While Delfin LNG LLC plans to launch the first deepwater liquefied natural gas exporting in the Gulf of Mexico, the company is getting ready to establish its headquarters to downtown Houston.
Delfin CEO Frederick Jones, who resides in Louisiana, said his team is deciding between three downtown locations for about 20 people to work.
"Houston is the energy capital of the world," said Delfin CFO Matthew Weil, who relocated from New York to Houston. "There's no other alternative really."
The company will submit its application to the U.S. Maritime Administration in the "relatively near future," Weil said, as Delfin seeks to export LNG to non-Free Trade Agreement nations like India and Japan. Last year, Delfin received approval from U.S. Department of Energy to export LNG to Free Trade Agreement countries.
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The ultimate goal for Delfin includes onshore gas compression facilities in Louisiana, a 42-inch pipeline to transport the LNG offshore and a deepwater port with four floating LNG vessels about 50 miles offshore. The aim is to export up to 13 million tonnes per year. The plan is to commence LNG exports in 2019. While other Houston-based LNG export projects are under construction, none of them are located offshore.
"We very much like the idea of floating liquefied, because it's a moveable asset," Jones said. "Bankers like that.
"If faced with an economic catastrophe, we can pull up our anchor and move somewhere else in the world," he said, adding that the deepwater port could also be moved temporarily to evade major hurricanes.
The company, which has been five years in the making, has been very busy lately. Late last year, Delfin finalized its purchase of Enbridge Offshore Pipelines' LLC's natural gas pipeline system from Cameron Parish in Louisiana. The system will connect with Delfin's deepwater port about 50 miles offshore.
Delfin just contracted with Norway-based Höegh LNG Ltd. shipowner to provide the vessels and with Brazil-based BTG Pactual Commodities as Delfin's "anchor long-term customer." Delfin also just signed another new customer in Litgas, which is part of the Lithuanian, state-controlled Lietuvos Energija energy company.
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"We're repurposing existing Gulf of Mexico pipelines that previously went offshore to onshore," Weil said. "We're basically a complete brownfield project.
"We're flowing gas the other way," he continued. "We'll just add the moorings and the floating liquefied vessel."
Even though oil and gas prices are slumping, Jones said, he still sees the need growing for LNG long term.
"We kind of consider it a bump in the road really," he said.
Delfin is owned by Fairwood Peninsula LLP, which is a partnership of the Singapore-based Fairwood Group and the Texas-based Peninsula Group. But Jones and Weil will not discuss the specifics of project costs and financing. Jones will spend most of his time in Houston going forward, although he said he will continue to travel a lot in Texas and overseas.
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