Stolt wants LNG lead

Stolt-Nielsen and its partners in a new LNG venture are aiming to secure the first-mover advantage on a proposed project in eastern Canada, an executive tells TradeWinds.

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However, how to provide the small-scale LNG carriers to deliver to customers in the country’s icy northeast has yet to be decided, said Jens Gruner-Hegge, Stolt’s vice president of corporate finance. He said the company will choose the shipping option that gives the best economics.

The Stolt LNGaz website displays an LNG carrier with a length of 150 metres but gives no capacity. Existing vessels with that length range from 15,600 cbm to 23,100 cbm in capacity, according to data from Clarksons.

As TradeWinds reported earlier today, Oslo-listed Stolt announced that it teamed up with SunLNG Holding and LNGaz to form Stolt LNGaz. The new company, in which Stolt will have a 50% stake, plans to develop a small scale liquefaction plant in Becancour, Quebec, along the St Lawrence River.

LNGaz’s website says the plant’s startup date is slated for fall 2017, and there are other projects proposed for the region.

“We are quite well-advanced and having a first-mover advantage is significant here,” he said.

Size not determined

The final size of the facility has yet to be determined, but it will have a final output capacity of 300,000 to 500,000 tonnes per annum, Gruner-Hegge. The Stolt LNGaz website says the facility will have two liquefaction trains and 50,000-metre storage tank.

Volumes will be carried by ship to mining companies, power producers and other energy buyers around Quebec’s coast as far as Hudson Bay.

The project involves an initial investment of $20m but it is expected to involve total capital costs of $570m. Small-scale LNG carriers are not included in that figure.

US gas

The provider of the pipeline gas for the project is also a matter of discussion, although the volumes will likely come from the US market.

London-headquartered Stolt is a newcomer to LNG but the company has been diversifying for some time from its core chemical tanker business, with divisions focused on LPG carriers, terminals, tank containers and bitumen all growing.

But its partners in Stolt LNGaz are not new to small scale LNG. LNGaz is led by president Bjorn Torildsen, former chief executive of Skangass, which runs Norway’s inaugural small scale LNG export facility which appears to be a model for the Canadian proposal.