The following 11 April, 2017 article ‘LNG’s Class of 2017’ mentions EWC’s Sengkang lng project beng “…on course to export its first 500,000 tonnes of LNG…”(see bold printed section below).
This year, seven LNG projects are scheduled to start or expand their production, bringing an additional 24.9 million tonnes (mta) to market. The Class of 2017 includes the world’s first live floating LNG (FLNG) project, two project start-ups in Australia, the expansion of two existing projects in the US and Australia and a small, modular LNG project in Indonesia.
Australia, in particular, is ramping up its output. Last year, the country exported 36.8 mt, an increase of more than a third. This year, the second and third trains at Gorgon LNG, the first train for the giant offshore Ichthys LNG project and the first train at Wheatstone LNG are due to bring an additional 18.7 mt to market.
By the end of the decade, Australia is on course to become the world’s biggest exporter of LNG, displacing Qatar, exporting some 85 mta. However, with global LNG supply exceeding current demand, reports of project delays were gathering momentum in the opening months of this year.
In February, Ichthys backer Inpex issued a statement, pledging that it will start production by September, hitting back at reports that the project faces new delays. It suffered a setback in January when the engineering firm CIMIC pulled out of its contract to build Ichthys’ power station, citing the project’s rising costs.
Gorgon announced last year that it would delay full production until this summer. It was unclear, at the time of writing, whether project backer Chevron plans to push the start date back further still. In February, India’s Petronet LNG received its first cargo from Gorgon, two years later than scheduled.
Project delays are of particular concern in Australia, because the country’s second wave of seven world-scale LNG-export projects is the most expensive the world has ever seen, according to a study that LNG World Shipping carried out last year. The average Australian project costs US$30.9 billion – three times more than the estimated cost of Canada-based start-ups, which have all been delayed due to cost concerns.
Delays in Australia may also boost uptake for unfixed cargoes from Sabine Pass in the US, where train three was due to complete construction in April, well ahead of its June target. US-based analysts are now predicting that owner Cheniere Energy may also complete train four this year, ahead of its original 2018 schedule.
Together, the two trains will add 9 mta of production capacity, doubling output from Sabine Pass. The next wave of US-based export projects is not due to start until next year.
Indonesia is opening a new mid-scale LNGexport project this year. Energy World is on course to export its first 500,000 tonnes of LNG from its 2 mta start-up, Sengkang LNG. It is developing the project as a modular venture comprising individual 500,000 tonne trains. Sengkang LNG will supply a regasification terminal and power plant that Energy World is building in the Philippines. The final project due to start this year is perhaps the most closely watched of all. Malaysia-based Petronas aims to start commercial production using the world’s first floating LNG (FLNG) vessel, PFLNG Satu, see page 26. Plans are for the 1.2 mta vessel to start commercial production at the time of going to press, after Petronas pushed back its original first-quarter 2017 launch date.
Last year brought a wave of FLNG project cancellations, reflecting investor nervousness, amid low oil and gas prices and rising project costs. If the proof of the pudding is in the eating, the performance of PFLNG Satu will determine how quickly Petronas brings online its second FLNG vessel – and how quickly its competitors bring additional FLNG projects to market.
EWC Price at posting:
36.0¢ Sentiment: Buy Disclosure: Held
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