Trafigura confirms LNG-import terminal plans for Teesside
Commodities giant Trafigura plans to reopen Teesside Gas Port to LNG imports and has taken on a long-term lease from landowner PD Ports. The two companies are working to secure permits for the project, aiming to receive the first shipments next summer and positioning the northeast terminal as a UK energy hub.
Reports suggest that Trafigura will invest US$30 million in recommissioning the terminal. A spokeswoman for Trafigura has confirmed the plan to LNG World Shipping but declined to discuss the project in detail.
Analysts say Trafigura is cashing in on falling LNG prices and reducing its exposure to the downturn in demand for coal. The company plans to invest in other LNG terminals. “We’re interested in having more infrastructure, both in Europe and around the world,” Trafigura head of LNG trading Hadi Hallouche told the Financial Times.
Trafigura may also position Teesside as European gateway for US LNG exports. “Given the growth in volumes globally and the flexibility of US supplies, it is likely that LNG shipped from the US will make up the lion’s share,” Mr Hallouche told the FT.
“LNG infrastructure is coming down in cost, and liquidity in the LNG market is getting deeper, making these kinds of projects possible.”
US-based Excelerate Energy launched Teesside GasPort in 2007 as the world’s first dockside floating regasification project, receiving gas from a visiting floating storage and regasification unit (FSRU). The site near Middlesbrough delivered natural gas into the UK’s national transmission system, providing access to national balancing-point markets.
Teesside GasPort can handle LNG carriers up to 150,900m³. Excelerate boasted that it brought the project into service within a year of selecting the site and for 10 per cent of the cost of building a land-based LNG terminal. In reality, it received few shipments.
Excelerate closed the site in 2015, saying that the terminal had come “to the end of its commercially viable life”.
The UK’s three established LNG-import terminals – Grain LNG in Kent and South Wales’ South Hook and Dragon LNG terminals – can handle up to 35 million tonnes a year of LNG.
Teesside has long-held LNG ambitions. PD Ports has had talks with Saudi industrial giant Sabic about setting up an LNG-bunkering project in the UK northeast.
Shell has supplied occasional bunkers to LNG-fuelled ethylene carriers Coral Sticho and Coral Star on Teesside, using road tankers. Sabic was said to want to build a dedicated LNG-bunkering jetty for the two 4,700m³ gas carriers that it charters for North Sea ethylene distribution.
LNG World Shipping has invited PD Ports to discuss progress on the Sabic project.