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"For much of the state of Maine, the environment is the economy"
                                           — US Senator Susan Collins, 2012 Jun 21


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Passamaquoddy Bay & LNG

2011 March

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2011 Mar

2011 March 31

Domestic Natgas Security Grows, Prices Remain Low

Energy expert annotates Obama's energy speech — Science Insider

Now, in terms of new sources of energy, we have a few different options. The first is natural gas. Recent innovations have given us the opportunity to tap large reserves -- perhaps a century's worth of reserves, a hundred years worth of reserves -- in the shale under our feet. But just as is true in terms of us extracting oil from the ground, we've got to make sure that we're extracting natural gas safely, without polluting our water supply. [Red bold emphasis added.]

U.S. Energy Department natural gas update for March 30 — Bloomberg

According to BENTEK estimates, the week’s average 68.1 Bcf per day of total nominal gas supply represented an increase of 2.0 percent from last week’s value. Domestic gas production was 63.8 Bcf, up 0.9 percent, accounting for the bulk of the increase. BENTEK notes that more new daily production records were set during the week. Canadian imports averaged about 6.3 Bcf per day, representing an increase of about 1 Bcf per day (14.9 percent) for the week, and now stand 3.2 percent above year-ago levels likely due to increasing productivity of new wells in Canada. Supply also picked up slightly in the liquefied natural gas (LNG) arena, where imports (less than 1 Bcf per day) increased 2.4 percent above last week but remain 27.3 percent below the corresponding week last year. [Red bold emphasis added.]

US revolution puts Australian exports at risk (Apr 1) — The Australian, Surry Hills, NSW, Australia

THE shale gas revolution in the US could threaten long-term demand for Australian LNG exports as big energy players start to talk about exporting gas from North America to Asia.

The domestic US market is now oversupplied with low prices.

"Talk of new LNG re-gasification (import) terminals in North America has been replaced by talk of liquefaction plants, which means that US shale gas may find markets in Asia and compete against other suppliers, including Australia," Deloitte Australian oil and gas leader Stephen Reid said.

If nukes fade, gas exports will gain — The Vancouver Sun, Vancouver, BC

Global markets seem to be betting that the answer will involve natural gas, the cleanest of the fossil fuels and one that just happens to be in surplus supply in Canada and the United States. Japan is already the world's biggest consumer of liquefied natural gas, or LNG, and gas-powered generators could be a quick, economical fix for its electricity shortage.

Even before the nuclear scare, companies in the United States and Canada had begun working on plans to [export LNG]. In Canada, for example, EnCana, a major gas producer, has just bought into a $4.7-billion LNG export terminal that's aiming to begin exporting by 2015 from Kitimat. EnCana's partners in this project are two U.S. firms, Apache Corp. and EOG Resources. [Red bold emphasis added.]

Did high gas prices dim plans for green energy? (Mar 30) — Asbury Park Press, Asbury Park, NJ

"The reality right now is we're exporting more domestic oil products than ever before. . . . There are 10 applications to take American natural gas and export it as LNG (liquefied natural gas)," Zipf said. "We are going to export ours to import theirs?" [Red bold emphasis added.]

Webmaster’s Comments: The SPB webmaster doubts that there actually are 10 applications to export US LNG, and has contacted the person quoted in the news article, asking for a source corroborating that number. I will post more information on the actual number on a later date.


2011 March 30

Natgas Production & Consumption Up,
LNG & Pipeline Imports Fizzle

Major natural gas pipeline upgrade coming to Portland area (Mar 28) — Natural Resources Council of Maine

"This project will modernize the area's gas infrastructure making it more reliable and better able to meet the growing demand for natural gas in Maine," O'Meara said.

"There are people in Portland that we currently cannot service because of the volume of gas in our pipeline," said Hobart. "With the replacement of these lines we're going to increase the volume of gas and will be able to take on those new customers."

"Your average bill is approximately 20% less now than it was two years ago, and that decrease thanks to abundance of supply, there's no indication that's going to change, will certainly be offsetting the cost of this project," O'Meara said. [Red bold emphasis added.]

Webmaster’s Comments: Maine has plenty of natural gas, contrary to false claims by Downeast LNG.

Natural Gas Monthly (Mar 29) — US Energy Information Administration

[Note: The following was received from the EIA via monthly email notification, and is not available on a webpage.]

The March issue of the NGM, featuring data for January 2011, is now available. The preliminary estimate of total consumption of natural gas in the United States totaled 2,872 billion cubic feet (Bcf) for the month, the highest on record. The high levels of residential and commercial consumption, 971 and 523 Bcf, respectively, were the main contributing factor. They were primarily driven by colder than normal temperatures in many regions of the country as natural gas home customer-weighted heating degree days were 3.9 percent above the historical January average. However, industrial consumption was also strong at 641 Bcf, the highest level since January 2008. [Red bold emphasis added.]

Webmaster’s Comments: It is notable that monthly natural gas consumption is the highest on record, yet imports are falling due to the increasing production efficiencies of shale drilling — even as the number of operating shale rigs falls (see the following EIA item).

Natural Gas Weekly Update (Mar 24) — US Energy Information Administration

U.S. domestic production continues to create new records as volumes from shale formations increase. Supplies from unconventional gas fields such as the Marcellus Shale in the Northeast/Appalachia region and the Haynesville Shale in Louisiana helped boost domestic production above 63 Bcf per day on average during the report week, and as high as 63.3 Bcf on Sunday, March 20, which is the highest production level ever reported by BENTEK in its daily production statistics (See Other Market Trends below). U.S. domestic production is 5.9 percent higher compared with this time last year, according to BENTEK statistics. Domestic production has not declined substantially despite reductions in overall rig counts compared with this time last year, likely in part because of greater efficiencies in the drilling process and the high initial production levels at shale fields. However, it should be noted that there is often a delayed effect on production output from changes in drilling trends.

Imports of natural gas continue to flow into the United States at much lower levels than in previous years, likely as a result of higher U.S. domestic production. During the report week, net Canadian imports averaged 5.5 Bcf per day, which is 8.0 percent lower than the same week in 2010. The pace of deliveries of U.S. LNG imports in recent weeks has also decreased considerably in comparison with this time last year. Sendout from U.S. LNG import terminals averaged about 0.9 Bcf per day during the report week, or 11.8 percent lower than the same week in 2010. The lower level of U.S. LNG imports this week is the result of much higher prices being available to suppliers of LNG in regional markets in Europe and Asia. Following the nuclear crisis in Japan (which will likely result in higher demand for LNG) and conflict in North Africa, the difference in prices in the United States and other world markets has increased even more. Currently, however, the extent to which this will affect current deliveries of LNG to the United States is unclear. [Red bold emphasis added.]

Gas oversupply means producers should seek customers abroad: E&Y — BIV Business Today, Vancouver, BC

Canadian unconventional natural gas producers face a host of new challenges, not the least of which is an oversupply of gas in eastern Canada and the U.S., global tax and advisory firm Ernst & Young (E&Y) said Wednesday.

The prediction comes amid a plethora of massive shale gas finds throughout North America, which reduced prices in January and February. [Red bold emphasis added.]

Canada: JV proposes second Kitimat LNG terminal (Mar 29) — LNG World News

“To Canada, it makes perfect sense, with the price dropping, with U.S. shale gas development making them self-sufficient, so where is Canada going to sell natural gas? China is only natural.” [Red bold emphasis added.]

China's shale gas gambit (Mar 15) — PennEnergy

The linchpin to these developments is almost certainly a planned gas export terminal at Bish Cove, near Kitimat. Back in 2005, when the fallout from Hurricane Katrina drove North American gas prices over $15 per million British thermal units (MMBtu), the terminal was one of several around North America proposed to import LNG from stranded fields in places like Qatar, Indonesia and New Zealand. Since then, evolving shale extraction technology has more than doubled North American gas reserves and driven the price below $5 per MMBtu, possibly for decades. In 2008, proponent Kitimat LNG reconfigured what was supposed to be a $700-million regasification terminal into a $3.5-billion liquefaction terminal that would take the gas from pipelines, cool it to -162°C and turn it into a liquid for marine transport. [Red bold emphasis added.]

Encana buys into $4.2 billion liquid natural gas project in Kitimat, British Columbia — Journal of Commerce, Burnaby, BC

"With Encana's investment in this planned international trade facility, we are helping lead a continental push to deliver exports of abundant natural gas, for the first time from Canada, to overseas markets," said Encana president and chief executive officer Randy Eresman.

Encana said recent B.C. discoveries indicate the province will have the capacity to more than double current production of about 2.8 billion cubic feet per day to more than seven bcf/d in the next seven to 10 years. [Red bold emphasis added.]

Age of cheap natural gas over? (Mar 29) — KYOT, Phoenix, AZ

The International Energy Agency said recoverable natural gas resources could last more than 130 years based on current consumption rates. That could double through the use of so-called unconventional resources like shale and liquefied natural gas.

Ian Cronshaw, a gas market analyst for the IEA, said the boom in the U.S. gas market means more resources for consumers. [Red bold emphasis added.]

Liquefied gas shipping rates up — Calgary Herald, Calgary, AB

The cost of shipping liquefied natural gas may advance 67 per cent [67%] to a five-year high as Japan replaces its crippled nuclear industry with power plants burning fossil fuels. [Red bold emphasis added.]

Webmaster’s Comments: LNG import terminal developers like Downeast LNG have argued that imported LNG would reduce the cost of natural gas. Even without the added increase in shipping costs that is untrue. Now, the huge increase in shipping costs makes LNG even more expensive than domestic natural gas.

Battle over LNG plan quietly goes on — The Dundalk Eagel, Dundalk, MD

Several years after initial plans were revealed and challenges to the proposal were made, citizens await further action on the AES Sparrows Point attempt to build a liquefied natural gas plant at Sparrows Point Shipyard.

“One thing that we are very upset about is that FERC took it upon itself to pass, under the Clean Air Act, AES’s newly-proposed strategy for their compliance with the general conformity rule,” Donnelly said. “That’s a no-no. That’s not allowed because FERC, in all of its glory, does not have the power to make that call. That is strictly the Environmental Protection Agency and [Maryland Department of the Environment] for the state.” [Red emphasis added.]

APGA files comments opposing Freeport LNG export proposal (Mar 29) — LNG Law Blog

The American Public Gas Association (APGA) has submitted comments to the U.S. Department of Energy opposing the Freeport LNG export proposal, arguing that U.S. domestic gas supplies would be put to better use in the North American market.

Webmaster’s Comments: Does it make sense for the US to export its energy security? APGA does not think so.

Numerous comments filed in support of Freeport LNG export proposal — LNG Law Blog

A number of comments have been submitted by interested parties in support of the proposed Freeport LNG liquefaction and export project. The comments, available in U.S. Department of Energy Docket 10-161-LNG, were filed by elected officials, trade groups, and other participants in the U.S. LNG industry.

Energy firm files comments supporting Freeport LNG export proposal (Mar 28) — LNG Law Blog

Copano Energy, a Houston-based midstream energy company, submitted comments to FERC and the U.S. Department of Energy in support of the Freeport LNG export project. Copano Energy cited numerous reasons it supports the export proposal, including creating new markets for North American natural gas, increasing state tax revenue, and creating jobs in furtherance of President Obama's National Export Initiative.

Joint venture proposes second LNG export project for Northern British Columbia (Mar 28) — LNG Law Blog

BC LNG Export Co-Operative LLC, a joint-venture between LNG Partners and the Haisla First Nation, has submitted an application to Canada's National Energy Board to construct and operate an LNG export facility on British Columbia's Pacific coast. According to the Calgary Herald, the LNG export project contemplated would have a liquefaction capacity of 125 MMcf/d and cost between $360-$450 million. The site of the BC LNG project would be north of the Kitimat LNG export project already under development. [Red emphasis added.]

High court halts county’s LNG pipeline hearing — The Daily Astorian, Astoria, OR [Paid subscription required]

The Oregon Supreme Court has put a halt to Clatsop County’s review of a liquefied natural gas pipeline application.

The county was supposed to hold a public hearing on the LNG pipeline application today. That meeting has been canceled. The board had withdrawn a previous approval of the application and scheduled reconsideration hearings March 9 and March 30. Based on the outcome of the March 9 hearing, the county was expected to officially deny the application today.

Palomar kills plan for liquid natural gas pipeline — Woodburn Independent, Woodburn, OR

Palomar notified the Federal Energy Regulatory Commission (FERC) on Wednesday morning that the company was withdrawing its application for FERC certification. The notice cited the termination of the Bradwood Landing project, a liquefied natural gas (LNG) terminal the pipeline would have connected to, as well as diminished commercial interest due to the economy, as the primary reasons for the move.

In May 2010, NorthernStar Natural Gas announced it was terminating the Bradwood Landing project and subsequently filed for bankruptcy. Bradwood Landing had already earned conditional approval from [FERC], the Coast Guard and Clatsop County. It had begun the process of Endangered Species Act consultation with FERC and the National Marine Fisheries Service, but its path had been riddled with legal challenges, culminating in a federal appeal of FERC’s authorization filed by the states of Oregon and Washington and the U.S. Department of Justice, among others.

Palomar gives up western leg of LNG project — News Times, Portland, OR

The push for a controversial liquefied natural gas pipeline (sic) through Washington County was hit with another setback last week, this one linked to the bankruptcy of Bradwood Landing, the LNG terminal that would have been sited 77 miles west of Portland on the Columbia River.

“Even though this battle appears to be finally drawing to a messy close, the barn door is still open,” Sansone said. “The abundance of domestic gas, and a relatively inexpensive price compared to Asia, is a strong economic incentive for LNG export proposals which would still require highly damaging pipelines across Oregon with very little economic benefit to the state.”

State to CoosCo: reconsider LNG pipeline — (AP) KVAL-TV, Eugene, OR

The Land Use Board of Appeals ruling made public Wednesday says the county needs to rework its method for demonstrating the pipeline has permission to cross all land holdings on the 50-mile route, and must consider what harm may come to native oysters by dredging a trench through a Coos Bay inlet.

Webmaster’s Comments: The pipeline is related to the proposed Jordan Cove LNG terminal at Coos Bay.

State rejects gas line approval — The World, Coos Bay, OR

Coos County commissioners must consider the proposed Pacific Connector gas pipeline's impact on native Olympia oysters in Haynes Inlet, the state's Land Use Board of Appeals ruled Tuesday.

The county also must get consent from all landowners before granting permits, or -- if a federal agency rules the property can be taken by eminent domain -- hold further hearings.

State tells Coos County reconsider LNG pipeline — Mercury News, San Jose, CA

The project is one of three LNG proposals in Oregon vying over the past six years to be the first on the West Coast. One on the lower Columbia River went bankrupt as public demand for gas waned with the recession and development of plentiful domestic gas reserves. Another in Warrenton is going through the approval process. While federal energy authorities have backed the projects, state officials have not, saying the energy is not needed and poses environmental problems.


2011 March 26

New LNG Import Projects Clobbered by Shale

Mass. market: State’s new LNG ports were idle this winter — The Enterprise, Brockton, MA

The frigid temps we endured this winter kept demand high for natural gas in New England. But the two new liquefied natural gas ports in Massachusetts Bay were remarkably quiet all season long.

The winter ended, and not one LNG tanker had pulled up to feed the pipeline system that delivers fuel to heat our homes. In fact, the Neptune terminal that went online one year ago has only received two shipments so far. Meanwhile, the Northeast Gateway terminal that opened in 2008 hasn’t accepted a new shipment since February 2010.

This couldn’t have been what the developers had hoped for when they proposed the offshore terminals more than six years ago. At the time, these buoy systems that allow gas to be unloaded into an underwater pipeline were touted as a safe way to import the gas without bringing LNG tankers close to homes. Additional supplies of LNG were viewed as crucial for keeping pace with the region’s increasing demand for the fuel.

Then there’s the unexpected increase in domestic [natural gas] supplies. Chris Kostas, an analyst at Energy Security Analysis Inc. in Wakefield, says the developers of the offshore terminals probably miscalculated how much the cost of extracting shale gas would drop due to improvements in technology.

Of more importance to New England is the Marcellus Shale formation that stretches under much of Pennsylvania and parts of New York. This immense resource, once considered essentially unusable, is practically at our doorstep. With the shale resources added to the mix, the federal government estimates that there’s enough natural gas in the U.S. to meet the country’s consumption for 110 years. [Red bold emphasis added.]

Shift in energy markets left Bay State’s two offshore LNG terminals quiet this winter — Mass. Market, MA

What if they built an LNG terminal out in the middle of Massachusetts Bay, and no one came? The developers of the two LNG ports that were built in the bay during the past several years may be asking that same question right now.

There were several factors at work: The LNG shippers chased more lucrative spot markets in Europe and Asia. The mortgage and market meltdown of 2008 curbed economic expansion here, keeping a lid on demand. And the emergence of shale gas as a viable domestic fuel source led experts to believe the U.S. could be self-sufficient on its own natural gas supplies for the rest of this century.


2011 March 25

Another Canadian Export Terminal; Mexico to Import US Gas

Cheap US gas forces Mexico to reduce LNG imports — LNG World News

Low natural gas prices in the US, pushed down by fast-growing shale production, has made it more attractive for Mexico to import gas via pipeline instead of landing LNG cargoes for regasification.

For that reason, Shell-Total-Mitsui’s 500mn ft³/d LNG terminal at Altamira on Mexico’s Gulf coast, and Sempra Energy’s 1bn ft³/d terminal at Ensenada on Mexico’s Pacific coast, are not expected to be importing at their full capacity for the foreseeable future, according to company sources and energy ministry planning documents.

El Paso Natural Gas has put its 1.25bn ft³/d Sonora LNG project at Puerto Libertad on the Pacific coast on hold, and the company is unlikely to build it at current gas prices, sources at Mexico’s energy regulatory commission (CRE) told Argus.

If Sonora LNG were to move ahead, it would most likely be with a view to exporting gas to the Pacific basin from US shale formations, rather than importing LNG into Mexico, which was its original purpose, according to the sources. [Red bold emphasis added.]

Another B.C. company jumps on LNG bandwagon (Mar 24) — The Globe and Mail, Dons Mills, ON

Three months after a group of major western companies applied for the first domestic natural gas export licence, a partnership named BC LNG Export Co-operative LLC has asked the National Energy Board for approval to build a second export terminal in Kitimat, B.C.

“Given all the unconventional gas that’s likely to be developed in North America, you’re looking at a pretty depressed gas sales price scenario in the B.C., Alberta area,” said Tom Taitham, the managing director of BC LNG. “Asian markets are completely different. They’re used to paying oil-equivalent prices which are much, much higher than we’re used to here in North America.”

The BC LNG model is far different from what Kitimat LNG has proposed. Instead of being owned by companies with major gas reserves, it would consist of an operating company that would liquefy gas, at a fee, for members of an export co-operative. Those members would include B.C. gas sellers and Asian buyers. Under the current structure of the co-operative, companies can buy in at a rate of $50,000 a year. Or they can receive free membership if they provide letters to the National Energy Board expressing intent to buy or sell gas through the terminal.

“Half a dozen producer members have indicated they want to participate and so have four LNG off-takers,” Mr. Taitham said. [Red bold emphasis added.]

Another LNG export terminal for BC? — Alaska Dispatch, Anchorage, AK

The newly proposed project would feature a novel, barge-based processing facility along with a work-flow design that would require no storage capacity, two factors that project backers believe will enable the facility to come online quickly, perhaps as soon as 2013. [Red bold emphasis added.]

Second Kitimat LNG plant proposed to target Asian markets — Calgary Herald, Calgary, AB

A second, more modest proposal to export liquefied natural gas to Asia through the West Coast port at Kitimat, B.C., has emerged.

The Kitimat LNG terminal is to be operated by Apache Corp., with partners Encana Corp. and EOG Resources Inc. All three are major land owners in prolific shale gas plays in northeastern B.C. and the three plan to build a new pipeline to bring gas from that area. [Red bold emphasis added.]

Americans find new romance with an old flame [Press release] — Cision Wire, Chicago IL

“The United States has enough natural gas reserves to last a century,“ he said, “and we keep finding more. Over the last decade alone, new technologies have helped to open up huge additional quantities.” [Red bold emphasis added.]

Energy costs and energy policy: Advantage USA — Investing Daily

With the US producing all-time record quantities of gas, the oversupply has depressed prices. The US has no real need to import natural gas in the form of liquefied natural gas (LNG). In fact, country is regarded as a market of last resort for LNG cargoes because North America has more capacity to store gas than most other gas-consuming regions of the world. In total, the US imports less than 10 percent of the gas it consumes, with virtually all of those imports coming from Canada. [Red emphasis added.]

Savannah City Council requests more federal study of LNG trucking (Mar 24) — Savannah Morning News, Savannah, GA

Savannah City Council on Thursday passed a resolution calling for federal regulators to perform a formal, detailed study of the risks associated with trucking liquefied natural gas through the city.

“ ... (The) City of Savannah has asked for and not received from Southeast LNG the necessary information to examine appropriately all the effects and concerns surrounding the trucking of LNG as part of the hazardous materials flow in Savannah,” the resolution read in part.

Scott’s main concern is that the federally prescribed evacuation zone of one mile for an LNG spill would be impossible to comply with quickly enough if there were a tanker truck accident.

“We can’t evacuate people, regardless of the route, if this substance is as dangerous as DOT says,” he said.

Import or export, we're first and last a port — The World, Coos Bay, OR

Critics pose legitimate questions about exporting or importing LNG. Natural gas is flammable, after all. That risk factor is also its value.

Those people contend Oregon shouldn't host an LNG import terminal delivering gas to California, because the gas wouldn't fuel Oregon. Recently the argument shifted to the theoretical possibility of exporting LNG to Asia. Even as you read this, shippers are diverting LNG tankers to provide power in place of Japan's nuclear energy.

While LNG's safety and environmental impact are worthy of debate, it's wrongheaded to say the Bay Area shouldn't be in the business of receiving or delivering commodities, including LNG.

Webmaster’s Comments: This editorial has missed the argument opposing the Jordan Cove LNG terminal. Objections are based on the unsafe siting of the proposed terminal, as clearly indicated by the world LNG industry's own terminal siting best safe practices (see LNG Terminal Siting Standards Organization for more on this issue).


2011 March 24

To Export or Not to Export, That Is the Question

There is an overwhelming US natgas surplus in a natgas surplus world

U.S. natural gas output may get boost from Japan nuclear crisis (Mar 23) — Bloomberg

Production of the heating and power-plant fuel can be ramped up within months, thanks to the industry’s ability to extract gas cheaply from vast shale deposits in North America, Larry Nichols, executive chairman of Devon Energy Corp. (DVN), the third-largest U.S. oil and gas producer, said in an interview.

Devon halved the [number] of rigs drilling for natural gas in the Barnett Shale deposit of Texas as gas prices fell in the past year. “We have 7,000 identified, undrilled locations that are surrounded by producing wells there,” Nichols said. “In areas like that, it’s fairly easy to ramp up. There’s no geological risk to speak of.” [Red bold emphasis added.]

RPT-Mexico reports first output from shale gas well (Mar 23) — Reuters

Shale gas is an unconventional source of natural gas that has become in recent years the fastest growing source of new natural gas supplies in the United States.

The new supplies have overturned assumptions that the United States would require increasingly large imports of liquefied natural gas in the coming years to meet domestic demand. [Red bold emphasis added.]

Unconventional gas to underpin BG's LNG (Mar 23) — Petroleum Economist [Paid subscription required]

UK GAS player BG Group firmly believes shale gas will support, not hinder, its international liquefied natural gas (LNG) business. BG, which received approval for a project to convert coal-bed methane (CBM) to LNG in Australia last year, is bullish about shale gas, saying the resource gives it a "fantastic platform on which we could enter the [US] market".

This optimism comes despite the US' unconventionals boom effectively ending the country's need for LNG imports, BG's most lucrative business segment.

Barclays Capital predicts LNG exported from North America to enter competitive market — LNG Law Blog

A report released by Barclays Capital yesterday suggests that LNG export projects in North America seeking markets in Asia may face substantial competition from other exporters, particularly Australia. Platts LNG Daily offers additional coverage. [Subscription required]

Webmaster’s Comments: Such competition means lower exports from the US, resulting in continued massive domestic natural gas oversupply, continuing lower natural gas prices — all good for US and Maine electrical power and natural gas consumers.

U.S. Energy Department natural gas update for March 23 — Bloomberg

At the New York Mercantile Exchange (NYMEX), futures prices also increased significantly as the weather outlook suggested higher consumption for the remaining days of March. The futures contract for April delivery climbed $0.40 on the week to $4.34 per MMBtu. Upward pressure on prices at the NYMEX also appears related to concerns over events in Japan that could affect energy markets. Japan, the world’s largest liquefied natural gas (LNG) consumer, is expected to boost consumption of LNG as a fuel for power generation following the nuclear crisis in the country. However, it should be noted that LNG demand in the United States has fallen significantly in recent years as a result of higher U.S. production.

Imports of natural gas continue to flow into the United States at much lower levels than in previous years, likely as a result of higher U.S. domestic production. During the report week, net Canadian imports averaged 5.5 Bcf per day, which is 8.0 percent lower than the same week in 2010. The pace of deliveries of U.S. LNG imports in recent weeks has also decreased considerably in comparison with this time last year. Sendout from U.S. LNG import terminals averaged about 0.9 Bcf per day during the report week, or 11.8 percent lower than the same week in 2010. The lower level of U.S. LNG imports this week is the result of much higher prices being available to suppliers of LNG in regional markets in Europe and Asia. Following the nuclear crisis in Japan (which will likely result in higher demand for LNG) and conflict in North Africa, the difference in prices in the United States and other world markets has increased even more. Currently, however, the extent to which this will affect current deliveries of LNG to the United States is unclear. [Red bold emphasis added.]

Deconstructing the duty to produce (Mar 23) — Anchorage Press, Anchorage, AK

After a column I penned in the Anchorage Press ("Pipe dreams," March 10) about how all-Alaska gasline supporters should stop peddling false hopes about how an LNG line to Valdez could be built anytime in the near future and questioned, among other things, where the natural gas would come from to fill this mythical pipeline, a reader responded.

The duty to produce argument is legally baseless, so for Ms. Von Reitz to say that the producers don't have any choice in committing natural gas to an LNG line because their "leases obligate them," shows a complete lack of understanding and more peddling of false hopes to Alaskans

Palomar gas partners pull the plug on controversial pipeline proposal (Mar 23) — The Oregonian, Portland, OR

Palomar is an expensive project, … and NW Natural has never been able to demonstrate sufficient demand to justify the investment. That was the case until energy developers proposed building several terminals near the Oregon coast to import liquefied natural gas. The proposed volume of imports was massive, far more than local markets could absorb, necessitating big pipes to move the gas to central Oregon and from there to California.

Palomar's withdrawal also raises new questions about the viability of another proposed project: the Oregon LNG terminal in Warrenton. That project's backers, like Palomar's, proposed building a pipeline to carry its imported gas into Molalla. Unlike Palomar, however, that's where the Oregon LNG pipeline would terminate. That theoretically would leave it with a massive volume of imported gas being pumped into an already bottlenecked transmission system along the Interstate 5 corridor.

Many industry observers believe the more likely scenario is for the LNG projects in Oregon to be converted to export facilities serving lucrative Asian markets like Japan, which could become far more dependent on natural gas following its nuclear crisis. [Red emphasis added.]

Webmaster’s Comments: Oregon, much like Maine, has a lot of open space between small communities, making natural gas availability to those small communities uneconomical.

Firm withdraws permit application for central Oregon pipeline (Mar 23) — OPB News, OR

Palomar Gas Transmission has withdrawn its permit application to build a 220-mile natural gas pipeline through central Oregon. But the company still has plans to submit an application for a new pipeline project with a similar goal of delivering natural gas to the Portland metropolitan area.

A spur of the main pipeline was planned to deliver gas to Molalla from the Bradwood Landing liquefied natural gas terminal. Bradwood Landing's bankruptcy was one of several reasons Palomar decided to withdraw its pipeline permit, according to company spokesman David Dodson. [Red emphasis added.]

Gas pipeline pulls application, cites low demand (Mar 23) — The Seattle Times, Seattle, WA

Developers of a natural gas pipeline to bring new supplies to the Portland metro area have pulled their application from federal regulators, citing the bankruptcy of an LNG terminal on the Columbia River, low demand for the gas, and development of a new route through the Mount Hood National Forest and across the Cascade Range.

It had originally been planned to carry gas from the now-defunct Bradwood Landing LNG terminal in Clatsop County and the Northwest Pipeline on the east side of the Cascades to the Portland area. [Red emphasis added.]

Palomar withdraws pipeline application (Mar 23) — Molalla Pioneer, Molalla, OR

Palomar Gas Transmissions filed a notice of withdrawal today for their application with the Federal Energy Regulatory Commission to build a natural gas pipeline that would have traveled through Oregon, including some private properties outside Molalla.

Several factors weighed in on Palomar’s decision to withdraw the project, Dodson said, including the bankruptcy of NorthernStar Natural Gas Inc. and the termination of the related Bradwood Landing LNG project. [Red emphasis added.]

Palomar natural gas pipeline shelved (Mar 23) — Sustainable Business Oregon, OR

In May, Bradwood’s developer, Houston-based NorthernStar Natural Gas, filed for Chapter 7 bankruptcy protection, putting a permanent halt to the project.

Grassroots power defeats dirty gas pipeline in Oregon — It's Getting Hot In Here, OR

There are still two proposals to build LNG infrastructure in Oregon: the Oregon LNG pipeline and terminal on the Columbia River, and the Jordan Cove project in southern Oregon. But I believe the elimination of Palomar and the Bradwood terminal marks the beginning of the end for LNG. Activists who have been fighting the Palomar pipeline for years can now channel their energy into defeating the remaining two LNG proposals and other fossil fuel projects. Already both Oregon LNG and Jordan Cove LNG are years behind schedule and struggling to obtain permits they need to begin construction.

Clatsop County's LNG controversy takes another step (Mar 23) — North Coast Citizen, Manzanita, OR

A liquefied natural gas pipeline application is going to the Oregon Supreme Court.


2011 March 22

Liberty LNG: MARAD, not FERC, should address New Jersey Governor’s opposition to project — LNG Law Blog

In a letter responding to a motion filed by Clean Ocean Action requesting that FERC deny the onshore gas pipeline associated with the Liberty LNG deepwater port proposal, Liberty LNG argues that the U.S. Maritime Administration (MARAD), not FERC, should make the determination as to the legal significance of Gov. Chris Christie's (R-N.J.) announcement that he will oppose the Liberty LNG project.

Ga. House passes Savannah-Chatham school board bill; LNG group created — Savannah Morning News, Savannah, GA

Also Tuesday, the delegation introduced House Bill 615 sponsored by Rep. Craig Gordon, D-Savannah. It would create a committee to study for seven months the transporting of liquefied natural gas through Chatham County.

The committee would include officials from the company wanting to truck the gas across county, Southern LNG, as well as representatives of city of Savannah, the county, the Georgia departments of transportation and public safety, the Savannah Area Chamber of Commerce and the Citizens for a Safe Secure Savannah.

Sabine Pass responds to comments filed on liquefaction proposal — LNG Law Blog

Sabine Pass Liquefaction, LLC filed responses to comments submitted by a number of groups in FERC's Sabine Pass LNG export proceeding.

Trinidad & Tobago considering new markets for LNG exports — LNG Law Blog

Noting that the United States is a major importer of his country's LNG, Ambassador Neil Parsan of Trinidad & Tobago said yesterday in Washington, D.C., that Trinidad is exploring LNG markets in Chile, Brazil, and Canada.

Webmaster’s Comments: This news squib failed to mention that US natural gas abundance is resulting in loss of US market for Trinidad & Tobago's LNG; thus, the need for T&T to search out new markets.

Alaska plant set to satisfy last liquefied natural gas shipment to Japan this month — Canadian Business Online

JUNEAU, Alaska (AP) - An Alaska plant plans to send its last scheduled shipment of liquefied natural gas to Japan this month.

[ConocoPhillips spokeswoman Natalie Lowman] says the plant did not provide a large percentage of Japan's total LNG needs. But she says ConocoPhillips is willing to help make gas available to Japan, if needed to meet energy needs, on a temporary basis.

Shell considering liquefaction project in British Columbia — LNG Law Blog

Platts LNG Daily reports that Shell Canada is in negotiations with potential partners for an LNG liquefaction facility on Prince Rupert Island in British Columbia, Canada. According to Lorraine Mitchelmore, Shell Canada's president, the facility would have a production capacity of at least 1 Bcf/d. [Subscription required] [Red & bold emphasis added.]

Cheaper gas prices rest on LNG project, says MLA — Terrace Standard, Terrace, BC

The loss of large industrial users meant passing the [natural gas] delivery costs to PNG’s remaining customers, notably residential ones, and that set the stage for price increase shocks even as the price of the gas itself was declining.

Oregon denies water quality permit for Bradwood Landing LNG project — LNG Law Blog

Earlier this month, the Oregon Department of Environmental Quality (DEQ) informed FERC that it has denied a water quality certification application submitted by Bradwood Landing LNG. The Oregon DEQ cited concerns with water quality degradation as a result of the Bradwood Landing LNG project and also stated that Bradwood Landing LNG failed to provide adequate information to the DEQ.

Webmaster’s Comments: Bradwood Landing LNG declared bankruptcy on 2010 May 4, and on 2011 March 2 the Ninth Circuit Court of Appeals invalidated the federal license to construct an LNG terminal issued by FERC. This project appears to be dead.


2011 March 21

Natgas Abundant, LNG Imports Low

Encana backs up support for gas — Calgary Herald, Calgary, AB

By doing this, Encana is putting its money where its mouth is; the company has been a vocal supporter of the need to increase the use of natural gas as a way to deal with rising greenhouse gas emissions while also boosting demand for what has become an abundant resource.

"We are in favour of looking at all ways of expanding the natural gas markets, however that works. We have, for example, expressed support in the U.S. for turning import terminals into export facilities during regulatory proceedings currently underway examining these issues," said Boras.

As Boras points out, the indexed price for natural gas in Asia is $12 US per thousand cubic feet compared with the $4/mcf Cdn -or less -in Canada; it doesn't take much to figure out the amount of money being left on the table. A similar differential, by the way, exists in the context of oil prices. [Red bold emphasis added.]

Post Fukushima– burn more coal and oil, and hire more engineers not regulators (Mar 20) — Forbes

As noted, for Japan in the short term it is clearly mostly oil. That is true as well for a surprisingly number of places in the world. Apparently Vladimir Putin has already directed accelerated development of Russia’s vast Sakhalin oil and gas field to “help” meet expected Japanese demand. Japan imports natural gas in liquefied (LNG) form – they’ll doubtless expand the import facilities and add to the already intense global appetite for clean LNG. Perhaps the U.S. will finally enter the world market as an exporter with its glut of domestic, and hugely under-priced, natural gas. [Red bold emphasis added.]

Analysis:U.S. gas market, unable to export, eyes nuclear outages — Reuters

Slicing into nuclear power would create a vacuum for other fuels to replace the lost generation -- likely natural gas as the nation has potentially more than a hundred years of supply trapped in between layers of underground rock.

U.S. LNG imports have already shrunk to near zero as a result of the domestic shale gas boom that's depressed prices. Proposed terminals to export LNG from the United States are years away. [Red bold emphasis added.

Cheniere’s Sabine Pass received LNG yesterday, vessel data show — Bloomberg

The tanker, Al Gharrafa, can carry as much as 216,200 cubic meters of LNG, or about 4.66 billion cubic feet of natural gas, equivalent to 7.5 percent of estimated daily U.S. gas production. The cargo is from Qatar, the data showed.

Another ship, Bluesky, is anchored off the Gulf Coast near Sabine Pass, according to the vessel tracking data.

Charif Souki, Cheniere’s chief executive officer, said on March 16 that the Sabine Pass terminal doesn’t have LNG inventory for re-export.

Webmaster’s Comments: The news article does not indicate if Sabine Pass LNG intends to re-export some or all of the LNG currently being received.

Few show up to bolster plan to truck natural gas from North Slope to Fairbanks (Mar 20) — Daily News-Miner, Fairbanks, AK

FAIRBANKS — It will take visible public support to advance a proposal to truck North Slope natural gas to Fairbanks, according to Jim Dodson, president of the Fairbanks Economic Development Corporation (FEDC).

Dodson hoped to produce a show of support for the gas trucking proposal with a 500-person rally on the floor of the Carlson Center Sunday afternoon.

Instead, about a fifth that many people came.

Encana to invest in LNG project — (Zachs) Yahoo Finance

Per the agreement, Encana will acquire an 11% interest of the venture from Apache, leaving the latter with 40% ownership and operatorship rights. The other partner, EOG Resources, will sell its 19% equity in Kitimat LNG and PTP to Encana, holding on to the remaining 30% stake.

The Kitimat project is targeted to tap enormous natural gas resources in the Canadian fields, in turn increasing export to the overseas regions. Encana management stated that the company's investment will enable it to capture high demand in the Asia-Pacific markets over the coming years. Apart from strengthening international trade ties and creating job opportunities, this endeavor will open doors for more future deals. [Red bold emphasis added.]

LNG sloshing on ABS testbed — Upstream Online

Class society ABS and South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) are closing in on completion of a one-year study examining critical wave conditions for sloshing model tests in cargo tanks of floating liquefied natural gas vessels.

Designing for sloshing effects is a key concern in the tanker containment industry. As the size of cargo tanks has increased so have the likelihood of severe sloshing and the probability of structural damage to the containment system.

“Models tests can not cover all possible wave height, period, heading and filling levels since there are too many combinations,” said Yung Sup Shin, head of containment systems at ABS.

The study will look specifically at a carrier operating a trade route from the Kara Sea and the Barents Sea to Europe or the US. [Red emphasis added.]

The future of gas collection may be in space — Upstream Online

It might appear that the human race is lightyears from weaning itself off hydrocarbons but we may eventually send space ships far out into the solar system to collect natural gas.

[British particle physicist and television presenter Professor Brian Cox], whose Wonders of the Universe series is currently drawing millions of viewers to BBC television in the UK, predicts a prime destination for hydrocarbon hunters could be the methane-covered world of Titan, Saturn's largest moon.

Webmaster’s Comments: It is not enough that humans are causing hydrocarbon fuels to spew life-harming substances into our atmosphere; Professor Cox is advocating bringing additional hydrocarbons to Earth from outer space so that we can make the problem even worse. Cox is ironic in his statement…

"We don't have to save the world. The world is big enough to look after itself. What we have to be concerned about is whether or not the world we live in will be capable of sustaining us in it."

While the world would continue to exist, what he advocates would contribute to exterminating life on it.


2011 March 20

EPA launches informal probe of Maine DEP commissioner (Mar 18) — MPBN, ME

The U.S. Environmental Protection Agency has launched an informal investigation into a possible conflict of interest involving Maine Department of Environmental Protection Commissioner Darryl Brown. The EPA is asking Brown to respond in writing to concerns raised by a Maine environmental group about Brown's financial links to the development industry, and in particular to a major development project that's in the midst of the permitting process.

Barton: Big trucks, stone walls (Mar 19) — Savannah Morning News, Savannah, GA

But Gordon’s bill is the thinnest of mush that any state lawmaker can concoct. It’s a non-binding resolution. It has the same force of law as a petition from a kindergarten class for a longer recess.

That’s unfortunate. It’s not unusual when big corporations give ordinary citizens the brush-off. But state lawmakers should be tougher to flick away.

LNG resolution weak, activists say — Savannah Morning News, Savannah, GA

“A ‘committee’ to discuss truck routing in monthly meetings clearly serves the company’s issue to ‘kick this can down the road’ rather than address vital concerns,” Harrington said. “It does nothing to advance public safety or support the citizens who will face the risks such trucking will pose.”

Harrington, a retired CIA bureau chief, said the resolution falls short because it examines how to truck LNG, not the more fundamental question of whether to do it at all.

“We requested an Environmental Impact Statement and were rejected,” Johnson said. “The idea of the company helping to defray costs associated with wear and tear on the roads was also rejected.”

“It is our opinion that their plans pose significant risk to our hospital, patients, guests, and Team Members, as well as to other businesses and neighborhoods in the DeRenne corridor,” said hospital spokesman Michael Notrica in a prepared statement. “We further believe that Southeast LNG has not yet provided sufficient information about the impact of a “worst case scenario” and the steps being taken to avoid such a situation.”

OUR extends submission deadlines for bids (Mar 19) — Go-Jamaica, Jamaica, West Indies

Prospective bidders complained that they were yet to be provided with information on the price at which liquefied natural gas would be sourced, and that would be essential to complete their bids.

Encana buys into LNG terminal in British Columbia (Mar 19) — Telegraph-Journal, Saint John, NB

The company announced Friday it will buy a 30 per cent stake in the $4.2-billion plant and pipeline project from American partners Apache Canada Ltd. and EOG Resources Canada Inc. to enable it to market the trillions of cubic feet of natural gas it expects to produce in northeastern B.C. to the lucrative Asian LNG market.

Sempra's Ensenada LNG plant passes inspection (Mar 18) — SignOn San Diego, San Diego, CA

A three-day visit to the liquefied natural gas facility by inspectors from the federal environmental watchdog agency, Profepa, revealed administrative irregularities, but “no environmental imbalance or damage to human health,” according to a written statement from the agency.


2011 March 18

US Natgas Security Spawns Canadian LNG Exports

Update 4-Encana seeks new markets, buys into Apache plant — Reuters

CALGARY/HOUSTON, March 18 (Reuters) - Encana Corp will buy a 30 percent stake in the planned Kitimat liquefied natural gas export terminal on Canada's West Coast from Apache Corp and EOG Resources Inc as it seeks to tap new markets for its burgeoning shale gas output.

The plant is expected to be fed by production from the Horn River and Montney shale gas deposits, seen as some of the largest in North America. Encana said recent studies indicate British Columbia's gas production could jump to 7 billion cubic feet a day in seven to 10 years from the current 2.8 bcfd.

A boom in production, largely due to discoveries of massive shale gas fields in several regions, has created a glut of supply in North America, pressuring prices for the fuel and prompting energy companies to seek new buyers. [Red bold emphasis added.]

Encana to acquire 30 percent interest in proposed Kitimat, B.C. liquefied natural gas export development — The Gazette, Montreal, QC

Enormous natural gas resource potential in British Columbia

Export volumes for the Kitimat LNG project are expected to be supplied by burgeoning natural gas resources in B.C. and Alberta – the Horn River Basin and the Montney geological formation. According to industry studies, recent B.C. discoveries indicate the province will have the resource capacity to more than double current production of about 2.8 billion cubic feet per day (Bcf/d) to more than 7 Bcf/d in the next seven to 10 years. This is more than sufficient to supply B.C., its current customers, and new markets opened by the Kitimat LNG export development. [Red bold emphasis added.]

Encana joins three LNG amigos — Calgary Herald, Calgary, AB

Encana is the logical choice to join the venture, having partnerships with a host of Asian players including the Korean state gas company and PetroChina among others. The deal marks a strategic shift for the gas industry as a whole, which has for too long relied on pipelines to ship gas to the U.S.

But that business model will come under extreme pressure as big new shale plays south of the 49th reduces the call on Canadian gas while the U.S. develops its own gas supplies. Some have speculated that Canadian imports could be completely backed out of the market. [Red bold emphasis added.]

Craig Gordon proposes group to study LNG trucking through Savannah (Mar 17) — Savannah Morning News, Savannah, GA

The group would examine proposals to move 58 truckloads of LNG from a compound on Elba Island through the city to various areas in the Southeast.

Businessman who donated to Barbour saw company make millions from energy project — The Tennessean, TN

The Texas businessman who recently donated $100,000 to Mississippi Gov. Haley Barbour's political campaign heads a company that has made hundreds of millions of dollars from the sale of its interests in a Mississippi liquefied natural gas facility.

Jamal Daniel and his partners in the Crest Group, a Houston-based firm, formed Gulf LNG in 2004 to develop a liquefied natural gas facility. Last year, Daniel donated $100,000 to Barbour's Leadership Committee, a Georgia political action committee.

Keeping all options open (week of Mar 20) — Petroleum News, Anchorage, AK

“Our intent is to preserve the plant so that whatever future opportunities might come up, whether it be future exports or an import situation, the plant would be in a position to be ready,” Clark said. Those opportunities could include conversion of the facility for importing LNG, to bolster local utility gas production, or restarting LNG exports, were some new source of Alaska gas to come online.

Exclusive: Japan crisis may spur demand for Alaska LNG — Reuters

ConocoPhillips said last month that it planned to shut its 40-year-old Kenai liquefied natural gas plant in Alaska in the coming months after it failed to sign new supply contracts with long-standing Japanese buyers.

ConocoPhillips and partner Marathon Oil had been granted an export license extension last year, from 2011 to 2013. But with ample supply elsewhere in the Pacific, Kenai's customers saw no need to extend contracts that run out in March.

Judge throws out LNG company's latest court action (Mar 17) — The Daily Astorian, Astoria, OR

The action by Judge Cindee Matyas effectively puts an end to the company's motion, which sought immediate approval for its consolidated land-use application for the construction of 41 miles of natural gas pipeline. A hearing scheduled for Friday morning in front of Matyas on the motion has been cancelled.

LNG critics worry focus for Jordan Cove changing (Mar 17) — OPB News, OR

Environmental groups say plans are afoot to change the liquefied natural gas terminal proposed near Coos Bay from an import site, to one that would export. As Rob Manning reports, the project backers say that's not what's happening.


2011 March 17

US Natgas Market Inversion

The US: a gas market turned on its head (Mar) — Petroleum Economist [Paid subscription required]

Within nine months, the idea of exporting gas from the US Lower 48 as LNG went from cocktail-hour hypothetical to front-page news with extraordinary alacrity. Two Gulf coast regasification terminals – Sabine Pass and Freeport – have announced plans to export LNG from the US, while other companies are conducting feasibility studies to understand the conditions under which exports may be profitable. [Red bold emphasis added.]

U.S. Energy Department natural gas update for March 16 — Bloomberg

U.S. imports of natural gas, including liquefied natural gas (LNG), were significantly lower during the report week in comparison with this time last year. According to BENTEK, which monitors flows on the continental pipeline network, U.S imports from Canada during the report week were 6.0 percent lower than the prior year at about 5.8 Bcf per day. LNG imports (as measured by sendout from regasification terminals), which averaged less than 1 Bcf per day the prior week, were 19.3 percent lower in comparison with the previous year.

U.S. Reliance on Foreign Sources of Natural Gas Lessens as Imports Continue to Fall in 2010. Increased domestic natural gas production is resulting in lower natural gas imports, both in imports by pipeline from Canada and from overseas sources of LNG. According to the February edition of the EIA’s “Natural Gas Monthly”, net imports to the United States decreased 117.8 Bcf to 2,561.2 Bcf in 2010, which marks the lowest level of net imports since 1994. Decreases in both pipeline imports from Canada and deliveries of LNG from a variety of countries resulted in a decrease of gross imports by 67.9 Bcf. Additionally, U.S. gross exports expanded 49.9 Bcf. Net imports represented 10.6 percent of total U.S. consumption, the lowest proportion since 1991. This is a remarkable change from just 2007, when net imports were the highest on record, equaling roughly 16.4 percent of consumption.

U.S. LNG imports in 2010 declined 4.6 percent from the 2009 level to 431.0 Bcf. This was the second lowest annual volume for LNG since 2002. The number of LNG source countries expanded from five to seven with Peru and Yemen shipping the fuel to the United States for the first time from new liquefaction plants in their countries. Nonetheless, the volume of LNG imports from existing exporters was well below the previous year. Decreased supplies from Trinidad and Tobago (the source country with the largest contribution to U.S. LNG imports), as well as from Egypt primarily accounted for the decline in deliveries in 2010. Volumes totaled 189.7 and 73.0 Bcf from, respectively, Trinidad and Tobago and Egypt. In 2009, Trinidad and Tobago and Egypt delivered, respectively 236.2 Bcf and 160.4 Bcf. [Red bold emphasis added.]

Golden Pass LNG terminal adds to Gulf Coast capacity — Oil & Gas Journal

Golden Pass is the fourth along the Texas-Louisiana Gulf Coast to begin operating since 2008, adding nearly 70 million tpy of LNG import capacity to the area. Trunkline LNG’s Lake Charles, La., LNG terminal started up in 1982 and, after expansions, can now import 14 million tpy. In 2005, Excelerate Energy’s Gulf Gateway buoy terminal, 116 miles off Louisiana, added 3.3 million tpy of capacity.

USA: Japan crisis does not change plans to shut Kenai LNG terminal, Conoco says — LNG World News

Company spokesperson Natalie Lowman said Wednesday they still plan to end exports to Tokyo Electric and Tokyo Gas this spring, even though Japan is in great need of LNG after massive earthquakes crippled its energy infrastructure.

Japan earthquake effects ripple through Alaska economy — Anchorage Daily News, Anchorage, AK

Conoco Phillips plans to mothball its liquefied natural gas export plant in Nikiski at the end of the month. The plant's only customers are Japanese utilities, which are struggling to secure LNG supplies in the wake of the devastation. Conoco said it doesn't plan to delay the closure.

Export LNG? No, says Jordan Cove — The World, Coos Bay, OR

Manager says plans still call for just imports

'Over the past year, we have fielded questions about, 'Have you thought about using your facility for export?'" [project manager Bob Braddock] said.

'Our answer was, 'No, it's a stupid idea,'" he said.

Right now, Braddock said, Jordan Cove is waiting for commitments from import customers, which haven't been forthcoming.

An export pipeline wouldn't qualify for eminent domain. And the land-use permits the county has granted for the pipeline specify that it can't be used for export. [Red emphasis added.]

Webmaster’s Comments: Those worried that Downeast LNG is planning an export terminal can be comforted by 'no eminent domain for export pipeline.' A pipeline delivering domestic natural gas to a liquefaction and LNG export terminal is not 'in the public convenience.'


2011 March 16

More US LNG Export Terminals?

Jordan Cove project developers considering LNG exports — LNG Law Blog

Developers backing the Jordan Cove LNG project in Oregon have considered redesigning the facility to allow for LNG exports. Platts LNG Daily [subscription required] reports that Project Manager Bob Braddock for Jordan Cove has received "inquiries from people who have [natural gas] production so we are starting to mull it over in our minds." [Red bold emphasis added.]

Canada not equipped to send natural gas to Japan (Mar 15) — Money

New shale gas discoveries coupled with drying up demand in the U.S. means things may only get worse for one of Canada's most important exports.

"There's a lot of fear right now with the U.S. meeting its own gas needs in the next two to three years; in the very near future they are not going to need Canadian gas," he said. [Red bold emphasis added.]

Global gas glut to stay even with more Japan demand — Gulf Times, Doha, Qatar

[A] boom in US shale gas production over the past two years has changed the global market from one of tight supply and sky-high prices to plentiful supply and relatively cheap gas. [Red bold emphasis added.]

Energy merchants hunt for LNG (Mar 15) — MarketWatch, The Wall Street Journal, New York, NY

The U.S. doesn't have the capability to liquefy large amounts of natural gas to export to other markets, so it can't easily respond to a demand spike in Asia.

But there is LNG stored on the Gulf Coast. The storage was built when it was expected that the U.S. would be a significant LNG importer, but the development of unconventional natural gas in recent years has instead helped create a supply glut in the domestic market.

The stored LNG could help meet a spike in demand. "This is going to accelerate re-exports out of the U.S. Gulf," said Mr. Johnson. [Red bold emphasis added.]

Golden Pass Pipeline now online (Mar 15) — Pipelines International

With nine interconnects to intrastate and interstate pipelines, the Golden Pass Pipeline provides access to major markets, connecting to both the Houston Ship Channel and major interstate pipelines servicing the Gulf Coast, and midwestern and northeastern United States. [Red bold emphasis added.]

Natural gas will stay cheap, even if Japan needs more of it — Fortune

The U.S. has a glut of natural gas supplies, so don't expect Japan's crisis to impact domestic prices. If the U.S. takes a new direction on nuclear energy policy, however, prices will likely move higher.

When it comes to natural gas, think of the U.S. and the rest of North America as an island of its own. Technological advances and the shale-gas revolution have made the region relatively self-sufficient in producing the fuel and virtually independent of LNG imports. In fact, the U.S. currently imports barely 1 billion cubic feet per day, accounting for less than 2% of domestic supply, according to CLSA Asia-Pacific Markets, a Hong Kong-based brokerage and investment group.

What's more, Barcella says, the U.S. already sits on a vast oversupply of the fuel – she points to the nearly 3,000 gas wells this past winter that have been drilled but have yet to be hooked up to the natural gas supply system. [Red bold emphasis added.]

As natural-gas market shifts, U.S. plans to become exporter — Engineering News-Record, New York, NY

To feed an insatiable need for more energy, countries worldwide are building terminals to import liquefied natural gas and constructing plants to convert waste fumes into LNG. However, the United States is no longer among that group.

In fact, the market for natural gas in North America has changed so dramatically in the past few years that companies that invested billions in terminals to import LNG now are looking to spend billions more to expand those facilities into export terminals.

In the last year alone, the amount of recoverable gas reserves has more than doubled, to 827 trillion cu ft in 2011 from an estimated 347 trillion cu ft in 2010, according to the U.S. Energy Information Administration. That volume accounts for enough gas to supply the U.S. for 100 years, according to Freeport LNG. The new gas discoveries drove down the cost of domestic natural gas, making it uneconomical to import LNG. [Red bold emphasis added.]

Japan quake: Boost for Cheniere Energy’s liquefied nat gas plans? (Mar 15) — The MarketBeat, Wall Street Journal, New York, NY

Cheniere’s terminals are designed to handle natural gas imports, but the development of unconventional gas in the U.S. in recent years has led to a supply glut and limited the need for imported LNG, which is natural gas that’s been cooled into liquid form for shipping. So Cheniere is working on a project that could allow it to turn natural gas into LNG and ship it overseas. In a recent news release, it said the project could be up and running by 2015. [Red bold emphasis added.]

Gazprom and the rule of EU law (Mar 14) — MarketWatch, The Wall Street Journal, New York, NY

The shale gas revolution in the United States has seen the demand for liquefied natural gas collapse in America, causing a major supply diversion to Europe. As a result, the European spot-market price for gas has been below the key German border price for most of this year. Worse still for Gazprom, even more liquefied natural gas is coming onto the market, with global production set to soar to 410 billion cubic meters in 2013 from approximately 240 billion cubic meters in 2008. [Red bold emphasis added.]

Eagle Plains could offer energy fix (Mar 14) —, Whitehorse, YT

The solution to Yukon’s energy pinch could be sitting beneath Eagle Plains.

There, some six trillion cubic feet of natural gas lies waiting to be sucked to the surface.

[A] study, to be completed this autumn, will consider two schemes.

One plan would see LNG facilities built at Eagle Plains. Another would see a 500-kilometre pipeline built out to Stewart Crossing. From there, gas would be fed to a generator connected to the Yukon’s power grid and to an LNG plant to supply mines.

How safe are we? — Everett Independent, Everett, MA

This isn’t meant as an indictment of the LNG people who manage the two largest tanks of the gas on the East Coast outside of New York. It isn’t even meant as a slap or a backhanded slight.

We don’t have nuclear reactors in Everett. We have the biggest LNG storage tanks in Northern New England.

We have been repeatedly assured the LNG is too heavy in its frozen state to ignite, that the tanks can’t explode, that fire systems and security are such that we don’t really have to worry.

But watching the unraveling of the nuclear reactors in Japan gets a person to thinking that what has happened there could just as easily happen to us here. [Bold brown emphasis added.]

Webmaster’s Comments: The repeated assurances mentioned have inherent problems: they are untrue. Once LNG is released from containment, there is always a flammable edge to the resulting vapor cloud until the cloud becomes sufficiently diluted with air -- and in the meantime the flammable vapor cloud could drift with the wind for miles, to who knows where. And, while the tanks might not literally "explode," they assuredly could create an enormous and searing fireball, generating a wide field of harmful thermal radiation. LNG ships present similar hazards, and their transit route is much too close to the public — as indicated by the LNG industry's own terminal siting best practices — to make such safety assurances.

USCG denies Rhode Island appeal of LOR for Weaver's Cove LNG project — LNG Law Blog

Earlier this month, the U.S. Coast Guard denied an appeal filed by the Rhode Island Department of Environmental Management of the Letter of Recommendation approving the proposed vessel route for the Weaver's Cove LNG import project.

Sabine Pass terminal has no LNG cargoes for re-export, CEO says — Bloomberg

Cheniere Energy Inc. (LNG) has no liquefied natural gas stored at the Sabine Pass terminal in Louisiana, Chief Executive Officer Charif Souki said in a phone interview.

Sabine Pass sent three cargoes to the U.K., Spain, and India in January, according to the Energy Department.

FERC authorizes continued cool down of Golden Pass LNG Phase II — LNG Law Blog

FERC informed Golden Pass LNG yesterday that it has approved the company’s request to cool down the balance of the Phase II facility.

Golden Pass announces in service date for commercial operations [Press release] —

Phase 1 commissioning activities and performance tests of its liquefied natural gas (LNG) receiving terminal were successfully completed in early March. The 69 mile interstate pipeline was successfully commissioned earlier in the year. Phase 1 operations will enable nominal send out capacity of 1 billion cubic feet per day of natural gas. Phase 2 of the terminal is expected to commence commercial operations in the May/June timeframe.

When fully operational, the terminal will be among the largest LNG import facilities worldwide, with the capacity to import 15.6 million metric tons of LNG annually. The pipeline, with multiple intra and interstate connections, has a nominal send-out capacity of 2.5 BCFD.

Qatar Golden Pass LNG terminal in US starts commercial operations (Mar 14) — Platts

Located near Sabine Pass, Texas, the Golden Pass LNG terminal has the capacity to deliver the equivalent of 2.5 Bcf/d of natural gas. "This represents enough natural gas to meet the average daily needs of about 10 million US households," QP said in a statement.

The Golden Pass terminal and pipeline facilities include two berths for unloading double-hulled LNG ships, including the world?s largest Q-Flex and Q-Max ships, five LNG storage tanks with capacity of 155,000 cubic meters each as well as vaporization equipment to convert cooled LNG back to natural gas. They also include pipeline facilities and equipment to transport the natural gas from the terminal to customers.

Webmaster’s Comments: This terminal's output capacity is a bit more than double that of Canaport LNG. Because of the US 100-year natural gas glut, the question becomes, "what will Golden Pass do with imported LNG?"

Sempra’s Cameron LNG terminal to receive cargo on March 27 (Mar 15) — Bloomberg

Sempra Energy (SRE)’s liquefied-natural- gas terminal in Louisiana is scheduled to receive a cargo March 27, according to vessel tracking data compiled by Bloomberg.

Time will come for Plan B on gas pipeline (Mar 13) — Anchorage Daily News, Anchorage, AK

It's time for a talk with TransCanada Corp. about renegotiating at least parts of the state's contract with the pipeline company. What seemed like a good idea three years ago doesn't anymore. TransCanada has been a good partner with the state, however, and there might be a win-win solution.

Here's the problem: The U.S. is awash in cheap gas being produced from shale. The world is also glutted with liquefied natural gas, or LNG, looking for a market. Things don't look good for our $40 billion-plus Alaska gas pipeline. [Red bold emphasis added.]

Columbia Riverkeeper to host film and dance (Mar 15) — The Daily Astorian, Astoria, OR

Columbia Riverkeeper will co-host the Astoria premiere of the documentary “Deep Down” at 7 p.m. Friday, followed by a festive Appalachian-style square dance and finger pickin’ session featuring local and regional musicians. The screening and dance will be held in the Loft at the Red Building, 20 Basin St.

Ensenada suspends bid to shut down LNG facility (Mar 14) — Sign On San Diego, San Diego, CA

More than a month after Mayor Enrique Pelayo Torres sent police to shut down the $1.2-billion plant, his administration has found itself forced to reverse its stance. On Monday, the city issued an order stating that the company’s operations will be allowed to continue.

The city’s reversal is the latest twist in a battle being fought on legal and political fronts to shut down Sempra’s Costa Azul operation. Mayor Pelayo has alleged that the terminal’s permits were improperly issued and that the facility constitutes a risk to city residents. Last month, Mexico’s federal legislature called for a review of the facility’s permits.


2011 March 11

Jamaica/WB: Consumers to benefit from energy efficiency programme — Electro IQ

ENP Newswire - 11 March 2011 Release date- 10032011 - Virtually the entire population of Jamaica of 2.7 million people will benefit as a result of a US$ 15 million loan approved today by the Board of Executive Directors of the World Bank to increase energy efficiency and security on the island.

Some specific activities which the project will support include: Developing detailed policies, strategies and implementation plans on renewable energy (in particular hydro, wind and biomass), energy efficiency and gas, and on related regulations. Strengthening the regulatory framework for private-public partnership monitoring of the energy sector by building capacity in the Ministry of Energy and Mining and the Office of Utilities Regulation. Introducing the Liquefied Natural Gas (LNG) program to support off-oil diversification.

Sempra Energy LNG plant will remain open - Mexican Energy Minister (Mar 10) — The Wall Street Journal, New York, NY

HOUSTON (Dow Jones)--Mexico's Energy Minister said Thursday the country's government will make sure that a liquefied natural gas terminal owned by Sempra Energy (SRE) in Ensenada remains open, despite efforts of local authorities to shut it down.

The dispute was the latest chapter in a long-running land dispute between Sempra and a local rancher. In 2006 the rancher, Ramon Eugenio Sanchez Ritchie, claimed that Sempra had unlawfully acquired a 250-acre parcel of land that belonged to him near the LNG terminal site. In May, a Mexican court tribunal ruled that Ritchie was the rightful holder of the land and ordered Sempra to hand the property over to him. The company has said that it does not need the disputed land to operate the facility.

US Pacific refiners monitor operations as tsunami waves roll in — ICIS, UK

In Mexico, Sempra LNG operates a 1.0bn cubic feet (bcf)/day import terminal in Ensenada, Mexico, along the Baja coast, which serves the California electricity market.

The company said it had put its tsunami plan in place, but did not anticipate a substantial impact from the projected 1-to-2 metre waves.

LNG plant takes another step — Northern Sentinel, Kitimat, BC

Kitimat LNG partners Apache Canada and EOG Resources Canada announced Friday they had awarded KBR the Front End Engineering and Design (FEED) contract for their planned LNG plant.

Environmental film leads into music and dance — Coast Weekend, Astoria, OR

Similar to the Columbia Estuary's own fight to stop proposed liquefied natural gas terminals, "Deep Down" is a film showcasing a community's battle to overcome a proposed mountaintop-removal coal mine in the heart of Appalachia. The film displays the heart, passion and dedication of everyday citizens fighting to keep their community safe.

Clatsop board moves toward reversal on LNG decision — OPB News, OR

The Clatsop County Commission has taken a big step toward reversing the land-use approval for the Oregon LNG liquefied natural gas project in Warrenton.

Despite the pending court case, the Clatsop County board voted 4-to-1 Wednesday to accept new findings that show Oregon LNG's pipeline plan conflicts with land-use law.

The board has a final vote scheduled for March 30, but the county will also have to respond to Oregon LNG's court filing before March 18.


2011 March 10

Eastport Council wary of negative effects of Kendall Head conservancy plan — Bangor Daily News, Bangor, ME

Although the councilors agreed with protecting the property and agreed it would be an amazing resource for the city, they were concerned that Eastport would be losing tax revenue. They were also concerned that DCC would object to aquaculture operations, seaweed harvesting, and the possible passage of liquefied natural gas tankers off the property.

Council president Bob Peacock told Boutureira that DCC needed to formalize its [LNG] opinion before the council could agree to support the proposal. The Eastport City Council supports LNG development because of the jobs it would provide. Peacock said the council could not support a plan that would interfere with job creation.

The council asked Boutureira to come back to its March 15 special council meeting with a definitive answer regarding DCC’s status on taxation and LNG development. [Bold brown & yellow emphasis added.]

Governor speaks candidly to local reporters — The Jamestown Press, Jamestown, RI

Although Chafee has made his position clear in the fight against Weaver’s Cove Energy, a Hess owned company that plans on building an LNG terminal in Mt. Hope Bay in Fall River, Mass., he also said that the prospect of LNG as a whole is important. “It’s abundant and burns cleanly,” he said.

Dominion CEO: Marcellus Shale gas could be exported to Europe, Asia via Cove Point LNG terminal — LNG Law Blog

Speaking at the CERAWeek conference in Houston yesterday, Dominion Resources CEO Thomas Farrell said that he believes that the Cove Point LNG terminal's geographic location near the Marcellus Shale gas play presents an attractive outlet for producers who seek to export gas to Europe and Asia. According to Platts LNG Daily [subscription required], Dominion is willing to finance the construction of liquefaction facilities at the Cove Point terminal, but is seeking producers and shippers to contract for export capacity.

FERC authorizes Golden Pass LNG terminal to commence service — LNG Law Blog

Today FERC issued a letter authorizing Phase I of the Golden Pass LNG terminal and its associated pipeline to commence service.

Webmaster’s Comments: Already grossly-oversurplus LNG import capacity has gained another unneeded terminal.

Update 1-Golden Pass LNG gets FERC approval to begin ops — Reuters

The Golden Pass terminal has received test cargoes since October, but until now has not been allowed to send commercial deliveries into the grid.

Canada, BC, Join Haisla Nation and Kitimat LNG Partners in marking project go-ahead; 'A very big day for our people' says Chief Councillor Pollard [Press release] (Mar 9) — Marketwire

The Governments of Canada and British Columbia joined with Haisla Nation Council, Apache Canada, and EOG Resources Canada today to celebrate the November 25, 2010, signing of an agreement signifying the decision to proceed with the $4.5-billion Kitimat LNG project on Haisla reserve land on the Douglas Channel.

Kitimat LNG has received federal and provincial environmental approvals for the export terminal. Initial shipments of LNG from the Kitimat facility to the Asia-Pacific region are expected to begin in 2015.

Webmaster’s Comments: Due to vast natural gas resources in western Canada, Kitimat LNG is an ex-import turned export terminal.

Haisla celebrate signing of KM LNG lease agreement — CJFW-FM, Terrace, BC

An historic ceremony took place in Kitamaat Village on Wednesday night to celebrate the formal signing of the lease and business arrangement between the Haisla First Nation and the partners of the Kitimat LNG [export] project.

Clatsop County votes against LNG project in Warrenton — The Oregonian, Portland, OR

The Clatsop County Board of Commissioners voted 4-to-1 Wednesday to reverse its earlier approval of a pipeline that would serve the proposed Oregon LNG terminal in Warrenton. The vote marks another major victory for those who oppose importing liquefied natural gas to Oregon, throwing the viability of the controversial project in doubt after years of engineering, environmental and permitting struggles.

If the court backs the county, the Oregon LNG terminal is likely dead in the water, and would become the second of three proposed LNG terminals in Oregon derailed by opposition in Clatsop County.

If the project backer prevails, it still faces a long line of federal, state and local permitting hurdles. With burgeoning U.S. gas reserves due to shale gas drilling, it's not clear there is any need for the terminals or that the economics of importing natural gas still make sense. The developers maintain that their project is still economically viable. [Red & bold emphasis added.]

Clatsop County closer to killing second LNG project proposal following commissioners' vote (Mar 10) — The Oregonian, Portland, OR

The Clatsop County Board of Commissioners on Wednesday threw the Oregon LNG terminal into legal limbo, voting 4-1 to reverse its earlier approval of a pipeline that would carry its imported natural gas to market.

But Oregon LNG and its backer, New York-based Leucadia National Corp., already have moved to pre-empt the county, filing a motion in court last week challenging the board's jurisdiction and seeking immediate approval of the project. A judge has signed that writ, which compels the county to approve the project or appear in court to justify its actions.

Report: Stalled energy projects cost Oregon 21,000 jobs — Sustainable Business Oregon, OR

Research by the U.S. Chamber Commerce indicates that nine stalled or canceled energy projects in Oregon have cost the state $6.8 billion and 21,200 jobs.

The nine projects identified by the study include, not surprisingly, four liquefied natural gas — or LNG — projects. But the list also includes two wave energy projects, two wind energy projects and one solar energy project. Not all of the identified projects are dead, some are merely delayed in the approval process.

Webmaster’s Comments: The US Chamber of Commerce has a Build Anything Absolutely Anywhere (BAAA) philosophy, regardless of hazard to the public or realistic impact on the economy.

Coronado tycoon is Sempra’s ‘enemigo’ (Mar 9) — SignOn San Diego, Dan Diego, CA

The Watchdog, along with media partner 10News, has learned that [rancher Ramon Eugenio Sanchez Ritchie's] efforts have been financed in part by a Coronado resident, Jose Susumo Azano Matsura, who flies a private jet tending to business interests in the U.S., Mexico and elsewhere.

Under an agreement between the two men, obtained by The Watchdog, the businessman would receive 55 percent of any money and 66 percent of any land the rancher wins from the company during ongoing litigation.

Last week, Mexico’s federal legislature approved a resolution calling for an investigation into how [San Diego-based Sempra Energy] obtained permits.


2011 March 9

Plenty of Natural Gas in Maine & US

Company plans to construct natural gas pipeline — Kennebec Journal, Augusta, ME

A Portland-based energy firm is proposing to construct a new 56-mile natural gas pipeline from Richmond to Madison, a $70 million project it says would benefit the environment and economic development around the region.

The company would be the fourth in the state to provide natural gas, which is available in greater Portland, Lewiston-Auburn, greater Bangor, the Brunswick area and Kittery, according to the Maine Public Utilities Commission.

“Until we learn a lot more, it’s hard to say how important this is from an economic development standpoint,” [Waterville City Manager Michael Roy] said. “We’re excited that there’s another energy alternative. How much of a difference it makes is still a question.

[Kennebec Valley Council of Governments executive director Ken Young] said the new pipeline could eventually serve residential customers in more densely populated areas, such as Waterville, Augusta and possibly Skowhegan.

Competitive Energy Services and Silkman are also under scrutiny from the Federal Energy Regulatory Commission [FERC], which has accused them of trying to manipulate electric markets in 2007, in concert with a Rumford paper mill.

Webmaster’s Comments: There is plenty of natural gas in the Maritimes & Northeast Pipeline. It is important to note, though, that — as indicated by Ken Young — the pipeline could provide natural gas to residential customers in more densely populated areas.

While the spur pipeline might be built to supply large anchor customers, supplying residential customers would require profitability for that additional infrastructure — the very issue that currently prevents natural gas from being available to communities near existing natural gas pipelines: Baileyville, Princeton, Calais, and Bucksport.

Dominion considering exporting LNG from Maryland terminal — Platts

Dominion Resources is confident it can export LNG supplied from the Marcellus Shale to markets in Europe and Asia, although it has no timeline for when it will apply for the necessary federal approvals, CEO and President Thomas Farrell said Wednesday.

Richmond, Virginia-based Dominion's pipeline system sits atop the Marcellus Shale and the firm has recently enhanced its infrastructure to move those supplies to downstream Northeast markets.

Dominion is considering reversing flows on its system to get supplies to the terminal for export.

Dominion is the latest in a slew of LNG terminals in North America positioning themselves to export gas in 2015. Others include Freeport LNG terminal in Texas; Sabine Pass and Cameron LNG in Louisiana; and the Kitimat facility in Canada's British Columbia.

Webmaster’s Comments: There are now five (5) new North American LNG export projects in the making.

Shale gas: Applying technology to solve America’s energy challenges — US Department of Energy

[Note: The following link leads to a PDF file; 9.53 MB.]

This resource’s availability to the American people could not have come at a better time. The calls for reducing our reliance on foreign energy supplies, for reducing our contribution of carbon dioxide to the atmosphere, and for increasing economic growth and wealth creation, can all be met, at least in part, by the development of shale gas. The U.S. Department of Energy (DOE), through the National Energy Technology Laboratory (NETL), has played a historic role in helping to advance the technology that is making shale gas production possible.

2005 to 2010 – Gas production from Barnett Shale grows to about 5 Bcf per day. Development of other major shale plays begins in other major basins.

2010 – The Marcellus shale underlies a significant portion of the mid-Atlantic/NE region—close to East Coast metropolitan natural gas demand centers—and is thought to contain nearly half of the technically recoverable shale gas resource.

The EIA projects that there are 827 trillion cubic feet (Tcf) of natural gas that are recoverable from U.S. shales using currently available technology. The United States currently consumes about 23 Tcf per year, of which we produce about 20 Tcf and import the rest, so the shale gas resource alone represents about 36 years of current consumption. One Tcf of natural gas is enough to heat 15 million homes for 1 year, generate 100 billion kilowatt-hours of electricity, or fuel 12 million natural-gas-fired vehicles for 1 year. [Red bold emphasis added.]

LNG trade growth to slow on N American self sufficiency - study —

HOUSTON (ICIS)--Global growth in liquefied natural gas (LNG) trade will slow over the next decade as North American shale plays make it an increasingly self-sufficient market, consultants said on Wednesday.

“North America is much less dependent on LNG than was projected just three years ago, disconnecting the market from gas prices elsewhere.” [Red bold emphasis added.]

Will the U.S. ever become a net exporter of natural gas? [Opinion column] — FavStocks

The price of natural gas in the US is less than $4.00 per million British thermal units (mBtu) and many analysts are predicting it will stay at these levels for the foreseeable future.

The US is awash with natural gas from the shale gas plays of Texas, Arkansas, and Pennsylvania to name a few. The increase in production of natural gas is a major change in circumstances and has created a glut of natural gas on the market. [Red bold emphasis added.]

Methane bonanza: What to do with all the gas? —

A wealth of unconventional methane is exploding onto the energy scene, much to the dismay of dieoff doomers, Russian energy tsars, and carbon hysterics. But what is the world to do with all this methane -- which is difficult to transport, and cannot be easily used within the liquid fuels infrastructure? [Red bold emphasis added.]

U.S. ACE expects to decide on Sabine Pass LNG terminal modifications by July 2011 — LNG Law Blog

The U.S. Army Corps of Engineers (U.S. ACE) notified FERC that it has received an application from Cheniere Energy to amend the Corps' permit for the Sabine Pass LNG terminal seeking authorization to install liquefaction equipment at the facility. U.S. ACE informed FERC by a letter dated February 28, 2011, that the agency should render a decision on Cheniere's application by July 31, 2011.

What about energy conservation? [Editorial] — The Gleaner, Kingston, Jamaica, West Indies

Unfortunately, our Government - notwithstanding that undertaking, its request for bids for 480 megawatts of gas-fired electricity generation and naming a preferred bidder for a liquefied natural gas storage and regasification facility - continues to decline to share with the public the economic basis on which it arrived at its decision. The public, in the circumstances, cannot be sure that this is the least-cost option for energy.

Foreign investment bankers win Jamaican LNG project consultancy — Jamaica Observer, Kingston, Jamaica, West Indies

GOVERNMENT plans to pay US$630,000 ($54.1 million) to "re-engage" the services of global-based investment bankers Taylor DeJongh for the liquified Natural Gas (LNG) project.

The sole source contract will provide "financial consulting services" according to the just released January posting by the Office of Contractor General (OCG). The contract, which was endorsed by the National Contracts Committee awaits Cabinet approval. It follows a December contract for LNG consulting to overseas-based Ernest Megginson for a three -month period valued at US$105,000. That contract was reportedly criticised by Opposition spokesman on mining Philip Paulwell who requested full disclosure.

City of Fairbanks voices support for gas line, liquefied natural gas — Daily News Miner, Fairbanks, AK

FAIRBANKS — The Fairbanks City Council this week voiced its support for a liquefied natural gas trucking operation and a natural gas pipeline to lower energy costs for the Interior.

Pipe dreams [Opinion column] — Anchorage Press, Anchorage, AK

Filled with calls for Alaskans to do it ourselves, supporters of the LNG line have been great cheerleaders, but they've never once given any substance to explain just how the project will be pulled off. In fact, they've failed to answer the most important question: Where is the gas coming from to fill the pipeline?

[U]nless major oil and gas producers are going to negotiate with the builders of an All-Alaska line to secure long term gas supplies, there is no gas to put in any LNG line.

Haisla to hold signing ceremony tonight for LNG project — CJFW-FM, Terrace, BC

A signing ceremony will take place at Kitamaat Village tonight, to formalize the lease and business arrangement between the Haisla and developers of a liquefied natural gas facility at Bish Cove. Representatives of the village council and Apache Corporation will be on hand for the ceremony.

LNG pipeline project gets another hearing in Clatsop County — The Oregonian, Portland, OR

Clatsop County Commissioners will hold a public hearing today to decide the fate of the Oregon LNG pipeline, despite a legal challenge by the project's developer contending that the county has already made an irreversible decision to approve the project.

The hearing continues a continuing legal and political kerfuffle over controversial liquefied natural gas projects in Clatsop County. The Oregon LNG proposal includes an import terminal in Warrenton, near the mouth of the Columbia River, as well as a 120–mile pipeline that would loop southeast to Molalla, carrying the terminal's gas to market in the Willamette Valley and beyond. About 41 miles of that pipeline are within Clatsop County.


2011 March 8

FERC denies Weaver's Cove LNG's request for rehearing on Wedge Lot issue (Mar 7) — LNG Law Blog

Last Friday, FERC denied a Request for Rehearing submitted by Weaver's Cove LNG addressing the ongoing controversy surrounding legal title to the so-called "Wedge Lot." FERC confirmed its prior conclusion that the issue should be resolved by a court applying Massachusetts state law and that any argument regarding the application of U.S. Department of Transportation regulations to the "Wedge Lot" should be made before that agency, not FERC.

Local environmental groups ask FERC to deny onshore component of Liberty LNG deepwater port project (Mar 7) — LNG Law Blog

Several local environmental groups have requested that FERC deny the application for the Liberty Natural Gas Onshore Pipeline, the onshore component of the Liberty LNG deepwater port proposal. The filing argues that because Gov. Chris Christie (R-N.J.) has vetoed the proposed Liberty LNG deepwater port, the onshore component of the project cannot go forward as originally proposed. [Red emphasis added.]

LNG options limited for Savannah (Mar 7) — GPB News, Georgia Public Broadcasting, GA

Georgia public safety officials said Monday that there's little they can do to prevent liquefied natural gas from being trucked on Savannah streets.

Three months ago, federal officials at a public hearing said that they only had authority over the terminal, on Elba Island.

Streets were a state matter.

Chief Charles Middleton said that Southern LNG -- a partnership of Atlanta Gas Light and El Paso Corporation -- still hasn't provided details on how it would handle an accident that could start a massive fire that burns for days.

"My primary concern is the emergency plan and how it's going to be implemented, the responsibilities of LNG and the responsibilities of us as first responders," Middleton said. "They didn't offer anything new in that regard on any front." [Red emphasis added.]

Hospital opposes LNG trucking (Mar 7) — Savannah Morning News, Savannah, GA

“St. Joseph’s/Candler has an obligation to protect the safety of our patients and co-workers,” Vice President Peter Schenk said at a Town Hall meeting on LNG held at the Civic Center. “Other than the federal department of transportation emergency response guidelines, at this point, we do not have confidence in the information we have heard thus far that would allow us to believe the risks are insignificant.”

"[U]ntil we have evidence that demonstrates that there is no risk to our hospital and surrounding community, we are now on the record in opposition to approval of this route,” Schenk said.

LNG trucking plan draws opposition at town hall meeting (Mar 7) — WSAV, Savannah, GA

The proposed route puts trucks near Savannah's two hospitals and 15 Savannah-Chatham County Public School facilities, drawing leaders from those groups to voice concerns

LNG meeting includes state, federal transportation officials (Mar 5) — Savannah Morning News, Savannah, GA

Johnson said Southern LNG has stonewalled city officials, including Fire Chief Charles Middleton. They're not getting the information they've requested about the safety and terrorism risks from LNG trucking in an urban setting, nor about who will pay for making sure the city is adequately prepared to respond to an accident, Johnson said.

Interview: Rochelle Small-Toney — Connect Savannah, Savannah, GA

We are still working through the LNG issue. That falls under the larger umbrella of emergency management in general; a process of looking more critically at how well the city is prepared to respond to a disaster that might occur within our boundaries, and how well we’re equipped to respond and assist outside of the city proper.

Cheniere Energy sues Centerbridge after revenue dispute — The Wall Street Journal, New York, NY

Cheniere Energy Inc. (LNG) has filed a lawsuit against Centerbridge Partners LP, saying the distressed investment-focused hedge fund disrupted Cheniere's business with a letter alleging it had defaulted on debt.

Cheniere said Sabine Pass received a letter from Centerbridge saying it strayed from generally accepted accounting principles by recording affiliate payments from Cheniere Energy Investments LLC as revenue. As such, the letter argued, Sabine Pass was in default under the terms of some of its notes, of which Centerbridge said it was a significant holder.

LNG company challenges county decision (Mar 7) – The Daily Astorian, Astoria, OR

Despite a legal motion filed last week, the Clatsop County Board of Commissioners will proceed with a public hearing Wednesday, March 9 to reconsider a liquefied natural gas pipeline land use application.

County officials to consider land use application submitted by Oregon Pipeline — LNG Law Blog

Officials with Clatsop County, Ore., have scheduled time tomorrow to discuss possible responses to a petition filed by Oregon Pipeline LLC to compel the county to act on the company's land use application by March 18, 2011. According to the Daily Astorian, Oregon Pipeline, a pipeline project affiliated with Oregon LNG, argues that Clatsop County missed the deadline to withdraw its previous approval of the land use application.


2011 March 4

US Abundance Keeps LNG, Nat Gas Imports Flat

Rising U.S. production to push down Canadian natural gas prices, exports — The Vancouver Sun, Vancouver, BC

Prolific U.S. production and new pipelines shutting out Canadian volumes

CALGARY - Natural gas prices could plunge to $2 per gigajoule by the fall as volumes get backed up into Alberta on rising U.S. production and stable demand, say analysts.

Natural gas exports to the U.S. fell to an 11-year low in 2010, along with the lowest average price - $4.29 per gigajoule - seen in a decade, according to National Energy Board data. [Red bold emphasis added.]

Webmaster’s Comments: Following are some approxiamte energy equivalents:

1 gigajoule =
947,817 BTU (British Thermal Units)
948 MBtu (Thousand British Thermal Units) — rounded up
1 MMBtu (Million British Thermal Unit) — rounded up
1 Mcf (Million cubic feet) — rounded up

Analysts: U.S. LNG import volumes not expected to rise this summer — LNG Law Blog

Citing North American and European natural gas market conditions, several industry analysts speaking in Houston said that they do not expect LNG import volumes to the United States to increase during the upcoming summer. Platts LNG Daily reports that one analyst, Christopher Micsak of Bentek Energy, predicted that [regasified] sendout from U.S. LNG [import] terminals would decline over the summer. [Subscription required] [Red bold emphasis added.]

City holding meeting on LNG trucking — WTOC, Savannah, GA

SAVANNAH, GA (WTOC) - The City of Savannah is continuing to take a look at the proposed trucking of liquified natural gas through the city.

This Monday night at 7:00 p.m. at the Savannah Civic Center Ballrooom the city of Savannah is holding an LNG truck town hall meeting. City officials are inviting the public to attend. The have also invited El Paso Energy and Southern LNG to be a part of the meeting to answer any questions they may have.

FERC chairman responds to Texas congressman's letter in support of Freeport LNG export proposal (Mar 3) — LNG Law Blog

This week FERC Chairman Jon Wellinghoff issued a response to Congressman Ron Paul's (R-Tex.) letter in support of the Freeport LNG export proposal.

FERC chairman responds to submissions by Texas legislators — LNG Law Blog

FERC Chairman Jon Wellinghoff issued responses to four legislators from Texas, including U.S. Sens. John Cornyn (R) and Kay Bailey Huchison (R) and State Reps. Dennis Bonnen (R) and James Keffer (R), who submitted comments supporting the Freeport LNG export proposal.

Jamaica woos investment in alternative energy — Jamaica Information Service, Kingston, Jamaica, West Indies

Minister Robertson outlined the National Energy Policy 2009 to 2030 and the government’s strategy to modernise the country’s energy sector, including the replacement of over 300 MW of old and inefficient generators with the introduction of Liquefied Natural Gas (LNG), upgrade of the Petrojam Refinery, the continued exploration for oil and gas and the promotion of energy conservation and efficiency in the public sector.

Update 1-Trinidad LNG train off for maintenance mid-March — Market News

NEW YORK, March 4 (Reuters) - Trinidad's liquefied natural gas producer Atlantic LNG said Friday one of its production units will be down for scheduled maintenance in mid-March, and expected back up by the end of the month.

Hope springs eternal on Alaska's large natural gas pipeline — Alaska Journal of Commerce, Anchorage, AK

Another effort, in the early 1990s, North Slope producers teamed up to look at a liquefied natural gas, or LNG, project in Valdez. The conclusion was that the Asian market couldn't absorb the volumes of LNG required to make a Valdez LNG project viable.

Today there are huge amounts of LNG being sold in Asia, as well as Australia. There doesn't seem to be room for Alaska LNG, a fact illustrated by ConocoPhillips' inability to sell even small quantities of liquefied gas from its existing Kenai LNG plant. The plant's owners, ConocoPhillips and Marathon Oil, decided to close the plant earlier this year.

The state has committed up to $500 million in a subsidy to TransCanada in return for certain agreements by the pipeline company. So far the state has paid $134 million to TransCanada to reimburse it for expenses. Gov. Sean Parnell has included authorization for another payment of $160 million in the state's fiscal year 2012 budget.

The state subsidy is galling to lawmakers because it seems like throwing money away given the size of the shale gas surplus. What also rubs legislators is that the contract with TransCanada limits the state in helping an alternative gas project, at least one that would require enough gas that it might be viable. [Red & bold emphasis added.]

Webmaster’s Comments: In actuality, the Kenai LNG plant was unable to satisfy Japan's need for large-quantity deliveries of LNG, since — despite Alaska's huge natural gas resource — there is no pipeline to transport the natural gas supply 800 miles to the LNG terminal.

Kitimat LNG Partners award KBR the FEED contract for LNG project [Press release] — PR Newswire

"This is another important milestone for Kitimat LNG, taking us a significant step closer in being able to export LNG to Asia-Pacific markets as soon as 2015," said Janine McArdle, president of Kitimat LNG. "KBR is a recognized industry leader in LNG developments and brings extensive experience to our project."

Last month, Kitimat LNG Partners entered into an agreement to purchase the remaining 50 percent interest in Pacific Trails Pipeline Limited Partnership, thus securing full ownership in the infrastructure to transport natural gas from production areas to the Kitimat LNG facility. The Pacific Trails Pipeline is a planned 463-kilometre (287-mile), 914-mm (36-inch) diameter underground line that will carry natural gas from Summit Lake to Kitimat.

Baja officials raise concerns about Sempra’s LNG plant — KPBS, San Diego, CA

First, Ensenada Mayor Enrique Pelayo attempted to shut down Sempra's liquefied-natural-gas terminal in Baja after alleging that permits for the facility were improper. Now, Mexican federal lawmakers are calling for a review of the LNG plant's permits. We talk about why neighbors are concerned about the facility and why officials on both sides of the border are questioning Sempra's business practices in Baja.


2011 March 3

Gas Glut Deadens LNG Import Business

LNG imports to remain unmoved despite jump in UK prices: analysts — Platts

Credit Suisse predicts LNG sendouts to the US will stay between 1 Bcf/d and 1.5 Bcf/d through the summer. Beyond 2011, Viswanath said LNG imports will remain flat in the long-term.

"LNG will not play an increasing role in US supply in the next five years," Viswanath said.

Viswanath and Micsak also predicted re-exports of LNG at Freeport's LNG's Texas facility and Cheniere Energy's Sabine Pass terminal would remain steady through the year. [Red bold emphasis added.]

U.S. Energy Department natural gas update for Feb. 23 (Feb 24) — Bloomberg

According to BENTEK estimates, the average 66.4 billion cubic feet per day (Bcf/day) of nominal total gas supply represented a decrease of 1.6 percent from last week’s value. Domestic gas production was up 0.8 percent, accounting for the bulk of any gains. Canadian imports (about 6.2 Bcf/day) were down 17.4 percent for the week and remain 15.7 percent below year-ago levels. Things were little changed in the liquefied natural gas (LNG) arena, where imports (less than 1 Bcf/day) remained nearly 23.9 percent below last week and 27.5 percent below the corresponding week last year. [Red bold emphasis added.]

The evolution of a new Asian LNG market (Feb 23) — Platts

Asia's LNG market is set to come of age in 2011 as the volatility of the last few years has shaken up the region and increased players' appetite for a more sophisticated approach.

The region continues to be the dominant force in LNG. Growing shale gas production in the US has reduced the need for imports there to virtually nil. [Red bold emphasis added.]

Investors are at risk of getting stranded with Cheniere (Feb 18) — The Wall Street Journal, New York, NY

Cheniere Energy Partners, or CEP, is a master limited partnership controlled by Cheniere Energy Inc. CEP owns and operates the Sabine Pass liquefied natural gas, or LNG, import terminal in Louisiana. Once highly valued, such terminals are less useful now that shale gas has created excess supply. [Red bold emphasis added.]

LNG town hall meeting set (Mar 2) — WSAV-TV, Savannah, GA

Both side of the LNG issue in Savannah will have their chance to speak out on Monday.

The City of Savannah will host a Town Hall Meeting focused on the proposed LNG trucking route on Monday, March 7.

PIOJ head clarifies LNG position (Feb 24) — The Gleaner, Kingston, Jamaica, West Indies

However, to claim that my presentation posits a case for "LNG transparency", and in particular, to make the case "for the need for a full, frank and open discourse on the energy source that Jamaica should adopt to drive its economy into the future" is, in my humble view, a mis-characterisation. Certainly, this was not the intention of my presentation. I have posted the text of my presentation on the Planning Institute of Jamaica's website at for interested readers to arrive at their own judgement, and am now trusting that you will give some prominence to my response.

Webmaster’s Comments: It is curious that Director Hutchinson denies advocating for transparency and open discourse.

Alaska House committee hears factors behind LNG plant closure (Feb 16) — (AP) Daily News Miner, Fairbanks, AK

Once the largest plant of its kind in the world, it came to be dwarfed by more modern facilities. The sole supplier to Japan when it began exports in 1969, it provided less than one-half of a percent of that market's supply by last year, according to testimony given to a special legislative committee Tuesday. And in recent years, the plant was only able to get two-year extensions of its export license, all factors contributing to the companies' decision.

Canada’s energy watchdog weighs the public interest (Mar 1) — Alberta Oil, Edmonton, AB

The race to reach new markets in the Far East is giving fresh impetus to an old question faced by Canada’s national energy regulator. How do you determine whether a proposed export scheme is in the public interest?

The chicken-or-egg predicament shows up in a proposal on the books from Calgary-based Enbridge Inc. for an oil sands export conduit to a new marine terminal at Kitimat, B.C., on the Pacific coast. It also makes an appearance in a separate application made by Apache Canada Ltd. and EOG Resources Canada Ltd. for a 20-year export license to ship up to 10 million tonnes of liquefied natural gas (LNG) per year to Asian sales outlets.

Mega-deal for natural gas brings benefits (Feb 22) — The Vancouver Sun, Vancouver, BC

PetroChina's $5.4-billion US deal to acquire half of EnCana Corp.'s Cutbank Ridge natural gas play in northeastern British Columbia is tangible proof of the enormous value of this vast resource.

Not only does this transaction provide crucial capital at a time of historically low natural gas prices to accelerate production (now at 250 million cubic feet a day), but it breathes new life into a proposed liquefied natural gas (LNG) plant near Kitimat, opening new opportunities for oversupplied Canada to deliver its natural gas surplus to export markets. The $3.5-billion LNG terminal would be Canada's first. [Red bold emphasis added.]

Bradwood LNG laid to rest — The Daily Astorian, Astoria, OR [Paid subscription required]

Petitioners’ concerns about a proposed liquefied natural gas project at Bradwood Landing outside Astoria have been declared “moot” by the Ninth Circuit Court of Appeals.

Court voids license for Astoria LNG terminal — The World, Coos Bay, OR

The court vacated Bradwood Landing's license because the project's promoter is bankrupt and the license can't be transferred to another party.

[T]he states of Oregon and Washington, the Nez Perce Tribe, and a coalition of environmental groups appealed FERC's decision to the appeals court.

Court decision puts Bradwood Landing LNG project 'in grave doubt' (Mar 2) — OPB News, OR

But the court didn't answer the state of Oregon's question -- whether the Federal Energy Regulatory Commission, or FERC, was wrong to approve the project before it had obtained state permits. The court found that question to be moot in this case.

The same question is looming over the Jordan Cove LNG project in Coos Bay. The state has challenged that project's federal license, too, and is still awaiting an answer from federal regulators. [Red emphasis added.]

Mexican officials call for inquiry into Sempra plant — KPBS, San Diego, CA

SAN DIEGO — Federal legislators in Mexico want to know how Sempra’s liquefied natural gas plant in Baja was approved.

For years, planners in Ensenada had envisioned homes and a tourism hub on coastal land north of the city. Zoning laws supported that vision until Sempra applied for permits to build a liquefied natural gas plant there, according to Aaron Quintinar. He used to work for the environmental group WiLDCOAST.

“In an extremely expedited process, the zoning was transformed to allow heavy industrial use which allowed for the possibility of permitting an LNG facility in the area,” Quintinar said. “It’s real shadowy.” [Red emphasis added.]


2011 March 2

Overseas Interest in US-Produced LNG Is Growing

Japanese utilities keen to import LNG from U.S. to diversify sources — Reuters

Two of Japan's biggest utilities are keen to import liquefied natural gas (LNG) from U.S. producers in an effort to diversify their supply sources, executives from the companies said.

The massive increase in U.S. shale gas production and reserves in recent years has turned the U.S. gas market on its head, prompting traditional LNG importers to launch plans to export domestic gas overseas. [Red bold emphasis added.]

Dominion considering new export plant — Southern Maryland Newspapers Online, MD

Cove Point construction would start in 2016

Dominion is seeking out gas sources to import, focusing primarily on the Marcellus gas field, which first was drilled as recently as three to four years ago and spans portions of several states — New York, Pennsylvania, Ohio, West Virginia and the western shore of Maryland, Donovan said.

"They've been finding a lot of gas there, and it's changed the market around already," Donovan said.

Many U.S. LNG import plants have been suffering in recent years, Donovan said, since foreign markets are willing to pay more for gas shipments. The Cove Point facility only brought in 15 shipments last year, down from 25 in 2009. [Red bold emphasis added.]

Webmaster’s Comments: The reality is that nearly all US LNG import terminals have been suffering, due to massive domestic natural gas resources that have been drowning the market, mooting the need to import LNG.

Cheniere exceeds initial target capacity in good sign for US LNG exports (Feb) — Oil and Gas Insight

US-based Cheniere Energy has made significant headway in its attempt to win customers for liquefied natural gas (LNG) cargoes that it intends to sell from its planned export facility at the Sabine Pass LNG terminal in Louisiana. Cheniere is attempting to defy the sceptics as it looks to secure buyers in a bearish gas market. [Red bold emphasis added.]

FERC authorizes Cameron LNG to commence LNG re-export operations — LNG Law Blog

Yesterday, FERC authorized Cameron LNG to begin re-exporting previously imported LNG. [Red bold emphasis added.]

LNG: a physical market, for the foreseeable future — Petroleum Economist [Paid subscription required]

Global LNG production reached about 215m tonnes in 2010, compared with 174m tonnes in 2009 and 160.5m tonnes in 2008. The massive scale-up led many analysts to predict a tidal wave, or even tsunami, of surplus, flexible, spot LNG in 2010, the only option for which would be its eventual absorption into ultra-low-priced markets on the US east coast.

The tidal wave ended up coming from the opposite direction, with abundant US shale-gas output removing the need for imports and creating plentiful availability of LNG cargoes for numerous new markets. It also created extra cargoes for more traditional markets at a lower cost than available under long-term sale and purchase agreements. [Red bold emphasis added.]

Southeast LNG says city of Savannah can pick routes, will ‘never’ exceed 58 trucks — Savannah Morning News, Savannah, GA

ATLANTA -- The president of the joint venture seeking to transport liquefied natural gas from Elba Island over downtown Savannah streets told local lawmakers this morning that the city can pick the routes taken and that the number of trips per day will never exceed 58.

Webmaster’s Comments: When the Elba Island LNG terminal was reactivated in 2001, the terminal owner assured the City of Savannah that it would never truck LNG through the city. But now, the company want citizens to believe that they would not exceed sending 58 LNG trucks per day through Savannah.

If Southern LNG could profit by sending out 110 LNG trucks per day from the Elba Island terminal, who would be willing to bet they would not break their promise?

Court throws out Bradwood LNG license — Chinook Observer, Long Beach, WA

The Federal Energy Regulatory Commission (FERC) issued the license to construct an LNG terminal and pipeline on Sep. 18, 2008.

The [Ninth Court of Appeals] ruling Wednesday vacates that license. [Red bold emphasis added.]

Federal legislators vote in support of attempted shutdown of Sempra LNG terminal (Mar 1) — SignOn San Diego, San Diego, CA

More than two weeks after Ensenada’s mayor attempted to shut down Sempra’s liquefied natural gas terminal outside Ensenada, supporters in Mexico’s federal legislature on Tuesday called for a review of the facility's permits.

What was behind Ensenada LNG showdown? — SignOn San Diego, San Diego, CA

It was like a scene from an action movie. Dozens of police officers, some in SWAT gear, swarm a major energy installation, cutting through locks and confronting the operators. Hours later, the Mexican military arrives, and the municipal officers make a quick retreat.

The actions have been the subject of widespread speculation, but this much is certain: There’s a group of people who don’t want Sempra in Mexico, but the company has plenty of support among top officials.

Pelayo “is saying there were some irregularities when the land-use permit was authorized, and I agree,” said Horacio de la Cueva, a scientist at the Ensenada-based research institution, CICESE. “There are courts where you can appeal. I don’t think that shutting down Sempra is the way of doing it.” [Red emphasis added.]

We need a comprehensive energy plan [Opinion column] — The Hill, Washington, DC

We need to use American innovation to accelerate technology that burns coal more cleanly because it is the most abundant energy source in our country. We also need to build new liquefied natural gas facilities, which will increase our natural gas supply. [Bold brown emphasis added.]

Webmaster’s Comments: This column's author, Rep. Phil Roe (R-Tenn), and his staff had not done their homework before he wrote his opinion column. The US is in a 100-year natural gas glut, keeping prices low and mooting additional LNG import infrastructure. A 'comprehensive energy plan' is a plan that should be kept far out of Rep. Roe's reach.

Exhibition to ease safety concerns (Mar 3) — Gladstone Observer, Gladstone, Queensland, Australia

Armed with a rose, a balloon, a steel pipe, two goldfish and some LNG, Conoco Phillips’ Alaskan safety expert Peter Micciche will demonstrate why APLNG believes LNG is one of the safest, most reliable and cleanest sources of energy through a series of interactive demonstrations. [Bold brown emphasis added.]

Webmaster’s Comments: The LNG industry, via Peter Micciche, continue their irresponsible and misleading representation of LNG safety.


2011 March 1

Glut Breeds LNG Exports & Liquids Projects

Webcast: LNG Primer 101 — Association of Corporate Counsel's Energy Committee, sponsored by Sutherland Asbill & Brennan LLP

Several billion dollars in regas terminal assets are relatively idle along the U.S. Gulf Coast. All of these terminals were built with the objective to bring Liquefied Natural Gas (LNG) into markets to improve gas supply, lower energy costs and preserve jobs. Now, with some terminal owners proposing to reverse flow and export gas, what are the issues that they must address to obtain the necessary permits? If local politicians choose, will they be able to block terminal owner plans? [Red bold emphasis added.]

Parnell says he's following his own advice on oil taxes (Feb 28) — Daily News-Miner, Fairbanks, AK

The Alaska gas line is one of the president's five top green projects for this nation. We're speaking to a gas source where every day out of the ground at Prudhoe Bay we're getting about 8 billion cubic feet of gas coming up with the oil. The oil goes down the pipeline; the gas goes back in the ground. We effectively need to hook a garden hose, hook a pipeline up to that source that's coming up out of the ground every day. Effectively, no new wells have to be punched. I mean, we just need to -- we need to ship what we've got coming out of the ground.

…I remember about seven years ago when everybody said that America was going to be awash in LNG imports and we couldn't get, you know, the regas facilities licensed in any -- in any significant numbers, and so that -- LNG didn't work. We know that shale gas certainly has changed the economics of today, but pipelines are built on long-term economics, and shale gas is a -- potentially a short-term situation. For example, it has great environmental risks compared to a natural gas pipeline. It takes capital to keep punching holes for shale gas, where with a pipeline, you make the investment and then you operate it. [Red bold emphasis added.]

A release valve is in sight for a crippling gas glut — Alberta Oil, Edmonton, AB

At least one aspect of the shale gas “revolution” is turning out to be quite predictable. “The gas prices in North America are behaving pretty much as expected,” says John Manzoni, chief executive officer of Talisman Energy Inc. “It’s all about supply.”

A release valve for the growing bottleneck emerged in a deal late last year between Calgary-based Talisman and Sasol Ltd., a South African energy and chemicals company. In a December acquisition, Sasol forked over $1.05 billion for a 50 per cent stake in Talisman’s Farrell Creek shale gas project in northeastern British Columbia. The deal includes a commitment to study the feasibility of building a gas-to-liquids (GTL) plant in the region that could convert liquids-rich gas into a variety of petrochemicals and transportation fuels like diesel and jet fuel. [Red bold emphasis added.]

Encana deal sparks speculation of second LNG terminal (Feb 15) — (Postmedia News)

CALGARY - Encana's recently announced $5.4-billion joint venture deal with PetroChina is not just another signal of Asia's voracious appetite for the commodity. It has to be seen as one more step in the direction that will see natural gas exported from these shores.

Despite the less than stellar outlook for natural gas prices, Encana is forging ahead with its plan of doubling its production by 2015 by monetizing existing reserves while aiming to be the low-cost producer.

Rumours have been floating around for a while that two Canadian producers are looking at the possibility of developing a second liquefied natural gas export terminal - in addition to the one currently proposed at Kitimat, B.C. One of those companies could very well be Encana. [Red & bold emphasis added.]

Kitimat project gains momentum (Feb 18) — Calgary Herald, Calgary, AB

Export facility will provide access to new shale gas market

Momentum appears to be building for West Coast liquefied natural gas exports to sop up excess Canadian gas production, with the operator of the proposed Kitimat LNG project giving it an upbeat update Thursday.

"My personal opinion is that Kitimat as an export facility has got a pretty good shot at it . . . because we've got lots of gas in Western Canada, prices are poor in Western Canada and will likely remain so for a number of years, and exporting gas into the Pacific markets currently fetches very attractive pricing," he said. [Red bold emphasis added.]

More coming down the pipe? [Opinion column] (Feb 16) — Northern Sentinel, Kitimat, BC

In the course of his teleconference call last week to announce the sale, PNG CEO Roy Dyce took some time at the end to give his overview of the LNG industry.

Some of it was stating the obvious: not only was there an oversupply of natural gas in North America, there was an oversupply in the US itself, reducing its need for natural gas from Western Canada. [Red bold emphasis added.]

Choppy seas: the ups and downs of LNG economics (Mar) — LNG Business Review

Over the last decade the fundamentals of the LNG trade have undergone some huge shifts. The capital costs of LNG plants have escalated by a factor of 4 or 5. And prices have fluctuated wildly, with US gas prices climbing to over $10/MMBtu in the winter of 2000/2001, peaking to $13/MMBtu in mid-2008, before entering into what most consider now a future of weak, sub-$5/MMBtu prices as shale gas production has surged. [Red bold emphasis added.]

The weekly wrap (Feb 18) — Foreign Policy, Washington, DC

The Alaska decision [to close the Kenai LNG export terminal] bears watching because of what it says about efforts by BP and ExxonMobil to export the gas equivalent of 6 billion barrels of oil from the North Slope. These two companies are leading rival efforts to build a pipeline to ship out the gas, but they have been delayed because of the gas glut in the market-of-choice -- the United States. It's been presumed that if the U.S. market won't work, they can ship the gas by LNG tanker to fast-growing Asia. But at the Alaska Daily News, Tim Bradner wonders whether the Kenai decision signals that the Asian market has fundamentally changed, too.

GDF Suez’s Boston LNG terminal to receive cargo on March 6 — Bloomberg

GDF Suez Neptune, the tanker carrying the cargo, can move as much as 145,130 cubic meters of LNG, or about 3.13 billion cubic feet of natural gas, equivalent to 5 percent of estimated daily U.S. gas production. The vessel is from Trinidad and Tobago, according to the data.

GDF Suez operates the Everett terminal, which can send about 1 billion cubic feet of gas a day into the regional pipeline network, according to the company. GDF’s Neptune offshore LNG terminal, which consists of a buoy system, is also near Boston.

Webmaster’s Comments: The Neptune LNG terminal — along with Northeast Gateway, Canaport LNG, and booming shale gas resources in the eastern US — moot the now-failing Downeast LNG, the probably-failed Calais LNG, and the long-failed Quoddy Bay LNG proposals.

What's going on with the LNG terminal plan [Letter to the editor] — MiddletownPatch, Middletown, RI

I’m writing today to update you on the status of Hess’ efforts to build a massive liquefied natural gas (LNG) terminal in the middle of Mount Hope Bay and connect it to the Weaver’s Cove storage facility in Fall River by way of a pipeline along the bottom.

[D]ozens of community organizations, cities, towns and elected officials have stepped up to fight this. The release of the FERC DEIS is still delayed, and there remain several crucial issues that could finally end Hess’ relentless pursuit of the Weaver’s Cove projec…

FERC responds to Mass. state representative (Feb 22) — LNG Law Blog

Responding to a letter from Mass. State Rep. David Sullivan (D), FERC Chairman Jon Wellinghoff stated that the Commission is awaiting revised vapor dispersion exclusion zone analysis from Weaver's Cove LNG. Chairman Wellinghoff went on to say that FERC would only grant Weaver's Cove LNG's application if the project demonstrates compliance with the U.S. Department of Transportation's new interpretation of its gas dispersion zone regulations. [Red emphasis added.]

Christie didn't let facts stand in way of LNG veto [Commentary] (Feb 21) — Asbury Park Press, Asbury Park, NJ

Projects like Liberty's [offshore LNG projects in other states] are operating safely now, causing no adverse environmental impact on our oceans. And the projects have lowered energy costs by spurring competition in the natural gas market. Despite Clean Ocean Action's assertions that this offshore LNG pipeline project would cause harm to the environment, already proven facts state otherwise.

Webmaster’s Comments: There actually are environmenal impacts occurring from the four offshore LNG receiving projects mentioned in the commentary — and significant negative economic impacts; however, the developers in at least some of those cases are making compensatory payments (whether or not those payments can make up for the environmental and economic losses).

An issue the writer avoided to mention is the complete lack of need for the Liberty project, due to sufficient supplies from domestic sources.

Herrgesell: LNG is safe [Op-ed column] (Feb 20) — Savannah Morning News, Savannah, GA

There is a better way to fuel the heavy-duty truck market: It's with environmentally friendly liquefied natural gas or LNG.

We formed Southeast LNG, which is a joint venture between AGL Resources and El Paso Corporation, to expand the availability of LNG as a clean energy alternative to diesel fuel for heavy-duty fleet use throughout the Southeast.

Webmaster’s Comments: LNG is less "clean" than domestic natural gas, due to energy expended and pollution produced during LNG's liquefaction, ocean transport, and regasification.

Mr. Herrgesell refers to LNG's admirable safety record in the US during the past few decades, and claims LNG trucking would be safe while transiting through downtown Savannah. A proper question to consider:: "If a speeding semi-truck ran a stoplight and slammed broadside into a full LNG truck, would LNG's safety history protect the citizens of Savannah?"

NOAA accepting public comments on incidental take application filed by Port Dolphin LNG — LNG Law Blog

The National Oceanic and Atmospheric Administration (NOAA) announced in this morning's Federal Register that it is in receipt of an incidental take application submitted by Port Dolphin Energy LLC. The application requests NOAA authorize the company to engage in activities related to the construction of its planned LNG deepwater port, including activities that could affect populations of Atlantic spotted and bottlenose dolphins.

Texas senator offers support for Freeport LNG export proposal — LNG Law Blog

Citing economic benefits, United States Sen. Kay Bailey Hutchison (R-Tex.) has offered her support of the Freeport LNG export proposal.

FERC Chairman responds to Texas state senator on Freeport LNG export proposal — LNG Law Blog

FERC Chairman Jon Wellinghoff has responded to a letter submitted to the Commission by Texas State Senator Joan Huffman (R).

LNG plant closure heightens concern about gas (Feb 18) — Alaska Journal of Commerce, Anchorage AK

"The LNG market has changed a lot in the last six months to a year. There's a lot of LNG in Asia. The market had deteriorated to the point that we couldn't make exports viable."

Lockhart said that for Marathon the problem of handling large seasonal swings in demand from the Alaskan utilities "won't be an issue because we have sufficient storage," for Marathon's customers, which include regional gas and electric utilities.

Legislators discuss closure of LNG plant (Feb 16) — The Homer News, Homer, AK

What makes [LNG from] Alaska less competitive than Australia?

Clark stressed that multiple factors are at play. It can't export the volumes needed to be competitive.

Earlier in the hearing, he stressed the importance of the Nikiski facility's longevity and role in the company. It was the first of its kind. And now it is outdated.

ConocoPhillips plans Alaska shut-ins after LNG exports end: official (Feb 15) — Platts

ConocoPhillips Alaska will shut in some producing wells in the North Cook Inlet field and the Beluga River field this summer after it ceases exports from the Kenai natural gas liquification plant in April or May, a company official told a state legislative committee in Juneau Tuesday.

Nikiski LNG plant to close (Feb 10) — The Homer News, Homer, AK

"We will be ceasing actual exports effective April or May of this year," Lowman said.

The company will continue to produce natural gas from the Beluga and Tyonek fields to fulfill other natural gas contracts in Alaska, but Lowman didn't know if it would be producing the same quantity of gas.

Kitimat LNG info session tonight — CFTK-TV, Terrace, BC

The National Energy Board will hold a public information session in Kitimat tonight, to consider an application to export liquefied natural gas through Douglas Channel.

The session will take place from 7 to 9pm at Riverlodge in Kitimat.

A public hearing will be scheduled for June 7th at a location to be announced later.

Wu goes to bat for state LNG oversight (Feb 17) — The Daily Astorian, Astoria, OR

U.S. Rep David Wu, who represents the North Coast, introduced an amendment to a major appropriations bill that would cut federal spending to the regulatory agency that prevents state governments from approving new liquefied natural gas (LNG) terminals.

Wu continues fight for local control over LNG (Feb 16) — Congressman David Wu, Washington, DC

“Landowners in Oregon deserve a say in determining whether LNG terminals and pipelines are welcome in their backyards,” said Wu. “My constituents are frustrated by intrusive projects and unclear timelines, and their voices are not being heard on decisions that impact their livelihoods.”

Webmaster’s Comments: Wu's amendment failed to pass during vote taken on Feb 18.

State upholds Clatsop County’s decision on LNG (Feb 19) — The Daily Astorian, Astoria, OR

The ruling, issued Thursday, rejects a challenge filed by the project developer regarding the deadline for the county board of commissioners’ Jan. 14 decision.

Shale boom won't last, Gazprom says [Press release] (Feb 21) — OfficialWire

Gazprom in 2009 said it would meet about 10 percent of the U.S. gas demand by 2020. Most of this gas, the company said, would come from deliveries of liquefied natural gas from its projects in the northeast coast of Russia.

Webmaster’s Comments: Gazprom was not exactly prescient in its 2009 LNG market prediction. What makes it think it is a better predictor today?

Gazprom feels the heat as its gas market dominance is threatened (Feb 21) — The Telegraph, London, England, UK

Liquefied natural gas (LNG) currently comes mostly from the Middle East, but with its expansion, supplies are likely to start floating across from Australia and even America.

Potentially, an even bigger problem for Gazprom is shale gas, which has depressed global prices to their lowest level in decades. With the discovery of these new unconventional resources, which must be extracted from rock, America has doubled its gas reserves and overtook Russian as a producer in 2009.

Gazprom had been counting on the US as a major customer for its giant Shtokman gas field in the Barents Sea. This week, rumours have been abounding that this giant LNG plant will be again delayed, until 2018, from an initial start date of 2014.

On Monday Mr Miller attacked the economics of US and European shale, having previously described the industry as a “bubble” bound to burst. Nevertheless, new shale resources have pushed prices so low that energy buyers like EON and RWE are seeking cheaper deals with Gazprom instead of the current, more expensive oil-linked terms. [Red bold emphasis added.]


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