Kogas to develop Brazil’s first onshore LNG project

OREANDA-NEWS. September 13, 2016. The Brazilian state government of Ceara signed a memorandum of understanding (MOU) with Korean state-controlled Kogas to build a \\$600mn onshore LNG terminal in the Pecem port complex, which already features a floating storage and regasification unit (FSRU).

Ceara natural gas distribution company Cegas, together with Kogas, Korean construction company Posco and Korean industrial conglomerate Daewoo will participate in the LNG project.

Partners in Cegas include the Ceara-state government, state-controlled Petrobras Gas and Japan's Mitsui, which became a shareholder in December 2014.

The new terminal will have total capacity of 12mn m3/d, which could possibly be divided into two phases of 6mn m3/d each, a state official said.

The terminal would be used to import LNG to deliver via pipeline to more remote regions of the state that currently do not have access to gas.

According to Ceara state officials, the investors will now conduct an economic feasibility study.

Posco-Daewoo will be responsible for structuring project financing.

Petrobras already operates an FSRU at Pecem, but state government officials highlighted the need for an onshore terminal to meet the growing demand for gas from projects in the state.

Petrobras is trying to sell two of its three LNG regasification terminals, including Pecem, and their associated thermoelectric power plants.

In June, Petrobras sent the 22.5mn m3/d FSRU Experience to Pecem and the 7mn m3/d Golar Spirit to the Guanabara terminal outside of Rio de Janeiro.

The Experience, which is controlled by US firm Excelerate Energy, arrived at Pecem on 3 June, according to state-controlled port agency Cearaports. The 173,400m3 unit had been docked at Guanabara since 2014, and has a 15-year charter contract with Petrobras.

The Pecem LNG terminal supplies two thermoelectric plants -- 346MW Fortaleza and 219MW Termoceara.

Petrobras did not respond to inquiries regarding the possible sale or decommissioning of the existing Pecem terminal.