September 21, 2023 [Rigzone]- ConocoPhillips has signed a commercial agreement to secure additional regasification capacity in Europe at the Gate LNG terminal in the Netherlands.
The 15-year throughput agreement for approximately 1.5 million tons per annum (mtpa), or 70.63 billion cubic feet (two billion cubic meters) equivalent, begins in September 2031 and “secures access to this important market for the company’s growing global LNG [liquefied natural gas] portfolio”, ConocoPhillips said in a recent news release.
ConocoPhillips said the agreement further complements its LNG resource positions in Qatar and Australia, offtake and equity in Sempra’s recently sanctioned Port Arthur LNG Phase 1 project on the USA Gulf Coast, regasification agreement at the German LNG Terminal announced in 2022, and the offtake agreements at Mexico Pacific’s Saguaro LNG export facility on the west coast of Mexico announced in August.
“Adding capacity at the Gate LNG terminal fits well with our efforts to deliver reliable, lower-carbon energy into Europe from highly competitive LNG supply”, ConocoPhillips Executive Vice-President and Chief Financial Officer Bill Bullock said. “Expanding our LNG footprint with agreements like this further enhances a balanced, diversified, and attractive portfolio as we progress our global LNG strategy”.
Gate Terminal BV, a joint venture of Vopak and Gasunie, is an LNG hub at the Port of Rotterdam that contributes to the natural gas supply in the Netherlands and northwest Europe. According to the company website, Gate Terminal is the first Dutch LNG import terminal and has been operational since 2011. The terminal has an annual throughput capacity of 423.8 billion cubic feet (Bcf), or 12 billion cubic meters, of gas per year, covering approximately a third of the national gas consumption. The terminal has three storage tanks, three jetties, three loading sites for lorries, and an area in which LNG is converted into gas.
Gate Terminal has made a final investment decision to expand its storage and regasification capacity, consisting of a new LNG storage tank of 6.36 million cubic feet (180,000 cubic meters) and an additional regasification capacity of 141.3 Bcf (4 billion cubic meters) per year. The new capacity is already rented out under long-term commercial agreements and is expected to be operational by the second half of 2026, according to an earlier news release from the company.
Gate Terminal said the total investment is approximately $373.4 million (EUR 350 million). The company plans to fund approximately 15 percent of the expansion with equity and approximately 85 percent with non-recourse project financing with existing commitments. The project financing is expected to be finalized by the end of 2023. The equity contribution of each of the shareholders will be approximately $27.7 million (EUR 26 million) with cashouts expected in coming years, according to the release.
“The investment in this new tank is part of a broader package of proposed and already realized measures to increase LNG import capacity in the Netherlands”, Gasunie board member Hans Coenen said. “This is necessary to compensate for the loss of Russian natural gas and to reduce the scarcity of natural gas on the European gas market. In addition to expanding LNG import capacity, Gasunie is continuing to accelerate the energy transition. For example, through the construction of a national hydrogen network and the conversion of import terminals. We will also continue to focus on green gas, transport of heat and CO2 capture and storage”.
“We are excited to build upon our successful partnership with Gasunie”, Vopak CEO Dick Richelle said. “This investment fits well with Vopak’s strategy to grow in LNG infrastructure. We are proud to develop and operate reliable and open access infrastructure as this plays an important role in the security of supply of energy”.
“Now that all elements are in place, we are happy that today we can start with the construction of this important expansion”, Gate Terminal Managing Director Jarmo Stoopman.
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