French LNG projects race intensifies as all look on track
The proponents of LNG import projects in France appear to have stepped up the progress rate of their respective plans following delays caused by a string of public consultations held last year on a local level.
Last week, French regulator CRE said power incumbent EDF had submitted its application for full third-party access (TPA) exemption at its LNG project in Dunkirk (see ESGM 15.035).
4Gas, the Dutch LNG terminal operator, is to apply for TPA exemption at its planned LNG import facility in Le Verdon (near Bordeaux) “in the next few months”, Henk Jonkman, chief operating officer at 4Gas told ICIS Heren on Tuesday.
In December, the company had to revise some terms in the project following a request by the regional prefect that grants the necessary authorisations. 4Gas now expects to receive the construction and operational permits in the second quarter of 2010, for the final investment decision to be made before the end of 2010, and commercial operations to start late in 2013. Total capacity will range between 6 and 9 billion cubic metres (Gm³)/year.
Commercial negotiations are currently taking place with up to nine companies potentially interested in booking regasification capacity at the future terminal. The deals could be struck before 4Gas is given the thumbs-up for the project by local authorities. “It doesn’t stop us from negotiating the contracts,” said Jonkman. “There is a clause which says that [the contract] is subject to authorisations and subject to [TPA] exemption.”
Among the possible customers, there are major international companies planning to enter the French market or producing countries willing to develop commercial activities further downstream, he added.
Jonkman said: “In principle, the aim is to fill the terminal contractually [with long-term contracts],” which is also EDF’s plan. “There will be long-term contracts with use-it-or-lose-it [UIOLI] clauses…. We are aiming for contracts of 20 years,” he said, adding that it was too early to say whether there would be spare room for short-term capacity bookings.
Poweo will apply “in due course”
The other LNG project contender in France, Gaz de Normandie (a subsidiary of independent energy supplier Poweo and Austrian Verbund), is planning to apply for building permits before the summer this year and intends to apply for TPA exemption “in due course”, according to a spokeswoman. The Le Havre 9Gm³/year LNG terminal is scheduled to come on stream by 2013.
There are several forms of TPA exemption, but generally this means that owners of a new LNG terminal should not be automatically obliged to book capacity under short-term contracts, which gives better long-term visibility. CRE has said it would favour TPA exemption, provided LNG operators abide by European competition rules, as it is particularly conducive to much-needed long-term investments in new imports facilities. For new market entrants, like Poweo and EDF, exemption from TPA could help boost competition on a market dominated by GDF SUEZ and Total in the south of the country.
At Montoir de Bretagne and Fos Tonkin – the two existing terminals operated by GDF SUEZ – capacity is sold on a first come first served basis at regulated prices, with a UIOLI system imposed by the watchdog in order to prevent capacity hoarding. Most of the capacity is already booked, however.
The coming on stream of Fos Cavaou (operated by STMFC, a joint venture between GDF SUEZ and Total), by November, will put an end to unitary LNG tariffs in France. This means the cost of using regasification capacity will vary depending on
the terminal. The tariffs will still be set up by the regulator, however. FS
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