EkaLore has previously written about the likely capacity and logistics issues facing the EU for replacement of Russian energy supplies of Liquid Natural Gas (LNG) and pipeline imports of natural gas.
Incomplete information about the USA Freeport LNG terminal (Quintana Island, TX) event has created a scenario of problems. On June 8th it was disclosed that an explosion and fire had caused the production operations of the terminal to be halted. Nominal capacity at the Freeport operation is 15.3 MMT/year (2B cu ft/day). In a regulatory filing Freeport disclosed a shutdown was required of all three liquification trains (converting gas to liquid) and related process flows. Freeport has estimated that the repairs and regulatory investigations will keep the facility offline for at least 3 weeks.
Capacity of all 7 LNG USA export shipping terminals (including startup capacity at Calcasieu Pass, LA) totals 85 MMT/year (11.24B cu ft/day). The Freeport terminal thus represents about 13% of rated USA export capacities. Even before the event operational issues occurred reducing production volumes such as planned maintenance/restart, volatile supply volumes, supply quality, and logistics availability.
As an example of the complex interaction for natural gas supplies the liquification process to convert gas to liquid (by cooling) requires significant energy. The Freeport terminal uses electricity (from the Texas grid) often generated by natural gas. Other terminals use a portion (up to 15% or more) of their incoming gas to power the liquification process.
The repairs to the Freeport terminal are lengthening out due to supply availability and regulatory investigations. The plant will not be back online until late 2022. More than 3 months elapsed for a May 2020 fire/explosion repairs at the smaller (279M cu ft/day, 2.5MMT/year) Elba Liquification facility (Savannah, Georgia) in one of the liquification mixed-refrigerant compressors. Covid-19 and supply chain availability substantially delayed bringing the Elba facility back to full capacity.
The political and economic pressures are increasing for the rapid availability of USA produced natural gas. Pressures to supply the EU with USA liquid natural gas, although convertible to displace Russian natural gas/LNG, are at direct odds with the practicality. Trying to increase USA exports when full plants can take years to build (like Calcasieu Pass), and cost USD$B’s, this is not quickly done. In addition, natural gas production is typically stored in the USA for next winter’s consumption. Increasing demands for natural gas to fuel electrical production for air conditioning also puts pressure on natural gas availability. This interaction of these pressures and demands create market turbulence.
An example of the timeline and scale for LNG facilities is the expansion of the 1000-acre Calcasieu Pass facility. Engineering planning started in 2017 with initial paperwork from FERC in 1Q2019. Expected operational production is 4Q2022-1Q2023. Development and build costs were USD$10B. Expected production capacity is 10.8 MMT/year (516B cuft/year). An integrated 720 MW power plant will consume gas to run the production. Two docks capable of serving 185,000 cuM LNG carrier ships take off production. The construction firm estimated work of 5.15 staff millennia with 2700 workers over 25 calendar months.
USA LNG export capacity is set to expand rapidly though 2022 capacity is limited.
The next post continues this story from the point of view of the EU, and what they are struggling with in terms of ramping alternative sources of LNG to replace Russian supplies.
Read Part 2 at https://www.ekalore.com/post/pump-fake-2-eu-challenges
Bình luận