Northeast
Fight over exports at Cove Point (Apr 29) — The Daily Record, Baltimore, MD
[F]racking, the most significant development in the American energy industry in decades, has been disruptive to import facilities. Only three of the 16 liquid natural gas import terminals in North America are in use, said Zach Allen, president of energy consultants Pan EurAsian Enterprises Inc. Fracking has cut the demand for imports and turned the United States into a potential source of exports, he said. [Red, yellow & bold emphasis added.]
Downeast LNG is proposing to be the 14th idle LNG import terminal.
Market forces mire Md. gas export plan in uncertainty — Southern Maryland Online, MD
WASHINGTON -- Lusby's natural gas import terminal is a victim of the boom in domestic production, and the industry's political and economic uncertainties are endangering its owner's efforts to rebound by adding export capabilities to the facility to take advantage of the plant's vicinity to the Marcellus Shale gas field.
Cove Point in Lusby was built in the 1970's, but demand for natural gas tumbled soon thereafter, and the facility stopped receiving imports after 1980. It was purchased by Richmond, Va., based Dominion for $217 million in 2002 due to an anticipated resumption of imports. The plant has received no imports so far this year, said Dominion's Director of Media Relations Daniel Donovan. [Red, yellow & bold emphasis added.]
Gulf of Mexico
FERC requests DOD review of Corpus Christi export project — LNG Law Blog
Pursuant to a Memorandum of Understanding between the two agencies, FERC sent a letter to the Office of the Under Secretary for Defense regarding the Corpus Christi Liquefaction Project, requesting comments on whether the project may impact the test, training, or operational activities of any active military installation, and whether the Office of Under Secretary knows of any defense or military establishments in the project area that may be affected by the project.
Caribbean
Report on LNG project delay misleading — Zacca — Jamaica Observer, Kingston, Jamaica, West Indies
CHAIRMAN of Government's LNG Steering Committee Christopher Zacca has dismissed a media report concerning the delays and cost of the much-touted LNG project.
No evaluation on LNG bids - Zacca — The Gleaner, Kingston, Jamaica, West Indies
"There has never been a two-year delay in the implementation of the LNG project. This is completely false and dangerously misleading. Even if Jamaica had LNG supply and an LNG infrastructure today, there would be no major customer to buy it," Zacca said.
He noted that several months after the formation of the new LNG steering committee, based on a May 2011 report from the Office of the Contractor General, the former government aborted the previous tender for the LNG floating storage and regasification unit and pipeline distribution system due to the many documented violations of the Government of Jamaica Procurement Guidelines and international bidding standards.
Zacca denies delays, wasting money on LNG project (Apr 29) — Go-Jamaica, Kingston, Jamaica, West Indies
The article published in [Sunday's Gleaner] suggests that as much as half a billion could be wasted if Exmar Consortium is again selected to construct the proposed LNG Floating Storage & Regasification Terminal.
Two years, US$6 million wasted in LNG delays? (Apr 29) — The Gleaner, Kingston, Jamaica, West Indies
Sunday Gleaner sources say when the bids were opened last Friday one of the three was submitted without the necessary US$1 million bid bond, making it almost certain to be disqualified.
"In the first tender it was said that companies were excluded from bidding, and the Government spent US$6 million to hire consultants and to write a new bid document, and it appears that Exmar is again going to win," the source said.
Three bids for LNG terminal (Apr 29) — Jamaica Observer, Kingston, Jamaica, West Indies
According to a reliable source, Exmar Marine of Belgium, Samsung C&T Corporation of Korea, and Sener Ingeniería y Sisternas, SA of Spain handed in their submissions to the LNG Steering Committee on Friday.
Choosing the right technology [Op-ed] — The Gleaner, Kingston, Jamaica, West Indies
The question is asked: why did the Office of Utilities Regulation (OUR) allow JPS to bid on the project with a technology that is so dependent on a variable, liquefied natural gas (LNG) that is out if its control?
Oregon
New director vows: Stop LNG and coal projects, curb Elliott logging (Apr 29) — The World, Coos Bay, OR
EUGENE — Cascadia Wildlands, an environmental group previously active in Elliott State Forest management, has a new executive director who plans on staying involved in Coos County environmental issues.
Cascadia Wildlands opposes the export of LNG, Ferris said. He believes the facility is in a dangerous location and will cause pollution, the pipeline will disrupt habitat, and exporting the gas will increase the cost of natural gas domestically.
Northeast
Sierra Club says 'no' to LNG exports (Apr 27) — Energy & Capital
The [1972] legal settlement barring Dominion from moving ahead with this plan was last updated in 2005, allowing Dominion to add storage units. But it forbids large-scale construction without another update, an update the Sierra Club won’t provide.
When Save Passamaquoddy Bay began fighting the three LNG terminal proposals on the Maine-New Brunswick border, the US Sierra Club was still promoting imported LNG and would not oppose the three proposals here; although, the Maine chapter did oppose them.
Gas boom may stop at coast of Maryland (Apr 27) — The Washington Times, Washington, DC
Cove Point in Southern Maryland has become the latest flash point in the fight between the fossil fuels industry and its longtime foes in the environmental movement.
Sierra’s clout in Cove Point appears to be unique, and Dave O’Leary, the Maryland chapter chairman, said he is proud that his chapter is “the first” responsible for rejecting what he called “dirty liquid natural gas exports.”
The construction of natural gas export facilities also represents a dramatic change for the U.S. energy sector. A decade ago, analysts were predicting that the nation would have to begin importing huge quantities of the fuel in order to meet Americans’ demand. But the discovery of the Marcellus and other shale reserves has completely changed the equation.
Sierra Club objects to Maryland LNG plans (Apr 27) — UPI
In a letter to Dominion Transmission Inc., operator of an import facility at Cove Point, the Sierra Club offered a reminder that a 2005 [updated settlement agreement] stipulates the facility won't be used for exports.
Dominion gets customers for expansion (Apr 27) — Southern Maryland Newspapers Online, MD
On Thursday Dominion announced that the company signed binding precedent agreements in late March — one with an unamed shipper and the other with Sumitomo Corp., “a major Japanese corporation with significant global energy operations,” according to a company press release. Between the two shippers, the planned project capacity is about 750 million cubic feet per day on the inlet and about 4.5 million to 5 million metric tons per annum on the outlet.
Sumitomo, Tokyo Gas secure US LNG from Dominion (Apr 27) — Oil & Gas Financial Journal
Under the agreement, Sumitomo and Tokyo Gas will buy 2.3 million metric tons of liquefied natural gas annually for 20 years from Dominion’s Cove Point project in Maryland.
“If the project is finally agreed, Sumitomo will be able to establish a natural gas and LNG value chain in the US” stretching from extraction to export, Sumitomo officials said.
Update 1-Sumitomo, Tokyo Gas in talks for U.S. LNG imports (Apr 27) — Reuters
The Japanese companies added that they were considering sourcing feedstock from the Marcellus shale gas project in which Sumitomo is participating.
If the project receives formal U.S government approval in 2017, its shipments to Japan will likely be priced at less than $10/mmBtu, said Kunio Nohata, senior general manager of gas resources department at Tokyo Gas, well below current Asian prices at around $17/mmBtu.
The wash of domestic shale gas hitting U.S. markets has sent domestic gas prices plummeting, but concern that the fledgling movement to export LNG - natural gas cooled to a liquid for transport overseas - could drive up U.S. prices has drawn opposition from consumer groups. [Red & bold emphasis added.]
Gulf of Mexico
Excelerate considering South Texas for planned floating LNG liquefaction plant (Apr 27) — LNG Law Blog
At an industry conference in Houston this week, Excelerate Energy CEO Rob Bryngelson told Platts LNG Daily [subscription required] that his company is considering a South Texas location for a proposed floating liquefaction plant to export U.S. LNG to Caribbean island markets. [Red & bold emphasis added.]
Not only is the US drastically cutting its LNG imports from Trinidad and Tobago, US LNG exporters are wanting to take T&T's customers.
USA: Foster Wheeler scores Cameron liquefaction contract (Apr 27) — LNG World News
Foster Wheeler said today that a subsidiary of its Global Engineering and Construction Group has been awarded an owner’s engineer contract for a new LNG liquefaction project to be located in Hackberry, Louisiana, by Cameron LNG LLC, an affiliate of Sempra Energy, planned to export up to 12 million tons per annum of LNG.
British Columbia
B.C. Liberal Party: Booming Asian economy, jobs plan and resource sector central to growth (Apr 27) — The Vancouver Sun, Vancouver, BC
In January, we released our liquefied natural gas strategy. Global trade in LNG doubled between 2000 and 2010, and is expected to increase another 50 per cent by 2020. We have committed to having at least one LNG pipeline and terminal in operation by 2015. The first LNG export licence was granted to a facility being built in Kitimat just this year. We also have a number of investors and project proponents that could mean more than $20 billion in direct new investment and more than 9,000 construction jobs and 800 long term jobs. The potential of LNG is once in a generation.
Oregon
Proposed LNG export pipeline to cross Columbia County lands (Apr 27) — The Chronicle, St. Helens, OR
Oregon LNC and Oregon Pipeline plan to collaborate on a facility to bring natural gas from Canada by pipeline and ship up to 9 million tons of liquefied natural gas per year by specially designed tankers from a terminal in Warrenton. The gas would be destined for Asia markets.
United States
Why lower natural gas prices help the U.S. only a little (Apr 26) — Bloomberg Businessweek
Although we have massive amounts of natural gas—an estimated 2,214 trillion cubic feet, enough to last 100 years by some measures—we still don’t use that much of it. Case in point: We’re drilling so much and using so little, it’s conceivable that we’ll max out our 4.3 trillion cubic feet of storage capacity at some point this year. Americans burn about 22 trillion cubic feet of natural gas every year, enough to fill up about 595,000 Empire State Buildings. But we could use a whole lot more, and certainly will soon. Until we do, the U.S. economy won’t see that big of an upside from cheap prices. [Red & bold emphasis added.]
An underground threat? — The Moscow News, Moscow, Russia
Industry experts say that in 10 years, U.S. [LNG] exports will be a real challenge for Gazprom, as the American gas industry – boosted by overproduction – can already offer its domestic market prices, which are lower than Gazprom’s export prices, for overseas sales.
Europe
U.K. faces possible EU lawsuit over Milford Haven LNG safety (Apr 27) — Bloomberg
European Union regulators threatened to file a lawsuit against the U.K. over safety at the Milford Haven liquefied natural-gas terminal.
“They didn’t properly assess what the impact might be of LNG tankers going in and out of the Milford Haven facility,” Joe Hennon, environment spokesman of the Brussels-based commission, said today by telephone. [Red, yellow & bold emphasis added.]
It was SIGTTO LNG terminal siting best safe practices violations in Milford Haven, covered in the UK news media during the permitting process, that brought SIGTTO best practices to the attention of Save Passamaquoddy Bay. Downeast LNG's site selection also violates SIGTTO best practices. (See LNG Terminal Siting Standards Organization for more on this issue.)
Northeast
Application withdrawn, new plans in works for LNG port — Atlanticville, Manalapan NJ
Liberty Natural Gas (LNG) has withdrawn an application for a license to construct and operate a deepwater port 30 miles off the coast of Monmouth Beach.
“One of the things that a lot of people don’t know is that LNG imports are essentially dead. They’re expected to drop down to a miniscule amount of what they once were just starting next year, so the government’s energy forecast doesn’t envision any utility imports whatsoever. We’re already operating at only about 8, 9 percent of our country’s capacity to import on a daily basis, so there’s just no need for another import facility,” said Dixon on [Red & bold emphasis added.]
Proposal for offshore liquefied natural gas port withdrawn (Apr 25) — Asbury Park Press, Asbury, NJ
Liberty Natural Gas LLC has officially withdrawn its application to build a liquefied natural gas port 17 miles off the coast of Asbury Park.
The proposal was to build a 44-mile seafloor pipeline that would move up to 2.4 billion cubic feet of regasified fuel offloaded from tankers to Perth Amboy.
Company withdraws plan for liquefied natural gas terminal off Jersey coast; will do new plan (Apr 25) — (AP) The Republic, Columbus, IN
Liberty's plan was the last of three proposed offshore gas projects in New Jersey waters to remain under consideration. ExxonMobil had proposed a floating gas terminal called BlueOcean Energy about 20 miles off the coast of Manasquan, and The Atlantic Sea Island Group wanted to build a 63-acre artificial island nearly 20 miles off Sandy Hook for a liquefied natural gas port called "Safe Harbor Energy."
Liberty Natural Gas withdraws offshore industrial application (Apr 25) — Atlantic Highlands Herald, NJ
Sandy Hook, NJ - Under the certainty of defeat, thanks to the firm, unequivocal, veto issued by NJ Governor Christie, Liberty Natural Gas, LLC, (owned by a Canadian investment firm) has officially withdrawn their application to build a liquefied natural gas (LNG) terminal off the coast of New Jersey and New York. As a result, the Maritime Administration (MARAD) announced yesterday that it has terminated all activities and processing of the application.
On April 10, lawyers for Liberty Natural Gas sent a letter to MARAD claiming that the company had determined that they need a “complete overhaul of the application materials” and, therefore, “Liberty hereby withdraws its current application.”
LNG plan scrapped — for now (Apr 24) — LIHerald.com, Garden City, NY
In an April 10 letter to the Maritime Administration, however, the company said that it was withdrawing its application, saying that additional survey work is needed after it completely redesigned and scaled back the project last year from four buoys to two and eliminated the construction of an onshore pipeline, among other revisions.
The company’s application was also amended in February to change the terminal’s initial location — 16 miles south of Asbury Park, N.J., and 25 miles south of Rockaway, which critics said placed the terminal closer to New York and in proximity to a proposed windmill farm. [Red & bold emphasis added.]
Liberty Natural Gas previously scaled back the LNG project import capacity — because it recognized the falloff of need. And yet, Downeast LNG continues to push its unneeded project.
Sierra Club attempts to block LNG terminal — The State Journal, Charleston, WV
The Sierra Club announced it will deny permission to expand an existing facility for a liquefied natural gas export terminal in Maryland. Dominion is attempting to convert a Cove Point, Md., import facility to an export facility for LNG.
The group had a prior agreement negotiated to ensure the facility was used only for imports and was not expanded going back to the 1970s, the organization said. The deal between the Sierra Club, the Maryland Conservation Council and then-owner Columbia Gas Corp., was intended to limit the footprint of the facility.
Some expansions had been allowed since the initial agreement, but according to the Sierra Club, the 2005 agreement made clear that no further expansions or function changes would be allowed. [Red & bold emphasis added.]
Sierra vows to block Dominion’s LNG exports from Cove Point — Bloomberg Businessweek
Sierra Club sued to block construction of the terminal in the 1970s, and settled the case in return for gaining the right to approve plans for expansion. The group said today it won’t grant such permission.
“Sierra Club cannot and will not support LNG exports from Cove Point,” Michael Brune, executive director of the San Francisco-based group, said on a conference call. “If Dominion still seeks to move forward, we will insist that they stand by the agreement they have made with us.” [Red & bold emphasis added.]
Sierra Club to fight Dominion hub using 1972 deal — Reuters AlertNet
WASHINGTON, April 26 (Reuters) - The Sierra Club will try to use a 40-year-old legal settlement to scuttle plans by Dominion Resources Inc to convert a liquefied natural gas terminal in Maryland into a major export hub.
Dominion is one of nearly a dozen companies seeking government approval to export some of America's abundant shale gas resources. Natural gas is trading at $2 per million British thermal units in the United States, much lower than $6-$8 in Europe and around $13 in Asia.
"Every billion dollars that we're throwing into an LNG terminal is a billion dollars that's better invested in solar and wind," Sierra Club Executive Director Michael Brune told Reuters.
Sierra Club moving to block planned Maryland terminal to export liquefied natural gas — (AP) The Washington Post, Washington, DC
WASHINGTON — The Sierra Club said Thursday it will try to block an energy company’s plan to export liquefied natural gas to find new markets for the drilling boom that has flooded the Mid-Atlantic with natural gas.
Virginia-based Dominion Resources Inc. is seeking to export 1 billion cubic feet per day through a terminal it owns in Maryland. A previous legal settlement dating to the 1970s gives the Sierra Club the ability to reject any significant changes to the purpose or footprint of the existing natural gas terminal in Cove Point, Md., 60 miles southeast of Washington.
The Sierra Club said earlier this year that it accepted more than $26 million from Chesapeake Energy, a leading natural gas company, while promoting natural gas as a cleaner, more efficient alternative to coal. Brune said the donations were received from 2007 to 2010 and have now stopped.
Dominion lines up Sumitomo for LNG export unit — MarketWatch
NEW YORK (MarketWatch) -- Dominion Resources Inc.said Thursday it has lined up two customers for its proposed Cove Point liquid natural gas exporting facility. One of the customers is Japan's Sumitomo Corp., and the other wasn't named. .... Dominion said the LNG facility is now fully subscribed and that it hopes to negotiate terminal service agreements by the end of the summer. The Sierra Club said it's exercising a past legal settlement with Domnion to oppose the LNG project....
Dominion confident Sierra Club objections will not block Cove Point liquefaction project [Press release] — MarketWatch
Dominion announced earlier today it is moving forward with its natural gas liquefaction project at Cove Point. At the end of March, Dominion signed binding precedent agreements with two companies, one of which is Sumitomo Corp., a major Japanese corporation with significant global energy operations. Between the two shippers, the planned project capacity of about 750 million cubic feet per day on the inlet and about 4.5 million to 5 million metric tons per annum on the outlet, is fully subscribed. Construction is expected to begin in 2014, with an in-service date in 2017, pending receipt of necessary approvals, negotiating binding terminal service agreements with the shippers and successful completion of engineering studies.
Gulf of Mexico
Mixed response to Sabine Pass approval (Apr 23) — Politico
“We are already subjected to and told we are being extorted at the gas pump because we’re in a one-world economy, and we have to pay world price for gasoline and oil,” said Rep. Peter DeFazio (D-Ore.), whose district includes one proposed export facility. “Why subject ourselves to the same thing for natural gas?”
This much is clear: Domestic natural gas is cheap, recently dipping below $2 per 1,000 cubic feet for the first time in a decade — and the U.S. has lots of it. Some estimates say there’s enough gas to power the nation for 100 years at current usage. And with only so much gas needed to heat homes or run power plants, storage facilities are flush from a mild winter. [Red & bold emphasis added.]
Sierra Club protests Cameron LNG export proposal (Apr 25) — LNG Law Blog
Sierra Club filed a motion to intervene and protest with the U.S. Department of Energy alleging that Cameron LNG’s proposal to export LNG from its existing terminal in Cameron Parish, La. is inconsistent with the public interest and that Cameron LNG has failed to provide the required environmental and economic analyses to support its proposal.
Sierra Club takes swipe at natural gas (Apr 24) — UPI
The Sierra Club said it filed a formal protest to the U.S. Department of Energy challenging a proposal to export natural gas from a facility on Lake Charles in Louisiana.
"Exporting natural gas is dirty and dangerous, and puts American families at risk," Sierra Club Executive Director Michael Brune said in a statement. "The Sierra Club's action today follows a series of filings in an ongoing effort to protect families from the natural gas industry's dirty and dangerous operating practices."
Corpus Christi files Draft Resource Reports with FERC (Apr 25) — LNG Law Blog
Corpus Christi Liquefaction LLC has filed draft resource reports in its prefiling docket at FERC for its proposed LNG export project.
Caribbean
Paulwell wants a bigger stake in 360MW plant (Apr 25) — The Gleaner, Kingston, Jamaica, West Indies
Last night, Minister of Science, Technology, Energy & Mining Phillip Paulwell acknowledged that his ministry was in negotiation with JPS and its majority owners to pick up a bigger stake in the LNG plant but declined to disclose how much more it is asking for.
Wednesday Business was reliably informed, however, that Paulwell is hoping to quadruple that stake to about 20 per cent of the plant, which is yet to break ground but is expected to be operational by 2015.
Gov't focused on reducing cost of energy (Apr 24) — Jamaica Information Service, Jamaica
[Minister of Science, Technology, Energy and Mining (STEM), Phillip Paulwell] stated that government remained committed to the Liquefied Natural Gas (LNG) project and intends to adhere to the 2014 deadline for completing the required facilities for its successful implementation. He said there are plans to re-open discussions with Trinidad and Tobago for the souring of LNG from that country.
Seeking to expand trade — Newsday, Port-of-Spain, Trinidad and Tobago, West Indies
...Whereas until relatively recently TT supplied the United States with 72 percent of its LNG imports, today this has been readjusted to approximately 25 percent, with the country exporting the difference to more profitable markets in, for example, Latin America. In the meantime, there is a need for greater regional cooperation.
Trinidad and Tobago's Minister of Energy has projected that its LNG exports to the US will drop to zero.
Alaska
Exports have record year with seafood, weak dollar — Alaska Journal of Commerce
Energy exports declined by 7.3 percent to $387 million after ConocoPhillips shut down its liquefied natural gas export facility at Nikiski last November. The plant will resume operations this year after securing new contracts and leasing an LNG tanker. [Red emphasis added.]
Oregon
Oregon LNG plans to file DOE export application soon (Apr 25) — LNG Law Blog
Oregon LNG plans to seek authorization from the U.S. Department of Energy to export LNG to both free-trade agreement (FTA) and non-FTA countries in the near future, according to an article in Platts Gas Daily [subscription required]. A project manager for the company said that while his project would compete with Jordan Cove Energy’s proposed LNG export facility in Coos Bay, he did not see the facilities as mutually exclusive.
LNG pipeline [sic] could go through county — South County Spotlight, Portland, OR
As the prospect of liquefied natural gas importation terminals along the Oregon coast and the Columbia River has flat-lined, a revival of LNG’s presence in Oregon is gaining momentum. But this time the plan is to export, not import, the liquefied gas.
US regulations prohibit cryogenic LNG piping outside of LNG facilities. "LNG pipeline" actually refers to a non-cryogenic natural gas pipeline that would supply a facility that would produce LNG.
United States
Brookings to release study on U.S. LNG export impacts — LNG Law Blog
On May 2, in Washington, D.C., the Energy Security Initiative at Brookings will host the release of a new report "Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas."
'Assessing the Case for U.S. Exports of Liquefied Natural Gas' report released at Brookings — (AP) Power Industry News
Brookings Institution Energy Security Initiative [will host] release of new report 'Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas'.
Event Date: 2012-05-02
Event time: 14:00 EDT [2:00 pm]
U.S. gas export limit of 10% would be ‘smart,’ Dow CEO says — Bloomberg Businessweek
Dow Chemical Co. Chief Executive Officer Andrew Liveris said it would be “smart” for the U.S. to limit natural-gas exports to 10 percent of output because expansion plans in his industry are rooted in low gas prices.
Exporting more than 15 percent of the country’s gas production would tighten markets too much and lead to higher prices, Liveris said today in a telephone interview. Excessive exports of liquefied natural gas, or LNG, could “kill” chemical investments like the company’s $4 billion expansion in Texas and Louisiana, he said last week.
LNG export ruling heard around the world (Apr 24) — EnergyBiz, Aurora, CO
Sabine Pass is the first. Seven more in the queue
On Monday, FERC voted to allow Cheniere Energy to retrofit its Sabine Pass natural gas terminal so that it can export Liquefied Natural Gas. The facility, which sits on the border of Texas and Louisiana and is near the Gulf of Mexico, will start delivering LNG by 2014. While the energy agency’s decision is not a surprise, it is occurring over the opposition of not just environmental organizations but also major manufacturers who fear rising energy prices.
S&P: U.S. LNG exports could be limited (Apr 24) — LNG Law Blog
An analyst for Standard & Poor's Ratings Services believes that U.S. exports of LNG may be limited based on S&P's expectation that the current large spread between U.S. gas and oil-linked Asian LNG prices could narrow in the future due to increased U.S. domestic demand and Canadian gas supplies flowing into Asia. The analyst said current global prices could support two or three U.S. LNG export terminals with a combined export capacity of 5-6 Bcf/day.
FERC Commissioner LaFleur questions length of U.S. LNG export advantage (Apr 24) — LNG Law Blog
FERC Commissioner Cheryl LaFleur told an industry group last week that as the rush to build LNG export terminals continues, she wondered “how long the technological advantage that the U.S. appears to hold in unconventional gas extraction will last,” and how long it will take other countries with shale gas plays to catch up to the technology and reduce the current price advantage of U.S. gas supplies. LaFleur also noted that in FERC's order approving the Sabine Pass LNG export application last week, the Commission clarified that its role is to determine the public interest for the export facilities, whereas the U.S. Department of Energy reviews the commodity export and balance of trade issues.
Pioneer CEO: Exporting could boost natural gas price to $5/mcf (Apr 24) — The Dallas Morning News, Dallas, TX
Natural gas is bound to be cheap for a long time, until the U.S. starts exporting to more countries, said Pioneer Natural Resources chief executive Scott Sheffield said.
And then natural gas could rise to $5 per million cubic feet, he said.
Natural gas oversupply -- two perspectives [Blog] — Barnett Shale, Star-Telegram, Fort Worth, TX
Several participants agreed that producers have not been inclined to sign long-term contracts at today's $2 price level, the lowest in a decade, although Harpole said he thinks producers' willingness to deal long-term is growing as it appears the glut will prove longer-lasting. David Hill, vice president of Natural Gas Economy at Encana, said a big user that wants to lock in supply at low prices can do so by committing the money to take an interest in production, as one steel company has done. "It's happening," Hill said of such arrangements. The conference ends today. [Red & bold emphasis added.]
Potential buyers of US LNG seek contract options with supply security: exec — Platts
The US export project that is furthest along in development, Cheniere Energy's Sabine Pass in Louisiana, is not using a tolling model, but instead would buy gas for customers and sell LNG to them at 115% of the Henry Hub price, in addition to fixed costs that the buyers would pay for liquefaction capacity.
Gulf of Mexico
Cheniere on the cusp of LNG export boom — MSN Money
The U.S. is now on the cusp of becoming the world's largest exporter of liquefied natural gas, surpassing leading LNG exporters Qatar and Australia by 2017. How's that?
Sierra Club files protest at DOE regarding Sabine Pass LNG export proposal; submits letter to CEQ — LNG Law Blog
...Sierra Club alleges that FERC's review of Sabine Pass LNG's export application did not consider the environmental affects of hydraulic fracturing and requests that DOE consider those affects in its consideration of a final order on Cheniere's export application.
Sierra Club also sent a letter to the White House Council on Environmental Quality (CEQ) requesting that CEQ and the U.S. Environmental Protection Agency consider the environmental affects of hydraulic fracturing and provide guidance to DOE on whether to permit increased LNG exports.
Natural gas game changer: The U.S. paves way for Sabine Pass (Apr 22) — Money Morning
The oversupply of natural gas continues to swell thanks to breakthrough technologies in fracking and horizontal drilling that "unlocked" this huge swath of energy. Tack on that local U.S. demand has been limited by an unseasonably warm winter, and you get the unsurprising dip in gas prices. [Red & bold emphasis added.]
Caribbean
Coal is cheapest way to power a light bulb — The Gleaner, Kingston, Jamaica, West Indies
The [University of the West Indies energy think tank] said using current prices, it would cost US$178.70 to purchase two barrels of oil to power the incandescent bulb. It said if coal were to be utilised to do a similar job, it would take only 396 kilograms (871lb) of the product at a cost of US$23.8, or 13 per cent of the cost of oil. The think tank also said liquefied natural gas (LNG) would be a more expensive option to coal. The researchers argue that it would require 333 litres of LNG to power the same 100-watt bulb, which would cost US$83.3, or 47 per cent of the cost of oil.
Powering a light bulb [Opinion] — The Gleaner, Kingston, Jamaica, West Indies
While the predominant local energy debates about LNG versus coal, and fuel diversity, are important issues; getting Jamaican industry to a competitive 10-15 US cents/KWh will require a more fundamental conversation about the structure of the industry and the way that usable energy is extracted from a barrel of oil or a tonne of coal.
Ja-T'dad LNG talks at 'ground zero' — The Gleaner, Kingston, Jamaica, West Indies
The Office of Utilities Regulations is to open the bid for the supply of LNG in June, and Paulwell said it was important that Jamaica sought to secure an agreement with Trinidad before then.
Shock treatment - can JPS do more to reduce energy cost? (Apr 22) — The Gleaner, Kingston, Jamaica, West Indies
The JPS predicated its bid for building the new 360MW plant on Jamaica acquiring liquefied natural gas (LNG) in the very near future. However, even with LNG, there would be a difference in the efficiency rate between the reciprocating diesel engines and the combustion turbines. Further, if Jamaica is unable to secure LNG and JPS is allowed to install the combustion turbines, we can all kiss lower electricity prices, goodbye. JPS said as much in its press conference to announce its intention to build the 360MW plant.
Alaska
Valdez rated better for LNG line than Cook Inlet (Apr 22) — Anchorage Daily News, Anchorage, AK
"The Port of Valdez has already proven that it is a world-class oil export facility, with the infrastructure in place to export large volumes of North Slope gas in the form of LNG from Alaska," the study says.
British Columbia
BG inks USD 500 million credit deal with Export Development Canada — LNG World News
LNG player BG Group of UK today announced a US$500 million credit agreement with Export Development Canada (EDC).
Oregon
LNG export terminal proposed for Warrenton — Coastal River Business Journal, Astoria, OR
Oregon LNC and Oregon Pipeline plan to collaborate on a facility to bring natural gas from Canada by pipeline and ship up to 9 million tons of liquefied natural gas per year by specially designed tankers from a terminal in Warrenton. The gas would be destined for Asia markets.
Global economics driving plan to export LNG from Warrenton — Coastal River Business Journal, Astoria, OR
The economics of LNG have changed substantially in the nearly five years since Oregon LNG first considered an import terminal project in Warrenton. An abundance of gas from exploration in Canada and the U.S. has caused prices to fall here while a shift away from coal and nuclear fuels for electrical generation in Asia has driven demand overseas. [Red & bold emphasis added.]
United States
US FERC member suggests window for US LNG exports may not last long — Platts
"One issue that I have been thinking a lot about ... is as all the people rush to put their money into export facilities, how long the technological advantage that the US appears to hold in unconventional gas extraction will last," Cheryl LaFleur, a member of the US Federal Energy Regulatory Commission, said Monday.
Other countries have shale plays, but they do not yet have the infrastructure to access it, she said. While estimates vary as to how long the US will have a technological advantage, LaFleur said, her "experience is that these technological cycles seem to be shorter and shorter as we move forward all the time."
Shale gas: Terminal decline no longer — The Financial Times, London, England, UK [Paid subscription]
...Thanks to shale, the US in 2010 overtook Russia as the world’s largest gas producer.
Cheniere is one of a number of companies that plan to export surplus US gas – and at much lower prices than those set by other producers. For global energy markets, that is a change of potentially huge proportions....
For decades, LNG has been sold under 20-year contracts indexed to the price of oil. Cheniere’s export contracts are linked instead to US gas prices, which have been driven to 10-year lows by the shale gas glut....
Neighbouring Canada also has ambitious export plans: its National Energy Board recently granted licences for two planned LNG export terminals in Kitimat, a port on the northern Pacific coast in British Columbia, which will have a combined capacity of 12m tonnes a year.
Cheniere’s LNG import terminal at Sabine Pass, on the Texas-Louisiana border, went into service in 2008. But as the shale gas boom destroyed US demand for imported LNG, it became all but redundant....
[G]as from Sabine Pass will be sold at a price indexed to Henry Hub, the main US gas benchmark, which trades at less than $2 per million British thermal units.... [Red, yellow & bold emphasis added.]
The Climate Post: As half the U.S. contemplates hydraulic fracturing, first liquefied natural gas export plant approved (Apr 22) [Blog] — Huffington Post
The Federal Energy Regulatory Commission on Monday [Apr 16] approved the first large-scale liquefied natural gas export terminal in the lower 48 states despite record falling gas prices. Shipping from the $10 billion Louisiana plant is projected to begin as early as 2015. The Cheniere plant is the third liquefied natural gas plant in the works in Louisiana. Others are planned elsewhere in the country.
Americas LNG Markets to 2020- Analysis and Forecasts of Terminal wise Capacity and Associated Contracts, LNG Trade Movements and Prices — ReportLinker
LNGReports has launched the new comprehensive report on Americas LNG industry outlook to 2020. The report provides profound analysis and complete data on each segment of LNG countries in Americas. It also forecasts production, demand, major trends and challenges of investing in the market. Historical and forecasted information on source fields, connecting pipelines, processing plant, trains, storage tanks, jetty and LNG carriers is provided for each of the existing and planned LNG terminals in the country.
Gulf of Mexico
USA: Senator Landrieu applauds Sabine Pass approval — LNG World News
“This facility represents the huge growth that our nation has experienced in natural gas production over the last several years. This production is continuing to grow, and will be essential to increasing our energy independence and security,” Sen. Landrieu said. [Red & bold emphasis added.]
Chemical makers ride gas boom (Apr 18) — The Wall Street Journal, New York, NY
FREEPORT, Texas—Dow Chemical Co. will build a multibillion-dollar plant to convert natural gas into the building blocks of plastic in this coastal city, becoming the latest chemical maker to capitalize on the abundant gas supplies that are helping spur a renaissance in U.S. manufacturing.
Interveners file opposition to Freeport LNG export project — LNG Law Blog
Several parties recently filed Motions to Intervene and Protest in the Freeport LNG export proceeding pending before the U.S. Department of Energy. The filings of the Gulf Coast Environmental Labor Coalition and the American Public Gas Association are available under DOE Docket No. 11-161-LNG. Separately, a similar filing by the Sierra Club is available courtesy of Law360.com.
Cheniere to submit Resource Reports soon for Corpus Christi LNG export project — LNG Law Blog
Cheniere representatives informed FERC that the company will begin submitting draft environmental resource reports for the Corpus Christi LNG export project within two weeks. Minutes from a conference call between project developers and FERC staff are available in the eLibrary under Docket No. PF12-3.
Oregon
LNG terminal could be repurposed for export — (AP) The Bulletin, Bend, OR
PORTLAND — A proposed natural gas terminal on Oregon’s north coast originally designed for imports has been recast as an export facility.
A proposed LNG terminal in Coos Bay also began as an import project and now is planned for exports. With North American supplies of gas abundant, export terminals are proposed on the coast of British Columbia, as well as the Gulf Coast of the United States.
LNG resurfaces at Warrenton [Editorial] (Apr 18) — The Oregonian, Portland, OR
[T]he Federal Energy Regulatory Commission, which must declare a public necessity for the project before granting developers eminent domain authority to extend their pipeline across private lands, was never clear in defining public necessity -- something Oregon challenged the agency on to no avail. And Oregon Sens. Ron Wyden and Jeff Merkley cautioned that any potential exports could raise domestic energy prices and undermine U.S. energy security. [Red & bold emphasis added.]
FERC action will not delay Jordan Cove LNG export project development, company says — LNG Law Blog
Bob Braddock, project manager for Jordan Cove Energy Project, said FERC's decision earlier this week to vacate the authorization for the Jordan Cove LNG import project will not delay the development of an LNG export facility at the same site. However, opponents of the LNG project told the Register-Guard (Eugene, Ore.) that they view FERC's decision as a significant victory and were pleased with the outcome.
Separately, FERC staff released materials summarizing the staff’s visit to the site of the Jordan Cove LNG project. The materials are available in FERC's eLibrary under Docket No. PF12-7.
United States
2011 State of the Markets — Federal Energy Regulatory Commission (FERC)
Natural gas production reached an all time record in 2011, surpassing levels last seen in the 1970’s. Growing supply outpaced demand, which led to record high natural gas storage going into the 2011/2012 winter and natural gas prices fell to lows not seen since the early 2000’s. Plentiful natural gas supply and low prices led to talk of the need to develop new domestic and foreign markets for natural gas and in 2011 seven LNG export projects were proposed in the U.S. with almost 14 Bcfd of capacity. The electric markets also experienced low prices as fuel costs fell and demand remained stable. Changes in the pricing relationship between natural gas and coalfired generators caused a fundamental shift in the utilization of these plants, with natural gas plant production increasing and coal plant output falling.
Last year transportation capacity values dropped on many long-haul pipelines as strong production growth in the Marcellus and other shale basins displaced some natural gas flows from traditional supply basins. For example, we saw Rockies natural gas flows to the Northeast on Rockies Express Pipeline (REX) decline more than 40% since early November 2010, from 1.7 Bcfd to 1 Bcfd. The decline was so severe that S&P reduced REX’s credit rating. The downgrade is the result of persistent low profitability in shipping Rockies natural gas eastward, which has occurred because Rockies natural gas has been displaced in the Northeast by increased flows of less-expensive Marcellus Shale gas from Pennsylvania. Also, the new Ruby pipeline competed with REX providing Rockies producers access to a more profitable market in Northern California. S&P said that lower profitability now has increased the recontracting risk on REX as well. As with the Rockies, traditional U.S. Gulf Coast supplies have been displaced by largely liquids-rich Mid-Continent production.
...In 2011, pipeline developments shifted to projects focused on relieving local bottlenecks in new producing basins rather than long-haul pipelines. Most are located in the Northeast and Southeast and include the Tennessee Gas Pipeline Line 300 Expansion, the Texas Eastern TEMAX/TIME III project and the Acadian Haynesville Extension, an intrastate pipeline which feeds into the Henry Hub. [Red, yellow & bold emphasis added.]
Downeast LNG is demonstrably moot.
Natural gas: Should America export its surplus? — The Christian Science Monitor
"We have an overabundance of natural gas supply dwarfing demand," says Bill Cooper, president of the Center for Liquefied Natural Gas, a trade group representing LNG shippers, producers and terminal operators, in an interview. "To allow companies to export that when domestic need for this excess supply is not there, helps our balance of trade, brings wealth into the US, jobs, and dollars to local and state governments. So, yes, our position is that LNG exports certainly are consistent with the public interest."
But other natural gas companies – those delivering the product to customers – are distinctly less enthused. The American Public Gas Association, which represents small, often not-for-profit gas systems owned by municipalities and other public entities, opposes all of the proposed LNG facilities.
Environmentalists, meanwhile, note that according to the EIA study, increased exports could set back plans to broadly replace coal-fired power plants that emit the bulk of greenhouse gases with far cleaner, natural-gas-fired turbines.
Even the Center for LNG indicates Downeast LNG is unneeded.
Letter to the editor: Don’t increase LNG exports (Apr 18) — The Washington Times, Washington, DC
The American Public Gas Association (APGA) could not disagree more with the recent Op-Ed, “Democrats’ dumbest new energy idea” (Commentary, Tuesday). Our organization represents not-for-profit community-owned gas systems, and we offer the other side of the story.
The export of liquefied natural gas (LNG) sets a dangerous precedent that will ultimately harm the American economy. Exporting a finite domestic resource is contrary to a prudent national energy security policy.
LNG exports: A release valve for U.S natural gas (Apr 18) — The Globe and Mail, Toronto, ON
It’s unlikely that all the planned export capacity will get built. Political opposition or lower global gas prices may rein in the ambitions of exporters eventually. And first production from Sabine Pass isn’t expected before 2015.
Passamaquoddy Bay
Mayor says news of LNG project's demise is terrific (Apr 10) — Saint Croix Courier, St. Stephen, NB
[No part of this article is available online without a paid subscription. — SPB webmaster]
"It is a great gift they have given me in my last few weeks as mayor. I think the dominoes are in place and the other one (Downeast LNG) will fall as well," [St. Andrews Mayor John Craig said].
"In 2005 there were nearly 40 LNG import terminal projects in the works. Now, there are just two. The natural gas industry itself has recognized and dismissed LNG import terminal projects as a worthless and defunct business model. Downeast LNG is the last shoreside holdout in a pointless pursuit," [said Save Passamaquoddy Bay's researcher]. [Red, yellow & bold emphasis added.]
Northeast
Plans for liquefied natural gas project off Long Beach resurfaces — Long Island Herald, Garden City, NY
A plan to build a liquefied natural gas terminal off the coast of Long Beach has been submitted to the U.S. Maritime Administration and the U.S. Coast Guard for review, and local environmentalists are calling on the federal agencies to reject the proposal.
Last Year, New Jersey Gov. Chris Christie blasted the proposal, and vetoed it under the federal Deepwater Port Act. But according to Cindy Zipf, executive director of Clean Ocean Action, the Maritime Administration denounced Christie’s call on the agency to deny the application for the terminal’s construction, saying that the veto was “not legally significant.” Zipf said that the agency is now considering a revised application that would move the port closer to New York — and, ironically, right in the middle of a proposed offshore wind farm 13 miles off the Rockaway peninsula. [Red, brown & bold emphasis added.]
This is the only other LNG import terminal project left in North America. The other is Downeast LNG. Both are unneeded due to nearby copious supply of domestic natural gas.
Gulf of Mexico
U.S. regulators approve Cheniere LNG export plant (Apr 16) — (Reuters) Chicago Tribune, Chicago, IL
U.S. regulators on Monday approved the country's first liquefied natural gas export plant in nearly 50 years, which will open up cheap and abundant American supplies to importers across the globe.
It marks a huge turnaround for the U.S. energy market that five years ago was scrambling to build gas import terminals before shale gas drilling provided decades of domestic reserves. Analysts say the project alone will do little to alleviate the glut in supplies that have sent domestic prices to 10-year lows, however. [Red, yellow & bold emphasis added.]
Cheniere wins U.S. approval for natural-gas export terminal (Apr 16) — Bloomberg
Environmental groups including the San Francisco-based Sierra Club opposed the project, saying converting natural gas to liquid form emits carbon dioxide, which is linked to climate change. Some critics of the plan had also said exporting gas would drive up costs for domestic users.
Advanced drilling techniques have bloated gas supplies in the U.S. and Canada, sending prices to the lowest since 2002. Cheniere plans to super-chill the gas and ship it to Asia and Europe, where it sells at a premium to U.S. prices,Souki said in a March 15 interview.
Cheniere is planning another export facility near Corpus Christi, Texas, which may begin operating by 2017 or 2018, said Souki, the CEO. [Red, yellow & bold emphasis added.]
Cheniere gets US regulator's consent to start Sabine Pass LNG export construction (Apr 16) — ICIS Heren, London, England, UK
The commission, which was scheduled to review the environmental assessment of the proposed 16m tonne per annum (mtpa) liquefaction project in Louisiana on Thursday, made the decision notationally, meaning outside of the scheduled monthly public meeting, according to a FERC spokeswoman.
FERC's Sabine Pass ruling comes with 55 conditions, FERC said in its decision.
Cheniere is the first and sole recipient of an unrestricted LNG export trade license from the US Department of Energy. Monday's FERC approval finalises the second step of a two-agency regulatory process in the US.
FERC approves LNG export project [Press release] (Apr 16) — FERC (Federal Energy Regulatory Commission)
The Federal Energy Regulatory Commission (FERC) today approved a proposal by Sabine Pass Liquefaction, LLC and Sabine Pass LNG, L.P. to site, construct and operate facilities to liquefy domestic natural gas for export to markets worldwide. This is the Commission’s first authorization of a project that would export liquefied natural gas (LNG) from production resources within the United States. [Red, yellow, brown & bold emphasis added.]
Path cleared for LNG exports; Cheniere rides wave — The Atlanta Journal-Constitution, Atlanta, GA
Federal regulators have approved the first large-scale natural gas export facility in the U.S., signifying the rapid shift under way for a country suddenly rich in the natural resource.
Several other companies are proposing similar facilities.
A big step forward for liquefied gas exports — The New York Times, NY
I caught up on Wednesday with Charif Souki, Cheniere’s chief executive and chairman, and he spoke ebulliently about his company’s prospects as well as the nation’s potential to become a major energy exporter over the next 15 years. He predicted that while the United States would probably only export a trickle of gas over the next five years, it could be exporting four billion cubic feet a day by 2022, and as much as 15 billion cubic feet a day by 2027.
Cheniere closes in on its two-train FID for Sabine Pass — ICIS Heren, London, England, UK
Cheniere Energy will take a final investment decision (FID) within the next two months for the first two trains of its 18 million tonne per annum (mtpa) Sabine Pass liquefaction project where construction is ready to start in June, according to Cheniere Supply and Marketing president Jean Abiteboul.
Is Cheniere Energy a contrary indicator for natural gas? (Apr 16) — OilPrice
Four years [after constructing the import terminal] U.S. natural gas prices hover around $2 per mcf due to a glut caused by a flood of new production from deep shale deposits. Domestic demand for high-cost imported LNG has evaporated. With Europeans bidding $12 for LNG cargoes and Asians bidding $16, there is simply no way for Cheniere to obtain LNG supplies that can compete with $2 natural gas.
USA: Mitsubishi, Mitsui ink development deals with Cameron LNG (Apr 17) — LNG World News
A Sempra Energy unit, Cameron LNG, today said that the company has signed commercial development agreements with Mitsubishi Corporation and Mitsui & Co., to develop and construct a natural gas liquefaction export facility at the site of Cameron LNG receipt terminal in Hackberry, La.
Environmentalists challenge natural gas export plans (Apr 16) — FuelFix
Texas-based companies, such as Cheniere Energy and Freeport LNG, are eager to take advantage of the glut of natural gas produced in the U.S., using horizontal drilling and hydraulic fracturing techniques that allow the fossil fuel to be freed from dense shale rock formations.
The plans are opposed not just by environmentalists, such as the Sierra Club, but also some chemical manufacturers that use natural gas as a building block to create other products and worry about a resulting price climb. Congressional Democrats have proposed legislation that would ban new LNG exports. [Red & bold emphasis added.]
First U.S. LNG facility irks Sierra Club — UPI
Sierra Club Executive Director Michael Brune said the approval meant more hydraulic fracturing in the United States. FERC, he said, "refused to consider" the potential environmental and health effects of the process, also known as fracking.
Sempra to team with Japanese on gas terminal — Union-Tribune, San Diego, CA
Sempra Energy has signed development agreements with two Japanese conglomerates to help build a $6 billion liquefied natural gas export terminal at its existing import terminal in Louisiana, the San Diego-based company announced Tuesday.
Demand for new export infrastructure is driven by a surge in North American production made possible by new drilling techniques. U.S. natural gas prices have plummeted to a 10-year low, in stark contrast to prices around the globe. [Red & bold emphasis added.]
Mitsui, Mitsubishi in talks with U.S. company to export LNG to Japan — The Mainichi, Japan
TOKYO (Kyodo) -- Mitsui & Co. and Mitsubishi Corp. said Tuesday that they have begun consultations with U.S. energy company Sempra Energy on a liquefied natural gas deal amid growing LNG demand in Japan as fuel for thermal power generation.
While Mitsubishi plans to obtain natural gas from markets for liquefaction at the Louisiana facility, Mitsui is considering sending via a pipeline what is known as shale gas extracted from a U.S. gas field in which it owns a stake.
Sempra plans natural gas export terminal in La. (Apr 17) — Bloomberg Businessweek
It's the third LNG export terminal in the works for Louisiana. Cheniere Energy Inc. said late Monday that it has received permission from the Federal Energy Regulatory Commission to modify its import terminal at Sabine Pass in Cameron Parish for exports, making it the first large-scale U.S. gas exporter.
Energy Transfer Equity LP has filed for federal permission to build an export facility at its import terminal at Lake Charles.
Sempra Energy signs agreement for gas liquefaction export facility in Louisiana (Apr 17) — gCaptain
The agreement comes a day after Cheniere Energy Inc. (LNG) received federal approval to construct what would be the first major natural gas export facility in the lower 48 U.S. states.
Caribbean
New gas trust to oversee Jamaican LNG project — LNG Law Blog
A new gas trust will be created by the Jamaican government to oversee the commercial arrangements for the country’s planned floating gas terminal, according to an article in Platts LNG Daily [subscription required].
British Columbia
Widening of gas pipeline to Kitimat wins approval — Calgary Herald, Calgary, AB
The revamped $1-billion Pacific Trails pipeline, stretching from the northeast corner of the province to the marine terminal, will now be 106 centimetres (42 inches) in diameter instead of 91 cm (36 in.), according to documents from the B.C. Environmental Assessment Office.
Canadian producers, wallowing in abundant North American shale gas volumes, are seeking to profit from strong Pan Asian demand for LNG. Energy firms across North America have been jostling for position to access markets in Japan, Korea and China where the super-cooled fuel fetches approximately $16 US compared with $2 US in New York. [Red & bold emphasis added.]
'Fracking' is the dirty side of clean energy (Apr 16) — Surrey Leader, Surrey, BC
Premier Christy Clark’s recent interest in liquefied natural gas (LNG) will have a great impact on the future of Site C. This project had twice been cancelled because of insufficient demand forecasts, but in April 2010, Gordon Campbell announced it was once again a priority. He claimed that by 2030, B.C.’s energy needs would grow by up to 40 per cent and Site C’s power was needed. The estimated cost had doubled to almost $6.6 billion.
Along with her enthusiasm for LNG, Clark claimed that Site C is vital as a power source for those LNG plants, blithely setting aside all the once-urgent domestic demands and negating all arguments against dam construction. Is it possible that she is unaware of the problems the North America-wide growth of the LNG industry has brought?
Oregon
FERC drops import license for Coos Bay LNG project (Apr 16) — (AP) Mercury News, San Jose, CA
Federal regulators have dropped the import license for a liquefied natural gas terminal and pipeline proposed in southwestern Oregon while continuing to evaluate switching to exports.
Meanwhile, FERC gave approval for LNG exports to a project in Louisiana being developed by Sabine Pass LNG, L.P., and Sabine Pass Liquefaction, LLC. [Red, yellos & bold emphasis added.]
Feds deal blow to proposed Jordan Cove gas terminal (Apr 16) — Oregon Public Broadcasting
The Federal Energy Regulatory Commission withdrew approvals it granted more than two years ago for both the Jordan Cove LNG terminal and the associated pipeline. The order points to a recent change in the project from a terminal that would import natural gas, to one that would export it. Oregon Department of Justice spokesman Tony Green says his office was arguing that Jordan Cove couldn’t just switch from one to the other.
One FERC commissioner says the terminal’s proposed location - near a regional airport – raises safety questions. A dissenting commissioner argues that overturning the decision undermines years of private investment.
The Jordan Cove LNG site violates SIGTTO terminal siting best safe practices (see LNG Terminal Siting Standards Organization for more on this topic).
FERC vacates order authorizing Jordan Cove LNG project [Press release] (Apr 16) — FERC (Federal Energy Regulatory Commission)
Jordan Cove had notified FERC on Feb. 29, 2012, that due to current market conditions it no longer intends to implement a Dec. 17, 2009, authorization to construct and operate an import terminal. In the same filing, Jordan Cove sought pre-filing status to explore the feasibility of a liquefaction export project that would be built and operated at the same site. FERC granted that status (Docket No. PF12-7-000). [Red, yellow & bold emphasis added.]
FERC drops Jordan Cove’s LNG import license (Apr 17) — The World, Coos Bay, OR
The Federal Energy Regulatory Commission made its decision Monday, after Jordan Cove had indicated it no longer wished to build a $1.4 billion LNG import facility on Coos Bay. Instead, the company wants to build a $3.5 billion export terminal here to ship LNG to Asia, where high demand commands high prices.
In December, the U.S. Energy Department granted Jordan Cove a 30-year license to export LNG to a short list of nations with which the U.S. has free-trade agreements. While Jordan Cove has long pitched Asia as its target market, the existing license only includes one east Asian nation, Singapore. The license also includes Australia, Bahrain, Canada, Chile, El Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Peru and the Dominican Republic.
Feds withdraw LNG pipeline approval (Apr 16) — Oregon Public Broadcasting
The Federal Energy Regulatory Commission on Monday withdrew its 2009 authorization for a company to build a liquefied natural gas import terminal near Coos Bay and a pipeline across northern Jackson County en route to a terminal in Malin.
The decision was the result of Jordan Cove Energy Project announcing its intention to export the gas to Asian markets, officials said.
"This means they no longer have the authority to construct the terminal and pipeline for importing purposes," said FERC spokeswoman Tamara Young-Allen.
Coos Bay LNG terminal’s application denial buoys opponents — The Register-Guard, Eugene, OR
“While Jordan Cove has already begun a pre-application process for an export facility, FERC has agreed with our coalition that an export facility serves a different purpose than an import facility, and requires its own full analysis of environmental and economic impacts,” a statement issued by the coalition read. Members of this group include Rogue Riverkeeper, Friends of Living Oregon Waters, Western Environmental Law Center, Rogue Flyfishers, Cascadia Wildlands “and thousands of Oregon citizens,” the statement said.
Backers of proposed natural gas terminal undeterred by FERC decision (Apr 17) — Oregon Public Broadcasting (OPB)
Backers of a liquefied natural gas terminal proposed for the Oregon Coast are not deterred by the withdrawal of federal approvals for the project. The Federal Energy Regulatory Commission ruled Monday that Jordan Cove could not rely on prior approvals of the terminal and pipeline.
Oregon liquefied natural gas export terminal proposed near the mouth of the Columbia River — The Oregonian, Portland, OR
A proposal to build a liquefied natural gas terminal near the mouth of the Columbia River in Warrenton is reentering the regulatory running, resuscitated by burgeoning North American gas supplies after being left for dead by opponents.
...A similar proposal for an LNG export terminal in Coos Bay -- also originally an import project -- is well underway. And export terminals are proposed on the coast of British Columbia, as well as the Gulf Coast of the United States. [Red & bold emphasis added.]
LNG export? Whoever would have guessed? — The Oregonian, Portland, OR
In the wake of Ted Sickinger's story this morning in which we learn -- surprise, surprise! -- that the Oregon LNG terminal was designed for export all along, allow me to simply quote the opening two paragraphs from my September 2011 column:
"It's a jaw-dropping contradiction, a classic bait-and-switch. It's a thumb-in-the-eye of energy independence and the sort of numbing stupidity that, T. Boone Pickens argues, will confirm our legacy as "the dumbest generation."
Yet we continue to stumble along, strung out between Big Oil and a diminished president, moving inexorably toward the export of this nation's vast reserves of natural gas.
Hawaii
Jones Act requirements could block natural gas transport to Hawaii [Opinion column] (Apr 16) — Hawaii Reporter
Currently there are no ships available in the Jones Act fleet to accomplish the movement of LNG from the contiguous United States to Hawaii. There are no U.S. shipyards that have constructed a deep draft LNG carrier for the past 30 years.
The real promise of low cost natural gas currently emanates from the American Mid-West. To move that resource to Hawaii, it would be necessary to transport LNG from the U.S. Gulf Coast via the Panama Canal to Hawaii. This is a relatively long transit, and the costs of operating a Jones Act LNG carrier on such a lengthy route would in all likelihood preclude its consideration as it did in the Alaska case.
[T]here will be no way to arrange for shipment of the Alaskan North Slope (ANS) natural gas to Hawaii or for that matter the U.S. West Coast because of the economics of the Jones Act...
Hawaii will only get access to cheaper ANS crude petroleum oil and natural gas with an exemption from the U.S.-Build requirement of the Jones Act. This exemption should be for the noncontiguous domestic jurisdictions – Alaska, Guam, Hawaii and Puerto Rico – and only for large self-propelled ships. Such an exemption would permit the use of Foreign-Built U.S.-Flag ships in the noncontiguous trades.
The Jones Act, in an effort to protect US shipbuilding, prohibits foreign-built ships from transiting between two US ports without first landing at a foreign port.
United States
American Gas Association encouraged by Obamas [sic] Executive Order — LNG World News
The American Gas Association (AGA) released a statement regarding the announcement that the Administration will create a new interagency working group to support safe and responsible development of unconventional domestic natural gas resources and associated infrastructure to help reduce U.S. dependence on foreign oil.
“President Obama highlighted the benefits of natural gas in his State of the Union address, and has been promoting responsible production and broader use of this domestic, abundant, affordable, clean and reliable energy source,” said Dave McCurdy, president and CEO of AGA. “We are pleased to see this action today, which will help promote consistency between the Administration and policies that are put in place...."
The foolish policy of exporting natural gas — The Market Oracle
The lack of a government policy that promotes domestic energy independence in the United States is a tragic consequence of playing politics for decades. The current rage is the natural gas boom that offers the alternative of producing a plentiful and inexpensive source of fuel. Economic prosperity rests upon cheap and reliable power and natural gas offers the best option.
...The fact that our natural resources are squandered for export will never develop a marketplace where inexpensive domestic usage becomes the driving fuel behind a viable national transportation system.
Chris Smith from the U.S. Department of Energy sheds new light on North American LNG export plans [Press release] (Apr 17) — MarketWatch
Chris Smith, Deputy Assistant Secretary, Office of Oil and Natural Gas, along with Lauren O'Donnell, Director of the Division of Gas Environment & Engineering, from the U.S. Federal Energy Regulatory Commission, will be discussing the potential for North America to become one of the world's leading LNG exporters at the upcoming LNG Export Forum North America, taking place in Houston, TX, USA on May 16-18, 2012.
American Gas Association to host LNG 17 — LNG World News
The American Gas Association (AGA) will host the largest global gas event to be held in 2013. One year from today, the 17th International Conference and Exhibition on Liquefied Natural Gas (LNG 17), will bring strategic and commercial leaders and technical experts together in Houston, TX for four days of sessions, workshops and tours of world-leading liquefied natural gas (LNG) facilities.
Northeast
Dominion Cove Point submits stipulation agreement in terminal usage case — LNG Law Blog
Last week, Dominion Cove Point LNG, LP submitted a Stipulation and Agreement to settle the outstanding issues in the Cove Point LNG terminal usage case pending before FERC.
Gulf of Mexico
Sierra Club challenges TX liquefied natural gas export facility — eNews Park Forest, Park Forest, IL
The Sierra Club filed a formal protest to the U.S. Department of Energy (DOE) late Friday, challenging a proposal to export billions of cubic feet of domestic natural gas from a facility near Freeport, TX. The Sierra Club's challenge was filed as natural gas companies are rushing to secure liquefied natural gas (LNG) export licenses before DOE releases studies on the effects of exporting as much as a fifth of the domestic gas supply – and the public health and environmental damage caused by increased fracking.
Update 3-Cheniere secures financing for US LNG export plant — Reuters
Houston-based Cheniere has received debt financing from eight banks, the proceeds from which will be used to build an LNG plant at Sabine Pass that will chill cheap U.S. natural gas to a liquid for shipping overseas by 2015, pending regulatory approval.
Cheniere is now awaiting final environmental approval, which could come as early as Thursday when the Federal Energy Regulatory Commission (FERC) votes on whether to pass the project. The company already has government approval to ship gas overseas.
USA: Cheniere to raise up to USD 4 billion in debt for Sabine Pass liquefaction project — LNG World News
Cheniere Energy Partners said today that it has engaged eight financial institutions to act as Joint Lead Arrangers to assist in the structuring and arranging of up to $4 billion of debt facilities.
Cheniere Energy Inc. (Apr 14) — The Boston Globe, Boston, MA [Paid subscription]
The natural gas importer is poised to become the sole US exporter of fuel from the shale bonanza that’s turned the nation into the world’s biggest gas producer. The government may decide soon on Cheniere’s request to build a $10 billion Louisiana plant to liquefy gas and load it onto tankers. As the only firm with a 20-year Energy Department license to export continental LNG gas to nations without US free-trade pacts, Cheniere will have a near-monopoly. [Red & bold emphasis added.]
USA: Freeport LNG to buy land for gas pretreatment facility — LNG World News
Freeport LNG announced that it had entered into an option agreement to purchase approximately 400 acres of land located about one mile southeast of the city of Oyster Creek near County Road 690 and State Highway 332 in order to relocate the future site of a natural gas pretreatment facility, which is part of Freeport LNG’s overall natural gas liquefaction project.
Freeport LNG originally purchased 500 acres of land located off of CR 792 to use as the site for its natural gas pretreatment facility. However, this property had only one point of ingress and egress (which was shared by a few neighboring communities), was closer to a greater number of residents, and was not behind the surge protection levee (which would have resulted in needing to elevate the site). These limitations led to concerns being raised by nearby residents regarding the aesthetic impact as well as safety concerns regarding ingress and egress, and the limitations of the site presented significant, additional development hurdles to Freeport LNG. Freeport LNG continued to search for other available properties that could alleviate the community’s concerns and the limitations of the CR 792 site. When the new site near County Road 690 and State Highway 332 recently became available, Freeport LNG was able to obtain an option on the property.
Caribbean
Gov’t wants to conclude LNG talks by June — Go-Jamaica, Kingston, Jamaica, West Indies
Energy Minister Phillip Paulwell says a steering committee is in advanced talks with the bidders to construct an LNG terminal and to secure a supplier of the fuel.
Energía 2000 eyes northwest for 360MW thermo - Dominican R. — Business News Americas
Natural gas, along with renewables, is the Dominican Republic's energy choice to wean the country from oil and its derivatives.
The government's gas push has been accompanied by plans to build new LNG infrastructure, including projects envisioned by consortium Complejo GNL del Este, and BW Gas and InterEnergy Holdings.
The plant is planned for the municipality of Manzanillo in Montecristi province in the country's northwest, according to a CNE resolution.
Hawaii
Natural gas in mix as isle energy option (Apr 15) — Star Advertiser, Honolulu, HI [Paid subscription]
Soaring electricity bills are pushing officials to consider a major shift in Hawaii's energy infrastructure that could replace costly fuel oil with less expensive natural gas as a source for some of the state's power generation.
The prospect of shipping liquefied natural gas, or LNG, to Hawaii has been discussed at various times over the past 10 years, but plans never advanced largely because of the high costs.
United States
Record domestic onshore gas output in January, says EIA — Natural Gas Intelligence's Shale Daily, Sterling, VA [Paid subscription]
It may take some time before fewer drilling rigs and curtailed output make a dent in domestic onshore natural gas production. Dry gas production skyrocketed 11.6% in January from a year earlier to 2,047 Bcf gross, the Energy Information Administration (EIA) said. [Red & bold emphasis added.]
U.S. companies eye LNG export market as prices slide — Forbes
While companies are eager to explore export options, the Energy Department is weary that high gas prices in the U.S. could be unpopular among local actors, that use natural gas as an input. It is expected that the Energy Department will limit the number of export permits it provides to gas producers in the U.S. Analysts expect that companies can earn maximum profits from selling gas to international projects before the massive LNG projects on the coast of Australia come into operation by 2018, lowering international prices. Cheniere hopes to begin exporting from its Louisiana facility by 2015-16.
What should U.S. policy be on energy exports? — National Journal, Washington, DC
What are the economic benefits of exporting these fossil fuels? What environmental and price concerns should the country consider? Should the Obama administration or Congress seek to block--or accelerate--any of these export trends?
New England
LNG terminal drawing little traffic (Apr 13) — Gloucester Times, Gloucester, MA
Two full years after GDF Suez opened the Neptune liquefied natural gas (LNG) terminal 10 miles southeast of Gloucester, the multinational energy company has received just four shipments from fuel-laden tankers. [Red, yellow & bold emphasis added.]
In Downeast LNG's Dean Girdis's wacky version of reality, Boston is natural-gas starved, and needs even more idle LNG import infrastructure.
Gulf of Mexico
LNG export plant verges on U.S. approval amid shale glut (Apr 13) — Bloomberg Businessweek
Cheniere Energy Inc., the natural gas importer that lost $1.2 billion in a decade, is poised to become the sole U.S. exporter of fuel from the shale bonanza that’s turned the nation into the world’s biggest gas producer.
Cheniere Chief Executive Officer Charif Souki’s next step after clearing U.S. approvals will be to complete fundraising for the project. The liquefaction terminal will be built next to Cheniere’s LNG import facility that has been mostly idle since opening in 2009, thanks to the same domestic supply glut now driving Souki’s export plans. [Red & bold emphasis added.]
LNG projects on FERC Open Meeting agenda (Apr 13) — LNG Law Blog
[This same article appears under the Oregon heading, below. — SPB webmaster]
The agenda for FERC's April 19, 2012, open meeting includes the Sabine Pass LNG and the Jordan Cove Energy applications. [Red & bold emphasis added.]
Pallone to speak at meeting of Friends of Clearwater and Sierra Club [Press release] (Apr 13) — Atlantic Highlands Herald, NJ
Both clubs also are opposed to off-shore liquefied natural gas (LNG) terminals, supposedly designed to import LNG. However, many critics believe these terminals actually will be used to export hydrofracked American gas, which is causing major pollution problems, to higher-priced European and Asian markets, thus driving American natural gas prices higher.
Oregon
LNG projects on FERC Open Meeting agenda (Apr 13) — LNG Law Blog
[This same article appears under the Gulf of Mexico heading, above. — SPB webmaster]
The agenda for FERC's April 19, 2012, open meeting includes the Sabine Pass LNG and the Jordan Cove Energy applications. [Red & bold emphasis added.]
Canada
Canada to create new entry rules for foreign LNG workers, limit LNG project environmental review timeline (Apr 13) — LNG Law Blog
Canadian Immigration Minister Jason Kinney said in a speech this week that by the end of 2012 his government will create a new entry arrangement to permit thousands of skilled foreign workers to enter the country to work in the LNG and oil sands industries. Separately, Natural Resources Minister Joe Oliver said that the Canadian government intends to impose a two-year limit on the environmental review of proposed energy projects, including LNG export projects. [Red & bold emphasis added.]
United States
Natural gas prices drop below $2 for first time in a decade (Apr 12) — NASDAQ
It's time to party like its 2002 if you're a consumer of natural gas , as the fossil fuel dropped below $2 for the first time in a decade.
At the end of Wednesday, April 12, the price was at $1.984 per thousand cubic feet, reports The Associated Press. This is a 59 percent drop from the $4.85 price natural gas enjoyed last summer. [Red, yellow & bold emphasis added.]
Natural gas companies: A contrarian bet on higher prices (Apr 13) — The Market Oracle
The price of natural gas fell again last week after the government reported an unexpectedly large increase in supply. To date, natural gas prices have slumped to levels not seen in 10 years.
Just this week natural gas prices continued their slide, falling below $2 per cubic foot. [Red, yellow & bold emphasis added.]
Downeast LNG president Dean Girdis claims his wacky LNG import project would lower the price of natural gas. In a pig's eye.
US regulators vote on LNG export project next week (Apr 13) — Reuters
U.S. regulators will vote next week on Cheniere Energy Inc's proposed liquefied natural gas (LNG) export plant at Sabine Pass in Louisiana. It would be the first U.S. facility of its kind in the United States in nearly 50 years.
U.S. natural gas production has rocketed in recent years because of new technologies that have allowed drillers to tap vast shale deposits dotted across the country. Once expected to be a major importer, the United States now has decades of supply.
Surging natural gas production has swamped the U.S. market this year, pressuring prices to 10-year lows that have crimped profits for drillers. [Red, yellow & bold emphasis added.]
North America
Natural gas glut seeps into high-price markets — CTV News
...The United States no longer needs to import gas, meaning others believe there’s more for everyone else. Further, while vast amounts of North American gas may not be reaching import terminals overseas, foreign buyers now believe gas could transform into a global commodity, easing their reliance on neighbouring producers.
...With the United States and Canada swimming in natural gas, forcing prices below $2 (U.S.) per million British thermal units, fear is subsiding. While gas is at 10-year lows in North America, the commodity trades for about $16 in Japan and between about $8.80 and $12 in Europe, he noted. [Red, yellow & bold emphasis added.]
Passamaquoddy Bay
Goldman Sachs fined $22m over flaws at weekly 'huddles' — BBC, UK
"Despite being on notice from the SEC about the importance of such controls, Goldman failed to implement policies and procedures that adequately controlled the risk that research analysts could preview upcoming ratings changes with select traders and clients," said Robert Khuzami, the SEC's head of enforcement.
Rolling Stone magazine notoriously likened the bank to "a vampire squid wrapped round the face of humanity".
Goldman agreed to pay $550m to settle civil fraud charges of misleading investors in 2010 - the biggest fine for a bank in the SEC's history.
Goldman was also fined £17.5m by the UK's financial regulator, the Financial Services Authority, for failing to tell it that the bank was being investigated by the SEC.
Goldman Sachs (via subsidiary GS Power Holdings) was the financial backer of now-defunct Calais LNG until Goldman backed out in 2010 July. Nearly simultaneously, Goldman announced that exporting LNG — rather than importing it — was the hot investment ticket. North American booming natural gas production resulted in Calais LNG's ultimate demise.
Maine
Governor LePage, DEP Commissioner to bestow Environmental Excellence Awards Thursday [Press release] — Maine Department of Environmental Protection
-The April 19 awards will spotlight stewards of sustainability from Cumberland, Lincoln, Oxford, Waldo, Washington and York counties and also showcase Jotul North America’s manufacturing facility-
GORHAM – Governor Paul LePage will join Maine Department of Environmental Protection Commissioner Patricia Aho next Thursday, April 19 to announce the winners of the first state-sponsored environmental excellence awards given out in nearly a decade.
FYI.
Gulf of Mexico
Sierra Club responds to Sabine Pass’s opposition to intervention — LNG Law Blog
Sierra Club filed an answer at FERC to Sabine Pass LNG's motion opposing Sierra Club's motion to intervene in Sabine Pass LNG's export application case.
Caribbean — Puerto Rico
FERC asks for DOD review of potential Aguirre project impacts — LNG Law Blog
Yesterday, FERC sent a letter to the U.S. Undersecretary for Defense requesting comments on whether the Aguirre Offshore GasPort Project “could potentially have an impact on the test, training, or operational activities of any active military installation,” and requesting contact information for “any defense or military establishments in the project area that you believe may be affected by the project.”
Alaska
For Alaska (and Qatar and Mozambique and Russia) China is the hub of hope — Foreign Policy, Washington, DC
What do you do if you have the natural gas equivalent of 6 billion barrels of oil, and no way to get it to a market? And what if you are uncertain that there will ever be a profitable market for this stranded treasure, at least in the coming couple of decades?
If you are Alaska and the Big Oil companies drilling there, you check the numbers, and check them again, but know that ultimately you will be gambling based on the following calculus: In the glutted U.S., natural gas prices are at their lowest in a decade, under $2 per 1,000 cubic feet; in Asia, the same volume of gas is selling for up to ten times that sum, or $20.
British Columbia
As natural gas prices collapse, producers pin hopes on Asia (Apr 11) — Financial Post, Don Mills, ON
[This same story appears under the "North America" heading, below. — SPB webmaster]
...North American gas prices sank below US$2 per million British thermal units in New York Wednesday, the lowest point in a decade and far below what it costs to produce it, threatening gas producers’ ability to survive long enough to capture the pot of gold on the other side of the Pacific.
[W]ith natural gas futures sinking to a third of what’s needed for economic production, staying in business is a daily struggle for those still producing in Western Canada, where prices are further discounted because of transportation costs. [Red & bold emphasis added.]
Shell, Asian partners in final talks to build $12-billion LNG project on Canada's west coast — (Reuters) Calgary Herald, Calgary, AB
BANGALORE/TOKYO — Royal Dutch Shell PLC, Mitsubishi Corp, China National Petroleum Corp and Korea Gas Corp are in the final stages of talks to build a $12.35 billion liquefied natural gas (LNG) terminal on Canada’s west coast, which would be the third such project aimed at meeting demand from Asia.
Plentiful supplies have depressed North American gas prices to just over $2 per million British thermal units (mmBTU), sparking interest from Asian markets, where prices for spot LNG are much higher at around $16 per mmBTU.
Canada’s National Energy Board has already handed LNG-export licenses to two planned liquefaction projects near Kitimat: Kitimat LNG, backed by Apache Corp, Encana Corp and EOG Resources; and to BC LNG, a privately held 13-member co-operative. [Red & bold emphasis added.]
Shell, Asian partners in final talks on Canada LNG (Apr 11) — The Vancouver Sun, Vancouver, BC
Royal Dutch Shell, Mitsubishi Corp., China National Petroleum Corp. and Korea Gas Corp are in the final stages of negotiations to build a liquefied natural gas (LNG) terminal near Kitimat, the Nikkei daily reported Wednesday.
With production of gas on the rise in North America, an alliance among Japanese, South Korean and Chinese firms and an energy major is expected to stabilize import prices in Asia, the business daily said. [Red & bold emphasis added.]
Ottawa approves LNG export licence — The Vancouver Sun, Vancouver, BC
Natural Resources Minister Joe Oliver announced Wednesday that the federal government approved a licence application by the BC LNG Export Co-operative.
It's the second such licence approved by the feds in recent months and in both cases the exporters are targeting markets in Asia where natural gas products sell at prices about six times higher than gas is fetching in North America.
Last October the national energy board approved an application by Apache Canada and EOG Resources Canada for a 20-year export licence.
Oregon
FERC submits notes from Jordan Cove interagency meeting — LNG Law Blog
FERC has placed into the public file notes of an interagency meeting held March 26, 2012 regarding the Jordan Cove Energy Project. The notes can be found in FERC’s eLibrary under Docket No. PF12-7.
Oregon LNG terminal developers strike agreement with unions (Apr 11) — Daily Journal of Commerce Oregon [Paid subscription]
Oregon LNG today signed labor agreements with two union trade organizations indicating a “major milestone” for its proposed liquefied natural gas terminal in Warrenton, according to CEO Peter Hansen. After years of regulatory wrangling, the agreements with the Northwest Construction Alliance and the Columbia Pacific Building Trades Council give project leaders confidence that the state and ...
United States
Natural gas: Why prices are headed lower, and how to profit — Seeking Alpha
A drop in demand caused by mild winter conditions across the U.S., along with a record level of new supply from nascent shale gas technology (fracking) are the main economic drivers that have pushed natural gas prices 34% lower this year.
...Supplies are forecast to continue climbing and reach a record 3.9 trillion cubic feet by the end of the third quarter....
On the supply side, total U.S. natural gas production in 2011 was a record 29 trillion cubic feet, and the output continues to rise. Although some operators have started shuttering dry rigs, this decrease is being offset by an increase in the number of more profitable liquid oil rigs. As a byproduct to liquid oil production, these rigs produce a considerable amount of natural gas.
...It's not unreasonable to predict prices close to $1/mmBTU later this year.... [Red & bold emphasis added.]
Go long on natural gas, says Goldman, prices won’t stay down forever — Financial Post, Don Mills, ON
Goldman lowered its 2012 average NYMEX natgas price forecast to US$2.40 per mmBtu from US$3.10 per mmbtu, saying prices would need to remain low this summer to continue to motivate coal-to-gas substitution.
North America
Crude oil and natural gas ratio explodes to 52:1 — The Market Oracle, UK
The ink on our last article is barely dry when its dire prediction actually came true 48 hours later--natural gas price dropping below $2, a level not seen in over a decade. Henry Hub natural gas front month futures declined to $1.982 per 1,000 cubic feet (mcf) on Wed. April 11, its lowest level since January 28, 2002, when the price hit $1.91. Meanwhile, WTI crude oil rose by $1.68 to finish at $102.70 per barrel; Brent rude increased by 30 cents to finish at $120.18.
Crude oil and natural gas are both energy commodities and should logically have a high degree of correlation. Theoretically, based on an energy equivalent basis, crude oil and natural gas prices should have a 6 to 1 ratio. However, due to various market characteristics, the price of oil typically had traded 8-12x that of natural gas in the past 25 years or so (see chart above). That historical pattern has started to deteriorate since 2009 primarily due to the combination of rising domestic production from unconventional shale gas depressing price levels, while geopolitical events in the MENA region (Middle East & North Africa) adding fear premium to the global crude oil prices. [Red & bold emphasis added.]
As natural gas prices collapse, producers pin hopes on Asia (Apr 11) — Financial Post, Don Mills, ON
[This same story appears under the "British Columbia" heading, above. — SPB webmaster]
...North American gas prices sank below US$2 per million British thermal units in New York Wednesday, the lowest point in a decade and far below what it costs to produce it, threatening gas producers’ ability to survive long enough to capture the pot of gold on the other side of the Pacific.
[W]ith natural gas futures sinking to a third of what’s needed for economic production, staying in business is a daily struggle for those still producing in Western Canada, where prices are further discounted because of transportation costs. [Red & bold emphasis added.]
Gulf of Mexico
Louisiana terminal proposed for LNG exports applies to clear next hurdle (Apr 10) — The Times-Picayune, New Orleans, LA
The operators of a Lake Charles liquefied natural gas import facility are in the process of clearing the last major regulatory hurdle necessary to convert to liquefying and exporting domestic natural gas, the Louisiana Department of Natural Resources announced Monday.
Alaska
Alaska pushing LNG sales to Asia — LNG Law Blog
Alaska Natural Resources Department Commissioner Dan Sullivan is working to convince Asian customers of the benefits of purchasing Alaskan LNG supplies in an effort to replace revenues from sales of the state's dwindling petroleum supplies, according to an article in today's EnergyWire.
British Columbia
Government of Canada approves licence to export liquefied natural gas [Press release] — World New Report, EIN News
The Honourable Joe Oliver, Minister of Natural Resources, today announced that the Government of Canada has approved the issuance of a 20-year licence to BC LNG Export Co-operative to export liquefied natural gas from Kitimat, British Columbia. This is the second such licence recently approved by the Government and will enable the export of Canadian gas to markets in Asia.
The liquefied natural gas facility would be located on the west bank of the Douglas Channel in the District of Kitimat. BC LNG Export Co-operative intends to ship up to 1.8 million tonnes of liquefied natural gas annually to markets in Asia. [Red & bold emphasis added.]
Canada approves BC LNG's export license — Reuters
The Canadian government on Wednesday gave the final approval for BC LNG Export Co-operative's 20-year license to export liquefied natural gas from a British Columbia port to Asian markets.
The approval for Canada's second LNG export license follows on a February decision from Canada's National Energy Board to approve the bid from the 13-member group. [Red & bold emphasis added.]
Canada approves second liquefied natural gas export license — (NASDAQ) 4-Traders
The BC LNG Export Co-operative, comprising 13 small producers, received a 20-year license to ship 2.4 billion cubic meters a year to markets in Asia from the western port city of Kitimat, B.C. The project is a joint-venture between Houston's LNG Partners LLC and British Columbia's Haisla First Nation. It envisions allowing smaller producers to export natural gas abroad where it can fetch better prices.
Natural gas prices across North America have fallen to historic lows amid a glut of supply unlocked by hydraulic fracturing technologies. Natural gas futures closed below $2 per million British thermal units Wednesday. In Asian markets, it sells for several times that price. [Red & bold emphasis added.]
Update 1-Shell, Asian partners in final talks on Canada LNG plant - Nikkei — Reuters
Royal Dutch Shell Plc, Mitsubishi Corp, China National Petroleum Corp and Korea Gas Corp are in the final stages of negotiations to build a $12.35 billion liquefied natural gas (LNG) terminal on Canada's west coast, the Nikkei reported.
Canada
A backlash is brewing against U.S. LNG exports — Alberta Oil, Edmonton, AB
Canadian producers counting on exports of liquefied natural gas (LNG) in the United States to jump-start a rally in North American prices could be pinning their hopes to a political time bomb.
United States
Natural gas market falling victim to the bear — Business Insider, New York, NY
Natural Gas Drops Below $2/MMBtu — a 14 Year Low! —SPB webmaster
The natural gas market has hit a lull having fallen below $2 per million British thermal units (MMBtu) to record a new 14-year low.
Downeast LNG continues to ignore reality, to its own detriment. The US is up to its eyeballs in natural gas, and there is plenty of supply in Maine and New England.
EIA: US gas consumption to rise 4.2 percent in 2012 — LNG World News
EIA expects that large gains in electric power use will offset declines in residential and commercial use. Because of the much-warmer-than-normal winter this year, EIA expects residential and commercial consumption to fall by 3.9 percent and 2.7 percent, respectively, in 2012, reflecting a downward revision in projected consumption from last month’s Outlook. Currently, the National Oceanic and Atmospheric Administration (NOAA) expects heating degree-days to total 4,020 for 2012, 5.3 percent less than in last month’s Outlook, and about 11 percent below the 30-year normal level.
EIA also said that liquefied natural gas (LNG) imports are expected to fall by 0.3 Bcf/d (28 percent) in 2012. [Red & bold emphasis added.]
New England
Update 2-U.S. gov't boosts 2012 natgas production estimate — Reuters
[This same story also appears under the United States heading, below. — SPB webmaster]
NEW YORK, April 10 (Reuters) - The U.S. government sharply raised its estimate for domestic natural gas production this year for a third month in a row, dashing bullish hopes that deep cuts in drilling might be starting to temper a supply glut.
The steady rise to record production, primarily due to increased supplies from shale, has lessened the nation's dependence on Canadian imports, which have dropped from about 15 percent of total supply four years ago to about 11 percent now.
LNG imports are expected to fall by 0.3 bcfd, or 28 percent, to about 0.7 bcfd in 2012. Imports will likely come in the form of contractual cargoes to the Everett terminal in Boston and the Elba Island terminal in Georgia, the EIA said. [Red, yellow & bold emphasis added.]
Contrary to Downeast LNG's Dean Girdis' recent claims, the LNG imported into New England will be mostly due to contractual commitments. New England's reliance on imported LNG is shrinking, not growing. Downeast LNG is an exercise in futility.
Gulf of Mexico
FERC approves Trunkline LNG pre-filing process request (Apr 9) — LNG Law Blog
On Friday FERC issued a letter order granting Trunkline LNG Company's request to use FERC's pre-filing application process for the proposed Lake Charles liquefaction project. [Red emphasis added.]
Caribbean — Puerto Rico
U.S. Fish and Wildlife Service files comments on Excelerate's Aguirre project (Apr 9) — LNG Law Blog
The U.S. Fish and Wildlife Service filed comments with FERC last Thursday in response to the Commission's notice of intent to prepare an Environmental Impact Statement for Excelerate Energy’s proposed Aguirre Offshore GasPort Project.
Oregon
Jordan Cove LNG export proposal different than others — LNG Law Blog
Jordan Cove Energy Project says that since its proposed LNG export terminal would be located on the West Coast and would include exports of Canadian gas supplies, its pending application before the U.S. Department of Energy (DOE) should not be subject to the same DOE economic and public interest analyses as other pending LNG export applications.
Jordan Cove Energy wants to export Canadian gas as LNG via the US, so the required pipeline is not in the US public interest. Jordan Cove's insistence that it not be subjected to public interest analysis is patently illogical.
United States
Update 2-U.S. gov't boosts 2012 natgas production estimate — Reuters
[This same story appears under the New England heading, above. — SPB webmaster]
NEW YORK, April 10 (Reuters) - The U.S. government sharply raised its estimate for domestic natural gas production this year for a third month in a row, dashing bullish hopes that deep cuts in drilling might be starting to temper a supply glut.
The steady rise to record production, primarily due to increased supplies from shale, has lessened the nation's dependence on Canadian imports, which have dropped from about 15 percent of total supply four years ago to about 11 percent now.
LNG imports are expected to fall by 0.3 bcfd, or 28 percent, to about 0.7 bcfd in 2012. Imports will likely come in the form of contractual cargoes to the Everett terminal in Boston and the Elba Island terminal in Georgia, the EIA said. [Red, yellow & bold emphasis added.]
Contrary to Downeast LNG's Dean Girdis' recent claims, the LNG imported into New England will be mostly due to contractual commitments. New England's reliance on imported LNG is shrinking, not growing. Downeast LNG is an exercise in futility.
The World LNG Series: Americas Summit: Setting the Americas LNG Market in a Global Context [News release] — OilVoice
On the 24- 27 April, the CWC Group will host the twelfth World LNG Series: Americas Summit in San Antonio, Texas. With the radically changing dynamics of the LNG market in the Americas, 2012 will be an important year for the LNG and gas industry in the Americas.
Passamaquoddy Bay
Passamaquoddy LNG proposal pushes ahead — CBC News
Girdis concedes he still faces many challenges before his proposed terminal in Robbinston, opposite St. Andrews, can be approved, financed and built.
But Girdis maintains there is a need for a liquefied natural gas (LNG) terminal.
"From an economic standpoint it makes no sense whatsoever,” [SPB's Robert Godfrey] said, noting the number of companies hoping to build LNG terminals in the U.S. has recently dropped from dozens to just two after it was discovered there is plenty of natural gas buried deep in shale already inside U.S. borders.
"We're going to dog this other one until it's done, until it's gone,” said Godfrey, referring to Downeast LNG. [Red, yellow, brown & bold emphasis added.]
In 2005 there were around 40 LNG import terminal projects in North America. Now there are just two — Downeast LNG and Liberty Natural Gas. Liberty is 35 miles offshore from New Jersey, and is regulated by MARAD instead of FERC, since it is more than three miles offshore in federal waters. With offshore terminals, the adjacent state's governor has the right to reject or approve the project. The Governor of New Jersey rejected Liberty in 2011, but Liberty's developers, too, try to convince the public that their project is needed, continuing to dump money down a hole.
If New York and New Jersey do not need additional LNG import facilities to meet their needs — with the massive market there — and if Boston cannot provide enough LNG import business to the two new terminals offshore there (Northeast Gateway Deepwater Port and Neptune LNG, that have been mostly idle since construction), and Canaport LNG, that is only operating at a fraction of capacity supplying Boston, Maine, and New Brunswick, it is clear that Dean Girdis' Downeast LNG proposal doesn't hold water, will never hold LNG, and Girdis hold no credibility.
Northeast
Latest LNG plan no improvement [Editorial] (Apr 6) — Asbury Park Press, Asbury Park, NJ
When it comes to a proposed site for a liquified natural gas port off the New Jersey coast, it looks as if Liberty Natural Gas won’t take no for answer. If the federal government continues to allow Liberty to pursue this folly, the state should be prepared to go to court to stop it.
Liberty’s latest maneuver has it shifting the site from a location 18 miles off Asbury Park to one about 35 miles east of Monmouth County.
This bait-and-switch tactic, announced this week, should fail as resoundingly as the company’s first proposal. Geography and distance are not the issues. The ocean and the environment are. In fact, it should be dead in the water. When Gov. Chris Christie vetoed the project last year, the veto included this alternative site.
But now, Liberty Natural Gas has sought an end run around Christie’s veto and found an apparently willing ally in the federal government. The U.S. Maritime Administration (MARAD) is still reviewing the revised plan, allowing Liberty to conduct even more surveys. In fact, the company will conduct surveys of fisheries and ecosystems at the more distant site through this summer and submit its findings to MARAD in September or October, which could lead to public hearings on the proposal a few months later.
Libery Natural Gas' LNG import proposal is the only LNG import project besides Downeast LNG.
Caribbean
Editorial - Time for clarity from Minister Paulwell — The Gleaner, Kingston, Jamaica, West Indies
It is in this same context that we ask for greater transparency on the status of the Government's liquefied natural gas (LNG) project, under which JPS was the sole bidder, and winner, of the tender to build and operate a 360-megawatt, gas-fired generating plant at Old Harbour. This plant will replace one that should have been mothballed a long time ago.
However, after the debacle of its initial effort on this project, the Government is yet to complete the rebidding for a LNG storage or regasification facility. Neither does it have, JPS apart, committed offtakers for natural gas. Nor are there agreements for the supply of LNG.
Alaska
Halcro: Has Alaska's LNG ship come in? [Commentary] (Apr 7) — Alaska Dispatch, Anchorage, AK
Last Friday Governor Sean Parnell announced the three major oil producers on Alaska's North Slope will come together to study an LNG line for export to Asian markets. Does that mean our ship is about to come in?
Settlement provides fresh start on LNG project [Opinion column] (Apr 7) — Anchorage Daily News, Anchorage, AK
This doesn't mean an LNG project will actually happen. All the challenges are still there, including high Alaska costs, the burden of an 800-mile pipeline to an LNG plant vs. competitors who have gas right at tidewater, and the yet-unresolved state tax issues. But at least we have a fresh start.
The biggest issue is that this pipeline is too small to be efficient and is burdened in ways it shouldn't be. For example, the project bears the cost of building with thick steel and operating at high pressures so it can move natural gas liquids like ethane, butane and propane along with the methane, the main component of natural gas used for heating. Moving these liquids adds costs, but there are no known buyers for them in Southcentral Alaska. Consumers need only the methane. If someone wants the liquids, that company should pay the extra costs.
British Columbia
Progress Energy shares jump amid takeover speculation (Apr 3) — Calgary Herald, Calgary, AB
A global energy heavyweight's pledge to soon spend $5 billion or more scooping up Canadian natural-gas assets has piqued curiosity in the oil patch, but isn't raising eyebrows in an increasingly crowded West Coast liquefied natural gas space that's expected to grow.
A report Monday by Bloomberg that Malaysian state-owned oil company Petronas is looking to close a multibillion-dollar acquisition within three months, to secure supply for export to Asia, was met with predictions of more to come.
Oregon
In the pipeline? — The Register-Guard, Eugene, OR
Proposed Coos Bay natural gas terminal remains up in the air
COOS BAY — Three years ago, Bob Braddock was telling anyone who would listen that the idea of exporting liquefied natural gas from the United States was nuts.
Consider that switch flipped.
So, will it happen? The proposed Coos County import terminal has some tactical advantages over facilities on the Gulf Coast in its proximity to Asia, but it faces competition with a terminal in Kitimat, B.C., that won approval in October to export gas.
United States
Natural gas glut means drilling boom must slow — (AP) Bangor Daily News, Bangor, ME
So much natural gas is being produced that soon there may be nowhere left to put the country’s swelling surplus. After years of explosive growth, natural gas producers are retrenching.
...Citigroup commodities analyst Anthony Yuen says the price of natural gas — now $2.08 per 1,000 cubic feet — could briefly fall below $1.
Storage capacity, which has grown by 15 percent over the past decade, cannot be built fast enough to address the rapidly expanding glut. And analysts note there is little financial incentive to build more anyway. [Red & bold emphasis added.]
Downeast LNG and Dean Girdis live in an alternate reality — and they want you to join them in the last ill-fated shoreside LNG import proposal left in North America.
The World's largest LNG supplier? (Apr 7) — Barron's
By 2017 the U.S. could be the largest exporter of liquefied natural gas in the world, surpassing leading LNG exporters Qatar and Australia. There is one big "if," however. America can produce more gas, export a surplus, improve the trade deficit, create jobs, generate taxable profits and reduce its dependence on foreign energy if the marketplace is allowed to work and politics doesn't get in the way. [Red & bold emphasis added.]
Energy goals need to be balanced — Telegram & Gazette, Worcester, MA
WASHINGTON — Call it Richard Nixon's revenge.
Production from mature U.S. fields was declining, while Americans' energy thirst increased. Oil imports went from 35 percent of use in 1973 to 60 percent in 2005. As for natural gas, companies prepared to import liquefied natural gas.
No more. The LNG isn't needed; the United States is approaching self-sufficiency in gas. And in 2011, oil imports fell to 45 percent of consumption, the sixth year of decline. Behind these developments lies a new reality: America's oil and gas reserves are far larger than previously thought. [Red & bold emphasis added.]
Australia LNG boom threatened by cheaper US shale exporters (Apr 7) — Gulf Times, Doha Qatar
Natural gas trading at a 10-year low in the US and discoveries in Africa also threaten to slow the development of Australian LNG ventures following the approval of eight projects to meet surging demand from China, Japan and South Korea.
Australia and Qatar sell the commodity to Asia at prices linked to oil. Buying gas from the US will allow Asian consumers to pay prices tied to Henry Hub futures, which tumbled 32% last year amid record output driven by extraction from shale.
Passamaquoddy Bay
Feds reject permit for Calais LNG, but developers say project isn’t dead yet — Bangor Daily News, Bangor, ME
CALAIS, Maine — The Federal Energy Regulatory Commission has pulled the plug on a six-year effort to build a liquefied natural gas terminal on the St. Croix River basin in Passamaquoddy Bay near the Washington County community of Calais.
“Calais LNG is only the second LNG terminal applicant to ever be dismissed by FERC. The first dismissed LNG project was Quoddy Bay LNG, proposed at Pleasant Point.”
“In 2005 there were nearly 40 LNG import terminal projects in the works; Now, there are just two,” he said. “Both are unneeded due to the vast supply of domestic natural gas in nearby Pennsylvania and due to rapidly expanding natural gas interstate pipelines in the Northeast and New England regions. The natural gas industry itself has already recognized and dismissed LNG import terminal projects as a worthless and defunct business model.” [Red & bold emphasis added.]
Maine
Natural gas pipeline extension could cut energy costs for state, Rockland businesses (Apr 5) — Bangor Daily News, Bangor, ME
ROCKLAND, Maine — A major step in extending a natural gas pipeline to the Rockland area was reached Wednesday when the state signaled its intent to have a Scarborough company provide the fuel to the state prison facilities in Warren.
And the potential for major energy savings for local businesses is what prompted a Dec. 19 meeting at Rockland City Hall when state officials and Self-Gen unveiled the company’s intent to provide natural gas to the Rockland area. At that time, however, Self-Gen had no customers for which to make the extension of the pipeline financially feasible.
The agreement calls for Self-Gen to initially truck natural gas to the prison but once the pipeline is completed, it would be received in that method. Self-Gen would also construct a small energy plant in which natural gas would generate electricity for the prison.
This is more evidence that Maine has plentiful supply of natural gas available. The problem is lack of distribution infrastructure and the cost-return realities of building that infrastructure in low-population areas.
Gulf of Mexico
FERC requests additional engineering data for Cameron LNG terminal BOG project — LNG Law Blog
Yesterday FERC requested additional engineering data from Cameron LNG regarding the company's proposed boil-off gas (BOG) project. In its letter requesting the engineering information, the Commission states that the data requested is "necessary for [FERC] to continue preparation of the environmental assessment."
Alaska
Report: Valdez would be better than Cook Inlet for natural gas transport (Apr 5) — Daily News-Miner, Fairbanks, AK
FAIRBANKS — Valdez would be a better choice than Cook Inlet for any tankers used to export liquefied natural gas from Alaska, according to an analysis released Thursday by the Alaska Gasline Port Authority.
The study was conducted by a ship pilot with 26 years of experience moving vessels in Alaska, according to a news release from the authority.
Alaska: Decision expected soon on pipeline changes (Apr 5) — Bloomberg Businessweek
TransCanada has asked the commissioners of Natural Resources and Revenue to allow it to "curtail" its work on a line that would run from Alaska's North Slope into Alberta, Canada, to focus on a liquefied natural gas project, said Tony Palmer, the company's vice president for major projects development. TransCanada's piece of that project would be the pipeline.
British Columbia
B.C. Oil and Gas Commission arrive in Burns Lake (Apr 4) — Lakes District News, Burns Lake, BC
The B.C. Oil and Gas Commission held a drop in information session in Burns Lake recently.
"There has not been many oil and gas pipeline projects in this area. The area from Prince George to Kitimat is a new area for us to hold these type of information sessions. It is the proposed Pacific Trails Pipeline and the Kitimat LNG plant that is bringing us into this area."
Oregon
Jordan Cove LNG submits Draft Resource Report for export project — LNG Law Blog
Jordan Cove Energy Project has submitted a draft Resource Report 1 in compliance with FERC's mandatory pre-filing process for the company's planned LNG export terminal.
Canada & United States
Feds dump $47M down Alaska Highway pipeline pit (Apr 5) — Yukon News, Whitehorse, YT
On March 30 - the day after Ottawa delivered its federal budget, which included $47 million for the pipeline - the four companies issued a news release to say they were turning their attention to the LNG option and putting their Alaska Highway pipeline plans on the back burner.
ConocoPhillips cuts funding for Mackenzie gas pipeline (Apr 5) — iPolitics
ConocoPhillips said it cut funding for a proposed $16.2 billion (US$16.3 billion) pipeline project that would bring natural gas from northern Canada to U.S. markets, citing low prices for the fuel.
This isn’t the first time ConocoPhillips has changed course on a pipeline project amid the rise of unconventional gas supplies from shale formations. In May 2011, ConocoPhillips and BP Plc dropped plans for their US$35-billion Denali gas pipeline in Alaska, intended to send the fuel to U.S. and Canadian markets because they didn’t get enough customer interest.
ONGC to study Conoco’s U.S. shale assets as it seeks deal (Apr 5) — FuelFix
Oil & Natural Gas Corp. (ONGC), India’s biggest energy explorer, will soon study investing in ConocoPhillips’s U.S. shale-gas assets and expects to strike a substantial deal, Chairman Sudhir Vasudeva said.
“The idea is to get access to shale in the U.S.,” Vasudeva, 58, said in a telephone interview today. “Last week’s initial agreement is a platform that’ll allow us to do this.”
Passamaquoddy Bay
FERC dismisses Calais LNG applications - Apr. 04, 2012 — WQDY-FM, Calais, ME
In his letter to Calais LNG officials, Wright noted, "On December 14, 2010, approximately one year after filing its application with the Commission seeking authorization to construct and operate the Calais LNG Project, Calais withdrew its site location and other environmental permit applications pending before the Maine Board of Environmental Protection due to issues regarding project financing and the resultant loss of title, right and interest in the project site."
"At that time, and twice thereafter, Calais was asked to provide Commission staff with status updates regarding the project, including the availability of a site for the project. To date, 15 months later, Calais has yet to acquire either project financing or legal access to a project site."
Calais LNG lost its Goldman Sachs financing — and could not secure new financing — because of a fundimental flaw: there is no market in the US, the Northeast, New England, or Maine for additional LNG import facilities. Downeast LNG faces the same market realities — lack of need.
Breaking news: Calais LNG application dismissed by FERC. (Apr 4) — The Bay of Fundy Connection
Word has just been received that Calais LNG, a group that proposed building an LNG terminal at Devil’s Head In the St. Croix River Estuary, has just had it’s application dismissed by the Federal Environment Regulatory Commission.
FERC dismisses Calais LNG project applications — LNG Law Blog
Citing problems with project financing and securing a site for the planned LNG terminal, FERC has dismissed the applications to build the proposed Calais LNG import terminal and associated natural gas pipeline.
Feds dismiss Calais LNG application — Mainebiz
In a letter to company officials sent yesterday, the Federal Energy Regulatory Commission dismissed the company's application because "your continued inability to secure either financing or a site for the project is evidence that you are not currently in a position to proceed."
Calais LNG application dismissed by feds — WLBZ-TV, Bangor, ME
Calais LNG fell into financial troubles in late 2010 after it's major investor pulled out of the project. Since then Calais LNG also lost title, ownership right, and interest in the proposed project site. Without having any financing in place or a site for the project, the Federal Energy Regulatory Commission announced it was dismissing the application.
Northeast
Liberty LNG developers propose new project site — LNG Law Blog
Developers of the Liberty LNG deepwater port project have informed the U.S. Maritime Administration that they are considering an offshore project site closer to New York.
Liberty LNG is the only other LNG import project in the continental US besides Downeast LNG, but Liberty LNG is offshore, away from the public. The rest of the industry has abandoned building new LNG import facilities because of the domestic natural gas glut in North America.
Feds studying offshore gas plan — Asbury Park Press, Asbury Park, NJ
A proposed offshore liquified natural gas terminal opposed by Gov. Chris Christie is still under study by the U.S. Maritime Administration and Coast Guard, in an altered form that would move the delivery sites closer to New York and eliminate the need for a new pipeline and shoreside connections in the Raritan Bay area.
In February 2011, Christie asserted authority as governor to disapprove the LNG terminal under the Deepwater Port Act that grants a say over such projects to governors of affected states.
Liberty president Whelan on Tuesday said the latest iteration of the plan calls for two submerged turret loading buoys about 35 miles east of the Monmouth County coast and about 19 miles south of Long Beach, N.Y., where gas would be delivered to shore via the Transco pipeline.
Offshore gas terminal plan shifts closer to Long Island (Apr 4) — Asbury Park Press, Asbury Park, NJ
The latest site 19 miles south of Zachs Bay, Long Island, would tie into an existing undersea natural gas pipeline to send LNG tanker cargo ashore at Long Beach, N.Y. for delivery to Long Island customers during peak demand times of the year, Liberty president J. Roger Whelan said Wednesday.
Another change is in the company’s business projections. Once forecast to service as many as 200 tankers a year, the project now will likely unload 20 to 40 ships a year, Whelan said.
The prospect of new natural gas production in the eastern United States, particularly from the Marcellus Shale formation, is changing the picture of the market. Most of the LNG that Liberty would buy would come from gas fields in Trinidad and Tobago in the Caribbean, but now the company anticipates buying fuel from growing American supplies in the Gulf of Mexico, Whelan said. [Red & bold emphasis added.]
Liberty LNG has reduced its import projections by as much as 90% — and it would be serving New York! Downeast LNG is dreaming.
Alaska
Alaska gas opts for huge LNG export plant — Petroleum Economist [Paid subscription]
Instead of an overland route from Prudhoe Bay in northern Alaska to Chicago via Canada, BP and ConocoPhillips have agreed to team up with ExxonMobil on a huge liquefied natural gas (LNG) export terminal at Valdez on the Alaskan south coast an estimated cost of $40-50 billion.
Decision expected on request by TransCanada to alter gas line (Apr 4) — Anchorage Daily News, Anchorage, AK
The state of Alaska may decide this week to give TransCanada Corp. permission to shift its attention to a building liquefied natural gas pipeline [sic], capable of facilitiating overseas exports.
TransCanada has asked the commissioners of Natural Resources and Revenue to allow it to "curtail" its work on a gas line that would run from Alaska's North Slope into Alberta, Canada, to focus on a liquefied natural gas project, said Tony Palmer, the company's vice president for major projects development.
By "liquefied natural gas pipeline," the article means natural gas pipeline to feed an LNG liquefaction and export facility. By law, for safety reasons, there are no LNG pipelines allowed in the US; all LNG piping must remain within the confines of an LNG facility.
State decision expected soon on pipeline changes — (AP) Alaska Journal of Commerce, AK
TransCanada has asked the commissioners of Natural Resources and Revenue to allow it to "curtail" its work on a line that would run from Alaska's North Slope into Alberta, Canada, to focus on a liquefied natural gas project, said Tony Palmer, the company's vice president for major projects development. TransCanada's piece of that project would be the pipeline.
International Tower Hill recognizes Alaska progress made towards lowering energy costs for Alaskans [Press release] (Apr 4) — Energy Digital
VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 4, 2012) - International Tower Hill Mines Ltd. is pleased to inform investors that the State of Alaska has reached a landmark settlement with major oil producers BP PLC, Exxon Mobil Corp. and ConocoPhillips for the study of a major liquefied natural gas pipeline [sic] at the Point Thompson gas field on the North Slope of Alaska's northernmost coast. A major gas pipeline in the State would have the potential to significantly reduce power costs in Alaska and positively impact the economics for the Company's 100% controlled Livengood Gold Project located near Fairbanks, Alaska.
The pipeline would be a natural gas pipeline delivering gas to an LNG liquefaction and export facility; it would not be a "liquefied natural gas pipeline," since such LNG piping is not allowed outside of LNG facilities.
British Columbia
EOG Resources boss still bullish on Kitimat LNG — Alberta Oil, AB
[D]espite the fact the National Energy Board approved the Kitimat LNG project in late January, an investment decision hasn’t been made. While Canadian oil and gas industry observers wait for that to happen, Alberta Oil senior editor Jeff Lewis wrote this week that more entrants are joining the race to export LNG to Pacific Rim markets.
United States & Canada
Osaka Gas says may buy LNG jointly with Japan, US, Europe companies (Apr 4) — Platts
Osaka Gas is ... looking at participating in unconventional gas projects overseas not only to secure new supply sources but also lower its fuel costs, with a possibility of importing unconventional gas-based LNG from North America and having prices linked to gas benchmarks, Ozaki added.
The coming battle over natural gas (Apr 4) — Financial Post, Don Mills, ON
From co-dependent natural gas consumers and developers, Canada and the United States may soon be competing with each other as both countries start advancing their production plans for liquefied natural gas (LNG).
Rising natural gas production on both sides of the border, coupled with benchmark Henry Hub prices tracking 31-year lows, are forcing North American producers to find growing markets willing to pay more.
At least three LNG projects are in various stages of development to ship Canadian gas to Asian markets, but the shale gas boom may have given the Americans a head start — at least for now.
The Canadian gas export strategy is crucial to the industry. U.S. Energy Information Administration estimates show Canadian gas exports to the U.S. were significantly below the previous five-year range, and have been lower for much of 2012 so far. Meanwhile, U.S. natural gas production is growing, primarily from shale gas formations that are being shipped on pipelines into Canada, with increased deliveries to storage facilities in Ontario. [Red & bold emphasis added.]
Canadian gas exporters gain ground in race to Asian markets (Apr 3) — Calgary Herald, Calgary, AB
American plans to become a major exporter of liquid [sic] natural gas (LNG) to Asia could be stymied by politics, slow approvals and U.S. regulators’ desire for more study of future domestic gas demand, says a report by global research consulting company Wood Mackenzie.
“Certainly with nothing yet built, Canada faces different challenges than the U.S., which could be shipping out LNG by 2016. But the longer you wait, new options emerge and there is new competition to face,” McCullagh said.
Global LNG players jockey for space on a crowded field (Apr 4) — Alberta Oil, AB
“You’ve got potential for LNG exports in all sorts of places, but the elephant in the room is North American exports because they’re very likely to be cheaper,” he told Bloomberg. [Red emphasis added.]
Australia LNG boom threatened by U.S. shale exporters (Apr 3) — Bloomberg Businessweek
Australian liquefied-natural gas projects planned by companies from Royal Dutch Shell Plc (RDSA) to Woodside Petroleum Ltd. (WPL) and valued at about $100 billion are at risk from rising costs and cheaper U.S. exports.
Mexico
Manzanillo LNG terminal receives first commissioning cargo (Apr 4) — LNG Law Blog
Platts LNG Daily [subscription required] reports that Mexico's Manzanillo LNG terminal received its first commissioning cargo on March 20, 2012. A second commissioning cargo is expected to be delivered to the terminal later this month.
North America
"LNG Industry Outlook in North America, 2012 - Capacity Analysis, Forecasts and Details of All Operating and Planned Liquefaction and Regasification Terminals to 2016" - new market report [Press release] — SBWire
Williamstown, MA -- (SBWIRE) -- 04/05/2012 -- GlobalData's energy offering, "LNG Industry Outlook in North America, 2012 - Capacity Analysis, Forecasts and Details of All Operating and Planned Liquefaction and Regasification Terminals to 2016" is the essential source for industry data and information relating to the LNG industry in North America. It provides asset level information relating to active and planned LNG terminals in North America. The profiles of major companies operating in the LNG industry in North America are included in the report. The latest news and deals relating to the sector are also provided and analyzed.
Ontario & Quebec
Spectra looks to bring U.S. gas to Ontario, Quebec (Apr 2) — The Globe and Mail, Toronto, ON
The company is already reversing a line previously used to export Canadian gas into New York State in order to import supplies from the prolific Marcellus shale deposit in Pennsylvania.
In an interview Monday, Spectra chief executive officer Greg Ebel said he expects the development of U.S. shale gas to dramatically curtail Canadian exports into the U.S. Northeast, and even threaten the traditional central Canadian market.
Spectra itself is in the early stages of planning a new pipeline that would carry gas from Pennsylvania and Ohio to Union’s massive Dawn storage hub in Southwest Ontario. Union is already accessing growing volumes from western U.S. suppliers who are themselves being squeezed out of the U.S. Northeast market.
Mr. Ebel – an Ottawa native who served as a senior political aide in the Mulroney government – said shrinking markets in eastern North America underscore the urgency for companies to proceed with liquefied natural gas exports on Canada’s West Coast. [Red, yellow & bold emphasis added.]
Meanwhile, Downeast LNG president Dean Girdis continues to falsely claim that the US Northeast is "gas starved." What is actually "starving" is Downeast LNG's credibility and project prospects for success.
Gulf of Mexico
USA: One LNG cargo re-exported in Feb — LNG World News
The cargo was shipped from Cheniere’s Sabine Pass terminal on February 21 onboard the Arctic Spirit, a 87,305 cbm tanker.
There are currently three U.S. LNG terminals that have been granted Federal approval to re-export LNG: Freeport in Texas, Sabine Pass and Cameron in Louisiana. [Red emphasis added.]
Company asks permit for gas export terminal — The Advocate, Baton Rouge, LA
NEW ORLEANS — Energy Transfer Equity LP said Monday it has filed for permission from federal regulators to build its proposed natural gas export terminal at Lake Charles.
At least 10 export terminals are in various stages of planning in Louisiana, Texas, Maryland and Oregon.
The number of LNG export proposals keeps increasing, but Downeast LNG import proposal sticks its head in the sand.
Alaska & British Columbia
Alaska, Exxon deal opens way for LNG exports — Pakistan Observer, Pakistan
Anchorage—Alaska has reached a settlement with Exxon Mobil Corp and its partners to develop a huge, long-fallow oil and gas field, possibly paving the way for a $26 billion pipeline and an export plant for liquefied natural gas. The settlement, which resolves a long-running lease dispute over the Point Thomson field about 60 miles east of Prudhoe Bay, could allow for exports of liquefied natural gas via tanker to Asia and may boost Alaskan oil production after decades of decline.
The deal is a boon for Trans Canada, which plans to build a natural gas pipeline from Alaska’s North Slope to the south coast, feeding a possible export plant that would ship gas to thirsty markets in Asia.
ExxonMobil, ConocoPhillips, BP and Alaska pipeline project working together to commercialize north slope natural gas — Your Oil and Gas News
The four companies have agreed on a work plan aimed at commercializing North Slope natural gas resources within an Alaska Gasline Inducement Act (AGIA) framework. Because of a rapidly evolving global market, large-scale liquefied natural gas (LNG) exports from south-central Alaska will be assessed as an alternative to a natural gas pipeline through Alberta.
Alaska LNG plant could spike Canadian pipeline despite $47M boost from feds — iPolitics, Ottawa, ON
For over 30 years, Ottawa has been promoting the construction of a natural gas pipeline from Alaska’s North Slope, believed to hold up to 35 trillion cubic feet of gas, to Alberta, where it would plug into the North American gas network.
Last Thursday, the federal budget revealed its latest effort — $47 million to help stimulate the project and prepare for regulatory oversight.
The next day, the industry gave its surest sign yet that the project is a lost cause.
An oil consortium that includes the two companies behind the Alberta route announced it would study an alternative plan to build a liquefied natural gas, or LNG, plant near the North Slope in Point Thomson, Alaska and have the fuel shipped to Asia instead.
Asian energy giant Petronas seeks $5b natural gas deal that could spark new drilling in B.C. — Global BC
Eric Nuttall, portfolio manager at Sprott Asset Management, said speculators were getting ahead of themselves, but added that it is likely Shamsul was referring to Petronas’s need for proven reserves to finance another proposed liquefied natural gas terminal on the West Coast.
Petronas already has an agreement with Calgary-based gas company Progress Energy to acquire a 50-per-cent interest in 60,000 hectares of Progress gas properties in B.C. for $1.07 billion. Further, Petronas and Progress are planning a liquefied natural gas facility and export terminal, likely at Kitimat.
Progress Energy shares jump amid takeover speculation — Calgary Herald, Calgary, AB
Progress chief executive Michael Culbert said there is "a lot of discussion" about LNG between oilpatch players and Asian energy companies. "I think if you look at it from the shale gas supply side, the answer is a lot of projects can be supported."
United States
U.S. quietly becoming more energy independent — (Washington Post) Deseret News, Salt Lake City, UT
...Oil imports went from 35 percent of use in 1973 to 60 percent in 2005. As for natural gas, companies prepared to import LNG (liquefied natural gas).
No more. The LNG isn't needed; the United States is approaching self-sufficiency in gas. And in 2011, oil imports fell to 45 percent of consumption, the sixth year of decline. Behind these developments lies a new reality: America's oil and gas reserves are far larger than previously thought. [Red, yellow & bold emphasis added.]
Gas glut: Looking at the options available to U.S. natural gas (Apr 1) — OilPrice.com
With global warming driving down the demand for natural gas as a home heating fuel and natural gas drillers producing record amounts, an oversupply situation has developed quickly. Stocks of natural gas are rising. As a result natural gas prices have fallen way below profitability and drillers are scrambling to cut back production. [Red emphasis added.]
4 Stocks with juicy yields from booming LNG exports — InvestorPlace
Currently, there is so much natural gas being discovered from horizontal drilling and hydraulic fracturing that the price of natural gas has been crushed to $2.10 per mcf in the latest week of trading. The cost of buying natural gas in Tokyo, Seoul and Mumbai is around $13 – $15 per mcf. Being a source of fuel that is clean, green, domestic and abundant in supply, the export of natural gas in a highly concentrated liquid form is one of the most exciting investment themes for 2012 and beyond. [Red & bold emphasis added.]
North America
US LNG exports loom but Australia's Santos keeps watch on Qatar — The Barrel
Speculation about the likelihood of competing LNG exports from the US and Canada has mounted over recent years, with analysts pointing to falling gas prices in the US and the planned expansion of the Panama Canal in 2014, which will allow it to accommodate LNG tankers.
"With depressed Henry Hub prices and bullish oil prices going forward, US LNG should be much cheaper for Japan than its current oil-index contracts," Societe Generale European gas analyst Thierry Bros said.
The BREE counted nine companies that have applied to the US Department of Energy to export a total of 104 million mt/year of domestically produced LNG. But so far only Cheniere Energy, owner of the Sabine Pass terminal, has obtained approval to export LNG from the US to both free trade agreement and non-FTA countries, and is planning to build a 16 million mt/year facility, with a final investment decision targeted for this year and commercial operations in 2016.
In Canada, Apache has gained approval from the National Energy Board to export 5 million mt/year from its proposed Kitimat plant, expected to go to a final investment decision later this year. BC LNG also has approval to export 1.8 million mt/year from its proposed terminal in Kitimat. [Red emphasis added.]
Gulf of Mexico
Energy Transfer Equity announces its subsidiaries file with FERC for proposed liquefaction project [Press release] — MarketWatch
DALLAS, Apr 02, 2012 (BUSINESS WIRE) -- Energy Transfer Equity today announced that its Trunkline LNG Company, Trunkline LNG Export, and Trunkline Gas Company subsidiaries have filed with the Federal Energy Regulatory Commission to build the previously announced natural gas liquefaction project under development in Lake Charles, La. [Red emphasis added.]
Permit sought to build La. gas export terminal — R&D Magazine
Energy Transfer Equity LP said Monday that it has filed for permission from federal regulators to build its proposed natural gas export terminal at Lake Charles.
Construction of the project is awaiting FERC approval.
At least 10 export terminals are in various stages of planning in Louisiana, Texas, Maryland and Oregon.
Alaska
Exxon, Conoco and BP plan Alaska LNG exports — LNG World News
The four companies have agreed on a work plan aimed at commercializing North Slope natural gas resources within an Alaska Gasline Inducement Act (AGIA) framework. Because of a rapidly evolving global market, large-scale liquefied natural gas (LNG) exports from south-central Alaska will be assessed as an alternative to a natural gas pipeline through Alberta.
Update 3-Alaska, Exxon deal opens way for LNG exports (Mar 30) — Reuters
The settlement, which resolves a long-running lease dispute over the Point Thomson field about 60 miles (95 km) east of Prudhoe Bay, could allow for exports of liquefied natural gas via tanker to Asia and may boost Alaskan oil production after decades of decline.
In exchange for continued lease control, operator Exxon and partners BP and ConocoPhillips have agreed to build a pipeline from the field to deliver 70,000 barrels per day of liquids into the Trans Alaska Pipeline System.
The settlement also calls for the companies to produce 10,000 barrels per day of natural-gas condensates by the winter of 2015-16, state officials said.
The deal is a boon for TransCanada, which plans to build a natural gas pipeline from Alaska's North Slope to the south coast, feeding a possible export plant that would ship gas to thirsty markets in Asia.
Alaska LNG project eyes Asia (Mar 31) — Calgary Herald, Calgary, AB
A proposed pipeline to link Alaska's vast supplies of natural gas with Alberta appears increasingly unlikely as TransCanada Corp. and three major producers have committed to study an alternative instate line and liquefied natural gas export plant.
In announcing the agreement with the companies Friday, Alaska Gov. Sean Parnell said commercialization of North Slope gas is now specifically focused on a large-scale LNG project from south-central Alaska targeting Asian markets.
Alaska governor confirms deal on gas leases (Mar 30) — LoHud.com, NY
The companies said they have agreed on a plan to focus on a large-scale liquefied natural gas project, capable of overseas exports, as an alternative to a pipeline through Alberta, Canada, that would serve North America markets.
British Columbia
Decision on Kitimat LNG project delayed to year end (Mar 29) — Calgary Herald, Calgary, AB
CALGARY — Partners of Canada’s first proposed liquefied natural gas export terminal will trim their share of the Kitimat LNG project in a bid to attract long-term contracts, said one of the proponents.
Canada
Canadian gas exporters gain ground in race to Asian markets (Mar 30) — Edmonton Journal, Edmonton, AB
“Right now the U.S. has an advantage (in North America) in terms of liquefaction, with five brownfield projects (established LNG import terminals that can be converted to export terminals). But it is an advantage that can be squandered,” Amber McCullagh, co-author of the report, said in an interview from Houston.
This could have a positive impact on plans to build an LNG export hub at Kitimat, B.C., where a project by Apache Corp. and partners Encana and EOG Corp. is in advanced engineering. A final decision is expected later this year.
United States
Energy 'independence,' after all? [Op-ed] — Orlando Sentinel, Orlando, FL
Production from mature U.S. fields was declining, while Americans' energy thirst increased. Oil imports went from 35 percent of use in 1973 to 60 percent in 2005. As for natural gas, companies prepared to import LNG (liquefied natural gas).
No more. The LNG isn't needed; the United States is approaching self-sufficiency in gas. And in 2011, oil imports fell to 45 percent of consumption, the sixth year of decline. Behind these developments lies a new reality: America's oil and gas reserves are far larger than previously thought. [Red & bold emphasis added.]
Unpacking the shale gas LNG export boom — Democratic Underground, Kensington, MD
While the North American shale gas boom continues full-steam ahead, so too does another boom receiving less of the spotlight: the LNG export boom. [Red & bold emphasis added.]
Investing in the LNG market — Seeking Alpha
It was a classic miscue. Until just a few years ago almost everyone predicted a shortage of natural gas in the U.S. and Canada. In a rush to meet anticipated demand, companies such as Cheniere Energy (LNG) completed several LNG receiving facilities along the Gulf and East Coasts of the U.S. However, plunging prices from abundant shale gas turned the facilities into white elephants almost overnight. [Red & bold emphasis added.]
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