Wärtsilä Gas Solutions, part of Finland’s technology group Wärtsilä, is helping U.S. offshore gas players future-proof their energy infrastructure with its reliquefaction systems, which it will deliver for retrofit and installation onboard a floating storage regasification unit (FSRU), owned by the U.S.-based Excelerate Energy, a liquefied natural gas (LNG) giant with a full range of flexible regasification services spanning from floating storage regasification units (FSRUs) to infrastructure development and LNG supply.
Wärtsilä, which considers Excelerate Energy to be “the world’s largest FSRU operator,” will supply its reliquefaction systems for retrofit installation onboard the U.S. firm’s FSRU, enabling the Texas-headquartered player to clean up its greenhouse gas (GHG) emissions reduction act by improving the environmental footprint of its floating gas vessels’ operations.
Walter Reggente, VP of Wärtsilä Gas Solutions, commented: “As a market leader in types of cryogenic gas applications, Wärtsilä Gas Solutions has demonstrated to the market for many years that we have the technology to contribute to greener shipping operations. We are, of course, very proud to be partnering with an industry-leader such as Excelerate Energy, which is a strong testament to our capabilities in delivering quality, commercial value and environmental benefits to our clients.”
The order, expected to be booked by the Finnish player in Q4 2024 at the latest, is for the Compact Reliq Double units, based on the reversed Brayton cycle technology, and designed to reliquefy boil-off gas and return it to the cargo tanks, thus, eliminating emissions and saving cargo at the same time. In addition, the system is fitted with new technology and applications to minimize maintenance and operational costs for the operator.
David Liner, COO at Excelerate Energy, highlighted: “We are committed to reducing the environmental footprint in all our operations, and this project is a substantial part of that commitment. We are very pleased to partner up with Wärtsilä Gas Solutions for this project, as their unmatched experience in reliquefaction systems, state-of-the-art technology, and all-round project engineering capabilities make them the ideal partner for us.”
While the agreement with Wärtsilä will enable the U.S. company to purchase the former’s reliquefaction system for retrofit installation onboard one of its FSRUs, the firm has elaborated that the equipment will be available to be installed on any of its existing vessels based on customer demand or for prospective LNG projects.
The delivery of the Finnish player’s equipment is slated to start in early 2026, empowering further Excelerate’s mission of changing the way the world accesses cleaner forms of energy by providing integrated services along the LNG value chain to deliver rapid-to-market and reliable LNG solutions,
In line with this, Excelerate Energy recently signed a term sheet with ITECO Joint Stock Company, a Vietnamese private development firm, to co-develop a greenfield LNG import terminal in Haiphong, Vietnam. With an import capacity of 1.2 million tonnes per annum (mtpa), the Northern Vietnam LNG terminal (NVLT), will be constructed in two phases.
While the first project stage, with an estimated capacity of 0.7 mtpa, is expected to start operations in 2027, the project development is still subject to the execution of definitive agreements, regulatory approvals, and the satisfaction of other conditions. The main objective of the terminal is to enhance energy infrastructure in northern Vietnam by catering to the region’s energy needs.
Aside from the deal in Vietnam, Excelerate’s 138,000-cbm FSRU is scheduled to service Germany’s Wilhelmshaven 2 LNG terminal, where it will be moored at a new island jetty in northwestern’ Germany’s Jade Bay in late 2024. Natural gas vaporized at the unit will be sent to shore via ECOnnect Energy’s IQuay F-Class System and fed into the Open Grid Europe (OGE) gas grid.
Rethink on FERC’s mind for gas infrastructure projects
Excelerate Energy’s retrofit project comes when the U.S. Federal Energy Regulatory Commission (FERC) is mulling over a potential change for gas infrastructure project reviews in light of recent court rulings. As multiple energy players’ differing proposals for handling environmental reviews of natural gas projects through the lens of the National Environmental Policy Act (NEPA) thrust a widening gap into the limelight over the way the U.S. government tackles such reviews, FERC is at a crossroads as it weights the best way forward, which has the potential to set a precedent for the way the agency will apply the environmental law to the evaluation and oversight of natural gas and LNG projects.
Some developers have been trying to convince the FERC to step aside by claiming that proposals for LNG infrastructure are outside its jurisdiction, which would cause an uproar in the LNG review process, likely resulting in another permitting freeze despite the growing push the Biden administration is getting from the energy industry to unleash U.S. LNG exports to Europe and its allies as a way to assist in strengthening the global energy security and bolster U.S. economy by reaping the benefits of the LNG demand boom.
Ever since a Trump-era rule relieved the Department of Energy (DOE) from having to undertake the NEPA reviews for proposed LNG projects to avoid duplication of FERC’s review steps, the battle has been raging between those who want to keep things as they are and those that want a greater NEPA oversight to ensure no projects will slip through the cracks due to loopholes that are perceived to be part of the federal agency’s current review process.
Given the rise in state and federal policies revolving around climate change and a transition to clean energy, FERC is being urged to give real weight to the green wave sweeping over the energy industry before it grants certificates for the construction and operation of interstate natural gas pipelines and LNG projects. Aside from prompts to maintain the energy industry’s regulatory certainty, the heat is being turned up on FERC to fortify the agency’s environmental oversight of gas projects.
The Biden administration continues pushing climate change to the forefront of energy policies to become a focal point of many aspects of its domestic and international agenda. FERC, as an independent federal regulatory agency, has been doing its business as usual until lawsuits started to pile up as opponents of fossil fuels saw their chance to stop further gas infrastructure buildout even for projects already in the construction phase.
These sentiments have now put FERC in a tricky situation, as it finds itself at the center of ongoing debates over America’s energy policies and whether or not greenhouse gas emissions need to be considered before a project can get the green light to proceed. One of FERC’s reauthorizations the U.S. Court of Appeals for the D.C. Circuit revoked was for NextDecade’s Rio Grande LNG export project, consisting of the Rio Grande terminal and Rio Bravo pipeline.
The developer underlined that global energy security could be jeopardized if the court’s decision is upheld, since Rio Grande LNG’s long-term supply capacity totals almost 6% of the current global supply. The ruling could also compromise other infrastructure projects through a precedent inviting courts to upset federal permits.
The U.S. Court of Appeals for the District of Columbia Circuit Court axed in July FERC’s approval of Transcontinental Gas Pipeline’s almost $1 billion regional energy access expansion project because the commission allegedly did not adequately review the pipeline’s potential greenhouse gas emissions and questioned whether the U.S. federal agency properly considered the public interest of the pipeline that would boost Transco’s capacity by up to 829,000 Dt/d to serve about 3 million customers.
While Willie Phillips, FERC’s Chairman, pointed out during the commission’s monthly meeting last week that the court made a mistake in vacating the pipeline approval, he also underlined the recent string of court rulings vacating project approvals would force FERC to rethink its pipeline and LNG reviews.
While the approval of Commonwealth LNG’s proposed plant in Cameron Parish was remanded and returned to FERC to reevaluate it to entail climate impacts, the court also ordered the federal regulatory agency to prepare new environmental analyses for NextDecade’s Rio Grande LNG and Glenfarne Energy Transitio’s Texas LNG projects.
As a result, FERC does not expect to be done with the new environmental impact assessments and potentially reissue permits until the end of 2025, which means that the existing timelines for these projects will need to be pushed back. Phillips labeled the latest bundle of court’s rulings against planned LNG infrastructure projects as “a shift in the legal landscape,” since the court’s earlier decisions looked favorably on reissued permits.
While underscoring that “court’s decision is the law,” alongside the federal agency’s commitment to “do what the court told us to do,” Phillips underlined the desire to see FERC conduct its work in a “bipartisan, legally durable way” to handle the court’s concerns in all three gas project, and in future certificate decisions.
A joint venture between Technip Energies and KBR has been hired to repurpose a liquefied natural gas import and regasification terminal, located on Louisiana’s Gulf Coast, into what has been envisioned to become one of the largest LNG facilities in the United States.
FERC’s move to amend its 1999 pipeline policy for the first time two years ago was driven by global energy security concerns prompted by shifts in the availability of energy supply, price changes for U.S. energy resources, and rising concerns over climate impacts of new natural gas infrastructure, in combination with a series of adverse court decisions for the federal agency regarding its assessment of the need for more gas projects and impacts these projects would have on the environment and climate change.
Many have criticized this policy change as it comes with the potential to expand FERC’s ability to address concerns associated with new energy infrastructure from the courts and the public, thus, it even faced strong dissent from two of the federal agency’s commissioners alongside vocal opposition from industry and members of Congress, prompting FERC yet again to reconsider its new policy.
This attempt at changing the status quo showed without doubt that any actual energy policy reforms would be contested and hard to implement regardless of their duration. Big Oil and proponents of more oil and gas projects, especially LNG, will continue to clash with those who want to phase out fossil fuels and bolster renewable and clean energy development.
Tracy Carluccio, Deputy Director of Delaware Riverkeeper Network, warned: “There’s a huge, gaping hole in the review of natural gas infrastructure. There could be many projects that completely evade FERC reviews and NEPA reviews.”
Therefore, the pressure is mounting on FERC from both sides to change its ways. While some want to fast-track approval for gas and LNG infrastructure projects, others want to do the same for renewables and hand out a massive bundle of rejections to proposed fossil fuel developments.
These are urging the federal agency to start evaluating the project’s need for natural gas infrastructure by keeping net zero targets firmly in sight, as the age of climate change continues to wreak havoc worldwide, including in America.
There is also a third group, which advocates the pursuit of a balancing act by calling for more oil, gas, and LNG projects, along with renewables and other low-carbon, and green energies to ensure energy security of the U.S. and its allies will not be compromised in the wake of escalating geopolitical tensions.
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