— View the story online at The Brownsville Herald
BY STEVE CLARK
A worldwide glut of natural gas means it’s a lousy time to be trying to export the stuff, though proposals for liquefied natural gas exports from the Port of Brownsville are focused on the future, not the present.
Still, for exporters the short term looks bleak. AltaGas Ltd., a Canadian company, dropped plans late last month to ship liquefied natural gas from the north coast of British Columbia because it couldn’t find enough Asian buyers willing to sign long-term “off-take” contracts, according to The Globe and Mail, Canada’s national newspaper.
The media outlet also reported that the future of 19 other British Columbian export projects is in doubt due to the weak market.
Closer to home, Cheniere Energy Inc. exported a load of LNG to Brazil from its new Sabine Pass, Louisiana, terminal on Feb. 24. It was the first-ever LNG export from the lower 48 states, though the shipment took place against a backdrop of what the U.S. Energy Information Administration, in a report released March 4, termed “uncertainty in global LNG demand.”
Meanwhile, proposed LNG export terminals in the United States face competition from domestic and foreign terminals that are further along or have already been built.
Houston-based Rio Grande LNG, for its part, says it’s looking down the road. In October, the company took the first steps toward developing a local workforce and third-party vendors that want to be involved in construction.
Rio Grande LNG is one of three companies whose proposals are undergoing review by the Federal Energy Regulatory Commission. In addition to FERC approval, companies have to nail down long-term contracts for LNG exports before investors will sign on to build the massively expensive projects.
In November, Rio Grande LNG announced it had secured nonbinding contracts for about 14 million tons of LNG per year from customers in Asia and Europe. James Markham-Hill, manager of communications for NextDecade, LLC, Rio Grande’s parent company, said in February that the number had since grown “quite substantially.”
“Now, these aren’t binding contracts,” he said. “Those will be negotiated over the next year. But that is a firm indication that there is demand there. While there may be pessimism in the market, our experience in the marketplace is quite different. We’ve found quite a robust demand.
“Our expectation is coming online at the end of 2020. These are long-term projects looking at long-term supply and demand.”
Markham-Hill said the natural gas liquefaction plant/export terminal would take an investment of up to $20 billion to build and would create 4,000 to 5,000 construction jobs for up to seven years.
Construction of the Rio Brave Pipeline, a related project to bring natural gas to the plant from a hub near Kingsville, would employ 800 to 1,100 workers, he said. A study by the Perryman Group, a Waco-based economic analyst, estimates the operation would support another 3,000 indirect jobs in the county, Markham-Hill said. Once complete, the LNG plant itself would support at least 200 permanent jobs, he said.
Markham-Hill said the goal is to hire locally as much as possible and that he’s been busy spreading the word about the types of jobs and the certification requirements necessary to fill them.
“I have spent many months talking with a bunch of different educational groups and workforce development organizations, from the high schools to the community colleges, the trade schools and the four-year degree colleges,” he said.
NextDecade has also been working with RGV Lead, formerly Tech Prep of the Rio GrandeValley, a group that bridges the gap between education and industry, Markham-Hill said.
“There are a number of opportunities that are going to be available,” he said. “We want as many of (the workers) to be from the Valley as possible. We know we’re not going to get all of them from the Valley, but we want to make the best effort to get as many people from here in our projects.”
On the vendor/contractor side, NextDecade is working with construction company CB&I, which will be doing the hiring and contracting, to make sure local companies are considered first, Markham-Hill said.
“One of the challenges is that many companies have not had the experience of taking a contract within an industry like this,” he said. “There’s a large amount of bureaucracy and red tape that you have to get through.
“The safety standards are extremely high, and while there may be many businesses that conduct themselves just as safe as what we would want, they have to have the certification or the training for their employees in order to be qualified to bid on that work.”
NextDecade is planning a series of vendor information workshops (tentatively scheduled for April 11-15) that will address the issues related to bidding on major industrial projects, Markham-Hill said.
“We want to start this now so that they have the ability to win these bids,” he said. “We’ve got about 170 different companies signed up right now, but only perhaps 30 to 40 percent of those companies are local.”
An online vendor-registration portal can be found at rglng.com.
Markham-Hill said the steps are important even though the final decision whether to build the terminal and pipeline hasn’t been made.
“It is still an if,” he said. “There are a lot of things that have to line up and get done before it moves forward. But we feel confident in our project. The appetite is there.”
— View the story online at The Brownsville Herald