Oil & Gas Innovation Summer 2020 Digital | Page 34

NEWS - NORTH AMERICA
Enterprise Ramps up Ethylene Exports;
Commissions Ethylene Storage and Pipeline
Enterprise Products Partners L.P. (NYSE:EPD) today announced
that the company’s ethylene export terminal at Morgan’s Point,
Texas, a joint venture with Navigator Holdings Ltd. (NYSE: NVGS), has
exceeded design interim loading capacity and expects to export more
than 175 million pounds for the month of June. The terminal is in the
process of loading a record-sized ethylene cargo of 44 million pounds
on the Navigator Eclipse. The partnership expects to complete the
construction of an aboveground ethylene storage tank, which will bring
the total loading capacity of the marine terminal to 2.2 billion pounds
per year, by the end of 2020.
The marine terminal volumes are supported by Enterprise’s highcapacity
ethylene storage hub and pipeline system, which is connected
to four ethylene pipeline systems. Enterprise expects to complete
three additional connections by the end of 2020, linking its system to
a majority of ethylene production capacity in Texas. Enterprise’s open
access ethylene storage hub and pipeline system provides domestic
ethylene producers access to both domestic and global markets.
“To meet the growing demand for petrochemical products, Enterprise
built the world’s first fully open access global hub for polymer grade
propylene; now, we have developed the first global hub for ethylene,”
said A.J. “Jim” Teague, co-chief executive officer of Enterprise’s general
partner. “These hubs are transforming how ethylene and propylene
markets transact and will create a true marketplace for the world’s
primary petrochemical producers, consumers and traders. These hubs
provide the essentials for an efficient market: reliable supplies, price
transparency and access to domestic and global markets.”
Enterprise Products Partners L.P. is one of the largest publicly traded
partnerships and a leading North American provider of midstream
energy services to producers and consumers of natural gas, NGLs,
crude oil, refined products and petrochemicals. Our services include:
natural gas gathering, treating, processing, transportation and storage;
NGL transportation, fractionation, storage and export and import
terminals; crude oil gathering, transportation, storage and export and
import terminals; petrochemical and refined products transportation,
storage, export and import terminals and related services; and a
marine transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 50,000 miles of pipelines; 260 million
barrels of storage capacity for NGLs, crude oil, refined products and
petrochemicals; and 14 Bcf of natural gas storage capacity. •
Rystad: FPSO Awards Are Set to Recover to Seven
Vessels Next Year
Hit by the second industry downturn in five years, global awards
for floating production, storage and offloading (FPSO) vessels
will likely be limited to a single unit in 2020, Rystad Energy believes, as
exploration and production firms slash budgets and activity. Similar to
the previous downturn, awards are set to recover next year, with seven
projects likely to be sanctioned.
Modec won the only contract so far awarded in 2020 and will supply
a new-built FPSO for Woodside’s Sangomar development in Senegal.
The vessel, which will be the first FPSO to operate in Senegal, will be
supplied on a turnkey basis and feature topsides capable of handling
100,000 barrels per day (bpd) of oil and 130 million cubic feet per day
(cfd) of gas. Rystad Energy estimates that the total greenfield capex for
Sangomar phase 1 will be around $4.2 billion.
For the remainder of 2020, we don’t expect to see any new FPSO
contracts being awarded. Over the last 10 years, only 2016 saw a lower
level of activity when not a single FPSO contract was awarded. However,
from 2016 activity quickly rebounded with 27 awards in the three-year
period from 2017 to 2019.
“This time too, we expect to see a speedy comeback in FPSO sanctioning
with seven projects expected next year, including Bacalhau and Mero 3
in Brazil and Payara (Prosperity) in Guyana,” says Aleksander Erstad,
energy research analyst in Rystad Energy.
Aside from new FPSO contracts, three charter contract amendments
were disclosed in the second quarter of 2020.
The first contract amendment was for Altera Infrastructure’s (previously
Teekay Offshore) Petrojarl Knarr, which has been on contract with
Shell since 2015. The amendment extends the charter period from
March 2021 to March 2022. Under the previous agreement, Shell would
pay a penalty if they terminated the contract before 2025. Now, this
termination penalty has been removed in return for a new production
and oil price tariff. The day-rate is also set to fall from March 2021 as
low oil prices hurt the field’s profitability. It now seems likely that Shell
will shut down the field a few years down the road. Liquids production
at Knarr averaged 12,000 bpd in 2019.
In India, Bumi Armada and Shapoorji Pallonji Group received a
notification from ONGC about their intention to extend the charter
contract for the Armada Sterling FPSO. The seven-year fixed portion of
the charter contract expired on April 19 and ONGC now has six annual
extension options that can be exercised. The length of the current
extension is not yet disclosed as contract formalizations have stalled
due to the Covid-19 lockdowns in India. Bumi Armada and Shapoorji
Pallonji Group also own and operate Armada Sterling II for ONGC, and
a third FPSO for KG-DWN-98/2 is currently undergoing conversion
work at Sembcorp’s Tuas Boulevard Yard in Singapore.
BW Offshore received a charter extension for the BW Cidade de São
Vicente FPSO which will keep the vessel employed until October 9,
2020. The FPSO operates as a well testing facility and has performed
tests on multiple locations in Brazil since it started working for Petrobras
in 2009 as the first production unit in the massive Lula (previously Tupi)
field, kickstarting the field’s production. Ten years later, the Lula field
went on to produce 1 million bpd from nine FPSOs. BW Cidade de São
Vicente is currently conducting an extended well test at Farfan in the
Sergipe-Alagoas basin. •
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