Offshore East Africa: Deep Water Natural Gas Bonanza

Offshore reports the trend of continued success in locating gas in the deep waters off East Africa: Mozambique, Tanzania emerging as prolific deepwater gas plays. How big? Anadarko's Chairman says:

“This could be one of the most important natural gas fields discovered in the last ten years,with significant long-term benefits for Mozambique.”

Benefits? From the Offshore report:

Mozambique's government was anxious for work on the project to start, he said, both for the incoming tax revenue in the longer term and for the near-term impact on jobs creation in the area. At peak, he forecast that construction of the initial LNG plant would involve 7,000 workers, with more employment opportunities for the second train.

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Following meetings with local villagers, fishermen and farmers, Anadarko has filed an application for land to build the onshore reception and process facilities. The port of Ofungi is the chosen site for the LNG plant. "The nearby city of Palma only just received electric power for the first time last year, so there is potential for this project to change the area significantly," Vardeman observed. "Also, an aircraft landing strip will be built of sufficient size to land a 747 at least." At the coastal location, materials offloading and LNG loading facilities will be constructed. The proposed beach front site is large enough to accommodate LNG carriers turning, he said, although when the tide goes out a large area of flat sand appears.

Assuming the final investment decision is taken toward the end of 2013, first gas could flow in 2018. But this is a very competitive market, Vardeman noted, "and we must convince buyers that this will be a reliable source of LNG. Also, this will be our first LNG plant, so they need to count on us to be there a long time." On the other hand, Vardeman explained, having Bharat Petroleum, Videocon, and Mitsui as partners was helpful for marketing the Area 1 gas to India and Japan. "It's an optimal location, close to India, and the distance to Japan is the same as to Europe," Vardeman said.

Oh, those horrible oil and gas companies, applying their technology in such a way as to benefit the poor of Africa.

LNG for Japan and Europe.

Another blow to the former gas monopolists in Russia.

Too bad the world is running out of energy . . . not.

Of course, there are those Somali pirates to deal with.



All illustrations credit Anadarko.

LNG Terminal Opens on West Coast....on Mexico's Baja Peninsula

NIMBY, NIMBY, NIMBY. Keep saying that as whiny Californians will get their natural gas fed to them from a foreign country. Sempra LNG opens up its Baja LNG terminal near Ensenada, as reported here:

"The start of operations at Energía Costa Azul represents the culmination of seven years of development activity involving the acquisition of permits and commercial contracts, construction, start-up and testing," said Darcel L. Hulse, president and chief executive officer of Sempra LNG. "The journey from an idea to a whole new business has been both challenging and satisfying."

Energía Costa Azul's first cargo of imported natural gas arrived April 18 aboard the Al Safliya, a new, state-of-the-art LNG carrier from Qatar. A second LNG ship, the Bluesky, arrived at Energía Costa Azul May 6 with a cargo of LNG from Trinidad. The stringent performance testing is now complete and the terminal has successfully met all of its design criteria.

The terminal is fully contracted and capable of processing 1 billion cubic feet per day (Bcf/d) of natural gas, with room for expansion. While Sempra LNG owns 100 percent of the facility, the company is leasing half of Energía Costa Azul's processing capacity to Shell International Gas Limited under a 20-year agreement. Sempra LNG's half of the capacity at Energía Costa Azul will be supplied from a new liquefaction facility nearing completion at Tangguh, Indonesia. Shipments from the Indonesian facility should begin arriving in the second quarter of 2009.

The natural gas processed at Energía Costa Azul will be used in Baja California and the U.S. Southwest. Natural gas from the terminal will meet applicable Mexico and U.S. gas pipeline quality standards.

I applaud Sempra's success, but deplore the NIMBY attitude that causes businesses to have to locate such facilities in neighboring countries to avoid the NIMBYs. I guess the jobs associated with the LNG facility and the lower cost of shorter pipelines don't matter to some vocal, and in my view, misguided groups in California.

LNG Tanker poses no threat

Stalled LNG tanker towed to sea for repairs

The 992-foot-long disabled Spanish tanker that found itself without power in 20-foot seas off Chatham early Monday was towed to a point seven miles off Gloucester Tuesday night for repairs.

Despite the effort of the report to make it sound as if doom was averted, no one was ever in any danger:

According to the Coast Guard, the Catalunya Spirit lost power at 3 a.m. Monday about 35 miles east of Chatham. The ship was headed to Boston from Trinidad and Tobago.

Technicians from the ship's owners, Teekay LNG Partners of Vancouver, British Columbia, and marine inspectors from the Coast Guard were dropped to the ship from a helicopter Monday afternoon. They believe a computer that helps maintain constant pressure coming out of the ship's boilers might have failed. The boilers power the steam turbines that drive the ship. The boilers are fueled by burning some of the natural gas onboard.

Massachusetts Maritime Academy engineering professor James McDonald found it hard to believe there was no backup system to manually control the boilers. But the vessel and its crew of 29, drifting powerless at nearly 4 mph to the southeast, notified the Coast Guard at about 6:30 a.m. Monday that they could not resolve the problem and needed help.

In a telephone conference call yesterday, Cmdr. Howard Shaw of the Coast Guard Cutter Escanaba said seas were extremely rough when they found the Catalunya Spirit at 3:40 p.m. Monday. He said 30- to 40-knot winds and 18- to 20-foot seas were pounding the vessel and there was some concern about it drifting toward shallows on Georges Bank.

"What was critical was the tugs getting there," he said.

Tugs arrived late Monday night, with at least 30 miles before the ship encountered any shallow water. Four tugs towed and escorted the tanker north Tuesday at about 4 mph in light seas and wind, and the flotilla arrived at a safe anchorage seven miles off Gloucester Tuesday night.

By 11:30 a.m. Monday, the Coast Guard initiated an emergency plan that brought together federal and state agencies responsible for potential pollution and security risks and to coordinate the tanker's towing. Coast Guard spokesman Keith Hanley said there are always tugs available along the New England coastline, ready to help stricken vessels.

Port Security: Protecting Tankers

Good summary of the publicly released version of a recent GAO report covering port protection of tankers (oil, LPG and LNG) from MarineLog:

U. S. energy needs rest heavily on ship-based imports. Tankers bring 55 percent of the nation's crude oil supply, as well as liquefied gases and refined products like jet fuel. This supply chain is potentially vulnerable in many places here and abroad, as borne out by several successful overseas attacks on ships and facilities.

GAO's review addressed (1) the types of threats to tankers and the potential consequences of a successful attack, (2) measures taken to protect tankers and challenges federal agencies face in making these actions effective, and (3) plans in place for responding to a successful attack and potential challenges stakeholders face in responding.

GAO's review spanned several foreign and domestic ports, and multiple steps to analyze data and gather opinions from agencies and stakeholders.

The supply chain faces three main types of threats--suicide attacks such as explosive-laden boats, "standoff" attacks with weapons launched from a distance, and armed assaults.

Highly combustible commodities such as liquefied gases have the potential to catch fire or, in a more unlikely scenario, explode, posing a threat to public safety. Attacks could also have environmental consequences, and attacks that disrupt the supply chain could have a severe economic impact.
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Domestically, units of the Coast Guard, the lead federal agency for maritime security, report insufficient resources to meet its own self imposed security standards, such as escorting ships carrying liquefied natural gas.

Some units' workloads are likely to grow as new liquefied natural gas facilities are added. Coast Guard headquarters has not developed plans for shifting resources among units.

Multiple attack response plans are in place to address an attack, but stakeholders face three main challenges in making them work.

First, plans for responding to a spill and to a terrorist threat are generally separate from each other, and ports have rarely exercised these plans simultaneously to see if they work effectively together.

Second, ports generally lack plans for dealing with economic issues, such as prioritizing the movement of vessels after a port reopens. The President's maritime security strategy calls for such plans.

Third, some ports report difficulty in securing response resources to carry out planned actions.

Federal port security grants have generally been directed at preventing attacks, not responding to them, but a more comprehensive risk-based approach is being developed.

GAO report (pdf format) here. Same report covered in a more hysterical manner ("Doomed, doomed, I say")-and with a large factual error- here, covering particular concerns over a planned LNG facility:

The report is likely to raise more questions about a proposed $800-million LNG terminal in the Port of Long Beach, which Sound Energy Solutions, a Mitsubishi/ConocoPhillips subsidiary, wants to build on 25 acres of Pier T.

The proposal was shelved by port officials in early 2007 following a wave of protest from community groups and elected leaders concerned the facility would be a magnet for terrorists.

LNG, if released into the air and ignited at a very precise air-gas mixture, is capable of exploding, although the risk of such an incident is minute.

Contrary to the article, LNG will not explode (unless, I suppose, you manage to heat the entirety of an LNG tank on a ship while also stopping any overpressure vents), it may burn, but it will not explode. See here. But see for yourself, FERC reports: (1)ABS report (pdf):

Although LNG vapors can explode (i.e., create large overpressures) if ignited within a confined space, such as a building or structure, there is no evidence suggesting that LNG is explosive when ignited in unconfined open areas. Experiments to determine whether unconfined methane-air mixtures will explode have been conducted and, to date, have been negative.

; (2) Sandia Lab report (pdf) here.

LNG: Safety on the desert shores

If people don't want LNG ships near them, go where the people ain't, as set out here:

As a port of call, Puerto Libertad doesn't offer much. There's no public dock, no cargo cranes - not much at all, in fact, besides sand and shrubs and the unbroken horizon of the Gulf of California.

But for the huge tankers that carry natural gas around the world, this Mexican village is perfect: close enough to the United States to pump their volatile cargo over the border, but remote enough that a leak, explosion or terrorist attack wouldn't destroy an entire city.

As the United States runs out of natural-gas reserves, some energy companies are looking to Mexico, Canada and even the Bahamas for remote sites, like Puerto Libertad, where they can receive the mammoth boats carrying liquefied natural gas, or LNG. They can then sell it in the foreign country and pipe it across the border to U.S. homes and businesses.
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The foreign sites are also a way of bypassing opponents in American cities who are jittery about the prospect of gas tanker ships on their shores.

"Everyone is concerned that LNG is a combustible material, and they don't want it anywhere near them," said Alex Steis, managing editor of Natural Gas Intelligence, a trade publication. "It's the same stigma, or nearly the same stigma, as a nuclear facility, whether that (fear) is founded or not."

So, when the people move in near the LNG tank farm, where will the terminal go?

Oregon LNG PR battle continues

PR fight on LNG pipelines and terminals in Oregon reported as Pipeline battle hinges on need, livability:

Proponents of LNG contend that the gas will stay here. They argue that the Northwest is home to a variety of energy-intensive industries and needs another source of gas to buffer price shocks as supplies from the Rocky Mountains and Canada become constrained. Exports of Canadian gas are expected to decline as its domestic demand heats up for use in separating oil from sands in Alberta. Meanwhile, pipelines are under construction that will carry Rockies gas to East Coast markets, where prices are higher.

“In the absence of additional supply, the Northwest will find itself in a very volatile market,” said Joe Desmond, former chairman of the California Energy Commission, who is now a vice president at NorthernStar Natural Gas, which has proposed one of the Columbia facilities, called Bradwood Landing.

In a study paid for by NorthernStar, University of Oregon business professor Phillip Romero forecast that the addition of a natural gas terminal would increase regional gas supplies by 20 percent and cause gas prices to fall 13 percent.

The economic study is part of a major public-relations offensive that the company has waged in Clatsop County, which is scheduled to rule on the project's proposed zoning changes later this summer. A Bradwood Landing office in downtown Astoria is festooned with the facility's slogan - “Good for the Economy and Good for the Columbia” - as well as a profusion of displays advertising connections to the community, including local schools, Little League teams, 4-H, the North Coast Chapter of Ducks Unlimited, even Clatsop Historical Society.

Opponents of the terminals and associated pipelines, ranging from environmental activists to concerned residents, have their own campaign. They describe the projects as tempting terrorist targets and potential environmental disasters and say the projects threaten not only safety and quality of life for residents but also the local tourist trade.

They pepper their descriptions of LNG with words such as “blast zone” and “vaporized.” And they contend that while investors have tried to put a friendly local face on their projects, they are really wildcatters from Houston and New York.

Good thing the "opponents" aren't trying to use scare tactics.

Savannah LNG expansion plans approved, usual suspects whine

Reported here, an authorized expansion of a Georgia Liquid Natural Gas facility near Savannah:

Plans to more than double the storage capacity for liquid natural gas at Savannah's Elba Island terminal have moved closer to reality as the Federal Energy Regulatory Commission has concluded the project is not likely to cause significant environmental harm.

Of course, fear-mongers walk among us:

Elba is one of only four import terminals for liquid natural gas in the continental United States. Plans to build dozens more have met with community opposition from Maine to California, particularly in the aftermath of the Sept. 11, 2001, attacks.

But Elba's proposed expansion has met with little debate.

"Community after community, we've asked less questions than anybody else," Jennings said. "It's like the heat has fried our brains."

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The Sierra Club and the Savannah Riverkeeper commented on the draft environmental impact statement, as did dozens of concerned landowners along the pipeline route.

LNG is methane that has been cooled to ultra-low temperatures to condense it for transport and storage. Critics worry that incoming tankers or the import facility itself could be the target of a terrorist attack.

Experts suggest a catastrophic attack on a tanker at the terminal or on the tanks could produce a fire so large and hot that a two-mile buffer would be needed to avoid burns to exposed skin.

Accidents are also a worry. In March 2006, the 940-foot-long tanker Golar Freeze pulled away from its moorings on Elba after a passing ship created a surge.

The fact that no spill occurred does not comfort Jennings.

I doubt much would.

More info on the LNG facility from its owner, El Paso Corporation (from which, I should note, I will someday receive a pension) here.

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