries (the North Shore Ocean Sanctuary and the South Essex Ocean Sanctuary) and one federal marine sanctuary (the Stellwagen Bank National Marine Sanctuary). It also is just north of shipping lanes into Boston, thereby minimizing transit distances of ships across key ocean habitat areas.
Concerns about port security. Following the terrorist attacks of Sept. 11, 2001, many US cities, including Boston, demanded increased security around the delivery of LNG shipments to their ports. In the aftermath of 9-11, the terminal development team realized that a deepwater port would not have the safety and security concerns associated with an onshore facility, while still providing the same energy benefits to the region.

Further facilitating the process was the existence of an offshore pipeline placed into service in Massachusetts Bay in 2005 (the HubLine pipeline). Tying into this pipeline eliminated the need for onshore construction associated with the Northeast port. All construction activities, including the subsea interconnection to HubLine, occurred offshore. The result was a much less costly facility and a construction cycle of about six months.

Project benefits. As part of the project development process, the terminal development team undertook an initiative, independent of any mitigation that might be ordered by regulators, to begin a three-year, $5 million fuel assistance and energy efficiency grant program using area nongovernmental organizations already engaged in such activity. This program commenced with a $1 million donation in 2006 and consecutive $2 million donations in 2008 and 2008.

In addition, the project developer agreed to a $27.5 million mitigation package, which includes $6.3 million to establish the Gloucester Fishing Community Preservation Fund; $1.7 million for impacts to commercial lobstering interests; $5.3 million to increase public access to the Boston Harbor Islands; $3 million for ocean-floor mapping; and additional funds for ocean habitat protection, education and research.

This mitigation package also features a state-of-the-art acoustic whale monitoring and research system that was developed in conjunction with Cornell University Lab of Ornithology, the National Oceanic and Atmospheric Administration, and the Woods Hole Oceanographic Institution. This system will provide five years of acoustic data and life of the port acoustic detection capability in the Port of Boston shipping lanes, allowing for greater detection and avoidance of whales—in particular the North Atlantic Right Whale.

The project developer also agreed to a first-of-its-kind program with the Marine Engineers' Beneficial Association, with the goal of having an aggregate 25% of its port staff and vessel crew calling on the Northeast facility being US citizen mariners by 2012. Prior to this, and independently of any request to do so, Excelerate Energy embarked upon an aggressive cadet training program with the Massachusetts Maritime Academy, the Maine Maritime Academy and Texas A&M Galveston to train their cadets to work aboard existing LNG vessels. This program is designed as a grassroots effort to train crew members early in their careers to meet future needs aboard LNG ships.

Future LNG options. Through new developments for onboard, deepwater and dockside unloading /regasification methods, delivery of NG from upstream reserves to downstream markets can be accomplished more safely and efficiently than through a conventional LNG trade. Using innovations and technological advancement, LNG traders have the means to bring LNG to downstream markets more quickly and economically than ever before. HP

The author
Rob Bryngelsonis president and CEO of Excelerate Energy. He previously served as executive vice president and chief operating officer, where he was responsible for overseeing the company's extensive global operations. A founding member who helped form the company, he began at Excelerate in 2003 as vice president of development and downstream services, overseeing development, permitting and construction of Excelerate's LNG importation projects and related downstream activities. Mr. Bryngelson's extensive experience in global energy markets spans more than 15 years. Prior to joining Excelerate, he was managing director for El Paso Global LNG, responsible for LNG infrastructure development, supply procurement and downstream marketing for North America. In this role, he oversaw the development of several land-based LNG terminals and led the team that developed the Gulf of Mexico Energy Bridge deepwater LNG port project. Mr. Bryngelson holds master's degrees in business administration and mechanical engineering from the University of Texas at Austin. He received a BS degree in aerospace engineering from Texas A&M University.

LNG; ConocoPhilips, Marathon make deal with Alaska to ensure adequate supplies

2008-01-04T17:11:00.000-06:00

4 January 2008
Greenwire
Energy companies ConocoPhilips and Marathon Oil Corp. reached an agreement with Alaska to develop additional natural gas reserves in Cook Inlet, Gov. Sarah Palin (R) said yesterday.

The agreement ensures that there will be adequate supplies of natural gas for years to come. Under it, the state is supporting a two-year extension of the federal export license for the liquid natural gas plant Nikiski, the only LNG export plant in North America, which converts about 150 to 200 million cubic feet of natural gas into LNG per day, all of which is sold to Japan.

The deal also allows third parties to use the plant to process their natural gas, and the two companies have agreed to sell valuable seismic and well data to other companies looking to develop Cook Inlet's large natural gas reserve.

"It assures the gas will be available to consumers when they need it," said Steven B. Hinchman, Marathon's senior vice president for worldwide production.

The Energy Department still must approve the export license, which would be effective through March 2011. The current export license expires in 2009 (Mary Pemberton, Anchorage Daily News, Jan. 3). -- SG

Completed LNG port awaits Coast Guard permits

2008-01-03T17:38:00.000-06:00

3 January 2008
Gloucester Daily Times
Kristen Grieco

Work has been completed on a controversial liquefied natural gas port 13 miles off Gloucester, and the $200-million facility will begin off-loading tankers as soon as the Coast Guard issues an operations permit.

But the Northeast Gateway Energy Bridge port, long opposed by fishing industry advocates and environmentalists, will likely have little direct impact on the city, a company spokesman said.

"I don't believe you'll be able to see anything from shore, except maybe from a position of height on a clear day," said Douglas Pizzi, spokesman for the port's owner, Texas-based Excelerate Energy LLC.

The operations center is located in Salem, where jobs and in-port spending will be concentrated. Crews will be transported back and forth to the site from Salem, not Gloucester.

The port will receive massive tankers filled with liquefied natural gas. When the tankers dock, the liquid will be evaporated and discharged through the buoys into a pipeline that was constructed as part of the project. It will then move into the existing HubLine pipe, which runs underwater from Salem to Quincy.

A spokeswoman for the Coast Guard said yesterday that the official responsible for issuing operations permits was out of the office and she was unable to estimate when the permit may be issued.

The only thing visible above water when ships are not being unloaded will be a mooring buoy the size of a beach ball. A 35-foot high docking facility will rise to the surface upon the arrival of a tanker.

Concerns about the port's impact on fishing led to the company's payment of $23.5 million in mitigation money to North Shore communities, including Gloucester, and $4 million to local charities. Of the mitigation funds, $6.3 million went to establish the Gloucester Fishing Community Preservation Fund, which aims to buy fishing permits from local fishermen who are leaving the industry to keep them in local hands.

Much of the money went to address environmental concerns stirred up by the port proposal, including money for an acoustic system designed to protect right whales; the system uses 10 buoys to relay information about the whales' presence to vessels approaching the terminal.

Located in the popular fishing grounds known as Block 125, the LNG port also raised concerns the fishing industry would be hurt by environmental disruption and a 4-square-mile zone around the port where vessels will be prohibited.
Fishermen have said that the reduction in fishing grounds will further strain their ability to make money. Federal regulations designed to rebuild depleted fisheries limit the number of days fishermen can be at sea. With some of Block 125 off limits, the fishermen will need to travel farther for their catch.

Environmentalists said they were concerned about disruption of the sea bed and its marine life while a 16-mile, 24-inch connection pipe was laid beneath the ocean floor.

Pizzi said the ocean floor will return to its natural state with no significant damage done.

"Obviously, there was a trench dug to put the pipe in, but in terms of overall impacts, everything was within permit specifications," he said.

Environmentalists also said they worried about the effects of using millions of gallons of seawater to heat the supercooled gas, then returning the seawater to the ocean at a higher temperature.

Pizzi said that issue was addressed by switching to a "closed-loop" system that doesn't use seawater to prepare the gas in the tanker to be siphoned into the underwater pipeline.

The operations center for the Northeast Gateway Energy Bridge is located in Salem. That site has 17 employees who will oversee the LNG facility, supervise operations when tankers arrive at the deepwater port and run a vessel that will ferry people back and forth.

Excelerate officials said in July they expect to spend close to $10 million annually to run the gateway, most of it benefiting Salem. They estimated they would expend $1.5 million on payroll and $1.7 million on in-port spending.

Pizzi said Gloucester, like much of the North Shore, could see some stabilization in natural gas prices with the new source so close to home, particularly on peak demand days.

"We're at the end of the pipe," said Pizzi.

When demand for natural gas is high, North Shore communities such as Gloucester get "what's left" after it is tapped on its way from sources in Canada and the Gulf of Mexico and pay a premium. With the closer source providing 400 to 500 million cubic feet of gas per day, or about 18 percent of the region's energy needs, some of that pressure could be eased.

A second LNG port is being constructed within five miles of the Northeast Gateway. That one, owned by Suez Energy North America, will further limit access to Block 125 by fishermen, but will also have more economic impact on the city because Suez will be headquartered in Gloucester.
Suez expects to complete construction of the terminal next year and has signed a 20-year lease for office space at Cruiseport Gloucester.

Company executives have said the port will pump $10 million into the local economy over two decades. Suez will also contribute to the mitigation funds, which will total $47 million from the two companies.

LNG Imports Into US Climb to New Record

2008-01-03T17:36:00.001-06:00

3 January 2008
International Oil Daily
Barbara Shook

LNG imports into the US set a record in 2007 as volumes climbed almost 40% from 2006 levels.

Imports averaged 2.2 billion cubic feet per day, up from 2006's 1.6 Bcf/d, according to figures compiled by investment bank Tudor Pickering Hold.

The averages are a bit deceiving, however, as all of the growth came in the first eight months of the year, especially July and August when imports hit 4 Bcf/d. All five existing US receiving terminals were taking in LNG at near capacity for much of the time.

Starting in September, volumes plummeted as the arbitrage advantage the US enjoyed over Europe in the summer reversed, and Japan started buying cargoes to offset the loss of its largest nuclear power plant following an earthquake. Sellers elicited oil-indexed prices into Japan that sometimes topped $16 per million Btu, more than double the US' $7-$8/MMBtu. South Korea also has reportedly paid $16/MMBtu for a recent cargo.

In December 2007, US imports averaged 1 Bcf/d, about one-quarter of existing terminal capacity, compared to 1.7 Bcf/d in the year-ago month. Utilization rates likely will fall further in 2008 with the completion of at least one Canadian and four US terminals, some of which have no dedicated supply.

First up will be Excelerate Energy's second offshore buoy, Northeast Gateway near Boston. These will be followed by Freeport LNG in Texas and Cheniere Energy's Sabine Pass and Sempra Energy's Cameron LNG, both in Louisiana.

Canaport, a joint venture of Canada's Irving Oil and Spain's Repsol YPF near St. John, New Brunswick, will be the first Canadian LNG import facility.

Collectively, the five terminals have regasification capacity exceeding 6.5 Bcf/d, but committed supplies are minuscule.

French Total has a small volume of Qatari LNG that it will bring into Sabine Pass, and Italy's Eni has 600 million cubic feet per day of capacity at Cameron LNG, though the source has not been identified. Repsol hasn't indicated how it will supply Canaport, aside from its global portfolio. Freeport's capacity is completely committed, 1 Bcf/d by ConocoPhillips and 500 MMcf/d by Dow Chemical, but neither has arranged for supply.

LNG Imports Into US Climb to New Record

2008-01-03T17:36:00.000-06:00

Spectra Energy Projects Increase North American Gas Supplies

2008-01-02T17:38:00.000-06:00

2 January 2008
Gas Processors Report
Frank Nieto

Spectra Energy placed 13 projects totaling approximately $660 million in order to meet demands for the North American 2007-2008 winter heating season. The projects, part of Spectra’s $1 billion expansion capital budget, will expand the company’s North American natural gas transmission system capacity by 1.6 Bcf/d and contribute roughly $75 million in EBITDA.

The company’s U.S. projects are concentrated in the Northeast, where demand for natural gas is increasing by roughly 1.3% a year, and the South.

Spectra’s projects in the Northeast -- the Northeast Gateway Lateral, TIME II and Cape Cod Extension – will supply the region with new volumes from East Coast LNG facilities and Western U.S. basins.

The Northeast Gateway Lateral, 16 miles of sub-sea pipeline off the coast of Massachusetts, will transfer up to 800 Mcf/d of natural gas to New England from Excelerate Energy’s LNG deepwater port.

The TIME II expansion involves replacing 27.8 miles of pipeline, adding four miles of new pipeline looping, building a new compressor station, and adding more compression at an existing station. The project is expected to add 150,000 Cf/d
In the South, Spectra Energy added compression at the Egan Storage facility in order to increase cycling capacity for customers.

The company’s Canadian projects included the TFEP Phase II Project in Southwestern Ontario, which increased the capacity of the Dawn-Trafalgar Pipeline system by approximately 480 Mcf/d. The project is part of a three-year plan to increase existing system capacity by 20%.

Further projects in Canada included the St. Clair Pool, the first storage project providing additional Dawn storage services; and Pine River Phase II, Aitken Creek Crossover, Valhalla Pipeline, West Doe Plant and Peace River Crossing, all of which expanded and upgraded the company’s Western Canadian gas gathering and processing systems.

2007 was a year of progress - and 2008 will be the same

2007-12-24T08:54:00.000-06:00

24 December 2007
Evening Gazette

THE pace of change has accelerated across the Tees Valley in 2007.

Major investment and regeneration have continued at schemes right around the region. And 2008 looks set to be a year of even more development.

The region's process sector is in line for huge investment - with major projects already under construction or in the pipeline.
In 2007 the Evening Gazette launched its Pride In Our Process Industry initiative - as part of the Tees Pride campaign - which will continue in 2008 as the sector develops.

To meet this demand, it's vital for the Tees Valley to plough energy and investment into developing skills and training.

The National Skills Academy for the process industries, which was recently announced for Teesside, will drive forward this ambition in 2008.

We should also see progress being made at the area's key regeneration projects - Middlehaven at Middlesbrough, North Shore at Stockton, Hartlepool's Victoria Harbour, Durham Tees Valley Airport and Darlington's Central Park.

Plus PD Ports' ambitions for a £300m deep sea container terminal will hopefully be given the green light from the Government - making it a year of development on the Tees.

But what about 2007?

Here are some highlights from the last 12 months.

JANUARY

The year got off to a spectacular start with the opening of the Middlesbrough Institute of Modern Art. Mima, which cost more than £14m, put the town on the arts and culture map and was a clear sign of Tees Valley's world-class ambitions when it comes to regeneration.

Indian conglomerate Tata Steel won the battle for Corus, which employs 2,900 on Teesside. Tata's knock-out bid of £6.08-a-share saw off Brazilian rival CSN. The deal, which valued Corus at £6.7bn, is the largest ever overseas takeover by an Indian firm.

It was announced that a new centre to encourage the development of small companies in digital industries was set to be built in Middlesbrough. The centre is a key element of the Digital City initiative, spearheaded by Middlesbrough Council and Teesside University. The digital enterprise centre, which will cost around £8m, will be located in the Boho Zone - the part of Middlesbrough earmarked as an area for creative industries.

FEBRUARY

A deal to bring a huge investment to transform Stockton's North Shore site was signed. Two leading companies - AMEC and Urban Splash - agreed to bring about a development that will include homes, offices, leisure facilities, a hotel, and university facilities. Overall, £300m of public and private sector cash is being invested and around 2,500 jobs could be created on the site, which is a flagship scheme of Tees Valley Regeneration.

Teesport's new £40m Teesside GasPort project was officially opened. And the region's ability to embrace cutting-edge innovation was praised by a Government minister. The site, which is the world's first dockside regasification port, was visited by the then Trade and Industry Secretary Alistair Darling, who also applauded the region's can-do approach to business. Excelerate Energy revealed plans last year to import natural gas supplies direct to Teesside at Teesport. The company has now seen the arrival of the first liquefied natural gas (LNG) cargo on the Tees. Traditionally, LNG ships must deliver their cargo as liquid to onshore terminals, which then convert it to gas.

Stockton-based Aker Kvaerner Engineering Services confirmed a move to new purpose-built premises. It said it would move from its current home on Richardson Road to a new headquarters just a mile away at The Surtees Business Park on Bowesfield Lane in the new year - providing space for around 440 staff.

MARCH

Hundreds of people gathered to learn who had been declared the leading lights in the Tees Valley business community. Beer monitoring equipment firm Brulines of Stockton was crowned Company of the Year at the Tees Valley Business Awards.
And RS Industrial Services, a crane maintenance and repair outfit, scooped two awards - Small Business and Services.
In total 11 accolades were presented at the event, organised by the Evening Gazette and its sister paper, The Journal, on Tyneside.

SembCorp Utilities UK said it was to invest £36m in a heat and power plant project to enhance its supply of utilities at the Wilton International site.

APRIL

PD Ports' plans for a £300m Teesside deep sea container terminal, which could bring 5,500 jobs to the area, were given the green light locally.

Redcar and Cleveland planning committee unanimously gave outline approval to the scheme - which could be up and running in 2009 if given Government approval.

MAY

The stunning shape of things to come on Middlesbrough's Middlehaven site was revealed. Detailed plans for the first two buildings to be constructed in the £200m development by Bio Regional Quintain were unveiled for the first time. Both provided wow-factor designs by architects with worldwide reputations. One of the two buildings is by internationally renowned architect Will Alsop - the man behind the original Middlehaven vision contained in the masterplan. The second building is by award winning architects FAT.

A trio of Tees Valley companies proved to be regional champions as they scooped three of the honours at the North East Business Awards. The best of the area's commercial crop were Citrox, Middlesbrough, R S Industrial Services, Billingham, and 3M UK, of Newton Aycliffe.

Work got underway on a new Teesside green fuel plant. Ensus is developing the £250m bioethanol plant at Wilton.

JUNE

Stockton-based award winning pub equipment company Brulines is investing £3m in new Teesside offices, which will provide space to double its Teesside workforce to 200.

The firm is relocating its head office from Preston Farm Business Park to nearby Surtees Business Park. James Dickson, chief executive, said the move to new 15,400sq ft offices would be made by the end of the year.

JULY

Teesside manufacturer F Jones Cleveland, a marble and granite specialist, neared completion of phase three of a £5.2m investment programme. The firm has invested in a substantial factory expansion, which will see at least 15 jobs created in the next 12 months, adding to its 35-strong workforce. The Riverside Park company increased its floor space by 70% to 50,000sq ft and added an additional office and staff facilities.

Cleveland Potash mine workers celebrated news of a near £2m investment, safeguarding 1,000 jobs and the future of the mine for at least 20 years. The cash will be used to help access untapped resources at Europe's deepest mine at Boulby, near Loftus

A £12m centre, which will put Teesside on the worldwide map, was officially opened.

The National Industrial Biotechnology Facility, at the Centre for Process Innovation at Wilton, will transform the way vital chemicals used to make millions of everyday products are manufactured.

The construction of the new Middlesbrough College at Middlehaven marked a milestone with a topping out ceremony. The building of the £68m campus, which is due to open in September 2008, reached its highest point.

AUGUST

One of the most famous names in British industry fell into foreign hands after Dulux paint maker ICI agreed an £8bn takeover offer from Dutch rival Akzo Nobel. The deal, due to be completed in January, will end more than 80 years of British ownership for ICI which was first founded in 1926 through the merger of four chemical companies.

SEPTEMBER

North-east-based mortgage lender Northern Rock agreed emergency financial funding from the Bank of England. The UK's fifth biggest mortgage lender turned to the Bank as the "lender of last resort" after difficulties raising cash from commercial markets.

OCTOBER

A £2bn black gold bonanza was announced for Teesside. Sonhoe announced plans for a ground-breaking project to process heavy crude oil at Wilton. The project represents the biggest single industry investment on Teesside and will be the first specialist plant of its type in Northern Europe. Hundreds of permanent jobs and thousands of construction jobs will be created.

Able UK was finally given the go-ahead to dismantle the "ghost ships" on Teesside.

NOVEMBER

There was fantastic news for industry and education as it was announced a National Skills Academy for the process industries was to be based on Teesside. The University of Teesside will provide the base for the academy. The £10m organisation aims to deliver up to 8,000 extra NVQ qualifications and train an extra 800-900 apprentices

A £30m development creating 500 jobs was unveiled at the gateway to Middlesbrough's Middlehaven site. Teesside developers Terrace Hill put forward the proposals for the area once earmarked for an Asda superstore. A development of retail, leisure and recreation facilities is planned to revitalise the 16 acre site. The announcement coincided with news of a proposed £7m business village for Stockton at Portrack Lane.

A £50m import centre creating more than 800 jobs was announced for Teesside. Owner PD Ports submitted a planning application for a 1.2 million sq ft regional import centre for a major UK retailer at its Tees Dock site in Redcar.

A £60m wood-burning power station - the first of its kind in the UK - was officially opened on Teesside. SembCorp's biomass power station will save around 200,000 tonnes of carbon dioxide emissions a year compared with a conventional power station - reducing as much greenhouse gas each year as taking 67,000 cars off the road. The power station, based at Wilton, has created 15 permanent jobs and sustained 1,000 during construction.

PD Ports celebrated steel exports from Corus breaking through the two million tonnes barrier for the first time.

The Centre for Process Innovation, (CPI) based at Wilton, designed a ground-breaking environmentally-friendly fuel cell to power a lighthouse. The historic South Gare lighthouse at the mouth of the River Tees leads to one of the busiest ports in the UK and was thought too exposed to use a fuel cell. But CPI has worked with its partners to develop the innovation, which can operate in some of the harshest weather conditions.

James Dickson, chief executive of Brulines, has been named Tees Valley winner at the North East Business Executive of the Year Awards.

DECEMBER

Plans were announced for an eco-village of 2,000 environmentally-friendly homes at Wynyard Park. The project would be in addition to plans announced by Wynyard Park Ltd last month for £450m of investment in three million square feet of office space, designed to anticipate demand at the site over the next 15 to 20 years and creating 10,000 jobs. The £450m plans were given the green light in November.

The Evening Gazette celebrated an investment of almost £2m at its Borough Road offices. Work was completed to transform the original 1930s offices in the heart of the town into a modern state-of-the-art development for the multi-media business.

Spectra Energy Brings Additional Natural Gas Supply to North America New Pipeline and ...

2007-12-20T08:58:00.000-06:00

... Storage Projects Enhance Energy Security and Reliability in Time for Winter Heating Season.

20 December 2007
PRNewswire (PRESS RELEASE)

Picked up by: Fox Business News, CNNMoney.com and Earthtimes

HOUSTON, Dec. 20 /PRNewswire-FirstCall/ -- As part of the more than $1 billion in expansion capital expected to be invested in 2007, Spectra Energy placed into service 13 projects in time to meet the demands of the 2007-2008 winter heating season. Representing an investment of approximately $660 million, the projects:

-- Expanded the capacity of Spectra Energy's North American natural gas transmission system by 1.6 billion cubic feet per day - enough energy to heat approximately 16,000 homes for one year; and

-- Will contribute earnings before interest and taxes (EBIT) of approximately $75 million for 2008 of which about $50 million will be incremental to 2007's EBIT contribution.

"We continue to execute on our plan to invest more than $3 billion in critical natural gas infrastructure through 2009," said Martha Wyrsch, president and CEO of Spectra Energy Transmission. "This significant investment will provide suppliers access to high value markets helping to ensure greater supply reliability and security across North America."

2007 U.S. Projects

Three projects placed into service this year will deliver substantial volumes of natural gas to the Northeast United States, where demand is rising by about 1.3 percent annually.

The Northeast Gateway Lateral, TIME II and Cape Cod Extension projects are part of Spectra Energy's ongoing strategy to connect the Northeast markets with new volumes from East Coast liquefied natural gas (LNG) facilities and Western U.S. basins, helping to increase supply diversity and competition in the region.

The largest of the three - the Northeast Gateway Lateral - is capable of transporting to the New England market up to approximately 800 million cubic feet a day (MMcf/d) of natural gas. Northeast Gateway, 16 miles of sub-sea pipeline off the coast of Massachusetts, will deliver natural gas sourced from Excelerate Energy's LNG deepwater port.

In the South, recognizing the critical role that natural gas storage is playing in North America's energy picture, Spectra Energy installed additional compression at the Egan Storage facility to increase cycling capacity for customers and enhanced its Moss Bluff Storage facility.

2007 Canadian Projects

Spectra Energy's Canadian focus has been on growing its operations through optimization of existing assets and customer-driven expansions.

Spectra Energy's Union Gas business expanded its infrastructure in Ontario with the St. Clair Energy Centre Pipeline and the TFEP Phase II Project. The TFEP Phase II Project in Southwestern Ontario boosts the capacity of the Dawn- Trafalgar Pipeline system by approximately 480 MMcf/d. This project is part of a three year expansion effort to increase existing system capacity by 20 percent.

In addition, MHP Canada has completed development of the St. Clair Pool, its first storage project providing additional Dawn storage services.

In Western Canada, several projects were put into service to expand and upgrade the gas gathering and processing systems. These projects include Pine River Phase II, Aitken Creek Crossover, Valhalla Pipeline, West Doe Plant and Peace River Crossing.

"As evidenced by the breadth of these projects, our systems are continually expanded to accommodate the needs of the markets we serve," Wyrsch said. "The investments planned for the next several years will further enhance our ability to respond to the markets' needs."

Spectra Energy Corp is one of North America's premier natural gas infrastructure companies serving three key links in the natural gas value chain: gathering and processing, transmission and storage and distribution. For close to a century, Spectra Energy and its predecessor companies have developed critically important pipelines and related energy infrastructure connecting natural gas supply sources to premium markets. Based in Houston, Texas, the company operates in the United States and Canada approximately 17,500 miles of transmission pipeline, 265 billion cubic feet of storage, natural gas gathering and processing, natural gas liquids operations and local distribution assets. Spectra Energy Corp also has a 50 percent ownership in DCP Midstream, one of the largest natural gas gatherers and processors in the United States. Visit www.spectraenergy.com for more information.

Green light for Dutch Gate LNG terminal; Eemshaven also advances

2007-12-18T09:07:00.000-06:00

18 December 2007
European Spot Gas Markets

Gasunie and Royal Vopak have taken a Final Investment Decision (FID) to proceed with the EUR 800 million Gate LNG import terminal in the Dutch port of Rotterdam. The pair have been joined by Danish energy company Dong Energy, the Netherlands’ Essent Trading and Austria’s OMV, which have each acquired a minority equity stake of 5% in the facility.

At the same time, Essent, Gasunie and Vopak announced they have joined up to promote the Eemshaven LNG import terminal, also in the Netherlands. Not content with just taking a 5% to possibly 7.5% stake in Gate, Essent has also taken over ConocoPhillips’ share of the Eemshaven proposal, and convinced Gasunie and Vopak to each take a 25% stake, while Essent keeps a 50% share.

The Gate terminal will be built with send-out capacity of 9 billion cubic metres/year (Gm3/y) of natural gas, equivalent to 6.4 million tonnes per annum of LNG. But none of the partners has an LNG Sale and Purchase Agreement or equity LNG, so it remains to be seen where supplies will come from. At a recent LNG conference in Rome, delegates were warned that few European terminals were unlikely to run at higher than 30% capacity for the foreseeable future, making the economics of investment in terminals harder to justify.

Dong, EconGas (a consortium of Austrian gas buyers, including OMV) and Essent were also named as the first customers to have signed long-term throughput agreements with the Gate terminal. Each has committed to an annual throughput of 3 Gm3/y.

A few weeks ago, Piet Kager, business development manager at Gasunie, admitted Gate’s potential long-term capacity holders had experienced difficulties in signing long-term LNG supply contracts, and that had delayed the FID being taken on Gate.

Three previous Heads of Agreement (HOA) for capacity at the terminal have fallen by the wayside. Shell was to take 4 Gm3/y of throughput capacity, while RWE and France’s EDF had signed HOAs for 3 Gm3/y each. Both RWE and EDF had said they would take a 10% equity stake in the terminal, but none of those agreements was referred to in Gasunie and Vopak’s announcements.

An EDF source confirmed the company had decided not to progress its HOA, due to a general lack of LNG supply, and because the company is progressing its own, 100%-owned facility at Dunkirk. An RWE spokesman confirmed that RWE “would not join this project at this time”. He said the company – which recently announced talks to take a stake in US LNG shipper Excelerate Energy – was checking the economic rationale behind investments in European import terminals.

However, the companies involved are bullish. John Paul Broeders, chairman of Vopak, and Marcel Kramer, chairman of Gasunie, said in a joint statement: “The fact that our launching customers – Dong Energy, EconGas and Essent – have signed throughput agreements with us proves that the anticipated interest in the market for this state-of-the-art LNG terminal is there.”

Meanwhile, Essent’s director of business development, Gerard Uytdewilligen, said Gasunie and Vopak were “natural partners” for Essent in the development of the LNG terminal at Eemshaven, due to their “knowledge, power and market position”.
“The combination of Eemshaven and Gate helps Essent give a strong signal as to how seriously we take LNG as an alternative and supplement to natural gas. The producers of LNG will certainly understand this,” he added. The LNG terminal at Eemshaven is expected to have annual capacity of 12 Gm3. HW

ExxonMobil Plans $1B-Plus LNG Terminal Offshore NY/NJ

2007-12-17T09:11:00.000-06:00

17 December 2007
Natural Gas Intelligence

With liquefied natural gas (LNG) project proposals often running into onshore siting controversies, ExxonMobil Corp. last week unveiled plans for a $1 billion-plus floating LNG receiving terminal that it believes will create a gateway to global supplies of natural gas to help meet the growing energy needs of New Jersey and New York.

The BlueOcean Energy project will have the capacity to supply about 1.2 Bcf/d, enough to meet the needs of more than five million residential consumers. The company said BlueOcean Energy is at the start of a lengthy and rigorous permitting process involving state and federal agencies, as well as the general public.

To be anchored approximately 20 miles off the coast of New Jersey and 30 miles off the coast of Long Island, the facility will be far from shore and away from shipping lanes, ports and recreational areas.

"We believe that BlueOcean Energy is a unique and innovative solution to meeting the region's energy challenges," said Ron P. Billings, vice president, Global LNG, at ExxonMobil Gas & Power Marketing Co. "BlueOcean Energy will provide significant economic benefits to New Jersey and New York and will help the region achieve its environmental objectives."

Much like other LNG developers over the past five years (see NGI, Nov. 13, 2006; Aug. 28, 2006; March 27, 2006), ExxonMobil has run into siting roadblocks regarding onshore terminals outside of the industrial Gulf of Mexico ports in Louisiana and Texas. In late 2003, the proposed siting of an ExxonMobil Corp. LNG terminal just south of the city limits of Mobile, AL, stirred controversy and intense local opposition over safety and security hazards (see NGI, Dec. 15, 2003). Almost a year later, the company scuttled that project (see NGI, Nov. 1, 2004). Other onshore LNG proposals on both the East and West coasts have met with strong opposition.

On the other hand, both offshore LNG receiving terminals backed by Excelerate Energy -- Northeast Gateway located in the Massachusetts Bay east of Boston, and Gulf Gateway located offshore Louisiana in the Gulf of Mexico -- are either already operational (Gulf Gateway) or are soon to be (Northeast Gateway) (see NGI, May 21; April 11, 2005). Both of those terminals are smaller than the one planned by ExxonMobil, each capable of about half the delivery capacity of BlueOcean.

ExxonMobil said its BlueOcean Energy terminal can improve reliability while helping to reduce swings in natural gas prices and fuel future growth. The Rutgers University Bloustein School of Planning and Public Policy studied the economic effects of these benefits to the State of New Jersey. Rutgers' detailed report, to be issued shortly, concludes that "the proposed LNG terminal could have significant positive benefits for the New Jersey economy."

The company noted that the project will help the region in obtaining secure, safe and competitively priced energy, economic growth and development and environmental protection -- in alignment with goals of the New Jersey Energy Master Plan. It added that safety and security will be paramount. BlueOcean Energy commissioned former New Jersey Attorney General John Farmer, a noted security expert and senior counsel to the 911 Commission, to conduct a safety and security assessment of the facility.

"BlueOcean Energy is developing a sound plan for a safe and secure facility," Farmer said.

The BlueOcean Energy floating terminal is designed to receive LNG supplies from double-hulled LNG ships about twice a week, and store the LNG in insulated tanks inside the terminal's double hull. The stored LNG will then be warmed to turn it back into natural gas for delivery to New Jersey and New York markets through a new subsea pipeline that will connect to new and existing onshore pipelines.

ExxonMobil noted that the facility, which will not be visible from the New Jersey shoreline, will be moored in about 150 feet of water and be positioned outside of shipping lanes and away from port traffic. No route has been selected for the construction of a subsea pipeline to connect the ocean terminal to natural gas distribution pipelines onshore, though the company said its initial focus for a shore crossing is in New Jersey's Raritan Bay.

"Public consultation is a cornerstone of the permitting process, and we are committed to discussing the project with communities and other stakeholders," Billings said. "We look forward to working closely with state and federal officials, as well as with the U.S. Maritime Administration and the U.S. Coast Guard, the agencies responsible for the review of the terminal plans under the Deepwater Port Act."

In addition to BlueOcean Energy, ExxonMobil is involved in three other terminal projects. Receiving terminals are under construction near Sabine Pass, TX (see NGI, Aug. 28, 2006); in Wales in the United Kingdom; and offshore Italy in the Adriatic Sea. With several years required for permitting, engineering and construction, ExxonMobil said it expects BlueOcean Energy to begin service around the middle of the next decade.

German RWE named as buyer of Excelerate Energy

2007-12-17T09:09:00.000-06:00

17 December 2007
International Gas Report

German gas and power distributor RWE is buying 50% of Excelerate Energy, the US company that has pioneered on-board regasification technology, sources told Platts December 6.

While there have been many rumors that Excelerate has been for sale for at least two years, primarily because of its inability to secure long-term supplies, sources think there is good reason to believe that RWE would follow through on such a deal. Excelerate officials have previously denied that the company is for sale.

RWE already has a number of business relationships with Excelerate. It has a deal to take any regasified LNG delivered to Excelerate's terminal in Teesside, UK. The two companies also have an agreement to use Excelerate technology to develop terminals in Europe, including the proposed 600,000 cubic meter/hr Wilhelmshaven GasPort terminal in Wilhelmshaven, Germany, scheduled to come on line in late 2010.

RWE also has had a strong desire to enter the LNG business to grow its power and gas businesses in the increasingly deregulated European market.

In addition to its proposed projects with Excelerate, RWE has a 16.69% stake in the proposed Adria LNG terminal in Croatia that would serve central and eastern Europe and has entered into a preliminary agreement for a 10% stake in the proposed Dutch Gate terminal in Rotterdam, where RWE has committed to a long-term purchase of 3 Bcm/year of regasification capacity.

Through its partnership with Belgian shipping company Exmar, Excelerate has ownership interest in three existing onboard regasification vessels and five such vessels on order, as well as a charter interest in an existing standard LNG carrier.
In addition, Excelerate owns the Gulf Gateway terminal 116 miles offshore the US state of Louisiana that opened in 2005, the Teesside terminal that opened last year and the Northeast Gateway scheduled to open offshore Boston, Massachusetts, next month. The regasification capacity of each terminal is determined by the regasification capacity of the vessels.

The existing vessels have capacity of 400 million cubic feet/day each, with peak capacity of about 750 million cu ft/d. The vessels on order would have higher capacity. Excelerate is owned by Oklahoma billionaire oilman and financier George Kaiser.
While Excelerate has been rumored to be for sale for at least two years, talk of a sale picked up in August when Kathleen Eisbrenner left her job as CEO and president of the company to take a job in The Hague, Netherlands, as executive vice president of Shell's global LNG business.

Excelerate has had limited success buying LNG. Even for a billionaire, it is difficult to finance a long-term LNG supply contract that would cost billions of dollars. As a result, Excelerate has had to rely on buying spot cargoes occasionally or hiring out its ships to deliver cargoes owned by other companies.

Although Excelerate has reportedly made good money when it bought cargoes, many suspect that it has been losing money. When its ships are inactive, it must still pay significant operating costs for crews and maintenance.

RWE eyes Excelerate

2007-12-14T09:16:00.000-06:00

14 December 2007
Tradewinds
Lucy Hine London

German utility RWE is rumoured to be offering between $500m and $600m for a 50% stake in US onboard regasification specialist Excelerate Energy and is expected to conclude its negotiations before the end of the year.

Talk of an impending deal between the two companies was rife among delegates at CWC's LNG Summit in Rome last week. RWE later confirmed the two companies were in discussions.

Sources who know Excelerate well say banks value the company, which has been touted for sale for over a year, at around $1.6bn.

They comment that a buy would be "a huge risk" for RWE, which is banking on securing product that is not deliverable for several years.

However, they add that it would give the German company options, including access to the US and UK markets through Excelerate's terminals there and add that the amount of cash is not a huge outlay for RWE.

Excelerate, which is backed by US billionaire George Kaiser, already has a relationship with RWE. Last year the two companies teamed up under a deal that would see RWE market all the gas that Excelerate shipped into the UK via its Teesside GasPort import facility in Teesside. It was officially opened in February but the plant has yet to receive a commercial cargo.

Earlier this year RWE and compatriot Nord-West Oelleitung hooked up with Excelerate to develop a quick-start LNG-import facility at Wilhelmshaven in northern Germany for 2010 start-up.

RWE has a stake in a planned LNG terminal in Croatia and an agreement in place to take a share in Vopak's Gate LNG terminal.

Excelerate, which works closely with Belgian shipowner Exmar, operates a fleet of eight specially built LNG regasification vessels (LNGRVs) and one conventional LNG carrier. Five of the LNGRVs are due to be delivered from Daewoo Shipbuilding & Marine Engineering from March through to 2010.

The company, whose former president, Kathleen Eisbrenner, left to join Shell in August, also owns and operates the Gulf Gateway offshore port in the US Gulf and is due to open a similar facility dubbed Northeast Gateway off the coast of Boston this month.

RWE may buy Excelerate stake by Feb -source

2007-12-13T09:32:00.000-06:00

13 December 2007
Reuters News
Bruce Nichols and Peter Dinkloh

HOUSTON/BERLIN, Dec 13 (Reuters) - Germany's RWE AG , Europe's third-largest utility, may clinch a deal to buy a stake in U.S. gas-transport company Excelerate Energy by February, a person involved in the negotiations told Reuters.

One of the pending conditions is that Excelerate needs to demonstrate that its Northeast Gateway terminal, a facility to feed gas from ships into the U.S. grid, works, said the person, who declined to be identified.

The contracts for the deal to buy a 50 percent stake in the company, based near Houston, will most likely be finalized before the end of this year, the person said.

A spokeswoman for RWE said both the utility's management and supervisory board would have to agree to any potential acquisition, declining to give more details.

Both companies confirmed last week that they were in negotiations, without giving the value of any potential deal. Excelerate does not release financial figures on its website.

RWE and Excelerate, owned by U.S. banker-oilman George Kaiser, are already building Germany's first point to feed regasified liquid-natural gas into the German grid in the port of Wilhelmshaven in northern Germany.

The U.S. company operates ships for liquefied natural gas and owns regasification terminals in Britain and offshore Louisiana in the United States. It is preparing to open the Northeast Gateway deepwater Port near Boston, Massachusetts.

The company has been rumored to be for sale for more than a year, according to people familiar with the industry.
Liquefied natural gas -- or LNG -- is natural gas cooled to about minus 160 degrees Celsius (minus 260 degrees Fahrenheit), reducing the volume of the fuel six hundred times.

This makes it viable to transport LNG in large quantities on special ships without the need for pipelines, opening the possibility to transport the fuel to destinations which have no direct link with the source country.

LNG is currently the only way to transport gas from countries such as Iran or Nigeria to the European Union.
Countries in the 27-nation EU bloc are seeking access to fuel from those countries to become less dependent on the few current suppliers, including Russia and Norway.

RWE, with its competitors, is considering building another LNG terminal on the Croatian island of Krk. E.ON , the world's largest utility by sales, is also looking into building one in Wilhelmshaven.

Corporate News: Exxon plans LNG terminal off U.S. East Coast

2007-12-13T09:25:00.000-06:00

13 December 2007
The Wall Street Journal
Russell Gold

Excelerate Energy LLC expects to complete construction of a liquefied natural gas terminal off the Massachusetts coast later this month. It will be the first new LNG terminal built on the East Coast in three decades. An article Thursday incorrectly said a proposed Exxon Mobil Corp. terminal would be the first new terminal.

(END)

In an effort to bring international supplies to the energy-hungry U.S. Northeast, Exxon Mobil Corp. plans to spend $1 billion to build a floating natural-gas terminal 32 kilometers off the New Jersey coast.

The terminal would be the first East Coast terminal to handle liquefied natural gas, or LNG, built in three decades. Expectations of rising demand have led to several attempts but brought opposition from local officials and environmental groups. LNG doesn't raise the same pollution concerns as crude oil, but some critics have said the terminals raise safety concerns and can still be environmentally disruptive.

The Irving, Texas, company said it would build the terminal far enough from shore to ease safety and security concerns. The LNG would be taken off the tankers and stored in its freezing, liquid form in tanks on the floating terminal. Then it would be reheated, returned to its gaseous state, and sent into a pipeline to shore. It would deliver about 1.2 billion cubic feet a day, enough for five million residential consumers.

Natural gas -- a major fuel for electricity and home heating as well as a raw material for everything from plastics to fertilizer -- is generally transported by pipeline. When chilled to 162 degrees below zero Celsius, it turns into a liquid that can be shipped overseas in tankers like oil. That has led to a small but expanding market for overseas gas trading, letting industrialized nations use more than nearby fields provide.

In the past few years, several LNG terminals along the U.S. Gulf Coast and in Europe have been approved and built. Exxon has built, or is in the process of building, LNG terminals in Texas, in Wales in the U.K. and in Italy.

Along the U.S. East and West Coasts, fears the equipment could become a terrorist target or pose a hazard have prevailed, and several other LNG-terminal proposals have languished. The U.S. Coast Guard, for instance, has rejected plans to build a terminal in Fall River, Massachusetts, because the river approach was deemed unsafe for large tankers. California Gov. Arnold Schwarzenegger vetoed a proposal to build one 22.5 kilometers off the coast of Oxnard, California.

Ron Billings, Exxon's vice president of Global LNG, said the company's terminal will survive scrutiny. "It all starts with this facility being 20 miles off the coast, which we feel gives it a minimal footprint in the environmental, safety and security aspects," he said.

Still, environmental opposition is likely. Cindy Zipf, executive director of Clean Ocean Action in Sandy Hook, New Jersey, said she expects to fight the terminal. "We've worked long and hard to improve the ocean's quality and health, and now there's industrial sprawl into the ocean," she said.

Exxon could face opposition on safety grounds as well. The company said there have been 40,000 LNG tanker voyages without a tanker rupture. But in 2004, an explosion at an Algerian liquefaction facility killed more than two dozen people.

Buoys catch whales on tape Researchers seek clues to mammals' behavior

2007-12-12T09:34:00.000-06:00

12 December 2007
Bangor Daily News
Bill Trotter

BAR HARBOR - Not long ago, members of Allied Whale would make summertime trips 20 miles out to sea to drop an underwater microphone over the side of a boat, then spend hours listening to whatever sounds the device picked up.
The idea was to listen for whales and to see whether the noises they made revealed anything about their behavior as they swam through the Gulf of Maine. The researchers might not have heard much, but they believed the accumulated recordings would prove worth the effort to get up early, spend the day out on the water, and then spend hours back on land listening to whatever underwater chirps and burbles may have been caught on tape.

But for the past two summers, the group has been making trips out toward Mount Desert Rock with a slightly different mission in mind. This fall, they tracked down the offshore coordinates of a previous trip, pushed a button on a remote-control device they had brought with them, and waited.

After a couple of minutes, something they were looking for broke the water's surface nearby. It wasn't a whale, however, or even another marine animal. It was an underwater recording device they had deployed months earlier and were picking up to take back to land.

Allied Whale, affiliated with College of the Atlantic, deployed two of these so-called "pop-up" buoys below the waves in 2006 and six this past summer. By leaving the self-contained recording units out at sea for months, researchers can record much more data - and in all sorts of conditions - than they could while trying to do it from a boat.

"[The buoys] are doing it constantly. They are recording at night and in bad weather," Sean Todd, senior scientist at Allied Whale, said recently of the buoy system. "In theory, we could have a buoy out there all winter. No one wants to go 20 miles out to sea in winter."

Bioacoustic equipment

The buoys were developed by scientists at Cornell University's bioacoustics research program. Each buoy consists of an external underwater microphone called a hydrophone that is hard-wired through a waterproof connection to recording equipment sealed inside the buoy. Housed inside a 17-inch-diameter glass sphere are acoustic communications circuitry, a hard drive for data storage and batteries, according to a description on the Cornell program's Web site.

Besides powering the recording equipment, the batteries also electrify a stainless steel wire that attaches each buoy to an anchor of burlap sacks filled with pea gravel. After researchers activate a remote signal from the surface, the batteries charge the wire, which corrodes from the electrical current and then breaks within five minutes. Each buoy can be programmed to surface at a certain time and has a fail-safe mechanism that burns the wire so it can resurface before the batteries run out of power. Each buoy has strobe lights and VHF beacon transmitters that are activated at the surface to help scientists track them down.

They are built to go as deep as three miles below the ocean surface, but according to Todd the ones used by Allied Whale come to rest about 300 to 400 feet down. This year, the college deployed two groups of three buoys each in the Gulf of Maine, one trio just north of Mount Desert Rock, about 20 nautical miles south of Mount Desert Island, and the other along Inner Schoodic Ridge, an underwater formation a few miles to the northeast.

"They are pretty robust things," Todd said of the buoys. "The Maine seafloor is quite rocky and craggy."

By sinking the devices to a few feet off the bottom, scientists can minimize interference from the ocean surface, which tends to be more noisy and where sound tends to propagate more than at lower depths, Todd said. To maximize the buoys' range, researchers try to set them so they have good horizontal exposure to one another and to the surrounding water.

Each of the buoys has a recording range of up to about five miles, he said. The buoys in each trio are laid out five miles apart in a triangular pattern. They do not record nonstop but instead turn themselves on and off periodically to conserve battery power.

Having multiple buoys at each site helps in many ways, according to Todd. It helps provide redundancy in case one of the buoys fails, and by comparing the strength of a recorded sound among the three buoys in each triangular array, researchers can determine where the source was when the sound was made.

"We want to know where the whales are," Todd said. "Eventually, we're hoping these buoys will indicate what kind of distribution of right whales is out there."

'An ambitious program'

The location of whales in the Gulf of Maine, especially of endangered right whales, has become a hot topic lately as federal regulators have imposed restrictions on where lobster fishing gear can be deployed. Whale advocates say underwater arcs of rope on lobster traps pose a hazard to diving whales, but fishermen argue that whales don't swim in the near-shore waters where most fishermen set their traps.

Allied Whale researchers have not yet triangulated the sounds they captured, however, because one buoy from each trio has yet to be recovered, according to Todd. One seems to be hung up on an underwater ledge and the other may have surfaced prematurely and floated away, he said. Researchers have printed contact information on each of the buoys and will pay a finder's fee to anyone who returns a missing unit.

The recovered buoys have been sent back to Cornell University, where the audio is extracted and then returned to Allied Whale. Researchers at Cornell will keep the buoys for the winter and then bring them back to COA for deployment in the spring.

Chris Tremblay, a COA graduate who now works in Cornell's bioacoustics lab, said recently that the recording buoys were first developed about 10 years ago. With the growth of the global economy and of marine shipping traffic, he said, the program has expanded so that more than 100 buoys are now being used for a variety of academic and applied technical projects in the Pacific and Atlantic oceans.

For example, pop-up buoys are being used to determine the frequency and behavior of marine species off Gloucester, Mass., where Excelerate Energy is hoping to construct an offshore LNG importation terminal, according to Tremblay.

"Their application is pretty varied," he said. "We are starting to get in the realm of fisheries management type of stuff."
Still, the study of marine mammal acoustics is considered a "new thing," he said. Tremblay gave credit to Allied Whale for being committed to the program and for being in the forefront of institutions looking to learn more with pop-up technology.

"It's an ambitious program," Tremblay said. "It's not cheap for a small organization to do."

Discoveries

Though only in its second year, the program already has helped Allied Whale researchers make some interesting discoveries, according to Todd.

Kaitlin Palmer, an undergraduate student at COA, found that most whales were recorded vocalizing at night and that one humpback whale in the area even "sang" - a phenomenon thought to happen only when they breed at their wintering grounds in the Caribbean.

Palmer received a NASA fellowship to continue her research through this past summer. She is expected to present data from the program later this month at a Society for Marine Mammalogy conference in Cape Town, South Africa.

In an e-mail, Palmer indicated she has cataloged 12 types of sounds made by humpback whales around the buoy sites. She said little is known about the sounds humpbacks make when away from their breeding grounds.

"August 2007 I spent on Mount Desert Rock observing humpback whales in hopes that when we get the pop-up data back I will be able to compare my behavioral observations to the acoustic recordings, thereby correlating specific sounds to known activities (feeding, breaching, traveling etc.)," Palmer indicated. "Even the simplest call is really quite amazing. When you listen to the recordings it seems that out of nowhere comes this eerie voice that cuts through the relative silence."

The buoy program has helped Julien Delarue, a COA graduate student from France, study whether there is any difference between the vocalizations of whales found in the Gulf of Maine and those found in the Gulf of St. Lawrence. If there is, it could prove that whales in the two water bodies belong to two distinct populations, according to Todd.

"He's looking for the equivalent of a dialect," Todd said. "The students have more than proven themselves [with their research]."

Allied Whale has decided to concentrate on whale research at Inner Schoodic Ridge and at Mount Desert Rock, and the pop-up buoy program is just one component of that, Todd said. The group also conducts sight surveys for whales during the summer and is trying to determine the concentrations in the two areas of whale food such as herring and krill.

Meanwhile, researchers are extracting the data from the devices and beginning to go through this year's audio looking for interesting patterns or events. A computer program that speeds up the playback time helps shorten the process, but it still is likely to take months to go through it all.

"We're just starting to look at the data now," Todd said. "It's extremely labor-intensive."

RWE to conclude talks on Excelerate stake buy by Christmas - report

2007-12-10T09:39:00.000-06:00

10 December 2007
AFX International Focus (Thomson Financial)

Picked up by: Forbes.com and ABCMoney.com (UK)

FRANKFURT - RWE AG and Excelerate Energy plan to conclude their negotiations on a stake buy in Excelerate by Christmas, Financial Times Deutschland reported, without citing any sources.

RWE last week confirmed it is negotiating with Excelerate Energy to buy a stake in the company, which has developed gas ships that re-gasify Liquefied Natural Gas (LNG) on board.

According to Platts, an energy and metals information provider, RWE is seeking to acquire a 50 pct stake in Excelerate.

RWE already markets Excelerate's natural gas landed at an import facility in Teesside, UK.

The two companies also plan to cooperate on a planned LNG facility in Wilhelmshaven, Germany.

RWE reportedly seeking 50 % stake in Excelerate Energy

2007-12-10T09:38:00.000-06:00

10th December 2007
Energy Business Review (online)

German utility RWE is hoping to acquire a stake in US-based LNG importer Excelerate Energy, according to Thomson Financial, citing a company spokeswoman.

Although Thomson Financial cited the insider as refusing to reveal the size of the stake that the company is hoping to secure, the publication said that according to Platts, RWE is looking to purchase 50% of Excelerate.

Excelerate is an attractive target for firms involved in LNG activities because of its specialized vessels that can re-gasify LNG onboard, eliminating the need for expensive LNG terminal infrastructure.

If the deal were to be finalized, it would add to the parties' existing collaborations. Thomson Financial reported that the companies are planning to establish an LNG facility in Wilhelmshaven, Germany. In addition, RWE currently markets Excelerate's gas in the UK.

Algonquin's Northeast Gateway Lateral Cleared to Begin Operation

2007-12-10T09:37:00.000-06:00

10 December 2007
Natural Gas Intelligence

Algonquin Gas Transmission LLC received authorization from FERC last week to begin service on its 16-mile pipeline connecting the company's New England-area natural gas pipeline system to Excelerate Energy's Northeast Gateway deepwater liquefied natural gas (LNG) port.

Excelerate has said it expects the port to begin operation this month (see NGI, Oct. 22; May 28); however, no one at the Houston-based company responded to a request for comment last week. Meanwhile, Reuters reported last Thursday that a source at Excelerate confirmed "exclusive conversations with [German utility] RWE" about a possible sale. Rumors of a possible sale of Excelerate have circulated in the industry for some time.

"In granting this approval we note that rehabilitation and restoration of the seafloor and other areas affected by the project are proceeding satisfactorily and in compliance with the terms of the Order, as observed during staff inspections and as reflected in the progress reports Algonquin has submitted on a weekly basis...," wrote Richard Hoffmann, director of the Federal Energy Regulatory Commission's (FERC) division of gas-environment and engineering, in a letter to Algonquin.

Algonquin's 24-inch diameter lateral connects its existing HubLine pipe in Massachusetts Bay to the LNG facility, 13 miles off the coast. The pipeline has capacity to deliver up to 800,000 Dth/d of incremental supply to the Northeast market.

FERC granted a certificate for the lateral in March (see NGI, March 19), about one month after the U.S. Maritime Administration issued a deepwater port license to Excelerate for the port, the first of its kind in the Northeast, according to the company (see NGI, Feb. 12).

Excelerate has said the port will be operated by Skaugen Offshore and will accommodate Excelerate's proprietary Energy Bridge Regasification Vessel fleet operated by Exmar NV. With peak deliveries of up to 800 MMcf/d, Northeast Gateway will be able to deliver about 500 MMcf/d into the New England market during normal operations, or approximately 20% of that market's current annual consumption.

LNG terminal could be in operation by 2012

2007-12-07T09:47:00.000-06:00

7 December 2007
Upstream

Cyprus hopes to have an onshore liquefied natural gas terminal in operation by 2012 or 2013 but plans to use an offshore regasification plant in the interim, writes Iain Esau.

Solon Kassinis, energy services director at the Ministry of Commerce, Industry & Tourism, said Kellogg Brown & Root has completed the basic engineering of the onshore terminal at Vassilikos and expected tenders for a front-end engineering and design contract to be released within three months.

He suggested the FEED work would last about six months, pointing towards the likelihood of the engineering, construction and procurement tender process kicking off at the end of next year.

The terminal will initially be sized to handle 1 billion cubic metres per year of gas, which could be increased to 2 Bcm per year.

As for the offshore regasification scheme, he said a FEED study is currently under way and that approaches have been made by the likes of SBM Offshore, Mitsui and Excelerate Energy.

The offshore plant will only be used until the onshore terminal comes on line, suggesting five years as the most likely contract term.

Golar steps up conversions

2007-12-07T09:46:00.000-06:00

7 December 2007
Upstream

Golar LNG is pushing ahead with regasification-unit conversion work for vessels in its fleet.

Company chief executive Gary Smith said in a results briefing that the outfit is engaged in commercial talks for FSRU-type work on the company's 126,360-cbm Khannur (built 1977) for when it ends its charter to BG Group in 2009.

He reiterated that the company has signed a memorandum of understanding relating to the conversion of Golar's 125,858-cbm Golar Freeze (built1977) on an exclusive basis. Smith said he was unable to give further details on this business at present.

The Golar Freeze has been linked to plans put forward by Shell and Excelerate Energy to provide a quick-import solution for a Middle East state.

However, on this occasion Smith added that the business for the vessel was subject to a final investment decision on the project, which is expected early in 2008.

UPDATE: RWE In Talks On Stake In LNG Co Excelerate Energy

2007-12-07T09:44:00.000-06:00

7 December 2007
Dow Jones International News

FRANKFURT (Dow Jones)--German utility RWE AG (RWE.XE) is in talks with Excelerate Energy LLC on acquiring a stake in the U.S. company, a RWE spokeswoman said Friday.

The spokeswoman didn't want to comment on the size of the possible stake or at which stage the negotiations are at.
Platts Commodity News Thursday, citing unnamed sources, reported that RWE is interested in taking a 50% stake in privately-owned, Texas-based Excelerate.

The two companies have cooperated for over a year. In Teesside, U.K, RWE markets liquefied natural gas, or LNG, which Excelerate transports in specially-designed LNG vessels that are capable of regasifying the LNG before delivering directly into the pipeline grid. This by-passes the need for traditional onshore LNG regasification terminals and storage tanks.

In addition, both companies have confirmed their interest in an LNG project in Wilhelmshaven, northern Germany.

In Wilhelmshaven, RWE is in a joint project with Excelerate and German crude oil terminal operator Nord-West Oelleitung GmbH on building an import facility for LNG that also won't require the construction of a regasification terminal.

The plans for Wilhelmshaven foresee a capacity to feed up to 600,000 cubic meters an hour of regasified LNG into the German gas grid. This would equate to up to around 5.3 billion cubic meters a year.

Excelerate owns and operates LNG transport vessels that are equipped with onboard regasification technology.

According to the company's Web site, Excelerate controls a fleet of four vessels, three of which have onboard regasification capabilities. Its total LNG transport capacity currently stands at 552,000 cubic meters.

Excelerate has five LNG vessels on order with a combined capacity of 754,500 cubic meters. These vessels, which it will co-own with Belgium-based shipping group Exmar NV (EXM.BT), will be delivered between March 2008 and June 2010, according to the Web site.

Gate LNG Terminal Delayed; RWE to Buy Stake in Excelerate

2007-12-07T09:43:00.001-06:00

7 December 2007
Global Insight Daily Analysis
Zoe Grainge

Construction start-up at the proposed Gate LNG regasification terminal in the Dutch port of Rotterdam is reportedly being delayed because not enough throughput agreements have been signed. According to European Spot Gas Markets, the terminal's developer Dutch utility Gasunie said everything else was in place for construction to commence except these agreements. It was suggested the delay was a result of the difficulty of Gate LNG customers securing LNG supply to feed in to the terminal. Gate Terminal is a joint venture between Gasunie and storage company Vopak. To date, oil giant Shell has signed a Heads of Agreement to take 4 bcm/year (Gm3/year) of throughput capacity while Germany’s RWE and France’s Electricité de France (EdF) have signed up for 3 Gm3/year each. Both RWE and EdF said they would take a 10% equity stake in the terminal. Separately, RWE is negotiating with Excelerate Energy to acquire up to a 50% stake in the company, according to reports.

Excelerate has developed gas ships that re-gasify LNG on board, making re-gasification terminals unnecessary. Significance: RWE already markets Excelerate's natural gas landed at an import facility in Teesside, the United Kingdom. The two companies also plan to co-operate on a planned LNG facility in Wilhelmshaven, Germany, for which a feasibility study is currently being undertaken by authorities. Wilhelmshaven is managed by RWE's rival German utility E.ON, which is investing in LNG projects to diversify its natural gas supply sources.

INTERNATIONAL - COMPANIES: RWE looking for piece of Excelerate

2007-12-07T09:43:00.000-06:00

7 December 2007
Gas Matters Today

RWE is in talks to acquire a stake in Excelerate Energy. An RWE spokeswoman confirmed to Gas Matters Today that exclusive negotiations are under way between the pair but did not reveal any further details.

She pointed out that the companies are already in cooperation. RWE markets gas from Excelerate's onboard regasification LNG facility at Teesside in the UK. And, in June, they announced plans to jointly develop an LNG import project at Wilhelmshaven in Germany in conjunction with Nord-West Oelleitung GmbH (NWO). The project, called German GasPort, would use similar technology to Teesside and is expected to be able to feed up to 14.4 MMcm/d of gas directly into the German gas pipeline network by late 2010.

RWE may acquire 50% stake in Excelerate Energy

2007-12-07T09:42:00.000-06:00

7 December 2007
Financial Deals Tracker

According to Reuters, Platts reported that RWE AG, an integrated energy company, will acquire a 50% stake in Excelerate Energy, an importer of liquefied natural gas.

Deal Type Acquisition
Sub-Category Minority Acquisition
Deal Status Rumour: 2007-12-06

Deal Participants

Target (Company) Excelerate Energy
Acquirer (Company) RWE AG
% Acquisition 50%

Germany’s RWE in exclusive talks to take 50% in Excelerate Energy

2007-12-07T09:41:00.000-06:00

7 December 2007
European Spot Gas Markets

German utility RWE is in exclusive talks to take 50% of American LNG company Excelerate Energy, a source close to the negotiations told Heren Energy on Friday. Excelerate c.e.o. Rob Bryngelson told Heren Energy exclusive discussions were taking place, but declined to comment further on the deal.

Cooperation between the sides would give RWE access to existing LNG import infrastructure at low cost, and would give Excelerate access to downstream European markets. The two companies are already working together on a number of projects. In 2006, RWE Trading signed an agreement with Excelerate to market all the gas the latter delivers to its GasPort facility in Teesside, UK. In addition, the companies have commissioned a feasibility study for an LNG terminal in Wilhelmshaven, northwest Germany.

Excelerate already owns an offshore LNG terminal, Gulf Gateway, in the US Gulf of Mexico. Bryngelson told Heren Energy on Friday that its second US project, Northeast Gateway, is finished, but the company has not yet sourced a commissioning cargo. Excelerate has no equity LNG production, and has to buy on the spot market. KTV/LB

UPDATE 1-Excelerate confirms "exclusive" RWE talks

2007-12-06T09:50:00.000-06:00

6 December 2007
Reuters News

HOUSTON, Dec 6 (Reuters) - LNG company Excelerate Energy on Thursday confirmed "exclusive conversations" with RWE but declined comment on a report that the German utility is buying a stake in Excelerate.

"We have had exclusive conversations with RWE," a source at Woodlands, Texas-based Excelerate said, declining to comment further.

RWE also declined comment on the report by industry publication Platts which quoted sources at a conference in Rome saying RWE will buy 50 percent ownership of Excelerate.

RWE earlier this year announced that it would work with Excelerate to develop a facility to import liquefied natural gas (LNG) into Germany at Wilhelmshaven.

Excelerate, owned by Tulsa, Oklahoma, banker-oilman George Kaiser, operates LNG ships and regasification terminals in Great Britain and offshore Louisiana. It is preparing to open another offshore terminal near Boston, Massachusetts.

Excelerate has been rumored to be for sale for more than a year, according to persons familiar with the industry.

LNG is natural gas cooled to minus-260 degrees Fahrenheit (-162 degrees Centigrade) and converted into a liquid for easy hauling. One cubic foot of LNG equals 600 cubic feet of gas. (Reporting by Bruce Nichols; editing by Jim Marshall)

Germany's RWE to buy 50% in LNG company Excelerate: sources

2007-12-06T09:48:00.000-06:00

6 December 2007
Platts Commodity News

German gas and power distributor RWE is buying 50% of Excelerate Energy, the Texas-based company that has pioneered the use of on-board regasification technology, sources at a conference in Rome said Wednesday.

While there have been many rumors that Excelerate has been for sale for at least two years, primarily because of its inability to secure long-term supplies, sources think there is good reason to believe that RWE would follow through on such a deal.

Excelerate officials have previously denied that the company is for sale.

They did not return Platts' inquiries Wednesday.

RWE already has a number of business relationships with Excelerate. It has a deal to take any regasified LNG delivered to Excelerate's terminal in Teesside, UK. The two companies also have an agreement to use Excelerate technology to develop terminals in Europe, including the proposed 600,000 cubic meter/hr Wilhelmshaven GasPort terminal in Wilhelmshaven, Germany, scheduled to come on line in late 2010.

RWE also has had a strong desire to enter the LNG business to grow its power and gas businesses in the increasingly deregulated European market.

In addition to its proposed projects with Excelerate, RWE has a 16.69% stake in the proposed Adria LNG terminal in Croatia that would serve central and eastern Europe and has entered into a preliminary agreement for a 10% stake in the proposed Dutch Gate terminal in Rotterdam, where RWE has committed to a long-term purchase of 3 Bcm/year of regasification capacity.

Through its partnership with Belgian shipping company Exmar, Excelerate has ownership interest in three existing onboard regasification vessels and five such vessels on order, as well as a charter interest in an existing standard LNG carrier.

In addition, Excelerate owns the Gulf Gateway terminal 116 miles offshore the US state of Louisiana that opened in 2005, the Teesside terminal that opened last year and the Northeast Gateway scheduled to open offshore Boston, Massachusetts, next month. The regasification capacity of each terminal is determined by the regasification capacity of the vessels.

The existing vessels have baseload capacity of 400,000 Mcf/d each, with peak capacity of about 750,000 Mcf/d. The vessels on order would have higher capacity. Excelerate is owned by Oklahoma billionaire oilman and financier George Kaiser.

While Excelerate has been rumored to be for sale for at least two years, talk of a sale picked up in August when Kathleen Eisbrenner left her job as CEO and president of the company to take a job in The Hague, Netherlands, as executive vice president of Shell's global LNG business.

Excelerate has had limited success buying LNG. Even for a billionaire, it is difficult to finance a long-term LNG supply contract that would cost billions of dollars. As a result, Excelerate has had to rely on buying spot cargoes occasionally or hiring out its ships to deliver cargoes owned by other companies.

Although Excelerate has reportedly made good money when it bought cargoes, many suspect that it has been losing money. When its ships are inactive, it must still pay significant operating costs for crews and maintenance, sources said.

For more news, request a free trial to Platts LNG Daily at http://www.platts.com/Request%20More%20Information/index.xml?story [http://www.platts.com/Request%20More%20Information/index.xml?story] or subscribe now at http://www.platts.com/infostore/product_info.php?cPath=3_39&products_id=78 [http://www.platts.com/infostore/product_info.php?cPath=3_39&products_id=78]

World's largest suction anchors installed offshore Boston: system set in 30 days

2007-12-01T09:53:00.001-06:00

1 December 2007
Offshore

To meet the growing demand for gas in the northeast US, Excelerate Energy is building the Northeast Gateway Energy Bridge some 18 mi (29 km) offshore Boston.

The project foresees LNG shuttles shipping back and forth to source, and re-gasifying the LNG into the local Boston grid. LNG carriers will dock on one of the two APL submerged turret offloading (STL) buoys, which will connect via flexible risers to a subsea pipeline system.

The STL buoys will be permanently anchored offshore and, when not in use, they will float 30 m (98 ft) below the surface. On arrival on site for offloading, the LNG carrier will pull one of the STL buoys into a conical-shaped opening in its keel. A secure connection will then be made after which the regasification process will begin and the LNG (returned to its gaseous state) is fed into the local gas distribution grid.

System description

Each 156-metric ton (172-ton) STL buoy is held in place by eight mooring lines consisting of a chain segment (attached to the suction anchor) and 170-m (558-ft) length of spiral strand wire (SSW).

Due to the prevailing easterly weather and the shelter afforded by the coastline, the length of the 5 1/4 in. (134 mm) chain segments vary between 335 m (1,099 ft) and 710 m (2,329 ft) with the longer lengths on the east side of the mooring system.

With different soil conditions and different design loads at each anchor location, the suction anchor design varies per location. The largest suction anchor in the system measures 14 m (46 ft) wide, 11.5 m (37.7 ft) high, and weighs 142 metric tons (156 tons). The tallest suction anchor is 20 m (66 ft) high and 6.5 m (21 ft) wide.

Work scope

In January 2007, Jumbo Offshore signed an agreement with APL under which Jumbo Offshore and APL would jointly execute the installation of the two APL STL buoys and associated moorings using the DP2 heavylift vessel Jumbo Javelin.

The agreement covered transportation of most project materials from Europe to North America, installation of the 16 mooring legs, and preparation and over-boarding of the buoys for subsequent connection to the mooring system by an anchor handling tug.

With the exception of the suction anchors, which were shipped directly from China to the local staging post of Saint John, New Brunswick, Canada, all project materials were marshalled by APL in Rotterdam for transport to site by Jumbo Javelin.
In June, the vessel arrived hi Rotterdam for general project preparation and loading of the project materials. With a gypsy winch installed above the hold and a chain chute to guide the chain over the vessel's side, 8,000 m (26,247 ft) of 134-mm (5-in.) anchor chain (3,000 tons [2,722 metric tons] total weight) was loaded onto one section of the tank top and the tween deck. Subsequently, the vessel's 2 x 900-metric ton (992-ton) cranes were used to load the eight reels of spiral strand wire and the two STL buoys.

Installation

On July 16, 2007, Jumbo Javelin arrived in Saint John, New Brunswick, and the six largest suction anchors were loaded onto the main deck and sea-fastened in the vertical for transportation.

On arrival at the installation site, and once the pre-installation survey had been completed, the first anchor was prepared for overboarding. The lift rigging was attached to the pad-eyes on top of each suction anchor (up to 20 m [66 ft] above deck) and the suction anchor was moved to the over-boarding zone. The anchor chain was routed out of the hold, up and over the gypsy winch, over the side of the vessel, and then back onto deck. Connection of the chain to the suction anchor was achieved through use of a platform hung off from strong points on the side of the anchor. Through this procedure, the 250-kg (551-1b) pin could be safely handled and inserted to make the connection between the anchor chain and the padeye on the anchor.

Lifting and overboarding of the anchor was done in a single lift. While lowering through the splash zone, a passive heave compensation system was used to compensate for excessive dynamic loads and motions.

On touchdown of the suction anchor, an initial penetration of approximately 1 m (3 ft) resulted from the anchor's own weight. Again, heave compensation was used to compensate for the vessel motion relative to the stationary anchor. Final penetration was achieved by means of an ROV equipped with a suction pump. Once the anchor was landed on the seabed, the ROV docked the pump suction head onto the suction flange. With the suction pump activated, pressure inside the pile drops and the external hydrostatic pressure forces the suction anchor further into the seabed. Suction anchor embedding took between six and 20 hours, depending on anchor size and local bottom soil condition.

Once the design penetration had been achieved, the anchor chain was laid in the relevant corridor. This operation was repeated for all 16 anchors. The size and number of the anchors meant that two trips were needed.

Prior to over-boarding each buoy, one end of each of the eight spiral strand wires was attached to the turret located underneath the buoy and the other end hung-off from a spreader beam.

Using a powered reel drive, each SSW was reeled off via a chute overboard and hung-off underneath an outrigger structure to the starboard Side at one end. The other end of each SSW was connected to one of two spreader frames, one hung-off at the aft end and one at the fore end of the vessel. Then the 156-metric ton (172-ton) STL buoy was transferred from the deck to the pre-installed outrigger structure. Tugger winches pulled each spiral strand wire socket upwards and into a position where the spelter socket connection with the turret could be made.

Once all eight spiral strand wires had been connected to the turret of the buoy, one of the vessel's 900-metric ton (992-ton) cranes was used to lift the 156-metric ton (172-ton) buoy with all spiral strand wires connected from the outrigger structure into the water. Following this method, possible damage to the sensitive coating of the SSWs was avoided, as all SSWs were hung-off in vertical position underneath the buoy. With all eight spiral strand mooring lines connected, the buoys were handed over to tugs for connection to the previously installed anchor chains and suction anchors.

The same procedure was followed for the second buoy.

World's largest suction anchors installed offshore Boston: system set in 30 days

2007-12-01T09:53:00.000-06:00

Controversy flares over LNG quality standards.(Washington watch)

2007-12-01T09:51:00.000-06:00

1 December 2007
Underground Construction
Stephen Barlas

Spectra Energy's Algonquin Gas Transmission is getting hit from all sides over the quality of the liquid natural gas (LNG) it expects to bring into the U.S. via the Northeast Gateway project in Massachusetts Bay. Greg McBride, vice president, rates and economic analysis, Spectra Energy, says, "As you would expect, the pipelines for the most part are in the middle in this. The LNG suppliers are on one side; they want gas quality specifications that are fairly broad. Customers want more narrow specs."

The debate has also set LNG suppliers against local distribution companies, both of whom have engaged in some creative name calling. For example, Consolidated Edison, a major northeast distributor, sniffed that Statoil, the Norwegian company which apparently won't even drop off LNG at Northeast, is taking a "cavalier" approach toward Con Ed's peak-shaving facility, which Con Ed says "is not a bakery." Dominion Transmission Inc., another LNG supplier like Statoil and essentially its ally, says Algonquin is following the "Goldilocks Theory" arguing that because some say its proposed nitrogen limit is too high and others say it is too low, it must be just right.

Rhetoric is definitely flowing fast and deep as FERC decides whether it should reconsider the gas quality standards it has already approved for Algonquin which has completed 13 miles of pipeline to connect its existing offshore terminal to a fleet of specially designed Energy Bridge Regasification Vessels (EBRVs) owned by Excelerate Energy L.L.C. The FERC's reconsideration of such things as the Wobbe range, nitrogen level and hydrocarbon content of the LNG. Algonquin expected to start selling in late November and that underlines what is likely to be the precedent-setting nature of FERC's final decisions as new LNG delivery points coming on board, such as the Suez Neptune facility which will compete with Northeast in Boston, the Repsol Energy North America Corporation facility in Canada which will start delivering LNG through Spectra's Maritimes to the U.S. in November 2008 and Weaver's Cove, project slated for Fall River, MA.

Algonquin, the major natural gas supplier to the northeast U.S. along with Iroquis, already brings in about 7-8 percent of its 1.6 Bcf/day of throughput from the Distrigas facility in Boston. Distrigas gets its LNG from Trinidad; there have been no issues about the quality of that gas. However, Algonquin could take as much as 800,000 Mcf/day from the Northeast Gateway project, which was supposed to start operating in late November.

Algonquin had tried for the past two years to hammer out a consensus agreement on gas standards with local distributors such as KeySpan (the largest firm customer on Algonquin), Con Ed and local New England LDCs. Owners of electric generating capacity such as FPL and gas suppliers such as BP have been involved in the discussions, too. But players in each of those three categories have big problems with the Algonguin gas standards that FERC has endorsed. The FERC is now taking a second look at those standards.

Some of the local distributors in New England and Con Ed are unhappy with the 2.5 percent nitrogen cap Algonquin has proposed. They want a 2 percent cap instead. Distributors store liquefied LNG in peak-shaving facilities during the summer for use during the winter. Too much nitrogen in the LNG leads to frozen liquid. Potential suppliers such as Statoil and BP want a higher nitrogen cap at around 4 percent because they often add nitrogen to the gas they bring in to the U.S. in order to drive down high Wobbe numbers. Wobbe is a measure of the interchangeability associated with different qualities of natural gas, and is expressed in a numerical range.

The issues are so complex that some key parties take Algonguin's side on one issue, but oppose it on another. For instance, KeySpan supports the 2.5 percent nitrogen cap. However, KeySpan is opposing Algonquin on a second issue: it wants a limit on hydrocarbon constituents for ethanes and heavier hydrocarbons of 10 percent. Algonquin, which has proposed a 4 percent level, calls a 10 percent level "unacceptable," arguing it would cut off an additional six sources of LNG supply.

The New England LDCs are siding with KeySpan on the hydrocarbon constituent issues but part company on nitrogen, supporting a 2 percent nitrogen level; they cite Algonquin's historical data which shows that nitrogen levels on the Algonquin system are between 0.5 percent and 1.75 percent. Statoil and BP argue that even the 2.5 percent nitrogen level will cut off important supplies. It says LNG from places such as Qatar, Algeria and Nigeria will need nitrogen injection to reach the Wobbe numbers specified by Algonquin. Statoil wants a 4.0 percent nitrogen cap.

House Considers Diluting FERC's Authority On LNG Siting

While LNG gas quality standards are at issue at FERC, across town on Capitol Hill the siting of LNG terminals is again raising its head as a controversial political issue. When Congress passed the energy bill of 2005, it gave FERC exclusive authority to determine whether an LNG terminal could be built in a city or county. But with new LNG sites being proposed almost daily, and local groups seeing their political influence eroded by the 2005 legislation, Democrats on Capitol Hill are attempting to provide local opponents of LNG some new political muscle.

That would be in the form of amendments to the Coast Guard authorization bill (H.R. 2830) about to be passed by the House. The Coast Guard, a division of the department of homeland security (DHS), has responsibility now for only ensuring that a tanker carrying LNG can get up and down a ship channel to deliver its LNG to a terminal. The Coast Guard, while it does have some security responsibilities with regard to LNG, does not have final responsibility for siting a terminal. Only FERC has that authority.

But the amendments sponsored by Rep. Ed Markey (D-MA), whose district includes the Distrigas terminal in Everett, MA, seems to give the DHS veto power over FERC on LNG siting. The bill requires the approval of the secretary of homeland security in the licensing, approval, and authorization process for LNG facilities. That approval would have to be based on a very comprehensive investigation on the facility's vulnerable to potential terrorist attacks. Moreover, another amendment would allow the federal government to tax LNG carriers for security provided by the Coast Guard.

Bill Cooper, executive director, Center for Liquefied Natural Gas, calls that a discriminatory tax because LNG ships are only a small proportion of the ships entering a harbor with an LNG terminal. What makes it worse, he adds, is that the tax receipts would go to the federal Treasury, not the Coast Guard, so the money could be spent on anything. With regard to the two amendments, Cooper states, "They are something to worry about, and something to work on, which our member companies are doing." Of course, the Coast Guard, even minus the new authority the Markey amendments would give it, has slowed down some LNG projects. In October, the Coast Guard stopped the Weaver's Cove terminal in Fall River, MA, which already has FERC construction approval. The Coast Guard was concerned about bridges obstructing passage of LNG tankers, and some other issues. Jim Grasso, a spokesman for Weaver's Cove Energy, calls the Coast Guard ruling "a setback." But he says Weaver's Cove is confident it will be able to resolve the Coast Guard concerns.

GAS

2007-07-06T15:03:00.000-05:00

July 6, 2007
Utility Week

Gazprom and Eni are to build a 900km gas pipeline from Russia to Italy and central Europe via the Black Sea. A new joint venture will own and finance the 30 billion cubic metre per year South Stream project. Russian and central Asian gas could reach Europe via the route by 2012.

The South Stream pipeline would branch in Bulgaria, with one arm serving Greece and Italy and the other supplying Austria and Hungary. Greece and Bulgaria have already confirmed their participation, but Gazprom is seeking further partners for the €10 billion project.

OMV chairman Wolfgang Ruttenstorfer insists South Stream "complements" its EU-backed Nabucco route to bring gas from the Caspian Sea region to Central Europe, but this extension of Gazprom's infrastructure ties with Europe may threaten Nabucco's long-term viability.

Elsewhere, Gassco has taken over operation of receiving terminals for Norwegian gas at Dornum and Emden in Germany, Zeebrugge in Belgium and Dunkirk in France. The company already operates the pipeline.

l RWE is to work with US firm Excelerate Energy to build a LNG import facility at the north German port of Wilhelmshaven. The offshore plant will be operating by 2010, ahead of rival Eon's LNG project at the same port.

Free reuse - RBI + third parties

Momentum builds as FSRU benefits begin to take hold

2007-07-06T14:55:00.000-05:00

July 6, 2007
Upstream

Floating storage and regasification units (FSRUs) have been proposed for a number of locations around the world, but such schemes are still rare, although momentum is building, writes Adrian Cottrill.

The largest number of proposals for offshore regasification plants - either floating or founded on the seabed - has been put up for US waters.

However, those proposals have suffered mixed fortunes on the permitting front.

As a result, a number of fixed offshore proposals in the Gulf of Mexico have moved on to the back-burner. Also, in May, BHP Billiton's proposal for an FSRU off California had its application rejected by the state.

The plan for Cabrillo Port involved a true FSRU in every sense of the word - a floating steel hull moored well offshore in deep water, receiving liquefied natural gas from visiting shuttle carriers, regasifying it on board and then sending the resultant gas to shore by high-pressure pipeline.

However, for the moment Cabrillo Port looks to be off the agenda, a victim of opinions in a region that has, depending on your point of view, either the world's most finely-honed environmental sensitivities, or its most advanced case of "not in my backyard" syndrome.

Nevertheless, the US has also been the venue for the world's first offshore floating regasification unit, even if it does not quite fit into the category of full-blown FSRU.

The Gulf Gateway scheme in the Gulf of Mexico has been carried forward by operator Excelerate Energy and partner Exmar, and received its first cargo of LNG in March 2005.

That scheme is based on the concept of the "shuttle and regas vessel" (SRV), with the carrier serving for both ocean transport and then, on arrival at the import location, using its own onboard regasification plant to deliver gas.

The vessel picks up a mooring buoy, along with gas export riser and then proceeds to regasify its own cargo over a period of typically five days for a full ship.

In effect, the SRV option is a slightly temporary form of FSRU. In a full-blown FSRU, the vessel still stores LNG and carries regasification equipment, but it no longer is used as a sea-going unit.

Instead it is permanently moored at its chosen site to act as a receiving point for liquefied gas delivered by standard carriers. In this way, the unit serves as the equivalent of a coastal regasification facility, but is more easily set up and moved.

At the top end of the size scale, FSRUs will need to store larger volumes of LNG than any straightforward carrier can contain.

This means they will be purpose newbuilds, such as BHP's Cabrillo Port proposal. However, carrier conversion is perfectly viable for the sort of FSRU that Golar is to provide for Brazil.

Excelerate's pioneering Gulf Gateway SRV project has seen only intermittent use as a regasification terminal since that first transfer in 2005. However, Excelerate and Exmar have gone on to tailor this operational model for further projects.

First of these is the UK's Teesport, where the arriving regasification vessel ties up at a river-mouth quayside rather than mooring at a buoy offshore. This terminal took an initial part-cargo of LNG in February this year.

Excelerate is also moving ahead with a gas import scheme off the US coast - Northeast Gateway, in Boston Bay - where it plans to deploy two mooring buoys and dedicate two regasification vessels.

Another entrant to the SRV business - a teaming of Hoegh and Suez - is proceeding with the parallel Neptune two-buoy scheme in Boston Bay, aiming at start-up by the end of 2009.

Outside the US, the highest profile for offshore regasification projects actually under way at present is to be found off Italy.

The leading scheme is a big concrete gravity-base structure rather than a floater, for the Edison- ExxonMobil-Qatari Adriatic LNG project, well into construction now and due to start-up off the east coast in mid-2008.

However, Italy also has at least one floating regasification project moving through the planning stages off the west coast.

Known as OLT (Offshore LNG Toscana) this is sited 20 kilometres out to sea off Livorno, and is scheduled to be completed in 2009. It marks Golar's original foray in this field, dating from 2002.

The latest milestone to have been reached for OLT is May's signing of an agreement appointing Moss Maritime parent Saipem responsible for constructing the terminal.

This includes engineering for conversion of the 137,000 cubic metre capacity Golar Frost gas carrier, built in 2004 by Hyundai.

Livorno's gas send-out level will be about 10 million cubic metres per day, using an open-loop system that adopts propane as an intermediate fluid.

Building of shore facilities began in March and the partners are now heading towards a firm investment decision, perhaps in September this year.

Germany Team Up For Plant

2007-07-06T12:49:00.000-05:00

July 6, 2007
Upstream

RWE Dea and Excelerate Energy have joined forces to develop a liquefied natural gas import terminal at Wilhelmshaven on Germany's northern coast.

Wilhelmshaven will have an onshore jetty with an unloading arm taking regasified LNG from Excelerate's specially adapted vessels, the same method being used at the US company's Teesside GasPort terminal in the UK.

The partners have already been granted approval for the deep-water port site and the onshore jetty.

The terminal is a separate project from an existing onshore terminal already being developed in Wilhelmshaven by German utility E.ON Ruhrgas.

The facility would not fit the European Union description of a full LNG terminal, neither would it have any storage tanks, and would therefore be exempt from any third-party access requirements.

Project start-up is scheduled for 2010, although it could be fast-tracked, depending on talks with local regulators.

Excelerate Seeks Legal Review Of Cut To UK LNG Entry Capacity

2007-07-06T09:23:00.000-05:00

July 6, 2007
Dow Jones International News

LONDON (Dow Jones)--U.S.-based liquefied natural gas shipper Excelerate Energy is seeking a judicial review of U.K. gas and electricity market regulator Ofgem's decision to cut capacity to enter gas into the U.K. network at its new LNG terminal in Teesside, a senior company executive said Friday.

Rob Bryngelson, vice president of development and downstream services at Excelerate, said he was concerned Ofgem's cut of baseline entry capacity at Teesside from 70 million cubic meters a day to 33 mcm/day would hinder his company's ability to utilize the LNG terminal in the long term.

"The Teesside Gasport was built to provide gas to the U.K. at periods of high demand on short notice," he said. A capacity of 33 mcm/day wouldn't give the terminal sufficient flexibility and negate its whole purpose, he said.
At peak operation the Teesside LNG terminal can deliver around 16 mcm/day of gas into the U.K. network. Teesside also receives gas from numerous gas fields in the Central North Sea. Combined gas flows from these fields into Teesside were typically around 25 mcm/day in Winter 2006-2007.

A spokesman for Ofgem was unable to comment on the detail of Excelerate's complaint because it may now be subject to a legal case. He said they are considering their position and will decide whether to defend their decision within 28 days.

National Grid PLC (NGG) and Ofgem have previously argued its capacity allocations at entry points to the U.K. gas network are based on firm commitments from network users. Capacity will be cut if gas shippers don't indicate they need it by making long-term capacity purchases.

Excelerate said National Grid and Ofgem should also consider gas flow forecasts when it allocates capacity because many gas shippers who intend to use a network entry point prefer to buy more flexible short term capacity.

In a submission to Ofgem in May, Excelerate argued as North Sea gas production declines, unused capacity at the St. Fergus gas terminal in Scotland should be transferred to Teesside.

Bryngelson said Excelerate has been working with Ofgem and U.K. gas and electricity network operator National Grid to find a solution. Excelerate's decision to seek a judicial review hasn't ended these discussions, he added.

Excelerate also operates an LNG terminal off the coast of Louisiana in the Gulf of Mexico and has another under construction near Boston in the Bay of Massachusetts. The Boston terminal is on track to become operational in December, he said.

Last week it announced plans to build another terminal with German utility RWE AG (RWE.XE) in the port of Wilhelmshaven by 2010.

A joint project between Excelerate and Pakistani industrial conglomerate Associated Group isn't proceeding as quickly as originally envisioned, Bryngelson said. He said Excelerate is still interested in the project, but the original April 2008 deadline for the project is now looking uncertain.

Regulator on the Ropes over U.K. Gas Entry, Exit Rules as Excelerate Lobbies for LNG

2007-07-05T15:19:00.000-05:00

July 5, 2007
Sally Bogle
Global Insight Daily Analysis

U.S. LNG terminal developer Excelerate Energy is seeking permission to take U.K. energy regulator Ofgem to court over gas-entry rights, according to Platts. It follows the regulator's decision last December to cut the baseline entry capacity for Excelerate's Teesside terminal from 70 MMcm/d to 33 MMcm/d. Earlier this year, Excelerate said that had it known that Ofgem would cut back Teesside entry rights, it may not have invested in its LNG facility at Teesside, which came onstream last February. Excelerate's application for a judicial review comes as Ofgem is awaiting a decision from the U.K. Competition Commission on E.ON U.K.'s appeal against the regulator's decision on exit rights. A decision is expected by 10 July 2007.

Ofgem wants to restructure exit capacity rights by putting a price on flexibility, so that it costs more to flow gas out of the system at an uneven rate.Significance: The two disputes with Ofgem illustrate a clash between the regulator and operators with the former wanting to move to a longer-term model, but the latter lobbying for shorter-term, more flexible entry and exit rights. In Excelerate's case, the group's business model is to land LNG cargoes when prices are highest, meaning it is reluctant to commit to long-term entry rights. Meanwhile, E.ON and other power generators want flexible exit rights giving them the option to flow gas to their power plants during peak electricity-generation hours. With more LNG and piped import facilities expected online in the coming few years, further clashes are likely between the regulator and operators wanting to take advantage of price differentials in the continental European and Atlantic Basin markets (see United Kingdom: 2 May 2007: ).

UPDATE: LNG firm Excelerate seeks judicial review of UK gas entry

2007-07-04T15:20:00.000-05:00

July 4, 2007
Platts Commodity News

US LNG terminal developer Excelerate Energy is seeking permission to take British energy regulator Ofgem to court over gas entry rights, according to legal documents seen by Platts.

It has hired lawyers Watson, Farley and Williams, who filed a request for judicial review of Ofgem's decision at the High Court June 29, the documents show.

There is no date set yet for the High Court to decide whether to allow a review to go ahead. Regulator Ofgem has three weeks to reply.

The issue centers around gas entry rights. Any LNG shipper or North Sea field operator wanting to put gas into Britain's national transmission system must secure entry rights from National Grid. These are sold in a variety of auctions, with spare capacity released on the day.

Ofgem obliges system operator National Grid to make available a set "baseline" of entry capacity at each entry terminal on the British coast, including Teesside PX, where Excelerate Energy's LNG facility feeds in gas.

But the baseline that National Grid must provide can be changed. Last December, when publishing the latest price controls for National Grid, Ofgem suddenly slashed the baseline entry capacity for Teesside from 70 million cubic meters/day to 33 million cu m/day.

As well as Excelerate's Teesside Gasport facility, fields such as the North Sea Armada and Everest gas fields feed into Teesside Px through the CATS gas pipeline. Before Excelerate's new Teesside LNG terminal came onstream, peak flows into Teesside from these fields were already around 30 million cu m/day. So if National Grid is only obliged to release 33 million cu m/day, that does not necessarily leave much room for Excelerate's 11 million cu m/day LNG terminal to feed in its gas too.

Excelerate said earlier this year that if it had known Ofgem would cut back Teesside entry rights, it might not have invested in an LNG facility at Teesside.

Ofgem wants gas companies to commit to long-term capacity bookings. If Excelerate had booked entry capacity at Teesside in long-term auctions before December 2006, Ofgem probably would not have cut back the baseline so far.

But Excelerate's business model is to land LNG cargoes opportunistically, wherever prices are highest, so it does not really want to commit to buying long-term entry rights. It only wants to feed in gas when and where the prices are best. And traditionally it has been relatively easy to obtain entry rights in the short-term markets.

Excelerate wants an order that would quash the cuts to Teesside baseline entry capacity, the legal documents show.

Excelerate's application for a judicial review comes at the same time as Ofgem is awaiting a decision from the Competition Commission on E.ON UK's appeal against Ofgem's decision on exit rights.

The two cases show Ofgem's attempts to move the gas transmission network to a longer-term commitment model under attack from companies that would rather book their rights to put gas in and out of the national network on a shorter-term, more flexible basis.

An offshore solution to energy supply

2007-07-02T15:36:00.000-05:00

July 2, 2007
Petroleum Review

A gigantic concrete structure is rising up on the Spanish coast, across the bay from Gibraltar - but this is not a Spanish effort to emulate the famous rock, writes Jeff Crook. The structure is, in fact, an artificial island. When complete, it will be towed to the northern Adriatic, where it will be submerged in 30 metres of water to act as an offshore LNG terminal - the first of its kind in the world. When brought into operation towards the end of 2008, the offshore terminal will have capacity to store 250,000 cm of LNG and vapourise 8bn cm/y of gas. It will receive around two ship loads of LNG each week from RasGas II in Qatar.

The Adriatic terminal, which is operated by Edison, with partners ExxonMobil and Qatar Petroleum, is now the only LNG terminal under construction in Italy following a major setback at Brindisi. The Brindisi site has been seized in connection with a criminal investigation by the Italian authorities into allegations of improper conduct relating to the authorisation process. However, BG Group reports that it 'has not abandoned the Brindisi project, is actively pursuing release of the site and continues to target first LNG deliveries to the terminal during 2010'.

The problems at Brindisi have focused attention on the challenge that companies face in establishing LNG terminals on the coast. Competition for coastal sites has increased relentlessly as environmental standards continue to tighten. These LNG sites also tend to attract strong opposition from the local population due to the perceived safety risks. To address these problems there is a trend towards building offshore terminals, where LNG ships can discharge at sea, far from coastal communities.

First of its kind

When in operation, the Adriatic terminal will provide mooring facilities and loading arms to allow LNG ships of up to 152,000 cm capacity to be berthed and discharged. The regasification process and auxiliary plants, equipment, control room and living quarters will be placed on top of the gravity base (GBS) structure. It will be connected by a 30-inch gas pipeline to the shore, where gas is fed into the Italian gas transmission system. A logistics base on the Levante Po River will support the terminal operations.

The GBS is being built in an existing dry dock in Campamento in the bay of Algeciras. It measures 180 x 88 x 48 metres and is designed to be buoyant for its tow to the Adriatic. Aker Kvaerner carried out both the front-end and detailed design; Dragados Offshore was awarded contracts for construction, and Arup is performing project management services at the construction site.

The partners awarded a $110mn contract for the LNG tanks to Hyundai Heavy Industries (HHI) in South Korea. The transport of the two tanks presented a challenge due to their 155-metre length. This was addressed by dividing each tank into three sections, with the six sections loaded out on to a heavy lift vessel at the Ulsan yard in December 2006.

After being unloaded from the heavy lift vessel, the tanks were installed side-by-side within the concrete platform structure. When assembled, each tank weighs 4,800 tonnes, and measures 33 metres wide, 28 metres high and 155 metres long. The tanks needed to be designed to withstand internal pressure and the corrosive effects of seawater. HHI says that by using special material, such as 9% nickel steel, the yard can increase durability and maximise the size of tanks while minimising thickness of tanks and total weight. The tanks are protected with high resistance concrete double walls, with inert material (sand) between the two walls.

Once complete, the dock will be flooded and the caisson floated to its final location in 30 metres of water some 17 km offshore Porto Levante, in the northern Adriatic Sea. The pipeline will be buried in the seabed to minimise impact on the environment and maritime activities such as fishing. A gas flow metering station will be located close to the land fall, near the Levante Po River Mouth.

Navigation around the structure will be constantly monitored. Edison says that the terminal will be equipped with the most modern radar tools in order to detect the presence of ships in transit, as well as anti-collision signalling systems. In addition to advanced automation, the terminal will be equipped with advanced safety and security features, including fire-fighting systems, alarms, visual monitoring systems and sophisticated anti-intrusion systems.

There have been several other artificial island proposals, most notably in the Gulf of Mexico, although none is as advanced as the Adriatic scheme. This approach is, however, only suitable for calm and benign sea conditions, such as the Mediterranean, where ships can be moored to fixed offshore structures. An alternative approach, involving a 'submerged turret loading system', can be adopted for deeper and more hostile ocean conditions.

Gulf Gateway

The Gulf Gateway project uses the submerged turret loading concept and was inaugurated in April 2005, when it was not only the first offshore terminal in the world, but also the first new LNG terminal in the US for 20 years, according to its operator Excelerate Energy. The LNG is regasified on specially designed vessels, with gas fed to a pipeline system some 116 miles off the coast of Louisiana. The terminal has a baseload capacity of 500mn cf/d, with a peak capacity of 690mn cf/d.

This submerged turret loading concept involves minimal offshore construction in comparison to the Adriatic scheme, so these terminals can be implemented far more rapidly. However, one major drawback is that the Gulf Gateway can only be used by specialised vessels, equipped with turret/swivel to dock to the buoy and onboard facilities for vapourising the LNG. These ships are very expensive ($290mn each) and few have so far been built. Another drawback is that the terminals do not have LNG storage capability, so gas must be fed directly into the onshore distribution system.

The ships are moored to a single point mooring system developed and supplied by the Norwegian company APL. This system is widely used for oil and gas developments in harsh environmental conditions, such as typhoon prone areas of the South China Sea. Anchor lines and flexible flowlines are connected to a buoy, which floats 30 metres below the surface when not in use. When mooring, the buoy is pulled to connect to a 'turret'; this is a steel structure that is able to turn on bearings within the ship's hull. The turret enables the ship to 'weathervane' around the mooring, and thus ensures that a vessel can ride out a storm with the minimum of motion. As the mooring lines radiate out in all directions, they apply steady force to hold the vessel on station. Station-keeping and orientation are also aided by thrusters. A 'swivel stack' within the turret provides continuous fluid/electrical flow paths as the vessel turns. Fluids can then flow, via the buoy, to pipelines on the seafloor.

The robustness of the concept was demonstrated when hurricane Katrina left a swathe of wrecked offshore facilities in the Gulf of Mexico before causing devastation in New Orleans. The hurricane passed within 200 miles of Gulf Gateway on 29 August 2005, creating turbulent sea conditions with waves heights five to six metres high. However, this was 'well below the 100-year design and operational limits for the deepwater port', according to Excelerate Energy. Rather than closing down the facility, output was actually stepped up at Gulf Gateway in order to compensate for loss of production from other Gulf of Mexico facilities.

Future prospects

LNG imports currently account for a very small proportion of US gas consumption, with just five terminals currently operational, according to the Federal Energy Regulatory Commission (FERC). However, these imports could grow very rapidly as there were 43 firm proposals and the potential for 63 new terminals as of February 2007. Three of the approved proposals are for new terminals in Mexico and two in Canada.

While most proposals involve onshore construction, five proposals have been approved by Marad/US Coastguard for offshore terminals in the US, while another offshore scheme has been approved in Mexico.

Excelerate Energy is constructing the Northeast Gateway in Massachusetts Bay, also using the submerged turret loading concept. This will have an average output of 400mn cf/d, with peak capacity of 800mn cf/d. It will be located around 21 km south-east of Gloucester and is due onstream in 2Q2007. The company currently has a fleet of three 138,000 cm regasification vessels, with a fourth 159,000 cm vessel due to join the fleet in 2008.

The Neptune terminal, operated by Suez LNG, also involves the submerged turret loading concept and should be operational in 2009. The average send-out capacity of each SRV (shuttle and regasification vessel) will be 400mn cf/d, with a peak capacity of approximately 750mn cf/d. This terminal will supplement Suez LNG's existing onshore LNG terminal in Everett.

The Neptune LNG facility will be located approximately 16 km south of the city of Gloucester and 35 km north-east of Boston in 80 metres water depth. Samsung Heavy Industries received an order for the two 145,000 cm capacity vessels for this project at a cost of $290mn each. These diesel-electric ships will be operated by a joint venture between Hoegh LNG and Mitsui OSK lines.

ChevronTexaco has, meanwhile, proposed schemes for the Port Pelican discharge LNG terminals based on concrete gravity platforms, with a similar scheme proposed for Baja, across the border in Mexico. Front-end design was carried out by Aker Kvaerner and both these schemes have received approval from their respective authorities - although little progress has subsequently been reported. Shell's Gulf Landing project also has approval.

McMoRan is pursuing plans to develop the Main Pass Energy Hub, which will be used both for receipt and for storage of natural gas. This has also received Marad/US Coastguard approval. The plan involves using existing platforms that were formerly used for sulphur mining. The platforms are located 38 miles east of Venice, Louisiana, in 210 ft of water. The terminal would initially have capacity to handle 1bn cf/d of natural gas. Additional investments are being considered to develop cavern storage for 28bn cf of natural gas in the large salt dome structure at this site. This would permit delivery of up to 2.5bn cf/d of gas.

In addition to the offshore terminals described previously, a further 19 onshore LNG terminals have been approved by FERC in the US. However, there is uncertainty about how many of these will actually be completed. In a speech in October 2006, John Hofmeister, President of Shell Oil, said: 'We've seen a number of plans shelved for re-gas terminals in recent months. This year alone (2006) about six have been shelved. Next year some more could be shelved.'

The expansion of LNG imports into the US will, nevertheless, have enormous implications for the worldwide LNG market, which is already expanding at an exponential rate. So the terminal construction programme will be watched with great interest by the industry.

The Rise of LNG - a global perspective

2007-07-02T15:24:00.000-05:00

July 2, 2007
Petroleum Review

Chris Skrebowski provides an overview of IP Week's Thursday conference (15 Februrary 2007), organised in association with Gas Strategies, which addressed one of the key industry topics of the moment - the increasing importance of LNG in the global energy mix.

The conference was chaired and introduced by James Ball, President and Mentor, Gas Strategies. He started by noting the importance of LNG in the UK's gas supply mix by 2010. He then pointed out that by 2010 the LNG business would account for 38bn cf/d of supply, with both Atlantic and Asian markets reaching around 18bn cf/d. This, in his view, confirmed the prospects for the industry and the importance it would attain in less than four years.

He then introduced Andy Flower, who talked to the title 'LNG - The supply and demand outlook for 2007'. Flower started his presentation by looking at what had happened in 2006. Demand growth, at 15.7mn tonnes (11%), was strong and would have been even greater except that 10% of potential supply was lost to delays and supply problems. In 2006, Qatar had become the world's largest supplier, overtaking Indonesia. Rather less positively, there had been no new commitments to build liquefaction capacity in 2006. LNG shipping had gone into surplus, with 28 new vessels entering service. This had led to ship sales from the Atlantic to Asia and the use of vessels for floating storage in the second half of the year.

LNG demand had achieved 7.7% annual growth in the 1980-2006 period. However, in the 2004-2006 period, European imports had risen strongly, Asian imports had slowed and imports to the Americas had actually declined by between 2% and 2.5%. In 2006, nearly 22mn tonnes of new liquefaction capacity was started up. Notable production gains were made by Qatar, Australia, Trinidad and Egypt in 2006, but older suppliers like Indonesia, Malaysia and Algeria recorded output declines.

Flower also noted that final investment decisions (FIDs) had been expected on 33-53mn t/y of new capacity in 2006. In the event, no FIDs were actually recorded. He showed a diagram illustrating the way that inflation in liquefaction plant costs had reversed all the gains of the last 20 years, and suggested this was one of the reasons for the delay in FIDs.

The direct consequences of the delays to new construction was that global liquefaction capacity in 2012/2013 would now be 47mn t/y lower than had been anticipated in January 2006. The reverse situation applies to LNG shipping, where capacity has expanded more rapidly than demand. The order book stood at 134 ships at end-2006, with 218 vessels in operation.

Flower then turned to prospects for 2007, when nearly 20mn t/y of new capacity was expected to come onstream from Qatar, Nigeria, Norway and Equatorial Guinea, adding to the 190mn t/y in operation at end-2006. He showed that up to 80mn t/y could be given the go-ahead in 2007, although he felt around 40mn t/y was more likely. He also noted that it was typically taking four years for FID to first gas. (See Table 1.)

In terms of regasification capacity, 2007 should see new capacity commissioned in the UK, Spain and France. With regas capacity only being used at around 60% of capacity, regas is not really a constraint in the system. Similarly, shipping capacity is running ahead of liquefaction capacity, which may lead to scrappage of some of the older vessels.

In conclusion, Flower stated that for successful development of the industry, cost inflation needs to be slowed or reversed, while new liquefaction capacity needs to come to market and boost supplies in a predictable manner. He also posed the question as to whether surplus shipping capacity would boost short-term trading and bring a global gas market with global pricing closer.

The next speaker was John Baldwin of Gas Strategies, describing Excelerate Energy's system for regasification onboard the vessel and discharge directly into a gas grid. He described the development and use of the Teesside terminal (for a detailed description of the system, see Petroleum Review, January 2007).

The buyer's perspective

Megumu (Meg) Tsuda, Project Manager, LNG Contract Negotiation for Osaka Gas Company, then described the changes in the LNG market from the buyer's perspective. She started by noting that we were witnessing the largest change ever seen in the industry. Initially, the development of the LNG sector had been based on a mutual interest in security of supply by both buyers and sellers. As a result, 20- to 30-year contracts were the norm, with take-or-pay clauses usual. Indexation, in the case of Japan, was to the JCC (Japan crude cocktail - a mix of import crude values).

The so-called 'S' curve effect moderates the price impact of rapid crude price changes on LNG prices. Japanese buyers at this date (pre-1985) formed a buyers consortium. The market started to change with the entry of Korea in 1986 and Taiwan in 1999. As a result, Japan, which had purchased 75% of world LNG supplies in 1985, saw its share fall to under 50% in 2005, and expects to account for just 19% of world LNG imports in 2020. Recent challenges have been shortfalls of up to 10% in Indonesian supplies, nuclear plant outages which boosted Japanese gas demand, and high oil prices which have led to increased global gas demand.

The Asian market in recent years has become increasingly dependent on spot supplies to meet what has become a chronic LNG shortage in the region, she explained. This, in turn, has led to intra-area movements between the Atlantic and Asia-Pacific markets and the emergence of active LNG trading. This has been further stimulated by the strong linkage between LNG and power markets.

Tsuda also noted that, although the market is becoming increasingly globalised, Asia-Pacific prices have tended to be higher than those in European markets. Contract prices have typically been around $5/mn Btu, but spot prices have been as high as $25/mn Btu.

The challenge for buyers was to secure the required supplies at competitive prices in an era when less was sold on long-term contracts but a fully competitive, globalised short-term market has not yet emerged.

Diversity of supply

The next speakers were Adrian Liaker and Abrecht Muller von Blumencron of PricewaterhouseCoopers, talking about diversity of supply. They started by noting that Europe was already importing 50% of its gas supplies and that this would rise to 84% by 2030. This means that Europe will be looking for an additional 300bn cm of gas, of which 40% to 50% is likely to be imported as LNG. Importing such volumes is likely to prove challenging given that the global LNG market is already tight and effectively a sellers market.

Earlier concerns about the availability of regasification capacity were now abating, they reported, with European regasification facilities currently operating at around 45% of capacity. Concerns about vessel availability had largely evaporated in the face of the emerging surplus in the LNG carrier market.

Potential liabilities

Philip Rock, Partner at Norton Rose, then spoke about the potential liabilities associated with LNG shipping. He began by noting the excellent safety record of the sector to date. He explained that the primary risks were the normal seaborne vessel risks of collision, groundings, mooring etc. The key additional risk was the flammability of the cargo. Although there were reports covering this risk, the problem was that because there had so far been no major LNG spill at sea, the risks were not really known.

One increasing challenge was manpower and getting skilled personnel to go to sea. Already, steam engineers (most LNG vessels are propelled by steam turbines) work three months on and three weeks off contracts.

Other areas of risk were vessel mooring and ship-to-ship transfers. The latter may become increasingly important if solutions such as Excelerate Energy's become more popular in the industry.

Meanwhile, terrorism presented a new and important risk that would have to be addressed.

Equatorial Guinea

Steve Ollerearnshaw then gave a dectailed description of Equatorial Guinea's LNG project (the Equatorial Guinea LNG train started up in May and is so far the only LNG project to have started up in 2007 - Ed.) Ollerearnshaw explained that Equatorial Guinea, which is literally in the corner of the Gulf of Guinea, only became independent in 1968. It consists of Bioko Island (which is off the Cameroon coast) and Rio Mundi on the marshland (immediately south of Cameroon). (The exact location is important because one possibility for a second train on Bioko Island is to take gas supplies from Cameroon (due west of Bioko Island) and Nigeria (due north of Bioko Island) - Ed.)

Until the discovery of oil in Equatorial Guinea the economy was dominated by agricultural exports, but since the discovery of oil in the mid-1990s it has come to dominate the rapidly growing economy and accounted for 93% of GDP in 2005.

The shareholders in EG LNG are Marathon (operator) 60%, the state company Sonagas (Sociedad Nacional de Gas GE) 25%, Mitsui and Co 8.5% and Marabeni Corporation 6.5%. According to Ollerearnshaw it is all equity financing with the Equitorial government investing its oil revenues into LNG development.

The EG LNG facility has a capacity of 3.6mn t/y. Production is targetted at two major markets - US east and Gulf coast, and Europe. The EIA has estimated (annual Energy Outlook 2006) that the US will need an additional 4.7tn cf of gas by 2030. EG LNG is scheduled to deliver 170bn cf/y, starting in 2007. The EIA has also estimated that OECD Europe will require imports of 20.5tn cf by 2030, although pipeline supply is likely to dominate it will become a major importer and could become an alternative market for EG LNG supplies particularly if the second train goes ahead. Ollerearnshaw then showed that Atlantic basin regas capacity is running well ahead of LNG supply right out to 2015, clearly showing that it is LNG supply rather than regasification capacity that is the potential bottleneck.

The gas for the EG LNG project comes from Marathon's Alba field, which lies offshore to the north of Bioko Island. The other shareholders in the Alba field are Noble Energy and GEP (the Equatorial Guinea state oil company).

The current treatment of the Alba production stream is that first the condensate is removed and exported. LPG is then removed and exported. The dry gas stream is used to make both methanol and LNG. The LNG is covered by a 17-year sales and purchase agreement with BG, who currently plans to take all the LNG to the Lake Charles terminal in Louisiana.

In summary EG LNG purchases 600mn cf/d of gas from the Alba field. The 3.7mn t/y LNG train 1 uses the ConocoPhillips Optimised Cascade process. BG has contracted 3.4mn t/y of LNG for 17 years from movement to the US. The facility includes two 136,000cm LNG carriers.

According to Ollerearnshaw the project achieved the shortest time from FEED (front-end engineerig and design) to first LNG for any LNG project. Long lead time equipment was committed to in late 2003. The agreement with government was also signed in early 2004 with the FID and the EPC (engineering, procurement and construction) contract awarded in mid-2004. First cargo loading was achieved in May 2007.

The success of the project was attributed to a close alignment of government and shareholders, the early ordering of long lead time equipment and the experience of the contractor (Bechtel) with the LNG process ( Conoco Phillips Optimised Cascade).

Ollerearnshaw noted that the EG LNG project had caught the market right, in that it was ahead of the recent inflation, with an EPC cost of $270 t/y.

He then showed the impact of the project in terms of jobs and other positive impacts on the community before turning to the longer term prospects.

There is the potential for a regional gas hub in Bioko Island and space for multiple LNG trains. According to him the potential is there for up to 20mn t/y of LNG supply. There are considerable reserves of gas within a 100 km of radius of Bioko Island - possibly as much as 30tn cf. Heads of agreements (HoAs) have already been signed with Nigeria and Cameroon for gas supplies. In addition there are further gas resources in Equatorial Guinea's offshore. FEED work is already underway to determine if the next stage should be one or two new trains or whether a much larger train would be appropriate for Phase 2.
The ending of gas flaring at the Zafiro field could provide 100mn cf/d for train 1 or 2 as well as 50,000 b/d of condensates and 40,000 b/d of LPGs.

Future challenges

The final speaker of the day was Robert Fenton, Managing Consultant, Gas Strategies Consulting. He spoke to the title 'The challenge of commercial operations in LNG'. He started by noting the very rapid expansion of the LNG business over recent years and expected this to continue. Success, however, depended on aligning interests and overcoming a series of challenges which if not successfully addressed could undermine projects.

To reach the all important FID when money is committed and construction is initiated, investors must be confident of the technical and economic viability of the project.

The recent sharp upturn in unit costs is in direct contrast to the longer term experience of falling costs driven by technical innovation and increasing sizes of ships and liquefaction trains. Commerical arrangements have also evolved with arrangements becoming increasingly complex as the industry moves away from long-term contracts to a variety of more flexible arrangements.

The trend to more liberalised gas markets and the return of the US as a significant LNG buyer after 2000 have been important drivers.

He then went on to describe some of the main challenges, noting that along the chain gas or LNG will change hands under sale and purchase agreements (SPAs) which, in addition to price and volume specify a range of variables such as delivery point, delivery schedule, destinations, quality, size and type of ship etc.
Although every aspect of an SPA could throw up challenges to the parties involved, Fenton felt four areas presented particular problems:

- Determining value - Asian markets traditionally index LNG to crude prices usually the JCC index while in Europe indexation is to competing oil products - fuel oil or gas oil, but occasionally to coal or electricity depending on the application of the gas. Long-term contracts usually include 'meet to discuss' clauses or price review provisions. This can lead to expensive and lengthy contentions negotiations.

- Quantities and invoicing - many agreements have upwards and downwards tolerances on volumes that provide some flexibility to manage volume risk. Complication provisions cover make up, cover forward and make good in contracts but is a complicated and cumbersome process that needs careful monitoring.

- Scheduling deliveries - another area that can cause difficulties. Buyers demand profiles may not match the desire of LNG plants to operate as close to capacity as possible. Production planning aims to reconcile these, but considerable complications can arise.

- Force majeure (FM) - each agreement specifies when parties can claim FM and the recourse available to them. FM events such as the Skikda explosion are rare but can be complex and expensive when they do occur, particularly if the declaration of FM is contested.

According to Fenton there are two solutions to some of these commercial challenges. The simplification of provisions and improvements in competence of staff and the efficiency of the organisation in administering contracts.

Simplification had made only limited progress because LNG has flipped from being a buyers market to being a sellers market which has restricted pressure to move to master agreements.

In terms of improving the effectiveness of organisations and their staff, Fenton identified four areas of improvement:

- Better understanding of a company's portfolio of agreements.

- Developing business processes to administer key contractual provisions.

- Staff-training and readiness training.

- Building a commercial support system.

His conclusion was that the first evolution of the LNG industry had thrown up a number of administrative challenges which have yet to be fully addressed but remain threats to the smooth running and further development of the industry.

TABLE 1: POSSIBLE LIQUEFACTION CAPACITY FIDS IN 2007 (SEE ALSO PAGE 38)
Project Capacity (mn t/y)
Peru 4
Angola 5
Nigeria - OK LNG 11
Nigeria - Brass LNG 10
Nigeria LNG train 7 8
Australia - Gorgon 10
Australia - Pluto 6
Algeria - Skikda rebuild 4
Algeria - Gassi Touil 4
Iran - Pars LNG 10
Egypt - Idku train 3 3.6
Egypt - Damietta train 2 5
Total 80.6

Excelerate Energy signs up to develop LNG regas port in Germany

2007-06-29T15:44:00.000-05:00

June 29, 2007
Lucy Hine London
Tradewinds

Terminal-hungry Excelerate Energy has hooked up with business partner German utility RWE and its compatriot, Nord-West Oelleitung, to develop a quick-start LNG-import facility at Wilhelmshaven in northern Germany.

Excelerate president Kathleen Eisbrenner says the terminal is one of several the company is planning to develop in Europe with RWE.

She adds that the facility will be similar to the Teesside GasPort terminal opened by Excelerate in the UK in February.

She says the partners have already secured an existing deepwater-port site and jetty at Wilhelmshaven through which cargoes would be brought in using Excelerate's fleet of regasification vessels.

RWE says the gas port could supply some 600,000 cbm of regasified LNG per hour into the German grid.

The partners have said they are aiming for 2010 start-up. Eisbrenner says operations could start sooner but this will depend on how discussions go with the regulatory authorities.

Excelerate and RWE are planning to hold up the example of Teesside, which they fast-tracked to completion in just 13 months.

Teesside has only imported a small part of one LNG cargo since it first opened.

Eisbrenner says the Wilhelmshaven project would most likely be used to bring in cargoes during demand peaks and to provide security of supply to Germany.

RWE chief executive officer Harry Roels said: "It is our aim to significantly strengthen our position in the gas business and to ensure Germany has access to multiple sources of gas to guarantee security of supply."

Eisbrenner describes the project as "an alternative" to the LNG terminal German utility giant E.ON is currently developing at Wilhelmshaven.

RWE and Excelerate to build German Gasport at Wilhelmshaven

2007-06-29T15:42:00.000-05:00

June 29, 2007
Gas Matters

RWE has announced plans to develop an LNG import project at Wilhelmshaven in north Germany in conjunction with Excelerate Energy and Nord-West Oelleitung GmbH (NWO). The project, called German GasPort, would use similar onboard regasification technology to Excelerate’s GasPort LNG facility at Teesside in the UK. The German GasPort is expected to be able to feed up to 14.4 MMcm/d of gas directly into the German gas pipeline network by late 2010. The timing of the project coming onstream will depend on the pace of various German authority approvals. The LNG would initially be sourced by Excelerate, though there is the possibility of sourcing LNG from some RWE Dea upstream assets in the future. “It is our aim to significantly strengthen our position in the gas business,” said Harry Roels, CEO of RWE, “and to ensure Germany has access to multiple sources of gas to guarantee security of supply.

A German GasPort meets both of these objectives.” RWE and Excelerate’s project will have to compete for supply with E.ON Ruhrgas’ proposed 27 MMcm/d onshore LNG terminal, also at Wilhelmshaven. No investment decision has been made on E.ON Ruhrgas’ project, which is also targeted for a 2010 start up, though the company is currently in talks with Iran and Algeria for LNG supply.

Exmar puts faith in regasification fleet.

2007-06-28T15:59:00.000-05:00

June 28, 2007
Lloyd's List

ONE of the pioneers of regasification vessels, Exmar continues to show its faith in the sector as it signs for an eighth LNG regasification vessel, as well as securing an option for a ninth.

No values were revealed but it is believed that number eight represents an order in the region of $260m.

Again to be built by Daewoo Shipbuilding & Marine Engineering, hull number 2272 will have a capacity of around 150,900 cu m and delivery is scheduled for the second quarter of 2010.

The eighth in the series will include the GTT 96 membrane containment system. Exmar’s option on the ninth vessel will be for delivery in 2010.

Exmar’s strategic partner in the sector, Excelerate Energy, will also be participating in the ownership of the vessel, as well as for hull numbers 2270 and 2271, which were also ordered from DSME in 2006 and will be delivered in 2009.

The trio will be named Exquisite, Exemplar and Expedient.

This move to invest in these Energy Bridge vessels brings the firm’s fleet to nine.

These vessels use Excelerate Energy’s Energy Bridge technology, which allows LNG to be revapourised to gas onboard so that it can then be fed into natural gas pipelines.

The fleet will be used to serve the proprietary LNG market access points in the Excelerate GasNet, the company’s trading and logistics platform.

The partners believe that performing commercial ship-to-ship LNG transfers, either at traditional offloading facilitiesor by onboard regasification directly into gas networks gives them a competitive advantage compared with other LNG carriers.

Exmar has also furthered it relationship with Kong Kong owner Wah Kwong in the liquefied petroleum gas market, through a joint venture for six pressurised vessels.

The Belgian firm and Wah Kwong are going 50-50 in the deal for the six tankers, each with a capacity of between 3,500 and 5,000 cu m.

Wah Kwong ordered the tankers last year. Being built in Japan, these are scheduled for delivery between November, 2008, and July 2009.

Exmar and Wah Kwong already have a partnership involving two mid-size gas carriers, Touraine and Brugge Venture.

Shitanoe is building two ships of 5,000 cu m and one of 3,500 cu m and Yamanishi is building three 3,500 cu m vessels.

RWE to Study German LNG Terminal; E.ON to Launch Share Buy-Back Scheme

2007-06-28T15:57:00.000-05:00

June 28, 2007
Sally Bogle
Global Insight Daily Analysis

In the next few months, Germany's RWE will examine the technical prerequisites and the economic prospects for building a LNG import terminal in northern Germany. RWE, U.S.-based Excelerate Energy, and Nord-West Oelleitung will establish the facility, which will feed up to 600,000 cubic metres of regassified natural gas into the German gas network by end-2010. Separately, German utility E.ON will launch its share buy-back programme on 27 June 2007, a move that will see up to 3.5 billion euro (US$4.7 billion) of shares brought back by end-2007 and a further 3.5-billion-euro-worth in 2008, exclusive of charges. Based on the current share price, this will allow buying back some 58 million shares. The scheme will see E.ON cancel the repurchased shares to optimise its capital structure.Significance: Germany’s second-largest utility, RWE, signed a memorandum of understanding (MoU) with Excelerate in November 2006 to cooperate in downstream LNG activities in Europe.

Under the deal, RWE Trading will market all of the gas delivered by Excelerate to its GasPort LNG terminal at Teesside in the United Kingdom. The two will also jointly evaluate possible sites in Germany, the United Kingdom, and elsewhere in Europe where Excelerate's floating LNG terminal technology could be applied. RWE's efforts could pre-empt rival German group E.ON’s efforts to import LNG through Germany’s first terminal at Wilhemshaven by up to 12 months (see Germany: 23 November 2006: ).

Industry News - RWE Plans LNG Import Terminal At Wilhelmshaven

2007-06-28T15:47:00.000-05:00

June 28, 2007
Business Monitor International

German utility RWE has announced plans to construct a liquefied natural gas (LNG) terminal at Wilhelmshaven in northern Germany. It will develop the project alongside US firm Excelerate Energy and Germany's Nord-West Oelleitung (NOW), with which the company has signed preliminary agreements. Germany currently imports gas only via pipeline, with some 40% of its supplies being imported from Russia. The LNG terminal will enable Germany, and the broader European Union (EU) member states, to diversify their gas supplies.

The companies aim to develop a German GasPort. They are considering using Excelerate's technology and knowledge to transport LNG on Excelerate vessels and then to regasify on board, rather than building onshore infrastructure, and supply the regasified LNG directly into the German gas grid. The project is expected to pump some 600,000 cubic metres per hour of regasified LNG into the German network by the end of 2010. This technology is considered cost efficient as no onshore regasification facility will be needed and it will therefore be capable of providing cost effective LNG to consumers. Further, the flexible delivery of gas during peak times is also a significant advantage to the companies and consumers. While the companies wait to secure project permissions from several authorities, feasibility studies are to be carried out over the next few months.

LNG As Diversification Strategy
German Gas Imports By Pipeline, 2006

Source: BP Statistical Review of World Energy, June 2007

Gas consumption in Germany now makes up more than 20% of the country's primary energy demand and accounts for 11% of power generation supply. Its share of the power market is rising fast, so gas demand should also move higher. Our estimate is for demand to rise from 88.5bn cubic metres (bcm) last year to around 102.6bcm by 2011. The country is therefore looking to build additional infrastructure to manage increasing domestic demand. A new gas import pipeline, NordStream, from Russia to Germany via the Baltic Sea is to be built by Wingas, which is a joint venture (JV) between BASF subsidiary Wintershall and Russian gas transit monopoly Gazprom. Électricité de France (EdF) has struck a deal with Germany's Energie Baden-Württemberg (EnBW) over the storage of natural gas and the construction of a pipeline and compression facility at Etzel, near the German North Sea port of Wilhelmshaven. RWE's competitor E.ON is also considering the construction of an LNG import terminal at Wilhelmshaven. The plans to construct LNG facilities are clear indicators that the country is keen to diversify its imports away from its traditional suppliers Russia and Norway in order to increase security of supply.

RWE Unveils Plans for LNG Terminal at Wilhelmshaven

2007-06-27T16:09:00.000-05:00

June 27, 2007
Matthew Hall
Global Insight Daily Analysis

RWE has announced that it will combine with U.S. company Excelerate Energy and German group Nord-West Oelleitung to develop a new LNG import facility at the deep-sea port of Wilhelmshaven in northern Germany. The proposal will see LNG transported to the port on Execelerate vessel, before undergoing onboard regasification and being piped directly into the German pipeline network. RWE said the process, similar to that adopted at Teesside in the United Kingdom, is highly cost-effective as it does not require any land-based regasification infrastructure. The new facility is designed to deliver 600 Mcm of gas into the network each hour and could be operational by 2010.

The companies will now undertake a further technical examination of the Wilhelmshaven port and seek the required permissions from various authorities.Significance:Germany—continental Europe's largest gas consumer—does not currently operate any LNG import facilities, although a separate proposal to build a 10-Bcm-per-year facility at Wilhelmshaven is currently planned by Germany utility E.ON with a possible completion date of 2011. In addition to the new offshore regasification project, RWE is also looking at delivering LNG to the German market through import terminals in neighbouring countries such as the Netherlands. The company plans to use LNG imports to erode the market share held by its rival E.ON and to further its strategy to become a major gas trader in continental Europe.

Handelsblatt: RWE to import LNG to Germany (RWE bringt Flussiggas nach Deutschland)

2007-06-27T16:05:00.000-05:00

June 27, 2007
Handelsblatt

German utilities group RWE is planning to import liquefied natural gas (LNG) directly into Germany in future. The company, which is aiming to expand its position on the gas market, wants to find new sources of supply as an alternative to imports of Russian gas by pipeline. RWE announced yesterday that it is to construct a landing station for LNG in Wilhelmshaven together with two partners, US company Excelerate Energy and German company Nord-West Oelleitung.

At the landing station, the gas, which will have been transported in liquid form by ship, will be processed and fed directly into the German network. RWE says that Excelerate's technology is very cost-efficient. LNG was not competitive in Germany for years as the country was well-connected to Russia and the North Sea by pipeline; in the last few years, however, LNG has grown increasingly cheap. The new station is expected to be completed by the end of 2010. It is estimated that it will be able to feed up to 600,000 cu m of gas into the German network every hour.

RWE AG Plans to Develop Import Facility for LNG in Wilhelmshaven in Partnership with Excelerate and NWO

2007-06-27T16:03:00.000-05:00

June 27, 2007
Reuters Significant Developments

Date Announced: 20070627

RWE AG announced that it plans to develop an import facility for liquefied natural gas (LNG) in Wilhelmshaven, in northern Germany. RWE Gas Midstream is leading the project, with two other companies, the United States-based Excelerate Energy (Excelerate) and Nord-West Oelleitung GmbH (NWO), as partners.

Wilhelmshaven energy plant for German power pair.

2007-06-27T10:16:00.000-05:00

June 27, 2007
Lloyd's List

GERMAN utility RWE has announced plans for an liquefied natural gas terminal in Wilhelmshaven, working together with Excelerate Energy from the US and crude oil importer Nord-West Oelleitung,writes Katrin Berkenkopf Cologne.

It would be the second terminal for the German North Sea port, as competitor Eon presented its plans in late 2005.

Both utilities — the leading power and gas suppliers in Germany — have strongly expanded their LNG business in the recent past. RWE, for example, is working together with Excelerate in Teesside and has a memorandum of understanding for further co-operation in European projects.

The RWE plans for Wilhelmshaven are obviously still at a very early stage. The group did not name an investment volume, but said that technical requirements and economic prospects will be evaluated over the coming months.

It also admitted that it has not received planning approval from all necessary authorities.

The facility could have the capacity to feed up to 600,000 cu m of regasified LNG into the German grid when it comes on stream in late 2010, the group said.

It should make use of Excelerate's GasPort technology.

“It is our aim to significantly strengthen our position in the gas business and to ensure Germany has access to multiple sources of gas,” said RWE chief executive Harry Roels.

RWE Expands Position in European Gas Market

2007-06-26T10:22:00.000-05:00

June 26, 2007
Essen

New LNG project with Excelerate Energy and Nord-West Oelleitung in Wilhelmshaven, Germany

Direct delivery into German gas network planned

RWE is continuing its growth strategy for the European gas market. The Group plans to develop an import facility for liquefied natural gas (LNG) in Wilhelmshaven in northern Germany.

RWE Gas Midstream is leading the project, with two other companies, US-based Excelerate Energy (Excelerate) and Nord-West Oelleitung GmbH (NWO), as partners. As has already been done in Teesside in the UK, the project partners want to utilise the special Excelerate technology at a new German GasPort™. This technology enables not only the transportation of LNG on Excelerate vessels but also the direct supply of natural gas into the pipeline network after LNG regasification on board. The Excelerate technology is highly cost-effective as it does not require investment in LNG regasification infrastructure on land.

“It is our aim to significantly strengthen our position in the gas business”, says Harry Roels, CEO of RWE AG, “and to ensure Germany has access to multiple sources of gas to guarantee security of supply. A German GasPort meets both of these objectives.”

This GasPort™ will introduce the Excelerate technology in Germany for the first time. The aim is to have the ability to feed up to 600,000 m3 per hour of regasified LNG into the German network by the end of 2010. By way of comparison, an average family house uses some 2,200 m3 of gas per year. The project is based on an agreement between RWE and Excelerate on the joint development of LNG import facilities in Europe. In Teesside, an Excelerate GasPort™ like the one planned in Wilhelmshaven has been operational since February 2007, and it is from here that RWE Trading brings the delivered gas to the UK market. The key advantage of the GasPortconcept is the very flexible delivery of gas during times of peak demand.

“We are very pleased that the relationship established between Excelerate and RWE now affords us the opportunity to bring our GasPort and Energy Bridge technologies to Germany”, said Kathleen Eisbrenner, CEO of Excelerate Energy. “The German GasPort will further serve our goal of providing producers and consumers alike cost effective alternatives to the traditional LNG distribution model.”

The technical prerequisites and the economic prospects of this kind of gas facility in the deepwater port of Wilhelmshaven will be examined during the next months. The project is still subject to securing permissions which will be issued by various authorities concerning marine, environmental and pipeline connection matters.