South Hook: From Qatar to Wales

The South Hook jetty and mooring trestle extend more than half a mile from the onshore terminal, giving Q-Max LNG tankers like the Mozah plenty of room to berth.

The South Hook LNG Terminal is at the end of an integrated supply chain that brings liquefied natural gas (LNG) from Qatar’s North field some 6,000 nautical miles to the coast of Wales. Dedicated with a royal ceremony this spring, South Hook has extended Qatar’s reach into global markets and turned Wales into a new energy hub for the United Kingdom.

Vision became reality under overcast March skies when employees, officials and reporters at the South Hook LNG Terminal near Milford Haven, Wales, saw the ship they were waiting for top the horizon. The Tembek, a new Q-Flex class of LNG carrier, was delivering the first of several commissioning cargos — the long-anticipated initial loads needed to start the plant.

An official inauguration ceremony followed in May with a number of dignitaries attending, including Her Majesty Queen Elizabeth II of the United Kingdom and His Highness Sheikh Hamad bin Khalifa Al Thani, Amir of the State of Qatar, along with other members of both royal families.

The South Hook LNG Terminal, owned by Qatar Petroleum (67.5 percent), ExxonMobil (24.15 percent) and Total (8.35 percent), is part of the wider Qatargas 2 LNG value chain.

“For the leaders of Qatar, the integrated scope of Qatargas 2 served as a chance to invest in the global LNG industry,” says Jerry Wolahan, Middle East Projects vice president. “Never before has a resource owner also had the facilities to make LNG, the ships to transport it and a receiving terminal on the customer’s end. This complete value chain is a new model for our industry, and Qatar is the first producer to have it.”

Driving down costs It is important to note that LNG is not an end product but simply a way to deliver natural gas. To produce LNG, the gas must first be super-cooled to the point where it becomes liquid, then loaded onto vessels that keep the liquid cold. At the receiving end, the ships unload their cold cargos into huge insulated storage tanks that hold the LNG until it can be turned back into a gas, put into a natural gas pipeline and delivered to customers.

The manufacturing and transportation of LNG is expensive. To compete for customers of conventional natural gas, LNG producers needed to drive down their costs. Now, thanks to advanced technology and economies of scale, Qatargas 2 has done just that.

The global partnership
The liquefied natural gas that supplies South Hook comes from two of the largest LNG plants ever built: Qatargas 2 Trains 4 and 5, both of which began production in 2009. The twin production trains — each with a capacity of 7.8 million tons a year and both the size of a large refinery — produce enough LNG to deliver as much as 2 billion cubic feet of natural gas a day to customers in the United Kingdom. The Qatargas 2 joint venture also built 14 of the world’s largest LNG tankers to make the regular two-week runs from Qatar to South Hook and to serve spot market customers as needed.

“One attribute ExxonMobil brings to the relationship is its global presence,” says Jeff Woodbury, ExxonMobil Development Company executive vice president. “We were able to provide an entrance into some key markets, including the United Kingdom, mainland Europe and the United States.”

The size of Qatar’s gas reserves and the vision and integrity of its leaders make Qatar an ideal business partner.

“The visionary leadership of the Amir and his government is maximizing the value of the country’s resources and benefiting the Qatari people,” Woodbury says. “Qatar’s leaders recognized the importance of bringing in a partner that has not only the ability to develop the resource and apply the right technology but also has the global presence and financial strength to underpin the investment.”

A tanker unloads its cargo at South Hook. The Qatargas 2 joint venture built 14 of the world’s largest LNG vessels to make the regular two-week runs between Qatar and Wales.

Keeping a low profile
Although South Hook is one of the largest LNG terminals in the world, it is barely visible from the road. That was the plan from the start.

“We spent a lot of time on the environmental aspects of this facility,” says Jorge Calvo, who led the South Hook project team from 2002 to 2009. “We planned it that way to preserve the natural beauty of the area. Visual impact was one of the issues that came up in our public meetings early on.”

The main features that identify any LNG terminal are the storage tanks. South Hook has five of the largest-diameter tanks in the world. To make sure the tanks would not tower above the surrounding rolling rural landscape, contractors removed some 1.5 million cubic yards of dirt to lower the plant site by an extra 50 feet, and the excavated soil was used to form more hills nearby.

“Another challenge was the T-shaped jetty and trestle where the tankers berth,” says Daniel Wieczynski, the current project manager. “To minimize the impact on the coral reefs growing underneath them, we refurbished some existing structures rather than build new ones from scratch. Those structures were part of the former Esso Milford Haven refinery, which operated at the South Hook site from 1960 to 1983.”

A clean and secure energy supply
The same technology that supports South Hook and Qatargas 2 is driving LNG innovations worldwide.

“Not only will our LNG ventures with Qatar help satisfy the long-term demand for energy, they will also strengthen global energy security by helping to diversify supplies,” says Neil Duffin, ExxonMobil Development Company president. “We have an LNG regasification terminal operating in Italy and another under construction in the United States. The technology behind them will allow us to provide cleaner-burning natural gas to key markets in the world.”