Interview with Kathleen Eisbrenner, CEO of Next Decade and Founder of Excelerate Energy

In the business of liquefied natural gas (LNG), there are few people on this planet who are moving bigger pieces of the puzzle around than LNG-entrepreneur Kathleen Eisbrenner.

I had the opportunity to speak with her yesterday where she described her impressive career and the various billion-dollar operations she’s currently heading up.  Here’s what she had to say…

Kathleen, nice to speak with you today, please tell us a bit about yourself

I’ve been in the industry for a long time, 30 plus years.  I started out as a natural gas pipeline engineer after graduation from Notre Dame, back in the years before de-regulation, but quickly moved on, I’d say within about 6 months, to marketing.

After de-regulation happened, I moved into U.S. gas marketing with El Paso Corp, which then took me to international gas marketing, which I found was a bit more exciting.

I have been involved with LNG projects in Trinidad, Cove Point in Maryland, Altamira LNG regas plant in Mexico and others.

In 2004, Enron fell apart and El Paso became concerned about balance sheet issues.  We decided to sell off parts of their business in pieces.  One of the ideas I had for some of those pieces was Pangaea, which ended up not happening.

Shortly after, George Kaiser gave me the resources to start up Excelerate Energy, where I remained as CEO for the first 4 to 5 years.  I was then recruited by Shell to run their Global LNG business, and after about 3 years I left and started up Next Decade.

As the founder of Excelerate, what was it like to leave?

It was like leaving my children!  I admire the business they have, and everything they are doing, but I think I figured out that I am probably better at starting things, than operating them.  Rob and Ed are excellent at doing that.

Let’s talk about Levant FLNG offshore Israel.  Located on the Tamar field, the plan is to export the entire 3 million metric tons per year of output to Gazprom.  How was it that Israel agreed to that?

The Tamar Partners, which include Noble Energy, Delek, Isramco, Avner Oil, and Dor Gas, are each great companies, but none work in the LNG sector, or are large enough to take on an LNG project.  You need a large market cap behind you because as you know, in LNG, everything is big.

We approached 27 counter parties for off-take, but we needed a company with a strong balance sheet, experience operating LNG carriers, moving LNG cargos and has the opportunity to offer oil-indexed price.  All those factors led to Gazprom.  And I under-estimated the government-to-government relationship between Israel and Russia.

What’s the relationship with Next Decade and DSME?

With El Paso, and then with Excelerate, we built 8 regas ships at DSME, and I’ve known them for 10 years.  The first ship was ordered in 2002, delivered in 2005, and we ended up ordering 7 more, and always had a really good experience with them.  After leaving Shell I went on to Next Decade to work for the Delek-Tamar producers, who have some of the most attractive offshore gas in the world.  DSME came into the mix unsolicited and offered to build an FLNG for Tamar at the end of 2011.  At that point, DSME then asked Tamar to run the business on a combined basis, and I was chosen to head that up.

Tell me a bit about the Tamar FLNG.

At this point, we’re still in the Front End Engineering Design (FEED) stage, but are hoping to get to the Final Investment Decision (FID) by the end of the year.  More news is to come soon.

Regarding the design of the facility, it’s not a liquid-based design.  That is, it doesn’t use propane as a refrigerant.  Instead of dual N2, it uses a process called NicheLNG, which is owned by CB&I, and developed by Randall Gas Technologies.  The technology utilizes one loop of methane, and the other of nitrogen.  There is no hydrocarbon liquid inventory on the vessel except the LNG product. This mitigates the safety issues with most other conventional mixed refrigerant LNG technologies.  It’s very simple, has a low CAPEX, OPEX, equipment count, and has favorable results when used in a marine environment.

How about offloading the product?

We will be conducting alongside cargo transfers.  Due to the more benign weather conditions found in the eastern Mediterranean, versus that found offshore Australia, we determined this was the best solution.

What’s is your company up to in the United States?

We are partnered 50/50 with Statoil on the Pangea LNG project off Corpus Christi, which taps into the Eagle Ford Shale via a 27 mile ship-shore pipeline.  We’re big believers in the abundance of natural gas in the U.S. which is the reason why we put the Eastern Med and the U.S. as the first two of our projects.  Those two regions represent the world’s biggest offshore and onshore gas developments worldwide.

At the moment, we’ve received FTA approval from the DOE, and are awaiting Non-FTA approval for export.  We are in conversations with FERC as well.

I didn’t realize the scale of the Tamar field, how big is it?

Tamar has proven reserves of 10 TCF, next door is Leviathan with 20 TCF, and next to that is Cyprus Block 12 at 7 TCF.  That’s just the gas that we know of.  In addition, it’s biogenic gas, which is super “lean.”  It only has trace amounts of LPG and condensate, which is very much like US pipeline gas.

And very much like the gas off Mozambique

Exactly, which is why we are considering that as our next possible target.

You mentioned a Downstream Floating Power Plant in your presentation at LNG 17 last week, can you give me an overview of the concept? 

It’s a really cool design by DSME.  Essentially it’s an LNG carrier with a regas facility, plus an on-board power plant which produces 200 – 400MW of power and sends it to shore.  The price point is $400-$500 million, so it’s relatively small when compared to a $2 to $4 billion FLNG facility.

This sort of facility would likely be ideal off Japan, or perhaps off China where it could tie into existing grids that are fed by the dozens of coal-powered plants near the coast.