September 1, 2022

WWW.ENERGYINTEL.COM

Germany's Fifth FSRU Project Under Development

Germany has selected the partnership of green hydrogen firm Tree Energy Solutions (TES), German utility E.On and French utility Engie to develop the country’s fifth LNG floating storage and regasification unit (FSRU), which will be located in Wilhelmshaven.

The FSRU will begin operation in the beginning of the heating period 2023, according to a statement by the companies. It will have an annual regasification capacity of 5 billion cubic meters (Bcm), equal to roughly 3.6 million tons of LNG, equaling around 5% of German demand.

The FSRU was chartered by Engie, on behalf of the German economy ministry, from Texas-based shipowner Excelerate Energy for 5 years. The French utility will also be responsible for part of the FSRU’s LNG supply and together with TES will be the operator of the unit.

“By importing liquefied natural gas, we are making ourselves less dependent on imports of Russian pipeline gas. And all steps that free us from the uncertainty of Russian imports as quickly as possible are more necessary than ever in these times,” said German economy minister, Robert Habeck.

Last month, the German federal economy ministry and utilities Uniper, RWE and EnBW signed a memorandum of understanding to supply LNG to future FSRUs in Brunsbuttel and Wilhelmshaven, after RWE and Uniper secured four FSRUs on behalf of the German government in May.

Green Energy Hub

TES is also building a green energy hub in Wilhelmshaven to produce green hydrogen and renewable gas.

The arrival of the FSRU will accelerate the development of the company’s hydrogen terminal and it aims to begin imports of green molecules within the first year of operation of the FSRU for “a fast and efficient green transition.”

TES expects large-scale imports of hydrogen to start in 2025.

Inaugural Cargo to Eemshaven

While the German FSRU projects are still some way off from starting LNG imports, the Eemshaven FSRU project in neighboring Netherlands is expected to receive its first cargo next week.

The Shell-chartered Methane Becki Anne LNG vessel, laden with a cargo from the US Elba Island plant, is scheduled to unload at the Eemshaven terminal on Sep. 10, according to data by analytics firm Kpler, based on port authority data.

The terminal is composed of two FSRUs, the Golar Igloo and the S188 regasification barge, with a total capacity of 8 Bcm/yr, or roughly 5.7 million tons.

The terminal is being developed by Dutch grid operator Gasunie, with Czech utility CEZ, Shell and Engie booking the full regasification capacity of the terminal.
Daniel Stemler, Madrid

Shell Won't Keep Sakhalin-2 Stake

Shell will not keep its 27.5% minus one share stake in the Sakhalin-2 offshore upstream and LNG project in Russia’s Far East, the supermajor has said, confirming expectations.

The company has notified the Russian government that it will not take equity in the new project operator, Russia-registered Sakhalin Energy LLC which replaced Bermuda-based Sakhalin Energy Investment Co. in early August.

Shell also told the government that it reserves all its legal rights.

Moscow demanded that foreign shareholders of Sakhalin-2 apply for their stakes in the new operator by Sep. 4, something that would not be in line with Shell’s commitment to withdraw from Russian projects following Moscow’s invasion of Ukraine.

Other shareholders, Russia’s Gazprom and Japan’s Mitsui and Mitsubishi will keep their respective 50% plus one share, 12.5% and 10% stakes in Sakhalin-2. The Russian government approved Mitsui’s and Mitsubishi’s applications in late August.

Shell’s stake will now be held by Sakhalin Energy LLC itself. The government is entitled to assess its value and sell to a Russian entity within four months. It is not clear whether the stake will be sold to a strategic Russian investor such as LNG export champion Novatek or an intermediary which will then look for foreign investors from countries that did not impose sanctions on Russia, such as China or India.

Offtake Contract

Shell also has a 1 million ton per year long-term offtake contract with Sakhalin Energy Investment Co. expiring in 2028 and it is not clear whether it will re-sign this contract with the new operator. Shell has said it continues to monitor developments relating to that contract and assess its options in line with applicable legal requirements and agreements.

If Shell is no longer able to offtake LNG within the Sakhalin-2 contract, the company will continue to serve customers in line with commitments, as its global supply portfolio enables it to deliver LNG from multiple sources, the company said.

For more coverage of the Ukraine crisis, visit Ukraine Crisis: Energy Impact
Staff Reports

Adnoc Ships Low-Carbon Ammonia to Germany

Abu Dhabi National Oil Co. (Adnoc) said on Thursday it has shipped the first of several test cargoes of low-carbon ammonia to Germany as it seeks to position itself as a supplier of clean fuels such as hydrogen.

The shipment coincides with an energy crisis in Europe that has hit Germany especially hard.

In response to Russia's war in Ukraine, Europe's largest economy is working to reduce its heavy dependence on imports of Russian oil and gas by finding alternative sources of supply and turning to other forms of energy.

The low-carbon ammonia cargo on its way to Germany was produced by Fertiglobe, an Abu Dhabi-based fertilizer producer that is co-owned by Adnoc and Netherlands-based OCI.

It will be delivered to Hamburg-based Aurubis, a supplier of non-ferrous metals and a global player in copper recycling.

Aurubis plans to use the low-carbon ammonia in a wire rod plant to test it as a supplementary source of lower-carbon energy.

"To guarantee stable processes at our sites, we are expanding our portfolio of reliable energy sources and thus investing in the decarbonization of our production at the same time," said Aurubis CEO Roland Harings.

The hydrogen contained in the ammonia has the potential to become a low-carbon fuel for energy-intensive industrial processes, Adnoc said.

The cargo exported to Germany follows a number of similar low-carbon ammonia sales by Adnoc to customers in Asia.

It is part of a trend of growing investments in low-carbon ammonia and hydrogen in the Middle East as the region positions itself for a world that is expected to shift away from fossil fuels in the longer term.

On Wednesday, QatarEnergy announced that it plans to build a 1.2 million ton per year "blue" ammonia plant at a cost of nearly $1.2 billion.

Adnoc plans to scale up its hydrogen and low-carbon ammonia production capabilities with the development of a 1 million ton/yr low-carbon ammonia plant at Taziz, a chemicals and logistics hub at Ruwais in the emirate of Abu Dhabi.

The project is part of the state-controlled company's plans to expand its hydrogen production in support of the United Arab Emirates' ambition to supply up to 25% of hydrogen imports in key global markets.

Germany's national hydrogen strategy is based on the assumption that the country will need to import around 3 million tons/yr of clean hydrogen by 2030 and up to 15 million tons/yr by 2050.
Oliver Klaus, Dubai


In Brief

Oz Woodside Secures New GHG Storage Permit

Australian independent Woodside Energy has secured a new offshore GHG storage permit, the third one in two weeks, further consolidating its carbon capture and storage strategy.

Woodside has a 20% operated interest in the permit while BP, Shell, and Japan Australia LNG have a 20% stake each.

Japan Australia LNG is owned equally by Mitsubishi, Mitsui, Shell and Chevron.

The permit is located in the Northern Carnarvon Basin off the north-western coast of Western Australia, approximately 125 km north-west of Dampier and covers an area of 1775 sq km which contains the depleted Angel gas field.

Evaluation and appraisal work is set to start to investigate the potential for the geological storage of carbon dioxide in the permit area which could have a processing capacity of up to 5 million tons of CO2 per year, Woodside said in a statement.

“A multi-user CCS project near Karratha would be ideally located to aggregate emissions from various existing sources. It would also have the potential to facilitate the development of new lower-carbon industries, such as the production of hydrogen and ammonia, by providing a local solution for emissions,” the company added.
Marc Roussot, Singapore


Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India60.6361.1060.6961.0960.2860.0961.5959.7461.5060.7459.9359.6460.00
Sodegaura, Japan61.2662.7062.7262.8261.2357.7462.3060.1262.1763.1860.4659.6061.41
Zeebrugge, Belgium38.1036.6336.3036.6937.6437.9637.3036.2837.1736.2937.7636.9437.84
Huelva, Spain47.4145.8745.5245.9446.9146.7246.5645.4446.4545.5346.9646.0246.98
Isle of Grain, UK38.8237.3437.0137.4038.3938.6838.1237.0037.8937.0138.4837.6638.57
Everett, US7.336.136.416.177.097.000.016.746.575.867.49----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback28. Mar11. Apr25. Apr9. May23. May6. Jun20. Jun4. Jul18. Jul1. Aug15. Aug29. Aug10203040506070Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia0.0063.96-0.4963.96
SW Europe0.0048.08-7.4448.08
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)0.149.269.139.38
NBP, UK (futures)+2.8956.2453.3568.67
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF-1.5465.8767.4189.97
Zeebrugge (Belgium)-1.6141.3342.9459.84
German NCG-2.4267.4469.8590.78
NBP (UK)-7.4439.6447.0861.03
US Markets
US Spot Prices
Sabine Pass, Louisiana----8.949.31
Corpus Christi, Texas0.528.988.468.92
Cove Point, Maryland-0.148.248.388.66
Elba Island, Georgia--------
Nymex Henry Hub Futures
Near Month0.149.269.139.38
Second Mth0.149.339.199.34
Third Mth0.159.489.339.42
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaSep '21Oct '21Nov '21Dec '21Jan '22Feb '22Mar '22Apr '22May '22Jun '22Jul '22Aug '22Sep '220255075100125Energy Intelligence