Coral Dives into LNG Market
Coral Energy jumped head first into a new arena last Friday with
its purchase of 2.8 Bcf of liquefied natural gas (LNG) from
Malaysia LNG Sdn. Bhd. The shipment will be delivered to CMS' Lake
Charles, LA, LNG import facility later this month. Terms of the
transaction were not released.
"Coral is well positioned to become an importer of LNG into the
U.S. Gulf Coast market," said Jim Whalen, Coral Chief Commercial
Officer. "We have a strong market presence in the area, coupled
with an extensive asset infrastructure of intrastate gas pipelines
and gas storage facilities. In addition, we can provide LNG
producers risk management instruments and the financial strength of
our AAA credit rating. Plans for additional LNG imports are under
development." The company said it does not, however, have specific
goals for its LNG operations in place for this year.
Coral, a Shell affiliate, has retained the services of the Port
Harcourt LNG vessel to transport the gas from Bintulu Port in
Malaysia to Lake Charles. "This is one snag about the LNG market,"
said Jeff Holyfield, a CMS spokesman. "There are tons of LNG out
there, but one reason why it doesn't have more of an impact is
because there aren't enough transport vessels to move it across the
One of the factors helping Coral with the transportation process
was its parent company's heavy involvement. Shell said it was
involved in every step of this process from production to
marketing. Shell Malaysia, Shell International Gas and Shell
Trading and Shipping all assisted in the transaction.
Coral said it will sell the LNG in the U.S. market, but would
not be more specific.
For CMS, this shipment is one of 18 expected for its Trunkline
LNG terminal at Lake Charles this year. So far, 11 shipments have
been delivered. Each one, Holyfield said, has been in the 2.7 to
2.8 Bcf range.
"Lake Charles has been successful because it offers so much
flexibility," Holyfield said. "Because of Trunkline [Pipeline], the
port has direct access to 15 onshore pipelines, so companies
delivering LNG to the facility have a multitude of options. If you
look at the trend, it is going exactly like we want it. In 1997, we
had 12 shipments go through Lake Charles. In 1999, so far, we have
commitments for 18 and we're looking for more."
A large portion of the Lake Charles capacity is being used by
CMS' marketing division, CMS Marketing, Services and Trading (MST).
In April, the CMS affiliate announced plans for 9.3 Bcf of LNG from
Austrailia to be delivered to Lake Charles in three shipments. The
shipments will then be transported through CMS' Trunkline pipeline
to be distributed in the U.S. market.
MST, however, is not the largest importer of LNG from Lake
Charles. That title goes to Citrus Corp., a joint venture between
Enron and Sonat, which imports LNG from Algeria and transports 80
MMcf/d from Lake Charles to Florida for gas-fired power plants.