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Golden Pass LNG has the brownfield advantage

Wed 01 May 2019 by John Snyder

Golden Pass LNG has the brownfield advantage
Operations are expected to commence at the Golden Pass Product’s LNG export terminal in 2024

A joint venture between Qatar Petroleum and ExxonMobil, the new LNG export terminal Golden Pass will leverage existing infrastructure to lower development costs

Perhaps there is no other LNG export terminal project that better illustrates the radical transformation of the US energy picture than Golden Pass Products, LLC.

Riding the US LNG boom, Golden Pass Product’s LNG export terminal will be developed in Sabine, Texas next to a facility that was built as one of the world’s largest LNG import terminals, with regasification capacity of 2Bn ft3 per day.

In 2006, prior to the shale gas revolution, the US imported 583,537M ft3 of LNG. For 2018, total US imports were 76,451M ft3, according to the US Energy Information Administration. The agency now estimates that US LNG export capacity will reach 8.9Bn ft3 per day by the end of 2019, making it the third largest LNG exporter behind Australia and Qatar.

To protect its LNG market share, Qatar is a major investor in Golden Pass Products, LLC, through state-run Qatar Petroleum (QP), holding a 70% stake, and ExxonMobil with the remaining 30% interest. In February, joint venture partners QP and ExxonMobil announced their intention to proceed with the Golden Pass Products LNG export terminal, after it received all necessary federal regulatory approvals. The US$10Bn facility will have a nameplate capacity of 15.6 mta of LNG when operations begin in 2024.​

Brownfield advantage

The Golden Pass LNG import terminal encompasses about 1.2 km2 on the Port Arthur Ship Channel, about 16 km south of Port Arthur, Texas. Golden Pass constructed the existing terminal to import LNG for regasification and the subsequent transport of natural gas to the US domestic markets. It opened in two phases in 2011 and is authorised to handle about 200 LNG carriers per year.

At the time of the FID, Wood Mackenzie principal analyst Americas LNG Alex Munton, said the development of the export terminal by Golden Pass Products enjoyed several advantages over other US LNG projects. “The repurposing of the existing facility has commercial logic,” said Mr Munton. “The Golden Pass regas terminal, with its five storage tanks, two ship-loading berths and header pipeline, already includes much of the infrastructure needed for an export project.”

While a significant number of LNG projects have suffered from cost overruns, Mr Munton said that even if it came in slightly overbudget, "on a dollars-per-tonne basis, it is still one of the lowest-cost opportunities for new large-scale liquefaction capacity anywhere in the world.”

He also praised the timing of the FID: “Proceeding with construction now will enable the project to lock in costs and minimise exposure to inflationary pressures before the next cycle of global LNG investment heats up. By moving ahead now, the partners ensure that Golden Pass will be at the forefront of the second wave of US LNG.”

Mr Munton said the Golden Pass project offers QP the opportunity to optimise shipping costs, particularly into Europe and Latin America. The timing of the FID presses home the brownfield advantages it has over planned US greenfield projects in terms of cost and schedule, he added.

Golden Pass awarded the engineering, procurement and construction (EPC) contracts for the project to a joint venture of Japan’s Chiyoda International Corporation, McDermott International Inc and Zachry Group. It also executed a 20-year firm transportation agreement with Enable Midstream Partners.

Golden Pass Products chief executive Sean Ryan said: “Our team has worked diligently on the design, development and permitting for this world-class LNG export facility.”

Sean Ryan (Golden Pass Products): “Our team has worked diligently on the design, development and permitting for this world-class LNG export facility”

Golden Pass will have three liquefaction trains, each with a capacity of approximately 5.2 mta, as well as other associated utility systems, interconnections to the existing facility and the expansion of the facility’s storm protection levee system. It will utilise the existing infrastructure, including five 155,000 m3 LNG storage tanks, two marine berths to accommodate Q-Flex and Q-Max size LNG carriers, with capacities up to 266,000 m3, and the existing 111 km Golden Pass Pipeline system with access to US natural gas markets.

“On a dollars-per-tonne basis, it is still one of the lowest-cost opportunities for new large-scale liquefaction capacity anywhere in the world”

Additionally, the project contemplates the addition of compressor stations to the existing pipeline to facilitate receipt and redelivery of 2.6Bn ft3 per day of natural gas supply to the facility.

Houston-based Baker Hughes, a GE company, was awarded the contract to supply turbomachinery equipment for three of the facility’s LNG trains, including six gas turbines and 12 centrifugal compressors. BHGE’s technology will consist of six MS7001 EA heavy-duty gas turbines driving 12 centrifugal compressors. Two gas-fired turbines, each equipped with a heat recovery steam generator, would power each liquefaction train.

BHGE is also supporting the expansion of another US LNG export project. Last year, BHGE won a contract to supply the turbomachinery for the third liquefaction train of the Cheniere LNG facility in Corpus Christi, Texas.

BHGE was selected by Bechtel, which is the EPC partner for Cheniere. BHGE will provide turbomachinery equipment for the third train consisting of six PGT25+G4 DLE gas turbines driving various compressors. BHGE has provided the same equipment for two other trains already under construction at Corpus Christi, and similar technology for five trains at Cheniere’s Sabine Pass plant.

The Corpus Christi site is located on the La Quinta Channel on the northeast side of Corpus Christi Bay in San Patricio County, Texas.

When all three trains are completed, the Corpus Christi LNG will have a nameplate capacity of approximately 13.5 mta of LNG.

Ocean LNG will offtake and market all LNG volumes produced and exported from the Golden Pass LNG export terminal in Sabine Pass, Texas, according to QP. Owned by affiliates of QP and ExxonMobil, Ocean LNG will focus its efforts on marketing its US LNG volumes in the Asia Pacific region. It will also expand its relations and networks with both established customers, emerging and prospective LNG buyers, while maintaining a strong footprint across South America and Europe.

Qatar Minister of State for Energy Affairs, and QP president and chief executive Saad Sherida Al-Kaabi, said the agreement “is a further testament of Qatar Petroleum’s position as a global LNG leader with a large portfolio capable of offering tailored LNG supply structures and commercial terms in an evolving global LNG environment.”

The facilities required to serve smaller LNG carriers or LNG bunkering barges are being built into the project”

In preparation for the opening of the Golden Pass LNG export terminal in 2024, QP is already moving to renew its LNG carrier fleet. In April, it issued an “invitation to tender” for shipyard capacity to build initially 60 LNG carriers to support its North Field expansion project in Qatar and the opening of the Golden Pass LNG export terminal. The order could grow to more than 100 ships, the largest ever LNG carrier newbuilding programme.

Three South Korean shipbuilders – Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering – have previously built 45 LNG carriers (31 Q-Flex and 14 Q-Max designs) under charter to Qatargas to transport LNG to global markets. Qatargas also charters a fleet of 25 purpose-built conventional vessels, each with a capacity of between 135,000 and 152,000 m3 currently on long-term charter to transport LNG from Qatar to customers in Asia, the Indian sub-continent, Europe, and the Mediterranean Sea.​

As the world's largest cargo-carrying capacity LNG vessels, Q-Flex and Q-Max vessels are capable of transporting 210,000 m3 and 266,000 m3 of LNG respectively.

Flexibility built in

While some of the largest LNG carriers will call at the Golden Pass LNG export terminal when it opens, some of the smallest might, too. Golden Pass said that if a market develops, it would be ready to serve LNG bunkering barges with capacities of 3,000 to 12,000 m3 of LNG and marine vessels that use LNG for fuel.

The facilities required to serve smaller LNG carriers or LNG bunkering barges, such as modified LNG transfer arms and additional permanent marine dolphins, are being built into the project. Consequently, if all permits and authorisations are obtained for those potential future uses, the facilities required for their use would be in place and no additional construction would be required.

Golden Pass determined that constructing those facilities as a part of the original project would avoid interruptions of ongoing LNG loading operations in the future.

The Golden Pass LNG export project will make use of existing infrastructure, including five storage tanks with a capacity of 155,000 m3 each


Owners: Qatar Petroleum (70%)

And ExxonMobil (30%)

Investment: US$10Bn

Trains: 3 x 5.2 mta

Total capacity: 15.6 mta

Opening: 2024

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