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Passamaquoddy Bay & LNG

Northeast

Marcellus production boosts prominence, liquidity of budding Northeast markets — Platts

The continued growth of Marcellus Shale gas production is bringing two Northeast pricing hubs — Millennium Pipeline, East receipts, and Texas Eastern Transmission zone M-2 — to the forefront as these new supplies seek alternative transportation options. [Red & bold emphasis added.]

Southeast

Pascagoula LNG terminal quiet with down market — Sun Herald, Gulfport, MS

PASCAGOULA -- The $1.1 billion Gulf LNG terminal, which changed the horizon south of Pascagoula with its two huge storage tanks, was a major hope for bringing more traffic through the public Port of Pascagoula.

But no tankers have come into Gulf LNG in more than a year.

The two shipments the terminal handled in 2011 were used to acclimate the tanks and terminal to the chilled liquid. They are called the commissioning or cool-down shipments.

Since then, things have been quiet at the terminal.

Webmaster's comment: Things have been more than just "quiet." Things have been ruinous. Even before the ribbon cutting ceremony — and all those speeches pronouncing how the import terminal would be providing 'cheap natural gas to the US' — it was obvious to anyone paying attention that the project was a surplus waste of investment. Demonstrating the how desperate the situation is, Gulf LNG applied with the federal government in 2012 May to export US-sourced LNG.

Gulf of Mexico

Cambridge Energy subsidiary files for DOE LNG export authority — LNG Law Blog

CE FLNG, LLC, a subsidiary of Cambridge Energy Holdings, LLC, filed an application with the U.S. Department of Energy (DOE) for long-term, multi-contract authorizations to export up to 8 million metric tons per year (approximately 389.6 Bcf) of domestically produced LNG over a thirty-year period from a floating terminal it intends to construct, own, and operate in nearshore Plaquemines Parish, La. CE FLNG seeks authorization to export LNG to nations having a Free Trade Agreement (FTA) with the United States and to non-FTA nations.

Webmaster's comment: The mad rush to export LNG is growing rapidly, just as did the mad — and financially disasterous — rush to import.

Caribbean

JPS to stick with LNG plant (Sep 26) — The Gleaner, Kingston, Jamaica, West Indies

Power distributor Jamaica Public Service Company (JPS) remains committed to using liquefied natural gas (LNG) for its planned 360-megawatt power plant despite Government's expected plan to scrap the supply of gas for the project, according to the utility's boss.

The private sector can assume the role of supplying the gas, if allowed by Government, JPS Chief Executive Officer Kelly Tomblin said Tuesday.

Alaska

Halcro's wrong, Alaska has legal right to natural gas production [Op-ed] (Sep 26) — Alaska Dispatch, Anchorage, AK

Because the state owns the North Slope fields it wears two hats. It not only acts as the government regulator, but also as a trustee-landowner with the obligation to develop its resources for the maximum benefit of its beneficiaries, the people of Alaska. At first blush this distinction may appear academic, but it has very real consequences in terms of the state’s role and rights.

Japanese consortium scouting Alaska LNG project (Sep 26) — Alaska Dispatch, Anchorage, AK

Anybody who has even cursorily followed Alaska’s long, frustrating efforts to get Alaska gas to market knows that various large companies and government officials from Japan and Korea have been unsuccessfully eyeing Alaska’s natural gas for decades -- and for decades, their quest has been thwarted.

But the Japanese haven’t given up. A group called Resources Energy Inc., or REI, made up of large businesses, a bank in Japan, have been in Alaska for months trying to establish relationships and work with Alaska’s government to enter into a joint agreement to sell the state's Arctic gas to Japan. It first approached Scott Heyworth of the Alaska Natural Gas Development Authority in November.

British Columbia

Creating a new market for B.C.'s natural gas [Opinion column] — Times Colonist, Victoria, BC

Based on projects proposed, Canada could export the equivalent of nine billion cubic feet per day of natural gas as LNG, or 66 million tonnes a year, worth tens of billions of dollars to our GDP. Comparing that to Japan's current imports of 83 million tonnes demonstrates the size of the potential market.

BG Group looking to begin public discussion on Prince Rupert LNG terminal (Sep 25) — The Northern View, Prince Rupert, BC

Just weeks after announcing a partnership with Spectra Energy to build a pipeline connecting Prince Rupert to northeastern BC, the BG Group is looking to begin public discussion about its proposed LNG terminal on Ridley Island.

City urged to get on top of natural gas development — Terrace Standards, Terrace, BC

The large number of potential LNG projects grouped in the Kitimat-Terrace-Prince Rupert area means the northwest has the opportunity to become the second largest cluster of LNG export facilities in the world and a world-leading export hub.

Canada

LNG price shift a ‘huge risk’ for Canadian exports (Sep 26) — Alberta Oil, AB

Japanese trade minister calls to sever price link between oil, LNG

Japan is taking a hard look at the pricing mechanism that underpins the Asia-Pacific market for liquefied natural gas (LNG), raising fresh risks that North American export projects could be jeopardized.

[Japan’s trade minister Yukio Edano's ] call to revisit the oil-indexed price for LNG carries big implications for Canadian export ventures. It comes one week after Natural Resources Minister Joe Oliver spoke at a producer and consumer conference in Japan, where he said Canada could deliver up to 9 billion cubic feet per day of fresh supplies to Japanese power plants.

The erosion of the hard link between LNG and oil prices, as well as the gradual evolution of a spot market for the fuel, “is the largest commercial risk” that North American export projects face, said Ken Medlock, head of the natural gas program at Rice University’s Baker Institute.

Webmaster's comment: Cheniere's US LNG export project, Sabine Pass LNG, is already eroding the oil-indexed pricing mechanism by offering LNG exports to Japan at Henry Hub-indexed pricing.

United States

Lawmakers urge US DOE to carry out full environmental review for LNG exports (Sep 26) — Platts

"Even though exporting nearly one-third of our domestic gas production certainly constitutes a major federal action, the DOE has not yet conducted an EIS," the letter said.

"Such a review would inform your agency's decision and address the environmental and health impacts in our communities that may result from the opportunity to increase LNG exports," the lawmakers added. [Red & bold emphasis added.]

Potential U.S. LNG exports under fire — UPI

House Democrats, led by Reps. Jared Polis, D-Colo., and Maurice Hinchey, D-N.Y., wrote a letter to Energy Secretary Steven Chu calling for an environmental review of potential LNG exports.

... The Department of Energy said it has received applications from energy companies to export as much as 47 billion cubic feet of LNG per day.

Webmaster's comment: Export capacity of 47 bcf/day is approximately equivalent to 39 US LNG import terminals! The US has 12 LNG import terminals. Is Downeast LNG getting the picture? Apparently not. They are committed to wasting millions on a previous project that was already previous when Downeast LNG began permitting.

Dems push DOE for environmental analysis of natural gas exports (Sep 26) — The Hill, Washington, DC

A group of 20 Democrats told the Energy Department on Wednesday that it should complete environmental tests before approving liquefied natural gas (LNG) export deals.

“We are concerned that exporting more LNG would lead to greater hydraulic fracturing, or ‘fracking,’ activity thus threatening the health of local residents and jobs,” the letter said. “For instance, increased natural gas production in communities across the nation could negatively impact farmers, residents and local property values.”

The lawmakers said ramping up LNG exports would accelerate fracking. They cited a U.S. Energy Information Administration study that said 63 percent of export demand would come from increased production, 85 percent of which would come from unconventional methods such as fracking. [Red & bold emphasis added.]

The role of shale gas in deciding the US Presidential election (Sep 26) — Rigzone

The United States is currently endowed with a wealth of natural gas following years of overproduction, and while allowing exports would win friends within the industry and potentially boost the economy, it would anger those seeking to keep domestic prices low, says the new report.

U.S. gas exports could limit Putin’s influence [Editorial] (Sep 26) — The Washington Post, Washington, DC

ONE THING THAT this year’s presidential candidates both get right is that the United States’ plentiful reserve of unconventional natural gas is an exceptional national asset, not only revolutionizing the energy business at home but also benefiting America and its allies abroad.

[T]he United States, which used to worry about importing huge quantities of natural gas, is now producing loads of its own, so much that domestic prices have tumbled and energy companies are asking for permission to liquefy and export some of the country’s output.

That’s good for a variety of reasons, including, as The Post’s Will Englund and Kathy Lally reported Monday, accelerating the decline of Gazprom, Russia’s natural-gas monopoly.

Gazprom finances Russian President Vladimir Putin’s corrupt political system. Under Mr. Putin’s direction, it has also been a notorious international villain, tying delivery of its precious fuel, a matter of life and death during European winters, to the Kremlin’s political agenda. [Red & bold emphasis added.]

Webmaster's comment: Current market reality is lost on Downeast LNG president Dean Girdis and venture-capital backer Yorktown Energy Partners, who are doomed to lose their entire project investment.

Fracking makes U.S. surprise energy power (Sep 25) — Bloomberg Businessweek

What will the nation do with its newfound abundance of natural gas, mostly from unconventional sources?

The question lurks just under the surface of the national energy conversation, which vacillates between exuberance that shale gas exists at all and fear that the method of extracting it -- fracking -- is polluting people's water. The high-pitched debates around fracking largely obscure another player: the rest of the world. It wants less expensive natural gas.

How much should the U.S. spend on gas export infrastructure? If it sells its gas overseas, how much, for example, might future U.S. prices -- for U.S. gas -- rise as future South Korean prices fall? "That's what the big discussion is right now," said Andres Rojas, market analyst at Waterborne Energy Inc., the company that provides the Federal Energy Regulatory Commission with the map data. We spoke by phone late last month.

U.S. producers would like to sell gas in foreign ports, where they can ask a higher price. U.S. utilities, manufacturers, which use gas in an industrial feedstock, and residential and business consumers would like prices to stay low. [Red & bold emphasis added.]

Russia

Gazprom crisis casts shadow over Putin [Opinion column] — Financial Times

Gazprom, the natural gas company controlled by the Russian state, is in crisis. It is likely to fall victim to the shale gas revolution that is under way across the US. The shale gas revolution will probably have telling consequences for Russian state capitalism and President Vladimir Putin’s power

This crisis erupted suddenly. With its surge in shale gas production the US has become self-sufficient in natural gas. It has overtaken Russia as the biggest natural gas producer. Crucially, US natural gas is cheap. Domestic US natural gas prices are only a quarter of Gazprom’s oil-linked eastern European prices. Such large price differentials cannot possibly last for long. [Red & bold emphasis added.]

Major changes are coming to Russia’s natural gas market (Sep 26) — Voice of Russia, Moscow, Russia

[A] broader theme, which could not be sidelined in the report, is the prospect of new gas supplies arriving on the market. Liquefied natural gas (LNG) shipments from the US or Canada to Europe will undoubtedly put further competitive pressure on Russia’s Gazprom. Experts at Renaissance Capital reiterated their confidence that North America would start exporting some amount of LNG in the near future, noting though that the scale and scope of the process would largely depend on the country’s next leaders. [Red & bold emphasis added.]

Big setbacks give Gazprom impetus for change (Sep 26) — The Moscow Times, Moscow, Russia

Finally, something is happening to Gazprom, perhaps the most mismanaged and corrupt company of its size in the world. On Aug. 28, Gazprom announced that it would shelve its development of the Shtokman field in the Barents Sea. On Sept. 4, the European Commission opened an antitrust case against Gazprom. Both these events are momentous. Will Gazprom's dominant owner, the Russian government, face up to its crises?

[T]he biggest challenge to Gazprom is the shale gas revolution. The United States is now self-sufficient in natural gas. Currently, U.S. gas prices are less than one-fifth of those in Japan, with European prices somewhere in the middle. U.S. gas prices are actually lower than Russian domestic gas prices. [Red & bold emphasis added.]

Caribbean

Editorial - Gov't must come clean on LNG — The Gleaner, Kingston, Jamaica, West Indies

It is high time the Simpson Miller administration end the pussyfooting and come clean on the liquefied natural gas (LNG) project. For its policy-by-dribble is both confusing and confidence-draining and risks doing grave damage to the Jamaican economy.

Alaska

Will Alaska tap Asian demand for LNG? — Alaska Dispatch, Anchorage, AK

Will Alaska be able to cash in on Asia’s expanding demand for natural gas? Alaska Gov. Sean Parnell has given Exxon Mobil Corp., BP and ConocoPhillips until the end of September to provide the state with plans on how the oil giants would go about pumping natural gas from the North Slope to southern Alaska, where it would be condensed into liquefied natural gas (LNG) for export.

Alaska’s attempt to ship gas to the lower 48 stalled after U.S. shale output increased substantially. [Red emphasis added.]

Alaska sees Asia driving annual $20 billion via pipeline — Bloomberg

Alaska wants a $50 billion pipeline and export complex built to develop natural gas that’s stranded on its icy North Slope. The justification: Asia’s swelling appetite for the fuel.

The explosion of output from U.S. shale squelched Alaska’s long-held hopes to build a pipeline to the Lower 48 U.S. states, Book said. “So the next most logical place to take it is to liquefy it and ship it at significant price premiums to Japan, China and throughout the Pacific Rim.”

At the same time, North American LNG developers are seeking to escape a low-price U.S. gas market, where shale formations flooded the market with supplies. Gas futures touched a 10-year low in April of less than $2 per million British thermal units. [Red emphasis added.]

Alaska considers LNG exports to Asia — Energy & Capital

Citing Asia’s expanding demand for natural gas, Alaska wants to build a $50 million pipeline and exporting complex to develop natural gas from its North Slope region.

Parnell travels to Asia to promote Alaska natural gas — Anchorage Daily News, Anchorage, AK

JUNEAU -- Gov. Sean Parnell is in Asia seeking to drum up support for Alaska natural gas.

State of Alaska : Governor promotes Alaska gas in Pacific Rim — 4-traders

The trip is Governor Parnell's second international trade mission since taking office. In November 2011, he traveled to Europe to promote Alaska's international trade in seafood, and to build on the state's global reputation as a leader in oil and gas production.

Oregon

Developers seek liquid natural gas exportation through Oregon — The Epoch Times, New York, NY

Veresen Inc., a Canadian-based utility and natural gas, is currently proposing the construction of a liquid natural gas (LNG) export plant on Oregon’s West Coast. The project would include an updated LNG pipeline system, which would pipe gas into the plant for exportation to Asian markets.

A natural gas power plant poised to be built in the Jordan Cove region of Coos Bay, is in the 30-day notice period before it files its formal application for a permit with Oregon’s Department of Energy. The power plant would provide power to the nearby LNG exportation plant and has already been a great negative outcry from local opponents.

United States

Despite current arbitrage opportunities, don't lunge towards LNG — AOL Energy

On the surface, LNG appears to represent a new opportunity where easy profits are for the taking. In reality, producing and delivering LNG is a difficult business, and that business will only get harder as time goes on.

The near-term challenge is to finance terminal construction and have enough money left over for shareholders. Between profits and shareholders are bankers, who provided debt financing and expect to be repaid.

But there is something else going on. The motivation to build LNG export facilities is mostly about recovering losses from existing LNG import facilities. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis may want to lose money on his LNG import project just so he could try to justify an LNG export terminal to cover the import terminal losses. The problem that Girdis keeps overlooking is that his project is in just as goofball a location for exporting as it is for importing.

Natural gas exports set to go gangbusters — FatCat, Australia

Since mid-August, US companies have applied for permits with the U.S. Department of Energy to export 4.2 Tcf of LNG – more than 1/6 of current total domestic consumption. Total requests year to date equal 9.6 Tcf (though almost 1 Tcf is for re-export of Canadian gas). Add to that the 5.3 Tcf of export licenses filed in 2011, and you’re approaching a whopping 15 Tcf – or, 57% of today’s gas consumption.

Lawmakers tell feds to speed up LNG export decision — FuelFix

More than a dozen Western state lawmakers are pressing the Obama administration to speed up its review of allowing more U.S. natural gas to be liquefied and sold overseas.

The Obama administration is struggling to decide whether — and how much — the U.S. should share a bounty of newly recoverable natural gas with foreign countries. The United States already sells a relatively small amount of natural gas to Mexico, Canada, Brazil and other countries, but pending proposals could put the U.S. on track to export about 16 billion cubic feet daily.

The result, however, could be higher prices at home — one of the potential consequences being probed by the Energy Department export study.

Call for quicker approval of LNG export applications — Energy Global, Farnham, Surrey, United Kingdom

The Center for LNG has praised a bipartisan group of 16 legislators, representing districts in the western region of the US, who have called for an expedited review process for applications to export liquefied natural gas (LNG).

Webmaster's comment: The Center for LNG is not an objective participant in this issue. Anything that forwards LNG business profits will be supported by Bill Cooper and the Center for LNG, regardless of the impact on the American public.

Lawmakers step up pressure on DOE over natural gas exports — The Hill, Washington, DC

The letter follows one sent by a bipartisan group of 44 lawmakers from Arkansas, Louisiana, Oklahoma and Texas sent in August.

DOE said the complexities of analyzing global markets caused the delay in the report, which is being conducted by a third party.

Northeast

Sierra Club holds up LNG facility in Maryland — PennEnergy

The Dominion Cove Point facility in Calvert County, Maryland, has been in operation for more than 40 years, importing natural gas for steadily rising U.S. demand. With the rise of hydraulic fracturing in the country, however, the facility has seen less demand for imports and steadily dropping natural gas prices.

Webmaster's comment: "Less demand for imports" is an understatement! No demand is more like it. In 2011 the terminal unsuccessfully attempted to get FERC to force LNG deliveries to the terminal due to the storage facilities warming up from lack of use.

There is no shortage of domestic natural gas in the Northeast, New England, or Maine— a fact that Downeast LNG refuses to recognize.

FERC to prepare Environmental Assessment for Cove Point export project — LNG Law Blog

Today, FERC issued a notice of intent to prepare an environmental assessment (EA) which will evaluate the environmental impacts of the proposed Cove Point Liquefaction Project at the existing Dominion Cove Point LNG terminal in Lusby, Md. Comments on the scope of the EA are due October 24, 2012.

Caribbean

Dumped! Government to throw out LNG project (Sep 23) — The Gleaner, Kingston, Jamaica, West Indies

The Sunday Gleaner has now confirmed that the Portia Simpson Miller-led administration will announce plans to abandon its long-stated intention to introduce liquefied natural gas (LNG).

After years of planning and millions of dollars in expenditure, the Simpson Miller administration has decided that it just cannot afford the cost of setting up the infrastructure and other requirements for the introduction of LNG.

It is expected that plans 'B' and 'C' would see the Jamaica Public Service Company (JPS) being allowed to establish the LNG infrastructure and source the gas for the multibillion-dollar plant it plans to construct in Old Harbour, St Catherine. [Red & bold emphasis added.]

Scrapped LNG plans worry private sector — The Gleaner, Kingston, Jamaica, West Indies

"I don't know what went wrong but the bottom line is that it was going to be the private sector that was going to be funding the entire LNG project and I think they just messed up the whole thing," Mair said.

Alaska

U.S. shale glut forces Alaska to target Asia for gas exports — Financial Post, Don Mills, ON

The explosion of output from U.S. shale squelched Alaska’s long-held hopes to build a pipeline to the Lower 48 U.S. states, Book said. “So the next most logical place to take it is to liquefy it and ship it at significant price premiums to Japan, China and throughout the Pacific Rim.”

...North American LNG developers are seeking to escape a low-price U.S. gas market, where shale formations flooded the market with supplies. Gas futures touched a 10-year low in April of less than $2 per million British thermal units. [Red & bold emphasis added.]

Alaska may send LNG to Asian markets — UPI Asia

Kevin Book, managing director of consultant ClearView Energy Partners, told Bloomberg News the natural gas market in the Lower 48 may be saturated by the shale boom in the United States. [Red & bold emphasis added.]

Alaska sees Asia driving annual $20 billion via pipeline — Bloomberg

Governor Sean Parnell gave Exxon Mobil Corp., BP Plc and ConocoPhillips to the end of this month to provide plans to pipe the gas south and compress it into a liquid, known as LNG, for export. Their joint venture would compete with growing global supplies of LNG coming into markets within two decades from Australia, East Africa, the U.S. Gulf Coast and Canada.

Webmaster's comment: This article's author ignores potential US LNG exports originating from the US East Coast. Both Cove Poin LNG in Lusby, Maryland, and Elba Island LNG near Savannah, Georgia, are now wanting to export LNG instead of import. The US East Coast is well supplied with domestic natural gas — despite Downeast LNG's claims to the contrary.

British Columbia

One LNG project adds 3M tonnes of CO2 — Ship & Bunker, Vancouver, BC

A liquefied natural gas (LNG) pipeline [sic; natural gas pipeline to an LNG export terminal] running to Kitimat on Canada's West Coast would add more than three million tonnes of carbon dioxide a year into the atmosphere, according to a new report released by environmental group ForestEthics Advocacy.

"It seems like there is a new gold rush in B.C. and there hasn't been a full understanding by the public on what the full impact of shipping LNG is." [Red & bold emphasis added.]

United States

With success, natural gas industry eyes exports (Sep 23) — philly.com, Philadelphia, PA

The natural-gas industry is drowning in its own success.

Drilling companies are extracting so much natural gas from formations like Pennsylvania's Marcellus Shale that they want to export the fuel overseas, provoking opposition from some who say that American gas should stay at home.

"We have a hundred years of natural gas supply in this country, and that's a snapshot today," said Williams, who took over XTO after Exxon bought the shale producer in 2009 in what amounted to a $31 billion endorsement of unconventional drilling. [Red & bold emphasis added.]

Webmaster's comment: The US has 100-years of domestic natural gas supply, yet Downeast LNG says that is not good enough, that we need to import LNG from overseas.

Northeast

Dominion's LNG export bid sparks legal dispute — The Baltimore Sun, Baltimore, MD

LUSBY — For four decades, the owners of the liquefied natural gas terminal at Cove Point in Calvert County have given a pair of environmental groups a say over expansion of the sprawling complex, originally built to import fuel from abroad via the Chesapeake Bay. By all accounts, it's been a cordial, cooperative relationship.

The company, a subsidiary of Dominion Resources Inc., based in Richmond, Va., is scheduled to square off early next month in Calvert County Circuit Court with the Maryland chapter of the Sierra Club over whether the company's export plan violates the terms of its long-standing deal with the club and the other environmental group, the Maryland Conservation Council.

Only three tankers have called at Cove Point since March 2011, two of them bringing in LNG just to help maintain the super-cold temperatures in the storage tanks. [Red & bold emphasis added.]

Webmaster's comment: Meanwhile, Downeast LNG claims the Northeast is hurting for LNG imports.

Alaska

TransCanada encouraged by interest in project (Sep 21) — (AP) Ventura County Star, Camarillo, CA

JUNEAU, Alaska (AP) - TransCanada Corp., the company that holds an exclusive license to build a major natural gas pipeline in Alaska, has been encouraged by results of a recent market solicitation, a spokesman said Friday.

British Columbia

Report provides clearer picture on emissions — The Vancouver Sun, Vancouver, BC

A report released Friday on potential greenhouse gas emissions from northern energy projects shows that one liquefied natural gas pipeline [sic] and terminal alone would add over three million tonnes of carbon dioxide a year into the atmosphere.

Five LNG terminals are under consideration, three at Kitimat and two at Prince Rupert. The entire province of B.C. emits 62 million tonnes according to provincial government figures.

"We are saying these projects need to be thought of in terms of their cumulative impact," said Karen Tam Woo, ForestEthics Advocacy campaigner. "It seems like there is a new gold rush in B.C. and there hasn't been a full understanding by the public on what the full impact of shipping LNG is."

Asia

Asia gas importers gain traction in push for hub pricing — Reuters

Asia's energy-hungry nations may be finally making headway in their push to scrap oil-linked natural gas prices as the high cost of the fuel threatens economic growth, especially in Japan, the world's top importer of liquefied natural gas.

Removing the link between gas prices and oil and moving to the so-called hub pricing would drastically cut the cost of importing natural gas, but producer countries like Qatar have long opposed such moves.

Webmaster's comment: Hub pricing for US LNG exports is destined to disappoint the billion-dollar US LNG export terminal investors.

Gulf of Mexico

US floating LNG concept files for regulatory approval — ICIS Heren

An LNG export scheme located offshore in the US Gulf is seeking regulatory approval to export up to 24m tonnes per annum (mtpa) of LNG, based on using a defunct sulphur platform as a hub for floating liquefaction vessels.

The Main Pass Energy Hub LNG export project was jointly filed between US LNG marketing company United LNG and a subsidiary of offshore oil and gas producer McMoRan Exploration, Freeport-McMorRan Energy.

The large-scale liquefaction project, estimated to cost $14bn, aims to use existing floating infrastructure located offshore 37 miles east of Venice, Louisiana. The platform was initially conceived as an import and regasification terminal, as well as to process natural gas, to natural gas liquids and store gas into salt caverns.

Now the concept has become an export project, like so many of the pending US liquefaction projects, utilizing up to six floating liquefaction storage and offloading (FLSO) vessels capable of producing up to 4mtpa each. Each individual FLSO vessel would be marketed separately in terms of offtake and equity. The project would structure tolling agreements with users.

The Main Pass Energy Hub now becomes the sixteenth export application pending DoE approval. Of those, only Cheniere's proposed 18mtpa Sabine Pass facility in Cameron Parish, Louisiana, has received both FTA and non-FTA export licenses. [Red & bold emphasis added.]

British Columbia

BC fault line, tsunami risk may exist near proposed Northern Gateway, LNG projects — The Huffington Post B.C.

A tsunami hazard and a possible seismic fault have been identified in the Douglas Channel near Kitimat — the proposed site of the Enbridge Northern Gateway pipeline and at least three liquefied natural gas projects.

The information is included in a scientific paper by the Geological Survey of Canada and the Department of Fisheries and Oceans uncovered by Huffington Post B.C. blogger and journalist Robin Rowland. The study was part of a legal filing to the Joint Review Panel that’s assessing the proposal for a pipeline to carry bitumen from the Alberta oilsands to northern B.C.

“Only through the development and application of this type of tsunami modelling will it be possible to gauge the level of hazard posed by the identified submarine slope failures to shore installations and infrastructure, or to devise ways to effectively mitigate the impacts of future such events,” the department said in a statement.

A study based on 13 years of research concluded the clock is ticking on a major earthquake striking the Cascadia zone in the next 50 years. [Red & bold emphasis added.]

Government of British Columbia : Royalty program helps LNG prospects while creating jobs [News release] (Sep 20) — 4-traders

Minister of Energy, Mines and Natural Gas Rich Coleman announced British Columbia's eleventh instalment of the Infrastructure Royalty Credit Program this afternoon during the BC Energy Conference in Dawson Creek.

As in previous years, Industry will fund the entire cost of each infrastructure project. Companies can then recover up to 50 per cent of an approved project's cost through deductions which will reduce the royalties they must later pay to government. This year's program is expected to generate approximately $260 million in new industry capital spending in B.C.

Petronas LNG meet with officials about planned terminal in Prince Rupert (Sep 20) — The Northern View, Prince Rupert, BC

Proponents of a second natural gas export terminal in Prince Rupert were in town this week meeting with local government officials about the project.

BG Group announced earlier this year that they were also performing a feasibility study to create a terminal on Ridley Island, and have partnered with the Spectra Energy Corporation to create the gas line. Gill said two LNG terminals operating in the area would be feasible.

Careful haste in BC (Week of Sep 23) — Petroleum News, Anchorage, AK

It would be easy for the British Columbia government to get swept up in the tsunami of announced and planned LNG export projects, given that tens of billions of investment dollars are on the line and the proposals offer the only viable hope of developing trillions of cubic feet of stranded shale gas resources.

Pickering noted that power generation resources are not sufficient in parts of the United States to support the growth and development of LNG plants, identifying the Jordon Cove Energy project at Coos Bay harbor in Oregon as one example.

Currently 16 U.S. (two West Coast, two East Coast, 11 Gulf and one Alaska) and three Canadian projects (with about five others joining the preliminary line-up) are going through the export and construction approval process to handle 29 billion cubic feet per day of gas.

“We have the reserves,” [British Columbia Energy Minister Rich Coleman] said. “That’s the key. We have lots of gas. We could probably supply half of North America for the next 80 years with what we’ve got today.” [Red & bold emphasis added.]

Webmaster's comment: The proposed Canadian and US LNG export volume amounts to the equivalent of approximately 24 US LNG import terminals. (The US has 12 LNG import terminals, essentially sitting idly by.) The US and Canada are drowning in domestic natural gas supply. Downeast LNG simply cannot admit to reality.

Exxon Mobil vice-president says LNG terminal on West Coast still an option (Sep 20) — Canadian Business

"Exxon Mobil and Imperial are currently in the early stages of assessing potential LNG export options from British Columbia from our Horn River resource holdings," said Andrew Swiger during a presentation at the Global Business Forum in Banff, Alta., on Thursday.

In Asia, the fuel would be worth about five times more than it currently is in North America, where burgeoning supplies from shale formations across the continent have far outpaced demand. [Red & bold emphasis added.]

Webmaster's comment: LNG exported from British Columbia or the US to Japan is unlikely to be sold at "five times " the current price in North America. Japan is working hard to link LNG prices to US Henry Hub pricing.

Canada

Canada woos Asia for LNG — UPI

Five LNG projects to be developed on Canada's west coast could go online from 2014-19, Canadian Natural Resources Minister Joe Oliver said in a speech this week at a LNG conference in Tokyo, Platts news service reports.

Canada could have export capacity of 9 billion cubic feet per day of natural gas, equivalent to 66 million tons a year of LNG, based on proposed projects, he said.

Webmaster's comment: Potential Canadian LNG export capacity could equate to 7–9 existing US LNG import terminals that are now mostly idle.

United States

The Natural Gas Revolution: Good or bad for energy efficiency? — Renewable Energy World

The dramatic rise in natural gas supply, and fall in price, has reconfigured the energy scene in the United States, suddenly creating a bounty of domestic energy, driving down wholesale power prices and speeding retirement of polluting coal-fired plants.

Veteran energy insiders have told me in recent interviews that they never expected in their lifetime to see this kind of rapid market shift. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis apparently is wearing a blindfold or ignores energy news, since he still has not become aware that his proposal is now a previous project with nowhere to go.

Shale gas Is American success story, says XTO president (USA) — LNG World News

Williams said that because of the size of the shale gas resource, the United States will be able to export liquefied natural gas (LNG), which will increase domestic benefits.

XTO builds case for LNG exporting — Pittsburgh Business Times, Pittsburgh, PA

The case for exporting is simple: there’s a gas glut in the U.S. caused by aggressive drilling and depressed demand on account of the recession. Natural gas prices in the U.S. are below $3 per British thermal unit. In Europe or in Japan, a btu goes for double digits.

In 2007, there were 38 applications to import LNG. Today, there are 16 to export it. The only one that’s gotten federal approval is Cheniere Energy, a Texas-based company that plans to begin exporting from Sabine Pass in 2017. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG's Dean Girdis and Yorktown Energy Partners prefer to exist in an alternate reality, where — without Downeast LNG — no one in the US has access to natural gas.

United States: Gas generation shift still questionable — Mondaq

The domestic gas supply changes are largely the result of the successful development of US shale gas reserves. The combination of hydraulic fracturing and horizontal drilling has dramatically increased US technically and economically recoverable natural gas resources. While uncertainty is inherent in those estimates, there has been a substantial increase in the number of producing natural gas wells. That increase, in turn, has yielded a glut in the domestic gas market, much to the financial consternation of gas producers. Recent Henry Hub gas prices have been near historic lows. Low prices and abundant supply currently are giving natural gas a huge advantage over coal, as well as over renewables, in power producers' decision making, even as several utility executives warn of an overreliance on gas.

...Asian buyers, in particular, are seeing that US LNG priced to Henry Hub levels can be competitive with LNG priced to Japan Crude Cocktail (JCC). At present, Henry Hub-linked LNG appears to have an advantage over JCC-linked LNG of approximately $10 per mmbtu on a delivered basis. Not surprisingly, a US LNG export market is starting to take shape. [Red & bold emphasis added.]

Webmaster's comment: US-source LNG will likely be sold to Japan at Henry Hub-linked prices, not the bank-busting, oil-linked 6-times the Henry Hub price that Japan is currently paying others. That will result in greater demand for US-source LNG, likely driving domestic US natural gas prices upward.

FERC launches new Cybersecurity Office [OEIS] — Sutherland Asbill & Brennan

[The above link will access a PDF file; 106 KB.]

The Federal Energy Regulatory Commission (FERC) is creating a new office to address cyber and physical security risks to FERC-jurisdictional facilities, such as electric generation and transmission facilities, oil and gas pipelines, and LNG terminals. The new Office of Energy Infrastructure Security (OEIS) will rely on FERC’s existing statutory authority in providing “leadership, expertise and assistance” to identify and mitigate such risks. While electric utilities will be familiar with FERC’s efforts to address cybersecurity risks, such oversight will be new to companies in the oil and gas sectors.

FERC-jurisdictional facilities include electric generation and transmission facilities that are owned or operated by electric utilities and regional transmission organizations (RTOs), hydroelectric facilities, interstate oil and gas pipelines, gas storage facilities, and import/export terminals for liquefied natural gas (LNG). Users, owners and operators of the “bulk power system” are already subject to FERC oversight through FERC’s authority over the electric reliability standards developed and enforced by the North American Electric Reliability Corporation (NERC), including critical infrastructure protection (CIP) requirements.

...Companies in the oil, gas and LNG sectors ... likely will be subject to new oversight, expanding beyond FERC’s previously limited Critical Energy Infrastructure Information (CEII) designation requirements. Although OEIS’s functions appear to be limited to developing recommendations for industry (as opposed to requirements), all sectors subject to the new office’s oversight should remain vigilant to guard against the development of new requirements, at least in the absence of new legislation conferring additional statutory authority on FERC. [Red & bold emphasis added.]

British Columbia

Canada eyes Asian markets for B.C. natural gas exports — CBC News

"[Canada is] already the third-largest producer of natural gas in the world," Oliver told an audience that included Japan's Economy, Trade and Industry Minister Yukio Edano.

United States

LNG pricing changes urged / Crude-linked system, disparate costs debated at conference — The Daily Yomiuri, Japan

Japan made the proposal to lower the procurement cost of LNG by introducing a new price index system that reflects supply and demand prices in the United States, among other factors.

There were calls from Japan and South Korea at the international conference for LNG-producing nations to review the resource's prices, which are unduly high in some markets compared to procurement costs in the United States and European nations.

Meanwhile, Mohammed Saleh Al-Sada, state minister for energy and industrial affairs of Qatar, the world's largest LNG exporter, said the crude-linked pricing system is reliable, and a stable investment environment is required to produce LNG.

Interview: Tokyo Gas seeks LNG from US, Mozambique to dilute oil indexation — Platts

Tokyo Gas now intends to import LNG at Henry Hub-linked gas prices from the US as well as possibly buying LNG priced off the UK's National Balancing Point from Mozambique as part of its efforts to lower its oil-indexed import costs, Kunio Nohata, senior general manager of the utility's gas resources department, said.

If Tokyo Gas moves ahead with its prospective purchase deals, it would be the first time it has imported LNG on long-term contracts with Henry-Hub and NBP-price benchmarks, Nohata said.

Tokyo Gas and its partner Sumitomo now hope to conclude a natural gas liquefaction tolling agreement with Dominion Resources by the end of this year at the Cove Point LNG project in the US following the near completion of a front-end engineering and design work, Nohata said. [Red emphasis added.]

Northeast

BOCC may lease land to Dominion — Southern Maryland Newspapers

Dominion Cove Point Liquefied Natural Gas in Lusby is looking to acquire about 219 acres of land in Calvert County for the company’s proposed expansion to the Cove Point plant in Lusby that would allow the export of natural gas.

Dominion’s proposed expansion will allow the plant, currently an import facility, to export natural gas. The company plans to request project approval by March 2014 with an in-service date of 2017, pending necessary approvals. [Red emphasis added.]

Gulf of Mexico

FERC issues schedule for Environmental Review of Sabine Pass Feeder Pipeline — LNG Law Blog

FERC issued a notice of its schedule for preparation of an Environmental Assessment (EA) for the Creole Trail Expansion Project, which would enable bi-directional gas flow on the Creole Trail Pipeline system and allow for the delivery of feed gas to the Sabine Pass Liquefaction Project. FERC plans to issue the EA on September 18, 2012, and participating federal agencies must complete their review of the project by December 17, 2012.

Cheniere to sell Corpus Christi LNG under long-term contracts — Bloomberg

The company plans to follow the contracting model established at its Sabine Pass terminal in Louisiana, Souki said. Sixteen million tons of LNG from Sabine Pass, from a total output of 18 million tons, will be sold on long-term contracts of as long as 20 years, with the rest to be offered on the spot market, he said.

“Those are the volumes that we’re not sure we can produce year after year so these will remain in the spot market,” he said. The first spot cargoes from Sabine Pass will reach the market in late 2015 or early 2016, he said.

Cheniere says may sell spot Sabine Pass LNG late 2015 — Reuters

Cheniere Energy is likely to start selling spot liquefied natural gas (LNG) from the Sabine Pass project in Louisiana as early as late 2015, its chief executive said on Tuesday, setting the stage to export 2 million tonnes per annum (mpta) of U.S. supplies to global markets.

The company has firm supply deals with South Korea's state-owned gas buyer KOGAS, Britain's BG Group , India's GAIL and Spain's Gas Natural Fenosa.

Cheniere also aims to export up to 15 mpta of LNG from another LNG export plant at Corpus Christi in Texas, with 10-11 mtpa going to long-term buyers and the rest to the spot market, Souki said.

Alaska

Valdez LNG summit ends in the Land of Make Believe [Opinion column] (Sep 18) — Alaska Dispatch, Anchorage, AK

Craig Richards, an attorney for the Gasline Port Authority, told a crowd on Sunday that the state is taking the wrong approach in working towards a gas pipeline. The problem is his legal arguments with regards to what state government can do, are just as Governor Sean Parnell said, “outdated.”

Let’s be honest, the only tools the state has when it comes to the North Slope producers are taxes and permitting. How much longer do we have to entertain such lofty and misleading rhetoric from Valdez LNG supporters that we have any other option besides waiting until the legal leaseholders deem the project economical?

Alaska LNG Summit woos buyers, producers — Valdez Star, Valdez, AK

While city officials feel the summit achieved its goal of putting Valdez in the spotlight of the state’s decades old quest to develop its natural gas reserves on the North Slope, its biggest achievement may have been attracting favorable press from Anchorage TV stations.

British Columbia

B.C., Haisla sign ownership deal for potential gas development site — The First Perspective, Peguis, MB

The province of British Columbia has signed a deal allowing the Haisla First Nation to take ownership of a swath of coastal waterfront that could one day be used to build natural gas export facilities.

Under the framework agreement signed Friday, the Haisla gain the ability to lease or buy 700 hectares of land, and another 102 hectares of “unsubmerged” foreshore, along Douglas Channel. It is a spot that has attracted global interest as a potential location for the export of B.C.-produced liquefied natural gas to markets in Japan, South Korea, China and India. Already, three projects have been planned for the area near Kitimat, B.C., one led by Royal Dutch Shell PLC, one backed by Apache Corp., EOG Resources Corp. and Encana Corp. and another backed by a consortium of small and mid-sized natural gas producers.

Stakes go up in B.C. gas gamble [Opinion column] — Vernon Morning Star, Vernon, BC

Mike de Jong’s debut as B.C. finance minister was a grim one. The first financial update for this election year projects a $1.4 billion decline in natural resource revenues from Kevin Falcon’s one and only budget in February.

Most of that is from declining natural gas revenues in the next three years. And it’s not just the price of gas that’s lower than the finance ministry’s array of private sector experts had forecast.

The volume of B.C. gas sold is down as well, as abundant new sources of shale gas come on-stream in the U.S. As with oil, that’s currently the only market Canada has.

The one glimmer of hope in what de Jong called the “ugly” resource revenue picture is that natural gas revenues don’t have much farther to fall. And then there is the light at the far end of the tunnel, exports to Asia where the price remains much higher.

Canada

Canadian Minister of Natural Resources concludes visit to Japan — LNG World News

His visit supports the Harper Government’s priority to increase opportunities for the export of Canadian energy, with a specific focus on liquefied natural gas, of which Japan is the world’s largest importer.

Canada’s Joe Oliver pledges to feed Asia’s growing natural gas needs — The Globe and Mail, Toronto, ON

Natural Resources Minister Joe Oliver is offering assurances to Asian customers that Canada will move quickly to build liquefied natural gas plants capacity on the west coast to feed their growing demand.

Not everyone in the industry is as optimistic that all the proposed projects will be built.

The LNG projects are “terribly expensive,” Real Cusson, senior vice-president for marketing at Canadian Natural Resources Ltd., told The Globe and Mail’s Nathan VanderKlippe earlier this week.

“We have well over 100 years supply of gas,” [Mr. Oliver] said. “We don’t have the constraint based on our internal needs that the Americans have.” [Red emphasis added.]

Webmaster's comment: Canada has over 100 years of natural gas supply. The US has over 100 years of natural gas supply. But, Downeast LNG wants people to believe that importing more LNG from overseas, enlarging the US trade deficit, is what the US needs to do.

Canada targeting Japan for New LNG exports: Report — NASDAQ

Five LNG plants are currently planned for Canada's Pacific Coast, and two of those already have 20-year gas export licenses, Natural Resources Minister Joe Oliver said in an interview from Tokyo. The one snag so far has been the inability of the developers to sign up customers.

Japan is already the world's largest importer of LNG. Its moves to cut its reliance on nuclear power present a golden opportunity for Canadian LNG, an industry now in its infancy, Oliver said. He was in Japan for an LNG producer and consumer conference, where he spoke to investors.

United States

Gas-export study delay puts U.S. projects in limbo for this year — Fuel Fix

The Energy Department’s delay in releasing a report on liquefied natural-gas exports puts in limbo for this year as many as 12 applications including projects backed by Dominion Resources Inc. and Sempra Energy.

Decision on natural gas exports delayed — Innovation Trail, upstate NY

Among the arguments against hydrofracking in New York State and across the U.S. is that drillers will be taking the gas from New York and elsewhere and exporting it to countries like China and India, throwing a giant wrench in the argument that fracking is the path to energy independence.

But it's not clear that much gas will be exported.

North America

Japan eyes North American LNG imports — Energy & Capital

Tepco in Advanced Talks with the U.S. and Canada

...Thanks to the shale-generated boom, North American gas prices hover at around $3 per million British thermal units (mmBtu), and Asian markets have been eyeing it hungrily. Spot LNG costs much higher over there, at almost $13 per mmBtu.

...At present, all of Japan’s LNG import prices are tied to oil prices. Shifting U.S. benchmark gas prices at Henry Hub could go a long way toward reducing those costs. [Red emphasis added.]

Webmaster's comment: Japan wants — and there is indication that Japan will get — low-cost LNG based on Henry Hub prices, rather than oil-bechmarked prices. That will drive up demand for US LNG, forcing natural gas prices higher for Americans.

Tepco to buy North America liquefied natural gas — (Reuters) The Japan Daily Press

As Japan gets ready to cut its reliance on nuclear energy, Tokyo Electric Power Co, moves forward with advanced talks to secure liquefied natural gas (LNG) supplies from North America. North America is currently blessed with plentiful supplies and thus gas prices are hovering just over $3 per million British thermal units (mmBtu). This has raised interests from the Asian markets; apparently prices for spot LNG are much higher and pitted at $13 per mmBtu.

Japan eyes creating LNG futures market: report — MarketWatch

Japan's industry minister said Wednesday that Japan will launch a study this fall on setting up a futures trading market for liquefied natural gas to secure LNG at lower prices, amid increased demand in the country following the nuclear crisis at the Fukushima Daiichi plant, Kyodo News reported.

The prices of LNG imported by Japan have been relatively high as they are linked to crude oil prices under long-term contracts. Edano said with increased LNG supplies following expanded shale gas production in North America, prices there have fallen sharply. [Red \emphasis added.]

Japan calls for reform of LNG markets — (AFP) Google News

Edano said the present pricing structures on LNG markets meant in Asia, where its price is index-linked to oil, buyers were paying far more than those in North America, where price is determined on the basis of supply and demand.

The United States has increased its production of shale gas, a natural gas trapped in flakes of sedimentary rock, which has pushed down the price for natural gas in North America and is boosting interest around the world.

Gulf of Mexico

Natural holds open season for project that gives access to Cameron LNG exports — Platts

Natural Gas Pipeline Co. of America launched Monday an open season for its Sabine Henry Hub project that would give shippers greater access to the proposed Cameron LNG terminal.

This new Cameron Parish Delivery Point could give shippers access to the proposed Cameron LNG 1.7 Bcf/d export terminal in Louisiana.

USA: Main Pass Energy Hub files for LNG export license — LNG World News

The company seeks authorization to export domestically-produced LNG from existing and new facilities that it intends to modify, build, and operate, located in Federal waters in Main Pass Block 299, 16 miles offshore of Louisiana (MPEH™ Deepwater Port) to any country with which the U.S. has, or in the future may have, a Free Trade Agreement (FTA).

Alaska

Former Governor talks about Alaska's "pipe dream" (Sep 17) — KTUU-TV, Anchorage, AK

Today, former Governor Frank Murkowski told a luncheon in downtown Anchorage that he backs a proposal for a large-diameter "All-Alaska" pipeline project -- leading to an LNG Terminal either in Valdez or Cook Inlet.

Murkowski says that Japan is willing to pay premium prices for energy, but Alaska must act quickly. He says other providers like Qatar, Papua New Guinea and Australia would also like to sell Nat Gas to the lucrative Asian market. He urged the state to show possible buyers that it's serious about finally building the project, which has been a sort of "pipe dream" for Alaska for more than 35 years.

British Columbia

Canada expects to start LNG exports from late 2014: energy minister — Platts

"Quite frankly, Canada is at the forefront of natural gas revolutions," Oliver said. "But the relevance of Canada's gas reserves in the total market is more than scale. It's also geography. LNG tankers from Canada's Pacific North West reach the Pacific Basin LNG market in as few as 11 days."

Oliver said that Japan, as the world's largest LNG importer, should have a particular interest in Canada, where "there are up to 1,300 trillion cubic feet, or 37 trillion cubic meters in natural gas resources, which will undoubtedly increase as we discover more shale gas and offshore resources."

Apache Canada offers Asian LNG buyers oil-indexed price for Kitimat supplies — Platts

Apache Canada is offering prospective Asian buyers oil-indexed pricing for gas from its proposed Kitimat LNG project in British Columbia, company president Tim Wall said Tuesday.

When asked about Japanese LNG buyers' preference to import LNG from North America at Henry Hub gas prices, which were at 10-year lows earlier this year, Wall said: "Some do, some don't. It depends on buyers," declining to elaborate further on terms of pricing contracts.

While the company has not reached any heads of agreements with prospective buyers in Asia, Wall said the company has "pretty much completed" its front-end engineering and design work for the planned capacity of 5 million mt/year of LNG.

Webmaster's comment: Oh, sure! 'Some Japanese buyers would rather pay more-expensive oil-indexed prices for LNG than cheaper Henry Hub-indexed prices that others are offering.'

Apache Canada may soon end up with a lot of unsold LNG on its hands, and an expensive unused white-elephant LNG export terminal for sale — just like Downeast LNG's import terminal, if it ever had a chance of actually being built.

Canada

Why spend billions to sell LNG? — The Globe and Mail, Toronto, ON

A veritable flood of money is being readied for Canada’s West Coast, where at least seven natural gas export projects are being contemplated.

Canadian Natural Resources Ltd., one of Canada’s top gas producers, says ... it may actually be better to spend money converting coal-fired electrical plants to burn natural gas, said Réal Cusson, senior vice-president of marketing for the company.

“LNG is a fantastic market opportunity,” he said, then added: “It’s terribly expensive. The numbers that we have seen from proponents are in the range of $10- to $12-billion of investment for each bcf [billion cubic feet] of capacity. So if we had, say, five of these projects completed on the West Coast, we would be looking at ... $50- to $75-billion to invest. That’s a pretty considerable sum.”

But converting coal-fired electricity to gas could, he said, could sop up a lot more gas, at a price that is “not in the same league” as new LNG terminals.” [Red emphasis added.]

Canada looks to Asian markets amid LNG glut in US — Hydrocarbon Processing

A decade-long boom in US production of natural gas drove prices to a record low of $1.91 per million British thermal units in April, and has created more energy independence for the US, which is virtually Canada's only energy export market. Thus, Canada has set its sights on energy-hungry Asian markets.

The shale-gas output boom is expected to continue, turning North America into a net LNG exporter by 2017, the International Energy Agency said this year. [Red emphasis added.]

United States

Obama’s delay leaves LNG exports on hold though election — Houston Business Journal, Houston, TX

[Waterborne Energy Inc. analyst Lafayette Herring] explained that the export issue is a political football, especially during an election season. The kicker, though, is that it's anyone’s guess which side would support which end of the issue, he said.

“We don’t even have a guess,” he said. “Perhaps (one would assume) a Republican administration would favor exports, but at the same time, there some pretty entrenched American industries (that are typical Republican supporters) that are against it. It’s really so polarizing potentially.”

Herring said the report likely is delayed specifically to keep it from becoming an election issue, even though it’s not clear which side of the political divide would support or oppose exports.

Politics are causing LNG export delays, attorney says — Fuel Fix

“The Obama administration doesn’t want this to be a front-burner issue,” said Bloom, a partner at Mayer Brown. “The Romney campaign has not made it an issue because some of the manufacturing base that supports Romney wants low natural gas pricing.”

Booming demand for natural gas overseas could lift natural gas prices in the United States if exports are allowed at significant volumes. That worries some domestic industries and consumers that use home-grown natural gas. But producers argue that higher prices are needed to make natural gas drilling in the United States economical.

North America

After abandoning nuclear, Japan aims to buy Canadian, U.S. LNG — Financial Post, Don Mills, ON

“We want to procure LNG from the United States and Canada where prices are linked to Henry Hub.”

TOKYO — Japan’s biggest utility, Tokyo Electric Power Co, is in advanced talks to secure liquefied natural gas (LNG) supplies from North America and help reduce high import prices as Japan cuts reliance on nuclear power after the Fukushima disaster, company officials said on Tuesday.

All five major Japanese trading houses have invested in shale oil and gas projects in North America, spending a total of more than $13 billion since Sumitomo became the first firm to take part in a shale gas development in 2009.

Passamaquoddy Bay

Enviros say Maine LNG project needs harder look from FERC — Law360 (Paid subscription)

Law360, New York (September 17, 2012, 5:27 PM ET) -- A Maine environmental group on Monday told the Federal Energy Regulatory Commission that analysis of a proposed liquefied natural gas terminal doesn’t examine how the project could disturb toxins in a northeastern bay, potentially contaminating sea life and harming local food supplies.

Save Passamaquoddy Bay, which is fighting to protect a coastal area near the U.S.-Canada border, said in a letter to FERC and the state’s two U.S. senators that an environmental impact statement and biological assessment take an excessively narrow look at toxins, reviewing those...

Gulf of Mexico

FERC to prepare an EIS for Trunkline LNG's export project — LNG Law Blog

FERC issued a notice of intent to prepare an environmental impact statement (EIS) for Trunkline LNG and its affiliates' proposed Lake Charles Liquefaction Project, which involves LNG export facilities to be constructed at the existing Lake Charles LNG import terminal in Calcasieu Parish, La. Comments on the scope of the EIS are due October 15, 2012.

Lowest U.S. gas price since 1999 attracts GAIL: Corporate India — Bloomberg Businessweek

[This same article appears under the United States heading, below.]

GAIL India Ltd. (GAIL), the first Asian company to buy liquefied natural gas from the U.S., plans to take advantage of the lowest prices in 13 years to boost imports from America and revive sales growth at home.

In December, GAIL agreed to buy 3.5 million tons of LNG a year for two decades from Houston-based Cheniere Energy Partners LP (CQP)’s Sabine Pass terminal in western Cameron Parish, Louisiana. The terminal is the only one with approval to export the fuel to nations that don’t have a free-trade agreement with the U.S. The New Delhi-based company followed that deal with a supply agreement with France’s GDF Suez SA in August and a three-year contract to purchase the fuel from Barcelona-based Gas Natural Fenosa earlier this month.

A surge in shale gas output in the U.S. has driven down prices in the U.S. and prompted companies to convert LNG import facilities for export. [Red & bold emphasis added.]

Main Pass Energy Hub files at DOE to export LNG to FTA nations — LNG Law Blog

Main Pass Energy Hub, LLC (Main Pass) filed an application with the U.S. Department of Energy (DOE) for authority to export over a thirty-year period up to 24 million metric tons per year (approximately 3.22 Bcf/day) of domestically produced LNG from its deepwater port located offshore Louisiana. Main Pass initially proposes to export LNG to nations having a Free Trade Agreement (FTA) with the United States and will file a separate application to export LNG to non-FTA countries.

A potential blowout looms over Lithuania LNG terminal — Business New Europe [Paid subscription]

[This same article appears under the United States heading, below.]

As the developers of Lithuania's liquefied natural gas (LNG) terminal discussed possible supply deals in the US last week, the Baltic country's biggest gas users revealed they are considering mounting a legal challenge against the project.

Lithuanian Minister of Energy Arvydas Sekmokas said he expects to have agreements to supply the terminal with LNG in place before the end of this year, and confirmed that Rokas Masiulis, chief executive of project developer Klaipeda Nafta, met with US LNG major Cheniere on September 10 as part of supply negotiations. Masiulis has also met executives from other potential LNG suppliers, including Spain's Fenosa, BP, Shell and Norway's Statoil. "Our goal is to sign gas supply contracts in the near future. That would be very important for the further implementation of the entire project, because supply contracts always go hand-in-hand with construction," Sekmokas said.

Alaska

Attorney for Gasline Port Authority says state has things backwards on gas pipeline — KTUU-TV, Anchorage, AK

Richards says the way the state is running the project, right now, is completely backwards -- and has been so since at least the Murkowski Administration.

Richards says, our government is allowing the tenants to have veto power over attempts to sell our natural gas and he believes that's wrong.

Richards wants to see an 800 mile natural gas pipeline built from the North Slope -- parallalelling the Trans Alaska Pipeline. He wants to see a Natural Gas Liquefaction plant built in Valdez, and he wants to see Alaskan North Slope Natural Gas shipped from there to lucrative markets in Asia.

British Columbia

Joe Oliver seeks to boost Canada’s natural gas industry in visit to Japan, South Korea (Sep 16) — Financial Post, Don Mills, ON

[This same article appears under the Canada heading, below.]

Natural Resources Minister Joe Oliver is visiting Japan and South Korea this week for discussions with government and business leaders to promote energy trade and investment, focusing on Canada’s emerging LNG opportunities.

A handful of LNG terminals are at various development stages on Canada’s West Coast and the region is developing into one of North America’s hottest LNG export areas due to its proximity to Asia.

“We need to commercialize this endowment, and clearly the United States isn’t going to be the focus because they are discovering vast amounts themselves and we are looking to Asia. Starting in 2014, we are going to become a big factor in this regard and they are the biggest market.”

Canada

Joe Oliver seeks to boost Canada’s natural gas industry in visit to Japan, South Korea (Sep 16) — Financial Post, Don Mills, ON

[This same article appears under the British Columbia heading, above.]

Natural Resources Minister Joe Oliver is visiting Japan and South Korea this week for discussions with government and business leaders to promote energy trade and investment, focusing on Canada’s emerging LNG opportunities.

A handful of LNG terminals are at various development stages on Canada’s West Coast and the region is developing into one of North America’s hottest LNG export areas due to its proximity to Asia.

“We need to commercialize this endowment, and clearly the United States isn’t going to be the focus because they are discovering vast amounts themselves and we are looking to Asia. Starting in 2014, we are going to become a big factor in this regard and they are the biggest market.”

United States

Update 2-US Energy Dept delays release of LNG export report — Reuters

• Report to be completed by end of year
• Likely pushes decision past the U.S. election
• This is a complicated analysis - dept official

"This is a complicated economic analysis assessing a dynamic market," a department official said regarding the postponed report. "We'll release the report once it's complete."

"For members of Congress seeking reelection, LNG exports may be an issue with two wrong sides," ClearView Energy Partners said in research note on Monday.

Support for exports could leave politicians open to accusations of raising natural gas prices, while opposition could lead to charges of failing to support oil and gas jobs, the research note said. [Red emphasis added.]

US DOE may limit non-FTA LNG exports to 6-7.4 Bcf/d: ClearView — Platts

The US Department of Energy may limit US liquefied natural gas exports to countries without reciprocal trade agreements to 6-7.4 Bcf/d, putting four proposed projects in the lead to be built, according to a report from ClearView Energy Partners released Monday.

The projects at the top of the list could be Freeport's Quintana Island terminal in Texas, Cheniere Energy's Corpus Christi project in Texas, Sempra's Cameron terminal in Louisiana and Jordan Cove's Coos Bay project in Oregon, the report said.

"If ... rumors are true, then the 6 Bcf/d limit and the 10% ratio together would imply a range of between 6 Bcf/d and about 7.4 Bcf/d," the report added.

If this is the case, then it would become a race between the 16 export [projects] proposed thus far to see which can win permits the fastest, ClearView said. And the Federal Energy Regulatory Commission, which oversees the construction and operation of LNG facilities, may be a key gate keeper, it added.

Webmaster's comment: The number of LNG export proposals keeps climbing, just as happened with LNG import proposals. Will the same implosion occur? Downeast LNG does not play in this issue, since its developer and investors have no truck with reality.

Office of Energy Projects energy infrastructure update — FERC (Federal Energy Regulatory Commission)

• Freeport LNG filed to construct and operate a liquefaction terminal adjacent to its existing import terminal near Freeport, in Brazoria Co., TX. This export facility will have a liquefaction capacity of 1.8 Bcf/d.
• Corpus Christi LNG and Corpus Christi Pipeline filed to construct and operate an export/import terminal and related pipeline facilities near Corpus Christi, TX. This export/import terminal will have a liquefaction capacity of 2.1 Bcf/d and a regasification capacity of 0.4 Bcf/d, and the pipeline will have a capacity of 2.25 Bcf/d.

Webmaster's comment: LNG export terminals are where all the activity is. Downeast LNG was late into the game, and is even later at realizing they have lost their purpose.

Lowest U.S. gas price since 1999 attracts GAIL: Corporate India — Bloomberg Businessweek

[This same article appears under the Gulf of Mexico heading, above.]

GAIL India Ltd. (GAIL), the first Asian company to buy liquefied natural gas from the U.S., plans to take advantage of the lowest prices in 13 years to boost imports from America and revive sales growth at home.

In December, GAIL agreed to buy 3.5 million tons of LNG a year for two decades from Houston-based Cheniere Energy Partners LP (CQP)’s Sabine Pass terminal in western Cameron Parish, Louisiana. The terminal is the only one with approval to export the fuel to nations that don’t have a free-trade agreement with the U.S. The New Delhi-based company followed that deal with a supply agreement with France’s GDF Suez SA in August and a three-year contract to purchase the fuel from Barcelona-based Gas Natural Fenosa earlier this month.

A surge in shale gas output in the U.S. has driven down prices in the U.S. and prompted companies to convert LNG import facilities for export. [Red & bold emphasis added.]

A potential blowout looms over Lithuania LNG terminal — Business New Europe [Paid subscription]

[This same article appears under the Gulf of Mexico heading, above.]

As the developers of Lithuania's liquefied natural gas (LNG) terminal discussed possible supply deals in the US last week, the Baltic country's biggest gas users revealed they are considering mounting a legal challenge against the project.

Lithuanian Minister of Energy Arvydas Sekmokas said he expects to have agreements to supply the terminal with LNG in place before the end of this year, and confirmed that Rokas Masiulis, chief executive of project developer Klaipeda Nafta, met with US LNG major Cheniere on September 10 as part of supply negotiations. Masiulis has also met executives from other potential LNG suppliers, including Spain's Fenosa, BP, Shell and Norway's Statoil. "Our goal is to sign gas supply contracts in the near future. That would be very important for the further implementation of the entire project, because supply contracts always go hand-in-hand with construction," Sekmokas said.

Passamaquoddy Bay

FERC continues processing Downeast LNG's import project application (Sep 14) — LNG Law Blog

FERC recently sent a data request to Downeast LNG related to FERC's reliability and safety analysis of the developer's proposed LNG import terminal on Passamaquoddy Bay in Robbinston, Maine. FERC also issued a status update on its review of the project.

Webmaster's comment: Downeast LNG is determined to throw money away on their ill-fated project untill it is finally killed. Help kill this project — donate today.

Alaska

Valdez LNG Summit wraps-up (Sep 14) — KTUU-TV, Anchorage, AK

Conference is Big on Inspiration, But Tangible Progress On All-Alaska Gas LIne Hard to Discern

There just seems to be one little problem. Alaska's 35 trillion cubic feet of proven Natural Gas Reserves are all "Stranded" at the North Slope -- where it's not easy to ship the gas out profitably.

...Alaska is no longer the only potential U.S. producer of exported LNG for the world market. Now something like 18 ports -- all over North America -- are vying for the opportunity to liquefy natural gas and ship it overseas. [Red & bold emphasis added.]

Webmaster's comment: Just as Downeast LNG was 6-years late in proposing to import LNG, as compared to the now-existing three new Northeast LNG import terminals, Downeast LNG is still pushing to import unneeded LNG when the market is in exporting LNG — and Robbinston, Maine, is in no practical position to export.

British Columbia

First Nation signs deal aimed at fast-tracking natural gas exports — (The Canadian Press) Nanaimo Daily News, Nanaimo, BC

The B.C. government has struck a deal with the Haisla First Nation that the province says could help fast track a liquefied natural gas plant near Kitimat.

Victoria, Haisla agree to fast-track LNG project — The Vancouver Sun, Vancouver, BC

Coleman said five projects are now on the drawing board, including a smaller plant that would be co-owned by the Haisla.

"There are three in Kitimat, two in Prince Rupert. But I do know there is one other looking at Kitimat and one other looking at Prince Rupert," Coleman said. He identified global energy giant Exxon Mobil as one of the companies. [Red & bold emphasis added.]

Oregon

Idyllic Oregon thrust into energy export debate — Reuters

When federal officials arrived in this scenic but economically struggling port a few weeks ago for hearings on a proposed liquefied natural gas plant, some residents had a sense of déjà vu: it was only six years earlier, in the same auditorium, that they had already discussed the pros and cons of an LNG plant.

But there was one big difference this time around: the 2006 plan was designed to bring gas in, while the current project calls for shipping gas out.

This literal change in direction illustrates how quickly the shale gas glut upended the U.S. energy balance, and how critical ports in the Pacific Northwest could be to the country's re-emergence as an energy exporter, drawn by Asian demand.

When Coos County resident Holly Stamper shuffled up to a microphone at the first meeting on August 27, she carried the weighty EIS for the now-defunct import plan, which explained in its 1,123 pages why the United States needed more natural gas.

"Those arguments now become arguments against the project for exporting our gas," she said, before telling the officials: "Welcome back to Coos Bay. I hope we don't do it again." [Red & bold emphasis added.]

Gulf of Mexico

Total signs LNG deal with South Korea (Sep 13) — UPI

Total's gas affiliate Total Gas and Power Ltd. signed a deal with South Korea's Korea Gas Corp. for the purchase of around 700,000 tons of LNG per year from the Sabine Pass terminal in Louisiana for the next 20 years.

Total signs a commercial agreement with Kogas for LNG (Sep 13) — PennEnergy, Tulsa, OK

The LNG will be lifted following the startup of the Sabine Pass terminal’s liquefaction train 3, which is scheduled for commissioning in 2017.

Alaska

LNG conference: AK must build nat gas pipeline now (Sep 13) — KYUU, Anchorage, AK

Those [at] this week's conference here said that if Alaska does not want to lose its chance to get its share of those contracts, it must act… and it must do so now. The reason time is of the essence is because of the long lead time required for the pipeline. It would take 10 years -- and cost $20 billion dollars -- to build an 800 mile gas line from the North Slope to Valdez… along with a gas liquefaction plant at Valdez.

British Columbia

B.C. and Haisla First Nation sign liquefied natural gas deal — CBC News

The agreement comes as the B.C. government moves to slash spending to make up for a $1-billion budget deficit brought on by plunging North American natural gas prices.

"Currently British Columbia can only sell its natural gas on the North American market where there is ample supply and the commodity price is low, but by opening up new Asian markets where there is greater demand, British Columbian natural gas producers will be able to get up to four times the value," said Chong. [Red & bold emphasis added.]

Haisla Nation signs land agreement for potential LNG terminal — EnergyCity.ca

Yet another group is getting into the natural gas export business in B.C.'s northwest. The B.C. government has signed a deal to allow the Haisla Nation to lease or purchase up to 700 hectares of land along the Douglas Channel that could be used to develop liquefied natural gas terminals.

Another three projects are already in the works for the area near Kitimat, and two have already received export licences: Kitimat LNG and B.C. LNG Douglas Channel. This land could also be used for the expansion of current projects, if not for the construction of a new one.

British Columbia, Native group look to spur LNG development — Reuters

Land deal look to third LNG facility near Kitimat, B.C.

The government of British Columbia and the Haisla First Nation said on Friday they had reached a deal that will see the aboriginal group lead development of what could be a third liquefied natural gas export facility near the port of Kitimat.

The site is just north of the planned Kitimat LNG plant backed by Apache Corp, Encana Corp and EOG Resources Inc.

B.C., First Nation sign deal aimed at fast-tracking natural gas exports — (Canadian Press) Edmonton Journal, Edmonton, AB

The agreement would allow the purchase or lease of land that will enable the Haisla to work with the industry to develop both the plant and an export terminal on Douglas Channel.

B.C., Haisla sign ownership deal for potential gas development site — The Globe and Mail, Toronto, ON

Under the deal, the Haisla have the ability to secure leases to the land for up to 60 years, or the ability to buy it outright. The price of such transactions was not disclosed, but will be based in part on a provincial assessment of the land’s value.

British Columbia seeks to spur LNG with Haisla agreement — Bloomberg

The government sees as many as seven LNG export projects in British Columbia, with the first built as soon as 2015, said Rich Coleman, the provincial Minister of Energy, Mines and Natural Gas. British Columbia is seeking ways to liquefy and export its gas via tankers to Asian markets, where prices are higher than in North America

“Right now, Japan is most interested in receiving more exports of liquefied natural gas,” Chong said. “South Korea is also interested and we’ve also heard China and India are two large emerging markets.”. [Red & bold emphasis added.]

Spectra, BG advance LNG plans with 510-mile Prince Rupert line (Week of Sep 16) — Petroleum News, Anchorage, AK

Houston-based Spectra Energy has signed an agreement with BG Group to develop a new natural gas transportation system in northeast British Columbia to serve the United Kingdom company’s plans for an LNG export facility at Prince Rupert.

Gas pipeline proposed for British Columbia (Sep 13) — UPI

Spectra Energy Corp., which has headquarters in Texas, announced it signed a development agreement with BG Group to build a gas transit system for liquefied natural gas export facilities planned for British Columbia.

Declining natural gas revenues hit BC with $1.14 billion deficit (Sep 13) — The Vancouver Observer, Vancouver, BC

British Columbia faces a $1.14 billion deficit in 2012-2013 due to declining natural gas revenues, a deficit increase of $173 million from its Budget 2012.

Natural gas is a focal point for the government, particularly liquefied natural gas (LNG) development. The province's Natural Gas Strategy includes plans to operate three LNG facilities by 2020.

Oregon

Astoria-Warrenton residents invited to join ‘Frackdown’ campaign to stop LNG exports — The Daily Astorian, Astoria, OR

There will be a screening of “The Sky Is Pink,” a follow up video to Josh Fox's “Gasland,” screened earlier this year in Astoria, snacks and discussion on the state of the campaign to stop liquefied natural gas (LNG) exports in Oregon and its connection to the global effort to ban fracking for natural gas.

United States

Let’s not let L, N and G spell “stupid” [Opinion column] — The Energy Collective

Currently, North America has around 3-5 billion cubic feet per day of excess production. It’s the cause of the four year collapse in NG price that bottomed late this spring. Shale gas developers were afflicted with the same gold-rush mentality that has always characterized the upstream segment of the Oil & Gas Industry: they simply didn’t know when to stop. They finally got the message and slowed down. Those (over)developers of natural gas in North America are free market true believers, disdaining Federal intervention. Now they find themselves in the awkward position of not liking one market, which is performing poorly for their interests. They are asking our government to give them another market, one far higher in price, one that will raise the price of natural gas substantially to everyone. Why should we subsidize them at our expense?

Those shale gas deposits in which the NG is accompanied by significant amounts of natural gas liquids are still being developed. As the produced liquids price similarly to crude oil, those fields are economically viable at lower gas prices. Among the shale plays not currently being developed are a range of gas liquids content. This provides a price governing mechanism. When the price rises, given a similar oil price, more shale gas becomes economically developable, limiting the rise in price perhaps for decades, provided we don’t export the surplus.

This is not a right/left, rich/poor, Republican/Democrat nor pro-markets/anti-markets issue. It’s an issue of providing a second, unjustifiably higher-priced market to folks who just wrecked the market they are in. It benefits a very few at the cost of re-wrecking the economy for the very many. Cheap natural gas is the only really good economic news out there. It’s clearly in the national interest to keep the surplus at home. [Red, yellow & bold emphasis added.]

Study predicts six U.S. LNG export terminals by 2020 (Sep 13) — LNG Law Blog

A newly released study by Bentek Energy, a unit of Platts, predicts that six LNG export terminals will be built in the United States by 2020 due to global demand for LNG and plentiful U.S. shale gas supplies. [Red & bold emphasis added.]

Webmaster's comment: A lot more LNG import terminals were predicted, too, and look how that turned out.

U.S. trade group opposes LNG exports (Sep 13) — UPI

American Public Gas Association President Bert Kalisch said LNG exports would interfere with a push for more energy independence.

"We believe this is an energy security issue," he was quoted by the Platts news service as telling a Chicago gas forum. "America is now in a unique position to make a significant stride toward energy independence. Let's not fumble this opportunity away."

New Brunswick

Canaport LNG among assets Repsol looking to sell to shore up finances — (The Canadian Press) Edmonton Journal, Edmonton, AB

CALGARY - Spanish energy company Repsol isn't denying a report it has received multiple offers for its liquefied natural gas business, which includes a 75 per cent stake in a New Brunswick plant.

Repsol spokesman Kristian Rix says the company is looking to sell its LNG business in its entirety, which includes interests in the Canaport LNG facility in Saint John as well as assets in Trinidad and Tobago and Peru.

The remaining 25 per cent stake in Canaport LNG is held by Irving Oil.

Gulf of Mexico

Cheniere Energy reaches deals with Total for access to addl capacity, services — NASDAQ

Cheniere Energy stated that the agreements will provide Sabine Liquefaction with additional berthing and storage capacity at the Sabine Pass LNG terminal that may be used to accommodate the development of a fifth liquefaction train, provide increased flexibility in managing LNG cargo loading and unloading activity starting with the commencement of commercial operations of the third liquefaction train, and permit Sabine Liquefaction to more flexibly manage its storage with the commencement of the first liquefaction train.

Cheniere enters into agreements with Total for access to additional capacity and services at the Sabine Pass LNG terminal [Press release] (Sep 11) — MarketWatch

"These agreements with Total make further expansion of our LNG export capabilities at the Sabine Pass LNG terminal possible as we will have access to additional capacity required to service another liquefaction train," said Charif Souki, Chairman and CEO. "Additionally, these arrangements will enhance our flexibility for managing berthing and storage capacity at the Sabine Pass LNG terminal while allowing Total to retain some of its rights and access to the facility."

Cheniere Energy moves forward with engineering, design of liquefied natural gas project (Sep 11) — Corpus Christi Caller-Times, Corpus Christi, TX

The funding covers about 18 months of front-end engineering and design for the proposed liquefied natural gas terminal to be built along the La Quinta Channel in San Patricio County, company Vice President of Business Development Bill English told Port of Corpus Christi commissioners Tuesday.

Cheniere's subsidiary, Corpus Christi Liquefaction, filed for permits in late August with the Federal Energy Regulatory Commission to build and operate the terminal. The company also applied for permission from the Department of Energy to export LNG to other countries.

LNG 360 Forum to be held in Houston, USA — LNG World News

The LNG 360 Forum: Latin America & the Caribbean, which will be held from 15-17 January in Houston next year, will bring together major producers, importers and exporters, government representatives, project investors, shippers and other stakeholders to address the commercial and strategic challenges, and share their insights and experiences in the latest developments for capitalizing on LNG partnerships and projects.

Alaska

Alaska LNG Summit to be held in Valdez — LNG World News

A host of industry professionals will converge on the small coastal deep water port town of Valdez to see the existing oil terminal, meet key industry players and discuss the potential of Alaska LNG. Martin Hruska, Director Upstream Development for Excelerate Energy, will sit on a panel to explore Future Infrastructure Needs and Investment Opportunities. Hruska said, “We see great potential for the LNG export market in the United States. My presentation will demonstrate how Alaska can monetize its vast natural gas resources utilizing Excelerate’s Floating Liquefaction Storage and Offloading (FLSO) vessel technology, similar to the Lavaca Bay LNG project currently underway in Texas, providing a timely and cost effective solution”.

The option of Hawaii purchasing LNG from Alaska is a hot topic and the City of Valdez has received confirmation from Barbara Laflin Treat, Program Manager from the Hawaii Gas LNG Program, who will speak about the importance of bringing LNG to Hawaii. She will also explain how high oil prices are impacting Hawaii.

British Columbia

Ewart: LNG plants in B.C. spared the ruckus oilsands exports elicit [Opinion column] — Calgary Herald, Calgary, AB

The selection of Prince Rupert by Spectra Energy and BG Group as the site for a huge LNG plant and export terminal marks the second time in two months that energy companies have chosen it over nearby Kitimat.

In August, Malaysian energy giant Petronas completed a $5.5-billion purchase of Calgary gas producer Progress Energy and announced it will construct an LNG plant at Prince Rupert for the shipment of gas to markets in Asia.

Meanwhile, construction is underway down the jagged coastline of B.C.'s Inner Passage on the Kiti-mat LNG plant - backed by Apache, Encana and EOG - that is set to open in 2015. It will be the first of at least three LNG plants the B.C. government wants in operation by 2020.

Ocean bitumen spills are routinely debated, but B.C. dismisses that risk with LNG: "If it spills, LNG will warm, rise and dissipate into the atmosphere," [B.C. government LNG and natural gas strategy] states.

Unless, it combusts into a fiery inferno.

Of course, the B.C. government collects a lot of money from gas development and, like everyone, it's far easier to make a stand when it's not costing you money.

Apache says Kitimat LNG consortium looking to sell 20 pct equity — Reuters

Apache Corp and its partners in Canada's Kitimat liquefied natural gas (LNG) export project are looking to sell about 20 percent of their stake to large investors, a company executive said Wednesday.

Kitimat LNG is widely considered to be the front runner among five proposed LNG export developments in Canada. Apache's partners are Encana Corp and EOG Resources Inc.

Pipeline for shale gas exports — Energy & Capital, Baltimore, MD

Spectra, BG Group to Export to Asia

The pipeline is intended to move natural gas to an export facility in Prince Rupert, B.C. that BG plans to develop. It is the latest in a slew of recent developments in Canada where energy companies are trying to exploit low-cost natural gas in unconventional reserves and export it to Asian markets in order to make a profit.

Apache may be first on Canada LNG, British Columbia Premier says (Sep 11) — Bloomberg

A group led by Apache Corp may beat rivals including Royal Dutch Shell Plc

“We will have three LNG plants up and running by 2020, the first by 2016,” Clark said in an interview yesterday in Tianjin, China, where she’s attending the World Economic Forum. “Apache, Encana, their project will probably be first to go.”to become the first to export liquefied natural gas from Canada’s Pacific Coast, British Columbia Premier Christy Clark said.

Oregon

Ore. LNG terminal plan now includes power plant — (AP) KCBY, North Bend, OR

A proposed natural gas export terminal at Coos Bay will need a power plant to chill and condense the fuel into the liquid form known as LNG, the developers say.

The Jordan Cove project was initially conceived as an import terminal. But after major finds of natural gas in the United States, the developers shifted to exports.

Hemmingway said the local electricity grid can't supply enough power to cool the natural gas. "It takes tremendous energy," he said.

Proposed LNG energy plant draws high-voltage censure — The World, Coos Bay, OR

Meeting proves low on details, high on irritation

To build a power plant, Jordan Cove needs a permit from the Oregon Department of Energy. But that permit is in addition to, and separate from, Jordan Cove’s permit application to the Federal Energy Regulatory Commission, which looks at the project as a whole.

The public has 10 days left to comment on Jordan Cove’s notice of intent, which angered many of the 20 or so people who attended the meeting. Some claimed, in raised voices, that many locals still don’t know about the Energy Department’s permit.

Jordan Cove previously planned to build an LNG import facility on the North Spit, and even received an import permit from FERC. But the company changed its business model to export early this year, citing market shifts. [Red & bold emphasis added.]

North Bend will share resources with Jordan Cove — The World, Coos Bay, OR

The city council voted Tuesday night to enter a support agreement with the company. The pact enables city personnel to attend special training for potential LNG-related incidents. It also states the city will create an LNG response plan for potential hazards that could affect the city.

"It's important to add: This is not an endorsement of the proposed LNG project," said North Bend Mayor Rick Wetherell.

"We are neither endorsing nor putting down the project."

The city of Coos Bay has entered a similar support agreement with Jordan Cove, North Bend City Administrator Terence O'Connor said.

United States

Peak underground working natural gas storage capacity — U.S. Energy Information Administration (EIA)

Demonstrated peak working natural gas in the East rose by only 14 Bcf (less than 1 percent), but this small increase coincided with the rapid growth of production from the Marcellus Shale. [Red & bold emphasis added.]

Exporting LNG would increase prices, impair US energy independence: APGA — Platts

In a speech at the LDC Midcontinent Gas Forum in Chicago, Bert Kalisch, president and CEO of the American Public Gas Association, said LNG exports would cause US gas price to climb and curb growing demand in the industrial and electric generation sectors.

"We believe this is an energy security issue," Kalisch said. "America is now in a unique position to make a significant stride towards energy independence. Let's not fumble this opportunity away." [Red emphasis added.]

North America

North America may fill up Asia's gas needs [Opinion column] — Business Times, Singapore [Paid subscription]

SINGAPORE'S and, in fact, Asia's energy supply landscape could be fundamentally changed by the "unconventional" natural gas boom in North America of recent years, potentially seeing a major shift not only in sourcing, but also - and critically - in pricing.

New Brunswick

Update 1-GAIL India eyes Repsol assets in Canada, Peru, Trinidad — Reuters

[This same article appears under the Caribbean heading, below.]

GAIL was reported to be interested in Repsol's Canaport LNG terminal in Canada, but Rajeev Mathur, executive director of GAIL, said the company was looking at all of the LNG assets that Repsol was putting up for sale.

"Canaport is just one part of the story; there are many other assets along with it like Peru LNG, like Trinidad (LNG), along with shipping and so many other things," Mathur told reporters on the sidelines of an LNG industry conference on Tuesday. "We are looking at it. If we see some merit, we will take it forward."

Corrected-Oil and gas firms eyeing Repsol LNG assets - sources — Reuters

Repsol launched the sale of liquefied natural gas assets in Canada, Peru and Trinidad and Tobago in July to boost its finances and credit ratings.

Both sources tipped China's Sinopec, Spain's Gas Natural , BG Group, Novatek and Gazprom of Russia as well France's GDF Suez - which could bid with China's sovereign wealth fund CIC - as the companies that have presented bids.

Gulf of Mexico

Sierra Club opposes Cameron Parish LNG plant — (AP) theadvertiser.com

San Francisco-based Sierra Club filed petitions with the U.S. Department of Energy on Thursday in opposition to the company being granted clearance to begin constructing the facility, which will enable Sabine Pass Liquefaction to export LNG on the international market.

The Sierra Club decided to battle federal regulators over all applications from companies interested in selling LNG. Complaints have also been filed against Sempra Energy's Cameron LNG facility.

The environmental group contends that technology like hydraulic fracturing — a process that uses a high-pressure mix of water, sand and chemicals to extract natural gas and oil — leads to air and water contamination.

"We should have adequate protections before exporting gas to China. The natural gas industry does not have to prove or not prove impacts nor jump through additional safeguards that every other industry in the country have to abide by," she said.

Sierra Club believes that arguing against LNG exporting is needed to push state and federal regulators to impose environmentally sound restrictions on the industry.

Caribbean

Update 1-GAIL India eyes Repsol assets in Canada, Peru, Trinidad — Reuters

[This same article appears under the New Brunswick heading, above.]

GAIL was reported to be interested in Repsol's Canaport LNG terminal in Canada, but Rajeev Mathur, executive director of GAIL, said the company was looking at all of the LNG assets that Repsol was putting up for sale.

"Canaport is just one part of the story; there are many other assets along with it like Peru LNG, like Trinidad (LNG), along with shipping and so many other things," Mathur told reporters on the sidelines of an LNG industry conference on Tuesday. "We are looking at it. If we see some merit, we will take it forward."

British Columbia

Spectra Energy, BG Group to build super-size pipeline — The Vancouver Sun, Vancouver, BC

The BG Group has signed a contract for all of the gas, but there is the potential for the pipeline to service more than one LNG terminal. Spectra could significantly increase the capacity by increasing the compression of the gas in the line. A second company, Malaysian energy giant Petronas, recently signed an option to purchase a site on an island adjacent to the BG Group site, Energy Minister Rich Coleman said Monday.

"We have the reserves, that's the key. We have lots of gas. We could probably supply this and half of North America for the next 80 years with what we've got today."

Spectra Energy, BG Group partner on nat gas transportation system — Houston Business Journal, Houston, TX

The large-diameter transportation system will run about 525 miles from northeast British Columbia to BG Group’s potential LNG export facility in Prince Rupert, British Columbia. It is expected to be capable of transporting up to 4.2 billion cubic feet per day of natural gas.

Spectra plans export network for natural gas in Canada — Fuel Fix

The project is the latest in a string of corporate plans to liquefy low-cost natural gas from Canada’s unconventional basins and ship it to energy-starved Asian markets, where it’s more expensive.

“The size of the resource in northeast British Columbia is as big as any of the unconventional plays anywhere in North America,” said Gary Weilinger, Spectra’s vice president of strategic development and external relations. “For the province to reach its potential, we need more markets.”

Spectra & BG to build gas line — Zacks

A number of LNG based infrastructure has been proposed for northern British Columbia, as the region has immense shale-gas deposits. Further, its proximity to the Pacific coast makes LNG development feasible. Among the various gas-liquefaction projects announced so far, the Kitimat LNG’s facility – owned by Apache Corp, Encana Corporation and EOG Resources, Inc. is considered to be most sophisticated, while the remaining are still in their initial development phases.

Gas-handling major proposes pipeline — The Province, Vancouver, BC

Reached at his recently opened Vancouver office, Steve Swaffield, acting president of BG Canada, said the U.K.-based, gas-handling major is actively studying the feasibility of constructing a two-train, LNG export facility to open by 2019 on a site on Prince Rupert's Ridley Island with access to a deepwater port. "I think the total to develop the entire value chain would be in the tens of billions," he said.

Swaffield said the intention is that the entire contents of the Spectra pipeline would supply its LNG export terminal. The line would be built in phases and would be 50 per cent owned by each party.

Government of British Columbia : Premier participates in future of Energy Panel at World Economic Forum [News release] — 4-traders

Premier Clark participated in an hour-long panel session entitled Strategic Shifts: The Future of Energy and discussed British Columbia's valuable natural-gas reserves and government's plans to diversify and expand markets for its clean-energy exports through the development of a liquefied natural gas industry.

Oregon

North Bend to consider agreement with Jordan Cove — The World, Coos Bay, OR

NORTH BEND — The city will consider entering a support agreement with Jordan Cove Energy Partners at its council meeting Tuesday night.

The agreement states Jordan Cove will fund the city’s emergency response preparations for the proposed liquefied natural gas export facility. Jordan Cove would also provide necessary LNG safety training.

Oregon Department of Energy meets on Jordan Cove power plant Tuesday — The World, Coos Bay, OR

The Oregon Department of Energy will hold an informational meeting Tuesday night for the proposed natural gas power plant on the North Spit.

The South Dunes Power Plant would supply energy to Jordan Cove Energy Partners liquefied natural gas export terminal. Proposals show the plant’s location to the east of the terminal.

United States

Update 1-EIA raises U.S. natgas output growth, lowers demand estimate — Reuters

• EIA sees 2012 gas output at record-high 68.86 bcfd
• EIA sees 2013 production setting record for third yea
• 2012 gas demand seen up 3.2 bcfd (4.8 pct) from 2011 (Adds consumption, LNG and price data, background)

EIA expects imports of liquefied natural gas (LNG) to halve in 2012 to about 0.4 bcfd, and remain at that level in 2013, as shippers send more gas to higher-paying markets in Europe and Asia. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG's prospects for success have never been worse, and are projected to slide into oblivion.

North America

Latin America focuses on future LNG requirements — (PR Newswire) SYS-CON Media, Woodcliff Lake, NJ

Securing long term supplies to meet the increasing demand for natural gas has become a top priority for both Latin American countries and their Caribbean counterparts. Both market places are now striving to encourage the installation of new energy sources based on natural gas and to ensure availability and sustainability of energy to meet domestic demand in the long term.

Export license grants are now well within reach; LNG export in North America is becoming a tangible reality and is on the radar as a major source of supply for Latin American importers. Latin American buyers and North American sellers are now in the prime position of forging long-term partnerships and achieving significant commercial success. [Red emphasis added.]

Southeast

LNG importer seeks to export — GPB News

Southern LNG is seeking permission to ship natural gas to non-free-trade counties.

"Five years ago, a lot of investors spent tremendous capital to construct these import facilities which ultimately did not work out for them," Schryver says. "The import facilties more or less became out-dated because of the increase of natural gas being produced here." [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG wants to join the list of import facility investments that 'do not work out for them.'

Gulf of Mexico

Sierra Club files for rehearing and stay of DOE Final Sabine Pass Order — LNG Law Blog

Sierra Club has filed a request for rehearing and stay of the U.S. Department of Energy's Final Order granting Sabine Pass Liquefaction authority to export LNG to nations that do not have a Free Trade Agreement with the United States. Sierra Club argues that DOE should have granted its untimely intervention and that an environmental impact statement that considered increased U.S. gas production for the Sabine Pass LNG export facilities project should have prepared, rather than an environmental assessment.

Gulf Coast LNG Export responds to Sierra Club protest — LNG Law Blog

Gulf Coast LNG Export (Gulf Coast) filed an answer to Sierra Club's protest of Gulf Coast’s pending application at the U.S. Department of Energy (DOE) to export LNG to countries with which the United States has a Free Trade Agreement (FTA countries), as well as non-FTA countries. In its answer, Gulf Coast states that Sierra Club's protest is not relevant to LNG exports to FTA countries and, with regard to LNG exports to non-FTA countries, Sierra Club has failed to overcome the presumption that such exports are in the public interest.

Webmaster's comment: The US Department of Energy considers LNG exports and LNG imports to be in the public interest. Go figure.

Caribbean

Smell of death hits LNG idea (Sep 9) — The Gleaner, Kingston, Jamaica, West Indies

There are clear indications that the long-proposed introduction of liquefied natural gas (LNG) into Jamaica's energy mix could be abandoned.

"My position is that the Government must see a reduction in the region of 30 per cent on electricity or we are not going forward," Energy Minister Phillip Paulwell told The Sunday Gleaner.

But industry insiders say with the present cost of natural gas, plus the cost to establish the infrastructure, Jamaicans would see no more than a meagre 10 per cent reduction in electricity bills with the introduction of LNG.

Will JPS save the LNG project? (Sep 9) — The Gleaner, Kingston, Jamaica, West Indies

Having stuck to the letter of the law and prevented the parent company of the JPS, Marubeni Corporation, from bidding to supply LNG to Jamaica, the Government now seems ready to eat humble pie and beg the firm for help.

[W]ith the qualified bidders offering prices that would not lead to any appreciable decline in the cost of electricity to Jamaicans, it appears negotiations are set to be initiated with Marubeni.

Samsung team to visit Jamaica for LNG talks — Go-Jamaica, Kingston, Jamaica, West Indies

The government had projected to introduce LNG by 2014 but there are doubts that this timeline may be achieved because the administration is yet to secure a supplier of the LNG.

Repsol taking bids on its Atlantic LNG stake — The Trinidad Guardian Newspaper, Port-of-Spain, Trinidad and Tobago, West Indies

Repsol SA (REP), Spain’s largest energy company, will be taking bids for its liquefied natural gas (LNG) assets inclusive of its stake in Point Fortin-based Atlantic on Monday, Repsol chief financial officer Miguel Martinez said in a conference call with Barclays of London last Thursday. In its conference call report acquired by the Guardian, Barclays Capital’s analysts Lydia Rainforth, CFA, and Rahim Karim, said, “The potential sell down of Repsol’s LNG business is likely to prove a competitive process.

Alaska

Summit to showcase Valdez as best for Alaska LNG exports — Alaska Journal of Commerce, Anchorage, AK

A two-day conference in Valdez will explore the potential for developing and marketing Alaska’s liquefied natural gas.

The Alaska LNG Summit is scheduled for Sept. 13 and 14 in Valdez.

The port authority has supported a buried LNG line that would run from the North Slope to Valdez, alongside the trans-Alaska oil pipeline. That route was once permitted by the Yukon Pacific Corp., although it would need new permits now.

British Columbia

Update 1-BG, Spectra planning B.C. pipeline to serve LNG plant (Sep 11) — Reuters

Spectra, which operates pipelines in Canada and the United States, said it hopes to build a 850-kilometer (525-mile) line with the capacity to carry as much as 4.2 billion cubic feet of gas per day from the province's northeast corner to the liquefied natural gas plant planned by BG at the port of Prince Rupert.

Five gas-liquefaction project have so far been proposed for the province's northern Pacific coast to tap Asian demand for the fuel. Kitimat LNG's facility, owned by Apache Corp, Encana Corp and EOG Resources Inc, is seen as the most advanced, while projects planned by Royal Dutch Shell Plc and others are still in their early stages.

BG, Spectra Energy to set up gas pipeline JV in Canada — Reuters

Spectra Energy said BG will contract for the full capacity of the pipeline, expected to be able to transport up to 4.2 billion cubic feet per day (bcfe/d) of natural gas.

Webmaster's comment: For comparison, that volume of gas is equivalent to the capacity of about 3–4 LNG import terminals.

Spectra Energy Corp announces project development agreement with BG Group for new natural gas transportation system in British Columbia [Press release] — Spectra Energy

Spectra Energy Corp (NYSE: SE) today announced that the company has signed a Project Development Agreement with BG Group plc (LSE: BG.L) to jointly develop plans for a new natural gas transportation system from northeast B.C. to serve BG Group’s potential liquefied natural gas (LNG) export facility in Prince Rupert, on the province’s northwest coast. Spectra Energy and BG Group will each initially own a 50 percent interest in the proposed transportation project. Spectra Energy will be responsible for construction and operation and BG Group has agreed to contract for all of the proposed capacity.

The approximately 850-kilometre (525 mile), large diameter natural gas transportation system will begin in northeast B.C. and end at BG Group’s potential LNG export facility in Prince Rupert. The new transportation system will be capable of transporting up to 4.2 billion cubic feet per day of natural gas. The project also will connect with the Spectra Energy system at Station 2 (southwest of Fort St. John), a growing natural gas hub that collects supply from multiple areas of the province and other supply basins in Western Canada.

BG Group inks pipeline deal for LNG terminal — Calgary Herald, Calgary, AB

Swaffield said the intention is that the entire contents of the Spectra pipeline would supply its LNG export terminal. The line would be built in phases and would be 50 per cent owned by each party.

Spectra-BG LNG plant represents sea change for Canadian natural gas — Calgary Herald, Calgary, AB

Gas that has been historically landlocked in North America appears increasingly bound for the high seas.

Spectra, BG make big pipeline bet in the race to B.C.’s coast — The Globe and Mail, Toronto, ON

The pipeline plans serve as an insight into the size of the terminal BG is looking to construct.

The 850-kilometre line would be built with a capacity of 4.2 billion cubic feet per day. When it is full, the new Spectra-BG pipe [would] carry more natural gas than Ontario and Quebec burn today on a daily basis. The tremendous size being contemplated is the latest indication of how much gas companies believe they can extract in British Columbia and how substantial plans are for the province to become a globally significant player in gas markets. [Red & bold emphasis added.]

Spectra proposes natural gas pipeline across northern British Columbia — The Vancouver Sun, Vancouver, BC

Spectra and the BG Group, the world’s leading operator of liquefied natural gas (LNG) tankers, are proposing a 48-inch pipeline, the largest size currently in use in North America. It is capable of delivering 4.4 billion cubic feet of natural gas per day to Prince Rupert, more than all the gas currently being produced in B.C. The BG Group has plans for an LNG plant of an undisclosed size at Prince Rupert’s Ridley Island industrial site.

The BG Group has signed a contract for all of the gas, but there is the potential for the pipeline to service more than one LNG terminal. Spectra could significantly increase the capacity by increasing the compression of the gas in the line. A second company, Malaysian energy giant Petronas, recently signed an option to purchase a site on an island adjacent to the BG Group site, Energy Minister Rich Coleman said Monday.

The BG Group and Petronas proposals are the fourth and fifth LNG plants to be announced for the northwest. If only four of them go ahead, it would mean tripling British Columbia’s current natural gas production of three billion cubic feet a day to nine billion cubic feet just to meet their needs. [Red & bold emphasis added.]

Spectra, BG, plan gas pipeline across northern B.C. — CBC News

Spectra Energy and BG Group are joining the throng of companies aiming to export Canadian natural gas to Asia, announcing plans Monday to build a pipeline across northern B.C.

New Brunswick

India's GAIL may look to buy Repsol's stake in Canada LNG project -report — (Dow Jones Newswire) Fox Business

GAIL Ltd. may consider buying a stake in Repsol SA's Canaport LNG project in Canada, The Times of India reported Saturday. [Red, yellow & bold emphasis added.]

GAIL may buy Repsol stake in Canada LNG project — MarketWatch

Spain's Repsol is seeking buyers for its 75% stake in Canaport LNG, valued around 550 million Canadian dollars ($562.06 million), [The Times of India] said.

Southeast

Elba Island LNG facility asks permission to export — Savannah Morning News, Savannah, GA

Late last month Southern LNG filed with the Department of Energy for long-term export of domestic natural gas from Elba to non-free-trade countries. The request follows a similar one made in May to export to free trade countries. That earlier request was granted in June.

Liquefied natural gas, or LNG, is currently imported at Elba where it is gasified and sent out via pipeline. These requests are the first steps in allowing the facility to pipe in natural gas from the booming domestic shale gas industry, convert it to liquid and ship it around the world.

Elba is just one of 17 U.S. projects that have requested export permission from the Department of Energy. The company’s filings put the impact of the Elba exports on domestic natural gas prices at less than 5 percent. [Red & bold emphasis added.]

Webmaster's comment: Virtually all US LNG imports are now being received only at Elba Island in Georgia and Everett LNG in Massachusetts, and even those imports are falling significantly. Most LNG currently being imported into the US are required to fulfill long-term contract obligations, not due to need for natural gas. The US is drowning in what government and industry have labeled as a 100-year domestic naturtal gas supply.

Downeast LNG is merely throwing good money after bad on a project that has never been needed, even as was evident in 2005 since it was six-years behind three other regional LNG import projects, and has always been improperly sited according to the LNG industry's own terminal siting best safe practices (see LNG Terminal Siting Standards Organization for more on SIGTTO best practices).

Gulf of Mexico

FERC posts status of Trunkline LNG export terminal project (Sep 6) — LNG Law Blog

The status of FERC's review of Trunkline LNG's proposed Lake Charles LNG export project is outlined in conference call notes posted on eLibrary under Docket No. PF12-8.

Caribbean

Project update for the Aguirre Offshore GasPort project posted on FERC website (Sep 6) — LNG Law Blog

FERC has posted on eLibrary under Docket No. PF12-4 an update on the status of its review of the Aguirre Offshore GasPort LNG import terminal project to be located offshore near Guayama, Puerto Rico.

US-bound natural gas exports tumble—EIA (Sep 7) — The Trinidad Guardian Newspaper, Port-of-Spain, Trinidad and Tobago, West Indies

Webmaster's comment: This same article appears under the United States heading, below.

US-bound gas exports from Trinidad and Tobago fell 19 per cent to 54.1Bf3, according to the latest figures from the US Energy Information Administration (EIA). Mexican exports of natural gas via pipeline to the US fell 83 per cent year-on-year in the first half of 2012 to 194Mf3 (5.49Mm3). During the same period imports from the US rose 14.5 per cent to 284Bf3 (8.04Bm3).

Webmaster's comment: The US is rapidly moving toward zero LNG imports. Downeast LNG president Dean Girdis and Yorktown Energy Partners are no financial wizards, or they would have already figured out that their project is destined to utter failure and economic embarrassment. Would you trust them with your money?

British Columbia

CIBC’s Prentice decries Canada lagging Asian trade (Sep 7) — Bloomberg

Canadian companies such as natural gas producer Encana Corp. (ECA) risk being left behind in the race to supply Asian markets as Australia and other countries get there first.

Royal Dutch Shell Plc and Encana, both involved in developing separate LNG export terminals on Canada’s west coast, highlight the risks Canada faces. While demand for gas is growing faster in China than any other large market and prices for the fuel are as much as seven times higher than in Canada, it may be take another half decade before either company can profit from their proposals.

EOG Resources: 'Not at all sanguine' about natural gas, NGL markets (Sep 6) — Seeking Alpha

Kitimat LNG project facing uncertainties.

Kitimat LNG project jointly owned by EOG, Apache Corp. (the operator) and EnCana Corp.is apparently still in search of off-take arrangements. The project will not go ahead until the consortium gets an oil-indexed contract with a Far-Eastern buyer for the majority of the off-take. According to Mark Papa, the discussions with potential buyers have "gone certainly slower than any of us expected" and he "wouldn't even hazard to guess as to the time frame and as to how it is going to move forward."

Oregon

FERC posts staff presentation on Jordan Cove liquefaction project (Sep 6) — LNG Law Blog

FERC has posted on its website a presentation from the public scoping meetings held recently in Oregon for the Jordan Cove Liquefaction Project. The presentation contains information about the Project and can be found on eLibrary under Docket No. PF12-7.

United States

Natural gas supplies continue to build despite price rally [Press release] (Sep 7) — (Marketwire) Business Review USA

Since hitting a decade low of $1.90 per million British thermal units in April natural gas prices have rallied approximately 47 percent. While prices have rallied sharply, natural gas supplies have also continued to grow despite producers slashing the number of natural gas rigs. Data from Baker Hughes shows that the number of rigs drilling for natural gas has fallen to 473 from 895 a year ago. At the same time oil drilling rigs have surged by 355 from a year ago, this is key factor as roughly a quarter of natural gas production in the U.S. is a byproduct of oil drilling according to the EIA. Natural gas stocks are currently 14.6 percent higher than last year, and 12 percent higher than the five-year average. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG is oblivious to market realities.

US-bound natural gas exports tumble—EIA (Sep 7) — The Trinidad Guardian Newspaper, Port-of-Spain, Trinidad and Tobago, West Indies

Webmaster's comment: This same article appears under the Caribbean heading, above.

US-bound gas exports from Trinidad and Tobago fell 19 per cent to 54.1Bf3, according to the latest figures from the US Energy Information Administration (EIA). Mexican exports of natural gas via pipeline to the US fell 83 per cent year-on-year in the first half of 2012 to 194Mf3 (5.49Mm3). During the same period imports from the US rose 14.5 per cent to 284Bf3 (8.04Bm3).

Webmaster's comment: The US is rapidly moving toward zero LNG imports. Downeast LNG president Dean Girdis and Yorktown Energy Partners are no financial wizards, or they would have already figured out that their project is destined to utter failure and economic embarrassment. Would you trust them with your money?

Mexico

Peru LNG ships cargo to Mexico (Sep 7) — LNG World News

Peru LNG shipped a cargo of liquefied natural gas to Mexico’s Manzanillo terminal on Thursday, according to PeruPetro S.A.

New Brunswick

Gas Natural hires Citibank for Repsol LNG asset bid next week: report — Platts

Gas Natural's CEO Rafael Villaseca said in July that Repsol had approached the company to see if it was interested in acquiring the assets.

Madrid-based Repsol has a relatively modest portfolio of LNG assets, but the major has been growing the business in recent years and the unit generated 8% of its operating earnings last year. The company controls 75% of the Canaport LNG regasification terminal in eastern Canada, where it is contracted for 100% of the plant's capacity, selling gas in the US Northeast since 2009. [Red & bold emphasis added.]

Gulf of Mexico

Cheniere files permits to build terminal, export LNG — Corpus Christi Caller-Times, Corpus Christi, TX

Cheniere Energy has filed for permits from the federal government to build its proposed liquefied natural gas terminal in San Patricio County

Cheniere proposes processing about 1.8 billion cubic feet per day of LNG at the facility, drawn from sources including the gas-rich Eagle Ford Shale formation about 65 miles northwest of Corpus Christi.

Cheniere once considered an LNG import facility at the same location. The import project received full approval from the federal government before plans were shelved because of market shifts. [Red emphasis added.]

New applications filed at DOE to export LNG to non-FTA countries — LNG Law Blog

Several applications to export LNG to nations that do not have a Free Trade Agreement with the United States were recently filed at the U.S. Department of Energy (DOE):

Gulf LNG Liquefaction filed an application to export LNG from its LNG terminal in Pascagoula, Miss. over a 20-year period up to 11.5 million tons per year (approximately 1.5 Bcf/day).

Southern LNG Company, L.L.C. filed an application to export LNG from its Elba Island LNG terminal outside Savannah, Ga. over a 20-year period up to 4 million tons per year (approximately 0.5 Bcf/day).

Cheniere Marketing, LLC (Cheniere) filed an application to export LNG from the proposed Corpus Christi LNG terminal near Corpus Christi, Texas over a 22-year period up to 782 million MMBtu per year (approximately 767 Bcf/year).

Webmaster's comment: Gulf LNG in Pascagoula was brand new in October 2011. At the ribbon-cutting ceremony, there was much fanfare about how the import terminal would benefit the US by providing natural gas to 'Mississippi, the US, and beyond.' The words did not match reality — just like Downeast LNG president Dean Girdis' verbal flights of fancy.

Alaska

Report guides potential North Slope LNG producers through federal regulations (Sep 4) — AlaskaPublic.org

Larry Persily is the Federal Coordinator for the Alaska Natural Gas Pipeline and authored the report. He called it a tool for any company that, in the future, chooses to pursue a pipeline – regardless of its destination.

“Whether you build a pipeline from the North Slope to the Canadian border to serve North American markets, or you build a pipeline from the North Slope to tidewater in Valdez or Kenai somewhere, to serve Asian markets. All these environmental permitting issues are going to be the same,” Persily said.

United States

USA: Six LNG cargoes imported in July — LNG World News

Three cargoes were delivered to Everett LNG terminal while the Elba Island terminal received two cargoes.

The Sabine Pass LNG terminal also received one cargo in July.

U.S. [LNG] imports have been declining steadily as shippers send LNG to higher-paying markets in Europe and Asia.

Hawaii

Is liquefied natural gas a viable option? (Sep 2012) — Hawaii Business, Honolulu, HI

Some people call it a partial energy solution for Hawaii, while others dismiss it as just another dirty fossil fuel blocking the path to a renewable energy future

Fesharaki points out that LNG infrastructure includes a lot of costly decisions. One option, he says, is to choose traditional onshore regasification and storage. These facilities would probably have to be at Kalaeloa on Oahu’s southwest tip, but it’s not clear if there’s enough room for them. They could also cost upward of $1 billion to develop, especially if we have to dredge the harbor to accommodate a large LNG carrier. Another option is a vessel called a floating storage regasification unit (FSRU). This is essentially an LNG carrier with onboard regasifiers.

Northeast

Marcellus, Eagle Ford ready with more gas, Barclays finds — NGI's Shale Daily [Paid subscription]

The Marcellus and Eagle Ford shales have exactly what the U.S. gas market doesn't need right now: more gas on the way, according to natural gas analysts at Barclays Capital. They titled their latest note -- an analysis of the effects of upcoming pipeline debottlenecking in the two plays -- "Unleashing a Caged Monster." [Red, yellow & bold emphasis added.]

Webmaster's comment: The pipeline constraints that Downeast LNG president Dean Girdis claims cannot be overcome are actually being overcome; a "caged monster" is about to humiliate Girdis and his argument.

Pennsylvania unconventional gas output soaring — NGI's Shale Daily [Paid subscription]

The fourth iteration of the Pennsylvania Department of Environmental Protection's (DEP) biannual production report issued last week indicated that natural gas production from unconventional wells totaled 894.8 Bcf during the first six months of this year, a figure that includes Marcellus Shale wells along with some targeting the Utica Shale and other formations. Operators also reported producing 672,550 bbl of condensate and 49,194 bbl of oil from January through June.

Gulf of Mexico

Dow Chemical LNG re-export application noticed — LNG Law Blog

Dow Chemical Company’s (Dow) application to the U.S. Department of Energy (DOE), requesting blanket authorization for a two year period to export up to 390 Bcf of LNG that previously been imported from foreign sources, has been noticed in the Federal Register. Dow seeks authorization to export the LNG from the existing Freeport LNG terminal on Quintana Island, Texas, to any country with the capacity to import LNG via ocean-going carrier and with which trade is not prohibited by U.S. law or policy.

Freeport applies to US FERC to build Texas LNG export project — Platts

Freeport LNG Development has applied to add liquefied natural gas export facilities to its import terminal at Quintana Island, Texas, according to documents filed with the US Federal Energy Regulatory Commission.

"The need for the project is supported by projected trends concerning US gas demand and supply, which in recent years have supported LNG exports," Freeport said in its application, which was released late Friday. [Red & bold emphasis added.]

Alaska

Legislators ask Parnell for local guarantees on LNG export renewal (Aug 31) — Alaska Journal of Commerce, Anchorage, AK

Seven Alaska legislators asked Gov. Sean Parnell to seek explicit guarantees in a renewal of a federal license for liquefied natural gas exports from Alaska that local natural gas needs will be met by producers before gas is exported.

What prompted the request was a contract dispute over commitments made by Marathon Oil to supply gas to a new gas storage facility being developed to meet local utilities’ winter peaking needs.

Webmaster's comment: In other words, LNG exporters don't give a hoot about American's needs for natural gas, even in the LNG facility's host area. Profit trumps everything.

Oregon

Company plans to expand natural gas pipeline in Cowlitz County — The Daily News, Longview, WA

Northwest Williams Pipeline hopes to add 35 miles of new pipeline through Cowlitz County as part of a 140-mile statewide expansion to send gas to a proposed liquefied natural gas export terminal near Astoria.

The 36-inch diameter pipe running through Cowlitz County would carry regular natural gas in vapor form, not the superchilled liquid version known as LNG. The gas would come from Canada, through Washington and enter Oregon through a link under the Columbia River near Woodland.

The new LNG plans in Oregon have been retooled to export LNG rather than import it from foreign sources as previously planned. In addition to the Warrenton, Ore., site near Astoria, another LNG export terminal is planned near Coos Bay, Ore.

Five keys to the Pacific Northwest’s natural gas export debate — OPB (Oregon Public Broadcasting)

The Federal Energy Regulatory Commission is re-starting its environmental review for Jordan Cove, this time considering it as a potential export facility. Earlier, the agency known as FERC reviewed a different proposal, to import liquefied natural gas. The feds withdrew their authorization for the project in April, after Jordan Cove announced it intended to export natural gas to Asia, where prices are currently five to seven times higher than in the United States.

Here’s a rundown of the key issues that members of the public raised at environmental scoping meetings — and which will likely dominate the debate over Jordan Cove.

1. The use of eminent domain… for an export pipeline
2. The big quake
3. Job Creation
4. Water quality and wild rivers
5. Endangered species and federal forests

However, The National Marine Fisheries Service appears less willing to follow FERC’s lead on the Jordan Cove project. The fishery agency challenged FERC’s decision to permit Jordan Cove as an import facility, and has announced it’s not cooperating with the effort to draft a new environmental impact statement. NMFS has stated that the LNG project could harm coastal coho, green sturgeon, and a potentially endangered smelt population. [Red emphasis added.]

Mexico

US-bound natural gas exports tumble in first half — Business News Americas, Santiago, Chile

Mexican exports of natural gas via pipeline to the US fell 83% year-on-year in the first half of 2012 to 194Mf3 (5.49Mm3), according to the latest figures from the US Energy Information Administration (EIA).

During the same period imports from the US rose 14.5% to 284Bf3 (8.04Bm3). [Red & bold emphasis added.]

Webmaster's comment: In case Downeast LNG is reading this: the US has a decades-long natural gas glut. Downeast LNG's proposed additional LNG infrastructure is moot

U.S. Shale Glut Means Gas Shortage for Mexican Industry: Energy — San Francisco Chronicle, San Francisco, CA

The bottleneck in Latin America’s second-largest economy is the latest energy whiplash stemming from the U.S. shale gas boom. Mexican gas prices are tied to rates in its northern neighbor, where soaring supplies from shale fields drove gas to a 10-year low and reduced Mexico’s wholesale price 32 percent in the past year. Manufacturers can’t get enough of the energy.

The pinch illustrates how the global supply balance was rocked by advanced extraction techniques that have buyers in the U.S. paying about one-eighth the price Asian nations are charged for gas. At the same time, nations like Mexico that link prices to the U.S. Henry Hub benchmark are seeing rapid demand growth compared with Europe, where most rates are tied to oil.

U.S. exports by pipeline to Mexico reached an all-time high of 52.2 billion cubic feet in May as yields from shale formations drove U.S. output. [Red & bold emphasis added.]