Companies worldwide are increasingly tasked with finding cheaper, more sustainable energy sources that will reduce increasing levels of environmental pollutants while continually meeting the demands of its growing consumer base. Originally established by Southern California Telephone Company, SCT&E LNG is now globally renowned as the developer of a 12 mtpa natural gas liquefaction and LNG export facility on Monkey Island in Cameron Parish, Louisiana. The company’s innovative and technical innovations in providing sustainable and affordable natural gas via LNG to countries in need of clean burning and inexpensive energy solutions has been globally recognized, at which the company has been recently nominated for the CWC Asia Pacific LNG Innovator of the Year Award for its unique 20-year fixed price LNG supply offering, a first of its kind in the industry.
“The United States has an abundance of clean natural gas, and there are places in the world that are in desperate need of clean fuels, rather than pollutants which we are currently experiencing. SCT&E LNG will supply inexpensive, stable, and clean burning fuel into parts of the world that desperately need it,” explains Eric Smith, Executive Director of Business Development.
SCT&E LNG’s unique 20-year fixed price option is just the beginning of the company’s innovative offerings in the industry. According to CEO Greg Michaels, the company is “currently working on crafting LNG supply deals based on exotic indexes, something no one else has been able to achieve before.”
Multiple natural gas pipelines are located close to the 246-acre project site, which will allow natural gas to be collected and treated effectively in order to go through the liquefaction process where the gas will be cooled to -162°C (−260 °F) degrees. The LNG will then be placed within three onsite storage tanks situated alongside three LNG trains incorporated into the SCT&E LNG development. The storage tanks will hold around 160,000 cubic meters of LNG supply each, which will cater to the increasing demand for clean burning fuels, and can be utilized for a multitude of needs, from commercial and residential use, to industrial and transportation services.
While innovation is a key distinguisher of SCT&E LNG’s business philosophy, pursuing “proven” strategies, technologies and locations is also a fundamental aspect of its business model. Louisiana already has a robust infrastructure in place and has garnered strong community and government support. The $6.9 billion SCT&E LNG development will provide over 1,500 construction jobs, boost the US economy and has garnered widespread political support. Louisiana is also currently the third natural gas producer and the ninth crude oil producer in the nation.
The SCT&E LNG project is headed by a strong executive team of energy professionals with vast experience within the LNG and EPC industries. Vice President of Engineering, Scott Ray, has extensive knowledge and vast experience in designing and constructing a number of LNG liquefaction facilities globally, in addition to commissioning five LNG trains and seven cryogenic storage tanks. With over 27 years of experience in Engineering, Construction and Procurement (EPC) industry, Ray’s expertise compliments that of Smith, who is currently developing the project’s commercial and business development strategies.
“Our strategy is to have the most knowledgeable team of people with a high level of industry experience directly related to developing projects like ours. We run with a lean team to maintain staying power through the development phase, and to bring results and return on investment to our partners”, explained Michaels.
Running lean is a fundamental factor in SCT&E LNG’s continued success, and the project has been able to achieve several key milestones at the fraction of the money spent by other, more heavily funded projects. Michaels explains, “We are careful with our capital and understand what an important tool it is. We operate under a “waste nothing” mentality and negotiate with every contractor aggressively. We listen intently to our advisors and contractors, then apply their recommendations based upon our team’s extensive experience. We approach our customers/offtakers with the mindset of best supporting their needs. The response from offtakers on our commercial innovation, proven decisions, and customer service confirms that SCT&E LNG’s way of operating is working.”
SCT&E LNG has placed an increased emphasis on fulfilling what has been titled the “second wave” of LNG demand, which is predicted to begin in 2023 and rise thereafter. This prediction coincides with the timing of SCT&E LNG’s signed Natural Gas Supply Agreement, negotiated by Michaels, which begins at the commencement of the facility’s operations around 2023 and ensures a 20-year fixed price for the supply of LNG for SCT&E LNG’s customers. This agreement has enhanced the appeal of the facility’s LNG for buyers, creating a competitive advantage for the company and its shareholders. Five confirmed MOUs have been signed to date for a total of 5.7 mtpa of LNG, signifying increased momentum for the SCT&E LNG project.
“The long term, global benefit of our facility is the improved environmental impact it will have in places, such as China and India, where coal is being used as a primary fuel source and resulting in high levels of pollution in the atmosphere,” adds Michaels. “This pollution is causing devastating health consequences for the communities, and natural gas fueled energy will work to greatly improve the air quality of these countries.” Natural gas is known to be twice as clean burning as traditional energy sources, such as oil and coal, and will provide increased benefits through the reduction of pollutants regularly emitted.
A number of key partners have been bought into the project to deliver crucial engineering services and help drive the project forward. Technip has been selected as the Owner’s Engineer for the development and will undertake work relating to the Federal Energy Regulatory Commission (FERC). In addition, Technip has significant experience working with Air Products and Chemicals Inc. (APCI), the liquefaction technology provider selected for the SCT&E LNG project, a relationship that will be advantageous in successfully moving the project forward through completion.
“Our facility will have a direct positive impact on the health of tens of thousands of people where our gas will be consumed as well as contribute to the health of the global environment,” adds Michaels.
Ray remarked, “We selected the world’s number one LNG technology, Air Products and Chemicals. We’ve done that because it’s proven to be the best technology with the lowest cost for producing LNG.” Ray further adds, “for technology, two gas turbine drivers are currently being considered – one by GE Oil and Gas and the other by Siemens.”
The expected demand for clean fuels is predicted to triple within the next 20 years, which will yield a multitude of challenges for both suppliers and consumers. Eric Smith explains, however, “the main challenge presently faced in the global market is getting customers to make the switch from coal to natural gas on a long term basis”.
He adds: “Coal has historically been cheaper than natural gas, but it’s also extremely bad for the environment. What we’re finding is that the carbon tax being considered in many countries around the world is an attempt to equalize the price of coal with other cleaner fuels to encourage those nations to make the switch to fuel sources that will have less of an impact on the environment.”
The company, however, has acknowledged the need to find sustainable solutions that will also benefit the global community while driving the delivery of greener, cleaner energy sources for the world:
“A huge driver for us is the environmental impact the increased use of natural gas will have, which in turn affects society as a whole. People would like to have a cleaner atmosphere because it affects their quality of life, and our project will deliver fuels to these communities that will provide them with their electricity and create a cleaner atmosphere,” concludes Smith.
The long term benefits of the project are evident. “The fact that establishing this facility will make a difference in the lives of so many people around the world is what excites me and the entire team most”, reflected Michaels.
SCT&E LNG are clearly passionate about not only the sustainability and superiority of LNG as an energy source, but also the increased advantages it has over dirtier fossil fuels which the SCT&E LNG development can deliver globally. Strong partnerships will support the delivery and key outcomes, which in turn will effectively support countries in utilizing greener fuel alternatives to provide benefits for the future.