Coral Energy jumped head first into a new arena last Friday withits purchase of 2.8 Bcf of liquefied natural gas (LNG) fromMalaysia LNG Sdn. Bhd. The shipment will be delivered to CMS’ LakeCharles, LA, LNG import facility later this month. Terms of thetransaction were not released.
“Coral is well positioned to become an importer of LNG into theU.S. Gulf Coast market,” said Jim Whalen, Coral Chief CommercialOfficer. “We have a strong market presence in the area, coupledwith an extensive asset infrastructure of intrastate gas pipelinesand gas storage facilities. In addition, we can provide LNGproducers risk management instruments and the financial strength ofour AAA credit rating. Plans for additional LNG imports are underdevelopment.” The company said it does not, however, have specificgoals for its LNG operations in place for this year.
Coral, a Shell affiliate, has retained the services of the PortHarcourt LNG vessel to transport the gas from Bintulu Port inMalaysia to Lake Charles. “This is one snag about the LNG market,”said Jeff Holyfield, a CMS spokesman. “There are tons of LNG outthere, but one reason why it doesn’t have more of an impact isbecause there aren’t enough transport vessels to move it across theocean.”
One of the factors helping Coral with the transportation processwas its parent company’s heavy involvement. Shell said it wasinvolved in every step of this process from production tomarketing. Shell Malaysia, Shell International Gas and ShellTrading and Shipping all assisted in the transaction.
Coral said it will sell the LNG in the U.S. market, but wouldnot be more specific.
For CMS, this shipment is one of 18 expected for its TrunklineLNG terminal at Lake Charles this year. So far, 11 shipments havebeen delivered. Each one, Holyfield said, has been in the 2.7 to2.8 Bcf range.
“Lake Charles has been successful because it offers so muchflexibility,” Holyfield said. “Because of Trunkline [Pipeline], theport has direct access to 15 onshore pipelines, so companiesdelivering LNG to the facility have a multitude of options. If youlook at the trend, it is going exactly like we want it. In 1997, wehad 12 shipments go through Lake Charles. In 1999, so far, we havecommitments for 18 and we’re looking for more.”
A large portion of the Lake Charles capacity is being used byCMS’ marketing division, CMS Marketing, Services and Trading (MST).In April, the CMS affiliate announced plans for 9.3 Bcf of LNG fromAustrailia to be delivered to Lake Charles in three shipments. Theshipments will then be transported through CMS’ Trunkline pipelineto be distributed in the U.S. market.
MST, however, is not the largest importer of LNG from LakeCharles. That title goes to Citrus Corp., a joint venture betweenEnron and Sonat, which imports LNG from Algeria and transports 80MMcf/d from Lake Charles to Florida for gas-fired power plants.
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