An LNG JOURNAL PUBLICATION 21 May 2013

LNG Unlimited
The LNG export permit for the
Freeport facility in Texas to supply
US cargoes to Japan has had
repercussions far beyond the
sleepy US Gulf coast backwater of
Quintana Island where the lique-
faction plant will be built.
Freeport LNG has become the
second export project after Sabine
Pass to be licensed by the Depart-
ment of Energy to deliver cargoes
to countries such as Japan and
China that do not have Free Trade
Agreements with the US.
Costs
If Japan can after 2016 import
US LNG for about $9 per million
British thermal units, with a net-
back margin of around $4.3 (See
Graph) with related falls in more
expensive LNG, then the average
Japanese LNG import price for
cargoes could drop by about $90
per tonne
In addition to the Freeport per-
mit, Sempra Energy has come up
with a full $10 billion US export
plant joint venture deal for the
Cameron facility at Hackberry in
Louisiana with the previous provi-
sional liquefaction tolling agree-
ment signatories from Japan and
elsewhere. The relief that US LNG
is heading for Japan can be seen
in the record surges on the Tokyo
Stock Exchange in the Japanese
utilities and trading houses who
will buy the fuel and Japans LNG
fleet owners who will ship it.
The Japanese companies who
were immediately boosted by the
US LNG export breakthroughs are
Osaka Gas and Chubu Electric from
the Freeport project, Mitsubishi
and Mitsui & Co. at Cameron LNG
and Sumitomo Corp. and Tokyo Gas
from the Cove Point LNG in Mary-
land that should have its export
permit decision by June.
The two biggest LNG shippers
into Japan, NYK Line and Mitsui
O.S.K. Lines, saw their shares
jump over 7 percent in one day.
While over 20 projects have ap-
plied for licences to export to FTA
nations and non-FTA nations, the
number of non-FTA permits will
set the volume of the natural gas
glut caused by the US shale-gas
boom that will be sold abroad
from US coastal plants.
Decisions are now likely to be
made on a monthly basis for the
major projects, giving an indica-
tion of future global supplies
which could be expected to reach
up to 50 million tonnes per annum
or more from the US by 2020.
With Freeport now accorded
the second licence the next deci-
sion will likely concern the BG
Group-led export project at Lake
Charles in Louisiana, analysts said.
At Cameron LNG, Japanese
trading companies Mitsubishi
(through Japanese shipping com-
pany NYK Line) and Mitsui, have
now signed 20-year tolling capac-
ity and joint-venture deals.
US LNG export decisions for Japan
mark easing of post-Fukushima crisis
Netback margins for US LNG exports shipping to Europe and Japan
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Class society DNV
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SHIPPING
TERMINALS
PROJECTS
Zeebrugges LNG
facility sees carrier
traffc hit by Asia but
fuel venture grows
4
Indian energy frm
brings a second
LNG export venture
to Nova Scotia coast
5
Uruguay to use
GDF-Suez FSRU
for LNG imports
in Montevideo port
6
Sempra signs $10Bln
joint venture for
Cameron LNG with
French and Japanese
2
FLOATING LNG
LIQUEFACTION
TENDERS
Trafgura wins tender
in Mexico to supply
up to 18 LNG cargoes
7
Japanese LNG importers
have received boosts
from advances involving
Freeport and Cameron
Our North America editor
Meeting challenges
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Sempra Energy, the California-based
LNG player, has come up with a
full $10 billion US export plant
joint venture deal for the Cameron
facility at Hackberry in Louisiana
with the previous provisional liq-
uefaction tolling agreement signa-
tories from Japan and France.
France's GDF-Suez and Japan-
ese trading companies, Mitsubishi
Corp. and Mitsui & Co, have now
signed 20-year tolling capacity and
joint-venture agreements to sup-
port the development, financing
and construction at the Cameron
regasification terminal being
transformed into an export plant.
Tolling
The tolling agreements subscribe
the full nameplate capacity of the
three Train, 13.5-million tonnes
per annum facility that will pro-
vide an export capability of 12
MTPA of LNG, with the three for-
eign partners each having 4 MTPA.
The joint venture agreement
calls for affiliates of GDF-Suez,
Mitsubishi (through Japanese ship-
ping company NYK Line) and Mitsui
each to acquire 16.6 percent
equity in the existing facilities
and the liquefaction project,
with Sempra holding 50.2 percent.
"These agreements represent a
major step forward in the devel-
opment of our LNG export project
at the site of the Cameron LNG fa-
cility," said Mark A. Snell, Presi-
dent of Sempra Energy.
"This project, one of the
largest in Sempra Energy's history,
provides benefits to the local
Louisiana economy, promotes a
favorable balance of trade for the
national economy, and supports
national and international energy
security by assuring reliable long-
term gas supplies to US allies and
trading partners," Snell stated.
The anticipated investment,
the majority of which will be proj-
ect-financed, is estimated to be
between $6 billion to $7Bln,
excluding capitalized interest
and other financing costs.
The total cost of the facility,
including the cost of the existing
facilities plus interest during con-
struction, financing costs and re-
quired reserves, is estimated to be
up to $10Bln.
Contracts
Construction is expected to start in
2014 with the first phase of lique-
faction operations to commence in
the second half of 2017. Full com-
mercial operation of all three Trains
is expected in 2018, Sempra said.
Sempra has been active in LNG
since imports to North America
were seen as crucial - prior to the
shale-gas boom. The Californian
company built an import terminal
at Costa Azul on the Pacific coast
of Mexico and then completed
Cameron LNG just as the US
natural gas glut arrived and the
market turned.
Jean-Marie Dauger, executive
vice -resident in charge of the
Global Gas & LNG business line for
GDF-Suez said of the agreement:
By being a shareholder of the
Cameron LNG project, alongside
strong and experienced partners,
GDF-Suez - one of the world LNG
leaders - will contribute to the
emergence in the US of a new
source of LNG.
The Cameron LNG project will
add growth, diversity and flexibil-
ity to the group's LNG portfolio,
in order to supply its existing or
future markets in high growth
regions, Dauger added.
Jun Nishizawa, vice president
of the Global Gas Business Depart-
ment for Mitsubishi, said his com-
pany had accumulated experience
from more than a dozen LNG proj-
ects over the last half-century.
By participating in this LNG
export project, we are proud to be
able to contribute not only to the
development of stable energy trade
between the US and countries
around the world, including Japan,
but also to the growth of the US
economy, Nishizawa added.
Hirotatsu Fujiwara, general
manager of the Natural Gas Divi-
sion for Mitsui, said he was
pleased to add to a stable source
of energy supply to meet the
increasing global demand, includ-
ing in Japan.
Last year, Cameron LNG
obtained approval from the US
Department of Energy (DoE) to
export up to 12 MTPA of domesti-
cally produced LNG to all current
and future Free Trade Agreement
countries. The authorization to
export LNG to countries with
which the US does not have a Free
Trade Agreement is pending
review by the DoE.
In January 2013, Cameron LNG
initiated a tender process for the
engineering, procurement and
construction contract for the proj-
ect and launched its financing
process with the Japan Bank for
International Cooperation, Nippon
Export and Investment Insurance,
and commercial banks.
Sempra said the tolling capac-
ity and the joint-venture agree-
ments are subject to a final
investment decision to proceed by
each party, finalization of permit
authorizations, securing financing
commitments that are expected to
occur by early 2014, as well as
other customary conditions
Meanwhile, Tennessee Gas
Pipeline Co. a unit of US transmis-
sion giant Kinder Morgan, has
signed a binding 20-year trans-
portation agreement with
Mitsubishi to ship feed-gas to the
Cameron plant.
The Mitsubishi pipeline agree-
ment will come into force in the
second half of 2017, Kinder said.
The Japanese company will serve
as the foundation shipper for TGP's
Southwest Louisiana Supply Proj-
ect, which is designed to provide
transportation from various supply
basins in Ohio, Pennsylvania, Texas
and Louisiana.
Sempra signs $10Bln joint venture for Cameron LNG
NEWS LNG Unlimited 21 May 2013
2
California-based LNG player signs firm agreements with GDF-Suez, Mitsubishi and Mitsui for US exports
Our Houston reporter
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Det Norske Veritas Chief Executive
Henrik O. Madsen said that amid
financial uncertainty and rapid
technological change the Norwe-
gian classification society saw the
offshore industry and LNG shipping
stand out as two of the few seg-
ments that are performing well.
"This contributed to our mar-
itime business producing good
results despite the overall weak
developments in shipping in 2012,"
Madsen said in presenting DNV's
earnings.
DNV secured 316 new-building
classification contracts for ships
and mobile offshore units, corre-
sponding to 8.8 million gross
tonnes.
DNV has classed LNG carriers
ranging from the 1,100 cubic
metres "Pioneer Knutsen" to
216,000 Q-Flex LNG carriers
from Qatar.
The class society currently
has an estimated share in numbers
of 17 percent of overall shipping
industry newbuilding classifica-
tions and 22.5 percent in gross
tonnes.
The total DNV-classed fleet of
ships and mobile offshore units
fell from 6,134 at the end of 2011
to 6,115 at the end of 2012,
mainly due to a high level of
scrapping.
DNV, which has been involved
in LNG shipping since the Norwe-
gian development of the Moss-
style storage tank 50 years ago,
now has a 9 percent share of the
classed overall world shipping
fleet in numbers and 14.5 percent
share in gross tonnage.
Revenue
CEO Madsen said in the statement
that annual revenues increased
by 27 percent compared with
2011 and DNV strengthened its
global position in all its key
areas.
Both the Maritime and Oil &
Gas and the Business Assurance
business showed robust organic
growth rates, primarily from
DNV's traditional classification
and certification services.
DNV achieved operating rev-
enue of 12.8 billion Norwegian
crowns ($2.2Bln) in 2012, an in-
crease of 2.7Bln crowns.
However, net profit for 2012
slipped 1.5 percent to 719M
crowns compared with 730M
crowns for 2011.
The latest earnings were issued
as the Norwegian class society is
completing the process of taking
over Hamburg-based rival
Germanischer Lloyd. The transac-
tion is currently being considered
by competition authorities.
The merger when completed
will form "an excellent foundation
for the future," DNV said.
"I really look forward to leading
the new company and showing
customers, employees and society
at large how we add more value,
offer more opportunities and con-
tribute to a safer and more sus-
tainable future," said Madsen.
21 May 2013 LNG Unlimited NEWS
3
Det Norske Veritas navigates storm thanks
to LNG and offshore ahead of GL takeover
Our Europe editor
Severn Glocon
of UK to supply
valves weighing
up to 20 tonnes
for Ichthys LNG
Severn Glocon, the UK valves
specialist, won a landmark con-
tract to supply 536 engineered
control valves for the Australian
Ichthys LNG plant being con-
structed at Blaydin Point near
Darwin in a project being de-
veloped by Japanese energy
company Inpex and Total of
France.
Included in the contract are
cryogenic valves of up to 42
inches bore, weighing around
20 tonnes, as well as valves
with pressure ratings of up to
2,500 ANSI.
Landmark
"This is the largest and one of
the most technically challeng-
ing contracts in the firm's 50-
year history," the company said.
"The valves will deal with
volatile fluids at temperatures
as low as -160centigrade, and
they need to handle extreme
requirements surrounding cryo-
genics, thermal dynamics and
velocity control," it added.
Severn said its technicians
had developed bespoke designs
for the valves, and they are
being manufactured across the
group's manufacturing plants
in Gloucester, England, and
Chennai, India.
Engineering, procurement
and construction of the Ichthys
project are being undertaken by
the JKC Australia LNG Pty Ltd
(JKC), a joint venture between
JGC Corp. and Chiyoda Corp of
Japan and KBR of the US.
The project is now in the
construction phase and the first
valves are being shipped. Manu-
facture and supply of valves will
continue into 2014, Severn said.
"The scope, scale and harsh
demands of this project com-
mand highly-engineered, tech-
nically advanced hardware,"
said Roger Spiers, Commercial
Manager at Severn.
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The class society currently has an estimated
share in numbers of 17 percent of overall
shipping industry newbuilding classifications
and 22.5 percent in gross tonnes.

Fluxys Belgium, owner of the Zee-

brugge LNG terminal, said that de-
spite the strong attraction exerted
on LNG by the Asian market, in
the first three months of the year
eight LNG carriers unloaded at the
Belgian facility and five others
used the terminal to take on LNG
for re-export.
However, the carrier traffic
was down on the same quarter in
the previous year when 15 carriers
unloaded and five carriers loaded
at the terminal.
Take-up of LNG truck-loading
service continues to rise, with 126
trucks loading at the terminal in
the first quarter of 2013 compared
with 76 a year earlier, Fluxys said.
"These figures confirm the at-
tractiveness of Zeebrugge as one
of the most active LNG terminals
in North-West Europe," the Belgian
company said.
A second jetty for loading and
unloading LNG carriers is currently
being developed at the Zeebrugge
terminal.
Last month the engineering,
procurement and construction
turnkey contract was signed for
the construction of the jetty.
Ships with capacities ranging
from 2,000 cubic metres to
217,000 cubic metres of LNG will
be able to berth at this new jetty
from 2015.
Fluxys said Zeebrugge was at-
tracting LNG carriers of all sizes,
from the smallest to the largest.
"A number of medium-term slots
were sold last year for 2015 on-
wards and market interest remains
buoyant," the company said.
The company said in its interim
earnings statement that revenue
from transmission, storage and
LNG terminalling for the first
quarter of 2013 was almost 4 per-
cent lower at 156.2 million euros
($201M) compared with 162.4M
euros for the first quarter of 2012.
"It should be remembered that
the revenue for the first quarter
of 2012 included services invoiced
by Fluxys & Co (2.8M euros),
which was sold in January 2013."
Fluxys said.
Fluxys also noted an LNG ele-
ment in its transmission business.
"Unlike in previous years, large
volumes were transported to the
United Kingdom at a time of year
when natural gas flows usually
move in the other direction.
"This was because LNG imports
in the UK were at a very low level
and storage facilities were almost
empty.
Fluxys said that on March 21,
2013, a new daily record of 787 gi-
gawatt hours was set for pipeline
natural gas exports to the UK.
"This was 5 percent more than
the quantity of gas consumed in
the whole of Belgium that day.
"On the following day, when
the Interconnector - the subsea
pipeline connecting Zeebrugge with
Bacton in the UK - was unavailable
for eight hours, the Belgian net-
work and neighbouring operators
were able to deal flexibly with the
incident so that no impact was
felt on the continental European
market," Fluxys explained.
NEWS LNG Unlimited 21 May 2013
4
Zeebrugge LNG terminal sees carrier traffic
hit by Asian cargo flow but truck fuel grows
Our Europe editor
Zeebrugge can handle ships with capacities ranging from 2,000 cubic
metres to the Qatari Q-Flex vessels with 217,000 cubic metres
South Korea is on track to build its
fifth LNG import terminal at the
southern city of Boryeong after
contracts were awarded to two
local companies for the engineer-
ing and construction of the facility.
The terminal contracts worth
$680 million were awarded to
GS Engineering & Construction
Corp., and SK Engineering &
Construction Co.
The Boryeong LNG import
terminal is being developed by as
a 50-50 joint venture between GS
Energy Corp. and SK E&S, the city-
gas provider, as the government
eases import restriction on non-
state bodies importing the strate-
gic fuel. GS Energy is also the
partner of Chevron Corp. in
GS Caltex. Both GS Energy and
Chevron hold half of the outstand-
ing shares in GC Caltex.
The Boryeong LNG terminal will
have an initial capacity to handle
1.5 million tonnes per annum of
LNG and will have two storage
tanks with160,000 cubic metres
capacity.
LNG from Boryeong is expected
to be partially used to feed GS
Caltex's 440 megawatts Anyang
and 500MW Buchon power plants.
South Korean LNG purchases
last year amounted to 36.77
million tonnes, most of it
imported by state-run natural gas
company Korea Gas Corp.
The new Boryeong terminal will
be relatively small compared with
the three huge facilities owned by
Kogas at Pyeong-Taek, Incheon
and Tong-Yeong.
The LNG facilities are among
the largest in the world with a
combined 57 LNG storage tanks
between them.
The nation's fourth import
terminal at Kwangyang is owned
by steelmaker POSCO to provide
its own plant power.
However, Kogas remains the
principal LNG company in the
country with long-term supply
contracts with nine countries,
including the US Sabine Pass LNG
export plant being built in
Louisiana.
The Ministry of Trade, Industry
and Energy said in its latest LNG
supply report that LNG demand
will be just over 39MT in 2015. It
is then expected to fall to about
34MT in 2020, before bouncing
back up to around 38MT in 2027.
Planners see a ceiling on LNG
demand of under 40MT because of
the alternative use of nuclear and
coal for power generation and also
a slowdown in economic growth
that will temper demand from
industry.
South Korea to build its fifth LNG import terminal but
on smaller scale and to be used by private companies
The Canadian province of Nova
Scotia is to have a second Atlantic
Basin LNG export project, with the
latest being announced by an India
company based in Mumbai.
Darshan Hiranandani, director
of a company called H-Energy,
held a press conference in the
Nova Scotian capital, Halifax, with
Stephen Lund, the president of
the provincial body, Nova Scotia
Business, to explain the venture.
The Indian company plans to
build the plant in the town of
Melford at a cost of $3 billion.
Hiranandani said in his state-
ment that his venture would be
similar in size to the LNG plant
that Calgary-based Pieridae
Energy is planning to build at
nearby Goldboro.
The Hiranandani Group is one
of India's largest real estate devel-
opers. It also has real estate oper-
ations in Dubai in the United Arab
Emirates and energy operations
in India.
Hiranandani said the export
facility could be operational
by 2020.
The Indian company has taken
an option on 240 hectares of land
at the Melford Industrial Park to
build the facility.
Hiranandani said the site's deep
water port and proximity to an ex-
isting natural gas pipeline, which
would need to be expanded, made
the location ideal for the venture.
The other speaker Lund, head
of the provincial body to encour-
age business to Nova Scotia, said
there is a market around the
world for abundant North Ameri-
can natural gas.
"There will be facilities built in
North America, I don't think any-
one would dispute that. The ques-
tion is where they are going to be.
Why not Nova Scotia?" he said.
The Pieridae Energy proposal
made in October 2012 was for a
$5Bln LNG export plant to be built
close to Melford and the Maritimes
and Northeast Pipeline.
Hiranandani stressed that his
project was in its early stages and
the next step was a feasibility
study.
The Indian company would also
have to look at securing feed-gas
supplies from various North Ameri-
can sources, including Nova Scotia
and other parts of Atlantic
Canada.
The project was aimed at
exporting LNG to markets in Latin
America, Europe and India.
An existing LNG import facility
on the Atlantic coast of New
Brunswick, Canaport LNG, is plan-
ning to add liquefaction facilities
to its regasification equipment.
The terminal is owned by Spain's
Repsol and Irving Oil of Canada.
21 May 2013 LNG Unlimited NEWS
5
Indian company brings second LNG export
project to Atlantic coast of Nova Scotia
Our North America editor
Darshan Hiranandani of H-Energy (right) and Nova Scotia business
official Stephen Lund from the provincial government
LNG Shipping Forum 2013
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Thursday 6th June 2013
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LNG Unlimited
Monaco-based
LNG operator
GasLog sees
high-quality
shipping growth
GasLog, the Monaco-based LNG
carrier fleet operator, believes
the strong fundamentals of the
LNG industry will provide signifi-
cant growth opportunities for its
"high-quality shipping operations."
"We will continue to focus on
delivering the growth of the
business, through the on-time
delivery of the newbuilding
fleet, while ensuring full uti-
lization of the existing ships,"
the company said in presenting
its third-quarter results.
GasLog expects that the
strategy of leveraging its estab-
lished platform and customer re-
lationships will aid in qualifying
for charter possibilities for two
of its uncommitted newbuildings
as well as the options it holds
for four additional carriers.
For the first quarter, GasLog
reported profit of $5.9 million,
and earnings before tax and
other deduction of $13.9M. a
quarterly dividend of $0.11 per
common share is payable on
June 11, 2013.
GasLog, which will grow its
vessel roster to 24 carriers
under its control by 2016, has a
further three LNG carrier new-
builds due for delivery this year,
as well as two in 2014 one in
2015 and two in 2016.
The latest vessel delivery
was in March. The ship, the
"GasLog Santiago", is a 155,000
cubic metres capacity vessel
with tri-fuel, diesel-electric
propulsion.
Immediately on delivery that
vessel commenced a medium-
term charter to Methane Serv-
ices Ltd., a subsidiary of BG
Group, the world's leading LNG
portfolio player.
The company has a further
12 LNG carriers under its tech-
nical management for BG.
GasLog, controlled by Peter
Livanos, is listed on the New
York Stock Exchange.
NEWS LNG Unlimited 21 May 2013
6
The Canadian National Energy
Board said some natural gas
drilling in Western Canada for
feed-gas for planned LNG export
projects is likely being postponed
since the ventures themselves are
taking longer than anticipated to
obtain sales commitments from
Asian buyers.
"A key issue appears to be
resolving pricing terms. Buyers
appear to be seeking contracts
with prices indexed to lower
priced North American natural
gas. Sellers appear to be seeking
the more traditional indexing to
higher priced crude oil," the board
said in its market survey to 2015.
Feed-gas
This means preparations for
bringing feed-gas from Northeast
British Columbia to the Pacific
coast will be delayed, analysts
said.
Some of the projects include
LNG Canada. That ventures is
being developed at Kitimat by
Royal Dutch Shell, with Japan's
Mitsubishi Corp., PetroChina and
Korea Gas Corp. as partners.
These partners will buy the off-
take, however, the profile of other
projects is different.
Another venture being
constructed nearby, Kitimat LNG
owned by Apache Corp. and
Chevron Corp., has already been
through the permitting process.
But Chevron and Apache are hold-
ing out to sign up Asian long-term
contracts linked to the crude
oil price.
At least three other LNG proj-
ects are proceeding in the Prince
Rupert region north of Kitimat,
including two ventures run by
Malaysia Petronas and Japanese
partners, and BG Group of the UK
with Spectra Energy.
The board said in its energy
market assessment that Canadian
natural gas producers are under-
taking minimal drilling activity as
current prices do not cover the
full costs of developing prospects.
Drivers
The three key supply and demand
drivers influencing future Canadian
natural gas deliverability include:
1. Minimal drilling activity
because prices do not cover
the costs of developing most
natural gas prospects.
2. Growth in natural gas as a
by-product from developing
oil and natural gas liquids-rich
prospects.
3. Producers are not earning
sufficient returns to attract
additional equity investment
with current prices of around
$3.00 per million British ther-
mal units in Western Canada.
"The addition of pipeline capacity
to deliver shale gas from drilled
but previously unconnected wells
in the Marcellus Shale of Pennsyl-
vania and West Virginia is bringing
forth additional deliverability into
an already fully supplied North
American market, displacing Cana-
dian natural gas exports in the
Northeast US and some domestic
sales in central Canada," the
board said.
Further displacement of
Canadian natural gas could occur
due to the developing Utica Shale
in Ohio.
"Drilling in Canada is generally
funded through diminishing cash
flow and capital commitments
from previous joint venture
partners.
"This has imposed significant
capital discipline on Canadian
producers, thus prompting the
industry to reduce costs and
continue efforts to boost drilling
efficiency," the board said.
"Further, most producers have
shifted capital toward drilling
tight oil wells. While the Duvernay
Shale and the Liard Basin are
promising shale gas resources,
they are unlikely to have any
meaningful impact on Canadian
natural gas deliverability over the
forecast period.
"The large potential resource
base in the Liard Basin, Horn River
Basin, Cordova Embayment, and
deeper portions of the Montney
Formation is almost all dry gas.
Dependence
"Without the benefit of NGL
revenues, these resources will be
dependent on higher natural gas
prices to accelerate develop-
ment," it added.
"If the North American natural
gas market moved to more bal-
anced supply and demand condi-
tions, market prices would likely
rise and provide financial incentives
for industry to begin to develop
more of Canada's large natural gas
resource base," it said.
Lack of Asia sales by Canadian LNG export
projects add to nations natural gas slump
Our North America reporter
Uruguay to
use GDF-Suez
FSRU for
LNG imports
in Montevideo
Uruguay's state-owned energy
company Ancap has awarded
France's GDF-Suez the contract
to supply a floating, storage and
regasification vessel as an im-
port facility.
The FSRU is be deployed in
the port of Montevideo and will
enable Uruguay to lessen its de-
pendence on neighbour Ar-
gentina for its energy needs.
The LNG import facility plant
is expected to be operational by
the first quarter of 2015.
It is expected to receive
about eight cargoes per annum
and Ancap is currently looking
for potential suppliers.
Uruguayan Energy Minister
Roberto Kreimerman said: "The
recommendation is to award
GDF-Suez the supply of the re-
gasification terminal with a total
investment of $1.25 billion."
Kreimerman stressed the
importance of viewing the
regasification terminal in the
framework of a long-term
energy plan and said it was
"a milestone" for the country.
The project will require
building a breakwater near
where the FSRU will be located
in Montevideo port and connec-
tions will be made to the coun-
try's natural gas transmission
network.
The minister said the GDF-
Suez FSRU would initially be
chartered, but a new vessel
would be incorporated into the
project's second phase. Other
bidders for the project included
Norway's Hoegh LNG and a con-
sortium formed by Korea Gas
Corp. and Korean shipbuilder
Samsung Heavy Industries, the
minister said.
This is the second FSRU LNG
contract won by GDF-Suez in
the past month. it will also
supply an FSRU to Tiajin in
northeast China.
Our South America editor
Without the benefit of NGL
revenues, these resources will be
dependent on higher natural gas prices
to accelerate development,"

21 May 2013 LNG Unlimited NEWS

7
Trafigura wins Mexican tender to supply 18 LNG cargoes
Mexico will buy 18 spot LNG
cargoes from Trafigura, the global
energy and commodities player,
after a tender held by the
countrys Federal Electricity
Commission.
The average price paid for the
cargoes will be $15.84 per million
British thermal units and they will
be delivered to the Mazanillo
import terminal on Mexicos
Pacific coast.
Marketing deal
Trafigura became a serious LNG
player in March this year when it
signed an agreement through an
affiliated venture with Angolan
state energy company Sonangol to
market the southwest African
nation's share of the LNG project
set to come on stream, and to
build an LNG joint venture trading
business, including vessels.
That Mexican import terminal
currently receives cargoes from
Peru LNG under a contract with
Repsol, though the Spanish com-
pany has now sold its interest in
the plant to Royal Dutch Shell.
The Mexican CFE said Trafigura
will deliver the first shipment to
the Manzanillo terminal on July 19.
The Mexican body held an
auction for the 18 of 30 cargoes
required during 2013 and 2014.
There will be a later tender for
12 additional cargoes.
The spot cargo award was
made to Trafigura during a second
round of bidding, under an invita-
tion process involving 14 compa-
nies, of which eight made offers
after which the contract was
assigned to the company
Trafigura, the CFE said.
As a result of this second
process, the CFE obtained a sav-
ings of $47 million compared to
the bids received in the first
round, which took place two
weeks ago and it was declared
void because none of the 10 bids
complied fully with each and
every one of the requirements
set forth under the process, the
CFE said.
Of the 30 shipments sought by
Mexico, 17 will be delivered in
2013 and the remaining 13 in
2014.
The companies that submitted
bids in the second tender process
were: BP, Trafigura, Germanys
RWE, Vitol, Russias Gazprom, US
investment banks JP Morgan and
Morgan Stanley and Excelerate
Energy of the US.
The Mexican authorities had
scrapped an earlier first round of
bidding because of legal issues.
The shipments for 2013 will
be shared between state energy
company subsidiary Pemex Gas
and Basic Petrochemicals (PGPB)
and CFE, but will be settled
through separate contracts for
each of the companies.
The Manzanillo regasified LNG
will be fed into the national
pipeline linking the terminal to
the city of Guadalajara.
The Mexican terminal is the
main regasification facility outside
the Asia-Pacific region constructed
and owned by Asian companies.
The Mexican terminal is owned
and operated by Samsung of South
Korea, Korea Gas Corp. and Japan-
ese trading company Mitsui & Co.
The invitation to bid for the
Manzanillo terminal contract was
issued by the CFE way back in
June 2006.
Due to CFEs internal affairs,
the bidding date was postponed a
number of times before eventually
being set as February 2008.
There were a total of seven
bidders for the project , Tokyo
Gas-Iberdrola-IHI-ICA Flour,
Marubeni Corporation-CB&I,
Mitsubishi-Kyushu Electric,
Sumitomo Corp.-Union Fenosa-
Technicas, Repsol YPF-TKK,
TransCanada-MHI-Techint and
Mitsui-Kogas-Samsung C&T-
Samsung Engineering.
Among the bidders, the con-
tract was awarded to KMS, a con-
sortium that consisted of Kogas
(25 percent), Mitsui (37.5 percent)
and Samsung C&T (37.5 percent).
KMS held a kick-off meeting with
CFE in March and the contract was
signed on March 27, 2008.
Tanks
The first LNG tank commissioning
was completed in August 2011 and
the second commissioning on No-
vember 30, 2011.
It was executed with top-qual-
ity seismic design for LNG tanks
and facilities. Samsung managed
to achieve mechanical completion
after only 39 months.
The LNG tanks were based
on earthquake-resistant design
and built with high strength
concrete.
Shipments to Manzanillo import terminal on Pacific coast will cost an average of $15.84 per MMBtu.
Our Mexico City editor
Manzanillo import terminal has been receiving cargoes from Peru LNG under Repsol deal
Trafigura became a serious LNG player in March this year
when it signed an agreement through an affiliated venture
with Angolan state energy company Sonangol

NEWS LNG Unlimited 21 May 2013

8
Purchasing and contracting exec-
utives from the national energy
companies of the Gulf Coopera-
tion Council have held a meeting
in Doha organized by Qatar
Petroleum, the world's largest
LNG producer.
Qatar's Energy Minister
Mohammed bin Saleh Al-Sada
hosted the two-day gathering
at the Ritz-Carlton hotel in the
capital, also attended by Qatar
LNG project partners ExxonMobil
and Royal Dutch Shell.
This bi-annual event is a part
of the ongoing coordination
activities in oil, gas and LNG
between Gulf states. The
committee was originally
formed in 2000 under the
patronage of QP with the aim
of fostering GCC cooperation
on energy.
The GCC members are
Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, and the United
Arab Emirates.
Oman and the UAE are also
regional LNG producers. Addi-
tionally, the UAE and Kuwait also
import LNG.
In his keynote speech, Ahmed
Abdul Rahman Al-Mulla, QP
Corporate Manager Purchasing
& Contracts, said he firmly
believes that council remained
the foundation for successful
cooperation and the transfer of
knowledge among members.
He emphasized the impor-
tance of "supporting each other's
critical needs, thus ensuring
uninterrupted production opera-
tions aimed towards maximizing
profitability."
Al-Mulla made references to
recent incidences of mutual
exchanges of critical operational
materials among GCC energy
companies, thus resulting in
avoidance of revenue losses.
Qataris host meeting on energy and LNG activities
WGK wins
subsea contract
for Timor Sea
Bonaparte
FLNG venture
Wood Group Kenny has been
awarded a multi-million dollar
engineering contract for the
Bonaparte Floating LNG produc-
tion project in the Timor Sea
offshore northwest Australia.
The Bonaparte FLNG venture
is being developed by France's
GDF-Suez and Australia's Santos.
WGK has won the contract
for pre-front-end engineering
and design for the subsea
concept definition study.
The Bonaparte FLNG project
is made up of the Petrel,
Frigate and Tern gas fields,
located in the Timor Sea, which
were previously stranded fields,
but recent FLNG technology
advances have made them
economically viable to develop.
Currently, there are no
operational FLNG facilities in
the world. However, in recent
years a number of FLNG proj-
ects have been proposed and
are now under development in
Australia. such as Bonaparte
and Shell's Prelude venture.
Additionally, Japan's Impex
has the Abadi FLNG project
in Indonesian waters and
Malaysia's Petronas is develop-
ing two stranded gas liquefac-
tion ventures in its waters.
Phil Brown, Australian
Regional Director of WGK,
said: "We are delighted to have
been awarded this important
contract to support GDF-Suez's
operations in Australia, which
recognises our expertise in sub-
sea engineering, and in particu-
lar, FLNG emerging technology.
"This is a new client for us
and we hope to establish a long
and successful business rela-
tionship with them.
"WGK has been based in
Perth for nearly 30 years and in
that time we have developed a
very strong, local presence,"
Brown added.
Air Products, the US supplier of liquefaction equipment,
has signed a supply agreement for the delivery of nitro-
gen generator sets for use on the offshore portion of
the Australian Ichthys LNG project led by Japan's Inpex.
The generator sets will be supplied to South Ko-
rean shipyards Samsung Heavy Industries and Daewoo
Shipbuilding & Marine Engineering Co.
The Central Processing Facility work for Ichthys
LNG is being carried out by SHI and the Floating
Production Storage and Offloading installation is
being constructed by DSME.
Air Products was the first company to introduce com-
pact systems for membrane-based production of nitrogen
for use onboard ships and FPSOs as offshore installations.
Initially the equipment was used as a method for
choking gas during loading and unloading in order to
prevent explosions onboard the vessels.
However the product has been shown to have ad-
ditional uses, such as treatment of water in ballast
tanks, extended preservation of food during trans-
port, and increasing the lifetimes of marine tanks.
Air Products previously signed a contract with
Royal Dutch Shell for a similar delivery to the com-
pany's Prelude Floating LNG project also to be lo-
cated offshore northwest Australia. The 150-metres
by 110m CPF for Ichthys LNG will displace 140,000
tonnes and will have a peak feed-gas export rate of
1,657 million standard cubic feet per day, making it
the largest of its kind.
The semi-submersible is being built by SHI at its
Geoje Island shipyard, with US-based Mustang as the
detailed engineering sub-contractor.
Tom Cantero, Chief Executive and Managing
Director of Air Products Norway, said: "We are very
glad that Samsung and DSME have recognised the high
quality of our nitrogen generator sets and we look
forward to future cooperation.
"There is growing global demand for LNG and we
feel that the positive trends within this segment will
accelerate in coming years. We find ourselves very
well positioned to play a key role in this development
as Air Products has a very clear focus, a dedicated
team and a strong work ethic," Cantero said.
"Our agreement with Samsung is the result of
intense work and development. We feel that our spe-
cially developed membrane-based nitrogen generator
sets are setting the industry standard for use in the
LNG sector." he added.
National energy companies of the Gulf Cooperation Council held a meeting in Doha organized by Qatar Petroleum
Air Products to supply nitrogen generator
sets for offshore portion of Ichthys LNG