OUTLOOK: A Busy 2009 for LNG

2009 will be an eventful year for the global LNG industry.

As the table below shows, seven LNG trains with a total of 36.1 mtpa (1.73 trillion cubic feet) are scheduled to begin production from March through November of this year. In addition Train 6 of Nigeria LNG will add 4 mtpa of production when it resumes operations at some point. When one factors in the 4.4 mtpa of North West Shelf Train 5, the global LNG industry likely will have added 44.5 mtpa (2.14 trillion cubic feet) of liquefaction capacity via nine trains over a 14-month span.

Projected LNG Start-ups

PROJECT TRAIN ANNUAL CAPACITY START-UP DATE

North West Shelf

5

4.4 mtpa

September 2008

Nigeria LNG

6

4 mtpa

To be determined

Sakhalin II

1

4.8 mtpa

March 2009

Qatargas II

4

7.8 mtpa

March 2009

Tangguh

1

3.8 mtpa

June 2009

Yemen LNG

1

3.3 mtpa

July 2009

Sakhalin II

2

4.8 mtpa

July 2009

Tangguh

2

3.8 mtpa

August 2009

RasGas

6

7.8 mtpa

November 2009

TOTAL

 

44.5 mtpa (2,139 bcf)

 

SOURCE: Waterborne Energy

As the graph below illustrates, these projects (with the exception of Nigeria LNG) alone will boost LNG production capacity by 21 percent from 719 to 870 bcf.



Brief descriptions of these projects follow:

  • Nigeria LNG Train 6 (start-up in 2007 but suspended since Fall 2008)
    Completed in Dec. 2007, Train 6 of the Nigeria LNG (NLNG) facility is designed to produce 4 mtpa of LNG and 0.75 mtpa of LPG. The LNG terminal on Bonny Island is owned by Nigerian National Petroleum Corp. (NNPC) (49 percent stake), Shell (25.6 percent), Total LNG Nigeria Limited (15 percent), and Eni (10.4 percent).
    NLNG declared force majeure in Fall 2008 as a result of widespread theft from pipelines serving the facility. As of late January 2009, press reports stated that the force majeure was still in effect. When all six trains of NLNG are operational, they are designed to produce 22 mtpa of LNG and 5 mtpa of natural gas liquids (LPG and condensate). Approximately 35 percent of NLNG's total output is destined for customers in the U.S. and Mexico; the remaining customers are in Italy, France, Turkey, Spain, and Portugal.
    NLNG may add a seventh train that would bring the facility's LNG production capacity above 30 mtpa by 2012. A final investment decision is anticipated this year.
  • NorthWest Shelf Train 5, Australia (Sept. 2008)
    Capable of producing 4.4 mtpa of LNG, Train 5 of the North West Shelf Venture in Western Australia began operations in September 2008. North West Shelf Australia LNG, operated by Woodside Petroleum Ltd., now produces 16.3 mtpa with the addition of the fifth onshore train at the Karratha Gas Plant. The new production facility will process gas from the Venture's North Rankin A, Goodwyn A, and Angel offshore production platforms. LNG from the plant's five trains is shipped to customers in China, Japan, and South Korea.
  • Qatargas II Train 4 (March 2009)
    As part of its overall expansion of facilities at Ras Laffan Industrial City, Qatar, Qatargas is adding two LNG trains to its Qatargas II project. Each train will have a liquefaction capacity of 7.8 million tonnes per annum (mtpa) LNG and 0.85 mtpa of liquefied petroleum gas (LPG). The first of these trains, Train 4, is set to begin operations next month.
    LNG from Qatargas II will be shipped to markets in the United Kingdom and Europe via Q-Max and Q-Flex ships. Qatar Petroleum owns 70% of Train 4 and ExxonMobil owns the remaining 30%.
  • Sakhalin II Train 1, (March 2009); Train 2 (July 2009), Russia
    Gazprom, Shell, Mitsubishi, and Mitsui are developing the Sakhalin II project, which features the first LNG production plant in Russia. The plant, located in Progorodnoye south of Sakhalin Island in Russia's Far East, will liquefy gas produced from the Lunskoye gas field.
    According to Shell, virtually all of the gas from Sakhalin II has been sold via long-term contracts to customers in the United States, Japan, and South Korea. Three long-term charter vessels will deliver LNG to these markets. Both of the plant's LNG trains are expected to begin operations this year -- Train 1 went onstream just this past week and Train 2 in set to start production in July. Each train will have an annual capacity of 4.8 mtpa (230 bcf).
  • Tangguh Train 1, (June 2009); Train 2 (Aug. 2009)
    BP Indonesia is the operator of Tangguh LNG, which will be the third LNG hub in Indonesia when production begins from its first train in June 2009. When liquefaction from the second train begins two months later, the plant will be able to produce 7.6 mtpa of LNG. Each train has a capacity of 3.8 mtpa.
    Natural gas for Tangguh will be produced from six fields lying beneath Indonesia's Bintuni Bay; the combined proven reserves for these fields is approximately 14.4 trillion cubic feet. LNG from the plant will be delivered to four customers in China, South Korea, and Mexico under long-term sales deals.
  • Yemen LNG Train 1 (July 2009)
    The largest industrial project by far in Yemen's history, Yemen LNG is being developed to produce and export 6.7 mtpa of LNG from the Arabian Peninsula country to customers in North America and South Korea for at least two decades.
    The first LNG train of the project is scheduled to begin production in July 2009; it will boast a capacity of 3.3 mtpa (158 bcf). Gas will originate from the Marib area fields in Block 18, and reserves currently dedicated to the project include 9.15 trillion cubic feet of proven reserves and 0.7 tcf of probable reserves.
  • RasGas Train 6, Qatar (Nov. 2009)
    Natural gas produced from Qatar's North Field is processed at the RasGas LNG export terminal in Ras Laffan Industrial City, Qatar. The facility currently produces 20.7 mtpa of LNG in five trains. RasGas is building two additional trains that will each produce 7.8 mtpa of LNG, bringing the total LNG output of RasGas to 36.3 mtpa. Train 6, which will produce LNG for the U.S. market, is scheduled to begin operations in November. Train 7, which will serve Asia, is set to go onstream next year.

Would you like to suggest coverage of a timely downstream-oriented topic that you believe warrants attention? If so, send your suggestion to Matthew Veazey. Please include "Outlook suggestion" in the subject line.

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@rigzone.com

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