First U.S. call for a Q-Flex LNG carrierFiled from Houston
6/27/2008 8:45:24 PM GMT
SABINE PASS, TEXAS: Qatargas this week marked the arrival of the first Q-Flex liquefied natural gas (LNG) carrier at a U.S. port.
The Qatargas Q-Flex LNG carrier Al Gharrafa, on charter to RasGas carrying a cargo for Cheniere Energy, is discharging at the newly commissioned Sabine Pass LNG Terminal in Louisiana. This is the first Q-Flex vessel to call to the U.S. and the first for the new terminal. The vessel is the largest LNG carrier to ever transit Sabine Pass on the Texas Gulf coast.
The Al Gharrafa is one of Qatargas' new generation of LNG ships and has a capacity of approximately 216,000 cubic meters (7.6 MMcf). The vessel, built at Hyundai Heavy Industries (HHI) in Korea, is owned by a joint venture between Qatar Gas Transport Company (Nakilat) and Overseas Ship Holding Group (OSG) and is on long-term charter to Qatargas 2.
Ahmed Al Khulaifi, Qatargas chief operating officer, commercial and shipping said, "This is yet another significant milestone and industry first for Qatargas and its new fleet of vessels. It is the first time a Q-Flex has called at a terminal in the U.S. and we look forward to being able to ship many more cargoes safely to the U.S. in the future."
Muhammad Ghannam, managing director of Nakilat, said, "The arrival of the Al Gharrafa at Sabine Pass, La., is also a key milestone for Nakilat. It is the first vessel in our fleet of fifty-four LNG carriers to deliver Qatar's LNG to the United States."
Q-Flex are membrane type vessels, propelled by two slow speed diesel engines, making them more efficient and environmentally friendly than traditional steam turbine vessels. Equipped with an on-board re-liquefaction system to handle the boil-off gas, the new generation LNG carriers are able to deliver almost 100 percent of the cargo to the customers.
This reminds me of an old Meatloaf song; "Two out of Three Ain't Bad". 1) Yes, I am a long term short (you found me out despite my efforts to conceal it), 2) Yes, I COULD EASILY get use to this (although not much left at this stage) and 3) No, I'm not hating it so much.
Whether he is a long-time short or not, point out something that is wrong about his post? Amidst the loads and loads pointless drivel posted on this board equally by both longs and shorts, woelng's are by far amongst the most intelligent, informative and balanced that I see.
What he writes here is dead on correct. 216,000 m3 does indeed convert to close to 4.7 bcf, in terms of price, I've heard similar (roughly $14/mmbtu) and it is entirely likley that they hedged the sales price.
People should not be looking for a profit in the cool down cargos and should not be disappointed if there is no profit. Cool down is part of the commissioning process and you pay whatever price you have to in order to get the cargos. If you make a profit, great, if not then you are that much closer to commercial operation where you will become entirely focused on acquiring cargos that do result in a profit.
Jackblu01 – My understanding from talking with some of the LNG traders is that Cheniere negotiated a purchase price of [$14]/mmbtu with RasGas in mid-May. At that time, June/July Henry Hub prices were trading between $11 and $11.50, meaning that Cheniere had to pay a purchase price of roughly HH + $2.50/$3.00 for the commissioning cargo. Since Cheniere did not know whether HH prices would rise, or fall, between mid-May and the date of gas send out (late June/early July) I suspect that they hedged the cargo by selling June/July HH futures to protect themselves in case the HH market fell before the cargo arrived (as they did with the first cargo). This may be a requirement of their loans, or they may just be protecting their tight cash position.
When they bought the cargo, they knew that it was uneconomic on a stand alone basis, but they needed to buy at least two cargoes to continue with the commissioning process.
The Al Gharrafa is one of Qatargas' new generation of LNG ships and has a capacity of approximately 216,000 cubic meters (7.6 MMcf).
Once again the reporters lack the knowledge needed. I hope the ship carries more than they cite.
If you look at the link it has a picture of the vessel. That is one big boat. I bet this was a great test to see if a vessel that size could be manipulated to the facility. This is great news!! Shipment number two has finally arrived and we should expect more.
Good luck to all....