Announcements over the past week from three big energy players provide more evidence of the rapid growth and diversification that is ongoing in the world of energy. Viewed separately, they all detail significant, even record-setting milestones. Taken together, they illustrate the global interconnectivity and growth not just among energy producers, but also among the companies that offer a vast array of energy services.
A Final Go-Ahead For A Record LNG Project
Phase I of NextDecade’s Rio Grande LNG (RGLNG) project, which I wrote about in April, reached final investment decision (FID) status Wednesday. In a release, NextDecade said it had secured $5.9 billion in investment funding as part of a joint venture deal with Global Infrastructure Partners (GIP), GIC, Mubadala Investment Company (Mubadala), (collectively, the Financial Investors), and TotalEnergies.
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The commitments of the Financial Investors will combine with NextDecade’s own obligations to underpin the $18.4 billion in financing for RGLNG Phase 1, making it the largest greenfield energy project financing in U.S. history. Concurrent with reaching the positive FID, NextDecade issued notice to Bechtel Energy Inc. to proceed with construction under its turnkey engineering, procurement and construction contracts (EPC).
According to the release, “The final EPC cost at NTP is approximately $12.0 billion. The remaining expected project costs to be covered by the financing that closed today are: owner’s costs and contingencies of approximately $2.3 billion, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4,000 acres of wetland and wildlife habitat area and installation of utilities of approximately $600 million, and interest during construction and other financing costs of approximately $3.1 billion.”
Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer, said, “Achieving FID and issuing NTP on RGLNG Phase 1 is a landmark event reflecting years of hard work and dedication by NextDecade’s employees, shareholders, construction partners, equipment suppliers, and customers.” Schatzman also thanked local, state and federal officials with whom he and his staff have interacted over the last several years as the company worked to obtain all the needed permits to move ahead with the project.
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Phase 1, part of a planned 3-phase project, has a nameplate liquefaction capacity of 17.6 MTPA. Importantly, NextDecade details in its release that it has 16.2 MTPA of long-term binding LNG sale and purchase agreements in place with a set of customers, including TotalEnergies, ExxonMobil
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The record capital investment in the project will provide a boost to the Rio Grande Valley region, and will provide thousands of jobs over the course of construction. Many of those jobs will be filled by residents in the area.
Enverus Reaches A Key Milestone
Wednesday brought more evidence of the continuing growth in the U.S. energy sector with an announcement by energy data and analytics firm Enverus that it has now surpassed $500 million in annual recurring revenue (ARR), a rare milestone in that sector of the business. The company has experienced tremendous growth in recent years, following the decision by Hellman & Friedman (“H&F”), a global private equity firm, to acquire a majority stake of Enverus from Genstar in June 2021. Since that transaction, Enverus has achieved over 77% growth in its power and renewables offerings and 31% in new products.
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“Enverus has become the most widely adopted platform in the industry thanks to our focus on being a single source of truth in energy,” said Jeff Hughes, CEO of Enverus. “With the support of Hellman & Friedman and Genstar’s experience and resources, we have accelerated our growth to new heights. Together, we are driving continued innovation to help our customers make intelligent connections, using predictive analytics, artificial intelligence and machine-learning capabilities, while expanding into renewable energy, power and ESG capabilities.”
Headquartered in Austin, Texas, the company was founded in 1999 by former CEO and Chairman Allen Gilmer and his partners, and was the first to fully digitize lease records in Texas as an initial service offering. From those hard-earned beginnings, Enverus – renamed from the original DrillingInfo in August, 2019 – has grown rapidly to become one of the largest, most diverse and respected companies in the business.
SLB, Petrobras Ink Major Service Deal
SLB, another diverse and respected energy service company, announced on July 6 it has entered into a five-year agreement with Brazilian major Petrobras to execute an enterprise-wide deployment of its Delfi™ digital platform.
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In a release, SLB said the scope of the contract “covers Petrobras’ digital transformation from exploration, development, and production operations, including moving subsurface workflows to the cloud to significantly accelerate decision making. The award represents one of Petrobras’ largest investments in cloud-based technologies and sets the foundation for it to achieve its decarbonization and net zero targets.”
The award represents one of Petrobras’ largest investments in cloud-based technologies and sets the foundation for it to achieve its decarbonization and net zero targets. For geological and geophysical (G&G) interpretation, the Delfi platform realized a significant reduction in processing time with some workflows quickened from hours to minutes.
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“By leveraging AI, machine learning, and high-performance computing technology from SLB, Petrobras will drive aggressive efficiency and production increases across its E&P business,” comments Rakesh Jaggi, president, Digital & Integration, SLB. “Leveraging the Delfi platform to digitally transform Petrobras’ E&P workflows, will improve efficiency and demonstrates its commitment to sustainability and energy transition.”
The award represents one of Petrobras’ largest investments to date in cloud-based technologies. One of the main objectives for the investment is to help Petrobras achieve achieve its net zero targets and decarbonization goals.
The Bottom Line
As I’ve noted here several times, the world is not truly in the midst of any real “energy transition” despite all the propaganda tossed around by its promoters in the private sector and mainly western governments. What is actually taking place is a process of energy growth, adoption and diversification on the grandest scale in global history.
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Taken together, these three major announcements fully support that directional thesis, and there really isn’t a lot governments can do to change it.
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