March 10, 2023

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Indian FSRUs Delayed to 2025

Several of India’s floating storage and regasification facilities (FSRU), which have faced repeated delays in commissioning, will be further delayed to 2025, industry sources told Energy Intelligence.

India had been expected to join Pakistan and Bangladesh in making South Asia into a major demand center for LNG, but a series of price spikes has led to cargo diversions from the region as well as a plunge in regional demand.

India planned to expand its LNG import capacity by as much as 25 million tons by 2026, but the demand plunge has stymied that effort.

India's LNG buying peaked in 2020 and has been declining for the last two years (see graph). This year is also off to a slow start relative to last year with 3.2 million tons purchased for India during January-February of 2022 compared with only 2.7 million tons bought in January-February 2023, according to Kpler.





Created with Highcharts 9.0.0(million tons)INDIA'S LNG IMPORTS20082010201220142016201820202022051015202530Source: Kpler

Swan at Jafrabad

Mumbai-based conglomerate Swan Energy initially procured the Vasant FSRU for use at the 5 million ton per year Jafrabad FSRU project in Gujarat on India's west coast.

The company said that it has now has chartered the Vasant FSRU to Turkish state energy company Botas.

The vessel is leased for a year, and the contract is extendable by mutual agreement, so Swan is keeping its options open for an extension.

"The lease agreement based on bare boat charter will enhance the rental earning capabilities of the FSRU,’’ said Rishi Chopra, spokesperson of Swan Energy, which rented out the FSRU at a rate of $250,000 per day.

H-Energy at Jaigarh

H-Energy chartered the Hoegh Giant FSRU for its 4 million ton/yr Jaigarh LNG terminal in Maharashtra on the west coast, but Hoegh canceled the contract last year.

H-Energy may now have missed its chance at Maharashtra. H-Energy, unlike Swan Energy, does not even have an FSRU, and given demand from European buyers, it may not be able to secure one anytime soon, said an analyst from S&P.

Jaigarh, which was scheduled to startup back in March 2022, was initially delayed due to a lack of a connecting pipeline to supply consumers.

Better to Rent Than Deploy

"My understanding is H-Energy and capacity holders in Swan’s Jaffrabad terminal didn’t have any new term [LNG] contract and they are unable to pass such high spot prices to the downstream consumers," an industry analyst told Energy Intelligence.

It is more profitable to rent the carrier now than deploy it in India, he added.

Both terminals are unlikely to start until the tightness in the liquefaction market eases, when new projects in Qatar and the US come online in 2025-26, said an official from Indian state-run Petronet LNG.

The Indian west coast has a surfeit of LNG terminals, many operating at low utilization levels. The 5 million ton/yr Mundra LNG terminal operated at 18% capacity in the April-December period.

Only if offtake is secured for an LNG facility can it operate in India today, the analyst said.

Adani Total’s 5 million ton/yr Dhamra LNG terminal on the east coast, scheduled to start next month, has state-run oil companies Indian Oil and gas distributor Gail committed to a combined 4.5 million tons/yr of capacity, something that a politically well connected Adani managed to pull off.

Others, like Swan or H-Energy, are not so fortunate.
Dinakar Sethuraman, New Delhi

Italy's Snam Selects Lithuanian Firm for Piombino FSRU

Italian grid operator Snam selected Lithuanian LNG terminal operator Klaipedos Nafta (KN) for the installation and commissioning of the floating storage and regasification unit (FSRU) for Italy’s upcoming Piombino LNG terminal.

The Piombino LNG import project, which is expected to begin operation in the coming months, will use the Golar Tundra FSRU, with a nominal throughput of 5 billion cubic meters per year and storage capacity of 170,000 cubic meters.

KN will “support Snam in the FSRU installation and subsequent commissioning and testing of the floating LNG terminal,” the Lithuanian company said in a statement on Mar. 10.

Lithuanian Foresight

Lithuania brought in its own floating LNG import terminal, the Independence, in 2014 — about eight years before the Russian invasion of Ukraine prompted a massive European-wide scramble for LNG.

That foresight not only contributed to Lithuanian energy security, but appears to have also given KN a head start in the terminal operator business.

The rapid LNG demand jump in Europe following Russia’s invasion of Ukraine has since boosted KN's presence in other European countries that have bet on LNG to offset the loss of Russian pipeline supplies.

KN’s Piombino FSRU award follows the decision of German utility Uniper to select the Lithuanian firm as the commercial operator of Germany’s Wilhelmshaven FSRU last year.

"Increase in the demand for LNG terminal development in Europe opens up even more opportunities for us to utilize our existing knowledge and competences in new international LNG projects, where we would be selected as consultants, operators or investors,” said Darius Silenskis, CEO of KN.

Tundra's Tale

Snam purchased the Golar Tundra for $350 million (about €330 million) last June from Bermuda-based shipowner Golar.

Golar subsequently leased the vessel from Snam and had continued chartering it out to the market as a conventional LNG carrier. Its last cargo delivery was in mid-November, after which it sailed into a shipyard in Singapore, according to ship-tracking data by maritime analytics firm Kpler.

The vessel is currently located in the Gulf of Aden, heading toward the Suez Canal, having left the shipyard last month, according to Kpler, which suggests that it is going to Europe, likely to the port of Piombino (see map).

Piombino LNG

lngi230310_Italy_map.svg


Daniel Stemler, Madrid


In Brief

Chevron Inks CCS Deal With Jera

Chevron has signed an initial deal with Japan’s Jera to collaborate on carbon capture and storage (CCS) projects in the US and Australia.

The memorandum of understanding announced this week provides a “framework” for collaboration on the projects, with the potential to expand the companies’ existing relationship in the LNG space.

Jera is a joint venture partner on a number of Australian LNG facilities, including the Chevron-operated Gorgon and Wheatstone LNG facilities. It is also a partner on the Freeport LNG facility in the US.

While Chevron doesn’t operate any US LNG facilities, it has secured 4 million tons/yr of offtake from export plants on the US Gulf Coast. The company is betting big on CCS in the US, and recently took control of the giant Bayou Bend project in Texas. However, it has been scrutinized in the past over problems at the CCS facility at Gorgon in Australia.
Caroline Evans, Houston

Gazprom Export Chief Resigns

Gazprom's exports chief Elena Burmistrova has resigned, the Russian state-run gas giant said on Friday.

Gazprom did not state a reason for Burmistrova's resignation which comes at a time when Gazprom has been forced to shift its export strategy away from Europe because of Russia's war in Ukraine.

Burmistrova, 52, is leaving Gazprom for the affiliated bank Gazprombank, where she will be first vice president.

She joined Gazprom in 2003 and became CEO of Gazprom Export, the company’s export arm, in 2014 replacing the company's long-serving CEO and her mentor Alexander Medvedev.

Her promotion in 2014 coincided with the signing of Gazprom’s first gas supply deal with China.

In 2019, Burmistrova was also appointed Deputy CEO of parent company Gazprom while keeping the position of Gazprom Export CEO.

Burmistrova will be replaced as Gazprom Export CEO by Dmitry Khandoga, 41, who has been appointed acting CEO.

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


Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India10.0710.4510.1410.449.809.6610.839.3810.7610.179.539.309.60
Sodegaura, Japan10.9112.0612.0812.1310.888.0011.759.9911.6512.4210.269.5211.02
Zeebrugge, Belgium16.7915.3615.0315.4216.3416.6516.0215.0015.9015.0416.4615.6616.54
Huelva, Spain12.0110.6810.3810.7311.5711.4211.2910.2711.1810.3711.6310.8111.65
Isle of Grain, UK14.8513.4413.1213.5014.4414.7114.1913.0913.9813.1214.5313.7414.60
Everett, US1.470.150.440.201.211.090.010.830.65-0.161.65----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback3. Oct17. Oct31. Oct14. Nov28. Nov12. Dec26. Dec9. Jan23. Jan6. Feb20. Feb6. Mar10203040Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia13.2013.120.18-0.08
SW Europe11.1012.652.741.55
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)-0.112.432.543.01
NBP, UK (futures)+2.8415.8212.9813.41
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF3.7316.8313.1114.57
Zeebrugge (Belgium)1.8312.2210.39--
German NCG1.3113.0111.7012.95
NBP (UK)2.7215.6412.9113.98
US Markets
US Spot Prices
Sabine Pass, Louisiana-0.142.372.512.66
Corpus Christi, Texas-0.212.162.372.49
Cove Point, Maryland-0.152.292.442.46
Elba Island, Georgia--------
Nymex Henry Hub Futures
Near Month-0.112.432.543.01
Second Mth-0.122.562.683.14
Third Mth-0.122.802.923.32
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaApr '22May '22Jun '22Jul '22Aug '22Sep '22Oct '22Nov '22Dec '22Jan '23Feb '23Mar '230255075100125Energy Intelligence