Singapore firm links up
LNG company plans Houston office to service offshore import terminal for Vietnam client
Singapore liquefied natural gas company Delta Offshore Energy is opening a new office in the Houston area as the firm moves forward with plans to build an offshore LNG import terminal to feed a planned power plant in Vietnam.
Delta has government approval to build a 3.2-gigawatt power plant in the Bac Lieu province at the southern tip of the Southeast Asian nation. To feed that power plant with natural gas, the company plans to build an offshore import terminal about 19 miles off the coast
The privately held company has selected contractors, including some from Houston, and it plans to issue a request for proposals for an LNG supply deal this year.
The Houston office and supply deal come as an industry downturn caused by the coronavirus pandemic has resulted in nearly 100,000 layoffs, the cancellation of more than 100 LNG cargoes this year and the failure of companies such as Tellurian and Magnolia LNG to finalize key production deals.
Bobby Quintos, one of Delta’s two managing directors, is scouting for roughly 10,000 square feet of office space in the Houston suburb of
The Woodlands.
The company, he said, plans to have 20 Houston area employees by the end of next year. Most of them will supervise contractors and construction activities in Vietnam. Once construction nears completion, Quintos said, activity in the office will shift to LNG trading.
“We chose to open an office in Houston to be near our contractors, the top talent in the industry and LNG liquefaction plants along the Gulf Coast,” Quintos said. “We also want to promote growth and preservation of jobs in these challenging times for the oil and natural gas industry.”
With a goal of having the offshore terminal, an underwater natural gas pipeline and the first power plant turbines in operation by the first quarter of 2024, Delta plans to spend up to $3 billion on the project. And depending on demand, the power plant will need to be supplied with between 2.5 and 3 million metric tons of LNG per year.
Houston oil-field services company McDermott International is expected to build an offshore terminal and underwater pipeline connected to the project.
Delta had planned to buy natural gas for the project from the proposed Magnolia LNG export terminal in Louisiana but the deal expired in May. Magnolia’s parent company LNG Limited went through bankruptcy proceedings in Australia and sold the project in June to the New York conglomerate Glenfarne Group.
The Bac Lieu project generated a lot of excitement within the LNG industry when it was unveiled last year. Quintos has spent the last three months talking with potential LNG suppliers. “Now that the market has taken an even bigger downswing because of COVID-19, we’re going to be the only ones putting out an RFP this year for any sort of LNG volumes,” Quintos said.
Vietnam does not currently import any liquefied natural gas but Delta’s other managing director Ian Nguyen said demand is expected to grow up to 30 million tons per year by 2030 or 2035 as the Southeast Asian nation moves away from coal-fired power plants, electricity demand continues to grow and its own natural gas fields become depleted.