OGJ Oil Diplomacy Editor
LOS ANGELES, Mar. 12 -- Dutch LNG terminal operator 4Gas has dropped plans to construct a regasification terminal in the Port of Rotterdam after failing to reach agreements with customers on long-term supply contracts.
Dutch and German utility firms are not willing to commit to take capacity, said 4Gas Chief Operating Officer Joost Droge, who added that the company had no further plans for projects in the Netherlands.
Droge said 4Gas and the Port of Rotterdam had agreed to cancel the so-called LionGas project, which would have competed with the Gate LNG facility now under construction by Vopak and Gasunie.
In 2006, 4Gas secured a land use agreement with the Port of Rotterdam Authority for leasing two adjacent plots of prime development land at the mouth of the port. 4Gas also received a permit from Rotterdam to construct the LionGas LNG terminal on the two plots.
No less important, 4Gas said the Port Authority also agreed to invest €40 million in developing an LNG-dedicated harbor basin at the site.
“The developments keep the LionGas project on target to start construction in 2007 and becoming fully operational in 2010,” 4Gas said at the time, adding that the LionGas terminal would help “secure the supply of natural gas to Northwest Europe and the position of the Port of Rotterdam as major energy port.”
Droge said changes in the LNG market since the agreement to build that terminal had influenced the decision to scrap the Rotterdam plant, which he said would have cost €600-700 million.
Despite the setback in Rotterdam, Droge said 4Gas had started to focus on the Mashal LNG import terminal it is working on at Port Qasim in Pakistan.
Recent reports say that the US’s Overseas Private Investment Corp. and the World Bank’s International Financial Corp. have committed to provide financing to 4Gas for setting up the Mashal facility.
“We have received initial indication of funding commitments of $370 million—$220 million from OPIC…and $150 million from IFC,” said one 4Gas official.
Other 4Gas officials say the project will make use of a 170-acre site at Khiprinwala Island at Port Qasim. On completion, the LNG facility is eventually expected to import of some 14 million tonnes/year of LNG.
Sui Southern Gas Co. will be the buyer of the LNG, and GDF Suez has emerged the winner with an agreement to supply 2.75 million tpy under an initial 6-year arrangement with the possibility of a further 1.5 million tpy over a 20-year period.
According to other reports, Royal Dutch Shell PLC may also supply 1 million tpy over a 6-year period that would be expanded to 2.5 million tpy for an additional period of 14 years.
In addition to the Mashal LNG project, other 4Gas projects include Dragon LNG in Milford Haven, Wales; the MapleLNG project at Nova Scotia, Canada; and the Vista del Sol project in Corpus Christi, Tex.
Contact Eric Watkins at email@example.com.