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New Fortress builds on LNG presence with Irish, Mexican projects

Tue 04 Sep 2018 by Mike Corkhill

New Fortress builds on LNG presence with Irish, Mexican projects
NFE introduced LNG to Jamaica, using a coastal gas carrier to shuttle cargoes from a floating storage unit to the Bogue terminal and power station shown here

New Fortress Energy has added two major LNG import projects to its portfolio, as part of its drive to bring the benefits of clean-burning gas to new markets

New Fortress Energy (NFE) has agreed to buy a site at Ballylongford in Ireland’s County Kerry with the intention of constructing a new LNG receiving terminal. The proposed €500M (US$581M) facility has already been awarded the necessary planning permission and was recently designated an EU Project of Special Interest by the European Commission.

The project, termed Shannon LNG, has been under consideration for several years but the conditions have not been deemed amenable for a final investment decision on Ireland’s first LNG import terminal. 

Circumstances are now changing, however. On the one hand, the European Commission is putting pressure on EU member countries to substitute clean-burning gas for coal in power generation under its increasingly rigorous environmental programme. And on the other, the possibility of the UK’s imminent departure from the EU occurring as a “hard Brexit” is raising the prospect of higher charges for UK pipeline supplies, currently Ireland’s only source of natural gas, due to regulatory divergences.

NFE and its backers are likely to rely on public funding to cover up to half the cost of the Shannon LNG project. The scheme would be the company’s largest play in the LNG sector to date. 

To be situated on the south side of the Shannon Estuary on Ireland’s west coast, the terminal will have the capacity to process 3 mta of LNG and will feature four 200,000-m3 LNG storage tanks and a jetty able to accommodate LNG carriers of up to 266,000 m3. Shannon LNG also has planning permission to build an adjacent 500-MW gas-fired combined heat and power plant.

Down Mexico way

NFE has been increasing its commitment to bringing LNG to new markets this year. Earlier in August 2018, just two weeks before breaking the news about Shannon LNG, NFE was awarded a long-term contract by Mexico’s Port Authority of Baja California Sur (APIBCS) to develop, construct and operate an LNG import terminal at Pichilingue. 

Pichilingue is located close to La Paz near the southeastern tip of Baja California. Mexico’s southern Baja California state currently lacks any natural gas infrastructure.

The contract announcement coincided with the start of work at the terminal site. The US$185M facility should be in service by 2020. Although NFE and APIBCS provided no details of the terminal on announcing the scheme, the project’s cost and timing indicate an LNG receiving terminal based on using a floating storage and regasification unit (FSRU).  

LNG regasified at the terminal will be utilised locally, including as a substitute fuel for oil in the region’s power plants. Road tanker loading bays to be provided adjacent to the jetty will enable the distribution of LNG to nearby vehicle fuelling stations and LNG bunkering jetties.

Outside of Mexico, NFE developed an LNG project in Jamaica in 2016 for Jamaican power utility JPS, to supply the 120-MW Bogue power station at Montego Bay on the north side of the island. This was NFE’s first involvement in an LNG project and to meet its commitments the company chartered 138,000-m3 Golar Arctic for two years for use as a floating storage unit (FSU) and 6,500-m3 Coral Anthelia to shuttle LNG to the power plant.

Jamaica is seeking to press ahead with substituting oil with gas in power generation to the greatest extent possible. New customers for gas are being lined up and JPS has requested an enhancement of the country’s LNG-processing capabilities. In response NFE is chartering Golar LNG Partners’ 126,000-m3 FSRU Golar Freeze, for 15 years, commencing in Q4 2018, for stationing at Port Esquivel on the south side of the island, to the west of Kingston. 

Gas from Golar Freeze will be piped ashore to fuel the new 190-MW Old Harbour Bay power plant. Some LNG will be transhipped from the FSRU to a shuttle tanker and transported to the upgraded, 140-MW Bogue power station. A third gas-fuelled plant, of 94 MW, is being built in Clarendon for the Jamalco bauxite company.

Fortress affiliates

NFE is controlled by the New York-based investment management firm Fortress Investments Group LLC. American LNG Marketing, an affiliate company, is also involved in the LNG sector through its shipment of LNG in ISO tank containers to islands in the Caribbean. 

American LNG operates a small liquefaction plant in the Florida town of Medley near Miami. The company dispatched its first LNG tank container export shipment from this plant, known as Hialeah, in February 2016.

Hialeah has been approved for exporting up to 66,000 tonnes per annum of LNG in tank containers to countries with which the US does not have a free trade agreement. Natural gas for the facility is supplied by Peninsula Energy Services.

Between February and June 2018 American LNG Marketing handled 110 tank container shipments of LNG to Barbados and 50 to the Bahamas. The tanks were loaded onto ships berthed at Port Everglades in southern Florida.

Florida East Coast Railway (FECR), operator of 550 km of track linking the state’s eastern ports, from Jacksonville in the north to Miami in the south, is another Fortress Investments Group company. Both the Hialeah LNG plant and Port Everglades have intermodal terminals and FECR trains are used to shuttle laden and empty American LNG Marketing tank containers between the two facilities.

FECR is also using LNG as a locomotive fuel. Each train is powered by a pair of suitably modified locomotives while the fuel tender is comprised of a 40-foot LNG tank container mounted on a heavy-duty flat car. Such trains, which run on an 80/20 LNG/diesel mix, can make a return journey along the full length of the FECR line before an LNG fuel refill is required.

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