JAX LNG bunkering project ready to start construction

OREANDA-NEWS. October 13, 2016.  The JAX LNG terminal that would provide LNG bunkering services in the US southeast is ready to start construction after completing engineering and procurement contracting, partner Pivotal LNG said.

The facility in Dames Point, near the Port of Jacksonville, Florida, is scheduled to come on line in the fourth quarter of 2017 with production capacity of more than 120,000 USG/d, equivalent to about 10mn cf/d (283,000 m?/d) of gas, and storage capacity of 2mn USG, equivalent to about 167mn cf of gas.

The project would primarily serve a 10-year contract to supply the world's first two LNG-powered container ships. The dual-fuel vessels owned by TOTE Maritime carry goods between Jacksonville and Puerto Rico. The extendable contract is for about 400,000 USG/week of LNG, equivalent to about 4.8mn cf/d (136,000m?/d) of gas.

In addition, the first North American LNG bunker barge would be deployed at the facility to serve the TOTE ships and potentially other vessels. The project could supply other high-horsepower industries that may convert to using LNG instead of diesel, such as rail, trucking and exploration-and-production.

"Once complete, this new LNG facility will provide a reliable long-term LNG fuel source in Florida that will help meet the growing LNG demands of the maritime industry and help expand the use of LNG throughout the southeastern US," said Pivotal president Tim Hermann.

JAX LNG is a venture of Pivotal and NorthStar Midstream. Pivotal owns five peakshaving liquefaction plants in the US southeast and midcontinent.

The two TOTE ships, the Isla Bella and the Perla del Caribe, were delivered last year and early this year, respectively. Pivotal has been trucking LNG to Jacksonville to fuel the vessels using a mobile, skid-mounted device. The LNG is primarily coming from a peakshaving facility in Trussville, Alabama, but some is also coming from another plant in Macon, Georgia.

The bunker barge, called the Clean Jacksonville, which has storage capacity of 2,200m?, equivalent to 45mn cf of gas, is scheduled to be delivered to Jacksonville later this year.

Low oil prices have significantly slowed the momentum to convert high horsepower engines to LNG from diesel. But some shippers are moving forward with conversions to comply with new regulations to reduce sulfur emissions within 200 nautical miles (230 miles or 370km) of the North American coast. Most shippers are using ultra-low-sulfur diesel.

Pivotal is a wholly owned subsidiary of gas distributor Southern Company. NorthStar is backed by funds managed by Oaktree Capital Management and Clean Marine Energy.

Houston-based Eagle LNG plans to build a larger liquefaction facility at the Port of Jacksonville to serve two newbuild ships owned by Crowley Maritime, export supplies to the Caribbean and Central America, as well as sell to the domestic high-horsepower market.

That 1.5mn USG/d plant is scheduled to start operating in late 2018, but in May Eagle started construction of a smaller liquefaction plant in West Jacksonville that would come on line in early 2017 to serve Crowley's two vessels, which would also carry goods between Jacksonville and Puerto Rico.

The smaller facility would have initial capacity of 87,000 USG/d and could be expanded to 200,000 USG/d.