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Natural Gas Proven Reserves Are Booming
U.S. crude oil, natural gas, and natural gas liquids proved reserves: 2009 (Nov) — Energy Information Administration, Washington, DC
The following link is to a PDF document (1.6 MB)
U.S. natural gas proved reserves—estimated as “wet” gas which includes natural gas plant liquids—increased by 11 percent in 2009 to 284 trillion cubic feet (Tcf). This is their highest level since 1971, despite an approximate one-third decline in the prices used to assess economic viability for 2009 reserves as compared to the prices used in 2008. U.S.
Shale gas development in Louisiana, Arkansas, Texas, Oklahoma, and Pennsylvania drove the increase in proved reserves of natural gas. Louisiana led the nation in wet natural gas proved reserves additions with a 77 percent net increase of 9.2 Tcf owing primarily to development of the Haynesville shale. Both Arkansas (Fayetteville shale) and Pennsylvania (Marcellus shale) nearly doubled their reserves with net increases of 5.2 Tcf and 3.4 Tcf respectively. Shale development in Texas and Oklahoma wasn’t far behind, giving these two States proved reserves increases of 3.2 Tcf and 2.1 Tcf. These increases occurred despite a decline in natural gas prices relative to those used in assessing reserves at the end of 2008. This underscores the role of more efficient and effective shale gas exploration and productive technologies such as horizontal drilling and hydraulic fracturing. [Red bold emphasis added.]
Cheniere's liquidity plans hurt Gazprom (Dec 1) — The Wall Street Journal, New York, NY
Cheniere runs a liquefied-natural-gas import terminal in Louisiana. The opening of shale gas reserves obviates the need for LNG imports, so Cheniere wants to build a new facility by 2015 to export LNG. It has signed memoranda of understanding with three potential customers: Morgan Stanley and two Chinese and European gas distributors.
America's sudden gas riches mean LNG cargoes destined originally for itself can supply Europe, eroding Gazprom's market share and forcing it to adjust contract terms for some customers. Should America start exporting LNG, it would further undermine the old model of captive regional markets paying oil-linked prices. That is great for customers; Russian gas monopolies, not so much.
[Red bold emphasis added.]
LNG capacity [Letter to the editor] (Nov 26) — Bangor Daily News, Bangor, ME
In his recent letter to the editor, Dean Girdis again tries to justify the Downeast LNG project in Robbinston. He claims pipeline capacity is inadequate to bring more gas into New England because the pipelines are at capacity from November to March and cannot be expanded. He also claims building a new pipeline is not possible because “it is impossible to secure the necessary rights-of-way.” According to Girdis, LNG is the only solution to bring in more gas.
If the pipelines are truly saturated, there would be no way for Girdis to transport LNG from Robbinston to the rest of New England. Perhaps he is planning truck convoys?
Pipeline capacity to New England continues to expand. Today, there are several “impossible” pipeline expansion projects in the works to bring inexpensive shale gas to New England. This will avoid the expense of LNG, and the continued reliance on foreign sources for our energy requirements [Red, yellow & bold emphasis added.]
Hess LNG to Senate: Reject funding restriction for Taunton River facility proposal (Nov 29) — The Herald News, Fall River, MA
In the two-page letter, [Hess LNG CEO Gordon Shearer] lays out what the company considers to be five key points in regard to supplying the region’s energy needs while providing jobs, investment and additional tax revenues to Fall River and Somerset.
Viva la oil revolution in Cuba! — OilVoice
Earlier this month, Russian state-backed energy firm Gazprom acquired a 30% stake in four offshore oil exploration blocks offshore Cuba. And now, a unit of China's state-run China National Petroleum Corporation (CNPC) has won a contract to expand Cuba's Cienfuegos refinery. The deal involves CNPC developing a power plant and petrochemicals complex and also building a liquefied natural gas (LNG) import terminal on the same site.
In terms of the numbers, the Cienfuegos refinery is expected to cost a minimum of $4.5 billion while the LNG terminal would cost an additional $1.3 billion. Such a high degree of investment by the Chinese - if completed - could well mark one of the largest ever investments in the Cuban nation. And as things stand, work on the project is expected to start at the start of next year, with completion expected by the end of 2013.
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Domestic Natural Gas & LNG Exports Growing
Lower Churchill financing risky: analyst — CBC News, Canada
A deal to export hydroelectric power from Labrador to markets in the Maritimes and New England will have trouble getting financing, an analyst predicts.
"The investment case for selling that power to New England is actually not looking very good, partly because they have more than enough natural gas — cheap natural gas — to meet their own electricity needs for the next decade, at least," Couture said in an interview.
US natural gas supplies exploding without apparent end — OilPrice.com
One interesting recent find that was mentioned in the recently televised documentary "Haynseville", is that the already huge Haynesville shale deposit was compounded by another huge deposit discovered in a slightly shallower layer of rock.
Something has to be done with all of this gas production, so for now a move is on to create LNG facilities for export. Export of LNG to the UK has already begun.
[Red bold emphasis added.]
Natural Gas Monthly (Nov) — Energy Information Administration, Washington, DC
For the nine-month period compared to the same period last year, US LNG imports are down about 5%, while LNG exports are up 42% over the same period last year.
Imported LNG prices are up nearly 5% over the same period last year, while exported LNG prices were nearly 35% higher than in the preceding year.
Calais LNG requests delay to negotiate option and financing (Nov 26) — The Quoddy Tides, Eastport, ME
The landowners requested that the BEP enforce the requirement that applicants for projects being reviewed by the board must maintain "sufficient title, right or interest throughout the entire application processing period" to the property that is proposed for development. The property owners asked that the BEP continue to postpone or suspend the processing of Calais LNG's application. [Red, yellow & bold emphasis added.]
Calais LNG requests another delay — Mainebiz
With a Dec. 1 deadline approaching, Calais LNG has again asked state regulators for an extension to file its completed application, the fourth extension the company has requested since July. [Red, yellow & bold emphasis added.]
US' Cheniere in LNG export talks with Spain's Gas Natural Fenosa — Platts
"This is another significant development for our liquefaction project at Sabine Pass and we are pleased to announce the start of negotiations of definitive agreements with Gas Natural Fenosa," Cheniere Chairman and CEO Charif Souki said in a statement. "Including this MOU we have entered into MOUs for approximately 4.7 [mt/year] of LNG processing capacity and look forward to finalizing discussions with additional customers." [Red & bold emphasis added.]
LNG using up the tourist's beds (Nov 30) — The Observer, Gladstone, Queensland, Australia
GLADSTONE tourism, festivals and events may be at risk because of limited accommodation due to the liquefied natural gas industry.
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LNG Exports Born From Natural Gas Supply Glut
US shales drive LNG export plans (Nov 25) — Petroleum Economist [Paid subscription required]
JUST A few years after US authorities approved plans to build a raft of gas-import terminals along its coastline, a glut of supply in the country has opened a new, more profitable opportunity: exports.
This week, Freeport LNG and Australia's Macquarie bank said they would spend $2bn to build a liquefied natural gas (LNG) export plant alongside an existing import terminal on the Texas coast. [Red bold emphasis added.]
Musings: Separating wheat from the chaff of unconventionals — FavStocks, San Francisco, CA
Horizontal drilling and hydraulic fracturing technologies have dramatically altered the near term supply picture and have forced energy prognosticators to recast their forecasting models. Most of them now are calling into question the need for the U.S. to import as many hydrocarbons as previously thought.
According to Mr. Papa, “There is clearly sufficient North American gas supply to last for a bunch of years; 50 years at least. And there is clearly no need for us to import LNG (liquefied natural gas) for multiple years to come.”
[Red bold emphasis added.]
Still hope for gas pipeline (Nov 28) — Petroleum News, Anchorage, AK
[A]s the burgeoning development of plentiful supplies of so-called shale gas in the Lower 48 has caused a paradigm shift in the North American gas market, the price of Lower 48 gas has plummeted to levels below the projected transportation rates on a gas line from the Arctic, perhaps rendering the gas line uneconomic.
“No matter what, there’s an awful lot of shale gas that is going to be relatively inexpensive to produce,” Scott said.
“If you look at the price environment … it becomes hard to tell a story in which LNG finds an attractive home in North America,” Scott said.
Natural gas has better days ahead (in two years) (Nov 22) — The Market Oracle, UK
As I said before that we are literally swimming in crude oil amid high inventory; but when it comes to natural gas, “drowning” would be a more appropriate description. While crude was hammered by China’s efforts to curb inflation, natural gas has an even bigger problem--nowhere to go--since it is region bound, and not as widely traded.
Worse yet, the latest short-term outlook published on Nov.9 by the Dept. of Energy estimates natural gas production will rise in 2010 to the highest level in 37 years.
Some industry experts estimate that gas rig count needs see as much as 20% drop--to around 750—from the current 936 (as of Nov. 19) in the next 12 months just to keep production from growing. [Red bold emphasis added.]
Poland: Marry Gazprom in haste, repent at leisure (Nov 22) — Seeking Alpha
[Gazprom] has acknowledged in word and deed that the shale revolution in the U.S. has already derailed some big plans, and the extension of that revolution could truly rock Gazprom’s world, and not in a good way. So the company has every incentive to play skeptic in the hope that this will slow down the shale juggernaut–and every sentient being should discount its skepticism as heavily as the market discounts its stock price. Indeed, Gazprom is actively looking to get into shale plays in the U.S. At the very least, this indicates that it (quite sensibly) wants to learn more about the details of the technology and the performance of shale plays so that it can plan accordingly. Alternatively, it could indicate that the company knows very well that shale is for real, and wants to get into the game. Either way, it belies its skeptical public statements.
But the U.S. experience is one in which shale has completely demolished the conventional wisdom about the future of the North American gas market in a period of less than 4 years, and which has made earlier major investment plans based on this conventional wisdom costly failures (e.g., LNG import terminals in the U.S.–shed a tear for Cheniere; Gazprom’s abortive plans to export LNG to the U.S.). This should make everybody everywhere extremely chary about entering into expensive long term commitments. There is a real option value here–a value to waiting–and greater uncertainty actually makes that option to wait more valuable.
Calais LNG developers ask for fifth deadline extension (Nov 25) — Bangor Daily News, Bangor, ME
CALAIS, Maine — Developers behind the proposed Calais Liquefied Natural Gas project have asked state regulators for an extension until mid-January of their site application deadline.
This extension bid — the fifth requested by the company this year — was prompted by the company’s failure to renew its option on 330 acres of Red Beach property, where it wants to locate the LNG facility.
Calais LNG has had an option on the land for five years and has renewed it several times before, company spokesman Ian Emery said this week, but because the company is currently being sold, funding is an issue.
Fall River City Council split on whether to hear from LNG opponents' group — The Herald News, Fall River, MA
A City Council resolution this week to strengthen opposition toward a liquefied natural gas terminal elicited a new round of debate over who should be given audience to advocate their views.
Casey said the city’s fought the LNG terminal for years and absorbed the legal costs. She backed the Save the Bay effort as a way of “reaching out” to Rhode Island communities that also would be affected by the terminal.
LNG balks at describing hazards of Savannah truck route — Savannah Morning News, Savannah, GA
In filings with a federal regulator, Southern LNG Inc. has laid out details about its controversial plans for transporting 58 truckloads a day of liquefied natural gas through Chatham County.
But still missing, and not likely to be provided, is an analysis of a hazard zone around the proposed truck route.
The company is instead preparing a report detailing the hazard zone around the truck-loading facility itself on Elba Island, which was among the data requests made by federal regulators. No such analysis is required along the route by any state or federal agency or any local ordinances.
It's true that U.S. regulations don't require a "thermal exclusion zone" around an LNG trucking route yet, but European nations do, Watson said. Their standard would produce an exclusion zone of about 2,400 feet around the route, Watson calculated. [Red bold emphasis added.]
Over-optimistic shale gas bonanza (Nov 25) — Barentsnova, Russia
[SPB webmaster's note: This Russian article's sour-grapes propaganda is amazingly reminiscent of the Soviet era.]
A new technique that tapped previously inaccessible supplies of natural gas in the United States is spreading to the rest of the world, raising hopes of a huge expansion in global reserves of the cleanest fossil fuel, writes New York Times in 2009. Over the past three years, American production has soared. This year, the US overtook Russia to become the world’s biggest gas producer for the first time in a decade. The result is that the shipping terminals that the US built to receive liquid natural gas from overseas are now lying virtually empty, reported Financial Times.
In mid-April 2010, US Department of Energy announced [SPB webmaster's note: In the original article, the word "announced" is a link that goes to an RBC Daily article — in Russian] that the US had exaggerated their gas development volumes. The gas companies speculated around shale gas to increase their capitalization.
There are different estimates on extraction of coal bed methane and shale gas. I must say that there are some very serious problems associated with the extraction of those, says Sechin. [another link to a Russian language article] Their solutions will largely influence the prospects for this unconventional source of gas. And it is only time and accumulation of experience that will show us if these over-optimistic expectations are justified. [The previous sentence is self-contradicting; the categorization of being "overly-optimistic" is not evidenced, but requires time and experience to determine.]
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Brimming With Natural Gas — Where to Put It All?
Booming U.S. gas industry becoming an American energy exporter — The Huffington Post
At this time of Thanksgiving we can be grateful that a tectonic shift in America's dependence on imported energy is beginning to take hold. In the last weeks a number of major events have taken place that are beginning to shift the balance of energy in significant ways.
Major oil companies such as Exxon, Shell, Chevron and myriad other foreign entities have joined American gas producers such as Chesapeake Energy to invest tens of billions of dollars these past years to develop a stake in what is becoming a treasure trove of natural gas ranging from Texas and Louisiana to the vast Marcellus field of Western Pennsylvania, Ohio, West Virginia and upstate New York. With new drilling techniques the proven gas reserves of the United States have skyrocketed from bare subsistence levels by a factor of five and counting, with the shale play still in its infancy. It has turned a market of shortage with circa $14 MMBTU prices quoted on the NY Mercantile Exchange in 2008 to a market of product glut, currently hovering around $4 MMBTU. At that price natural gas delivers a BTU equivalency comparable to that of oil priced in $20/barrel range. Today oil is selling at $80 plus/barrel.
Storage drivers (Oct 10) — Pipeline and Gas Technology, Houston, TX
During the past several years, it has become patently obvious that new technology and the emergence of resource plays have led to enough natural gas to supply the U.S. at current consumption rate for a century—at least.
[A]lthough the U.S. has one of the largest gas-supply infrastructures of any nation, developers are starting to see the need for more. The question of when, where and how much storage is needed is yet to be answered.
Haisla make history — Kitimat Northern Sentinel, Kitimat, BC
The Haisla Nation have ratified an agreement with Apache Canada for a 49 year lease for construction and operation of the Kitimat LNG [export] terminal.
The project to be built on the shores of Bish Cove, part of the Haisla First Nation, proposes a liquefied natural gas (LNG) export, liquefaction and LNG send-out terminal.
US LNG export plans gain momentum (Nov 29) — Petroleum Intelligence Weekly, Energy Intellignece [Paid subscription required]
North American plans for exporting unconventional gas as LNG are rapidly gaining traction, although governmental authorizations are still required and first exports won’t take place before 2015. Following in the footsteps of the US’ Cheniere Energy and Canada’s Kitimat LNG, Australia’s Macquarie Group last week announced plans to convert its Gulf Coast Freeport LNG regasification terminal into a bidirectional facility that could also export liquefied domestic gas.
Natural gas ready to explode — The Street
Someone is clearly convinced of the United States' upcoming role as a viable exporter of natural gas, something we have heard about for years, but now is becoming a real watershed moment because capital is finally being committed to the idea.
LNG terminal could be terminal (Nov 23) — Saint Croix Courier, St. Stephen, NB
CALAIS – The Calais LNG project has been driven further into limbo.
Left without a financial backer since July 22, Calais LNG has no land upon which to build its proposed liquid natural gas (LNG) receiving terminal.
“Calais LNG appears not to have been straightforward with the BEP, the land owners or the public.…" [said co-chair of Save Passamaquoddy Bay-Canada Jessie Davies].
Calais LNG requests another extension — MPBN (Maine Public Broadcasting Network), ME
Opponents of the proposed liquified natural gas terminal near Calais in Washington County say they're disappointed at what they describe as the latest stalling tactics from the company behind the project. Calais LNG on Tuesday submitted a letter to the Board of Environmental Protection asking for a further seven-and-half weeks to sort out a couple of key problems, including how the project will be funded and where it will be sited.
It recently came to light that Calais LNG no longer has the option to buy most of the land on which it was proposing to build the 330-acre, billion-dollar distribution terminal. This comes as the company also tries to secure new financial backing for the project after the original investors jumped ship in July.
"They've lost financing. That we all knew from last summer. They've now lost the option over the land on which they intend to build," says Ronald Shems, attorney for Save Passamoquoddy Bay, one of groups opposing the LNG terminal.
Calais LNG failed to renew its option to purchase the land by the end of August, meaning that from September 1st, it no longer had rights to the land.
"The frustrating thing here is that there's a real level of deceit in not disclosing the fact that they didn't have title to the property--back on the September 15th hearing this was never mentioned," [attorney Jane West of the Conservation Law Foundation] says. [Red, yellow & bold emphasis added.]
Calais LNG updates state on Downeast project — WABI-TV, Bangor, ME
Calais - The company that wants to build a $1 billion liquefied natural gas terminal in Calais says it didn't renew an option to buy a major piece of property for the project because it's trying to secure a new investor.
The owners of two-thirds of that land say on September 1st, Calais LNG lost the rights to buy or use the property when the company didn't extend a purchase agreement for it.
[Red, yellow & bold emphasis added.]
Weaver's Cove LNG asks US Senate to reject attempt to strip funding — Platts
Weaver's Cove Energy asked a US Senate subcommittee this week to reject legislation intended to kill the proposed liquefied natural gas terminal by cutting off federal funds for the permitting process.
[Weaver's Cove CEO Gordon Shearer] said attempts to kill Weaver's Cove ignore the facility's potential to meet the region's energy demands, reduce high energy prices, create jobs and generate taxes for nearby communities.
LNG company responds to delegation's attempt to block plan — SouthCoastToday.com, New Bedford, MA
The project, a proposed import and re-gasification terminal on the banks of the Taunton River, has drawn criticism from some local and state officials who say establishing such an LNG facility near a densely populated urban area like Fall River is too dangerous.
Harrington: Get real about LNG risks [Op-ed column] — Savannah Morning News, Savannah, GA
…El Paso Gas asked federal regulators to "expedite" its trucking application while keeping city officials in the dark about its disaster preparedness plans for the increase in hazardous cargo - in a typical workday, an average of one LNG truck every 8 minutes - proposed for already overburdened streets.
[A]n LNG accident on DeRenne Avenue that required evacuation-a one-mile radius is standard protocol could shut down Savannah's two medical centers as well as nursing homes, schools and hotels, not to mention residential neighborhoods. El Paso spokesmen have been mum on defraying the costs of such dislocations, compensating businesses or assisting those evacuated.
Strict federal regulations govern the security of LNG tankers that off-load at Elba Island and the storage facility itself, but no such protection applies to trucking major quantities of gas. El Paso's public silence only underscores the responsibility of city and county leaders to spotlight the problem. [Red emphasis added.]
Kent Harrington is a retired senior CIA officer and an international consultant with experience in disaster preparedness and crisis management. He lives in Savannah.
Jamaica aims to cut oil imports to 30 per cent by 2030 — Jamaica Information Service, Government of Jamaica
Jamaica is looking to significantly cut the use of imported oil by more than 60 per cent over the next 20 years, with a greater percentage of energy needs to be met from renewable sources and liquefied natural gas.
Lamenting that the country relies on oil imports for more than 90 per cent of its total energy consumption, Mr. Vidal said biofuels can increasingly assist in satisfying the island's energy needs while reducing dependence on fossil fuels and thereby providing a higher degree of national energy security.
Cuba deal boosts China's Latin American oil plans (Nov 25) — Yahoo News, Malaysia
A unit of state-owned China National Petroleum Corp [CNPET.UL] expects to begin work in early 2011 on the project that will more than double the refinery's capacity to 150,000 barrels daily and include construction of a liquefied natural gas terminal.
Opponents appeal Clatsop County's LNG pipeline decision — The Oregonian, Portland, OR
The conservation group Columbia Riverkeeper last year successfully appealed Clatsop County's approval of the Bradwood Landing LNG terminal East of Astoria. Those LUBA appeals delayed and were ultimately a factor in killing that project.
The conservation group and its landowner allies n the Northwest Property Rights Coalition are now following a similar strategy to fight the proposed Oregon LNG terminal in Warrenton, and its associated pipeline. About 41 miles of the pipe run through Clatsop County, which conditionally approved the project earlier this month.
More power to us [Editorial] — The World, Coos Bay, OR
Coos County should keep its fingers crossed, as a Canadian firm mulls whether to buy a power plant elsewhere in Oregon or build one on North Spit.
[T]he North Spit plant's natural gas wouldn't come from Jordan Cove Energy Project LP's proposed liquefied natural gas terminal. It would come, instead, from Coos County's own underutilized 12-inch pipeline.
That means the power plant would need no new natural gas supply.
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Gas Glut & LNG Exports
Exxon: Proposed LNG terminal suspended due to changes on gas market — The Wall Street Journal [Paid subscription required]
HOUSTON (Dow Jones)--Exxon Mobil Corp said Monday it has suspended plans to build a floating liquefied natural gas import terminal off the New Jersey coast due to changes in the outlook for natural gas supply and demand.
"The natural gas supply and demand outlook for the region has changed since the BlueOcean Energy project was launched in 2007," Rachael L. Moore, a company spokeswoman said in an email.
[Red bold emphasis added.]
Pair plan US liquefaction terminal — Upstream Online
The plan marks an about-face for Freeport LNG, which just two years ago built an LNG import terminal in Texas, and highlights the massive change brought about by increased unconventional gas production in the United States.
It is the second LNG production plant proposed in the United States this year, following Cheniere Energy's similar plan, announced in June, to build a liquefaction plant at the site of its LNG import terminal at Sabine Pass, Louisiana.
The Kitimat project in west Canada has also changed its plans to import LNG, instead proposing an export plant for delivery of gas to Asia.
The construction of LNG export plants is a total reversal for the US natural gas market, where several import facilities were built in anticipation that the United States would become a major LNG importer in the coming decades.
Most US import terminals have sat idle over the past three years as shippers look to higher-paying markets in Europe, Asia and South America to send their cargoes.
One potential obstacle to the Freeport project, as for Cheniere Energy's plan, is the political opposition to exporting domestic resources abroad. [Red bold emphasis added.]
Macquarie Energy and Freeport LNG expansion, L.P. to jointly develop U.S. LNG export project — Your Industry News, Aberdeen, Scotland, UK
While forecasts that natural gas prices will remain relatively low in the U.S. do not bode well for import terminals, the price differential has opened up an opportunity to make the U.S. a leading exporter of natural gas.
“Recent developments in shale gas technology have transformed the U.S. gas market. The U.S. has developed significant natural gas resources and is able to meet projected domestic demand with a surplus for a long time to come,” said Nicholas O’Kane, Senior Managing Director and Global Head of Macquarie Group’s Energy Markets Division.
“The U.S. has been on the cutting edge of developing techniques to economically produce natural gas resources in recent years,” said Smith.
[Red bold emphasis added.]
Glut prompts project to chill natural gas for export (Nov 22) — Houston Chronicle, Houston, TX
The Freeport terminal, which opened on the Texas coast in 2008 to import liquefied natural gas from other countries, has already added the capacity to ship some of that LNG back overseas because of overproduction of the fuel in the U.S.
But adding the capacity to liquefy U.S.-produced natural gas for export shows just how deep the country's natural gas glut has become, thanks to the widespread success of prolific shale formations from Texas to New York.
Earlier this month, Cheniere said it also plans to build gas liquefaction capacity to export LNG from its facility in Sabine Pass.
[Red bold emphasis added.]
With natural gas glut, firms bank on exporting (Nov 22) — Star-Telegram, Fort Worth, TX
A $2 billion liquefied natural gas export terminal on the Texas coast, proposed by Macquarie Group Ltd. and Freeport LNG, will be able to take advantage of the current low natural gas prices, produced by surging supply driven by such formations as North Texas' Barnett Shale, to export U.S. gas overseas.
"This country has more than 100 years of supply of natural gas," said Michael Smith, CEO of Freeport LNG.
Spending billions to export U.S. natural gas represents a marked turnaround from conventional wisdom of less than a decade ago, when it was assumed that the nation would need to import huge supplies of foreign gas to meet demand. Energy companies plowed billions into coastal facilities designed to import liquefied natural gas, or natural gas that has been chilled to about 260 degrees below zero.
Smith said Freeport's gas will be able to compete with supplies from the Middle East and Africa because of low U.S. prices. Most of Freeport's supplies may go to Asia, with Europe as the second-largest customer base, Smith said. The project may also send gas to South America or the Caribbean, he said.
Also Monday, Exxon Mobil Corp. said it put on hold plans for a floating liquefied natural gas import terminal off New Jersey, citing changes in its outlook for fuel supply and demand in the region. [Red bold emphasis added.]
U.S.-to-U.K. LNG shipment last week may mark new trade link, JPMorgan says — Bloomberg
The LNG tanker Maersk Meridian delivered an initial shipment of the fuel to the Isle of Grain terminal, east of London, from the Sabine Pass terminal in the U.S., National Grid Plc said Nov. 19. The fuel had been reloaded at the U.S. terminal, JPMorgan Cazenove analyst Fred Lucas said in a report dated yesterday. [Red bold emphasis added.]
Calais LNG project suffers setback — Telegraph-Journal, Saint John, NB
Deadline: Regulator warns company it only has until Wednesday to sort out problem or its application will be in jeopardy
On Nov. 18, Maine's Board of Environmental Protection received a letter that raises new questions about the viability of Calais LNG's proposed terminal and pipeline. That letter, sent by the owners of the land that was to house the LNG terminal and pier, notes that Calais LNG failed to exercise or renew its option to purchase agreement on the land. In other words, as of Sept. 1, Calais LNG lost its right to use or purchase the 250-acre parcel of land for the proposed LNG facility.
In a subsequent letter to Calais LNG, dated Nov. 19, the board's chairperson, Susan Lessard, warns that the latest obstacle could derail the project. "An applicant must maintain sufficient title, right or interest throughout the entire application processing period," wrote Lessard, quoting her department's rules.
Back in July, the main financial backer [Goldman Sachs' subsidiary GS Power Holdings] stepped away from the terminal and pipeline project, leaving organizers chasing new funding leads. [Red, yellow & bold emphasis added.]
Calais LNG to seek extension on expired land option — Bangor Daily News, Bangor, ME
Note: The article cited below is not available on the Bangor Daily News website as of the Nov 23 SPB news posting.
CALAIS - Calais LNG has
until Wednesday to show why
its pending applications for a
liquefied natural gas facility in
Red Beach should remain viable since it has lost its option on the
land where the facility would
have been located.
Having and maintaining
rights to the property named in
pending applications is a
requirement of the Maine
Board of Environmental Protection
approval process.
CLNG spokesman Ian Emery
said late Monday that the company
will request an extension
and there is no intent to abandon
the project. He added, however,
that financial restructuring
has left the company scrambling
to come up with additional
money to renew the lease.
According to the letter to BEP
from Carothers and Roberts, the
company's option expired Aug.
31 and therefore, "Calais LNG
Project has lost any rights to use
or to purchase our property."
The couple said they also have
no new or existing contract
with CLNG and since the entire
project "relies almost solely
upon the use of our land,"
Carothers and Roberts requested
BEP either postpone or suspend
the company's applications. [Red, yellow & bold emphasis added.]
Calais LNG facing deadlines in order to win approval for project (Nov 22) — Maine Public Broadcasting Network (MPBN), ME
The company hoping to build a liquified natural gas terminal near Calais in Washington County has until Wednesday to convince the Maine Board of Environmental Protection that the project should go ahead. This follows relevations that the company, Calais LNG, does not own a portion of the land on which it plans to build the terminal, and no longer has the right to purchase it.
Calais LNG's plans for a 330-acre natural gas delivery and distribution terminal along the banks of the St Croix river in Washington County appear to be on increasingly shaky ground.
The company currently has a December 1 deadline to secure financial backing for the project. Failure to meet that deadline will likely force the company to withdraw its application with state environmental regulators. In the meantime, another, perhaps even more pressing problem has arisen.
"They do not have proper title for the proposed LNG plant, and so essentially they're not going to be able to build the entire facility," said Jane West, a staff attorney with the Conservation Law Foundation, an environmental advocacy group which opposes the planned LNG terminal.
U.S. Parks Service calls EIS for Weaver's Cove LNG project "out of date" — LNG Law Blog
Earlier this month the U.S. Parks Service submitted comments to FERC outlining a number of environmental concerns with the planned Weaver's Cove LNG import project. The filing states that the Environmental Impact Statement prepared for the project in 2005 is "fundamentally out of date," noting that "critical factors were not evaluated in that document and that other factors have changed since that review was conducted." [Red emphasis added.]
Weaver’s Cove files for rehearing on wedge lot issue — LNG Law Blog
Weaver's Cove LNG submitted a Request for Rehearing addressing FERC's recent findings that project developers have not satisfied thermal exclusion zones required for the project. Weaver's Cove LNG argues that FERC erred by concluding that the Commission could not determine the true owner of the so-called "Wedge Lot" parcel of property that has prevented Weaver's Cove LNG from securing control over the required exclusion zone. [Red emphasis added.]
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Existing LNG Terminals Turning to LNG Exports
Sabine Pass LNG gets approval to export US natural gas (Sep 9) — FoxBusiness.com
HOUSTON -(Dow Jones)- The U.S. Department of Energy said Thursday [2010 Sep 9] it has granted approval to Cheniere Energy Partners LP's bid to export liquefied natural gas produced in North America from a terminal in Louisiana.
The approval, granted Sept. 7, puts the terminal in Cameron Parish, La., one step closer to becoming the first facility to export natural gas produced in the Lower 48 states, drawing supply from the burgeoning unconventional gas fields in Texas, Louisiana, Arkansas and Oklahoma.
The proposal underscores how the natural-gas supply picture in the U.S. has turned from scarcity to overabundance, thanks to the exploitation of rock formations called shales.
North America's new gas wealth has prompted other export projects, such as Apache Corp.'s proposed facility in British Columbia, which aims to supply Asia with large quantities of Canadian natural gas.
[Red bold emphasis added.]
Correct: Freeport, Macquarie plan $2 billion LNG terminal upgrade — NASDAQ
The companies said Gulf Coast LNG import terminals are currently significantly underutilized due to low natural-gas prices in the U.S. relative to global LNG markets. As such, "the price differential has opened up an opportunity to make the U.S. a leading exporter of natural gas."
Freeport LNG--whose investors include Dow Chemical Co. (DOW) and ConocoPhillips (COP)--expects to file for an export license with the Department of Energy in December and shortly thereafter start the approval process with the Federal Energy Regulatory Commission. The new facilities are currently expected begin operation in early 2015. [Red bold emphasis added.]
Macquarie to fund LNG export facility (Nov 23) — (Dow Jones Newswire) The Australian, Surry Hills, New South Wales, Australia
The announcement by Macquarie's North American energy marketing and trading arm of the addition to an existing Texas import facility comes less than two weeks after a subsidiary of Cheniere Energy said it was working toward a deal to supply liquefied natural gas from its Sabine Pass terminal in Louisiana to one of China's largest independently owned natural gas companies.
The move further underscores the revolution that has shaken up North American natural gas production in the past decade, as producers unleashed vast onshore gas reservoirs trapped in rock formations called shales, creating a glut of supply in the US.
"While forecasts that natural gas prices will remain relatively low in the US do not bode well for import terminals, the price differential has opened up an opportunity to make the US a leading exporter of natural gas," a Macquarie statement said. [Red bold emphasis added.]
Macquarie, Freeport to upgrade LNG facility — The Wall Street Journal
Macquarie Group Ltd. and Freeport LNG Expansion LP are planning to upgrade Freeport's existing liquified-natural-gas import facility in Texas to take advantage of demand overseas.
The companies said import terminals of Gulf Coast LNG are currently underutilized due to low natural-gas prices in the U.S. relative to global LNG markets, creating "an opportunity to make the U.S. a leading exporter of natural gas." [Red bold emphasis added.]
US LNG export plan grows — Fairplay [Paid subscription required]
FREEPORT LNG has emerged as the second US terminal to pursue export liquefaction in response to the country’s waning import demand.
Macquarie Group eyes Asia for US LNG export (Nov 23) — (Reuters) Business Spectator
NEW YORK – Freeport LNG and Macquarie Group aim primarily to supply high-paying Asian markets from their proposed liquefied natural gas export plant in Texas, plans for which they announced late on Sunday.
The proposed $US2 billion plant, expected to be online in 2015, would liquefy US-produced natural gas for transport overseas as the United States faces continuing domestic oversupply.
Freeport LNG has already re-exported previously imported cargoes to Asian markets. The proposed liquefaction plant will be built on the site of Freeport LNG's import terminal.
"We have a (natural gas) resource that will allow us to have ample reserves for US needs for the next hundred years," Freeport LNG chief executive and chairman Michael Smith said during the same interview. US gas producers have shown interest in supplying to the project, he said.
Ample U.S. natural gas supplies create export opportunity [Blog] — Star-Telegram, Fort Worth, TX
Five-plus years ago, there were widespread predictions that U.S. natural gas supplies would prove insufficient to meet rising demand. Therefore, America would have to rely on more imported foreign gas, transported here in liquid form via tankers and then turned backed into a gas at liquefied natural gas (LNG) facilities on U.S. coasts.
But that [was] before domestic natural gas production and long-term reserves ballooned as a result of big "unconventional" gas plays, such as the Barnett Shale in North Texas, that benefited from advanced horizontal drilling and hydraulic fracturing techniques. Now, there are forecasts of an ample domestic supply for perhaps 100 years.
That explains Monday's announcement by Macquarie Group Ltd. and Freeport LNG of plans to build a new $2 billion LNG export terminal near Freeport on Texas' Gulf Coast, where an underused LNG import terminal already exists. [Red bold emphasis added.]
Calais LNG hit's another hurdle — 91.8 FM (The Tide) — St. Stephen, NB
Yet another bump in the road for the Calais Liquefied Natural Gas Terminal project. The project has lost its right to the 250-acre parcel of land required for the project pushing the LNG proposal to the close to collapse.
Calais LNG has failed to renew it's option to the purchase agreement with the Board Of Environmental Protection and the land owners are asking the board of environmental protection to suspend the application. [Red, yellow & bold emphasis added.]
Calais LNG Fails to renew agreement to buy land — WABI-TV, Bangor, ME
The owners of two-thirds of that land say on September 1st, Calais LNG lost the rights to buy or use the property when the company didn't extend a purchase agreement for it.
The Bureau of Environmental Protection has given the company until Wednesday to explain the action.
There will be fuel? An open letter to the New York Times [Op-ed column] — The Huffington Post
With respect to shale gas production in the U.S., which the author hypes along with LNG, U.S. gas production in 2009 was still four percent below the 1973 gas production peak. The U.S. is still a net gas importer via pipeline from Canada and via LNG from many countries. Despite the hype of people like Aubrey McClendon, the CEO of shale gas producer Chesapeake, who was recently featured on 60 Minutes, and who testified before Congress that U.S. gas production could increase by 50 percent or more in the next decade, the realities of shale gas make this unlikely. Shale gas wells have very high decline rates, between 65 and 85 percent in the first year, are high tech and hence expensive, utilize large amounts of water, and have environmental costs that are now becoming evident. The EPA has begun an extensive investigation of the environmental issues surrounding “fracking,” upon which shale gas production depends.
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US LNG Export Project Numbers Growing
There will be exports (Nov 20) — Newsweek
The U.S. may have long since reached its peak production of petroleum. But technological advances in drilling and extraction have led to a new boom in another fossil fuel: natural gas. More and more companies are using and perfecting the controversial method known as fracking—deploying ultrahigh--pressure water streams to blow apart rocks underneath the earth and release natural gas. The upshot: America’s reserves of natural gas, which burns cleaner and produces fewer emissions than coal, have risen 30 percent in the last few years. “Shale gas has brought in a flood of supply, and the question is now, what do you do with it?” says Bill Cooper, president of the Center for Liquefied Natural Gas in Washington, D.C. Earlier in the decade, companies began to build facilities that would allow for the importation of liquefied natural gas (LNG). Now the U.S. may have the capacity to become an exporter of natural gas.
…Cheniere Energy Partners this summer applied to the Department of Energy to add liquefaction capabilities to its Sabine Pass LNG facility in Louisiana, just over the Texas border. Earlier this month Cheniere signed a memorandum of understanding with a Chinese firm, ENN Energy Trading, in which ENN “intends to contract 1.5 million tonnes per annum…of bi-directional LNG processing capacity.” Translation: if Cheniere gets the necessary approvals and installs the necessary equipment, the Chinese company will consider importing natural gas. The Department of Energy and the Federal Energy Regulatory Commission are reviewing Cheniere’s proposal. If things go according to plan, Cheniere could be piping gas onto slow boats to China in 2015. [Red bold emphasis added.]
Oil in a week - Major shifts in the gas industry — Poten & Partners
Another challenge to the gas industry is shale gas production in the United States, and the negative impact of this new type of gas in the international gas trade, as it has led to short-term reductions in gas prices, and has given the United States the opportunity to begin exporting gas to Europe, having been a gas importing country itself until recently.
[Red bold emphasis added.]
Macquarie in gas tie-up with Freeport LNG — Financial Times, London, England, UK [Paid subscription required]
[Macquarie Group Limited (MGL) investment bank] is teaming up with energy company Freeport LNG to export US natural gas, in a move to gain from a boom in energy supplies from unconventional sources.
The Australian bank and Freeport LNG plan to retrofit a facility on the Gulf of Mexico, originally built to handle gas imports, to condense and ship the fuel abroad.
The project, which could cost up to $2bn, highlights how gas extracted from US shale has overturned the country’s import requirements for liquefied natural gas. Just a few years ago, developers were building LNG import terminals to supplement flagging domestic supplies. There are now 10, with two more under construction.
“There is a much greater demand for US exports than for imports,” said Michael Smith, Freeport chief executive.
The proposal follows a similar move by Cheniere Energy for a combined import and export terminal at Sabine Pass, Louisiana.
Projects, such as Freeport and Sabine, could have repercussions for global LNG markets. The shale boom has made the country the world’s biggest natural gas producer, with 57bn cu ft a day of output, according to Nikos Tsafos of PFC Energy, the consultancy. If the US exported just a 10th of its gas last year, he says, it would have been the world’s top LNG exporter.
[Red bold emphasis added.]
LNG still viable [Letter to the editor] (Nov 20) — Bangor Daily News, Bangor, ME
… The problem for New England is that the pipelines that could transport this natural gas to the region are at maximum capacity from November to March. Even if we do in fact have a 100-year supply of natural gas in the U.S., there is no way to bring this gas to New England when we need it most.
… The only solution to meet incremental gas demand in New England and Maine is with a new land-based LNG facility.
[Bold brown emphasis added.]
Oil sheen spotted in Taunton River near Weaver's Cove (Nov 20) — The Herald News, Fall River, MA
The 65-acre site at 1 New St. is where Shell Oil Co. operated a petroleum distribution facility for 66 years until 1995. In the 1920s it was a crude oil refinery.
It’s been owned since 2007 by Weaver’s Cove Energy, which in partnership with Hess LNG has proposed a liquefied natural gas facility linked to an offshore loading platform in Somerset waters.
“There is a fair amount of contamination in the groundwater and the soil,” Coletta said.
Gov. Christie opposes proposed natural gas facility off Asbury Park — The Star-Ledger, NJ
TRENTON — Gov. Chris Christie has taken aim at a proposed natural gas facility 16 miles offshore from Asbury Park — the last natural gas pipeline project in the state awaiting federal approval.
“I will not subject our state’s shore and economy to the environmental risks that are inseparable from such a project,” Christie said in a statement.
“Without the deepwater port, the onshore pipeline is a bridge to nowhere,” [DEP Commissioner Bob Martin] said in a statement.
Lake Charles LNG lease let stand (Nov 20) — (AP) WXVT-TV, Greenville, MS
The Louisiana Supreme Court won't consider the West Cameron Port's challenge to the Port of Lake Charles' $1.2 million-a-year lease with Sempra LNG.
The American Press says the Lake Charles port bought 200 acres in Cameron Parish near Hackberry to dump sediment dredged from the Calcasieu Ship Channel, leasing part of the property for a liquified natural gas plant.
In 2001, it amended the lease to let Sempra build the plant as long as the Cameron Parish Police Jury and the West Cameron Port approved construction.
'Downside risk' decision making harms Bahamas over innovation (Nov 19) — The Tribune, Nassau, Bahamas
Khaalis Rolle told Tribune Business that the Bahamas needed to stop "playing and toying" with industries such as liquefied natural gas (LNG), which could provide totally new avenues of economic opportunities, and focus just as much on the potential benefits they might bring as opposed to the negatives.
"There are risks associated with LNG, but those risks, particularly in this area, are minimal," Mr Rolle told Tribune Business. "We need to stop playing politics with these things, and make some hard decisions."
Blast should end debate over LNG [Op-ed column] — The Reporter, Vacaville, CA
But no matter how well PG&E behaves now (and it has yet to clean up its pipeline-maintenance act), one long-term consequence of San Bruno will almost certainly be the death of any and all plans to bring more liquefied natural gas (LNG) to California.
Even before San Bruno, proposals to build other receiving terminals in Humboldt County, Ventura County, Long Beach, Mare Island in Vallejo and near Camp Pendleton in San Diego County had all died or atrophied. But plans for two terminals in Oregon, at Astoria and Coos Bay, are still alive.
[A]s early as six years ago, a federal Energy Information Agency report indicated no gas shortage was likely in California until 2030 at the earliest.
And the questions about PG&E's maintenance of its existing pipeline network that arose immediately after the San Bruno disaster and still remain have done nothing but harden opposition to building anything that will tie into PG&E's network.
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Shale Boom: LNG Re-Exporting Grows
USA: ExxonMobil scraps FLNG project off New Jersey — LNG World News
ExxonMobil said it is suspending efforts to build a $1 billion floating LNG import terminal about 20 miles off New Jersey’s coast.
The company’s decision on its BlueOcean Energy project is the latest in a string of US LNG import proposals scrapped by developers as shale production has flooded the market with cheap supply.
The shale boom has made some analysts predict that no more LNG capacity will be built in the US. On the public front, New Jersey and New York politicians have fought the terminals. [Red bold emphasis added.]
Centrica brings in LNG from U.S. — (Reuters) Interactive Investor
LONDON (Reuters) - Britain's biggest energy supplier has taken delivery of the first liquefied natural gas (LNG) to be re-exported from the United States to the UK.
The shale-gas saturated United States started re-exporting LNG to higher-paying markets in Asia, South America, and Spain earlier this year.
U.S. gas prices have fallen more than 30 percent since the beginning of the year, pressured by a surge in North American gas production which has also reduced U.S. LNG imports to minimal contracted volumes, while UK prices have been rising since September. [Red bold emphasis added.]
First LNG cargo from US to UK in 50 years arrives at Grain LNG — Platts
Re-exports offer idle US terminals the chance to turn a profit by sending surplus LNG to higher-paying markets in Asia or South America, but shipping contraints and cooling demand in those markets at the time made Europe the next best destination.
US re-exports are growing in number, with just Sabine Pass and the Texas-based Freeport currently holding the right to do so. Sempra's Cameron terminal is awaiting regulatory approval to start re-exporting.
Closing bell: Choppy markets after Europe (GM, MELA, CPWM, LNG, NOK) — BloggingStocks
Cheniere Energy, Inc. (LNG) delivered the first cargo in 50 years of US LNG to the UK. This is the third LNG cargo to be shipped to Europe after a decision by the US government to allow re-export of LNG cargoes from the US. Cheniere shares rose more than 27% today on more than five times normal volume.
[Red bold emphasis added.]
Legal battle ends for Port of LC, West Cameron Port — KPLC-TV, Lake Charles, LA
Mike Dees says the five year long legal battle ended when the Supreme Court refused to review a lower court ruling in favor of the Port of Lake Charles.
The West Cameron Port claimed the Port of Lake Charles did not have the right to own land in their parish.
Haisla support lease agreement — Opinion 250, Prince George, BC
Members voted 354 to 25 in favour of a lease agreement that will allow reserve land to be used for the construction and operation of the proposed $3 billion Kitimat LNG terminal. The project will allow the province to export natural gas to overseas market by tanker.
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US Natural Gas Supply Surges, LNG Imports Wane
Gas in U.S. less than Canada means import slide: Energy markets — Bloomberg Businessweek
U.S. output is surging as companies increase drilling for gas from shale formations. Marketed production of the fuel will rise in 2010 to the highest level in 37 years, the Energy Department in Washington said Nov. 9. U.S. imports through pipelines, 99 percent of which come from Canada, will fall 11 percent to a net 7.33 billion cubic feet a day this year compared with 2008, the lowest amount since 1994, it said.
“Imports from Canada will likely see further deterioration, given the simultaneous growth of low-cost U.S. shale production and large-scale pipeline projects that will enable these supplies to compete head-on with Canadian production,” said Teri Viswanath, a director of commodities research at Credit Suisse Securities USA in Houston.
Rising U.S. production is encouraging energy companies to turn to export markets for customers, requiring the construction of liquefaction plants to cool the fuel into a liquid that can be put onto ships.
“Now both Canada and the U.S. may become LNG exporters,” said James Williams, an economist at WTRG Economics, an energy research and analysis firm in London, Arkansas. [Red bold emphasis added.]
Gas-market downturn hits 'Southern Corridor' pipeline race — World Politics Review
Second, the gas industry appears to be in the midst of a wide-ranging structural transformation due to the large-scale development of unconventional sources in the United States -- an event dubbed the "shale revolution" by industry analysts. This has led to a global gas glut, whose most significant consequence for Europe has been the diversion, especially by suppliers in Latin America and Qatar, of liquefied natural gas (LNG) deliveries initially meant for the U.S. market. [Red bold emphasis added.]
Christie administration moves to block offshore pipeline — NJ Spotlight, Montclair, NJ
"…Natural gas is and will remain a piece of our state's energy puzzle, but liquefied natural gas has not been shown to be a viable and needed piece of New Jersey's energy plan, nor will it necessarily result in lower price for New Jersey families," said Governor Christie. [Red bold emphasis added.]
Natural gas weekly update — U.S. Energy Information Administration (EIA)
Domestic production was off by 0.7 percent, accounting for the bulk of the decline. One contributing factor was the shut-in of the Independence Hub in the Gulf of Mexico over the weekend for planned maintenance. The facility typically flows about 0.5 Bcf per day and resumed operations on Tuesday, November 16. Other contributing supply sources also decreased during the week. Canadian imports were off by 11.1 percent and remain 20.3 percent below year-ago levels. Things were no better in the LNG arena where imports remained 25.7 percent below last year. LNG sendout fell below its 5-year (2005-2009) minimum and last Wednesday reached a new recorded daily low, since BENTEK started tracking the volumes. [Red bold emphasis added.]
Natural gas as a cure for OPEC dependence? Huh? [Blog] (Nov 16) — The Barrel, Platts
McClendon told the prime-time audience that US shales hold the natural gas equivalent of two Saudi Arabias worth of oil while veteran correspondent Leslie Stahl failed to ask him how that factoid translates into refined gasoline for our cars. [Red bold emphasis added.]
European Director General for Energy confirmed as key note speaker at European Gas Markets Summit — AllVoices
The shale gas revolution in the US has unexpectedly pushed the nation to the top of the gas producers' league and pushed LNG targeted at the US into other markets, especially Europe. [Red bold emphasis added.]
Canada: Canaport LNG sees a bright future (Aug 26) — LNG World News
Damien Gaul, an economist and LNG specialist at the U.S. Energy Information Administration, said the decision to cancel the $750 to $900-million Maple LNG terminal planned for Goldboro – about 200 kilometres east of Halifax – was “not really that surprising.”
“The market opportunity is no longer as strong or as big as it was in the past,” he said in a phone interview. “There’s enough capacity on the East Coast of North America to handle our expected imports of LNG for the next couple of decades,” he added, noting that forecasts for large increases in LNG shipments to North America turned out to be wrong.
[Red bold emphasis added.]
International energy watchdog predicts a decade swimming in natural gas (Nov 17) — Jamaica Observer, Kingston, Jamaica, West Indies
The revelation by the IEA should have significant implications for Jamaica, as the country seeks to shift a significant portion of its energy consumption to that source in a bid to lower increasing costs and increase the viability of local businesses to expand and generate new employment. Of added interest is the projection that the United States, Jamaica's largest trading partner, might become a net exporter of gas soon.
The story notes that "even rising global gas use, which will increase faster than any other fossil fuel, won't overcome a production surge that is emerging from shale gas resource development in the United States, and in Canada."
Recent technological developments have facilitated the extraction of gas from shale reserves that hitherto were uneconomic to mine, greatly increasing the availability of gas. "Already, there are some signs of that change in the works. In the past month, more than 19 billion cubic feet of liquefied natural gas were shipped out of the Gulf of Mexico, about half the amount that will be imported to the region for the month of November," according to Waterborne Energy, a Houston research firm. Given that just a year ago LNG terminals in the region didn't have the ability to re-export the LNG they took in, this is a major turnaround.
As of late last week three tankers were waiting in the Gulf of Mexico outside Sabine Pass to load up with LNG that had previously been offloaded at Sabine Pass, Waterborne noted. [Red bold emphasis added.]
ICIS Heren launches pricing for South American and US LNG (Nov 17) — (PR Newswire) Sys-Con Media
[F]or the first time, LNG has been re-loaded from NorthWest Europe and the US for trade into South American markets.
Some of the cargoes bound for Argentina and Brazil were sourced as re-loads in the United States. With increased domestic shale gas production and the attendant price slump on Henry Hub, the US Gulf region is rapidly becoming a filling station, where traders with demand elsewhere can purchase a cargo on an FOB basis either in Sabine Pass or Freeport. The number of applications for re-export licenses is growing fast as traders with capacity in the United States are looking to take part in the dynamic re-load trade, which was previously almost exclusive to importers at Belgium's Zeebrugge terminal. Some would argue that the United States could become a regional trading hub, creating extra levels of liquidity and flexibility in the Atlantic basin.
Responding to demand of traders worldwide, ICIS Heren also introduces a US Gulf Re-load price, assessing the cost of FOB cargoes sourced in both Freeport and Sabine Pass. [Red bold emphasis added.]
FERC requests additional information from Downeast, Calais LNG projects — LNG Law Blog
FERC requested additional information yesterday from Downeast LNG and Calais LNG addressing the U.S. Pipeline and Hazardous Materials Safety Administration's recent guidance on flammable vapor-gas exclusion zones.
Fall River LNG foes just ‘naive’ (Nov 17) — Boston Herald, Boston, MA
The developer of the proposed Fall River LNG terminal is calling opponents “very naive” for trying to pressure shareholders to kill the controversial project.
Gas would … be pumped, via underwater pipelines, about 4.25 miles to a land-based storage facility in Fall River.
N.J. DEP against proposed LNG facility off Asbury Park (Nov 17) — New Jersey Newsroom, NJ
State Environmental Protection Commissioner Bob Martin on Wednesday said he has file documents opposing the pipeline and offshore facility.
"New Jersey opposes Liberty's proposed deepwater port, which is a crucial piece of their proposed project," Martin said. "Governor Christie has repeatedly expressed his steadfast opposition to LNG facilities off New Jersey's coastline, including his intention to use his veto authority under the Deepwater Port Act to prevent construction off our shore. Without the deepwater port, the onshore pipeline is a bridge to nowhere. Its potential environmental and economic impacts on New Jersey are unacceptable."
[Red bold emphasis added.]
USA: Christie administration files motion to intervene in proposed Liberty Natural Gas Pipeline — LNG World News
"…From New Jersey’s perspective, this is simply not a workable project and I will exercise my authority to stop it.”
Location will help New Jersey port survive bleak LNG market: Liberty — Platts
President Roger Whelan said in a telephone interview the submersible port 16 miles offshore Asbury Park, New Jersey, will weather low gas prices and hostile politicians because of: "location, location, location."
All these things need to be explained in a way that shows it's enhancing gas supply and that it's complementary to Marcellus Shale," he said.
MARAD determines Liberty LNG project application ready for processing (Nov 17) — LNG Law Blog
MARAD announced in today's Federal Register that it has determined that Liberty LNG's application to construct and operate a deepwater port offshore New Jersey contains the information necessary to begin processing the application. The next step is for the agency to hold public hearings on the project within 240 days and render a decision on the application within 330 days.
El Paso sells Savannah operations to subsidiary — Savannah Morning News, Savannah, GA
Texas-based El Paso Corp. has announced that it will sell its full ownership of Southern Liquified Natural Gas Co. - which owns the Elba Island LNG import terminal here - as well as its ownership of the El Paso Elba Express Co. to El Paso Pipeline Partners LP.
"This is basically a financial transaction in which earnings will now accrue to a different segment of the company," said El Paso spokesman Scott Langston. "As far as operations are concerned, there will be no changes in personnel or jobs."
FERC authorizes Golden Pass LNG to continue cool down operations as second commissioning cargo arrives (Nov 17) — LNG Law Blog
Yesterday, FERC authorized Golden Pass LNG to continue cooling down its Phase 1 facilities.
Separately, NATS [subscription required] reported yesterday that a second commissioning cargo, carried aboard the Q-Flex class vessel Al Oariq, has arrived at the Sabine Pass waterway en route to the Golden Pass LNG terminal.
Jordan Cove investors may build power plant (Nov 17) — The World, Coos Bay, OR
Investors in the proposed Jordan Cove liquefied natural gas terminal on Coos Bay's North Spit may know within 60 days whether they'll also build a natural-gas-fired power plant nearby, Jordan Cove's manager said Tuesday.
Currently known as the South Dunes Power Project, the plant would have 50-megawatt generators powered by natural gas.
The plant wouldn't directly use gas from Jordan Cove or the associated Pacific Connector pipeline. Rather, it would use gas from Coos County's existing 12-inch pipeline.
But if the Jordan Cove facility is built, it would benefit the South Dunes plant because gas being shipped from Jordan Cove would keep the 12-inch pipeline full, Braddock said.
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Fall River LNG foe takes case to investors — Boston Herald, Boston, MA
A major opponent of the proposed Fall River LNG facility is appealing to Boston’s Fidelity Investments, State Street Corp. and Wellington Management to pressure Hess Corp. to drop its controversial development plan.
Stop Hess LNG — Save Narragansett Bay, Providence, RI
Hess LNG in Fall River wastes shareholders' money. Tell Hess to end this project NOW!
Save the Bay's open letter to shareholders to be published Nov. 17 in The Wall Street Journal.
Save the Bay takes Hess LNG fight to the "street" — MarketWatch, Wall Street Journal, New York, NY
"Management has badly miscalculated its estimation of the time and expense required to obtain the necessary permits for this project, has misjudged how quickly competing projects would come on line, and underestimated the resolve of the citizens of Massachusetts and Rhode Island," writes Stone in his letter to Hess shareholders.
Citing a variety of permitting, political and economic reasons for abandoning their plans, Stone concludes, "In the parlance of the energy industry, Hess Corporation's Fall River terminal project is a dry hole. Your money is being wasted."
Save the Bay steps up campaign against LNG terminal — The Providence Journal, Providence, RI
Save The Bay sent the letters to 68 people at 17 companies representing major shareholders at Hess. It also spend $6,600 for an advertisement bearing a version of the letter in the Wall Street Journal.
Jonathan Stone, Save The Bay's executive director, has previously worked as a portfolio manager and founder of a hedge fund. It is because of that background, he said, that he feels shareholders would want to know when management is spending their capital the way they should.
Golden Pass seen ready in early 2011 — Upstream Online
The terminal was set to receive its second test cargo today after the inaugural shipment arrived in October and further cargoes are expected in the coming months to help cool down the storage tanks.
"It could be the end of the year or it could be the first quarter (of 2011) when they finish commissioning," the spokesman said, adding that another test cargo could potentially arrive in December.
The volumes currently being delivered will be used for cool-down purposes only.
A spate of recent gas explosions concern homeowners across the country [Press release] — 24-7 Press Release
According to data released by the New York Times, in the past five years alone nearly 70 people have been killed and hundreds others injured in natural gas-related explosions. That number includes the more than 50 injuries and seven fatalities resulting from a late-September blast in San Bruno, California. Less than a week later, a similar explosion in Richfield, Minnesota, destroyed one home and damaged others close by.
Amazingly, a New York Times review of PHMSA [Pipeline and Hazardous Materials Safety Administration] data shows that a whopping one-third of the enforcement actions started in the past eight years are still pending, and that the number of fines issued by the PHMSA fell a staggering 40 percent between 2004 and 2009. Even some unresolved enforcement cases from the early 1990s have fallen through the cracks and have lingered open.
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US LNG Exports Grow
Suez Canal LNG traffic rebounds in October — LNG World News
Kuwait has turned at times to distant providers for its imports, despite its proximity to the world’s largest LNG producer.
It received deliveries last year from as far as Belgium and Russia. And a US-loaded cargo appears headed for Kuwait aboard the 150,900m³ Exquisite, which was rounding the coast of South Africa today.
Unconventional economics — E&P Magazine, Houston, TX
EOG's Mark Papa says shale plays have permanently and dramatically altered US energy supply and security.
The true impact of unconventional drilling in unconventional rock formations is the most underreported event in the mainstream press today, according to Mark Papa, chairman and chief executive of EOG Resources Inc. The enormity of the boost to the US economy is entirely overlooked, he said.
"There is clearly sufficient North American gas supply to last for a bunch of years, 50 years at least. And there is clearly no need for us to import liquefied natural gas for multiple years to come."
"Talk about stimulus and ways to boost the economy," Papa said. "One of most significant ways the economy has been boosted is in not having to pay an extra $50 billion a year for energy." [Red bold emphasis added.]
You need to know this about natural gas - Dave Forest (Nov 11) — Seeking Alpha
Some projections show that Eagle Ford producers could give their gas away for nothing and still make a positive return on shale wells selling the liquids. Across the liquids-rich sections of this play, returns on drilling investment can be as high as 200% at $4 per million British thermal unit (MMBtu) gas, according to Colorado's Bentek Energy. The break-even gas price for such wells is an astonishing $2.04.
Suddenly, America had something unthinkable—a surplus of gas. This led some producers and shippers to consider an equally radical solution—exports.
Passamaquoddy woman given NRCM People's Choice Award (Nov 11) — The Quoddy Tides, Eastport, ME
"Vera's persistence in ensuring that the decision-making process was open and responsive to the grassroots constituency resulted in a landmark ruling giving rights to tribal members themselves, not just the tribal governing body," added Houston. "This ruling, acknowledging that tribal people as individuals have standing, set an international precedent and gives voice to those whose concerns may otherwise be silenced."
Francis accepted the award "with great humility" and noted, "[Houston] said 'You should have a vision'. I would only add, not only should you have a vision. You need to hang onto it tightly because it's only when you lose sight and when we lose touch with vision, when inappropriate industrial complexes can be proposed for a pristine [and] a cultural and ceremonial gathering grounds, for lands that are attached to one of the largest Native American populations in New England, there's only in those kind of moments that that can be proposed."
Quoddy Bay's plans for terminal at Split Rock reach end of road (Nov 11) — The Quoddy Tides, Eastport, ME
In a letter to Quoddy Bay President Donald Smith, Dean White, the acting director of the BIA's Eastern Region, states that he has determined that he will not reconsider his April 23, 2010, decision that the lease was cancelled. Previous to that decision, White had issued in February a notice of lease violation to Quoddy Bay, asserting that Quoddy Bay's failure to make certain lease payments to the tribe and its failure to pursue a license from the Federal Energy Regulatory Commission constituted a breach of the lease. Quoddy Bay had been given 10 days to remedy or dispute the violation or request additional time. The BIA, though, did not receive a reply from Quoddy Bay, so White cancelled the lease. His decision could have been appealed to the Interior Board of Indian Appeals, but Quoddy Bay instead chose to write directly to the BIA seeking reconsideration of the decision. No appeal of the lease decision was filed, though.
* FOIA — Freedom of Information Act.
Energy stocks choppy, deals multiply — Investors.com
El Paso Pipeline Partners LP (EPB) said Monday that it plans to pay $1.13 billion to El Paso Corp. (EP) for the remaining 49% interest in Southern LNG Co. LLC and El Paso Elba Express Co. LLC. The deal also includes an additional 15% interest in Southern Natural Gas Co.
After the transaction, El Paso Pipeline Partners will own 100% of Southern LNG and Elba Express and a 60% interest in Southern Natural Gas. El Paso Pipeline Partners will fund the deal with $415 million in cash from its flotation of common equity in September. It may also issue public securities and a promissory note to El Paso Corp.
Uncertainty hangs over state's resources (Nov 11) — Alaska Journal of Commerce
The biggest uncertainty is that which hangs over the big gas pipeline project. Open seasons were held this summer for both competing projects, the TransCanada/ExxonMobil group and the BP/ConocoPhillips Denali pipeline.
This year the worry is that the Lower 48 gas market for the project has evaporated, captured by aggressive shale gas producers.
A liquefied natural gas, or LNG, alternative doesn't look any better, with the world awash in LNG projects and liquefied natural gas tankers at sea looking for places to sell their cargoes.
Utilities explore importing LNG (Nov 10) — (Morris News Service) HomerNews.com, Homer, AK
Southcentral Alaska gas and electric utilities are exploring the feasibility of importing liquefied natural gas to Cook Inlet in an effort to be prepared if regional gas supplies continue to decline and a plant on the Kenai Peninsula that now exports LNG closes after a federal license expires in 2013.
ConocoPhillips and Marathon Oil Co., which own the LNG plant, were recently given a two-year extension of an LNG export license by the U.S. Department of Energy. The new expiration date is March 2013.
After 2013 or 2014 there may be insufficient gas production to supply utility needs and the export plant, gas reserve studies done by the utilities indicate.
Higher natural gas consumption and improving economic conditions improve U.S. outlook — Pipeline & Gas Journal
Forecasted imports of LNG average 1.23 Bcf/d in 2010, a slight decline from 2009 levels. Nevertheless, EIA expects LNG imports to grow slightly in 2011 to 1.32 Bcf/d, a 7% increase. On total natural gas consumption, the report projects increases of 4.6 % and 0.1% in 2010 and 2011, respectively. Moreover, consumption of natural gas in the industrial and electric power sectors make up the bulk of the year-over-year increase in consumption in 2010.
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US Natural Gas is Overflowing
Uncle Sam has too much gas (Nov 13) — Pravda, Moscow, Russia
The U.S. is starting to supply gas to Europe. The surplus of domestic production and the active procurement of LNG in Qatar allowed the country to re-export gas using the so-called arbitrage transactions which means transferring purchased gas to new buyers. The first gas transport will come to the UK this weekend.
The U.S. is the largest producer of shale gas in the world. In one year, gas production from unconventional sources, mainly from shale deposits, has jumped by 30 billion cubic meters. America's need in the imported liquefied gas has dropped sharply, and its price has dropped more than two-fold.
The closure of the U.S. gas market for imports hit the producers in other countries. In February of 2010, Gazprom has postponed the project for the production of LNG from the giant Shtokman field in the Barents Sea, including the fact that the U.S. target market is no longer in need of additional supplies. [Red bold emphasis added.]
Mainstream media and investing public just awakening to enormous value of unconventional oil assets (Nov 13) — GuruFocus.com
"There is clearly sufficient North American gas supply to last for a bunch of years, 50 years at least. And there is clearly no need for us to import liquefied natural gas for multiple years to come."
… Assuming that gas prices are at least $2 lower than if the industry never learned to extract gas from shales, then U.S. consumers of natural gas benefit by some $50 billion less burden of energy cost.
And that redirection of LNG? "We're going to be self-sourcing" gas, he says, which softens the balance of payments of U.S. foreign imports.
Horizontal shale-gas drilling has "dramatically and permanently" changed the U.S. natural gas supply picture for a long, long time. Papa says he is not of the camp that believes this production is going away in five years because of high decline rates from shale-gas wells. "I've seen enough of the specificity of what EOG has in its inventory. What's happened is clearly a game changer." [Red bold emphasis added.]
LNG tankers expected to dock in British, Belgian ports (Nov 11) — Bloomberg
The following table is an overview of liquefied natural gas tankers scheduled to arrive in the U.K., Belgium and northwest Europe.
U.K.
Tanker |
Capacity |
Expected |
Origin |
Terminal |
| Maersk Marib |
165,000 |
Nov. 10 |
U.A.E. |
Isle of Grain |
| Al Gharrafa |
216,200 |
Nov. 12 |
Trinidad |
Dragon 1 |
| Al Mafyar |
261,043 |
Nov. 13 |
Qatar |
South Hook 2 |
| Al Ghuwairiya |
257,984 |
Nov. 16 |
Qatar |
South Hook 2 |
| Maersk Meridian |
163,285 |
Nov. 18 |
U.S. |
IIsle of Grain |
| Al Thumama |
216,235 |
Dec. 9 |
Qatar |
Isle of Grain |
[Red bold emphasis added.]
Liquefied natural gas from US headed to China (CQP, LNG, APA) — 24/7 Wall Street
Last month, Cheniere Partners received permission from the US Department of Energy to export LNG produced in North America from its Sabine Pass terminal. The company had already received permission to re-export imported LNG that it couldn’t sell.
The reason Cheniere Partners can’t sell imported LNG is because the US is awash with natural gas from the shale gas wells of Texas, Arkansas, Pennsylvania, and elsewhere. In late 2008, it appeared that both Cheniere Partners and Cheniere Energy might be headed for failure due both to the financial crisis and the booming supply of domestically-produced natural gas.
[Red bold emphasis added.]
How to get in early on America's next great commodity boom — The Market Oracle, UK
U.S. energy companies, before the shale gas boom changed everything, thought the U.S. would need to import natural gas. So the U.S. has about 10 LNG import terminals and two more in the works. Now, with a natural gas glut in the U.S., these terminals are pretty much useless.
[P]ut together Callahan's data on exports and imports with the glut in the U.S. and the lack of export terminals. I think it's pretty clear we'll see more export terminals in the U.S. It's too big of an opportunity to ignore. The U.S. could become the leading exporter of natural gas in the next decade.
[Red bold emphasis added.]
Shale gas: can’t do without US — The Financial Express, New Delhi, India
US is the only country to have achieved commercial success in shale gas production. The share of non-conventional energy in US consumption has risen fast over the past few years, significantly reducing that country's dependence on imported LNG. [Red bold emphasis added.]
LNG common sense [Letter to the editor] (Nov 13) — Bangor Daily News, Bangor, ME
In a Nov. 9 BDN article, Kevin Raye asserts, “common-sense solutions are what have been missing in Augusta.” He also said, “I intend to lead by example.” If those two statements are true, then Sen. Raye needs to get off the LNG train.
That train is not limping through a regulatory morass. It’s been derailed by the industry.
All applications now before federal and state regulatory boards are stalled due to lack of completion on the part of the developers. There is ample evidence of a domestic natural gas supply for the next 100 to 200 years; in other words, there is a natural gas glut. [Red bold emphasis added.]
Ex-exec says Sempra resort questions got him fired (Nov 13) — SignOnSanDiego.com
The corporate retreat, which cost a fraction of the $1.5 billion Sempra spent on its LNG plant 15 miles north of Ensenada, is now front and center in a whistle-blower lawsuit by a longtime Sempra executive.
“Michelon repeatedly questioned the propriety of the manner in which the CEO was directing Casa Azul, as well as the manner in which Casa Azul would be used for nonbusiness related purposes, but was repeatedly told that he was to stop asking such questions if he wanted to keep his job,” according to a complaint filed Nov. 4 in San Diego Superior Court.
The utilities are regulated by the California Public Utilities Commission, which told The Watchdog it will track the litigation to see whether the utility wrongly billed customers for costs associated with Casa Azul.
Another issue complicating the investment in Casa Azul is that Sempra could face additional income taxes if the place is used for executive decision-making not related to LNG.
Whisteblower claims Sempra Energy bribed Mexicans — Beverly Hills Courier, Beverly Hills, CA
The alleged payoffs to Mexican officials, if true, could violate the U.S. Foreign Corrupt Practices Act. It prohibits U.S. companies from paying bribes to foreign officials.
Michelon provided the Union-Tribune with copies of e-mails that indicate the company directed him to "have cash" to pay Mexican authorities who were evicting a man from land to which he claimed ownership -- land now occupied by the massive Costa Azul project.
Sempra built the terminal in Mexico to get a jump ahead of competitors seeking to build LNG terminals in California, where environmental regulations delayed and eventually killed those proposals.
A resident of Baja California has also sued Sempra, claiming the company illegally seized his beachside ranch in 2006 to build Costa Azul.
Ex-executive says Sempra paid bribes in Mexico (Nov 12) — SignOnSanDiego.com
Rodolfo Michelon, terminated in March after five years as controller for Sempra Global in Mexico, said he was directed to bribe government officials, approve improper spending and overlook his ethical obligations as a certified public accountant.
“Sempra regularly required Michelon to transfer funds, and account for illegitimate expenditures that boiled down to bribes of government officials,” states the wrongful-termination suit, filed in San Diego County Superior Court.
Energy: Ex-employee says Sempra paid bribes in Mexico (Nov 12) — North Country Times, CA
Michelon's lawsuit is the second high-profile complaint related to the terminal. In the first, Sanchez Ritchie, a rancher who lived nearby, said he had been improperly evicted from his land to make way for the terminal. Property ownership remains in dispute.
Media statement on Michelon lawsuit [Press release] (Nov 12) — Sempra Energy, San Diego, CA
“Mr. Michelon’s claim that utility ratepayers had to pay directly or indirectly for the construction of Casa Azul is patently false. Customers of San Diego Gas & Electric and Southern California Gas Co. – Sempra Energy’s two California utilities -- had no part in the funding of the facility.
“Mr. Michelon also has made unfounded allegations about bribery in Mexico that are absolutely false. The company has complied with all applicable laws in its business dealings on both sides of the border.
“Responding to allegations made by Mr. Rodolfo Michelon, earlier this year, the Sempra board of directors ordered a thorough and independent investigation into this matter. The Sempra board is satisfied with the results of the independent investigation that the allegations made by Mr. Michelon are without merit.”
The explorers 2010: Cook Inlet basin — Petroleum News
Although past exploration in the region focused primarily on finding oil, large volumes of gas were also encountered during that drilling effort. A resulting excess supply of stranded natural gas drove the construction of LNG and fertilizer plants at Nikiski on the Kenai Peninsula and has enabled the residents of highly populated Southcentral Alaska to enjoy cheap gas for heating and electricity generation.
Industrial facilities such as the Nikiski LNG plant underpin the Cook Inlet gas industry by providing a large and relatively stable market for the gas. And, as part of the state’s deal with the LNG plant owners at the time of the LNG export license renewal, the owners agreed to allow gas producers other than themselves to supply some of the gas used by the plant.
Local gas and power utilities are the other main purchasers of Cook Inlet natural gas. But these utilities constitute quite a small market, with a gas demand that fluctuates widely between warm summer days when gas usage is relatively low, to frigid winter conditions when gas usage, especially for space heating, soars.
Sen. Wyden looks to surge South Coast economy (Nov 12) — KCBY-TV, Coos Bay, OR
Aside from business taxes, audience members addressed availability in renewable energy and Wyden's support in the proposed Liquefied Natural Gas Terminal, out on the North Spit.
Wyden says he believes Oregon can work together to use this energy in a safe and beneficial way, but that first, the state needs to gain control back from the Federal Energy Regulatory Commission.
"Lets bring together everybody from energy developers, to home owners to ranchers to environmentalist folks," said Wyden. "And that's why I feel so strongly about getting it out of Washington D.C., where these special interest lobbies for oil and gas get to call all the shots, and getting it home."
[Red emphasis added.]
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US to Make, Sell & Ship LNG to China
= Cheniere working on deal to send liquefied natural gas to China (Nov 11) — Trading Markets
A subsidiary of Cheniere Energy Inc. ( LNG | PowerRating) said Thursday that it is working toward a deal to supply liquefied natural gas from its Sabine Pass terminal in Louisiana to one of China's largest independently owned natural gas companies.
Cheniere originally built its Sabine Pass terminal, the largest regasification facility in the world, with the aim of importing LNG to the U.S. But the glut of natural gas that has come from domestic shale formations in recent years has turned the U.S. natural gas market upside down--and seems to make massive importation of LNG unnecessary.
The U.S. Department of Energy granted Cheniere permission in September to begin annually exporting up to 16 million metric tons of liquefied gas, culled from shale formations in Texas, Oklahoma, [and] Arkansas … through the Sabine Pass terminal. However, the company needs to build the exporting infrastructure first. [Red bold emphasis added.]
Cheniere signs MOU with ENN Energy Trading for bi-directional processing capacity at the Sabine Pass LNG terminal [Press release] (Nov 11) – Cheniere Energy, Inc., Houston, TX
Cheniere Energy Partners, L.P. announced today that its subsidiary, Sabine Pass Liquefaction, LLC, has signed a memorandum of understanding ("MOU") with ENN Energy Trading Co., Ltd., under which ENN Energy Trading intends to contract 1.5 million tonnes per annum of bi-directional LNG processing capacity at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.
Under the MOU, ENN Energy Trading and Sabine have agreed to proceed with negotiations of definitive agreements for ENN Energy Trading to contract capacity for a primary term of 20 years with mutually agreed extension terms, subject to certain conditions precedent, including but not limited to Sabine's receipt of regulatory approvals and making a final investment decision to construct the liquefaction facilities, and ENN Energy Trading reaching a final investment decision to construct an LNG receiving terminal.
ENN Energy Trading is a subsidiary of ENN Energy Holdings Ltd. ("ENN Energy") (2688.HK) (formerly known as XinAo Gas). ENN Energy is one of the largest independently-owned natural gas operators in the People's Republic of China.… [Red bold emphasis added.]
Cheniere sees $6.70/MMBtu break-even price for Sabine Pass LNG export project (Nov 11) — Gas Matters [Paid subscription required]
Cheniere is planning to take a final investment decision (FID) for its proposed liquefaction facility at Sabine Pass in the US between the summer and autumn of 2011, Jean Abiteboul, president of Cheniere Supply & Marketing told Gas Matters Today on the sidelines of the European Autumn Gas Conference on Wednesday.
[Red bold emphasis added.]
Easing the natural gas glut (Nov 11) — iStockAnalyst
The glaring supply glut in North America has sent analysts scrambling to call a new bottom.
At this pace, it will take years to ease the over-supply in the North American gas market.
Much of that is thanks to the surge in shale gas development, which has boosted U.S. natural gas resources by approximately 50% since 2000.
In fact the number of producing gas wells has risen nearly 60% during the last decade...
For the first time in almost five decades, the United States shipped exported LNG to Europe. [Red bold emphasis added.]
In the unconventional gas world, 'monsters' are relative (Nov 11) — Platts
The reason energy companies are able to extract monster gas levels from a single well is technology. Horizontal drilling, longer laterals (extending the horizontal leg of a well by thousands of feet to access more gas) and multi-stage fracturing have vastly upped the volumes yielded by an individual well. And in the last decade -- and especially the last several years -- operators have been recovering more and more gas, and also oil, from their wells.
Even when gas prices sank below the $4/Mcf threshold, these wells still were economic. That is why producers have flocked to shale and unconventional plays and continue to drill away despite relatively low gas prices. So if you ever wondered why the US has a gas surplus that keeps the price tamped down and is projected to remain that way for the next year or so, now you know why. Blame the monsters. [Red bold emphasis added.]
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US Natural Gas Glut Reshapes World Market
Think the unthinkable: Gas glut could make the U.S. an LNG exporter — FuelFix.com, Houston, TX
The International Energy Agency tells Reuters the world will be swimming in natural gas for another decade as U.S. domestic production surges and other nations ramp up their abilities to export gas as LNG.
These factors are setting up what was an unthinkable scenario just a few years ago – that the U.S. might become a net exporter of natural gas.
Despite the risk, companies are starting to move forward with plans to actually turn those LNG import terminals into true export terminals with the ability to turn domestically produced natural gas into LNG.
Johnson said he believes the Freeport LNG terminal south of Galveston is also working up similar plans. The rumblings are that all the natural gas expected to be produced out of the Eagle Ford Shale in South Central Texas could be directed toward Freeport for export, he said. [Red bold emphasis added.]
U.S. noses into Russia's gas domain (Nov 9) — (Reuters) The Globe and Mail, Toronto, ON
The United States may play a role this winter in loosening Russia’s grip on the European market for natural gas by shipping liquefied natural gas across the Atlantic.
Awash with domestic shale gas and with little need to import extra fuel, the United States has started re-exporting LNG cargoes, which firms had previously imported under contract, to countries where gas prices are much higher.
U.S. shale gas has already forced many LNG producers that had hoped to supply the North American market to find alternative buyers, with many cargoes ending up in Europe and driving spot gas prices below the price of oil-indexed Russian gas.
In February, Russian gas export monopoly Gazprom postponed it’s Shtokman LNG project because the United States, its target market, did not need more imports.
Major European pipeline gas supplier Statoil has been forced to find alternative markets for LNG it had hoped to send to the United States, often selling it into Europe.
U.S. LNG imports have fallen to contractual minimums as gas prices have sagged, forcing importers whose terminals are sitting idle to change strategy and re-export to make the most of higher prices overseas.
Update 1-IEA sees gas glut lasting until 2020 (Nov 9) — Reuters
All IEA scenarios forecast gas demand will increase, but it said that demand would take until 2020 to absorb swelling global gas supplies, which are due largely to a surge in North American shale gas and liquefied natural gas production (LNG).
"The glut of global gas supply capacity that has emerged as a result of the economic crisis ... the boom in U.S. unconventional gas production and a surge in liquefied natural gas capacity could persist for longer than many expect," the IEA said in its World Energy Outlook 2010 published on Tuesday.
[Red bold emphasis added.]
LNG cargo heads to U.K. from Sabine Pass, tracking data show (Nov 9) — Bloomberg
A liquefied-natural-gas tanker is carrying a previously imported cargo of the fuel to the U.K. from Texas’s Sabine Pass LNG terminal, according to Bloomberg vessel tracking data.
Citigroup Energy Inc. exported an LNG cargo to Spain from Sabine Pass in February, according to the Energy Department. JPMorgan exported another cargo from the port in June to South Korea.
[Red bold emphasis added.]
Short-term energy outlook (Nov 9) — U.S. Energy Information Administration
EIA expects gross pipeline imports of 9.1 Bcf/d in 2011, an increase of 1.4 percent compared with 2010 imports. Projected liquefied natural gas (LNG) imports average 1.27 Bcf/d in 2010, a 2.3 percent increase from the 2009 levels. High domestic production and low U.S. prices relative to European and Asian markets have discouraged LNG imports into North America. However, LNG imports grow slightly in 2011 to 1.32 Bcf/d, a 4.5-percent increase from 2010 levels.
At the end of the winter heating season (March 31, 2011), EIA expects 1,776 Bcf of working natural gas will remain in storage, about 114 Bcf higher than the end of March 2010. This is an upward revision of more than 70 Bcf from last month's Outlook because of the current higher-than-expected stock level and upward revision in the production forecast. [Red bold emphasis added.]
Natural gas weekly update — U.S. Energy Information Administration
Working gas in storage sets a new all-time record. Despite smaller injections than last year through much of the summer, high production combined with relatively mild fall weather has enabled storage levels to meet and surpass last year’s record level of 3,837 Bcf. Exceeding last year’s record level is particularly notable, because the new record resulted in large part from robust domestic production throughout the refill season, and was set despite increased total U.S. natural gas consumption in 2010, driven largely by gains in gas-fired electric power generation.
Gas estimates 'significant' — New Brunswick Business Journal, Saint John, NB
The report also said the junior oil and gas firm has very thick shale running underground the expanse of the Rosevale Block property where the E-08 well is located, notable since the Frederick Brook shale has been estimated to contain massive amounts of gas on nearby property where Halifax-based Corridor Resources Inc. (TSX:CDH) has partnered with Apache Canada to look at development.
"Unconventional gas, or shale gas, certainly appears to be where the industry is going and so knowing that we've got a shale gas formation that essentially runs through the whole property is going to be very important going forward," he said.
Kevin Raye says GOP control a boon for dollars and sense (Nov 9) — Bangor Daily News, Bangor, ME
“I intend to lead by example,” Raye said. “Common-sense solutions have been the Republican theme, and that is what has been missing in Augusta.”
Raye said there has been a pattern in Augusta of complete disrespect of property rights. A glaring example of that, he said, can be seen in the debate over liquefied natural gas in Washington County.
“The LNG issue goes back to 2004 in Washington County,” he said. “Here we are, six years later, and we are still limping along through a regulatory morass, despite both Robbinston and Calais overwhelmingly favoring LNG development. Meanwhile, the Irving Corporation in New Brunswick already has their facility up and running.” [Bold brown emphasis added.]
In Fall River, gas-storage tanks pose too great a risk [Editorial] — The Boston Globe, Boston, MA
MASSACHUSETTS ALREADY has one major storage facility for liquefied natural gas too close to a built-up area. Given the risk at that site in Everett, the state doesn’t need another such hazard in Fall River.
Unlike the Gloucester facilities, Weaver’s Cove — like Everett — could store LNG to supply tanker trucks servicing the state’s gas utilities in the winter. But if the region needs more such storage capacity, it should be at a site safely away from any homes, and it should be big enough to replace Everett at the same time. This is the natural-gas project that energy entrepreneurs should be considering — not another tank depot cheek by jowl with homes and businesses.
FERC says pre-filing process not required for modifications to Sabine Pass LNG facility — LNG Law Blog
Responding to a previous inquiry from Sabine Pass LNG, L.P., FERC said yesterday that pre-filing procedures are not required for the proposed installation and operation of spare gas pipeline compressors at the Sabine Pass LNG terminal.
ALNG partners continue push for increased throughput — Oil & Gas Journal
PORT OF SPAIN, Nov. 10 -- Trinidad and Tobago will decide by yearend if it will approve the debottlenecking of Atlantic LNG’s four trains and the export of an additional 300 MMcfd of natural gas.
“Our concern is that these contracts are long term and while it is true that we have an oversupply situation at the moment, we are talking about 20-year contracts. We have to study whether we will be able to support further expansion,” Seepersad-Bachan said.
B.C. views: Campbell pushes industrial legacy (Nov 9) — Kamloops This Week, Kamloops, BC
And here is a partial list of what Campbell intends to see develop through this ministry: the Site C dam, a province-wide network of new mines, forest tenures, liquefied natural gas production and export facilities, new independent power projects, and all the roads, power lines and pipes needed to connect them. [Red emphasis added.]
County OKs LNG pipeline (Nov 9) — The Daily Astorian, Astoria, OR
Leaders split 4-1 on approval, but demand emergency plan
The county has said it won't grant development permits for the construction of "any portion of the Pipeline" until the plan is submitted to the county, and has been reviewed by the county's Emergency Management Division and assessed by an independent consultant.
It's rebuilding time at the county [Editorial] (Nov 9) — The Daily Astorian, Astoria, OR
January cannot come soon enough for turnover at the Clatsop County Commission. Last week's ruling by the Oregon Court of Appeals reminded Clatsop County voters and taxpayers just how wrong-headed and wasteful some incumbent and former commissioners have been over the past four years. The appeals court ruled the county commission was wrong in saying that the Bradwood liquefied natural gas terminal project was minor and that it would protect salmon.
Under the chairmanship of Richard Lee, the commission loaded the county planning commission with people who would disregard reality and bend to Bradwood's will. Thus the planning commission turned aside staff recommendations in order to clear the path for the Bradwood LNG terminal. Continuing the pattern of corruption, the commission made its ruling, including two breathtaking statements: that the project was not large and that it would protect salmon.
Clatsop County won't appeal Bradwood decision — The Daily Astorian, Astoria, OR
The Clatsop County Board of Commissioners will not challenge a recent Oregon Court of Appeals ruling that blocked the county's approval of the Bradwood Landing LNG land-use application.
The appeals court issued a ruling Nov. 3 upholding a decision by the Oregon Land Use Board of Appeals that found fault with two elements of the county's original approval for the project, a liquefied natural gas terminal and pipeline proposed for Bradwood 20 miles east of Astoria.
EPA rules require disclosure of oil and gas methane pollution and electronics fluorinated gas emissions [News release] (Nov 9) — Environmental Defense Fund, Washington, DC
EPA's action for the oil and gas sector requires annual reporting of methane, carbon dioxide and nitrous oxide emissions from flaring, equipment leaks, offshore petroleum and natural gas production, onshore production facilities, liquefied natural gas imports and exports, and onshore transmission and distribution. EPA, however, has not completed final rules for the gathering lines and boosting stations at onshore natural gas and petroleum processing and production operations.
"For far too long the public has been kept in the dark about the large volumes of pollution released from facilities in the oil and gas sector," said Emma Cheuse, an attorney at Earthjustice. "EPA's action will strengthen public accountability for this major source of global warming pollution."[Red emphasis added.]
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Natural Gas Surge Spawns LNG Re-Exporting, Diversions
U.S. sends first gas to NW Europe in 50 years — (Reuters) Yahoo News UK & Ireland
The United States is set to supply gas to Britain for the first time in half a century, with a liquefied natural gas (LNG) tanker expected to arrive from Louisiana in late November.
U.S. gas prices have fallen more than 30 percent since the beginning of the year, pressured by a surge in North American gas production which has also reduced U.S. LNG imports to minimal contracted volumes.
Nearly 20 billion cubic feet of gas has been re-exported from the United States this year, excluding the gas aboard the UK-bound vessel. [Red bold emphasis added.]
Yemen LNG to divert 35 cargoes to Asia in 2011 — (Reuters) Yahoo News Phillipines
Yemen LNG, a liquefied natural gas venture led by French oil major Total, will divert 35 cargoes originally meant for U.S. markets to Asia next year because of higher prices there, an official said on Sunday.
"Today our strategy at Yemen LNG is to exploit the difference of prices between the U.S. and Asia, and to deliver to Asia the cargoes which were originally meant to be delivered in the U.S. to enjoy better price," Francois Rafin, general manager of Yemen LNG, told a news conference in Sanaa.
"We are now planning to divert 30 per cent of the 6.55 million metric tones to be produced during the next year. That is 35 cargoes," Rafin said.
He said the company has already diverted 25 cargoes to Asia out of 85 shipped this year from its plant at the Arabian Sea port of Balhaf.
LNG demand in the United States, which was expected to be a major importer, has fallen due to massive increases in domestic supply from shale gas.
[Red bold emphasis added.]
Process removes carbon, yielding cleaner natural gas — Boston Globe, Boston, MA
A new technology developed by a Canadian company aims to remove carbon from natural gas before it’s burned, cutting carbon dioxide emissions by as much as 40 percent and capturing solid carbon — known as carbon black — a substance that can be used in making tires, laser printer toner, and other products.
The firm, Atlantic Hydrogen Inc. of Fredericton, New Brunswick, has formed a partnership with the utility National Grid, which has about 1.2 million customers in Massachusetts and is considering developing a pilot plant in Boston to help prove the technology on a commercial scale. If it works, a National Grid executive said, it could reduce carbon dioxide emissions at a cost that is up to 80 percent less than postcombustion methods that capture greenhouse gases and pump them underground.
Analysts expect natural gas to play a large role in the US energy mix as the nation makes the transition to alternative sources of power, such as wind, solar, and fuel cells. Natural gas is not only the cleanest-burning of fossil fuels, which include oil and coal, but also found in abundance in North America. Improved drilling technology has recently unlocked massive new supplies in US shale deposits. [Red bold emphasis added.]
Natural gas from Midwest shale ‘game changer’ for CT — Hartford Business, Hartford, CT
Connecticut’s reliance on foreign LNG will plummet — just like it has in the rest of the nation — as the benefits of newly available domestic natural gas in the Midwest are fully realized; but because New England is at the end of the country’s transmission system, those benefits will be slower coming.
Because of the widespread use of domestic shale natural gas, the amount of foreign LNG used in the country is far less than predicted, said Damien Gaul, economist with the U.S. Energy Information Administration. Natural gas coming from foreign sources hit a 15-year low nationally in 2009.
[Red bold emphasis added.]
Cheniere signs memorandum of understanding With Morgan Stanley Capital Group Inc. for LNG processing at the Sabine Pass LNG terminal [Press release] — PRNewswire
Cheniere Energy Partners, L.P. announced today that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a non-binding memorandum of understanding with Morgan Stanley Capital Group Inc. in connection with the potential acquisition by Morgan Stanley of certain import capacity and approximately twenty percent of a proposed 7.0 million tonnes per annum (mtpa) of LNG liquefaction capacity at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.
"This is a significant development for our liquefaction project at Sabine Pass," said Charif Souki, Chairman and CEO of Cheniere Partners.
As currently contemplated, the liquefaction project would be designed and permitted for up to four modular LNG trains, each with a peak processing capacity of up to approximately 0.7 Bcf/d of natural gas and an average liquefaction capacity of approximately 3.5 mtpa. [Red bold emphasis added.]
Enviromental groups protest proposed gas line through Middlesex, Union County — CentralJersey.com, NJ
TRENTON — Environmental groups on Monday ramped up opposition to a federal permit application by Liberty Natural Gas to build an ocean pipeline and connect it to a proposed gas storage facility 16 miles off the coast of Asbury Park.
The plan calls for the liquefied natural gas pipeline [sic] on land to run through Perth Amboy, Woodbridge, Carteret and Linden, "one of the most densely populated areas of the state, putting people in harm's way for unnecessary reasons," said Jeff Tittel, executive director of the Sierra Club of New Jersey. Tittel contended that U.S. energy markets are already "awash in gas." [Red bold emphasis added.]
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North America's Natural Gas Supply Growing, Price Declining
Canada LNG export plan may not prove to be beneficial..... — Gerson Lehrman Group
In past the rat race for building LNG Termnials in US with anticipation of huge demand for Gas in USA has resulted in net loss to the company who has invested in such infrastructure. The gas prices are expected to be further squeezed and these company will come under more pressure to float above the bottom line.
In last 5 years if one checks the utilization of the LNG terminals in USA it would be an eye opener. The amount spent on building and maintaining these terminals, if not spent would have given much better returns just by sitting in the banks and giving the added liquidity to the company for profitable ventures, which has otherwise already spent these amount. [Red bold emphasis added.]
Chesapeake CEO outlines "holy grail" for natural gas (Nov 3) — Star-Telegram, Fort Worth, TX
McClendon, whose Oklahoma-based company is the second-largest gas producer in North Texas' Barnett Shale, said he thinks the current glut in the U.S. domestic gas supply "should balance itself out" by the middle of this decade. He said the U.S. by then could have in place an infrastructure for conversion of natural gas to liquid form, potentially for use as a motor fuel, and for export to foreign countries as liquefied natural gas (LNG). [Red bold emphasis added.]
LNG premium in Asia advances to 20-month high: Energy Markets (Nov 3) — Bloomberg Businessweek
The difference between LNG in Japan, Asia’s biggest gas importer, and the average monthly U.S. Henry Hub price rose to $7.19 a million British thermal units in September, the most recent month for which customs data is available. That’s 48 percent higher than a year earlier and the biggest gap since January last year.
Global gas prices are diverging as U.S. customers switch to cheaper, domestically produced gas from shale deposits, while Asian importers continue to pay prices linked to oil. Shale gas will account for 34 percent of U.S. production by 2035, compared with 18 percent in 2008, Energy Department estimates show. [Red bold emphasis added.]
Region's senators urge limits that would block LNG — SouthCoastToday.com, New Bedford, MA
The U.S. Senate could become the new battleground in the effort to block the LNG facility proposed for Fall River.
Senators from Massachusetts and Rhode Island want to block federal regulators from using taxpayer dollars to authorize construction of any liquefied natural gas terminal or related infrastructure within 5 miles of Fall River.
Senators from R.I., Mass. want to halt money for Mount Hope Bay LNG project — The Providence Journal, Providence, RI
Without the money, it would be impossible for the Federal Energy Regulatory Commission to assess the application from Weaver’s Cove Energy for the floating terminal. The senators’ aim is to kill a plan that has been widely opposed in Rhode Island and Massachusetts on grounds that it would damage the environment, disrupt boating and pose a safety hazard. Weaver’s Cove maintains that the project is safe and that shipments can be made without having a negative effect on Narragansett and Mount Hope bays.
Kerry, Brown, Reed, Whitehouse seek to bar LNG facility in Fall River (Nov 5) — PoliticalNews.me
In an effort to protect communities in Massachusetts and Rhode Island, U.S. Senators John Kerry (D-Mass.), Scott Brown (R-Mass.) Jack Reed (D-R.I.), and Sheldon Whitehouse (D-R.I.) sent a bipartisan letter to the top members of the Appropriations Subcommittee on Energy and Water Development urging them to prohibit the Federal Energy Regulatory Commission (FERC) from using federal funds to approve a liquefied natural gas (LNG) terminal in the city of Fall River, Massachusetts.
The full text of the letter is below…
LNG opponents to meet Nov. 11 at Fall River church (Nov 5) — Wicked Local Fall River, Fall River, MA
The next meeting of the Coalition for Responsible Siting of LNG Facilities is Thursday, Nov. 11, at Calvary Temple Assembly of God, at 4321 North Main St. at 7 p.m. Area residents and business people are encouraged to attend to support the ongoing fight against the Hess LNG facility proposal.
Five gold, coal mines detail energy needs (Nov 3) — Homer Tribune, Homer, AK
“At this point, Chakachamna is an idea. It’s not even in permitting yet,” he said, noting that Pebble would need an immediate source rather than one many years out.
Obtaining electricity would involve a bullet or spur line piping gas from Nikiski’s LNG plant, which recently won approval to go back into operation.
“We’re willing to look at a number of options, (including) coal to gas and geo-thermal,” Shively said. “Absent these options, we would need to import LNG to the dock or port area.”
KLNG receives positive reception at open house (Nov 3) — Kitimat Northern Sentinel, Kitimat, BC
The project to be built on the shores of Bish Cove, part of the Haisla First Nation, proposes a liquefied natural gas (LNG) export, liquefaction and LNG send-out terminal.
The original project developed by Galveston LNG was to import LNG for the North American market via a terminal at Bish Cove.
In 2008, due to changing market conditions, the proposed terminal was changed from an import facility to an export facility. [Red bold emphasis added.]
NW Natural unveils joint venture on Palomar pipeline project — iStockAnalyst
The utility told analysts during its third quarter earnings conference call that it had signed a memorandum of understanding for Williams Northwest Pipeline to become a part owner in the project and to consolidate the respective companies' efforts to build more cross-Cascades gas capacity.
The project is still tentative, but if the companies can drum up enough shippers, their cooperation would breathe new life into a controversial project that has been hamstrung by the bankruptcy of its biggest shipper and fierce opposition among landowners and environmentalists.
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New England Finally Has Plentiful Natural Gas
Commentary: U.S. exports of coal & natural gas (Nov 2) — PBS
SUSIE GHARIB: Energy independence is always a hot button issue when it comes to politics. But tonight's commentator says few people realize the U.S. has become a big energy exporter. He's Daniel Gross, columnist and economics editor at Yahoo! Finance.
Just a few years ago, companies were building terminals along the coast to facilitate the importation of clean- burning liquefied natural gas or LNG. But thanks to huge new discoveries and new drilling techniques, the U.S. now has abundant supplies of its own. In September, the Department of Energy approved the application of one of those import terminals in Sabine Pass, Texas, to convert to an export facility. It turns out the U.S. still produces plenty of what the world needs, including energy. I'm Daniel Gross.
Senators take aim at LNG plan — EastBayRI.com, RI
U.S. Senators Jack Reed (D-RI), Sheldon Whitehouse (D-RI), John Kerry (D-MA), and Scott Brown (R-MA) sent a bipartisan letter this week to the top members of the Appropriations Subcommittee on Energy and Water Development, urging them to prohibit the Federal Energy Regulatory Commission (FERC) from using federal funds to approve a liquefied natural gas (LNG) terminal in Fall River.
“Finally, New England already has access to ample supplies of natural gas. In fact, an analysis by the Massachusetts Department of Energy Resources asserted that it is “unclear to what extent, if any, Weaver Cove’s LNG supply is needed to meet the region’s gas supply needs ...” Within this past year two new or expanded LNG facilities – Canaport LNG and Neptune LNG – were completed, creating a combined new capacity over twice that of the proposed facility. With the large excess of supply already in the natural gas market, combined with these new facilities, it is unclear why there would be demand for additional LNG infrastructure.” [Red bold emphasis added.]
Massachusetts and Rhode Island senators seek ban on LNG terminal (Nov 4) — The Herald News, Fall River, MA
“Both of our states will be negatively impacted by this proposed LNG terminal and we strongly encourage you to include language in the final appropriations bill that would prohibit the use of federal funds to support this ill-advised project,” the letter read.
Follow the facts — Savannah Morning News, Savannah, GA
WEDNESDAY'S SPLIT decision by the school board not to protest a plan to truck liquified natural gas through Savannah reflects a desire not to hit the "no" button prematurely.
The City of Savannah has taken the lead on questioning the safety of a proposal by Southern LNG to truck up to 58 tank loads of LNG daily from Elba Island to interstate highways, using a crosstown route that includes DeRenne Avenue.
To its credit, the city has hired consultants to get at the facts, but not just about moving LNG. They want to know the current risks of trucking gasoline and other hazardous substances on local roadways. Those risks already exist, but draw no protests.
- Compared to gasoline, LNG is more flammable; burns at a higher temperature; and produces little masking smoke, so is a significantly higher thermal-radiation burn hazard at distance.
SCCPS Board won't oppose LNG — WSAV-TV, Savannah, GA
Liquefied natural gas… The city is concerned of its safety and what where to happen if there was (sic) an explosion. But the Savannah Chatham County School Board turned down a resolution to oppose the plan.
“I was hoping that the board would at least file a protest to oppose the trucking of LNG, but that doesn’t mean it won’t happen near our schools. Hopefully we will get more information and the board members will feel comfortable opposing the trucking of LNG near our schools.”
The School Board will meet again in December to discuss the issue.
Savannah-Chatham schools won't oppose LNG transport (Nov 4) — Savannah Morning News, Savannah, GA
Issue may be reconsidered after staff investigates safety risk
"Have we done any study on the risks?" Board Member Greg Sapp asked. "If the board is being asked to make a policy position, it should be based on some work the school board does. I'm a little reluctant to make a decision based on what you've read in the paper and heard in public forums."
Utilities explore shipping LNG to Southcentral — Alaska Journal of Commerce, Anchorage AK
Southcentral Alaska gas and electric utilities are exploring the feasibility of importing liquefied natural gas to Cook Inlet in an effort to be prepared if regional gas supplies continue to decline and a plant on the Kenai Peninsula that now exports LNG closes after a federal license expires in 2013.
One company that has expressed interest in supplying LNG to the region is Shell, which now ships liquefied gas to Asia and North American markets from Sakhalin [Island in Russia], said Jim Posey, general manager of Anchorage's city-owned Municipal Light and Power, one of the utilities engaged in the import study.
A state of Alaska team is doing engineering and cost estimates for a small 24-inch pipeline to bring North Slope gas to southern Alaska, but it would be 2018 or 2020 before the system could be built and operating, they concede.
ConocoPhillips and Marathon Oil Co., which own the LNG plant, were recently given a two-year extension of an LNG export license by the U.S. Department of Energy. The new expiration date is March 2013.
The cost of building new or reconfigured LNG facilities to handle imports could range from $150 million to $300 million, Posey and other utility managers have estimated. Regional consumers will have to pay these costs on top of new costs for natural gas storage that is now planned to be built about the same time. [Red & bold emphasis added.]
Enstar examines its options if Southcentral has cold winter (Nov 7) — Petroleum News, Anchorage, AK
Southcentral Alaska depends heavily on gas for heating and for power generation, but gas production from the aging oil and gas fields of Cook Inlet has been steadily declining for a number of years. And, although Enstar is in the process of building a new gas line to the southern Kenai Peninsula, to ship gas from a new gas field at North Fork, that field is unlikely to come on line before the spring, Starring said.
In a worst case scenario during a cold snap, supplies to gas-fired power stations might need to be curtailed, to ensure the maintenance of adequate gas pressure in utility gas lines. That would lead to rolling power blackouts in the Southcentral region.
Enstar and other utilities have been investigating the possibility of importing LNG into Southcentral, to supplement local gas supplies. In addition to talking to potential suppliers, the utilities are participating in a study of the LNG import concept, Starring said. [Red emphasis added.]
Ruling: LNG port violates county rules — The World, Coos Bay, OR
GRANTS PASS - The Oregon Court of Appeals has ruled that Clatsop County should never have approved construction of the Bradwood Landing liquefied natural gas project on the Columbia River.
Clatsop county should not have classified the project as small- to medium-sized based solely on the amount of dirt that would be moved for the port facilities, the court ruled. It should have also taken into account dredging in the river.
The court also found the county was bound by its comprehensive plan to protect traditional fishing grounds and salmon habitat. [Red emphasis added.]
Court decision may complicate LNG efforts in Coos Bay, Warrenton (Nov 4) — The Oregonian, Portland, OR
Though Bradwood's backers have already declared bankruptcy and abandoned their efforts, opponents worry that another entity could resurrect the project by purchasing the development rights out of bankruptcy.
The court's decision said "mitigation" efforts weren't the same thing as "protection." Protection, it said, "means inhibiting development that causes significant adverse impacts on the protected resource." [Red emphasis added.]
Bradwood Landing decision may affect other LNG projects (Nov 4) — Oregon Public Broadcasting (OPB)
The Oregon Court of Appeals has ruled against a county’s approval of a liquefied natural gas project, likely ending what dim chances it still had of construction.
The appeals’ court decision upholds two big objections to the project: that the terminal would be too big for the local zoning and that mitigating for salmon habitat destruction isn’t the same as “protecting” it.
County has two weeks to appeal LNG ruling from state Court of Appeals — The Daily Astorian, Astoria, OR
Any appeal would go to the Oregon Supreme Court. The decision on whether to appeal would be made by the Board of Commissioners, Cole said.
He said if the developers, NorthernStar of Houston, wanted to appeal they would first have to pay the county the money it owes from earlier proceedings. [Red emphasis added.]
State Appeals Court rules against Clatsop County in LNG controversy (Nov 3) — The Daily Astorian, Astoria, OR
SALEM - A new ruling says Clatsop County was at fault in its handling of the Bradwood Landing liquefied natural gas project.
LUBA had remanded the issue of the approval of the proposed LNG plant back to Clatsop County after a review showed its members believed the commissioners failed to properly consider the impacts of dredging 46 acres of the Clifton Channel. This leads into the Columbia River and would be needed to create a turning basin for deep-draft gas tankers that deliver LNG from overseas to the terminal. Also at issue was where the dredge spoils would be dumped, according to court records. Opponents said the proposed dredging would take place in "critical salmon habitat."
Two LNG terminals are still on the drawing board in Oregon. One is in Coos Bay and the other on the Skipanon Peninsula in Warrenton.
LNG lines pose threat to first responders [Op-ed column] (Nov 4) — The Forest Grove News Times, Forest Grove, OR
An investigation by the Associated Press into [liquefied natural gas] pipeline crisis plans has found that the federal government has withheld access from local first responders.
The report indicates that if Clatsop County fails to require detailed emergency response plans, including a funding plan, before approval, the first responders of all the jurisdictions affected will not be able to review or even maintain copies of the plan.
In addition, local jurisdictions will be stuck with absorbing the cost of providing services to protect our communities. This is clearly unacceptable. [Red emphasis added.]
Legislation needed to unlock US shale-gas potential (Nov 4) — Petroleum Economist [Paid subscription required]
LAWMAKERS must give gas producers fair and open market access if the US is to advance a supply revolution that has transformed its energy outlook, says the boss of one of the country's largest developers.
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US Natural Gas Glut 'Widely Recognized'
2010 Regional System Plan — ISO New England
The following link will access a large PDF file; 4.1 MB.
While natural gas remains the dominant fuel within New England‘s electric power generation sector, the region‘s diversity and expected reliability of natural gas supply has improved. This is the result of the new Canaport LNG terminal that went into commercial operation in 2009 and the Neptune LNG facility that went operational in 2010. In addition, new pipeline expansion projects have been designed to improve the ability to deliver LNG and other sources of natural gas to the region.
Regional gas prices on the spot market, which reached about $15.00/million Btu (MMBtu) in mid-2008, have dropped by about 66% to approximately $5.00/MMBtu in summer 2010. [Red bold emphasis added.]
Qatar may divert LNG to China, India, Al-Attiyah says (Oct 31) — San Francisco Chronicle, San Francisco, CA
Nov. 1 (Bloomberg) -- Qatar, the world's biggest liquefied natural gas producer, may divert more cargoes away from the U.S. to emerging markets in Asia and South America, Energy Minister Abdullah al-Attiyah said.
Gas production in the U.S., which has been boosted by unconventional sources such as shale rock, depressing prices amid lower demand, will average 61.3 billion cubic feet a day this year, according to the Energy Department, the most since 1973. Output will be 2.2 percent higher than last year.
The U.S. used 10 percent of its 100 million tons a year of LNG import capacity last year, Malcolm Brinded, executive director for international exploration and production at Royal Dutch Shell Plc, said at the conference. Spare capacity at U.S. LNG import facilities was six times China's total import capacity for the fuel, he said. [Red bold emphasis added.]
How Gov. Parnell squandered development of Alaska's natural gas [Opinion column] (Oct 31) — Alaska Dispatch, Anchorage, AK
ConocoPhillips is closing gas wells in the Lower 48 due to a massive abundance of natural gas, according to CEO Jim Mulva. ConocoPhillips is also making plans to export gas as LNG from the Lower 48.
Canada is preparing to export LNG out of Kitimat, British Columbia. They see what the All Alaska Gas line advocates like Bill Walker and Ethan Berkowitz see. The best value for Alaska's gas is found by placing it in the premium, world markets. The 250 trillion cubic feet of estimated North Slope reserves are worth over $3 trillion if sold on the world markets -- and worth less than a third of that value if sold in the depressed U.S. market (if the massive transportation costs and other problems are discounted). [Red bold emphasis added.]
Innovative telemetry system will help tap hard-to-reach natural gas resources — US Department of Energy, Washington, DC
Using novel new technologies normally associated with interplanetary deep space navigation and missile guidance systems, the technology is designed to transmit data to and from downhole equipment in real time, enable surface processing of downhole sensor data, and control downhole tools directly from the surface. The technology allows the system to successfully operate at greater depths than other EM systems and to propagate signals through formations that typically weaken electromagnetic waves.
DOE's Deep Trek Program was established in 2002 to develop "smart" systems to address the needs of U.S. producers drilling to depths of 15,000 feet and deeper, where more than 125 trillion cubic feet (Tcf) of untapped natural gas is estimated to be in place. For comparative purposes, DOE’s Energy Information Administration estimates technically recoverable U.S. natural gas resources at 2,119 Tcf, with proved reserves of 238 Tcf.
[Red bold emphasis added.]
A solution for North America’s natural gas surplus — Seeking Alpha
The expansion in liquefied natural gas (LNG) exports may well hold the key to turning a glut into advancing profit.
With the gas glut turning into a more permanent energy fixture in North America, the market will progressively become (even more than currently) one in which production will primarily meet regional needs, with contract swaps acting to offset differences between regions.
In the Marcellus, wells are coming in cheaper than anticipated. The average well spud this year will come in profitable, at less than $3.60 per NYMEX contract, with a rising percentage coming in significantly below that level. Unlike western Canada, the Marcellus has the advantages of much closer proximity to end users and an increasing network of pipelines to serve both throughput and storage.
Already in operation, Cove Point is the largest LNG facility on the US east coast. As the need collapses for LNG imports into the US – another result of our ongoing gas surplus – don’t be surprised if this terminal begins reversing operations to export volume. This is tailor-made to provide a major outlet for additional production from the Marcellus.
Welcome to North America: the new Saudi Arabia of energy. [Red bold emphasis added.]
Washington dragging its feet on gas production is a drag on job creation [Opinion blog] — The Hill, Washington, DC
With more than a 100-year supply of gas from U.S. shale formations, this newly accessible resource is a game changer and it’s time our leaders seized this opportunity.
Industry skeptical of IEA views on EU gas glut: Enagas executive (Oct 28) — Platts
"Shale gas is not only competitive but in the US [shale gas] is the lowest-cost
gas--now it's cheaper than conventional gas and is seeing many technological
refinements," [said Francisco de la Flor Garcia, director of
regulation for Spain's Enagas].
LNG market developments have played a significant role in the gas glut,
with the US set to become an LNG exporter and Spain capable of exporting an
excess in LNG of up to 20 billion cubic meters per year, said de la Flor
Garcia. [Red bold emphasis added.]
DOE will review Sabine Pass LNG export application under Section 3(a) of NGA (Oct 29) — LNG Law Blog
The U.S. Department of Energy's (DOE) Office of Fossil Energy has decided that it will review an application submitted by Sabine Pass Liquefaction, LLC to export LNG to member nations of the World Trade Organization (WTO) under section 3(a) of the Natural Gas Act (NGA), which requires DOE to examine the complete application and determine whether the proposed LNG export scheme is in the "public interest."
Separately, Chevron has submitted an application for a short-term permit to export LNG from the Sabine Pass LNG facility.
[Red bold emphasis added.]
Prospects for North American LNG export program [article #1] — Sutherland Asbill & Brennan
[See related article immediately below this one.]
Several billion dollars in regas terminal assets are relatively idle along the U.S. Gulf Coast. All of these terminals were built with the objective to bring LNG into markets to improve gas supply, lower energy costs and preserve jobs. Now, with some terminal owners proposing to reverse flow and export gas, David’s presentation will address…
[Red bold emphasis added.]
Prospects for North American LNG export program [article #2] — Zeus Development Corporation
[See related article immediately above this one.]
It is widely understood that unconventional gas producers in North America have expanded their reserves to such an extent that U.S. prices have fallen to only a small fraction of world prices. Some analysts believe that North America now has sufficient reserves to last it for 100 years at current demand levels.
For this reason, entrepreneurs, including owners of U.S. Gulf Coast regasification terminals, such as Cheniere, aim to offer liquefaction and export services. This workshop will examine the economic merits and implications of their propositions. [Red bold emphasis added.]
Massachusetts Congressional delegation asks FERC for response to request to rescind approval for Weaver's Cove (Nov 1) — LNG Law Blog
The request states that in light of the U.S. Pipeline and Hazardous Materials Safety Administration's new guidance for exclusion zones surrounding an LNG facility, the method used by Weaver's Cove Energy to calculate its exclusion zones is no longer acceptable.
[Red emphasis added.]
Liberty Natural Gas files application for onshore gas pipeline associated with LNG deepwater port proposal — LNG Law Blog
Last month Liberty Natural Gas, LLC submitted an application to FERC to construct the onshore portion of its natural gas pipeline system connecting to a proposed LNG deepwater port to be located offshore New Jersey.
Savannah gains allies in LNG scrutiny (Nov 1) — Savannah Morning News, Savannah, GA
For weeks, the city of Savannah has been alone among governments and businesses in its vocal concern over a plan to truck up to 58 tankers of liquefied natural gas daily across DeRenne Avenue.
On Friday, St. Joseph's/Candler announced it will file to become an intervenor. The Savannah-Chatham County Board of Education will discuss the matter at its next meeting.
The county commission is also studying the matter.
Southern LNG announced in August its plans for the truck-loading facility on Elba Island, where it imports liquefied natural gas. That fuel - methane that's supercooled and therefore condensed - currently comes in by ship as a liquid and leaves as a vapor in pipelines.
An ensuing spill and fire could trigger an evacuation of up to a mile around it, a difficult proposition in the congested DeRenne corridor, they told city council and repeated at a town hall meeting last month.
U.S. Maritime Administration issues Record of Decision for TORP’s Bienville offshore energy terminal [News release] (Nov 1) — BusinessWire
WASHINGTON--(BUSINESS WIRE)--Maritime Administrator David T. Matsuda on Friday signed the Record of Decision approving the deepwater port application submitted by TORP Terminal LP for a license to own, construct and operate the Bienville Offshore Energy Terminal, an LNG regasification facility located in the Gulf of Mexico, 63 miles south of Dauphin Island, Alabama, in a water depth of 425 feet.
The Terminal will have a peak LNG sendout capacity of 1.4 Bcf per day and will be able to accommodate any LNG carrier without modification to the incoming vessel.
FERC authorizes Cameron LNG to begin installation of spare gas compressor — LNG Law Blog
Yesterday FERC authorized Cameron LNG to commence installation of its spare gas pipeline compressor.
Louisiana official offers support for Cheniere LNG export proposal (Nov 1) — LNG Law Blog
Stephen Moret, secretary of the Louisiana Department of Economic Development, has offered his support for the LNG liquefaction project proposed by Cheniere Energy for its Sabine Pass LNG terminal.
Minutes from inter-agency meeting on Sabine Pass liquefaction project now available — LNG Law Blog
Minutes from the October 14, 2010, inter-agency conference call to discuss the Sabine Pass LNG liquefaction project are now available in the FERC eLibrary under Docket No. PF10-24.
Commissioning of Golden Pass LNG terminal to last two or three months (Oct 29) — LNG Law Blog
An official with ExxonMobil told Platts LNG Daily [subscription required] yesterday that commissioning of the Golden Pass LNG terminal has begun. The official also noted that the process is expected to take between two and three months.
Liquid natural gas is key to Cuba’s energy plans (Oct 29) — Cuba Standard, Tampa, FL
A (sic) LNG re-gasification facility to receive Venezuelan-sourced LNG is currently being planned for the southern coast port city of Cienfuegos by CuvenPetrol, a joint venture between Venezuela’s PdVSA (51%) and Cuba’s Cupet (49%). Two 1-million-ton re-gasification trains are planned for 2012 at a cost of over $400 million. The natural gas is destined as fuel for that city’s thermoelectric power plant, and as a feedstock (hydrogen) for the Cienfuegos refinery and future petrochemical/fertilizer plants.
Natural gas will provide fuel to the refinery as well as hydrogen for the upgrading units scheduled to be completed by 2013. Natural gas will also be used as a feedstock for a planned $1.3 billion petrochemical complex which will include ammonia and urea producing facilities which will provide Cuba with much needed fertilizers for its agricultural sector.
Gov't seeks buy-in from bauxite sector on LNG use (Nov 1) — Jamaica Information Service; Ministry of Industry, Investment and Commerce; Government of Jamaica
The National Energy Policy, now before Parliament, calls for a minimum of 20 per cent of the island's energy to come from renewables, "which means that Jamaica will be at 1,400 megawatts (Mw) of installed capacity and at least 300 Mws of that will be coming from renewables", Minister Robertson informed.
Focus is being placed on LNG, which is a cleaner-burning and more cost effective alternative to fossil fuel.
[Bold brown emphasis added.]
Southcentral Alaska utilities studying possibility of liquefied natural gas imports — LNG World News
Anchorage’s city-owned Municipal Light & Power and Chugach Electric Association, the two largest Southcentral Alaska electric utilities and Enstar Natural Gas, the regional gas utility, are together studying the possibility of LNG imports after 2013, when regional gas production is forecasted to fall short of local demand. Studies mainly center on the cost of facilities needed to regasify and store any LNG to be imported.
A state of Alaska team is doing engineering and cost estimates for a 24-inch pipeline to bring North Slope gas to southern Alaska, but it would be 2018 or 2020 before it could be built and operating, they concede.
Most LNG carriers today are larger, so the dock would have to be modified. The cost of building new or reconfigured LNG facilities to handle imports could range from $150 million-$300 million, utility managers have estimated. Regional consumers will have to pay these costs on top of new costs for gas storage now planned to be built about the same time.
West Coast LNG exports potentially viable, but Canadian gas costs must fall: Shell (Oct 29) — PennEnergy
Canada must drive down its natural gas costs so it can meet soaring future demand for the clean-burning fuel overseas, Royal Dutch Shell plc's top executive in Canada said Thursday.
"[W]ithin a decade China's annual gas demand could be comparable to half of the current U.S. demand," [said Lorraine Mitchelmore, Shell's country chair for Canada].
Changing well profile helps service sector even as gas prices remain weak — Junewarren-Nickel's Energy Group, Calgary, AB
"The dispute is about how the shales are going to perform," he said. "What's the decline curve going to look like, especially in those out years, is it really going to flatten out? There's a lot of focus on initial decline rates.
"(But) if you're starting from (20 mmcf per day) for your initial production rate and you have a 75% first-year decline rate, at the end of that year, you've still got a pretty darn good well on your hands." [Red bold emphasis added.]
Apache officials visit Kitimat to discuss LNG project (Oct 29) — CFTK-TV, Terrace, BC
A pair of Texas-based companies bought the Kitimat LNG project earlier this year, and Joanne Monaghan says Apache representatives were in town for a luncheon and open house.
The multi-billion-dollar project will see natural gas piped to Kitimat, where it will be cooled and liquified for export by ship.
Letter: Concern for safety [Letter to the editor] (Oct 29) — The Daily Astorian, Astoria, OR
Can Oregon and Clatsop County afford to lose the Clatsop and Tillamook forests without compensation? Can the Clatsop County Commissioners in good faith send in first responders without training, equipment and detailed plans of dealing with a pipeline related crisis? Can private timberland owners and other industrial users of the forests be expected to pay for costs associated with the increased fire danger from the proposed pipeline, or limit their activities according to the Oregon Forest Practices Act when Oregon LNG is refusing to do so?
Clatsop County would never approve a residential subdivision or commercial development without similar commitments and assurances. Why should Oregon LNG be treated differently?
County adds conditions to LNG pipeline OK (Oct 28) — The Daily Astorian, Astoria, OR
The Clatsop County Board of Commissioners voted 4-1 to affirm an approval of a liquefied natural gas pipeline project Wednesday night.
Commissioner Dirk Rohne was the only dissenting vote to a motion that affirmed a decision drafted by county-hired Hearings Officer Peter Livingston, allowing the Oregon Pipeline LLC project to move forward.
Livingston's approval of this project in August came with a host of conditions, many recommended by county staff. In some places, however, Livingston and the staff came to different conclusions.
11-2 community briefs — Newberg Graphic, Newberg, OR
Anti-LNG group will meet Nov. 8
An Oregon Citizens Against the Pipeline (OCAP) meeting is slated for 6:30 p.m. Nov. 8 at the Woodburn Grange Hall, 891 N. Settlemier Ave. The meeting is open to those seeking updated information concerning liquefied natural gas (LNG) terminals/natural gas pipelines being proposed in the area.
San Bruno blast should be final nail in LNG coffin [Opinion column] (Oct 28) — Santa Monica Mirror, Santa Monica, CA
Both Oregon and California regulators would most likely go along with [LNG imports] happily – if there were a need for the gas. But as early as six years ago, a federal Energy Information Agency report indicated no gas shortage was likely in California until 2030 at the earliest.
Why build plants and pipelines today in anticipation of a problem that might exist in 40 years – or might never arise if America begins using more renewable energy sources? [Red emphasis added.]
Thumbs-up to LNG fueled ships [Opinion column] — Bunkerworld
LNG is a natural for coastwise shipping, less so for trans-oceanic vessels. American start-ups including Coastal Connect, American Feeder Lines, and Intermodal Marine Lines see a role for natural gas in powering the modern vessels planned for marine highway service.
Now there are obvious regulatory and distribution issues to be addressed. But sitting there, surrounded by a US industry group that knows little of shipping and a lot about natural gas, I realised that comparatively smaller US maritime shipping sector could have a major lobbying partner to advance innovative US-flag shipping if we only were willing to engage. What do you say, Mr. Pickens? What do you say, Washington?
Download free Adobe Reader software for PDF files.Also, the LNG proposal is to send as many as 58 LNG trucks per day on a busy highway through town — certainly more than the number of gasoline trucks taking that route in one day.