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News Articles
Passamaquoddy Bay & LNG

2011 May

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2011 May

2011 May 31

Lacking Imports, Cove Point LNG Cries For Help!

Cove Point asks US FERC to allow it to order shippers to import LNG — Platts

Dominion Cove Point LNG has asked the US Federal Energy Regulatory Commission to allow it to order its shippers to import liquefied natural gas to its terminal in Maryland, arguing that a lack of imports threatens to warm its cryogenic facilities so much that they would no longer be operational.

Webmaster’s Comments: The US natgas glut is so great, Cove Point LNG is not receiving cargos, and is considering converting entirely to exporting LNG. This article makes it even clearer that there is no need for new US LNG import infrastructure such as Downeast LNG.

Shale can support LNG exports: Chesapeake — Platts [Paid subscription required]

According to a study commissioned by Chesapeake based on rig counts, the US could produce more than 80 Bcf/d in a base case and more than 90 Bcf/d in the high case, he said. Those figures do not take into account potential development of new technology, he added. [Red bold emphasis added.]

Green panic and growing anti shale gas propaganda —

Remember all this? America is running out of natural gas. Prices will soar, making imported liquefied natural gas (LNG) and T. Boone Pickens’ wind farm plan practical, affordable and inevitable. Well, reality intervened. We are having an energy transformation, but just the opposite of what the non-market energy planners predicted.

Barely two years later, America (and the world) are tapping vast, previously undreamed-of energy riches – as drillers discover how to produce gas from shale, coal and tight sandstone formations, at reasonable cost. [Red bold emphasis added.]

Update 1-Apache Canada exits shale gas JV with Corridor — Reuters

May 31 (Reuters) - Corridor Resources Inc said Apache Canada has exited the joint venture formed to develop the Frederick Brook shale in the Canadian province of New Brunswick, as the gas project failed to show promise.

Oregon Senate approves bill opposed by environmentalists due to fears about LNG pipeline — The Republic, Columbus, IN

SALEM, Ore. — Oregon lawmakers have approved a bill opposed by environmentalists that would make it easier to build new roads, transmission lines, pipelines or other so-called linear facilities.

Oregon law allows landowners or people they authorize to apply for a permit to perform construction work through state waterways. The proposal backed Tuesday would allow developers to apply for a permit without a landowner's permission.

Oregon Senate passes legislation though critics claim it would speed LNG projects — The Oregonian, Portland, OR

...Opponents wanted to be sure that the bill would not also allow for the speedy siting of liquefied natural gas pipelines, which have been controversial among environmental groups and affected communities.


2011 May 30

US LNG Exports May Exceed 6Bcf/d

North American LNG exports may exceed 6 billion cubic feet per day by 2015 (May 27) — LNG World News

An oversupply in the U.S. has pushed domestic prices lower, prompting companies to plan exports of LNG. The fuel in Asia costs about three times U.S. benchmark gas because of inadequate production in China, India, Japan and South Korea.

LNG production capacity by 2015 may be equivalent to 10 percent of current U.S. total gas output, Allidina said in a report today. The U.S. has approved a plan by Cheniere Energy Inc. to export gas from a proposed 2 billion cubic feet-a-day facility.

Other LNG projects waiting for export approval include Freeport LNG, Southern Union and BG Group Plc’s Lake Charles terminal, Dominion Resources Inc.’s Cove Point in Maryland and the Kitimat project in Canada, according to the report. [Red bold emphasis added.]

Shale plays are changing the natural gas industry (May 29) — The Times Picayune, New Orleans, LA

[T]he natural gas industry has started to switch gears. Rather than developing infrastructure to handle a spike in natural gas imports, the industry is readying facilities that can also be used to export excess fuel to international markets. And some of those proposed import terminals are being reformatted so that they can also handle exports.

"Once it became very clear that there was going to be adequate supply for domestic consumption, and the domestic consumption wasn't going to increase as far as some people predicted, then the next logical thing to do was look for ways to export it," said Mukul Sharma, a professor in the department of petroleum and geosystems engineering at the University of Texas at Austin. [Red bold emphasis added.]

Cheniere doubles down on its LNG bet (May 28) — The Wall Street Journal, New York, NY

Now, a glut of domestic gas has sprung from onshore shale formations, reducing LNG imports to a trickle at Cheniere's Sabine Pass, La., regasification plant. [Red bold emphasis added.]

U.S. natural gas terminal may start exporting LNG in 2015 — Electric Choice Energy News

It is estimated that about 20% of our current surplus natural gas stores could be exported via terminals such as the Cheniere facility at Sabine Pass. Natural gas futures for 2015 have risen substantially following the news, and analysts say this is only be the tip of what could be a very big iceberg.

"…With the unprecedented growth in unconventional reserves, supply of natural gas continues to outpace demand dramatically. There are currently an estimated 3,500 wells that have been drilled but not completed with the potential to continue to boost production. The U.S. has an opportunity to become a significant supplier in the global energy markets.”

The developments allowing terminals in the U.S. to export LNG as well as import will likely impact consumers as well as the market as a whole. There has previously been no market for exporting natural gas, but the Sabine Pass terminal could now dip into 20% of our natural gas surplus to meet newly realized demand for the fuel in Europe and Asia. Such a reduction in our domestic stores would affect market prices, which would also affect electricity prices, as the cost of power is based on the market price for natural gas. [Red bold emphasis added.]

Shell Canada says it’s looking at B.C. coast for new LNG terminal (May 27) — The Vancouver Sun, Vancouver, BC

Shell’s proposal is one of three potential LNG terminals on B.C.’s northwest coast. Furthest advanced is the EnCana Corp., EOG Resources and Apache Corp. proposal for a $4.7 billion pipeline and LNG terminal at Kitimat to export 1.4 billion cubic feet of gas a day, making use of the existing Pacific Trails pipeline right-of-way. That project is to go before a National Energy Board hearing at Kitimat June 7. Apache executives said in that company’s quarterly conference call that gas export permits are likely to be in place by the end of the year. The first super-chilled natural gas could be shipped by late 2015. [Red bold emphasis added.]

Lithuania says U.S. gas cheaper than Gazprom’s — The Moscow Times, Moscow, Russia

Lithuanian Energy Minister Arvydas Sekmokas said the price offered by the United States' Cheniere Energy for gas supplies would be at least 25 percent lower than the country pays Gazprom.

Klaipedos Nafta, which operates Lithuania's oil terminal on the Baltic Sea, is negotiating possible gas supplies from Cheniere to help the country diversify from sole supplier Gazprom. The government is also in talks over gas imports from Norway and Qatar, Sekmokas said.

Natural gas: the turnaround kid in waiting — CTV News, Scarborough, ON

In the past few years, industry has gained the ability to tap huge new reserves of so-called shale gas that had previously been considered impossible to extract. This has triggered what many call a revolution: In a very short period, North America’s gas supply has gone from constrained to overabundant. The result was a crash in prices that, after reaching $14 per 1,000 cubic feet in 2006, have hovered around $4 in recent years. [Red bold emphasis added.]

Cheniere submits petition for Declaratory Order on LNG terminal buy/sell arrangement (May 27) — LNG Law Blog

Cheniere subsidiary Sabine Pass Liquefaction, LLC has submitted a Request for Declaratory Order from FERC declaring that Cheniere’s proposal to offer bi-directional LNG import and export services, including transportation on the Creole Trail interstate pipeline, at the Sabine Pass LNG facility does not violate FERC's capacity release rules, particularly the rules prohibiting buy/sell transactions. In the alternative, should FERC not provide the requested declaratory order, the petitioner asks that FERC grant Sabine Pass Liquefaction a waiver from capacity release rules, including the ban on buy/sell transactions.

Golding insisted LNG project must go to tender, OCG finds — Jamaica Observer, Kingston, Jamaica, West Indies

[T]he prime minister "explained that electricity would eventually be derived from this LNG source, and the rate payers are his constituents. So, although the Government was not buying anything specifically, nor was the Government putting up any money, the constituents would have to be protected".

LNG legal battle brews (May 29) — The Gleaner, Kingston, Jamaica, West Indies

In a report tabled in Parliament last week, the OCG said the entire tender process, won by a consortium led by the Belgian firm Exmar, was compromised, brought into disrepute and tainted by a conflict of interest and a gross lack of objectivity and impartiality.

But [Ian Moore, a director of Caribbean LNG and former chairman of the Petroleum Corporation of Jamaica], one of the persons singled out by the OCG in its report which recommended that the tender process be terminated, has challenged many of the claims by the contractor general.

Steering Committee too, finds fault with LNG tender process (May 29) — Jamaica Observer, Kingston, Jamaica, West Indies

In a report to [Prime Minister Bruce Golding] and copied to [former energy minister James Robertson], Finance Minister Audley Shaw, Transport Minister Mike Henry and junior energy minister Laurence Broderick, the committee said that its review led it to conclude that "the November 2009 RFP was seriously flawed and that it does not rise to the level of a fair and transparent process required by the Government of Jamaica's procurement guidelines and good industry practice".

Send the fool a little further [Opinion column] — Jamaica Observer, Kingston, Jamaica, West Indies

IN June of last year the Office of the Contractor General made a surprise 'raid' on the offices of the PCJ. The sudden investigation gave many the impression that shenanigans were taking place with the highly publicised LNG energy plan and the bidding process which awarded Exmar Consortium the go-ahead to roll out its proposed LNG facility by early 2013.

Kitimat LNG project granted extension — Opinion 250, BC

The Environmental Assessment Office has granted an extension to the Kitimat LNG Operating General Partnership’s environmental assessment certificate. Under the original certificate, substantial construction had to be underway on the LNG terminal by June 1st of this year.

The Kitimat LNG Operating Partnership must now have substantial construction started on the project prior to June 1ST of 2016.


2011 May 26

Prolific US Natgas is Defeating NB-to-ME Electricity Exports

Power: Study says new power generation not needed (May 25) — Telegraph-Journal, Saint John, NB

The recovery of natural gas has resulted in increased gas supply and in turn dramatically lower prices, making New Brunswick's power generating stations less competitive.

"We have to be realistic," Volpe said. "The exports we were doing before which allowed us to sell surplus electricity to Boston and New York during the summer months to the benefit of New Brunswick - we lost those markets." [Red bold emphasis added.]

U.S. Energy Department Natural Gas Update for May 25 (text) — Bloomberg

Net imports of natural gas continue at much lower levels than in previous years, likely as a result of higher U.S. domestic production and relatively low gas prices. During the report week, net Canadian imports averaged 5.3 Bcf per day, which is 20.7 percent lower than the same week in 2010. Sendout from U.S. liquefied natural gas (LNG) import terminals averaged about 1.1 Bcf per day during the report week, or 8.2 percent lower than the same week in 2010. The lower level of U.S. LNG imports this year 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 future deliveries of LNG to the United States is unclear. [Red bold emphasis added.]

LNG export project means additional jobs for area (May 23) —

In a news release, U.S. Rep. Charles Boustany, R-Lafayette, said the decision [to allow Cheniere Energy to export liquefied natural gas] “proves the United States has an abundance of natural resources to be utilized in both foreign and domestic markets.” [Red bold emphasis added.]

BP may divert Sempra LNG from Tangguh to Gas Negara’s terminal in Sumatra — Bloomberg

BP Plc may divert liquefied natural gas from its Tangguh plant in Indonesia meant for Sempra Energy’s port in the U.S. to PT Perusahaan Gas Negara’s planned terminal in North Sumatra, a government official said.

As much as 140 million cubic feet a day may be diverted, Evita Legowo, director general of oil and gas at the Energy and Mineral Resources Ministry, told reporters in Jakarta today. [Red bold emphasis added.]

Cheniere eyes stake in Lithuania terminal-report — Reuters

The Houston-based company, which is seeking a license from regulators to build an export plant in Louisiana, could become the first company to ship liquefied natural gas (LNG) from the United States since the production of vast shale reserves flooded its markets. [Red bold emphasis added.]

Meilunas: LNG export from US will influence gas price in Lithuania as well (May 24) — The Baltic Course, Baltic States (Latvia, Lithuania, and Estonia)

"The export of liquefied gas from US to the European and the whole world's markets will also determine gas price in Lithuania. At present, we buy gas from Russia and the price of it is significantly higher than in the US domestic market. It is very important that Lithuania's company Klaipedos Nafta has already launched discussions with the American company," Meilunas said. According to him, the US Energy Department's decision to grant export licence to Cheniere is a very important sign to Lithuania as well.

During Lithuanian Energy Minister Arvydas Sekmokas' visit to the US May 9-13, Lithuania and the president of Cheniere signed a memorandum of understanding on purchase and supply of liquefied natural gas. [Red bold emphasis added.]

LNG: Here come the Yanks (May 24) — FN Arena News

At the same time, the US has fallen in love with shale gas and is now madly developing projects across the country to also exploit growing gas demand out of Asia et al. Given the US already boasts abundant natural gas reserves of its own (a factor helping to keep a lid on the spot price), these shale gas projects are targeting LNG export opportunities. So the Yanks are also in the race with the Aussies. The good news, for the Aussies, is that US shale LNG exports are not expected to commence until 2016 – at least a year after the glut of Aussie projects is anticipated to commence export. This should give the Aussies the jump on locking in long term offtake agreements, but then after 2016 we're probably back to having too much gas again, at least until demand again catches up down the track. Barclays has called Asia's LNG demand potential “seemingly boundless”. [Red bold emphasis added.]

Sable Island natgas project to shut 1 week in June (May 24) — Reuters

Natural gas supply from the Sable Offshore Energy Project off the coast of Nova Scotia will be unavailable to flow on the Maritimes Canada pipeline system for one week in June during planned maintenance work, two Spectra Energy pipeline units said Tuesday.

Save the Bay launches new KEYS campaign (May 22) — Middletown Patch, Middletown, RI

“We have a lot to celebrate this year," Jonathan Stone, Executive Director, said. “Additionally, the Hess LNG project has been delayed and is about 18 months behind schedule. We’ve had many partners in rallying for public support and we know we’ve been successful. It’s not over until it’s over.”

News briefs (May 24) — Connect Savannah, Savannah, GA

During last week’s workshop, the City’s emergency management consultant Benjamin Johnson provided an update about ongoing search by the city to find leverage in the debate with Southern LNG [SLNG] over plans to truck liquefied natural gas through the city.

SLNG had not responded to requests for information from Johnson, and still have not provided the Environmental Impact Statement requested by the City.

US LNG export proposals may be too optimistic: SocGen analyst (May 25) — Platts

Societe Generale's Laurent Key said in a late Wednesday note that Sabine Pass' projected in-service date of 2015 is unrealistic, that its $4 billion price tag for liquefaction facilities was "to be taken with a grain of salt," and that LNG buyers would be hard-pressed to find US producers willing to sell gas forward at prices below $6/MMBtu for 2015 or 2016.

Stating the economics at the Freeport terminal are better, Key said gas prices in south Texas would remain at a discount to Henry Hub due to rising volumes out of the nearby Eagle Ford shale.

He also said conversion of such terminals into export facilities is likely to cost between $6.5 billion and $8 billion, rather than the $4 billion and $2.5 billion cited by Sabine and Freeport, respectively.

El Paso’s CEO dishes on company split (May 24) — Houston Business Journal, Houston, TX

Q. What’s your take on the notion that the U.S. could become and exporter of liquefied natural gas?

A. It’s probably not a big growth area for us. We’re not a big believer that you’ll see exports of LNG from the Gulf Coast.

Exmar says no irregularities in bidding for Jamaica LNG project — LNG World News

It is too early for Exmar to comment on the contents or any findings and recommendations contained in the OCG report. Exmar will require time to review the report and to discuss it with the other members of the Consortium and with the Government of Jamaica. However, Exmar is confident that the Consortium’s award as preferred bidder for the Project was made with total transparency and in full compliance with Jamaican bidding regulations as well as with international infrastructure project bidding standards and norms. At no time prior to or during the selection bidding process did Exmar Marine NV act improperly or in an irregular manner.

Golding: LNG project not cancelled — Jamaica Observer, Kingston, Jamaica, West Indies

PRIME Minister Bruce Golding said that Government’s liquid natural gas (LNG) project is going ahead despite the recommendation by Contractor General Greg Christie to stop the tender process for a re-gasification terminal and natural gas transportation system.

Jamaican anti-corruption body calls to end LNG auction it says was tainted (May 25) — Platts

Jamaica's independent anti-corruption commission has recommended that the tender process for a planned LNG project there be immediately abandoned because of overwhelming evidence the process was unfair, tainted and irregular, according to a copy of the 609-page report posted late Tuesday on the website of the Jamaican Parliament.

The commission said police and prosecutors should investigate to determine whether Moore and/or Wedderburn used their offices in a fraudulent or corrupt manner to ensure a future illicit benefit for themselves, Caribbean LNG, and/or the Exmar consortium.

Abort LNG project - OCG (May 25) — Go-Jamaica, Kingston, Jamaica, West Indies

The Office of the Contractor General (OCG), says its investigation into the award of a contract in relation to government’s proposed Liquefied Natural Gas (LNG) project has uncovered glaring irregularities which require criminal investigation.

The OCG said the entire tender process for the project has been compromised, brought into disrepute and tainted by a conflict of interest and a gross lack of objectivity and impartiality.

Mr Robertson did the right thing [Editorial] (May 25) — Jamaica Observer, Kingston, Jamaica, West Indies

After the United States revoked his visitor's visa, it would have been extremely untenable for the country to have a minister who could not travel on national business to that key ally and valued business partner.

[W]e believe that he should have made the decision to resign at the time when the prime minister took the Liquefied Natural Gas (LNG) project under his own wings at Jamaica House, thus essentially relieving Mr Robertson of what appeared to have been his main task as energy minister.

Of course, we are aware that the story is not over, because the country still wants to know why the US would take such a drastic step against a Government minister. We would certainly prefer if Mr Robertson be the first to tell us what went wrong, and not wait until he is prodded by America. [Red emphasis added.]

Christie wants new tender process for LNG project (May 25) — Jamaica Observer, Kingston, Jamaica, West Indies

Christie named former chairman of the board of directors of the Petroleum Corporation of Jamaica (PCJ) Ian Moore and former LNG project co-ordinator for the PCJ Stephen Wedderburn, who are tied to Caribbean LNG (Jamaica), which is part of the Exmar Consortium, saying he was leaving it to the Director of Public Prosecution (DPP) and the commissioner of police to determine whether Moore and/or Wedderburn "used their offices in a conspiratory, fraudulent, corrupt, clandestine and or surreptitious manner to ensure a future illicit benefit for themselves".

Update 1-Mexico trumpets "significant" deepwater gas find (May 25) — Reuters

Pemex has been studying development options for the Lakach gas discovery but low North American gas prices have weighed on the project while reserves found so far are too small to justify a major liquefied natural gas export facility.


2011 May 23

'US Is Natgas Self-Sufficient' —FERC

Even industry-friendly FERC indicates that new LNG import projects are moot,
indicating Downeast LNG is an economically-unviable project

PDF file2010 State of the Markets (Apr 21) — Federal Energy Regulatory Commission

[The following link will open a 650 KB PDF file.]

The course of natural gas prices in 2010 revealed an interesting new market dynamic. Through recent years, natural gas prices moved together with other commodities, represented here by the Goldman Sachs Commodity Index (GSCI). Yet even though the GSCI has doubled in the last two years, natural gas prices have remained relatively flat. This is a result of several factors. Aside from a small amount of LNG imports, at present, the North American natural gas market is self sufficient and largely insulated from the international pressures that other commodities face.

Strong domestic production growth, combined with added pipeline and storage infrastructure, have increased domestic supply and reduced geographic and seasonal price differences. And unlike in 2008, natural gas prices appear to be responding primarily to physical fundamentals, namely growing supply from lower-cost sources, rather than financial market influences. Also, the graph shows that natural gas prices and coal prices have been converging. This has led to some dispatching of natural gas-fired generation before coal-fired generation. [Red, bold, and italic emphasis added.]

GDF Suez diverts LNG away from low-paying U.S. (May 13) — Reuters

Low U.S. gas prices, due to ample domestic supply, have deterred shippers from sending as many cargoes of LNG to U.S. shores this year, instead preferring to supply other markets where oil-linked gas prices have risen way above U.S. levels.

Massive increases in shale gas production in the United States have kept gas prices around $4 per million British thermal units this year, less than half British gas prices and about one third of those in Asia. [Red bold emphasis added.]

Webmaster’s Comments: GDF Suez owns two LNG import terminals inMassachusetts: Distrigas LNG, Everett, Massachusetts — the busiest in the US — and Neptune LNG offshore from Gloucester.

The busiest US LNG importer is diverting cargo overseas, lacking a sufficient market in the USA.

Energy Dept. OKs La. liquid natural gas exports (May 22) — Sify Finance

The Energy Department said this is the first time an exporter has been allowed to send natural gas from the lower 48 states as liquefied natural gas, or LNG, to all U.S. trading partners.

The terminal went into service in 2008 to handle imported natural gas during shortages. That was before domestic supplies skyrocketed as vast amounts of gas in shale rock formations became easier to extract. The Energy Department reported Wednesday that the U.S. has nearly two trillion cubic feet of natural gas in underground storage and supplies have been steadily growing.

Exports are expected to begin in 2015. Cheniere, which did not provide a cost estimate for expanding the terminal for exports, said a final investment decision will be made after it determines how many exporting contracts it can obtain, along with financing and final regulatory approval from the Federal Energy Regulatory Commission. [Red bold emphasis added.]

Energy Department approves Gulf Coast exports of liquefied natural gas (May 20) — Fossil Energy Techline, U.S. Department of Energy

Washington, D.C. - The U.S. Department of Energy today issued a conditional authorization approving an application to export liquefied natural gas (LNG) from the Sabine Pass LNG Terminal in Louisiana, paving the way for thousands of new construction and domestic natural gas production jobs in Louisiana, Texas, and several other states. Subject to final environmental and regulatory approval, Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy, Inc., will retrofit an existing LNG import terminal in Louisiana so that it can also be used for exports. This is the first long-term authorization to export natural gas from the lower 48 states as LNG to all U.S. trading partners. [Red bold emphasis added.]

Update 2-Cheniere gets approval to export US gas across globe (May 20) — Reuters

"With the unprecedented growth in unconventional reserves, supply of natural gas (in the United States) continues to outpace demand dramatically," said Cheniere chief executive Charif Souki.

The approval is subject to the Federal Energy Regulatory Commission giving authorization to build the export plant. FERC is conducting an environmental assessment of the project.

The first and only U.S. LNG export plant was built in Alaska 40 years ago, but is now in the process of shutting down because it is no longer competitive with newer suppliers in Asia. In its place, a wave of new export proposals have emerged to ship low-cost U.S. gas to high-paying markets overseas. [Red bold emphasis added.]

Cheniere unit wins US approval to export LNG from Louisiana (May 20) —

The U.S. has seen its gas shortage turn into a glut as producers learned in recent years to unlock deeply buried energy-bearing rocks. Demand in Asia, meanwhile, is on the rise. And natural gas prices there are tied to the price of oil, meaning that gas that costs $4 per million British thermal units in Louisiana could fetch up to three times as much overseas. [Red bold emphasis added.]

US shale gas shapes up as LNG export rival (May 23) — The Australian, Surry Hills, NSW, Australia

The shale gas industry in the US is shaping as a strong competitor in Asia, and after 2015 the US could be a major exporter of LNG, according to a Standard Chartered Bank report. [Red bold emphasis added.]

Saturated market dictates we build an in-state LNG line (May 21) — Anchorage Daily News, Anchorage, AK

BP and Conoco Phillips' Denali Gas Pipeline project, proposing to take gas from Alaska to Lower 48 markets, has been abandoned due to the long-term oversupply, the result of huge shale gas finds. The project sponsors concluded that it did not make economic sense to continue with efforts to move Alaska's gas to a collapsed gas market.

Much has changed since the passage of Alaska Gasline Inducement Act. As countless energy analysts have acknowledged, the discovery and development of abundant shale gas reserves is a game-changer for the energy world. And it is a radical game-changer to which Alaska has turned a blind eye. We have sat back and watched as Lower 48 and Canadian LNG receiving terminals are being converted into LNG export terminals. It is foolhardy and an outright gambling of Alaska's future to continue to look to the Lower 48 as a market for Alaska's gas. [Red bold emphasis added.]

Taking advantage of abundant natural gas (Apr 21) — Resource Investor

“We’re starting to measure our development inventory in the range of 30, 40 or 50 years, and for an E&P [exploration and production] company historically we would have inventories that we were one or two years ahead of us, if we were lucky,” [said Encana President and CEO Randy Eresman].

“We do see an abundant supply of natural gas in North America, and with the time it will take to significantly increase the demand that can’t be met by continued development of natural gas in North America prices are going to definitely be in the lower band.”

"The one thing we didn’t realize was how many plays would be accessible with the new technologies, and so we had thought that over time we would still see a rising price. Unfortunately for us that’s not the case, so now our business is more focused on being the lowest supply cost in amongst that portfolio of new natural gas plays in North America,” [Eresman said]. [Red & red bold emphasis added.]

Council hikes Fort Getty outlay (Apr 21) — The Jamestown Press, Jamestown, RI

Dick Lynn, vice chairman of the town’s Committee on LNG Threat, said his panel “understands that there is a strong possibility that the [environmental impact statement] will be issued this year. In anticipation of that, we believe that the Town Council would want to be ready to address the [environmental impact statement] if it doesn’t go in our favor. As a result, the threat Committee would like to request a transfer of $40,000 from the undesignated fund balance to engage in potential legal proceedings.”

Councilor Ellen Winsor said that Fall River’s municipal attorney, Steve Torres, and outside attorney Dianne Phillips — who are jointly leading the city’s multi-million dollar fight against the LNG terminal — have informed her that “Save the Bay is accumulating a legal defense fund and planning a fund-raising initiative in coordination with the Coalition for Responsible Siting of LNG Facilities to fund legal maneuvers.”

LNG insider criticizes trucking plan (May 21) — Savannah Morning News, Savannah, GA

A former Southern LNG employee has filed a critical analysis with federal regulators about plans to truck liquefied methane across Savannah.

DaWayne Penberthy, who was the principal for marine operations at Southern’s Elba Island import facility, concludes that LNG trucking exposes the public to “additional and substantial risk,” that the oft-touted safety record for LNG trucking is “at best incomplete,” and that the company is promoting trucking to avoid costly upgrades in liquefaction equipment for one of its large customers.

LNG’s trucking record may look good superficially, but it’s incomplete, Penberthy argues. Carriers operating within a state, as most LNG carriers do, were not required to file hazardous materials incident reports until 1998. A report written by CH-IV International, a private engineering and consulting company, documents 20 domestic trucking accidents dating back to 1971. One death, one injury and at least one LNG fire are reported. Seven of the incidents resulted in releases of up to 20 percent of the cargo, Penberthy writes. [Red emphasis added.]

Bay Street safer, but still poor choice, for LNG (May 19) — Savannah Morning News, Savannah, GA

Bay beat out DeRenne Avenue, where the trucking debate has been focused since August, after consultant Ben Johnson factored into the analysis local data such as the worst intersections for wrecks.

But Johnson stopped short of recommending Bay as the route. Instead, he said, the exercise shows that it appears impossible with the existing infrastructure to safely route the proposed 58 tanker trucks a day of the LNG out of Southern LNG’s import terminal at Elba Island on Savannah’s east side. [Red emphasis added.]

LNG trucking foes say lobbyists, campaign, cash stymied close scrutiny (May 14) — Savannah Morning News, Savannah, GA

“El Paso is following a well-established script of ... extremely generous political giving,” said Kent Harrington, co-founder of Citizens for a Safe Secure Savannah.

“All this means the average citizen is left outside the door with his nose pressed up against the window while corporate money buys a seat at the table,” Harrington said.

State-backed Alaska gas pipeline can supply utilities, revive LNG plant (May 20) — Platts

"Bringing North Slope gas to southcentral Alaska could provide gas to regional utilities and make it possible for ConocoPhillips and Marathon Oil to resume LNG exports," from the companies' Kenai gas liquefaction plant, now set to mothballed this summer, Chenault said.

Bill Popp, CEO of Anchorage Economic Development Corp., said Thursday that resumed shipments of LNG from Kenai is a real possibility if North Slope gas is available at a reasonable cost.

Duke Energy CEO cautions on natural gas (May 20) — Power-Gen Worldwide

Duke Energy Corp. CEO James E. Rogers said the U.S. should be careful about depending on natural gas for energy, Bloomberg reported. The fuel's historic volatility, questions about accessible reserves and the possible environmental implications of drilling all raise concerns, Rogers told reporters after a speech in Washington, D.C. [Red emphasis added.]

Shell to green light world's first floating gas rig (May 20) — The Sydney Morning Herald, Sydney, Australia

Energy giant Royal Dutch Shell is expected to confirm it will invest in a cyclone-proof floating gas rig to be placed in the Timor Sea which can produce millions of tonnes of LNG a year.

The announcement, scheduled for today, will be for the world's first floating liquefied natural gas (LNG) project, off the coast of Western Australia.

Webmaster’s Comments: Well, it is not the first floating LNG project, but is the first dedicated floating LNG liquefaction project. Floating LNG-to-natural gas regasification — the exact process to Shell's project — was first performed offshore from Louisiana in 2005 by Excelerate Energy's Gulf Gateway Deepwater Port. That is the LNG import facility that has recently annouced it is shutting down and and being disassembled, due to lack of market.

If LNG exporting makes sense, then floating offshore liquefaction facilities — miles from civilian populations — would present fewer hazards to the public, in compliance with the LNG industry's own SIGTTO terminal siting best safe practices. Those are best practices being flouted by nearly two-years-late-and-floundering (its site is too small to contain the USDOT's terminal Hazard Zone) Downeast LNG, and that were flouted by zombie (dead at the FERC and state levels, but thinks it's still alive) Calais LNG, and permanently killed-by-FERC Quoddy Bay LNG.

Bin Laden seemed to stick to schemes he knew best (May 22) — (AP) The Atlanta Journal-Constitution, Atlanta, GA

Al-Qaida operatives with enough training could easily manage to capture ships carrying millions of gallons of oil or liquefied natural gas. All they would have to do is imitate the tactics of Somali pirates who already use small boats to overpower tanker crews in mostly remote locations, the experts said. Few supertankers have armed guards, due to gun import laws and the risk of accidental gunfire igniting explosive cargos.


2011 May 18

Natgat Glut Continues to Thwart LNG Imports

Blazing trail for Enbridge — Pacific Free Press

"We think we're in a very strong position with regard to exporting Canadian natural gas in particular. We're currently putting forward our credentials to the proponents - EOG, Apache, Shell and others - that are working on moving Western Canadian natural gas out to the West Coast; and we would hope to be able to see some synergies with the right-of-way that we're working on with our Gateway pipeline out to the West Coast. So, yes, we're very interested in doing that and we would hope to be the the pipeline provider for one or both of those alternatives. (emphasis added)" [Red bold emphasis added.]

Going bi-directional in the Gulf (Jun) — LNG World Shipping Journal [Paid subscription required]

A measure of the confidence in the prospects for US Gulf LNG exports is given by the commitments being made for the liquefaction capacity proposed for the Sabine Pass LNG terminal in Louisiana. Most recently, Sabine Pass has signed a memorandum of understanding to sell Basic Energy, a Dominican Republic power generator, up to 600,000 tonnes per annum (tpa) of LNG. Owned by Cheniere Energy, Sabine Pass opened for business as an LNG import terminal in November 2008. It has one of the largest rega.... [Red bold emphasis added.]

High oil prices, investment in shale drive growth; Canada leads in innovation: PwC — New Technology Magazine, Calgary, AB

"Just a few years ago, we were looking for ways to cope with the day when we would run out of conventional gas by planning for LNG facilities and arctic gas pipelines," says Bolton. "Now, we're trying to deal with a wave of shale gas production that will be flowing to market for decades to come. It's remarkable how the industry has shifted in such a short time period and more change is expected to come with technological innovation as a key driver." [Red bold emphasis added.]

FERC grants Crown Landing LNG developer's request for an extension of time — LNG Law Blog

Yesterday, FERC granted a request by Crown Landing LNG developer Hess LNG to extend the deadline for requesting to use the Commission's pre-filing process. Hess LNG now has until June 30, 2012, to file its request to use the pre-filing process.

OCG cites breaches in LNG bidding — Go-Jamaica, Kingston, Jamaica, West Indies

It appears that the Office of the Contractor General (OCG) has uncovered breaches in the selection of Exmar Consortium as the preferred bidder to operate Jamaica’s Liquefied Natural Gas (LNG)project.

Denali's demise doesn't bode well for state-backed gas pipeline [Commentary] — Alaska Dispatch, AK

First, lets be brutally honest: With the glut of natural gas on the global market today and the depressed prices, the bottom line is no Alaska natural gas pipeline project is economical currently. In June 2008, natural gas was selling for almost three times the price it stands at today. With the saturation of gas availability worldwide and the price collapse, the economics for Alaska's gas producers are all upside down.

This impacts everything from a large-diameter line through Canada to the over-hyped LNG line to Valdez. As the Denali group discovered, you can't find customers willing to sign the necessary long-term shipping and pay contracts worth billions with so much uncertainty in market conditions.

Oregon LNG loses challenge against county — The Daily Astorian, Astoria, OR

Clatsop County Circuit Court Judge Phil Nelson issued a ruling Tuesday which upheld the right of the Clatsop County Commission to reject Oregon LNG’s proposed liquefied natural gas pipeline project.

In [a letter from the chairman and the president of the company funding Oregon LNG included in their annual report], they comment on the status of the Oregon LNG project and the long permitting process involved.

Since January 2007, “we have been working with the Federal Energy Regulatory Commission (‘FERC’) to permit the site for an onshore LNG terminal,” the letter reads. “That process has been much slower, challenging and frustrating than we anticipated. If we had known what we were getting into, we would not have done it!” [Red bold emphasis added.]

Clatsop Court Rules Against LNG Company (Mar 17) — OPB News, OR

The Clatsop County Board of Commissioners approved the pipeline last November. But soon after, the project’s opponents appealed. And, a new majority took over the Clatsop County Commission.

The Clatsop County Circuit Court has now ruled that it has “no authority” to force a land-use approval, as the LNG company wants.

LNG Americas Summit set to start next week (USA) — LNG World News

This Summit is the only place to hear from and network with the key international LNG buyers and suppliers, get the latest industry developments, and set the Americas LNG market in a global context.

Questions to be disscussed:
- Will the US become an exporter?
- What does US shale mean for the LNG industry?
- What is the future of LNG in the Americas?
- What new technological breakthroughs are on the horizon?


2011 May 17

US is Nearly Free of Natural Gas Imports

Shale gas eroding US LNG demand (May 16) — Petroleum Ecomomist [Paid subscription required]

SHALE-gas development has transformed the North American gas market, slashing US liquefied natural gas (LNG) imports again last year. But while other countries hope to replicate this success with their own shale reserves, the global affect on LNG demand is unlikely to be quite so dramatic.

GDF Suez diverts LNG from U.S. (May 14) — LNG World News

Low U.S. gas prices, due to ample domestic supply, have deterred shippers from sending as many cargoes of LNG to U.S. shores this year, instead preferring to supply other markets where oil-linked gas prices have risen way above U.S. levels.

Massive increases in shale gas production in the United States have kept gas prices around $4 per million British thermal units this year, less than half British gas prices and about one third of those in Asia. [Red bold emphasis added.]

Technically recoverable shale gas resources jump 134 percent (May 16) — Canada Free Press

The increase in shale gas brings total U.S. recoverable natural gas resources to 2,629 trillion cubic feet. This is a welcome change because as little as 10 years ago, analysts and politicians said that the United States could not drill its way out of a natural gas shortage. But, with new technology and investment, we did just that.

Domestic shale gas production has turned the U.S. natural gas import market around. The U.S. had thought it needed to build re-gasification terminals to re-gasify imported liquefied natural gas (LNG) from abroad, including the Middle East, to compensate for lower domestic production and declining pipeline imports from Canada. Instead, natural gas production, estimated growing at an annual rate of 0.9 percent a year through 2035, is compensating for lower pipeline and LNG imports and meeting expanding demand.

Shale gas has made the United States practically free of imported natural gas. In 2008, on net, the U.S. imported 13 percent of its natural gas supply. That share is expected to fall to less than 1 percent by 2035, according to the EIA’s Annual Energy Outlook 2011. And not only are natural gas imports affected, but U.S. natural gas prices at the wellhead dropped by 54 percent between 2008 and 2009. [Red bold emphasis added.]

Cheniere, Lithuanian company sign MOU for LNG supply — LNG Law Blog

Last week Cheniere Energy, Inc. and Lithuanian LNG terminal developer Klaipedos Nafta signed a Memorandum of Understanding (MOU) to negotiate supply options for the Klaipeda LNG import terminal on the eastern Baltic Sea. According to Cheniere's press release, the two companies will begin negotiating a supply arrangement that is expected to involve U.S.-sourced LNG exported via the Sabine Pass LNG terminal. [Red bold emphasis added.]

Apache executive: Kitimat LNG export terminal project under way — Automated Trader

HOUSTON -(Dow Jones)- The head of Apache Corp.'s (APA) Canadian business said Tuesday that work has begun on the company's planned Kitimat liquefied natural gas export facility and that the first super-chilled natural gas could be shipped from there by late 2015.

The Kitimat project was originally planned as a natural gas import facility. But the recent abundance of cheap natural gas unlocked from North America's unconventional reservoirs prompted its owners to recast the project as an export terminal.

Mexico stepping up natural gas imports as Pemex fields lie idle — San Francisco Chronicle, San Francisco, CA

CFE, as the utility is known, is expected to start the construction this year of "about a half-dozen" power generation plants using fossil fuels, according to Alcocer. Increased demand for gas may boost sales from U.S. companies, such as Apache Corp. and Cheniere Energy Inc., that are building LNG export terminals betting they can find more foreign buyers. [Red bold emphasis added.]

BP, Conoco scrap planned $35 billion Alaska Pipeline — The Wall Street Journal

Alaska is believed to have at least 35 trillion cubic feet of gas, 35% more than the rest of the U.S. produced last year. But most of that gas is trapped in the state, with no way of reaching users. ConocoPhillips plans to close the only export terminal later this year.

[I]n the past three years, companies have figured out how to tap vast new gas fields in Texas, Louisiana, Pennsylvania and other states. The new fields have led to a surge in gas production, pushing down prices.

Many experts have been skeptical that the Alaska pipeline remained viable amid the natural-gas glut. In December, the Energy Information Administration, the federal government's energy statistics agency, concluded the project would be uneconomic for at least the next 20 years.

In statements Tuesday, BP and Conoco both said they aren't abandoning hope of exporting gas from Alaska. One possibility would be for them to join the Exxon-TransCanada project, which has the backing of the Alaskan government. That project, which would cost between $32 billion and $41 billion, would either carry gas to Canada, where it would join other pipelines carrying gas to the U.S., or else to the Alaskan port of Valdez, where it would be turned into liquefied natural gas for export overseas. [Red bold emphasis added.]

Denali withdraws from Alaska pipeline race — Calgary Herald, Calgary, AB

Since Denali began its efforts in 2008, the North American gas market has changed significantly, primarily as a result of the development of shale gas resources that have been blamed for creating a supply glut and driving prices to decade lows. Denali said “this has created a very difficult environment in which to secure financial commitments from potential customers.” [Red bold emphasis added.]

Letter submitted to FERC argues siting challenges for Crown Landing LNG also apply to Weaver's Cove LNG — LNG Law Blog

In a letter submitted to FERC last week, opponents of the Weaver's Cove LNG import project argue that siting challenges facing Hess LNG, the developer of the Crown Landing LNG project as well as the Weaver's Cove project, apply to both projects. As Crown Landing LNG asked FERC to extend the deadline for the company to develop its project due to siting difficulties caused by new LNG exclusion zone guidelines issued by the U.S. Pipeline and Hazardous Material Safety Administration (PHMSA), the letter argues that Weaver's Cove LNG also is unlikely to be able to comply with the PHMSA requirements.

Webmaster’s Comments: Downeast LNG suffers from the same inability to contain the Hazard Zone within the project fence line.

Massive Puerto Rico pipeline triggers debate (May 14) — The Associated Press

SAN JUAN, Puerto Rico (AP) — Puerto Rico's governor is proposing to solve soaring energy prices on this oil-dependent U.S. island with a massive natural gas pipeline that would cross some of the territory's most fragile ecosystems and archaeological sites.

The pipeline proposal, which Fortuno has dubbed "The Green Way," also has sparked corruption allegations. The largest contract so far has gone to an engineering firm with no pipeline construction experience that is owned by a childhood friend of the governor. Fortuno has denied any conflicts of interest.

The pipeline would originate in southern Puerto Rico, where billions of cubic feet of liquefied natural gas would be imported and regasified. The line would then bisect the island and veer east until it nearly reaches the capital of San Juan.

It would traverse 235 rivers and wetlands, cut through more than 60 miles (100 kilometers) of the island's northern Karst region and possibly affect up to 32 endangered species, including the Puerto Rican parrot, crested toad and boa, according to the Corps of Engineers.

BP, ConocoPhillips stop development of Denali ANS gas line — PennEnergy

The second option would transport gas about 800 miles from ANS to Valdez, Alas., where it would be converted to LNG in a facility to be built by others and then delivered by ship to North American (sic) and internationally.

Q&A: Consultant says shale overheating (May 14) — Houston Chronicle, Houston, TX

The reason people are looking at LNG exports is, "What are we going to do with all of this gas? If we could export it, hey, maybe we would get a better price." If I were an off-taker, I would wonder how long that would last and how comfortable I was with that.

All change for the global LNG market? (May 16) — PRLog

The World LNG Series: Americas Summit for ten years has been the only international LNG event in the Americas which sets this market in a global context by bringing major suppliers to the region, allowing senior executives the chance to discuss key challenges and look for solutions together.

Amongst other topics on the agenda this year, the focus will be on liquefaction, re-export and other changing business models in the Americas LNG business allowing participants to develop their company strategies in line with changes within the industry.

World LNG Series: Americas Summit runs from May 23-26 at the Marriot Riverwalk, San Antonio.


2011 May 12

Massive Amounts of North American Natural Gas

Shale gas, LNG & the coming impact of wet shale — Energy Tribune

[I]n what must be one of the worst examples of bad timing in any industry, the unconventional wisdom came up with massive new shale reserves, not merely providing the solution but turning it on its head. Supply was now so massive that demand fears were irrelevant. Shale gas emerged so rapidly and so successfully that North America had the exact opposite problem: they needed a bigger markett.

The North American shale experience started in the Barnett Shale in Texas in 2002, but it is the Marcellus which has evolved into the mother of all shales. The Marcellus had reserve estimates in January 2007 of 5 Tcf but 50 Tcf by December the same year. Today it is ten times that: the second largest gas field on earth has come out of nowhere. The size would be significant enough anywhere, but the bounty lay within commuting distance of one of the great gas markets of the planet in the North Eastern United States. The Marcellus is to natural gas what Spindletop was to oil a century ago - and more. The Marcellus experience is almost certainly repeatable in multiple locations on every continent.

Yet LNG marketeers have been slow to understand the looming impact of North American shale on world LNG markets. Just as the modern shale combination of hydraulic fracturing and horizontal drilling was opening up undreamt of deposits, U.S. LNG import capacity was built or upgraded. [Red bold emphasis added.]

Webmaster’s Comments: Floundering Downeast LNG, zombie Calais LNG, and totally-dead Quoddy Bay LNG are included in those who have been slow to understand the impact of North American's natural gas boom.

FACTBOX-North America natural gas export plans (May 11) — Reuters

NEW YORK, May 11 (Reuters) - Southern Union and BG Group filed an application to build a U.S. natural gas export plant this week, the third such filing in a year as companies look to make the most of cheap domestic gas compared to higher-paying markets in Europe and Asia.

Massive increases in North American gas production have eroded import needs and prompted companies to consider exporting domestically-produced gas overseas in the form of liquefied natural gas (LNG).

In addition to the three terminals which have filed for permits in the United States [Sabine Pass, LA; Lake Charles, LA; Freeport, TX], there are two proposals in Canada [both at Kitimat, BC]. Three other projects are being considered in North America [Cove Point, MD; Jordan Cove, OR; and Prince Rupert, BC]. [Red bold emphasis added.]

Shale gas exports set to grow (LNG, CQP) —

Cheniere Partners owns 100 percent of the Sabine Pass LNG terminal located in western Louisiana on the Sabine Pass Channel. The company, along with Chesapeake, is working on building the first liquefaction plant in the U.S. in over 40 years. The plant could start exporting LNG by 2015 and could be huge for the domestic natural gas industry. CEO Charif Souki recently said of the project, "With the abundance of estimated natural gas reserves and the expectation that gas prices will remain competitive for years to come, the U.S. is positioned to become an attractive, low cost alternative supplier of natural gas for international buyers." [Red bold emphasis added.]

U.S. Energy Department Natural Gas Update for May 11 (text) — Bloomberg

Natural gas consumption fell by 7 percent from last week, while supply fell slightly, according to data from BENTEK Energy. Decreases in residential and commercial demand a reflection of the warm temperatures largely accounted for the overall decline in consumption. However, compared with the same week last year, residential and commercial consumption was about 1 percent higher. Electric power consumption increased by almost 5 percent from last week, likely reflecting cooling demand in areas of the United States where average temperatures reached into the upper 70s. Production was up slightly from last week, and almost 7 percent from the same week last year, but overall supply fell by about .2 percent as Canadian pipeline imports and LNG imports both fell. LNG imports dropped about 20 percent from last week and were down 40 percent from the same week last year. Reflecting continued weakness in LNG imports, this week Southern Union and BG Group filed an application with the U.S. Department of Energy for permission to export domestically produced natural gas from the Lake Charles LNG import terminal in Louisiana. [Red bold emphasis added.]

Biggest oil-gas premium may spur North America LNG exports: Energy markets — Bloomberg

The growing price difference is encouraging U.S. companies to build LNG export plants, betting they can find buyers in nations such as Korea and Japan, where contracts have been pegged to crude since the 1970s for lack of an international benchmark price. Apache Corp. and Cheniere Energy Inc. are among companies planning to build nine terminals to export LNG from North America starting in 2015.

U.S. shale gas production grew by an average of 48 percent a year from 2006 to 2010, according to the Energy Department in Washington. Output will grow almost threefold from 2009 to 2035, the department predicted in its Annual Energy Outlook release on April 26.

The U.S. is already re-exporting LNG cargoes. Banks such as Citigroup Inc. and companies including ConocoPhillips last year shipped a record 12 previously imported cargoes to countries including Japan, South Korea, Spain and the U.K., according to the Energy Department. Five cargoes were transported in the first two months of this year, department data show. [Red bold emphasis added.]

Cheniere and Klaipedos Nafta sign agreement to address natural gas needs and assess LNG options for the Lithuanian company [Press release] (May 11) — PR Newswire

HOUSTON, May 11, 2011 /PRNewswire/ -- Klaipedos Nafta (Vilnius: KNF1L) and Cheniere Energy, Inc. announced today that they have signed a Memorandum of Understanding ("MOU") to address Klaipedos Nafta's future natural gas needs and assess LNG purchase and supply options. This agreement has been signed at the Embassy of the Republic of Lithuania in the United States of America.

"Today we signed an MOU with Cheniere to initiate discussions on natural gas supply options and the optimal structure under which Cheniere would be the future LNG supplier for our Klaipeda LNG receiving terminal project being designed with an initial LNG import capacity between 1.5 to 2.2 million tonnes per annum ("mtpa"), with expansion capabilities. Due to intensive shale gas developments, the U.S. has the potential to become a meaningful exporter of natural gas, which would not only benefit our project but our country as well, by providing a more diversified source of supply in Lithuania and boosting energy security," said Rokas Masiulis, General Manager of Klaipedos Nafta. [Red bold emphasis added.]

Pennsylvania congressman backs export of shale gas (Apr 20) — Pittsburgh Tribune-Review, Pittsburgh, PA

"The fact is, we have a bountiful amount of it (natural gas)," he said. "We could probably be in a position to meet our energy needs and, if need be, be able to export."

The amount of liquified natural gas -- natural gas that is condensed into liquid and highly pressurized -- that the [Sabine Pass] Louisiana port wants to export would amount to approximately 2.2 billion cubic feet per day of ordinary natural gas, according to the Public Gas Association.

Thompson said he supports a similar export facility under consideration at Dominion Energy's Cove Point LNG terminal and port in Maryland. That terminal could be used to export Marcellus shale gas. [Red bold emphasis added.]

Distrigas provides LNG to the first LNG refueling station east of the Mississippi River — Digital Journal

BOSTON, May 12, 2011 /PRNewswire/ -- Distrigas of Massachusetts LLC, a subsidiary of GDF SUEZ Energy North America, announced that it is providing LNG (liquefied natural gas) to the first LNG refueling station east of the Mississippi River. Enviro Express Natural Gas, LLC owns and operates the combination LNG and CNG (compressed natural gas) refueling station in Bridgeport, Connecticut, adjacent to Interstate 95. This represents the first time LNG has been sold as a vehicle fuel from Distrigas's Everett Marine Terminal.

Webmaster’s Comments: Distrigas has a surplus, demonstrating how domestic natural gas is supplanting the importance of imported LNG.

Council hikes Fort Getty outlay (Apr 21) — The Jamestown Press, Jamestown, RI

The councilors also agreed to fund an entirely new set-aside: $40,000 for potential legal fees to fight the liquefied natural gas terminal proposed by Hessowned Weaver’s Cove Energy. Councilor Bob Bowen formally proposed the set-aside, which would not increase the tax rate because it would be drawn from the town’s undesignated fund balance.

Advocates for LNG terminal in bay spinning the issue [Op-ed column] — The Jamestown Press, Jamestown, RI

In opposition to Mr. Lynn’s legitimate concerns about the negative economic impact of the project, Mr. Gehrig presents few facts to support Weaver’s Cove’s sales pitch of rescuing the economy. As the Federal Energy Regulatory Commission reported last fall, domestic supplies are increasing, the price differential between the Northeast and other parts of the country is shrinking, and pipeline capacity in the Northeast is expanding rapidly. If natural gas prices fall, it may have nothing to do with Hess. [Red emphasis added.]

Mr Golding's failure to discuss energy [Editorial] — The Gleaner, Kingston, Jamaica, West Indies

The administration's declared policy is to convert to liquefied natural gas (LNG) as the fuel of choice for power generation, and it has named a preferred bidder for the LNG storage and distribution facilities. It has also invited bidders for 480 megawatts of electricity-generating capacity, based on LNG.

And it steadfastly refuses to share with the public an independent technical review of the LNG project. [Red emphasis added.]

Alaska exports hit $4.2 billion in 2010 — The Bristol Bay Times, Anchorage, AK

The value of Alaska's LNG exports to Japan in 2010 was $366.2 million, an increase of 42.7 percent, reflecting much higher global prices.

Japanese trio join race for Canadian shale — Petroleum Economist Unconventional [Paid subscription required]

CHUBU Electric Power, Tokyo Gas and Osaka Gas are each taking a 7.5% stake in a Canadian shale-gas project from fellow Japanese player Mitsubishi as they rush to make up for the loss of nuclear power in Japan’s energy mix.
The deal sees them take an interest in Cordova Gas Resources, a unit of Mitsubishi that owns 50% of the Cordova Embayment shale-gas...

Bentek Energy predicts U.S. LNG imports will average 1.1 Bcf/d over five years — LNG Law Blog

Bentek Energy released a report this week predicting that U.S. LNG imports wil average 1.1 Bcf/d over the next five years. The report also notes that it does not expect exports of domestic U.S. gas as LNG to begin within the five-year forecast period.

Webmaster’s Comments: The predicted total US LNG imports are equivalent to the capacity of just one LNG import terminal the size of Canaport LNG.


2011 May 10

LNG Export Goldrush Springs from Dead Import Goldrush

British Columbia the new gatekeepr of Canadian oil and gas growth (Apr 13) — The StarPhoenix, Saskatoon, SK

Two LNG [export] terminals are being planned for Kitimat, and a third one is at an advanced planning stage, potentially transforming the B.C. coast into a busy energy export hub. [Red bold emphasis added.]

Text:US EIA May outlook: Lowers 2011/12 oil price forecast -2 —

Growing domestic natural gas production continues to reduce reliance on natural gas imports. Because of the earthquake in Japan and subsequent nuclear generation outages, Japan's demand for liquefied natural gas (LNG) as a replacement fuel for electric power generation is expected to increase, contributing to higher global LNG prices. Japan is already the largest importer of LNG in the world, with daily imports averaging more than 9 Bcf/d in 2010. EIA projects U.S. imports of LNG will average 0.9 Bcf/d in 2011, down 21 percent from 1.2 Bcf/d in 2010. [Red bold emphasis added.]

Experts and Politicans debate whether natural gas will help America out of its energy bind — Hartford Advocate, Hartford, CT

The issues involved are massive. By many estimates, the U.S. has something like 100 years' worth of domestic natural gas reserves in places like Alaska, western New York, Texas, Louisiana, Wyoming, Pennsylvania and Colorado. [Red bold emphasis added.]

U.S. reduces 2011 natural gas output forecast by 0.1% — Bloomberg

Marketed gas production will average 63.23 billion cubic feet a day in 2011, down from 63.32 billion estimated in April, the Energy Department said in its monthly Short-Term Energy Outlook, released today in Washington. The estimate is up 2.3 percent from 61.83 billion produced in 2010.

LNG imports will average 940 million cubic feet a day this year, down from 1.05 billion forecast in April.

Natural gas for June delivery rose 2.8 cents, or 0.7 percent, to $4.182 per million Btu at 12:30 p.m. on the New York Mercantile Exchange. Prices have declined 5 percent this year. [Red bold emphasis added.]

Southern Union, BG plan to export LNG (May 9) — Houston Chronicle, Houston, TX

In its earnings announcement Monday, Southern Union said the companies have formed a joint venture for the export application, which will require modifying the import terminal by adding equipment to turn natural gas into a liquid. The application asks for the right to ship more than 2 billion cubic feet per day of natural gas over a 25-year period.

Freeport LNG just south of Houston and Cheniere Energy's Sabine Pass LNG Terminal have both received permits to re-export LNG shipments that are in storage at the sites, and have both applied for licenses to super-chill natural gas into a liquid to export. [Red bold emphasis added.]

Webmaster’s Comments: Southern Union's Lake Charles LNG import terminal is the third US domestic natural gas-to-LNG liquefaction for export project.

U.S. gas: Futures bounce back from three-week low — Drovers Cattle Netword

The supply glut has stoked interest in exporting liquefied natural gas. U.S. regulators have before them three requests to export domestically produced natural gas from owners of liquefied natural gas import facilities.

Most recently, Southern Union Company (SUG) said Monday that is has, along with partner BG Group PLC, asked regulators for permission to export 2 billion cubic feet per day from an existing liquefied natural gas import facility in Lake Charles, La., over a 25-year period. [Red bold emphasis added.]

Cheniere faces cash shortage (May 9) —

Cheniere Energy, an LNG importer that has lost money for 13 consecutive years, may have to sell assets and restructure debt to avoid running out of cash as soon as next year.

US gas-import terminals constructed during the last decade have languished as new drilling techniques unlocked a bonanza of domestic supply, pushing prices too low to justify costlier imports from overseas.

How to profit from diverging natural gas prices (Apr 15) — iStockAnalyst

America: Awash in Natural Gas

It's no secret that we have a newfound abundance of natural gas under domestic soil. That's largely come about due to improved surveying techniques and the deployment of horizontal drilling and hydro-fracking technologies.

The unlocking of shale gas has really become a positive "black swan" event for the future of U.S. energy policy.

Bottom line is this: Here in the United States, natural gas is plentiful, and it will remain relatively inexpensive for the foreseeable future. [Red bold emphasis added.]

Fall River resident honored for work in opposition to proposed LNG facility (May 9) — The Herald News, Fall River, MA

Fall River resident Joe Carvalho will be honored at the Save The Bay annual meeting for his work on the Hess LNG opposition. The 41st annual meeting for Save The Bay will be held at the Easton’s Beach Rotunda on Memorial Boulevard in Newport on Thursday, May 19, from 5:30 to 7:30 p.m. The event will feature a keynote address by Will Baker of the Chesapeake Bay Foundation.

LNG plan hits a roadblock (May 9) —, NJ

"Without an approved vapor dispersion model, Crown Landing cannot determine how much land and what land use restrictions and facility configurations are required to site any land-based LNG facility," Shearer wrote.

[I]n July 2010, the U.S. Department of Transportation ruled that a risk calculation model known as SOURCE5 can no longer be used to "compute vapor gas dispersion exclusion zone distances," the CEO wrote.

There are no known alternative computer models to SOURCE5, he said. [Red emphasis added.]

Webmaster’s Comments: The USDOT discovered that its existing regulations were not sufficiently safe.

House passes LNG-study resolution (Apr 14) — Savannah Morining News, Savannah, GA

ATLANTA -- The House passed a resolution Thursday urging monthly meetings about the routes of trucks transporting liquefied-natural gas through Savannah.

Golden Pass gets full FERC approval — Upstream Online

The terminal will now be able to import as much as 15.6 million metric tonnes of LNG per year, with a send-out capacity of at least 2 billion cubic feet of gas per day, the company said.

Golden Pass announces Phase 2 commissioning completion and FERC authorization to place in service [Press release] — (Golden Pass LNG) PR Newswire

Phase 2 commissioning activities and performance tests of its liquefied natural gas (LNG) receiving terminal were successfully completed in late April. Golden Pass LNG previously announced that Phase 1 commissioning activities and performance tests were completed in early March. As also previously announced, the FERC authorized Golden Pass Pipeline LLC (Golden Pass Pipeline) to place in service the 69-mile interstate pipeline that transports gas from the terminal facilities to downstream markets. Combined Phase 1 and Phase 2 operations will enable nominal send out capacity of more than 2 billion cubic feet per day of natural gas from the terminal.

Horn River shale gas resource base doubled: Good news for Kitimat — Oil and Gas Insight [Paid subscription required]

BMI View: The doubling of the potential shale gas resource base in the Horn River Basin augurs well for the Kitimat LNG export project and the future of the gas export trade from Canada to east Asia.

The case for amending House Bill 2700 [Op-ed column] —, OR

If passed in its current form, HB2700 could let giant energy companies apply for permits to build pipelines on private land without the landowner's knowledge or consent. This is power the liquefied natural gas (LNG) industry has been seeking for years. Stonewalled by public opposition to their pipelines, LNG companies hope to make it easier to commandeer private land with less public scrutiny. Rolling LNG fast-track legislation into HB2700 is a clever ploy to gain support from municipalities that just want to be able to build needed infrastructure more easily.

How a young girl united a community against natural gas exploitation (Apr 15) — Treehugger

Erica worked in concert with the Sierra Club and Latino No on LNG group to mobilize the youth and Latino voice in protests and public meetings. She organized weekly protests at the BHP Billiton offices in Oxnard, met regularly with community members, marched through neighborhoods that would be most affected, reached out to the media, and brought more than 250 high school students to a critical rally.


2011 May 6

100-Years' Natural Gas Supply; Ample LNG Capability

Lloyd's List: Natural gas to step in to fill nuclear breach (May 5) — Poten & Partners

The US is among the best countries positioned to benefit from natural gas — a clean fuel which can be burned in power plants that could be constructed in as little as 18 months. Price volatility for US natural gas that has run rampant in past years has been tamed. Even as oil and other commodities spike in price, US natural gas continues to trade at about $4/MMBtu, defying global commodity pressures.

According to the Department of Energy, the US’ proven net recoverable natural gas reserves rose 11% in 2009 to 284 trn cu ft largely due to drilling’s technological breakthroughs. Most experts believe these resources can satisfy over 100 years of US demand at current levels. Furthermore, American industry is the recognised world leader in gas extraction technology which is commercialising the nation’s vast shale gas resource. This technology is already being transferred overseas, enhancing gas reserves in other continents.

Also, to further strengthen the US supply position, there are also ample liquefied natural gas receiving terminals to assure the availability of imported gas to American households, power plants and industry. Investments are being contemplated at several of these facilities to enable exports as well. This is encouraging for the development of the US’ abundant gas reserves, assuming policymakers do not prohibit US exports for fear of creating higher prices for the American consumer. At $4/MMBtu, gas prices are very competitive with oil and comparable to coal when used to generate power. Gas is certainly cleaner than coal and more reliable than renewables such as wind and solar. [Red bold emphasis added.]

U.S. Energy Department natural gas update for May 4 (May 5) — Bloomberg

U.S. net pipeline imports from Canada were significantly lower during the report week in comparison with the prior week, continuing a trend since the beginning of the year. According to BENTEK, which monitors flows on the continental pipeline network, net imports from Canada during the report week decreased 4.3 percent relative to the prior week and ended the week below 6 Bcf per day. Both Canadian and liquefied natural gas (LNG) imports are significantly lower than the prior year at this time, likely as a result of continuing supply strength from domestic drilling, particularly in the shale formations. Pipeline and LNG imports during the report week were, respectively, 8.2 percent and 73.8 percent lower than last year at this time. [Red bold emphasis added.]

EIA tots up ‘vast’ shale resources (Apr 7) — Petroleum Economist

[In the US], shale-gas reserves now account for more than a third of the country’s total, and half of the lower 48 states’ resources, the EIA said. Shale gas will the largest contributor to the projected growth in gas production, it added, forecasting that by 2035 output will meet almost half of the US’ total.

US not ready for debate on exporting shale gas: Shell official (Apr 26) — Platts

"We're still waking up to the fact that we have this enormous energy resource in our backyard," Marvin Odum said at the US Energy Information Administration's conference in Washington. "It completely changed the way we look at energy as a country."

Odum, in the same address, gave a dim outlook for a proposed gas pipeline from Alaska's North Slope to Alberta. In December, EIA dropped the estimated $40 billion project from its long-term supply forecast, deciding [Alaska's Aorth Slope natural gas pipeline] would not overcome competition from cheaper, closer-to-market shale gas and get built in the next two decades.

The outlook for an LNG derivatives market (May 5) —

LNG demand is also set to rise in Europe as declines in indigenous production coincide with higher demand, particularly in 2015–2020, according to Morgan Stanley. However, in the US, the world’s biggest gas consumer, demand for LNG has fallen below earlier expectations due to the shale gas revolution. US shale gas production is set to reach 12.2 trillion cubic feet in 2035, or 47% of total US production – compared to 16% in 2009. As a result, the need for LNG imports has fallen dramatically. The US Energy Information Administration’s (EIA) latest Annual energy outlook predicts imports will meet 18% of US demand by 2035, down from 24% in 2009. [Red bold emphasis added.]

Advantage: USA — Investing Daily

The US is the world’s largest producer of natural gas, producing almost as much natural gas as the entire Middle East and Africa combined.

Thanks in part to two new technologies that have revolutionized the development of unconventional shale fields, the US producing all-time record quantities of gas. That oversupply has depressed prices.

The US has no real need to import natural gas in the form of liquefied natural gas (LNG). In total, the US imports less than 10 percent of the gas it consumes, with virtually all of those imports coming from Canada. [Red bold emphasis added.]

Cheniere cash dwindles amid wait for gas exporting permit — Bloomberg

Cheniere Energy Inc., a liquefied natural-gas importer that has lost money for 13 consecutive years, may have to sell assets and restructure debt to avoid running out of cash as soon as next year.

U.S. gas-import terminals constructed during the last decade have languished as new drilling techniques unlocked a bonanza of domestic supply, pushing prices too low to justify costlier imports from overseas. Cheniere’s 9.75 percent, $400 million term loan issued in 2007 matures in May 2012, according to data compiled by Bloomberg.

Cheniere shares more than tripled in the past year as the company took steps to convert its Gulf of Mexico gas-import terminal into a facility that would liquefy the fuel for export aboard tanker ships. The company is awaiting a federal regulatory decision on its request for permission for the project. [Red bold emphasis added.]

Nexen Inc. sees future n (sic) liquefied natural gas (Apr 28) — Calgary Herald, Calgary, AB

Production in B.C. would be a given to move to Asian consumers, particularly as North American markets are flooded with domestic volumes, he said. "There are lots of hurdles to jump through, but I think it represents a very realistic possibility," he told reporters after the AGM. [Red bold emphasis added.]

Mexico eyes shale-gas ramp-up to boost petrochemicals sector (Apr 27) — (Reuters) The Province, Vancouver, BC

[State oil monopoly Pemex] has been slow to get into the gas business due to low returns compared with oil drilling, forcing Mexico to import gas from the United States and in the form of liquefied natural gas.

Shale gas has radically altered the North American natural gas industry, dramatically boosting U.S. gas reserves and putting off the need for large scale imports from outside North America for decades. [Red bold emphasis added.]

Canaport LNG shut for planned work, back by June (May 5) — Reuters

Canaport LNG, a partnership between Repsol with 75 percent and Irving Oil, with 25 percent, confirmed maintenance began and terminal operations were shut down. "The warranty related maintenance will be completed within the month of May," a spokeswoman said.

Playing politics with investments [Editorial] (Apr 26) — The Providence Journal, Providence, RI

Politicians, recklessly playing games with our region’s need for affordable and reliable energy, have been busy whipping up public fears of liquefied natural gas, hoping to cash in with votes and campaign contributions from the not-in-my-backyard (NIMBY) crowd.

Webmaster’s Comments: The Providence Journal editorial staff are ardent supporters of the Weaver's Cove LNG import terminal. While the newspaper is correct that Massachusetts politicians have been playing politics regarding LNG and that state's investments, the Providence Journal is not viewing the LNG project with an informed and objective eye. Rather, it ignores the LNG industry's own terminal siting best safe practices, ignores the overabundance of natural gas already available to the region, and resorts to calling names.

New: Senate strikes blow against LNG facility (Apr 7) — GoLocalProv, Providence, RI

The Senate vote supports the opposition to the proposed LNG facility among East Bay RI and Massachusetts communities, including Aquidneck Island and Jamestown, as well as advocacy organizations such as Save The Bay, which is based on concerns about public safety in the event of a disaster, disruption of boating taffic on the bay caused by passing LNG tankers, and onshore impacts that would involve having to close the Newport Bridge whenever tankers were to pass under the span.

USA: Hess delays Crown Landing LNG project — LNG World News

A company hoping to salvage plans for a liquefied natural gas terminal along the Delaware River opposite Claymont has asked federal regulators for a third permit deadline extension, citing delays caused by the discrediting of a key risk analysis model for LNG terminals nationwide.

The company’s timetable has been disrupted by a little-known ruling that a widely used model for calculating spill and fire risks at LNG terminals could result in “truly gross underestimates of the hazard.”

No alternative model has been approved for risk calculations required by the federal Pipeline Hazardous Materials Safety Administration, FERC and Department of Tranportation. The DOT barred use of the challenged model on July 16 and has since ordered all pending and approved terminals to submit revised estimates of vapor and fire hazards.

“Generally speaking, I know of no situation where the use of SOURCE5 [models] could do anything other than give you an unrealistically shorter distance” for vapor hazards, said Jerry A. Havens, a professor and director of the Chemical Hazards Research Center at the University of Arkansas.

Havens has warned for years that accepted risk estimating methods were inaccurate.

Webmaster’s Comments: A similar Thermal Hazard Zone issue applies to the Downeast LNG project, preventing the company from complying with FERC information requests.

Potential LNG anchorage proposed offshore in Rhode Island Sound [Opinion] — The Jamestown Press, Jamestown, RI

Simply put, the Coast Guard and Homeland Security proposed an offshore anchorage in Rhode Island Sound, south of Brenton Point, for use by vessels waiting to enter Narragansett Bay. This would likely include LNG tankers. This is the spot where we currently see what we now consider very large tankers waiting to enter our bay. LNG tankers would dwarf them and be visible nearly every other day as we look out to sea.

…Weaver’s Cove could alleviate this certain hit to our bay’s economy and environment by merely doing as another facility in Gloucester, Mass., has done. They can simply site it offshore by 20 miles and this issue goes away for all of us.

Webmaster’s Comments: Since there is no need for the Weaver's Cove LNG terminal, due to the prolific amount of domestic natural gas already available, the ultimate solution — as nearly two score of other LNG import projects have already done since 2005 — is for Hess Energy to scrap the project.

Delaware River liquid natural gas terminal delayed by risk calculations — The News Journal, DE

A company hoping to salvage plans for a liquefied natural gas terminal along the Delaware River opposite Claymont has asked federal regulators for a third permit deadline extension, citing delays caused by the discrediting of a key risk analysis model for LNG terminals nationwide.

The company's timetable has been disrupted by a little-known ruling that a widely used model for calculating spill and fire risks at LNG terminals could result in "truly gross underestimates of the hazard."

Chatham commissioners to consider supporting LNG study (Apr 6) — Savannah Morning News, Savannah, GA

“I’ve heard a lot of rhetoric,” Shay said. “I just think we need to go ahead and get a scientific report and say this is what the real issues are before we come to a community opinion of whether this is a good thing or not.”

That U.S. Department of Transportation response guide includes LNG among a list of flammable gases that are easily ignited by sparks or flames and that can form a volatile mixture with air, Scott said. The guide calls for an area to be isolated and evacuated at least one mile in every direction in the case of an LNG spill, Scott said.

Kent Harrington, co-chair of Citizens for a Safe Secure Savannah, a group formed to scrutinize the LNG plans, welcomed the county’s input on the matter. There are a number of questions regarding emergency response that Southern LNG has refused to address, Harrington said. Information related to worst-case scenarios, disaster plans and the security vulnerability of LNG trucks need to be provided, Harrington said.

Gulf LNG terminal on track for completion this year (Outlook 2011) (Apr 25) —, MS

Baerg reports that the facility expects to receive its first shipment of liquefied natural gas this summer, which will serve to adapt the tanks and physical piping to the extreme temperatures at which they must perform.

Most of the LNG is expected to come from the west coast of Africa, through Angola LNG, a consortium of energy companies, and the ENI, an Italian energy company.

Webmaster’s Comments: When the US is in a natural gas glut, 30 LNG import projects have been scrapped since 2005, and some import terminals are switching to LNG exporting, one can only wonder where Gulf LNG expects to sell its LNG-source gas.

Golden Pass LNG seeks FERC authorization for Phase 2 facilities to commence service — LNG Law Blog

Earlier this week, Golden Pass LNG asked FERC for authorization to commence operations using its Phase 2 facilities.

USA: Cheniere explains Sabine Pass expansion plans to Port Arthur City Council (May 5) — LNG World News

The whole issue revolves around water and lots of it.

The compressors needed for the expansion will need about 1.6 billion gallons of water a year. [Red bold emphasis added.]

Governor-General: From stabilisation to growth (Apr 14) — Jamaica Information Service, Kingston, Jamaica, West Indies

In keeping with the National Energy Policy which was presented last year, work toward the introduction of natural gas to reduce our energy costs and improve our competitiveness is at an advanced stage and Requests for Proposals for the supply of LNG will shortly be issued. RFPs have already been issued for the installation of 480 megawatts of new generating capacity to replace old generating plants whose inefficiency contributes to the high cost of energy. This is of particular importance to the manufacturing sector whose ability to compete is significantly affected by energy costs. The government remains fully committed to supporting the manufacturing sector which is a major employer of labour, contributes substantially to the economy and is one of the engines of growth that must be strengthened. The government will continue to support its modernization, the application of new technology and the penetration of new markets.

Jamaica: LNG project may be further delayed (Apr 25) — LNG World News

There are indications that the Government’s long-awaited Liquefied Natural Gas (LNG) project may be in trouble.

Prime Minister Bruce Golding last week admitted to the House Standing Finance Committee that legal issues connected to the LNG project could result in further delays.

Golding’s response contradicts the impression conveyed in the Governor General’s throne speech which states that “work towards the introduction of natural gas to reduce our energy work towards implementation” is “advanced”.

No transparency on energy (Apr 25) — The Gleaner, Kingston, Jamaica, West Indies

But here is the rub with regard to Jamaica and the Government's decision to go with LNG, for which it has invited bids for 480 megawatts of power. The public is being kept in the dark about the technical basis - economic and scientific - on which the administration made the decision.

This approach can't be the best way for the administration to build trust in its policy and the confidence of those who invest in the economy. The administration, in particular the Zacca task force, could begin to build trust and confidence in the process by releasing the study that reviewed the LNG project and made recommendations for its overhaul.

Time is now to ensure year-round LNG supply (Apr 9) — Anchorage Daily News, Anchorage, AK

I listened to a talk by Carri Lockhart, Marathon Oil's regional manager, to a group of legislators last week, and was rudely reminded that we're on borrowed time with our Southcentral natural gas supply.

We've heard a lot about winter "deliverability" problems or the difficulties aging gas wells now have delivering gas and keeping up with high demand in cold weather. During cold snaps there are shortfalls in supply, but we've kept the heat on with gas diverted from the liquefied natural gas plant near Kenai. The LNG plant is being mothballed, however, so we won't have that backup next winter.

Second LNG project promoted (Apr 14) — CJFW, Terrace, BC

A second LNG export project is being proposed for Kitimat and the public has a chance to learn more about it….

The B.C. LNG Export Cooperative is a partnership between the Haisla First Nation and Texas-based LNG Partners.

Will Lee Beyer, Chris Edwards, and Ginny Burdick stand up for Democratic values next week? [Opinion] (May 5) — BlueOregon, OR

Update: it now looks like the vote on the anti-LNG amendment to HB 2700 will probably be put off at least another week. Hopefully that gives committee members even more time to think about the reasons why LNG is a bad deal for Oregon.


2011 May 5

Shale Moots New LNG Import Infrastructure

Energy generators bet on shale gas future (May 6) — The Wall Street Journal

A revolution in shale gas technology has turned the US from a net importer of gas to one with a surplus in just the past five years, capping gas prices and dashing a host of planned liquefied natural gas import terminals.

The EIA, which is the US Energy Department's respected statistics and analysis arm, completed a study of global shale gas prospects last month and found Australia was one of the most prospective countries for development. "With geologic and industry conditions resembling those of the US and Canada, the country is poised to commercialise its gas shale resources on a large scale," the EIA said. [Red bold emphasis added.]

Shale gas 'revolution' impacts to vary across globe: OTC panelists — Platts

In the US, where the "shale gas revolution" first started and already is well under way, domestic gas supplies have severely cut into the demand for imported LNG, Emma Cochrane, manager of gas power and marketing for ExxonMobil, said.

With ample gas supplies to meet US gas demands most of the time, LNG imports will largely serve to meet seasonal balancing needs, she said.

"Imports will mostly come in the summer, where there is nowhere else for the gas to go," Cochrane said. As a result of the inflow of gas supplies from shale plays across the nation, "the US becomes almost self-sufficient" in meeting its gas demand in the future.

"In the US, we have a natural gas market that doesn't exist anywhere else in the world," [Davis Thames, president of Cheniere Marketing] said. Technological innovations in gas production techniques have resulted in "a tremendous amount of gas," coming onto US markets, driving down the domestic costs of gas and destroying the economic rationale behind building LNG import-only terminals. [Red bold emphasis added.]

Gas Development Executive Roundtable — PennEnergy

Shoemaker: An interesting reflection of the rapidly changing dynamics in the last 18 months in the U.S. natural gas market is what Cheniere Energy has done with its Sabine Pass LNG facility in Louisiana. As a result of what’s gone on domestically, they’ve announced that they’ve been looking at the ability to export gas from that facility. This is a reflection of what we’ve seen with the shale market plays. That bi-directional capability, depending on how much that catches on in terms of other facilities, will make it interesting to see what market dimension is added to domestic natural gas pricing. [Red bold emphasis added.]

Natural gas glut begins to shrink — Rigzone

A global natural gas glut is disappearing sooner than expected, thanks to rebounding economies and troubles in Japan and the Middle East, panelists said at the Offshore Technology Conference on Wednesday.

By 2025 U.S. natural gas production capacity is expected to grow beyond what the country will consume by then, even with a strong economic rebound.

"The U.S. will be almost completely self sufficient for natural gas in 2030," Cochrane said. [Red bold emphasis added.]

Destinations of LNG tankers in bay ‘not a mystery’ [Op-ed column] — The Jamestown Press, Jamestown, RI

Rhode Island’s economy operates at a competitive disadvantage because it has among the highest energy prices in the country. The Weaver’s Cove Energy project will help moderate the region’s natural gas and electricity prices by providing additional natural gas supply when and where the market needs it most. Energy consumers take note.

Webmaster’s Comments: Since there is no shortage of natural gas in Rhode Island, and since LNG can be more costly than domestic natural gas, there is no assurance that importing LNG at Weaver's Cove Energy will have any positive impact on the cost of the region's natural gas or electricity.

Gas Natural delivers first LNG cargo to Puerto Rico; one US re-export in March — Gas Matters [Paid subscription required]

Gas Natural brought its first LNG cargo into Puerto Rico in March while in the same month there was one re-export carried out from North America – by Cheniere to Gazprom for delivery to the UK.

KOGAS Canadian investment may signal continued interest in Mackenzie Valley LNG — LNG Law Blog

An investment of $30 million by KOGAS Canada in an Alberta exploration company may signal South Korea's continued interest in acquiring Mackenzie Valley natural gas via a potential LNG export facility on the Beaufort Sea. Platts LNG Daily [subscription required] provides additional details on KOGAS Canada's activities.


2011 May 4

Low Natgas Prices Driving LNG Exports

Impact of low natural gas prices (Apr 24) — Platts Energy Week

Video Low natural gas prices are driving an import and export switch in US LNG.

British Columbiais planning to export LNG to Asia, and the Jordan Cove LNG project at Coos Bay, Oregon, is contemplating exporting.

Local utilities do not like the idea of upsetting the area natural gas supply by exporting. [Link leads to page with video.]

Webmaster’s Comments: The article makes no mention of the two LNG export projects in the Gulf of Mexico, or the Cove Point LNG export project in Maryland.

Barclays analyst: United States could build 2 Bcf/d of liquefaction capacity by 2017 (Apr 20) — LNG Law Blog

Speaking at an energy industry conference in Houston, Biliana Pehlivanova, director of commodities research for Barclays Capital, predicted that the United States could build LNG liquefaction and export capacity totaling up to 2 Bcf/d by 2017.

Canada: Nexen sees LNG future (Apr 28) — LNG World News

Production in B.C. would be a given to move to Asian consumers, particularly as North American markets are flooded with domestic volumes, he said. “There are lots of hurdles to jump through, but I think it represents a very realistic possibility,” he told reporters after the AGM. [Red bold emphasis added.]

Natural gas plant terminal (Apr 28) — Journal of Commerce, Burnaby, BC

Project is currently going through the National Energy Board (NEB) approval process for its application to export liquified natural gas from British Columbia's North Coast near Kitimat. Engineering design and construction schedules to be confirmed in January/February 2012. Further update at that time.

World Energy sees real change coming to the Cook Inlet of Alaska (Apr 6) — Business Wire

The Cook Inlet of Alaska is in danger of running short on natural gas. According to the South Central Alaska Natural Gas Study, 95% of the gas in the Cook Inlet was found before 1970. Currently proven developed reserves are forecasted to only meet demand until 2012. Until now the only solution appeared to be curtailing industrial use and importing LNG. However the Inlet is home to an estimated 13-15 TCF of gas and 230 million barrels of oil bypassed by the majors as they moved on to the North Slope of Alaska (Based on published studies by the State of Alaska).

With the creation of Kenai Offshore Ventures (KOV), a partnership with Alaska Industrial Development and Export Authority (AIDEA) and Ezion Holdings Ltd of Singapore, Buccaneer was able to pull together a collation of industry, capital and government partners to identify, purchase and bring a Letourneau 116c rig to the Inlet. On Friday the board of AIDEA cleared the way for the organization to invest $30 million in KOV.

Several LNG liquefaction projects competing to export Western Canadian gas (Apr 15) — LNG Law Blog

Platts LNG Daily [subscription required] carries an analysis of the LNG liquefaction projects proposed for Western Canada. The projects examined include the Kitimat LNG project, the BC LNG Export Cooperative, and Shell's proposal to build a liquefaction facility on Prince Rupert Island.

Saint John plans evacuation route — CBC News

Saint John is setting up more than 200 blue-and-white directional signs that mark an evacuation route in the city in the case of a disaster.

"We're an industrial city. We have the largest oil refinery in Canada. We have an [liquefied natural gas] facility. We have three industrial parks, Point Lepreau [Nuclear Generating Station] isn't too far away from us," Court said.

"Basically, things do happen — you have to be proactive, not reactive.".

Nitrogen injection system proposed for Everett LNG facility not subject to mandatory FERC Pre-filing process (Apr 28) — LNG Law Blog

FERC informed Distrigas, the operator of the Everett LNG import terminal, that the company will not be required to conform to mandatory pre-filing procedures and review process of its planned installation of a nitrogen injection system at the Everett facility in Massachusetts

Local earthquake risk another reason LNG is a bad idea [Op-ed column] (Apr 27) — The Herald News, Fall River, MA

Weaver’s Cove Energy, a subsidiary of the Hess Corporation, has proposed an off-loading facility in Mount Hope Bay, in northeastern Narragansett Bay, to connect with storage facilities in Fall River via submarine pipe.

Narragansett Bay is a geologically young, still active north-trending horst and graben system that experiences small earthquakes, especially along its eastern side. A major northeast-trending late Triassic fault system, the Watch Hill fault zone, crosses the bay to pass through Mount Hope Bay and beyond where it forms the southeast side of the Narragansett Basin. Younger north-trending faults form the east side of Narragansett Bay and cross western Mount Hope Bay.

The LNG site has many unresolved fault and earthquake issues. But the investigation for the LNG site released to the Federal Energy Regulatory Commission does not list the pertinent geologic work in the area, has not compiled the fault data and ignores the local seismicity. Each request for such studies by state, town and local groups is met by a statement such as, “we have done significant work and find no problems.” [Red emphasis added.]

Senate wants state to have first dibs on LNG permits (Apr 6) —, RI

STATE HOUSE -- A resolution strongly denouncing the Weaver’s Cove proposed offshore liquefied natural gas (LNG) has passed in the R.I. Senate, calling for the Federal Energy Regulatory Commission to deny any approvals of the project unless the state’s Coastal Resources Management Council first approves each step.

The fight against the Weaver’s Cove project will still continue in the General Assembly, Sen. Felag said, adding that the task force will reconvene if any federal permits are granted to Weaver’s Cove.

Council sets timeline to finalize proposed budget (Apr 7) — The Jamestown Press, Jamestown, RI

Dan Wright, who chairs the town’s Committee on LNG Threat, told the Council that the Federal Register notice “repeatedly points out that there won’t be any unfavorable environmental impacts [from the new anchorage area], but LNG tankers aren’t considered [in the notice]. Do we want to comment on this? The threat Committee believes we should because there would be a 1,000-foot exclusion zone on either side of an LNG tanker,” which could prevent fishing boats or other vessels from traversing the anchorage in the event that an LNG tanker anchored in that area.

Hoyer dedicates Cove Point security system (Apr 28) — The, MD

U.S. Rep. Steny Hoyer (D-5th) on Wednesday officially activated a new marine surveillance system at the Dominion Cove Point LNG facility in Lusby. The new SureTrak system provides an extra level of security for a wide swath up and down the Chesapeake Bay. And, it piggybacks onto a Sure Trak operation at the Atlantic Test Range at Patuxent River Naval Air Station.

SureTrak is a product of Computer Sciences Corporation Applied Technology Group, which has an office in Lexington Park. The Navy funded the installation of a maritime radar, tower, AIS receiver and work stations at Cove Point. The system pinpoints boat traffic and identifies the type of boat and registry.

FERC offers recommendations following annual inspection of Cove Point LNG terminal — LNG Law Blog

FERC's post-inspection recommendations for the Cove Point LNG terminal are available in the Commission's eLibrary under Docket No. CP01-76.

NATS: Shell imports Qatari LNG cargo to Elba Island LNG terminal — LNG Law Blog

NATS [subscription required] reports that Shell has imported a Qatari LNG cargo to the United States via the Elba Island terminal. According to NATS, this marks the first time in five years that an importer other than BG used the Elba Island terminal to import an LNG cargo.

Lawyers: Public would be liable for cost in event of LNG accident (May 3) — Savannah Morning News, Savannah, GA

A trio of tort lawyers looking at the issue of who would be liable for the cost of an LNG trucking accident say it’s most likely not the company that imports or trucks the liquid methane.

A catastrophic accident is at the heart of concerns over the trucking proposal. LNG can’t burn as a liquid, but if a tanker were breached the resulting vapor cloud could burn hot enough to blister exposed skin more than 700 feet away.

The attorneys concluded that Savannah’s best protection from a truck accident was preventing the permit for the loading dock at Elba from being issued. [Red emphasis added.]

LNG hot topic at town hall meeting — WTOC, Savannah, GA

"We think that this LNG issue is a significant environmental issue, not only is it an environmental issue, but it's also a public safety issue. So the public needs to know about it, and it's our aim to try and bring as much information to the public as we can", said Cletus Bergen II, the president of the Citizens for Clean Air and Water.

County asks LNG to complete Environmental Impact Study (Apr 8) — WTOC, Savannah, GA

"We don't have the ability to say yes or no. At the end of the day that belongs to the Federal Energy Regulatory Commission and apparently the United States Department of Transportation and the Georgia Department of Transportation. They are in the process of doing their deliberations, so I am not asking the Commissioner to force anybody to do anything," said Shay. "I'm just asking that those that are proponents of this strongly consider, if the commission desires it, a request to go ahead and perform and Environmental Impact study."

Commission agreed and the motion was passed.

Early College vote tabled (Apr 6) — Savannah Morning News, Savannah, GA

The City of Savannah may have questions about the risks associated with trucking liquefied natural gas past schools, but the Savannah–Chatham Public School Board does not.

Wednesday the board voted not to support City Council’s resolution to urge the Federal Energy Regulatory Commission to perform an environmental impact study of the plans to truck liquefied natural gas through the city and to provide possible alternate routes.

Southeast LNG is seeking federal clearance to truck volatile highly liquid natural gas through Savannah. The company’s proposed transport route passes nearly one third of the public school system’s properties, including 15 schools and a site where school buses and fuel are stored. But some board members don’t believe the highly regulated transport process poses any public safety threat. Others argued that they’ve got too many academic issues to worry about.

5 questions with Mark McAndrews, Jackson County Port Authority (Apr 5) —, AL

Q: How is LNG dredging work coming along?

MCANDREWS: The original dredging of the maneuvering and berthing areas was completed in 2007. The current operation is a maintenance cycle due primarily to shoaling caused by hurricanes Ike and Gustav. It is expected to be completed by the end of April.

Golden Pass ‘a major outlet’ for Qatar LNG (Apr 7) — Gulf Times, Doha, Qatar

“The joint ownership with QP allows us to maintain a balanced relationship throughout the value chain,” Isaacson told Gulf Times yesterday. The Golden Pass Terminal is 70% owned by Qatar Petroleum while the remaining 30% are shared by ConocoPhillips and ExxonMobil. The multi-billion dollar terminal was formally inaugurated on the sidelines of the Business & Investment in Qatar Forum in New York [on April 5].

The Golden Pass LNG terminal is capable of importing 15.6mn tonnes of LNG per year, or approximately 2bn cubic feet of natural gas per day, through its dual berth ship docks. With two processing trains and advanced vapourisation systems, the terminal can send out 2.6bn cubic feet of natural gas per day into the Golden Pass pipeline to meet needs of customers, providing them with maximum flexibility.

Webmaster’s Comments: With the existing US natural gas oversupply, one wonders what Golden Pass will do with all that imported LNG.

Freeport LNG answers protest filed by APGA (Apr 15) — LNG Law Blog

Freeport LNG has filed a response to the American Public Gas Association's protest of Freeport LNG's planned LNG liquefaction and export project.

Excelerate hopes to redeploy equipment from Gulf Gateway Deepwater Port within 18 months (Apr 20) — LNG Law Blog

Excelerate Energy CEO Ron Bryngleson told Platts LNG Daily [subscription required] that his company hopes to redeploy the buoy and associated equipment from the Gulf Gateway deepwater port to another site, possibly in the Atlantic Basin, within the next 18 months.

Webmaster’s Comments: New in 2005, the Gulf Gateway Deepwater Port is being scrapped due to lack of need. There is a new terminal to be built offshore from Florida, due to the insufficiency there of natural gas transportation pipelines and the large-population natural gas market. Perhaps the Gulf Gateway equipment will be deployed there.

How the gangs 'tax' energy [Editorial] (Apr 29) — The Gleaner, Kingston, Jamaica, West Indies

We will be reminded that the current Jamaican administration has refined, and launched, an energy policy that was shaped by its predecessor. Jamaica has committed to liquefied natural gas (LNG) as the fuel of choice for electricity generation.

But Mr Zacca's task force has been proceeding with a lack of transparency which, frankly, we find disconcerting.

LNG, oil plants under guard — Newsday, Port-of-Spain, Trinidad & Tobago, West Indies

Minister of National Security Brigadier John Sandy has ordered that all ports of entry both in Trinidad and Tobago, as well as the Atlantic LNG and Point Galeota facilities be closely monitored in the aftermath of the killing of al Qaeda leader Osama bin Laden on Sunday.

Kenai LNG to continue export operations until August — LNG Law Blog

A representative for ConocoPhillips told Reuters that Kenai LNG will continue operations beyond its planned closure this month. One LNG export cargo loaded this week and three additional export cargos are scheduled between now and August. The cargos reportedly are bound for Japan and China. However, the ConocoPhillips spokesperson noted that the long-term plans to end operations at the Kenai LNG facility remain unaffected.

Despite declines, Cook Inlet remains busy (Apr 2) — Anchorage Daily News, Anchorage, AK

Conoco Phillips and Marathon are mothballing their liquefied natural gas export facility on the Kenai Peninsula. While the companies said they are monitoring LNG demand in Japan in the aftermath of an earthquake, tsunami and nuclear disaster, they do not have plans to make any shipments beyond their original contract.

Alaskan utility regulators seek information on potential LNG imports — LNG Law Blog

The Regulatory Commission of Alaska, the body that regulates Alaska's local utilities, will convene a public meeting in the coming weeks to receive information regarding proposals by various utilities to import LNG. Platts LNG Daily [subscription required] provides further coverage.

Spectra considering gas pipeline to Kitimat LNG site — LNG Law Blog

Greg Ebel, president and CEO of Spectra Energy, said yesterday that his company may build a natural gas pipeline from its existing Westcoast pipeline to the planned site for the Kitimat LNG export terminal. According to Platts LNG Daily [subscription required], the project could cost between $2-3 billion.

Canada's NEB requests additional information from BC LNG (Apr 27) — LNG Law Blog

Canada's National Energy Board (NEB) has requested additional information from the developers of the BC LNG export project. In its requests for information, the NEB focuses on expressions of public interest in the project.

FERC seeks additional environmental data from Oregon LNG (Apr 25) — LNG Law Blog

FERC has asked Oregon LNG to provide additional environmental data regarding the company's planned LNG import facility and associated natural gas pipeline.


2011 May 3

LNG & Natural Gas Imports Slump

US LNG imports slump (Apr 5) — Petroleum Economist [Paid subscription required]

US LNG imports slumped by nearly half last year, with overall net gas imports recording huge falls over the past three years, according to new data from the US Energy Information Administration (EIA).

"US net imports of natural gas have fallen for three consecutive years, due largely to growing domestic production from shale-gas formations. Between 2007 and 2010, annual net imports declined by about 1.2 trillion cubic feet (cf), or nearly one-third," the EIA said. [Red bold emphasis added.]

LNG analysis told only one part of story [Op-ed column] (Apr 13) — The Herald News, Fall River, MA

We were encouraged to see that The Herald News acknowledged in Jon Chesto's March 29 only-in-print "Mass Market" business analysis titled “Quiet waters” that “winter has come and gone without one tanker pulling up to the state’s two new LNG ports to feed the pipeline system that delivers fuel to heat our homes,” but we think the article tells only part of the story.

These offshore facilities have seen little use since they were installed three to four years ago. Opponents of our project, including The Herald News, have suggested that the lack of activity at the offshore LNG facilities is proof that there is no need for additional LNG supply. [Red bold emphasis added.]

Webmaster’s Comments: Weaver's Cove Energy President & COO Ted Gehrig ignores Canaport LNG's 'in market' output. Canaport LNG has been operating at just 20-21% of capacity this year, with most of its output shipped via the Maritimes & Northeast Pipeline to the US Northeast. Prices for natural gas exported via pipeline from New Brunswick, Canada, dropped in 2010 (the latest NB export price information available) to near 2001 levels, being in a marked decline since 2008..

Marcellus shale gas may head overseas (Apr 10) — Pittsburgh Tribune-Review, Pittsburgh, PA

Drilling companies rapidly expanding their U.S. operations in places such as Pennsylvania's vast Marcellus shale formation repeatedly tout they are providing American jobs and securing the nation's energy future. Yet, a Tribune-Review examination found foreign companies are buying significant shares of these drilling projects and making plans for facilities to liquify and ship more of that natural gas overseas.

“The implications are great,” said Paul Cicio, president of Industrial Energy Consumers of America, which represents large U.S. manufacturers. He believes exporting newfound natural gas is a strategic blunder that will cost American manufacturing jobs by hiking the price of gas here.

Pennsylvania sits above the sweet spot for one of the world's largest natural gas deposits, trapped in a rock layer a mile below the surface known as Marcellus shale. [Red bold emphasis added.]

LNG Co-op business plan outlined (Apr 29) — Northern Sentinel, Kitimat, BC

Noting there is a big difference between what you can get for natural gas in North America and what Asian markets are ready to pay for LNG, Tatham said everybody is trying to get into the LNG export game these days. [Red bold emphasis added.]

Big flare will be visible at Canaport during May (Apr 15) — Telegraph-Journal, Saint John, NB

SAINT JOHN - During the month of May, Canaport LNG will be undergoing warranty related maintenance at its facility.

As a result of this work, there will be a significant flare that will be visible from some vantage points around the city for the duration of the shutdown, which is expected to last about one month.

Williamson takes over for Thompson in NB Southwest — The Daily Gleaner, Fredericton, NB

Williamson acknowledged the advantage he had following the footsteps of Greg Thompson, who won six of the seven elections since 1988. Thompson announced in January 2010 he wouldn't run again.

[Green Party candidate Janice Harvey] still plans to work with her new MP on opposition to liquefied natural gas tankers in Passamaquoddy Bay as they did before the election. [Red bold emphasis added.]

Webmaster’s Comments: All Canadian political parties support banning LNG traffic in Passamaquoddy Bay. There is no way for Downeast LNG to receive LNG. That, along with the lack of need for more LNG import infrastructure, makes Downeast LNG an unviable, wasted effort.

Province stays Tory blue — The Daily Gleaner, Fredericton, NB

[H]and-to-hand combat in the ridings was generally the order of the day with the focus on local issues. In Saint John, for example, the parties touted plans to ensure the city has clean drinking water. In New Brunswick Southwest, voters were concerned about preventing pollution from LNG tankers. [Red emphasis added.]

‘Vigilant now more than ever’ — Boston Herald, Boston, MA

State Police leaders spent yesterday strategizing for coverage against high-profile targets such as the LNG tanker — a difficult task with 500 fewer Massachusetts troopers than were on duty on Sept. 11, 2001, according to several high-ranking sources. There were also increased patrols at Logan Airport, the launching pad for two of the four planes used by jihadists on that dark morning.

Boston Mayor Thomas M. Menino has long complained about the vulnerability of the LNG tanker and held several City Hall powwows with BPD Commissioner Edward Davis and Boston Fire Commissioner Rod Fraser.

“Clearly this is another reminder that the LNG tanker is not good for the city of Boston,” said Menino’s spokeswoman, Dot Joyce. [Red emphasis added.]

Region deserves much better than Hess-LNG [Op-ed column] — The Herald News, Fall River, MA

I could mention that World Gas Intelligence had analyzed the 40 proposed LNG terminals using 22 different criteria divided into 10 primary groups. The evaluation of the 40 was performed by Mr. Ed Kelly, a gas and power vice president at Wood Mackenzie, a company that analyzes energy initiatives. And what was Mr. Kelly’s rating for Hess-LNG/Weaver’s Cove Energy? Out of 40 proposals evaluated by Mr. Kelly, he rated Hess-LNG/Weaver’s Cove Energy dead last, 40th out of 40.

Or we could mention that the Society of International Tanker and Terminal Operators (SIGTTO) which represents over 95 percent of the world’s LNG industry, when addressing LNG sitings stated that “LNG terminals should not be sited up long and winding inland waterways where navigation hazards are greater” and further stated that “LNG terminals should not be sited where there are conflicting uses of the waterway-now and into the future.”

Here are the comments by [Everett, Massachusetts Fire Chief Butler] that [Weaver's Cove Energy George “Ted” Gehrig] forgot to admit into the record: “If I were the fire chief in Fall River and you asked me, ‘Do I want an LNG plant?,’ the answer would be no! It is ridiculous to put an LNG plant in a neighborhood in the middle of a city.” [Red emphasis added.]

Mass. asked to divest from Hess over LNG project (Apr 19) — Boston Globe, Boston, MA

BOSTON—Sen. John Kerry and U.S. Reps. Barney Frank and James McGovern are urging the state to divest its shares of Hess Corporation to protest the company's support of a proposed liquefied natural gas terminal in Fall River.

Leadership, not gimmicks, needed to fight Hess [Editorial] (Apr 20) — The Herald News, Fall River, MA

Even when it comes from your side of a debate, a bad idea should be repudiated as a bad idea. Such is the case with a proposal that is so misguided it’s hard to believe it could come from three out of four members of the area’s congressional delegation.

Forum explores who pays in LNG accident (Apr 29) — Savannah Morning News, Savannah, GA

Discussion has focused largely on what physical harm would ensue if a truck coming out of Southern LNG’s Elba Island terminal spilled its cargo and the super-chilled methane were released and caught fire. The route passes hospitals and schools in a densely populated area. Local emergency managers worry the recommended evacuation zone of up to one mile would be impossible to comply with.

Now a local advocacy group, Citizens for Clean Air and Water, is focusing on the financial consequences of an LNG trucking accident. In an “LNG Insurance Forum” at 7 p.m. Tuesday [May 3] in Candler Hospital’s Marsh Auditorium, attorney Clete Bergen, the president of CCAW, will address exceptions to life insurance policies as they could apply to the consequences of an LNG truck accident. [Red emphasis added.]

Port Dolphin project Mmay be step toward ending coal-fired power plants (Apr 30) — The Bradenton Times, Bradenton, FL

The so-called SRV ships - Shuttle and Regasification Vessels - will be moored 28.8 miles offshore, the project website says. Floating regasification ships are an innovation that are catching on in the natural gas industry. Currently, there are a total of 25 in development, 13 in operation and another three in construction. The latest of them can hold up to 170,000 square cubic meters of gas in four separate tanks on each ship.

Webmaster’s Comments: Port Dolphin will use technology similar to the new-in-2005 Gulf Gateway Deepwater Port 116 miles offshore from Louisiana that has announced it is shutting down due to lack of market.

Freeport LNG submits Draft Resource Report to FERC — LNG Law Blog

Late last week, Freeport LNG submitted its Preliminary Draft Resource Report 3 to FERC, outlining potential effects on fish, wildlife, and vegetation of the planned installation of LNG liquefaction equipment at its existing facility.

Feds look to stem pipeline dangers [Press release] — 24-7 Press Release

The state of our nation's aging natural gas infrastructure has become a major concern in light of the recent string of pipeline explosions. Places like Allentown, Pennsylvania and San Bruno, California have seen firsthand the catastrophic aftermath of natural gas pipeline disasters. And, with 1.8 million miles of gas delivery lines veining the earth beneath the streets of almost every U.S. city and town, similar tragedies could happen anywhere.

Since 1990, nearly 3,000 major natural gas pipeline accidents have been recorded by U.S. government officials. Most of these incidents occur in unpopulated areas. Nonetheless, about 30 percent of the pipeline incidents resulted in death or serious injury. [Blue emphasis added.]


2011 May 2

LNG Imports Fall, Exports Surge

Gas imports drop to near 1993 levels: DOE report (Apr 1) — Platts Energy Week

US net gas imports have dropped significantly since peaking in 2007, dropping close to levels not seen in 18 years, according to the latest trade data from the Department of Energy.

While imports from Canada increased from 3.34 Tcf in 2009 to 3.36 Tcf in 2010, US exports to Canada outpaced the change, increasing from 702.7 Bcf in 2009 to 738.4 Bcf in 2010, the report said.

Exports via pipeline accounted for a lower percentage of exports due in part to a big surge in re-exports of liquefied natural gas, in which terminals import LNG but then export it to other countries.

Two new LNG terminals, Neptune Deepwater Port and Golden Pass LNG, began operations in 2010, even as US demand for LNG slumped. One terminal, Gulf Gateway, did not receive any LNG during the year. Everett and Elba Island received the most LNG of all terminals during 2010. [Red bold emphasis added.]

Shale boom, gas demand to make North America LNG exports reality — Downstream Today

The increase in North American natural gas due to the shale gas boom and a projected increase in global gas demand mean that North America will become a liquefied natural gas (LNG) exporter within the next few years.

North American LNG exports should be sustained as long as North American shale gas production remains at existing levels, said Zach Allen, publisher of PanEurasian Enterprises NATS report, which tracks global LNG markets. Cheniere Energy's Sabine Pass in Louisiana and Freeport LNG in Texas are two existing LNG regasification facilities that will have liquefaction capacity added to allow for LNG exports. [Red bold emphasis added.]

Excelerate Energy to retire its Gulf Gateway Deepwater Port [News release] (Apr 13) — Excelerate Energy, The Woodlands, TX

GULF OF MEXICO – Responding to the changing market for liquefied natural gas (LNG) imports into the U.S. Gulf Coast, Excelerate Energy® LP (Excelerate Energy) will retire its deepwater facility in the Gulf of Mexico, the Gulf Gateway Energy Bridge Deepwater Port (Gulf Gateway®). Excelerate Energy will continue to import LNG into the United States through its Northeast Gateway® Deepwater Port facility located offshore Boston, Massachusetts, providing incremental LNG access to the high-demand Northeastern US gas markets.

Gulf Gateway was the first deepwater LNG import facility in the world. Excelerate Energy’s commissioning of Gulf Gateway in March 2005 allowed the realization of the floating LNG regasification concept which was first conceived in 2001. Gulf Gateway provided the means for establishing the technical and commercial viability of the Energy Bridge Regasification Vessels (EBRVs®). EBRVs are specially built LNG vessels equipped with onboard regasification capabilities allowing the delivery of natural gas directly into downstream markets.

“Gulf Gateway has served us well, and was instrumental in confirming the viability of floating LNG regasification – turning an innovative concept into an accepted industry solution. As Excelerate Energy looks to expand its operations and deliver flexible and efficient regasification solutions around the world, we are focused on markets with the greatest need. This focus, coupled with the surge in LNG importation capacity in the US Gulf Coast in recent years, has reduced the need for Gulf Gateway and confirmed that its retirement is the most financially prudent course of action for us” said Rob Bryngelson, Excelerate Energy President and CEO. [Red bold emphasis added.]

US LNG exports will face stiff competition in medium term — Oil & Gas Journal

Oversupplied North American natural gas markets might see construction of liquefaction that would allow LNG export potentially in 2015. There is a question, however, of whether the world needs another source of LNG supplies.

Increased LNG demand from Japan aside, the indisputable success of shale gas development and the resulting extended period of oversupply in North American natural gas markets has prompted companies that not long ago wanted to import LNG into North America now to consider exporting. North American natural gas prices are among the lowest in the world, both in the cash markets and far out the forward curve.

With the US markets now shunning LNG and given the destination flexibility of the new volumes, global LNG markets embraced a growing spot trade and moved the new supply to markets more in need of gas.

While terminal capacity to import gas has expanded along with growing liquefaction capacity, the demand behind those regas terminals has not kept pace with supply. [Red bold emphasis added.]

FGE: 2010 US LNG imports, future buck regional trends — Oil & Gas Journal

Saying 2010 was an "indifferent year" for US LNG imports, FACTS Global Energy, Singapore, also said in a review of the US market that rising unconventional gas output has helped contain US LNG demand while higher natural gas production has helped depress US gas prices.

FGE also said that several US LNG players seem to agree with the US Energy Information Administration's assessment that unconventional gas development will depress LNG demand by initiating moves to become LNG exporters of US-produced natural gas, mainly unconventional. [Red bold emphasis added.]

Encana in deal with US natural gas distributor — CNBC

CALGARY - Canada's Encana Corp. has signed a joint-venture development agreement with Northwest Natural Gas Co., a Portland, Oregon-based natural gas distributor.

Earlier this year, Encana bought a 30 per cent stake in a liquefied natural gas export terminal planned for Kitimat, British Columbia.

U.S. natural gas producers Apache Corp. and EOG Resources are also partners in the project, which would connect Canada's plentiful natural gas supply with energy-hungry markets in Asia. [Red bold emphasis added.]

R.I. Senate opposes Weaver's Cove LNG terminal (Apr 7) — Taunton Daily Gazette, Taunton, MA

Providence — After months of researching, the Rhode Island Senate Wednesday approved a resolution in opposition of the liquefied natural gas terminal proposed by Weaver’s Cove Energy.

A copy of the resolution is being sent to the Federal Energy Regulatory Commission and seeks that in the event FERC approves the project, the Senate Task Force “strongly recommends and respectfully requests that any approval provide a specific condition for Weaver’s Cove Energy to document that it has received concurrence from the R.I. Coastal Resources Management Council that the project is consistent with the Coastal Resources Management Program.” [Red bold emphasis added.]

LNG discussion scheduled for Tuesday — WTOC, Savannah, GA

SAVANNAH, GA (WTOC) - A panel of Savannah attorneys, including Howard Spiva, Mark Tate, George Lewis and Clete Bergen will discuss the issue of liability insurance and its pertinence to liquefied natural gas.

LNG trucks: Information, please [Op-ed] (Apr 9) — Savannah Morning News, Savannah, GA

When you don’t get the answers you need to make an informed decision, you don’t stop asking questions.

That explains why the Chatham County Commission joined the Savannah City Council on Friday in asking for an environmental impact study on a controversial proposal to truck liquefied natural gas through the community.

The biggest concern shared by many elected officials on City Council and the County Commission is information, especially as it relates to safety and risk. They want more explanations — not more of the same — from El Paso/AGL Resources. Many citizens share that view.

Chatham commissioners to consider supporting LNG study (Apr 6) — Savannah Morning News, Savannah, GA

Commissioner Pat Shay, whose district includes much of the proposed trucking route, has requested that commissioners on Friday consider approving a resolution in support of a federal environmental impact study regarding the plan.

“I’ve heard a lot of rhetoric,” Shay said. “I just think we need to go ahead and get a scientific report and say this is what the real issues are before we come to a community opinion of whether this is a good thing or not.”

Chatham Emergency Management Agency Director Clayton Scott is backing Shay’s request. Scott said his concerns stem from federal emergency response guidelines.

That U.S. Department of Transportation response guide includes LNG among a list of flammable gases that are easily ignited by sparks or flames and that can form a volatile mixture with air, Scott said. The guide calls for an area to be isolated and evacuated at least one mile in every direction in the case of an LNG spill, Scott said.

Kent Harrington, co-chair of Citizens for a Safe Secure Savannah, a group formed to scrutinize the LNG plans, welcomed the county’s input on the matter. There are a number of questions regarding emergency response that Southern LNG has refused to address, Harrington said. Information related to worst-case scenarios, disaster plans and the security vulnerability of LNG trucks need to be provided, Harrington said. [Red emphasis added.]

Utilities look to renewables as natural gas dwindles (May 1) — Peninsula Clarion, Kenai, AK

Despite its high costs, renewable energy is a good risk-management strategy for Southcentral Alaska electric utilities, which currently depend heavily on natural gas for power generation. The problem is natural gas reserves are running down, and the only near-term guaranteed fall-back is imported liquefied natural gas.

It's not a good position to be in.

Webmaster’s Comments: Alaska has a boodle of natural gas, but it is 800 miles from southcentral Alaska, and there is no existing pipeline.

Democracy Canadian-style (Apr 3) — Petroleum News

The three opposition parties have also, in varying degrees, called for Canada to: impose a carbon tax as part of climate-change legislation that would be independent of whatever action the United States takes; ban crude oil and LNG tanker traffic off the British Columbia coast; introduce tough legislation to effectively end oil and gas exploration in Arctic waters; and refuse to provide any direct or indirect financial support for corporate partners in the Mackenzie Gas Project. [Red bold emphasis added.]

Webmaster’s Comments: Similarly, all Canadian political parties support banning LNG tanker traffic in Passamaquoddy Bay. This is further evidence that the LNG tanker ban in Passamaquoddy Bay is not anti-competitive protectionism. It is protecting Canadian lives and environment.

Globalization is diminishing America’s natural resources — From the Trenches World Report

China is quietly becoming heavily involved in American resources, more so than many Americans are aware. Natural gas is becoming something that China’s 1.3 billion people are in desperate need of, and America’s supply is in the cross hairs. Leaseholds are being snapped up by China, and the question has to be asked, how will this affect the price if exported out of the country? China is one of many who are snapping up the American supply.

Pennsylvania sits on one of the largest natural gas reserves in the world, called the “Marcellus Shale Formation”, located a mile deep where gas is trapped in shale rock. The process of fracking is the way it’s extracted from the shale rock. Much of the gas will be liquefied and shipped to China by way of export ports that are designed to handle the transfer to the ships that will ferry the liquefied natural gas to China.


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