MARCH 3, 2015 — Delfin LNG LLC says it has signed a memorandum of understanding ("MOU") with natural gas supply and trading company LITGAS, part of the Lithuanian state controlled Lietuvos Energija energy company group.
Under the terms of the MOU, LITGAS intends to contract processing capacity at the Delfin LNG deepwater port in the Gulf of Mexico off the coast of Louisiana.
It is expected that Delfin LNG will be the first floating deepwater liquefaction project in the United States and will be fully operational by 2019.
The Delfin LNG Deepwater Port project has four main parts:
- Newly built onshore gas compression on existing site (brownfield)
- The use of an existing 42-inch pipeline to transport natural gas offshore
- The offshore port complex comprised of four moorings
- Four floating LNG vessels (FLNGVs) with an initial total export capacity of 8 million metric tonnes per year, that could be expanded to 13 million metric tonnes per year if market conditions warrant and pending any necessary regulatory review or approval
Delfin initiated the purchase of the UTOS Pipeline (now Delfin Offshore Pipeline) from Enbridge Inc in 2012 and closed the transaction in 2014. The pipeline was originally built to transport gas from offshore wells in the Gulf of Mexico into the U.S. natural gas market; however, Delfin LNG will build an onshore compression facility to reverse the flow of the pipeline to deliver processed gas from onshore sources to the Delfin LNG Deepwater Port.
The Delfin LNG Deepwater Port will receive natural gas from the Delfin Offshore Pipeline. The FLNGVs at the four moorings will have the capacity to liquefy up to 1.32 billion standard cubic feet per day (Bscf/d) of natural gas, or approximately 8.0 million metric tonnes per annum (MMtpa) of LNG, and each one will have storage capacity of up to 165,000 cu. meters. Periodically, the LNG will be transferred from storage tanks on the FLNGV to an LNG carrier where it will be delivered to customers around the world.
"We are excited to announce the signing of this MOU with LITGAS," said Frederick Jones, President of Delfin LNG. "At this time, the need for diversification of supply in Europe is critical. As such, Delfin LNG is looking to fill the void by supplying European entities with the diversification they need in an environmentally friendly, cost competitive and efficient manner. We look forward to continuing the development of the United States' first floating deepwater liquefaction project."
Lithuania has been looking to lessen its dependence on gas imports from Russia. In March last year, the FSRU Independence, owned by Hoegh LNG, was commissioned in Klaipeda. Last month Delfin LNG signed a Joint Development Agreement with Höegh LNG in relation to the Delfin LNG Deepwater Port. Under that agreement Höegh LNG will act as a co-owner, owner's engineer and operator of the floating liquefaction vessels.