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US LNG trade in growth mode


LONDON�Reflecting the growing interest in liquefied natural gas trade, energy giant BP Friday became the second big oil company to order new LNG tankers.

BP said it has placed an order worth in excess of $300 million with South Korea's Samsung Heavy Industries Co. for two tankers�and options to buy a further three vessels�as part of a strategy to develop the group's international traded gas business.

Construction of the vessels, which will feature the Technigaz MKIII containment system with a storage capacity of 136,000 cu m, will begin in April 2001. Delivery of the first tanker is scheduled for the fourth quarter of 2002, and the second for the first quarter 2003.

BP said the vessels, which will be classified by Lloyd's Register, have been "specified to allow a high degree of flexibility and utilize the LNG experience of BP's shipping business" in their design, construction, and operation.

BP Gas & Power Chief Executive Richard Flury said the order was "part of a much broader set of investments and initiatives" with respect to natural gas and LNG embarked on by the group. He pointed to a recent deal to supply LNG to the Dominican Republic, the "securing of access to the North American gas market via Cove Point in Maryland," and the decision to invest in the LNG regasification and power station at Bilbao, Spain, as examples.

Shell International Gas Ltd. earlier reported it ordered two LNG carriers from the Mitsubishi Heavy Industries shipyard in Japan. They will be delivered in third quarter 2002 and first quarter 2003. They will also be used to supply Cove Point, where Shell recently secured capacity.

Earlier, Cove Point LNG LP said it executed binding precedent agreements with Coral LNG Inc., a Shell affiliate; El Paso Merchant Energy-Gas LP; and a BP subsidiary. The new service initially will provide 4.25 bcf of storage capacity and 750,000 dekatherms/day of terminal and pipeline capacity to accommodate LNG imports by the three customers.

The deal also provides for a 2.5 bcf vapor-equivalent storage capacity expansion of Cove Point in Lusby, Md. Cove Point LNG officials were expected to file an application with the Federal Energy Regulatory Commission for authorization to provide the LNG tanker discharging service, to recommission Cove Point's marine facilities, and to construct new facilities including the new LNG storage.


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