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Passamaquoddy Bay & LNG

Nova Scotia

Partnerships key to Goldboro LNG success — Guysborough Journal, Guysborough, NS

In addition to the partnership with MODG that helped get the Goldboro LNG plans to this stage, Pieridae Energy has also established and is pursuing a number of private-sector partnerships. The federal government will also be involved in terms of the regulatory process.

During an interview with The Journal Sunday, Hines said the potential business partners that Pieridae is in talks with “are all significant partners across the globe.”

Webmaster's comment: Hines' remark resembles defunct-Quoddy Bay LNG president Don Smith's bloviating inaccuracies.

Goldboro LNG and the legacy of Kevin Dunn — Guysborough Journal, Guysborough, NS

The proponents of Goldboro LNG have “ a very focused window of opportunity,” he noted.

East Coast

US Northeast gas pipelines weather storm despite power outages (Oct 30) — Platts

In the aftermath of Hurricane Sandy, US natural gas pipelines and liquefied natural gas terminals seem to be faring well, despite some power and communication problems, officials said Tuesday.

Caribbean

LNG and future power generation — The Gleaner, Kingston, Jamaica, West Indies

The advantages of CNG include reduced pre-shipment preparation, no requirement for ultra-low-temperature liquefaction, thickly insulated transport vessels, and no need for regasification at its destination.

CNG is considered to have a clear advantage over LNG for delivery of modest-size quantities of gas over relatively short distances.

The International Energy Agency estimates that with proximity to sources of gas and relatively short transport distances, the supply cost of CNG would be one-half that of LNG.

Although the new generators are normally referred to as being designed for LNG as fuel, in reality they are designed to burn natural gas and will be operationally indifferent as to whether the gas was once liquefied or super-compressed.

British Columbia

Editorial: Pathways — Terrace-Standard, Terrace, BC

At last count, there are four pipelines planned to feed proposed liquefied natural gas (LNG) plants in Kitimat and in Prince Rupert and one oil pipeline.

Oregon

Court ruling a setback for Oregon pipeline — Natural Resource Report, OR

The Oregon Court of Appeals rejected a motion to force Clatsop County to allow Oregon LNG to build 41 miles of pipeline through the county. The pipeline would carry liquefied natural gas [sic; natural gas] to a proposed export terminal in Warrenton, near the mouth of the Columbia River.

U.S. Senators request more time for scoping comments on Oregon LNG export project — LNG Law Blog

Senators Ron Wyden (D-OR) and Jeff Merkley (D-OR) have requested that FERC extend the deadline for comments on the scope of FERC's environmental review of the Oregon LNG export terminal and related pipeline project from November 8, 2012 to January 8, 2013.

Numerous comments filed on scope of Environmental Review of Jordan Cove LNG export terminal — LNG Law Blog

Comments from a wide range of interested parties have been filed at FERC on the scope of its environmental review of the Jordan Cove Energy LNG export terminal and related pipeline project. Commenters include the State of Oregon, the U.S. Environmental Protection Agency, environmental groups, and various individuals.

United States

Gas boom means U.S. exports grow fastest rate since ’70s: Energy — Bloomberg

The natural gas glut that’s straining drillers is creating a bonanza for pipeline operators, spurring the biggest increase in exports to Mexico and Canada since the 1970s.

Exporting to neighboring countries allows pipeline companies and gas producers to reach new markets without the risk of the LNG trade, said Judith Dwarkin, chief energy economist at ITG Investment Research in Calgary.

The country will be a net exporter in about a decade, according to the department’s data. Imports from Canada have fallen to 8.2 billion cubic feet a day this year, from 10.4 billion in 2007. Imports from Mexico have fallen to less than 1 million cubic feet a day this year, from 148 million cubic feet a day in 2007.

Exports last year were driven by a 49 percent jump in shipments to Mexico and a 26 percent increase in shipments to Canada, according to the department.

U.S. producers in Pennsylvania’s Marcellus Shale have plenty of cheap gas and are closer to Canada’s big markets, said Martin King, an analyst with FirstEnergy Capital Corp. in Calgary.

About one-third of the planned exports will come from reversing or expanding existing border crossings. [Red, yellow & bold emphasis added.]

Webmaster's comment: Goldboro LNG in eastern Nova Scotia plans on receiving one-third of its natural gas from the US — by reversing the flow of the Maritimes & Northeast Pipeline.

Downeast LNG has no more substance than a Haloween phantom.

Passamaquoddy Bay

LNG: Ooops! Downeast LNG stumbles again. (Oct 25) — The Bay of Fundy Explorer

Downeast LNG has obviously and carelessly pasted boilerplate text from a completely unrelated LNG project into its response to FERC. The EcoEléctrica LNG terminal near Peñuelas, Puerto Rico, is very different from the proposed Downeast LNG terminal in Robbinston, Maine. The settings and safety issues are different. [Red & bold emphasis added.]

Maine

Presque Isle hospital first in state to convert to compressed natural gas (Oct 27) — Bangor Daily News, Bangor, ME

XNG will be the first company in Maine to haul CNG for heating use, and will provide the trailers, decompression station, CNG, and do all of the hauling. The hospital’s supply of CNG will come from the northeastern United States. XNG trucks with tube trailers will transport the fuel from a new CNG compression station being built in Baileyville in Washington County. [Red, yellow & bold emphasis added.]

Webmaster's comment: There is no shortage of natural gas in Maine, New England, the Northeast, or the US. Downeast LNG is hallucinating.

MaineGeneral signs 10-year deal with Maine Natural Gas for new hospital heating — Kennebec Journal, Augusta, ME

Hays said the hospital had originally planned to use a liquefied natural gas system, but piped-in gas is estimated to save more than $250,000 in infrastructure costs.

Brunswick-based Maine Natural Gas already has state Public Utilities Commission approval to distribute gas anywhere in Maine where a gas pipeline does not already exist.

Canada

Exxon favors gas over expensive oil sands in M&A deals — Bloomberg Businessweek

Three of the five largest energy acquisitions announced by foreign buyers in Canada this year, valued at a combined $9.8 billion, were for natural gas assets, according to data compiled by Bloomberg. The trend will continue next year as liquefied natural gas developers move closer to commissioning projects, said Robert Mark, who helps oversee C$4.5 billion ($4.5 billion) at MacDougall, MacDougall & MacTier Inc. in Montreal.

Nova Scotia

LNG plan gives hope to Goldboro families (Oct 25) — The Chronicle Herald, Halifax, NS

“[Y]ou can’t blame people for getting their hopes up. But we’ve seen a number of proposed megaprojects go down and people are cautious with their optimism. It’s like the boy who cried wolf.”

“It’s not just a local thing. Seeking these big projects is like prospecting for gold. We should invite them, by all means, to make proposals and try, but we should avoid getting our hopes up.”

Caribbean

Trinidad and Tobago Energy Minister outlines LNG export changes — Oil & Gas Journal [Subscription]

Trinidad and Tobago, a major LNG exporter in the Western Hemisphere, is changing its emphasis from spot sales to large Atlantic Basin customers to contracts with Caribbean and South American nations eager to move to gas from imported diesel and fuel oil for electricity generation, the country's energy minister said. "We like to think of ourselves as the Atlantic Basin's LNG pioneer," Kevin C. Ramnarine told an American Gas Association Natural Gas Roundtable breakfast. "But there's no escaping the possibility that the United States, with its considerable shale gas resources, could become the region's LNG export leader if it decides to." He noted that as recently as 3 ye... [Red & bold emphasis added.]

Alaska

Southcentral utilities plan to import gas to meet projected shortfall — Alaska Journal of Commerce, Anchorage, AK

Gas fields in the region, which date from the 1960s, are being depleted, and production will be inadequate to meet local demand for space heating and power generation by as soon as 2014, said Lee Thibert, vice president for strategic planning for Chugach Electric Association, the state’s largest electric utility.

The group has also been in discussions with ConocoPhillips on converting its LNG plant at Kenai to a regasification and import facility. The plant is still making LNG and shipping it to Japan, but the LNG export license for the plant expires next March.

Webmaster's comment: This is an example of how the free market can sometimes backfire on public interests, in favor of big business; short-term big business profits vs. long-term energy security. The Federal Government has allowed Southcentral Alaskan natural gas to be shipped to Asia since 1969. Now, the area gas supply is nearly exhausted, so Southcentral Alaskans now may have to import LNG, or freeze.

Utilities move forward on two options for gas imports (Oct 27) — Anchorage Daily News, Anchorage, AK

With natural gas supplies from Cook Inlet set to fall short of local gas demand by 2014 or 2015, the time has come to start arranging imports to supplement that gas, Southcentral utility executives told the Regulatory Commission of Alaska last week.

Opening of huge Russian field drives another nail into Alaska's gas coffin (Oct 28) — Alaska Dispatch, Anchorage, AK

[W]ith Bovanenkovo coming online in Russia's Arctic, floating LNG production platforms starting to be employed offshore in the Asia-Pacific region, and continuing plans in the Lower 48 and Canada to ship shale gas via LNG tankers to foreign markets, one has to wonder if Alaska's gas reserves will get to any market anytime soon.

British Columbia

Pipeline sea route possible — Terrace Standard, Terrace, BC

The final leg of a planned natural gas pipeline from northeastern B.C. to Prince Rupert could very well go underwater.

One of the water routes would have the pipeline enter the ocean in the Kitsault area and the other in the Nasoga Gulf area, just north of the Khutzeymateen grizzly bear sanctuary. The land route would run south of the Nasoga route.

Project comes out of its shell — Terrace Standard, Terrace, BC

Details of one of the pipeline projects to supply a planned liquefied natural gas (LNG) plant at Kitimat emerged last week as officials from Coastal GasLink held public sessions and met with local government officials.

The TransCanada Corporation pipeline would run 700km from gas fields in northeastern B.C. to an LNG plant, called Canada LNG that is owned 40 per cent by Shell Canada with state-owned Korea Gas, state-owned Petro-China Company and Mitsubishi each taking 20 per cent.

At 48 inches in diameter, the pipeline would deliver at least 1.7 billion cubic feet of gas a day to the Canada LNG plant which, based on two processing units, is scheduled to initially export as much as 12 billion tonnes of LNG a year.

United States

The elusive promise of cheap energy — DC Bureau, Washington, DC

...Today domestic gas supplies are so high and prices so low that energy companies are scrambling for clearance to export it to countries that will pay three or four times as much for it.

But granting export permits to all who seek them could be a dangerous mistake. The U.S. Department of Energy, among others, suspects that rampant exporting would trigger domestic price spikes that would hurt consumers, electric utilities and manufacturers. Over time, more expensive gas would undercut the competitiveness of U.S. manufacturing worldwide.

The problem is that energy company applicants seek clearance to export a total of 48 billion cubic feet of gas a day – well over half of all U.S. gas consumption. A preliminary study by the DOE found the export of 12 bcf per day would raise prices as much as 9 percent. Cheniere is authorized to export up to 2.2 bcf per day from Sabine Pass.

Apache Corp. and Royal Dutch Shell have already announced plans to ship LNG to Asia from the town of Kitimat on Canada’s Pacific Coast. On Canada’s Atlantic Coast, Pieridae Energy Canada plans exports to Europe and India from a site north of Halifax, Nova Scotia.

“Currently every major pipeline is looking for ways to bring Marcellus gas to Canada,” Alfred Sorensen, president of Pieridae, told DCBureau.org. “Once the gas crosses the border it is no longer ‘U.S. gas’ and is not subject to the U.S. restrictions currently in place.” [Red & bold emphasis added.]

Qatar seeks US foothold to sustain LNG dominance — Gulf Times, Doha, Qatar

Qatari producers are looking abroad as a moratorium limits domestic expansion and amid a boom in new projects from the US to Australia. The increased volume may help offset lower income as users from Tokyo Gas Co to Italy’s Edison seek to reduce costs under supply contracts linked to crude prices.

“The government has temporarily taken away the ability to expand production in Qatar,” Trevor Sikorski, director of European energy markets research at Barclays in London, said on October 4 by phone. “If you are facing price risk, you have to do something on volume.”

Mexico

16th Annual Mexican Energy — Platts

New Perspectives on Energy Policy and Gas Supply for Economic Growth

[This is a conference announcement.]

Nova Scotia

New Brunswick

Shale gas produces fractured lines in New Brunswick — Financial Post, Don Mills, ON

While some analysts have dismissed New Brunswick’s potential as an oil and gas hub, two reports last week once again brought the issue of shale gas development to the forefront.

“While there is a belief that New Brunswick does possess large scale shale gas deposits, the potential still needs to be calibrated through more exploration and testing,” Mr. LaPierre wrote in the report. “A moratorium will only serve to delay that important study and postpone making a determination if there is a business case for shale gas extraction, how it can be done on an environmentally sound basis, and how proposed regulations can be implemented to have the desired effect.”

Spanish giant Repsol SA., which operates the LNG import terminal in Saint John, is reportedly looking to sell its stake and has at least six players — from China, Spain, the United Kingdom, Russia and France — interested in the asset.

LNG expert dismisses Goldboro export plant as long shot (Oct 25) — CBC News

[This same article appears under the Nova Scotia heading, above.]

Shook does not believe Pieridae would be able to use shale gas from the United States under the North American Free Trade Agreement (NAFTA).

The company could import the gas into Canada, but would not be able to export it to a non-NAFTA country without a special exclusion permit, which is difficult to obtain, she said.

The president of the Atlantica Centre for Energy contends Canaport LNG's import terminal in Saint John would make a better location, due to existing infrastructure and proximity to natural gas sources in the United States.

People interested in buying Spanish oil giant Repsol's 75 per cent-share of Canaport, which is co-owned by Irving Oil Ltd., have been visiting the site in recent weeks, said Herron.

He believes the potential buyers are primarily interested in converting Canaport into an export terminal. [Red, yellow & bold emphasis added.]

Passamaquoddy Bay

Judge rules Quoddy Bay LNG lease invalid — The Quoddy Tides, Eastport, ME

US Department of Interior (DOI) Interior Board of Indian Appeals (IBIA) Law Judge Deborah Luther ruled on October 4 that a 2005 lease agreement between the Pleasant Point tribal government and now defunct Quoddy Bay LNG was invalid from the start. The Bureau of Indian Affairs (BIA) violated its own regulations, so the lease "never went into effect as a matter of law.," the judge ruled.

...Passamaquoddy tribal member and NN organizer Vera Frances states, "We are pleased with this closure, and know now what we knew then — that the ground lease was always invalid. But what we need to do today is to move on and close this chapter with grace and deep appreciation for that which has always sustained us — Passamaquoddy Bay." [Red, yellow & bold emphasis added.]

Northeast

Dominion, shipper cancel agreement for Cove Point LNG output (Oct 25) — Bloomberg Businessweek

Dominion Resources Inc. (D) said it and an unnamed shipping company terminated an agreement for liquefied natural gas to be processed and shipped from the company’s planned Cove Point export facility.

Dominion is in talks with other potential customers and expects to complete agreements for the terminal’s planned capacity by the end of the year, Dan Donovan, a spokesman for Dominion Energy, said in a telephone interview today. [Red emphasis added.]

Gulf of Mexico

Company to build $2 billion natural gas plant in Port Lavaca — Victoria Advocate, Victoria, TX

Excelerate Energy has announced it will build a liquefied natural gas terminal in Port Lavaca in its bid to become one of the first American energy companies to export natural gas.

"Port Lavaca provides us with the unique opportunity to further capitalize on our position as a market leader in floating LNG (liquefied natural gas) solutions," said Rob Bryngelson, Excelerate Energy president and CEO.

Cheniere considers 50% expansion of LNG plant at Sabine Pass (Oct 25) — Bloomberg Businessweek

Cheniere Energy Inc., the first company to win approval to export gas from the continental U.S., is considering a 50 percent expansion of capacity at its Sabine Pass terminal in Louisiana as LNG demand rises.

“When we marketed the project at Sabine Pass, clearly we had more demand than we could satisfy,” Nicolas Zanen, the vice president of trading at Cheniere, said in an interview in Singapore today. “It makes sense to look at expanding to a fifth and a sixth” train for liquefying gas, he said. No timeline for enlarging the facility has been set, he said.

“Customers come to us and say they want to buy LNG from the U.S., they want to buy based on Henry Hub,” Zanen said. “We have a good idea of what the demand is like. The U.S. gas price is very cheap, and they want to benefit from that. They want to diversify as well.”

Webmaster's comment: Cheniere's fire-sale pricing is already building demand for more, even before the LNG is available. What will this do to US natural gas prices?

Alaska

Southern Alaska utilities seek proposals for gas deliveries (Oct 25) — Platts

The group has also been in discussions with ConocoPhillips on converting its LNG export plant at Kenai to a regasification and import facility. The plant is still making LNG and shipping it to Japan, but the LNG export license for the plant expires next March.

[Lee Thibert, vice president for strategic planning for Chugach Electric Association,] said the LNG options being considered include conventional ships like those now carrying LNG from the Kenai plant, LNG vessels with ship-mounted regasification, and LNG barges that would be towed by tugs.

US Senator Lisa Murkowski discusses Alaskan LNG with producers (Oct 25) — LNG World News

Murkowski said it’s important that Alaska price its gas competitively in the world market to ensure development of a project that’s estimated to cost as much as $65 billion. But she also pressed the executives of all three companies on the importance of moving quickly to seize the opportunity to ship Alaska gas to the energy hungry markets of Japan, South Korea and the rest of the Pacific Rim.

Oregon

In our view: LNG proposal suffers setback [Editorial] — The Columbian, Vancouver, WA

Another defeat was suffered this week by proponents of liquefied natural gas pipelines near the Columbia River estuary. Think of it also as another triumph for nature, and for the countless people of this region who properly believe the lower Columbia River must be protected from incursions by the petroleum industry. The Oregon Court of Appeals ruled on Wednesday that Clatsop County (Astoria) commissioners were correct in March 2011 when they denied an application by Oregon LNG to build a pipeline from a proposed LNG plant on the Skipanon River near Warrenton.

LNG tanker safety In Columbia River sparks appeal — Oregon Public Broadcasting, OR

The lawsuit challenges the U.S. Coast Guard’s green light for the proposed Oregon LNG terminal and associated LNG tanker traffic.

Following a lengthy administrative appeal process, the citizens’ groups filed a lawsuit in the Ninth Circuit Court of Appeals challenging the Coast Guard’s decision to issue its recommendation before preparing an Environmental Impact Statement and considering the impacts on endangered species. The challenge contends that the U.S. Coast Guard violated the National Environmental Policy Act, which requires a thorough analysis of the impacts, and the Endangered Species Act, which requires the Coast Guard to consult with fisheries agencies.

Webmaster's comment: This lawsuit could also impact the Downeast LNG project.

Court rules county can deny LNG pipeline (Oct 25) — The Daily Astorian, Astoria, OR

The Oregon Court of Appeals has paved the way for Clatsop County to finalize its denial of the proposed pipeline for liquefied natural gas.

This case began in March 2011, when the Clatsop County Commissioners voted 4-1 to deny the Oregon LNG pipeline application, saying the project does not comply with county law. The commission reversed the 2010 vote by a different board of commissioners.

Oregon LNG responded by filing a motion in Clatsop County Circuit Court, hoping to pre-empt the board’s decision. Oregon LNG argued that commissioners had already made an irreversible decision. But the Circuit Court rejected that challenge. Oregon LNG appealed the decision to the Court of Appeals.

Court rules against Clatsop gas pipeline (Oct 25) — Gazette-Times, Corvallis, OR

The Oregon Court of Appeals says Clatsop County can change its mind and block a pipeline that would carry natural gas to an LNG terminal at the mouth of the Columbia River.

The Oregonian reports the court's ruling Wednesday paves the way for the county to make final its decision against zoning for the Oregon LNG terminal at Warrenton.

Local opposition led backers to drop plans for another LNG terminal, upriver from Astoria, in 2010. [Red & bold emphasis added.]

Ore. court rules against Clatsop gas pipeline (Oct 25) — (AP) Ventura County Star, Camarillo, CA

Three LNG terminals have been proposed in Oregon.

Local opposition led backers to drop plans for another LNG terminal, upriver from Astoria, in 2010.

A third terminal project, at Coos Bay, remains active.

Originally, the terminals were envisioned as a means to import liquefied gas, but technological advances touched off a boom in domestic exploration and production. After that, the LNG proposals began to focus on exporting domestic supplies to Asia.

United States

Qatar plans to build LNG plants in the United States [Times of Oman] (Oct 25) — equities.com

DOHA: Qatar is seeking to build liquefied natural gas (LNG) export plants in the United States to offset an anticipated slide in revenue as prices of the fuel fell from a record.

"The government has temporarily taken away the ability to expand production in Qatar, and if the question is growth and profit, it's not going to come from domestic production," Trevor Sikorski, director of European energy markets research at Barclays in London, said on October 4 by phone. "If you are facing price risk, you have to do something on volume."

Nova Scotia

Taylor: Hopeful signs in energy sector — The Chronicle Herald, Halifax, NS

Encana management has been cagey about when gas production will be coming from Deep Panuke. Possibly the last conventional gas project on its books, Encana has been slow to bring Deep Panuke into production, pushing back the startup several times since announcing in 2007 it would proceed with its development.

The fact that Encana is about to start production of the Deep Panuke project just as ExxonMobil’s Sable project is winding down seems to create a logical fit.

Gulf of Mexico

Trinidad and Tobago energy minister outlines LNG export changes — Oil & Gas Journal

Trinidad and Tobago, a major LNG exporter in the Western Hemisphere, is changing its emphasis from spot sales to large Atlantic Basin customers to contracts with Caribbean and South American nations eager to move to gas from imported diesel and fuel oil for electricity generation, the country’s energy minister said.

He noted that as recently as 3 years ago, 80% of Trinidad’s LNG cargoes went to US customers and the other 20% elsewhere. “That has flipped because of this country’s shale gas revolution, and we expect US demand for our LNG to eventually fall to zero,” Ramnarine said. [Red & bold emphasis added.]

BP disagrees with Energy Minister on US$120m claim — The Trinidad Guardian Newspaper, Port-of-Spain, Trinidad and Tobago, West Indies

Energy giant BP yesterday said that the “implications of impropriety in BP LNG sales reported in recent media articles are incorrect.” The company was responding to last week’s statement by Energy Minister Kevin Ramnarine that T&T lost an estimated US$120 million ($771 million) between 2009 and 2012 because state-owned National Gas Company’s (NGC) equity gas from Train IV was marketed by BP in that period.

United States

The big new push to export America’s gas bounty(Oct 23) — The New York Times, New York, NY

[Excelerate Energy] plans to build a multibillion-dollar offshore export terminal halfway between Corpus Christi and Galveston to ship natural gas around the world.

With 15 other export projects currently under review by the Energy Department, America could soon become the world’s second-largest natural gas exporter behind Russia, which remains the largest seller because of its long-term contracts to energy buyers across Europe and farther afield.

The glut puts the United States at the center of the increasingly globalized natural gas market.

In early October, Golden Pass Products, a venture whose majority owner is the state-owned Qatar Petroleum International, was granted a license to export liquefied natural gas from a proposed site in Texas. The British energy company BG Group, which owns shale gas deposits from Texas to New York, also plans to ship American natural gas from its operations in Louisiana. [Red, yellow & bold emphasis added.]

Gulf of Mexico

The big new push to export America’s gas bounty — The New York Times, New York, NY

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

The Houston energy company [Excelerate Energy] plans to build a multibillion-dollar offshore export terminal halfway between Corpus Christi and Galveston to ship natural gas around the world.

“Asian companies are out in front in signing natural gas contracts,” said Teri Viswanath, a commodity strategist at the French bank BNP Paribas in New York. “For countries like China, the tremendous domestic demand ensures it will always be an importer.”

Webmaster's comment: Teri Viswanath's opinion that Chila will always be a natural gas importer may or may not be true. China is a vast country with its own vast shale gas assets that it has not yet developed.

Oregon

LNG tanker safety sparks appeal — The Daily Astorian, Astoria, OR

Federal law requires the Coast Guard to issue a letter of recommendation on the suitability of the Columbia River for LNG tanker traffic as it relates to safety and security. In 2009, the Coast Guard issued its determination, finding that the Columbia River is not currently suitable for LNG traffic, but could be made suitable.

Following a lengthy administrative appeal process, the citizens’ groups filed a lawsuit in the Ninth Circuit Court of Appeals challenging the Coast Guard’s decision to issue its recommendation before preparing an Environmental Impact Statement and considering the impacts on endangered species. The challenge contends that the U.S. Coast Guard violated the National Environmental Policy Act, which requires a thorough analysis of the impacts, and the Endangered Species Act, which requires the Coast Guard to consult with fisheries agencies.

“The Coast Guard failed to comply with the law when it gave the OK for LNG traffic. They failed to consider the new threat of export, failed to engage stakeholders, and failed to take a hard look at the impacts as required by federal law,” stated Brett VandenHeuvel, executive director for Columbia Riverkeeper.

Webmaster's comment: According to the US Coast Guard Captain of the Port staff in South Portland, Maine, the Coast Guard is no longer required to consider NEPA (National Environmental Policy Act) when rendering its Waterway Suitability decisions.

Hawaii

Environmental groups: Don't import natural gas — Honolulu Civil Beat, Honolulu, HI

Hawaii has the highest dependency on fossil fuels of any state, according to the Hawaii Clean Energy Initiative website. Hawaii residents also pay more for electricity than almost anyone else in the nation.

LNG is seen by many as an inexpensive alternative to oil and the proposal has the support of the Abercrombie administration. State officials have said that even when shipping costs are factored in, consumers would save money with natural gas.

"Until we find a way to store energy from renewable energy we’re always going to need a source of firm energy to back it up," said Boivin, adding that natural-gas fired power plants fill that need.

"Liquefied natural gas is a very greenhouse gas-intensive fuel because of all of the energy it takes to drill, liquefy, transport and re-gasify it," said Ellen Medlin, an attorney at the Sierra Club who helped draft the organization's motion to intervene in the gas company's application. [Brown & bold emphasis added.]

Webmaster's comment: Hawaii has plentiful, renewable, clean geothermal energy to generate electricity at its disposal, with no storage requirements. It is surprising the state is considering LNG imports.

Canada

Petronas-Progress saga all about protecting turf [Opinion] — The Globe and Mail, Toronto, ON

[T]he real antagonist derailing Petronas was, in part, the well-timed ExxonMobil-Celtic deal.

There are many valid issues associated with state-owned enterprises that don’t sit well with Canadian interests. Poor human rights records, corruption, a dearth of democracy and fear of cultural misalignment are just a few. All are good fodder for late-night debate over a Scotch as Canadians and the federal government stumble to figure out what the ownership characteristics of our natural resources should look like in a brutally competitive world.

Even if the Petronas-Progress deal comes to life again, last week’s surprise rejection will surely serve to hose down the enthusiasm of state-owned players seeking entry into the fray. As a consequence, the cost of doing business in Canada’s oil and gas industry has just gone down – an outcome that is advantageous for the large domestic incumbents. Yet, it’s far less clear that this protection of competitive turf and cheapening of assets is advantageous to the interests of Canada.

United States

Building gas power plants: Investment or speculation? — Platts

While discussing the challenging outlook for financing new power plants during a recent conference in New York, Carl Williams, a principal at Riverstone Holdings, harkened back to 1998-2001 when a sudden surge in building new generation fired by natural gas resulted in the addition of 70 GW to the grid. But rather than scaling back, developers – and the bankers who funded them – continued the build-out, adding another 105 GW between 2001 and 2003, the equivalent of replacing the entire capacity of the PJM Interconnection, Williams noted.

The result was a glut of gas-fired generation that is still being sorted out through multiple bankruptcies and serial mergers and acquisitions.

Williams, speaking at Platts 14th annual Financing US Power conference in New York on October 19, expressed a concern that once again, “we could be escalating commitment to a failing action.”

Then, as now, there is an “overriding belief in market constructs,” Napolitano said. The flaw with market constructs, he said, is that “when things are going fine, you can depend on them; when they aren’t, you can’t.”

“I believe we will do exactly the same thing again,” Williams said, referring to the last gas-plant build-out. “The herd mentality will be difficult to break.” [Red, yellow & bold emphasis added.]

Webmaster's comment: "Herd mentality" is exactly what occurred with the lemming-like rush to build LNG import terminals, and is what is now occurring to build LNG export terminals. Both are/were "escalating commitments to failing actions."

Explain ground rules for natgas export decision -Sen. Wyden — Reuters

The U.S. Energy Department needs to explain how it will determine whether to allow more exports of the nation's bountiful supplies of natural gas, Senator Ron Wyden, a top Democrat on the Senate Energy Committee, said on Tuesday.

"I request an all-inclusive description of the factors that DOE will consider in determining whether to approve a supplier's authority to export LNG, and what factors DOE will consider in revoking such authority," Wyden wrote in a letter he sent Chu on Tuesday.

The United States has been flooded with natural gas thanks to horizontal drilling and hydraulic fracturing, or "fracking," technology that has helped drillers tap supplies trapped in shale rock formations. [Red & bold emphasis added.]

Key US lawmaker wants answers about potential LNG exports — Platts

Wyden said DOE should consider a host of factors in deciding whether to approve would-be LNG exports, including the impact they would have on US natural gas supplies and commodity prices. DOE should also consider how LNG exports would affect US air pollution levels, electricity prices, employment, manufacturing and economic growth, Wyden said. [Red & bold emphasis added.]

Critic: Shale gas a false hope — UPI

Food & Water Watch announced it opposed energy industry efforts to tout the benefits of liquefied natural gas and hydraulic fracturing.

The group said any effort to expand the use of LNG for exports would lead to more hydraulic fracturing, known also as fracking. More LNG production, they said, means more environmental threats.

Analysis of deep monitoring wells by the Environmental Protection Agency in a Wyoming aquifer near the Pavillion natural gas field revealed glycols and other synthetic chemicals associated with hydraulic fracturing. [Red emphasis added.]

Daniel Yergin: The real stimulus: Low-cost natural gas — The Wall Street Journal [Paid subscription]

An unconventional oil and gas revolution is under way in the United States, but its full ramifications are only beginning to be understood. The basic facts are clear enough. Half a decade ago, it was assumed that the U.S. would become a large importer of liquefied natural gas; now the domestic natural gas market is oversupplied, thanks to the ability to produce shale gas through hydraulic fracturing and horizontal drilling technologies. [Red & bold emphasis added.]

Webmaster's comment: The basic facts are not clear enough for Downeast LNG's Dean Girdis, who is standing on his head to make an upside-down LNG market look right-side-up. Even standing on one's head, there is no future in yet another idle LNG import terminal.

The big new push to export America’s gas bounty — The New York Times, New York, NY

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

The Houston energy company [Excelerate Energy] plans to build a multibillion-dollar offshore export terminal halfway between Corpus Christi and Galveston to ship natural gas around the world.

“Asian companies are out in front in signing natural gas contracts,” said Teri Viswanath, a commodity strategist at the French bank BNP Paribas in New York. “For countries like China, the tremendous domestic demand ensures it will always be an importer.”

Webmaster's comment: Teri Viswanath's opinion that Chila will always be a natural gas importer may or may not be true. China is a vast country with its own vast shale gas assets that it has not yet developed.

Mexico

Sempra to construct gas pipeline in Mexico — LNG World News

After a competitive and transparent international public bidding process, Sempra Mexico’s offers were selected to develop the new pipeline network. The network will be comprised of two segments that will interconnect to the U.S. interstate pipeline system in Arizona and will provide natural gas to new and existing CFE power plants that currently use fuel oil. The capacity for each segment is fully contracted by CFE under two 25-year firm capacity contracts denominated in U.S. dollars.

Webmaster's comment: ...More US natutal gas exports.

New Brunswick

Five groups left eyeing Repsol LNG assets sale (Oct 21) — MarketWatch

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

Five groups out of the initial 15 are still interested in buying the liquefied natural gas assets put up for sale by Spanish oil company Repsol SA, reports Cinco Dias in its Monday Internet edition, citing unidentified sources.

The potential buyers are Russia's Gazprom OAO and Novatek, as well as China Petroleum & Chemical Corp, known as Sinopec, India's Gail and France's Total, the paper adds. [Red & bold emphasis added.]

Webmaster's comment: The assets Repsol has for sale include the majority stake in Canaport LNG in New Brunswick, Canada, and interest in Atlantic LNG at Point Fortin in Trinidad and Tobago, West Indies.

Passamaquoddy Bay

LNG: Downeast LNG persists in its application for a Passamaquoddy Bay Terminal – Time for FERC to reject the last outstanding application. (Oct 20) — The Bay of Fundy Explorer

From tourism to whales to cotton-tail rabbits Downeast LNG doesn’t understand Passamaquoddy Bay. It’s now long past the time for FERC to reject the last outstanding application to place an import LNG terminal in Passamaquoddy Bay, a process that, if it weren’t so serious, would be a comedy about how the dead keep walking. [Red, yellow & bold emphasis added.]

LNG: Cartoon leaves vital questions unanswered about LNG in Passamaquoddy Bay. (Oct 8) — The Bay of Fundy Explorer

“If large Cruise ships can come through Head Harbour Passage, what’s so wrong with LNG tankers?”

The answers are two-fold....

Maine & New England

Fracking for gas to thank for Maine’s growing electricity market (Oct 21) — Bangor Daily News, Bangor, ME

The increased natural gas supply has reduced its price in the United States, and New England, according to Dolan at the New England Power Generators Association.

New England’s gas-fired power plants no longer need to buy natural gas from the Gulf of Mexico or import it from overseas, Dolan says.

“Now it’s just coming from Pennsylvania and Ohio. It’s cheap gas and there’s a huge amount of it,” Dolan says. “Projections say over 100 years worth of new gas supply.” [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG wants you to believe this isn't so.

Gulf of Mexico

Sabine Pass LNG files Monthly Status Report — LNG Law Blog

Sabine Pass LNG filed a status report on construction of its LNG export terminal in Sabine Pass, La., stating that as of the end of September, engineering is 24.2% complete, procurement is 20.6%, and the overall project completion is 11.8%. Sabine Pass states that the overall project schedule is progressing ahead of the contractual schedule basis, with significant acceleration of the Train 1 and Train 2 substantial completion dates from the contractual basis. Early targets for Train 1 substantial completion and Train 2 substantial completion are 43 and 47 months, respectively, against the contractual basis of 49 and 58 months for Train 1 and Train 2.

No time to waste on LNG (Week of Oct 21) — Petroleum News, Anchorage, AK

While proponents of Canada’s LNG are digging in, determined to negotiate oil-indexed prices, Sabine Pass has already done deals tied to Henry Hub gas prices for the Sabine operation.

Shigeru Muraki, executive vice president of Tokyo Gas, told a gas conference in London earlier in October that the U.S. shale gas boom could supply LNG to Japan at sustainable prices up to 40 percent lower than current oil-indexed capital prices.

“U.S. domestic gas prices cannot be the ultimate determinant of gas price in other global markets,” [United Kingdom’s BG Group chief executive officer Frank Chapman] argued. “But we do not expect this to drive a convergence of Henry Hub prices and Asian term prices. We expect gas prices to remain highly regional for the foreseeable future.”

DOE grants applications to export LNG to FTA Nations — LNG Law Blog

The U.S. Department of Energy (DOE) recently granted authority to Cheniere Marketing, LLC (Cheniere Marketing) and Gulf Coast LNG Export, LLC (Gulf Coast) to export domestically produced LNG to nations with a Free Trade Agreement with the United States. Cheniere Marketing proposes to export LNG from its Corpus Christi LNG terminal and Gulf Coast LNG would export LNG from its proposed Brownsville, Texas terminal. [Red emphasis added.]

DOE delays decision on Cheniere Energy facility (Oct 19) — American Press, Lake Charles, LA

The Sierra Club is fighting regulators over all applications from companies interested in exporting LNG. Complaints have also been filed against Sempra Energy’s Cameron LNG facility, which plans to develop a $6 billion LNG export terminal in Hackberry.

Corpus Christi Liquefaction bids for 100% of feeder pipeline capacity (Oct 19) — LNG Law Blog

In an open season held earlier this month, Corpus Christi Liquefaction, LLC bid for 100% of the capacity of Corpus Christi Pipeline for a twenty-year term. The pipeline is proposed to interconnect with Corpus Christi Liquefaction’s LNG terminal. No other bids were received.

Editorial: Cheniere's LNG terminal merits OK by feds (Oct 19) — Beaumont Enterprise, Beaumont, TX

If the U.S. Department of Energy needs to take longer to approve plans by Cheniere Energy Inc. to build an export terminal for liquefied natural gas in southwest Louisiana, that's OK. A major facility like this should be thoroughly vetted.

Caribbean

Paulwell has no fear (Oct 21) — Go-Jamaica, Kingston, Jamaica, West Indies

Energy Minister Phillip Paulwell says he is not worried about a possible probe by the Office of the Contractor General (OCG) of his role in the controversial Liquified Natural Gas (LNG) project.

'We had no choice' - Paulwell defends Government's decision to turn over LNG project to JPS (Oct 21) — The Gleaner, Kingston, Jamaica, West Indies

Since last week, reports have surfaced that at least two major players involved in the Government's initial plan to introduce LNG have urged the Office of the Contractor General (OCG) to probe the decision to turn over the project to the JPS.

Sources in the energy sector have reported that the OCG has been asked to see if Paulwell breached the rules and short-circuited the process by approaching the JPS in March, even while the LNG Steering Committee was still trying to pull together the project.

JPS committed to LNG, says Tomblin (Oct 21) — The Gleaner, Kingston, Jamaica, West Indies

President and Chief Executive Officer of the Jamaica Public Service Company (JPS) Kelly Tomblin has expressed cautious optimism that a successful liquefied natural gas (LNG) arrangement will be eked out in talks between the Government and her company, although the attempt to ink a deal remains on slippery slope.

Last month, the Government scrapped the LNG project as it was being designed and passed it over to the JPS.

Five groups left eyeing Repsol LNG assets sale (Oct 21) — MarketWatch

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

Five groups out of the initial 15 are still interested in buying the liquefied natural gas assets put up for sale by Spanish oil company Repsol SA, reports Cinco Dias in its Monday Internet edition, citing unidentified sources.

The potential buyers are Russia's Gazprom OAO and Novatek, as well as China Petroleum & Chemical Corp, known as Sinopec, India's Gail and France's Total, the paper adds. [Red & bold emphasis added.]

Webmaster's comment: The assets Repsol has for sale include the majority stake in Canaport LNG in New Brunswick, Canada, and interest in Atlantic LNG at Point Fortin in Trinidad and Tobago, West Indies.

Alaska

Export permission: Where do Lower 48 LNG terminals stand? — Alaska Dispatch, Anchorage, AK

Indeed, that shale gas glut is currently driving a mini-boom of LNG export projects across the Lower 48, driving companies to seek better prices for their product and to draw down bloated storage capacity. As of mid-October, 19 terminal projects in the Lower 48 have applied for permission to export domestically produced LNG.

Just as it used to be difficult to follow all of the different proposed Alaska gas pipelines, it gets hard to follow so many different Lower 48 export projects. According to trade magazine LNG Global's handy chart of domestic LNG project export applications, most of the terminals have obtained federal permission to export LNG to countries the U.S. has a free-trade agreement with. [Red, yellow & bold emphasis added.]

British Columbia

Prince Rupert LNG project in jeopardy after feds reject Petronas takeover — The Northern View, Prince Rupert, BC

Petronas Carigali Canada — a division of the Malaysian oil and gas giant — has actively been pursuing a liquid natural gas export site on Lelu Island. However, the decision to reject the deal — announced by Industry Minister Christian Paradis late Friday night — casts doubts on the project but not a death blow.

In a statement issued early Monday, Petronas said, they along with Progress Energy Resources Corp. officials, will meet with Industry Canada to question the decision. The company has 30 days to appeal the decision.

B.C. LNG plans at crossroads after Petronas-Progress deal blocked (Oct 21) — The Globe and Mail, Toronto, ON

The government’s decision to block the foreign takeover of a mid-sized Canadian natural gas company adds another note of uncertainty to ambitious plans for natural gas exports to Asia that in recent weeks have been thrown into doubt.

Failure of the Petronas terminal could have broader ramifications, since the Malaysian company is expected to share the cost of a $6-billion to $8-billion pipeline to the coast with BG; Spectra Energy Corp. has agreed to build that line.

Troubles with Canadian LNG projects have already started to surface: Japanese research suggests far more gas exports are being proposed than the world will need. Kitimat LNG, meanwhile, acknowledged earlier this month it is having difficulty securing oil-indexed sales contracts, which would provide better pricing and stability than contracts indexed to feeble North American gas prices. Those troubles generated recent Internet rumours that Kitimat LNG has been postponed. In a statement, spokesman Paul Wyke said those rumours are false: the project has completed final engineering, and continues to prepare for construction, he said. [Red & bold emphasis added.]

Energy Biz Wrap: Apache postpones Kitimat, Canada looks at Petronas bid [Opinion] (Oct 21) — Wall St. Cheat Sheet, Asheville, NC

Apache Corporation has postponed its proposed $3 billion Kitimat project, while competitors have undercut its ability to win customers to long-term supply contracts, leaving Kitimat without sufficient clients to start construction. Observers say that Cheniere Energy offers liquefied natural gas at prices that are based on the less expensive Henry Hub benchmark, driving potential Apache buyers to drive a harder bargain. [Red & bold emphasis added.]

Apache LNG Plan in Limbo — The Wall Street Journal

Hopes were high just a couple years ago. The Houston-based energy company in 2010 offered financial backing to the first major effort to ship North American shale gas to Asia, taking a stake in a proposed export terminal in Kitimat, a coastal town in Canada's British Columbia. The nearly $3 billion export project, which involved liquefying natural gas for shipments that were to begin in 2017, gained the Canadian government's approval last year.

But Anglo-Dutch oil company Royal Dutch Shell has since disclosed a bigger project in the same town. Its project is financed in part by big Asian buyers of liquefied natural gas, known as LNG, ensuring it a ready market.

In the U.S., Cheniere Energy Inc., LNG also of Houston, joined the fray, securing contracts for a proposed U.S. Gulf Coast project with Spanish, British and Asian clients by promising prices pegged to the cheap natural gas rates now prevailing in the U.S.

Their plans have undercut Apache's ability to sign customers to long-term supply contracts and left its proposed Kitimat project without enough clients to begin construction. [Red & bold emphasis added.]

Natural gas strategy nothing more than a fairy tale [Opinion column] (Oct 19) — The Vancouver Sun, Vancouver, BC

Alas, this story is too good to be true. Many are questioning whether these ventures work at all from a corporate profitability perspective, given interest by other countries in LNG exports. But it is also the case that economic benefits for ordinary British Columbians, in terms of jobs and government revenues, will be minuscule, and environmental costs high.

B.C.’s plans for expanding the natural gas industry would be like adding 24 million cars to the roads of the world. And emissions from extraction and production would mean B.C. breaking with 2007’s Greenhouse Gas Reduction Targets Act, and its 2020 target of a 33 per cent reduction in GHG emissions.

The government’s assertion that B.C.’s natural gas is good for the climate because it will displace coal use in China is wishful thinking. Natural gas will only pile on to China’s growing demand for energy. Meanwhile, Japan wants LNG to displace its nuclear capacity, which will mean a major increase in their emissions.

BC missing natural gas boat to China [Opinion] (Oct 19) — EcoLog, Toronto, ON

British Columbia (B.C.) is missing lucrative trade opportunities because of overlapping and outdated legislation affecting the export of liquefied natural gas (LNG) to Asia, a new study from the Fraser Institute concludes.

Oregon

Groups file suit over LNG tanker safety — The Daily Astorian, Astoria, OR

WARRENTON — Citizen groups have filed a lawsuit in the Ninth Circuit Court of Appeals to challenge the safety of proposed Liquefied Natural Gas (LNG) tankers on the Columbia River.

Columbia Riverkeeper, Columbia-Pacific Commonsense and Wahkiakum Friends of the River are asking the U.S. Coast Guard to take a hard look at threats to communities, such as explosions and “cascading failures” of LNG, and impacts to the environment. [Red & bold emphasis added.]

Editorial: We are pawns in the LNG game — The Daily Astorian, Astoria, OR

The Port executive director and commission in 2004 should not have committed a prime public asset for any such use without seeking meaningful participation from neighbors and local voters. This violation of a basic democratic principle of including residents in important decisions poisoned the reception for any resulting LNG proposal.

Many of the same objections that applied to siting a large LNG importation plant on the Skipanon waterfront also apply to an export facility. These include concerns about river traffic safety, placing a large quantity of explosive material in a place subject to massive subduction-zone earthquakes, conflicts with existing river uses, and worries about LNG pipeline safety and expansion.

The flaw in the federal LNG terminal siting process is that it contains no strategy. The federal process only rewards the company that gets to the Federal Energy Regulatory Commission first.

It is dangerous to build a regional economic future on energy schemes. That was the fundamental flaw in the Port of Astoria’s lurch in this direction.

Hawaii

Groups oppose plan to ship LNG to Hawaii (Oct 19) — Star Advertiser, Honolulu, HI

Among the concerns expressed by the two groups in documents filed today with the Federal Energy Regulatory Commission is that bringing in LNG runs contrary to the state’s push to reduce its dependence on fossil fuel.

Environmental groups file protests on Hawaiian LNG import proposal — LNG Law Blog

Sierra Club filed a protest on The Gas Company's FERC application to import into Hawaii LNG produced in the continental United States. Sierra Club opposes Gas Company's request that FERC review only the first phase of the project and requests that FERC prepare an environmental impact statement on all phases of the proposal. Sierra Club's protest also raises other environmental issues related to alleged increases in natural gas production that would be induced by the project.

Blue Planet Foundation also filed a protest arguing that the application does not provide enough details on the comprehensive LNG import plan and that the proposal will continue Hawaii's dependence on imported fossil fuels. [Red emphasis added.]

Canada

Nexen-CNOOC deal in trouble after Canada blocks Petronas bid — iStockAnalyst

Canadian industry minister Christian Paradis stated that the Government "was not satisfied that the proposed investment is likely to be of net benefit to Canada"....

...Canadian Security Intelligence Service (CSIS) had warned that foreign investment in the country could be a security issue. While the vast majority of foreign investment in Canada is carried out in an open and transparent manner, certain state-owned enterprises (SOEs) and private firms with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their pursuits here.

Cash-Rich Asian companies face North American snub — Wall Street Journal Live

VIDEO: Opposition in Canada to a bid by Malaysia's Petronas for one of its gas companies could signal tough times for Asian companies seeking acquisitions in North America. The WSJ's Simon Hall tells us why the Petronas deal could set a bad precedent.

Canada well-positioned to fulfill rapidly increasing need in Asia-Pacific [Policy briefing] — The Hill Times, Ottawa, ON

We have the third largest proven oil reserves, and are the third largest producer of natural gas and the second largest producer of uranium. However, over 99 per cent of our oil and 100 per cent of our gas exports go to the United States. Canada and the United States have the largest bilateral trade relationship in the world—and that will continue. However, the U.S. has discovered huge oil and gas reserves of its own. Furthermore, our oil is selling at a significant discount to international prices, which is costing the Canadian economy billions of dollars of lost revenue. Therefore we must diversify our markets to the fastest growing economies, in particular the Asia-Pacific region.

[F]ive Liquefied Natural Gas projects ... are being developed on our Pacific Coast, including three at Kitimat, B.C., which plan to be in service between 2014 and 2019. Additional LNG export terminals and related pipeline infrastructure are also being proposed for Prince Rupert. Based on these projects, Canada could export the equivalent of nine billion cubic feet per day of natural gas as LNG, or 66 million tons a year, worth tens of billions of dollars to our GDP. [Red & bold emphasis added.]

Natural gas industry ‘still hurting’ despite price bounce (Oct 18) — Financial Post, Don Mills, ON

A crucial factor is the gas glut in the United States, which remains elevated despite massive mothballing of gas wells.

“We anticipate U.S. oil development should contribute 2.1 billion cubic feet per day of incremental gas supply in 2012 and 1.7 bcf per day of additional gas output in 2013, thus dampening the effect of a lower gas rig count,” says Jason Gerdes, an analyst at Canaccord Genuity. Still, he remains bullish enough to predict natural gas prices in the U.S. to hit “at least” US$4 this winter and US$5 long term.

In short, the U.S. gas glut and market dynamics remain a drag on Canadian natural gas production. While Canadian gas exports to the U.S. hit a 14-year low in 2011, U.S. natural gas exports to Canada hit a record high last year, highlighting the structural changes to the Canada-U.S. energy equation. [Red & bold emphasis added.]

United States

US policy uncertainty delays LNG supply growth: BG Group — The Economic Times, India

A shale gas boom in the United States has sparked plans for a large liquefied natural gas (LNG) export industry, but fears that exports could feed energy prices have spurred a strong lobby to limit gas exports.

Study casts fresh doubt on prospects for US LNG export plans — Lloyd's List Australia [Paid subscription]

US exporters of liquefied natural gas face an uphill struggle, according to a new study, because the longer that projects take to be approved, the more serious the consequences for the fleet that will carry the cargoes from the projects.

Analysts say that approval delays could throw the LNG carrier fleet into disarray because so many owners, anticipating a boom in US exports within a few years, ordered new vessels with that supply in mind.

New lobbying effort to promote LNG exports exposes oil and gas industry’s hypocrisy — NorthCentralPA.com, PA

Washington, D.C.—“Today, the oil and gas industry announced the Center for Liquefied Natural Gas, its latest effort to promote fracking for fracking’s sake. The Center will lobby for federal approval of facilities to export liquefied natural gas. Such approval would allow the industry to maximize its profits by selling fracked gas overseas to India, China and other nations.

“But what about the industry’s rhetoric regarding U.S. energy security? The industry’s claims of energy security through fracking are a ruse, and industry’s push to export fracked gas proves it. The industry wants unrestricted drilling and fracking to increase its bottom line.

“The truth is that fracking is a dangerously false solution to America’s energy challenges.”

Webmaster's comment: "Energy security" means having adequate energy availability. Shipping energy overseas reduces US energy security.

RPT-Exclusive-U.S. LNG group to launch campaign for natural gas exports (Oct 21) — Reuters

Backers of liquefied natural gas will launch the first major campaign on [October 22] to press lawmakers to allow the sale of more U.S. gas abroad, as the industry push for exports intensifies.

The effort by the Centre for Liquefied Natural Gas will include a new web site and outreach aimed at policymakers and the public, making the case that selling the nation's surplus natural gas to foreign countries will yield significant economic benefits and not drastically raise prices.

Webmaster's comment: The Center for LNG will promote anything that returns a profit to their membership, regardless of the economic impact on the US economy or the public.

Campaign launched to push LNG exports — PennEnergy, Houston, TX

Thus far many legislators have avoided confronting the possibility of LNG exports because many manufacturers and refineries are opposed to the higher prices that would result. Natural gas exploration, however, could be limited without exports and The New York Times notes that many energy companies have seen net losses to this point.

Natural gas group launches campaign to promote LNG exports – *Update — FuelFix, Houston, TX

CLNG [Center for LNG] President Bill Cooper tells me that he supports the official federal review process for LNG export permits. But he’s concerned about the “ de facto moratorium” on permit approvals.

“A revolution in American energy has unlocked a vast supply of natural gas, more than enough to meet the needs of our country for generations to come,” said CLNG President Bill Cooper in a written statement. “We can continue to harness this important resource for our domestic needs while also selling some to our trading partners. This will grow our economy, revitalize our manufacturing sector, and create tens of thousands of American jobs.” [Red & bold emphasis added.]

Group enters natural gas export debate to nudge administration — The Hill, Washington, DC

"Prior to approving a proposal to export natural gas, the Natural Gas Act requires the Energy Department to determine that the proposed export is consistent with the public interest. That public interest determination includes, among other factors, both economic and environmental considerations," the DOE official said.

Waller LNG Services applies to export LNG, USA (Oct 19) — LNG World News

Waller Point LNG is seeking authorization to export domestically produced LNG from its proposed liquefaction facilities and terminal, Waller Point LNG Terminal, presently under development by Waller Marine for intended construction, ownership and operation at its approximate 180 acre site which it has secured at the entrance point of the Calcasieu Ship Channel in Cameron Parish in Southwest Louisiana, to any nation that currently has or develops the capacity to import LNG and with which the United States currently has, or in the future enters into, a Free Trade Agreement (FTA) requiring the national treatment for trade in natural gas and LNG.

Webmaster's comment: Waller Point LNG is the proposed terminal name that is yet to be permitted by FERC.

Applications received by the DOE to export domestically produced LNG as of October 12th, 2012 (Oct 16) — LNG Global, El Segundo, CA

Webmaster's comment: The entire article consists of a table and footnotes. Here is a list of the applicants:

1. Sabine Pass Liquefaction
2. Freeport LNG Expansion and FLNG Liquefaction [This is a separate docket than #8, below.]
3. Lake Charles Exports
4. Carib Energy (USA)
5. Dominion Cove Point LNG
6. Jordan Cove Energy Project
7. Cameron LNG
8. Freeport LNG Expansion and FLNG Liquefaction [This is a separate docket than #2, above.]
9. Gulf Coast LNG Export
10. Gulf LNG Liquefaction Company
11. LNG Development Company (d/b/a Oregon LNG)
12. SB Power Solutions
13. Southern LNG Company
14. Excelerate Liquefaction Solutions I
15. Golden Pass Products
16. Cheniere Marketing
17. Main Pass Energy Hub
18. CE FLNG
19. Waller LNG Services

Total FTA export volume for all 19 applicants would be 27.58 Bcf/d (billion cubic feet per day).
Total non-FTA export volume for the above would be 21.06 Bcf/d.
A typical existing US LNG import terminal capacity is around 1.2 Bcf/d.

Mexico

Peru LNG ships cargo to Mexico (Oct 19) — LNG World News

The cargo is being hauled by the 173,400 cubic-meter Barcelona Knutsen, and it is sailing to Mexico’s Manzanillo terminal.

Asia

Asia needs to develop gas trading hubs for pricing on regional fundamentals: IEA chief — Platts

"Despite the volume of its gas consumption and trade, one fundamental thing is missing in this region: trading hubs, where natural gas would be priced not in relation to oil but depending on regional supply and demand fundamentals," she said, in an address at the opening of the Singapore International Energy Week.

She pointed to the wide variations of LNG prices as symptomatic of the problem, with LNG going into Japan this past summer at $18/MMBtu, compared with gas prices in the US at $3/MMBtu and in Europe of $10-$12/MMBtu.

British Columbia

Bluff and bluster rings hollow [Letter to the editor] — Burnaby NewsLeader, Burnaby, BC

Just when you think things are bad, they get worse. Almost simultaneous with Clark’s “chump change” remark was the breaking news that a U.S.-based natural gas company concluded an agreement to deliver LNG to China at a deeply discounted price, but a price nevertheless based on current market realities. Energy Minister Rich Coleman tried to dismiss the deal as having no significant impact on the development of LNG exportation in B.C., but his not-to-worry message rang hollow.

Bluff and bluster doesn’t change the fact that the LNG train seems to have left the station without B.C. aboard. [Red & bold emphasis added.]

Canada

Ewart: Global giants snap up Canada assets — Edmonton Journal, Edmonton, AB

Exxon was widely rumoured to be a rival bidder when Malaysian state oil company Petronas made its offer for Progress Energy during the summer as global energy giants snap up properties in promising shale oil and gas plays in Alberta and British Columbia. Exxon's friendly offer for Celtic is the latest in a series of foreign purchases of unconventional assets - including oilsands - in Canada that represent long-term strategic acquisitions for some of the industry's biggest players.

Celtic assets are primarily liquids-rich gas, which still command reasonable prices in North America, and complement the large reserves of dry gas in B.C.'s Horn River basin that Exxon and its subsidiary, Imperial Oil, already own.

The deal - completed as gas prices rebound from decade lows in North America - draws more attention to the push for gas pipelines and export terminals from the West Coast to Asian markets.

ExxonMobil to acquire Celtic Exploration, Canada — LNG World News

The agreement is subject to approval by Celtic Exploration’s shareholders and Canadian regulatory authorities.

ExxonMobil Canada, a subsidiary of Exxon Mobil Corporation, has a long history in Canada that dates back to the 1940s. The company is a leader in the Atlantic Canada offshore, where it operates the Sable project in Nova Scotia, is lead owner of the Hibernia project in Newfoundland and Labrador, where it is developing the Hebron project. ExxonMobil Canada has additional assets in Western and Northern Canada.

United States

More bad news for U.S. natural gas exporters [Opinion] — Seeking Alpha

Oil and gas price decoupling in Asia has already begun

In January, Cheniere Energy entered an agreement with Korea Gas Corp. to sell LNG based on Henry Hub spot prices. This is significant because until now gas in Asia was sold under 20-25 year long contracts pegged to the price of oil. Horizontal drilling and hydraulic fracturing have been so effective that oil and gas prices are already divorced. That divorce means Asian countries will be seeing much lower prices for natural gas in the future.

Exporters in the US dreaming of huge profits from Asian countries are having their hopes crushed. The terminals currently under construction in the US will most likely become profitable or at least break even in the long run. Unless the DOE acts swiftly to define non-FTA export limits, there won't be anybody left in Asia willing to sign long term deals US exporters for $15/MMbtu gas. [Red & bold emphasis added.]

Webmaster's comment: The mad-rush-to-export-LNG house of cards is already beginning to tumble.

Why not profit from the race for natural gas assets required to feed West Coast LNG facilities? [Opinion] — Seeking Alpha

There are currently at least four proposed LNG export facilities in the planning stages for the West Coast of Canada with expected startup beginning as early as 2017. The motivation behind building these facilities is the big difference in price that producers receive for natural gas in Canada, versus what they could receive exporting it to Asian markets. That difference in prices has been shocking in 2012 with British Columbia wellhead prices being under $2.00 per mcf vs $14.00 plus per mcf in Asian markets. It is hard to imagine that Asian buyers are paying 7 times the price that North Americans are for the very same commodity.

Webmaster's comment: The author is correct in his disbelief that Asia pays so much more for LNG than elsewhere — that price differential is rapidly collapsing. LNG export projects are becoming very iffy.

New Brunswick

GDF Suez says eyeing Repsol's LNG assets — Reuters

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

The Spanish oil company has received at least six offers from other firms for the package of stakes in liquefied natural gas plants which it put up for sale earlier this year, sources with knowledge of the matter told Reuters last month.

Mestrallet says GDF Suez might bid for Repsol’s LNG assets — Bloomberg Businessweek

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

In addition to having exclusive marketing rights over this production, Repsol LNG also has stakes in the Canaport LNG plant and the Atlantic LNG plant in Trinidad and Tobago and is in an alliance with Petroleo Brasileiro SA, BG Group Plc and Galp Energia SGPS SA for studies for a floating liquefaction plant in Brazil’s pre-salt area.

Gulf of Mexico

Waller LNG Services files for DOE LNG export authority — LNG Law Blog

Waller LNG Services, LLC filed an application with the U.S. Department of Energy (DOE) for authority to export over a twenty-year period up to 1.25 million metric tons per year (approximately 0.16 Bcf/day) of domestically produced LNG to nations with a Free Trade Agreement with the United States. Waller intends to export the LNG from a proposed terminal at the entrance point of the Calcasieu Ship Channel, Cameron Parish, La.

FERC provides status update for Corpus Christi LNG export project — LNG Law Blog

FERC has released an update on the status of its review of the Corpus Christi LNG terminal and related pipeline project applications.

Caribbean

GDF Suez says eyeing Repsol's LNG assets — Reuters

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

The Spanish oil company has received at least six offers from other firms for the package of stakes in liquefied natural gas plants which it put up for sale earlier this year, sources with knowledge of the matter told Reuters last month.

Mestrallet says GDF Suez might bid for Repsol’s LNG assets — Bloomberg Businessweek

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

In addition to having exclusive marketing rights over this production, Repsol LNG also has stakes in the Canaport LNG plant and the Atlantic LNG plant in Trinidad and Tobago and is in an alliance with Petroleo Brasileiro SA, BG Group Plc and Galp Energia SGPS SA for studies for a floating liquefaction plant in Brazil’s pre-salt area.

British Columbia

Fraser Institute releases BC LNG exports study (Canada) — LNG World News

The BC government’s dream of creating jobs and investment by exporting liquefied natural gas (LNG) to Asia could be at risk unless the existing cumbersome and overlapping regulatory process and environmental reviews can be further streamlined, concludes a new study released today by the Fraser Institute, Canada’s leading public policy think-tank.

Pipeline company promotes northwest BC project — Terrace Standard, Terrace, BC

Spectra Energy staged what it called an “interactive townhall” to explain plans for a 48-inch diameter pipeline that would run approximately 850 kilometres from the northeastern BC gas fields to an LNG export plant at Prince Rupert.

Spectra Energy reps discuss LNG pipeline to Prince Rupert — The Northern View-News, Prince Rupert, BC

Right now Spectra is looking at three possible routes for the pipeline, with the split being around the Cranberry Junction. One of the lines is entirely on land while the other two include marine pipelines, something Whitwham says the company is very experienced at doing. Regardless of which route is chosen, the route will be mostly in the wilderness and will not be running near many municipalities.

Spectra has signed a partnership with the BG Group, who are proposing an LNG export terminal on Ridley Island, that would dedicate 100 per cent of the capacity of the pipeline to the terminal.

Canada

Exxon to buy Canada’s Celtic Exploration for $2.6-billion — The Globe and Mail, Toronto, ON

Exxon Mobil Corp., the most-watched company in the energy industry, is making a big move into a promising Alberta natural gas play with the $2.6-billion acquisition of Celtic Exploration Ltd., whose lands may one day feed an LNG export terminal.

Celtic had assembled a large position in the Resthaven Montney, a play in northwestern Alberta that is 195 kilometres from pipelines that could carry gas to the British Columbia West Coast, where Exxon and numerous other companies are planning expensive new export terminals. Celtic’s Resthaven Montney land contains some 13-trillion cubic feet of recoverable natural gas, according to an estimate by Raymond James analyst Luc Mageau, equal to nearly three years of Canada’s entire gas output, and enough to supply a large LNG plant for 20 years.

Exxon makes a land grab with $2.6-billion deal for Celtic — The Globe and Mail, Toronto, ON

The sale, which must gain Investment Canada approval before it can proceed, marks the latest multibillion-dollar acquisition of domestic energy companies with big land holdings. For Exxon, the deal, worth $3.1-billion once debt is included, provides access to a pair of large natural gas plays that provide feedstock for the oil sands and a potential West Coast natural gas export terminal.

In some of its plays, the company produces 75 to 100 barrels of liquids with each million cubic feet of gas (starting at 25 barrels per million, the liquids are worth more than the gas today). And “half to two-thirds of that is condensate,” Mr. Fitzmartyn said.

The rise of plans to export LNG from the British Columbia coast is another important factor. Exxon Mobil, in part through its majority-owned subsidiary Imperial Oil Ltd., already has substantial land in northeastern B.C., and is pursuing plans for an export terminal on the province’s West Coast.

Exxon’s $3.1-billion bid for Celtic underscores oil majors’ LNG race — Financial Post, Don Mills, ON

Exxon’s next steps will likely involve securing more resource, an LNG plant in either Kitimat or Prince Rupert in B.C. and lining up customers in Asia. Exxon already owns lands in the Horn River basin and has talked about its desire to participate in the LNG business in Western Canada.

United States

Administration wrestles with granting natural gas export permits [Opinion column] — FDL News Desk

The main thing that LNG exports would do in the near term is increase the cost of energy in America. If you take a domestic industry global, the prices then get set on the global market. In an indirect way it probably means more coal production, as domestic natural gas would be less plentiful for use in the United States. But it also means gobs and gobs of money for the exporters.

In addition, it would mean that the fights over fracking we see today would take on a far greater degree of urgency, with far more money at stake.

This makes the fight over LNG export licenses carry new significance. It’s a key element of the debate over fracking. If producers have basically a free rein to export natural gas, it will be nearly impossible to stop the fracking of America.

DOE delays decision on Cheniere Energy facility — (AP) Daily Comet, Lafourche, LA

The Sierra Club argues that federal regulators need to look at the ramifications of increased natural gas production should the facility be built. The group argues that natural gas drilling creates air pollution, contaminates groundwater and damages the environment in other ways.

DOE delays decision on natural-gas export license (Oct 16) — The Hill, Washington, DC

Many Democrats ... believe exporting LNG would ramp up use of unconventional drilling methods, commenting that too little is known about their environmental and health impacts. Some also are concerned that exporting LNG would raise natural-gas prices, denting consumers’ and manufacturers’ finances.

U.S. natural gas industry stifled by DOE inaction [Opinion column] — Seeking Alpha

All of those projects and others like them are likely to be stalled or completely halted until the DOE can decide exactly how much LNG it will allow to be exported. According to ClearView Energy Partners, exporters can expect an limit of between 6-7.4 Bcf/d. These numbers aren't official statements from the DOE. They are based largely on rumors and information from sources close to the investigations, because the DOE refuses to define their export policy.

North America

Key Japanese LNG buyers push for more flexible contracts — Reuters

With the possibility of North American shale gas imports on the horizon, oil-linked LNG pricing in Asia will no longer be feasible within a few years, Minister of Economy, Trade and Industry, Yukio Edano, who also oversees energy issues, said last month.

New Brunswick

Novatek of Russia eyes Repsol LNG assets — LNG World News

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

Novatek is interested in buying LNG assets that were put up for sale by Repsol of Spain, according to Reuters.

Properties that are up for grab include stake in liquefaction and regasification plants in Peru, Canada and Trinidad and Tobago.

Novatek is, after Gazprom, Russia’s second-largest producer of natural gas. [Red & bold emphasis added.]

Novatek eyes Repsol assets — The Moscow Times, Moscow, Russia

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

"The Repsol assets are of interest to us, but we are not in talks," Mikhelson said.

The assets include a 75 percent stake in a regasification plant in Canada, a 20 percent stake in a liquefaction plant in Peru and a 23 percent interest in a liquefaction plant in Trinidad and Tobago. [Red & bold emphasis added.]

Gulf of Mexico

US DOE delays decision on staying Sabine Pass LNG export permit — Platts

The new order comes in a response to a September 6 request from Sierra Club, which asked DOE to reconsider and stay Sabine Pass' permit to export LNG to countries without US free trade agreements. Sierra Club argued the permit was based on an inadequate environmental review.

The order is the latest in a long regulatory saga related the Sabine Pass project, the only facility so far to win permits to export LNG to both FTA and non-FTA countries.

Caribbean

Ramnarine: Big hike in LNG price [Opinion column] — Trinidad Express Newspapers, Port of Spain, Trinidad and Tobago, West Indies

Energy Minister Kelvin Ramnarine disclosed yesterday in the budget debate in the Senate that Trinidad and Tobago had begun marketing its LNG on much better terms than previously applied. On one cargo alone, the National Gas Company (NGC) earned revenue of US$25 million, whereas under the previous marketing arrangement it would have earned US$4.3 million for the same cargo, he said.

Webmaster's comment: Trinidad and Tobago received a much higher amount, perhaps because the LNG went to Asia, rather than North America. It will be interesting to see if Trinidad can continue to receive the higher price once US LNG exports commence while linked to low Henry Hub prices. Not only will the US be competing with Trinidad and Tobago, the US impact is likely to cause an unwelcome drop in Trinidad's LNG pricing.

Novatek of Russia eyes Repsol LNG assets — LNG World News

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

Novatek is interested in buying LNG assets that were put up for sale by Repsol of Spain, according to Reuters.

Properties that are up for grab include stake in liquefaction and regasification plants in Peru, Canada and Trinidad and Tobago.

Novatek is, after Gazprom, Russia’s second-largest producer of natural gas. [Red & bold emphasis added.]

Novatek eyes Repsol assets — The Moscow Times, Moscow, Russia

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

"The Repsol assets are of interest to us, but we are not in talks," Mikhelson said.

The assets include a 75 percent stake in a regasification plant in Canada, a 20 percent stake in a liquefaction plant in Peru and a 23 percent interest in a liquefaction plant in Trinidad and Tobago. [Red & bold emphasis added.]

Oregon

Natural gas debate comes to the Northwest — KLCC Public Radio, Eugene, OR

WARRENTON, Ore. - Natural gas production in North America has increased so dramatically that no fewer than 17 companies have now applied to export the fuel overseas. Two gas export terminals are proposed in the Northwest -- one near Coos Bay and the other at the Port of Astoria.

Some of the same dynamics played out during a similar hearing earlier this month in Coos Bay. Another company has plans for a natural gas export terminal there. Both of these projects started years ago as gas IMPORT gateways. Then new drilling technologies and new discoveries in North America glutted our marketplace with cheap natural gas. It’s three or four times more expensive in Asia. So the Oregon-based exporters see a hot market for natural gas they plan to get mostly from Western Canada. [Red & bold emphasis added.]

Warrenton LNG terminal boils down to safety vs. jobs — The Daily Astorian, Astoria, OR

Robert Lorey, left, of Portland, and Dave Lillis, a “marine biologist against LNG,” brave the elements before Monday’s Federal Energy Regulatory Commission public scoping meeting to oppose the Oregon LNG liquefied natural gas export terminal project.

United States

Trouble in China for U.S. LNG exports? — InvestorPlace, Rockville, MD

China’s energy use has surged over the last few years as it continues its modernization programs. That makes it the prime destination for the output from all of those new and proposed North American LNG plants. However, some recent data could throw a wrench into those carefully laid export plans and imperil many of the facilities’ prospects.

It seems that China has begun to ramp its imports of piped natural gas from Eurasia.

The reason comes down to cost. Even before the expense of re-gasification, LNG imports cost about 3% more on average than straight pipeline imports. So far this year through August, China has spent roughly $5.4 billion, an average cost of $547 a ton, for piped natural gas from Turkmenistan. That contrasts to the $562 a ton it paid for LNG imports from places like Australia and Qatar. Back in 2008, China was paying an average price of just $282 a ton for LNG.

Given China’s growing thirst for cheaper piped natural gas, as many as 12 U.S. projects that have applied for an LNG export license — including Cheniere’s (NYSE:LNG) Sabine Pass facility in Louisiana — could be thrown for a loop. At the same time, more $100 billion worth of LNG projects in Australia, such as Exxon Mobil‘s and BHP Billiton‘s Scarborough gas field and Hess’s Equus project could be canceled if China continues to expand its usage of piped natural gas. [Red & bold emphasis added.]

Webmaster's comment: As with the mad goldrush to import LNG that fell flat on its face, the LNG industry may be getting set up for yet another big and expensive failure.

Will domestic politics in the US and Russia shape European gas markets? [Opinion column] — Huffington Post UK

The North American shale gas revolution has led the gas independence of the United States and forced liquefied natural gas (LNG) cargos to move elsewhere. The US success has had a serious impact on commercial drivers and consumer-producer relations in traditional markets and in Europe, in particular. It has forced countries to start exploring new ways of following the American "shale gas" footsteps.

The new abundance has undermined the oil-linked gas price formula used by Gazprom in its long-term contracts. The US could further change the global energy game if it opts to export its gas or use more gas instead of oil. This could lead to an increase in oil exports from North America which could also cause shock-waves in the global oil market.

North America

LNG 17 attracts leading world experts and speakers [Press release] — BCM Public Relations, Dorking, Surrey, England, UK

The 17th International Conference and Exhibition on Liquefied Natural Gas (LNG 17), will take place from April 16 – 19, 2013 in Houston, Texas. It is anticipated that LNG 17 will attract approximately 5,000 senior technical, commercial and strategic experts from over 80 countries. Attendees will have the opportunity to visit more than 300 exhibitors, hear from top-level speakers and attend a variety of networking events.

The spotlight session on the North American LNG Market will cover the implications of North American LNG exports on global dynamics, with three speakers bringing insight and experience from very different parts of the US LNG market. Betsy Spomer, Head of Global LNG, BG Group will look at Gulf Coast imports and exports, Phil Ribbeck, President, Repsol Energy North America will concentrate on Atlantic Coast trade and Janine McArdle, Senior Vice President – Gas Monetisation, Apache Corporation will focus on Canadian West Coast exports.

New Brunswick

Canadian gas exports down 4%, imports rise 20.4% in August: NEB (Oct 12) — Platts

With production still rampant from unconventional plays, market players continued to use storage as an avenue for the burgeoning supplies. Indeed, Eastern Canadian storage fields -- which are the main destination for imports into Canada, according to the NEB -- are now 95% full as of October 5, according to Enerdata.

The NEB also noted a lone liquefied natural gas cargo found its way into Canada's single terminal, Canaport in New Brunswick, in August. The 159.1 million cu m short-term delivery came from Qatar and its average price was not disclosed. The last time Canaport received a cargo, either long or short term, was in June. [Red & bold emphasis added.]

Webmaster's comment: Canaport LNG is feeling the effect of vast domestic US and Canadian natural gas at our disposal. Canaport LNG is for sale. Downeast LNG is trying to sell refrigerators at the North Pole.

Northeast

FERC holds hearing for Dominion project (Oct 12) — Southern Maryland Newspapers, MD

It was a divided auditorium Tuesday night as residents argued their concerns for the Dominion Cove Point Liquefied Natural Gas expansion project and officials championed its effects.

“We’ve failed to see how this would be in the public’s best interest,” Neal said of the homeowners association.

Neal said their concerns include the increase in natural gas prices to U.S. companies, the impact the large trucks and barges would have on Solomons, the increased noise, whether the county is prepared for the safety measures involved, increased traffic down the only emergency route, and that many of the thousands of workers aren’t going to come from the area.

Southeast

Follow up on purported LNG accident in China [blog] (Oct 10) — Savannah Morning News, Savannah, GA

An LNG industry consultant posted several comments on the blog saying that he had information from his sources in China that it wasn't an LNG truck, but an LPG (liquefied petroleum gas, basically propane) truck transporting dimethyl ether or DME. I've since seen one industry report that indicates it was LPG. It's here. I got another call today from a staffer at the Center for LNG saying it wasn't LNG and I should correct the blog, though she didn't want to be quoted.

Webmaster's comment: Please take a look at the comments I posted to the above online story. The "evidence" that the incident was LPG (propane), and not LNG, includes no factual, checkable references. While it is possible the event was either LPG or LNG, the video footage does not provide conclusive evidence, either way.

Gulf of Mexico

DOE issues Tolling Order on Sabine Pass rehearing request — LNG Law Blog

The U.S. Department of Energy (DOE) has issued a tolling order which extends indefinitely the date by which DOE must act on Sierra Club's request for rehearing and stay of DOE's order authorizing Sabine Pass Liquefaction LLC to export LNG from its LNG terminal in Sabine Pass, La. to nations without a Free Trade Agreement with the United States. In the absence of the tolling order, Sierra Club's request for rehearing would have been deemed denied by operation of law within 30 days of the date it was filed. [Red emphasis added.]

Excelerate Liquefaction Solutions files to export LNG to non-FTA nations (Oct 11) — LNG Law Blog

Excelerate Liquefaction Solutions I, LLC ("ELS") has filed an application at the U.S. Department of Energy ("DOE") to export over a 20-year period up to 10 million metric tons per year (approximately 1.33 Bcf/day) of domestically produced LNG to nations without a Free Trade Agreement with the United States. ELS would export the LNG from proposed floating liquefaction, storage and offloading terminal facilities in Calhoun County, Texas.

Caribbean

Argus launches fob Trinidad LNG prices [Press release] — PR Newswire

Leading energy and commodities reporting organisation Argus has expanded its suite of global liquefied natural gas (LNG) prices to include the Americas with the launch of Trinidad and Tobago fob (free on board) price assessments. The launch is in response to growing spot trade of LNG from Trinidad and Tobago to an ever increasing range of destinations.
PR Newswire (http://s.tt/1q6pk)

"Trinidad and Tobago is no longer just a supplier to its traditional term contract buyers such as the US and Spain," Argus Media chairman and chief executive Adrian Binks said. "We have seen Trinidadian deliveries arriving in areas as diverse as northeast Asia, China, India, the Middle East, southern Europe, northwest Europe and South America over the last 18 months. Trinidad and Tobago fob prices will be a key tool in valuing the growing global LNG trading complex."

Trinidad LNG bound for Canada — LNG World News

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

Repsol YPF SA’s Canaport terminal in Canada is due to get one liquefied natural gas cargo from Trinidad and Tobago this week, according to shipping data.

Alaska

Alaska is making gas line progress [Op-ed] (Oct 13) — Daily News-Miner, Fairbanks, AK

We have made a strong case for Alaska LNG in Japan, China and Korea in the past year. For example, in September, DNR Commissioner Dan Sullivan was invited to speak along with the world’s energy ministers, LNG buyers and suppliers at a major LNG conference in Tokyo, where Japanese utility and government officials publically recognized Alaska’s long-time role as a pioneer and a reliable supplier of LNG.

Talk taxes: Pushing Alaska gas can’t hurt but isn’t a catalyst [Editorial] (Oct 13) — Daily News-Miner, Fairbanks, AK

Alaska’s advantages start with its proximity to Japan and the strong four-decade record of reliability in exporting liquefied natural gas from Kenai to Japan. Other regions of the world cannot boast of the same prospects of stability for future decades.

Southcentral Alaska utility warns of possible natural gas supply shortage (Oct 11) — Alaska Dispatch, Anchorage, AK

Most Alaskans are acutely aware of the irony of gasoline prices. Despite receiving about $1,000 a year for their share of the state’s oil riches, Alaskans pay some of the highest gasoline prices in the nation. Despite an oil pipeline running just miles north of the city, Fairbanks residents struggle with exorbitant heating fuel prices. For some, it doesn't make sense.

The next irony may happen with Cook Inlet natural gas, long considered a lone holdout in rising Alaska fuel prices.

Despite increasing natural gas exploration and development in Cook Inlet, it's looking increasingly likely that the needs of Southcentral residents may be difficult to meet without importing gas.

Webmaster's comment: Industry requested — and the federal government granted, since it was "in the public interest" — the ability to export Alaska-source LNG. Now, Alaskans are suffering from a lack of natural gas at their disposal.

British Columbia

Clark's jobs plan goes head to head with Campbell's climate action plan — Canada.com

"We acknowledge that we are responsible for our own greenhouse gas targets and we know it will be a challenge to meet those by 2020. However, I think when we look at this opportunity around liquefied natural gas, it's really a once-in-a-lifetime opportunity for economic development of a resource that we have a lot of." If nothing else, Lake is an optimist. By the time the 2016 numbers are known, I can't see how the government will be able to do anything but admit defeat.

Oregon

FERC sets LNG meeting dates; Monday in Warrenton (Oct 12) — The Daily Astorian, Astoria, OR

The Federal Energy Regulatory Commission will hold a public scoping session Monday [Oct 15] relating to the proposed Oregon Liquefied Natural Gas (LNG) export project in Warrenton. The meeting will take place 6 p.m. Monday at the Warrenton Community Center, 170 S.W. 3rd St.

There will be additional meetings at 6 p.m. Tuesday at the Woodland (Wash.) High School/Middle School Commons (755 Park St.) and 6 p.m. Thursday at Vernonia Schools Commons, 1000 Missouri Ave.

Canada

Trinidad LNG bound for Canada — LNG World News

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

Repsol YPF SA’s Canaport terminal in Canada is due to get one liquefied natural gas cargo from Trinidad and Tobago this week, according to shipping data.

United States

Twenty in Congress want new study on LNG shipments — Ohio.com, OH

Twenty members of Congress want U.S. Energy Secretary Steven Chu to complete a detailed Environmental Impact Statement before the United States proceeds to export liquified natural gas (LNG).

Signers include: Polis, Hinchey, Raúl Grijalva (AZ), Bob Filner (CA), Charles Rangel (NY), John Olver (MA), Barbara Lee (CA), Gerald Connolly (VA), Pete Stark (CA), José Serrano (NY), Paul Tonko (NY), Betty McCollum (MN), Chellie Pingree (ME), Sam Farr (CA), Michael Honda (CA), Janice Schakowsky (IL), Carolyn Maloney (NY), Dennis Kucinich (OH), Steven Rothman (NJ), and Steve Cohen (TN). [Red emphasis added.]

EIA expects gas consumption to rise, USA — LNG World News

Liquefied natural gas (LNG) imports are expected to fall by about one-half in 2012 from the year before. EIA expects that an average of about 0.5 Bcf/d will arrive in the United States (mainly at the Elba Island terminal in Georgia and the Everett terminal in New England) both in 2012 and 2013, either to fulfill long-term contract obligations or to take advantage of temporarily high local prices due to cold snaps and disruptions. [Red & bold emphasis added.]

Why the natural gas picture is improving [Opinion] — Seeking Alpha

The bigger issue ... has been the game-changing entrance of unconventional natural gas supply in North America. Both the surplus of in-market stored gas and the ready availability of expanding reserves have been driving factors in lowering prices.

The amount of available gas is staggering. Known reserves of shale and tight gas, coal bed methane, and remaining free standing volume now allow up to a 25% increase in supply per year into the foreseeable future. Now, nobody would actually drill that much, because they would destroy the market (the classic example of "drilling" oneself in the foot).

By 2020, international projections say that the U.S. alone will account for at least 9% of the world LNG trade by 2020 - that's from 0% today. That could translate into a second huge multi-billion cubic foot per day demand. [Red & bold emphasis added.]

Get ready for US gas rivalry, Exxon warns (Oct 12) — The Australian,Surry Hills, New South Wales, Australia

THE local chief of US oil major ExxonMobil says Australia should be alarmed at the prospect of US gas exports, calling for policies to make our liquefied natural gas industry more competitive.

Here’s why China might not buy LNG from America (Oct 11) — Wall St. Cheat Sheet, Asheville, NC

[C]ustoms data show it is cheaper for China to have gas piped from Turkmenistan than to import LNG. Turkmenistan is able to pipe gas at an average of $547 per ton, while LNG averages $562 per ton. China accounts for almost a quarter of Asia’s total gas use, spending $10.6 billion this year through August. [Red & bold emphasis added.]

Southeast

LNG truck accident kills 5 in China (Oct 8) — Savannah Morning News, Savannah, GA

Savannahians may want to take note of this accident. The company that runs the LNG import facility at Elba Island, Southern LNG, had sought to reopen its truck loading facility so that up to 58 tanker trucks a day of LNG could flow out of Elba and through Savannah's streets. The company withdrew its request in March, later saying it wasn't commercially viable. Southern LNG, now part of the energy giant Kinder Morgan, has left open the possibility of revisiting a trucking option in the future.

"From what I can see of the footage, the tanker did not rupture when it overturned. It ruptured some time later, probably due to the LNG heating up and expanding - not sure why the expansion disk didn't rupture first, probably the tank wall was damaged in the accident and failed first, but not sure that matters too much. Either way, the initial 'explosion' isn't a combustion blast, but simply a pressure front as the LNG lost containment and vaporized. What the presenter in the NHK footage calls "smoke" is actually a cold LNG vapor/condensation mix. At some point the vapor hit the critical mixture and ignited for some reason (the orange flare), causing the secondary combustion blast. Neat footage, illustrates how there are multiple effects with very different physics." [Red & bold emphasis added.]

Gulf of Mexico

Sabine Pass files to modify LNG export terminal facilities (Oct 9) — LNG Law Blog

Sabine Pass Liquefaction, LLC, filed an application at FERC for certain modifications ("Modification Project") to enhance the operation and reliability and facilitate the construction of the Sabine Pass Liquefaction Project currently under construction at the existing Sabine Pass LNG Terminal in Cameron Parish, La. The modifications include: (1) construction and operation of (i) a heavies removal unit to be located within each of the four liquefaction trains; (ii) condensate storage, metering, and send-out facilities; and (iii) four feed-gas pipeline meter stations to interconnect with the Liquefaction Project; and (2) construction and operation of (i) two additional water supply lines and (ii) natural gas liquids truck loading facilities.

GE Technology to power Cheniere Energy's LNG export facility in Louisiana — OilVoice, Milton Keynes, England, UK

GE Oil & Gas will supply gas compression trains for Cheniere Energy's Sabine Pass liquefaction expansion project in Cameron Parish, La., about 170 miles west of Baton Rouge. Adding liquefaction capabilities will transform the existing Sabine Pass LNG terminal into the first LNG terminal capable of importing and exporting liquefied natural gas (LNG) in the U.S.

Caribbean

Editorial - Chavez's victory and the LNG project (Oct 9) — The Gleaner, Kingston, Jamaica, West Indies

[T]he Jamaica Public Service Company (JPS) says it is moving ahead with its plan to build a 360-megawatt gas-fired plant. But a court ruled that its declared monopoly on the distribution of power is illegal. The question is whether JPS can fulfil its plan in the absence of legal clarity on this matter.

The same question arises over the announcement that JPS is to take over the promotion/development of an LNG storage and regasification facility, a matter further complicated by the fact that there are no agreed offtakers for two-thirds of the LNG to be processed by the plant. [Red emphasis added.]

Alaska

Alaska LNG: A new global competitor? — Resource Investing News, Vancouver, BC

[This same article appears under the British Columbia heading, below. —SPB webmaster]

If this project is given the go ahead, a significant amount of investor interest is bound to shift west of Northern British Columbia’s gas projects. There are presently seven projects under development or consideration in BC, and if they all go online successfully, the amount of gas they produce will amount to several times the volume of daily exports that might flow out of Alaska.

However, it is not necessarily volume of export potential that will top investor checklists; the distinct advantages that Alaska holds may prove more important. The state is located nearer to Asian markets than many of its competitors, and would be making use of supplies that are considered more reliable than large portions of BC’s shale gas reserves, where few projects have reached the production phase. [Red & bold emphasis added.]

British Columbia

Alaska LNG: A new global competitor? — Resource Investing News, Vancouver, BC

[This same article appears under the Alaska heading, above. —SPB webmaster]

If this project is given the go ahead, a significant amount of investor interest is bound to shift west of Northern British Columbia’s gas projects. There are presently seven projects under development or consideration in BC, and if they all go online successfully, the amount of gas they produce will amount to several times the volume of daily exports that might flow out of Alaska.

However, it is not necessarily volume of export potential that will top investor checklists; the distinct advantages that Alaska holds may prove more important. The state is located nearer to Asian markets than many of its competitors, and would be making use of supplies that are considered more reliable than large portions of BC’s shale gas reserves, where few projects have reached the production phase. [Red & bold emphasis added.]

Oregon

Protesters persist at LNG meeting — The World, Coos Bay, OR

NORTH BEND — Health and safety concerns were the recurring themes at a Tuesday night meeting on the proposed natural gas export terminal.

FERC previously granted Jordan Cove a permit to build a natural gas import terminal on the North Spit. Jordan Cove then announced market conditions had changed and the company wanted to build a facility to export natural gas instead.

FERC vacated the original import permit, but still will use portions of the original Environmental Impact Statement.

Canada

Liquified natural gas: Canada assures India of stable supply (Oct 9) — India Today, Film City,, Noida, India

"We have vast natural resources in Canada. India, as one of the world's largest energy consumers, is looking to diversify its energy supply sources which Canada is well positioned to fulfil," [Canada's Minister of Natural Resources Joe Oliver] told media persons here.

United States

USA: Three LNG cargoes exported this year (Oct 9) — LNG World News

Kenai LNG terminal shipped a cargo of LNG to Japan’s Kansai Electric on August 16, according to DOE.

In 2012, U.S. re-exported four LNG cargoes. Two of the cargoes were shipped from the Sabine Pass terminal and two from Freeport LNG terminal.

There are currently three U.S. LNG terminals that have been granted Federal approval to re-export LNG: Freeport in Texas, Sabine Pass and Cameron in Louisiana.

China piped gas imperils US$100B LNG plans — Bloomberg News

China is importing more natural gas by pipeline than sea for the first time, highlighting the risk to planned LNG projects costing at least $100 billion as buyers seek cheaper supplies.

“We don’t think LNG [imports to China] will grow to be as big as many people are thinking,” Simon Powell, the head of Asian oil and gas research at CLSA, said by e-mail. “LNG prices are still too high to compete in China. Piped gas imports are way bigger.”

US shale’s seismic shaking of Gazprom (and Putin) — Energy Tribune, Houston, TX

First Putin rubbished it. Then he tried to ignore it. Now the seismic tremors of the US shale gas boom are really being felt in Moscow. Not only are they rattling the Kremlin’s confidence in the future of its energy empire, but they could also prove fatal to Russia’s gas giant, Gazprom.

In a recent report, Harvard University’s School of Government concluded, “the relative fortunes of the United States, Russia and China – and their ability to exert influence in the world – are tied in no small measure to global gas developments.” While Europe is still failing to get the message, Russia has. Not only has the U.S. shale gas tsunami transformed the domestic and global market, it is, even more significantly, re-empowering Western democracy and diminishing the ‘tyrannical’ political power bases of OPEC, the Middle East and Russia.

Sierra Club continues opposition to U.S. LNG exports — LNG Law Blog

Sierra Club filed a protest at FERC regarding Corpus Christi Liquefaction LLC's application to construct natural gas liquefaction and LNG export terminal facilities near Corpus Christi, Texas. Sierra Club argues, among other things, that FERC s environmental review of the project should include review of the effects caused by an increase in hydraulic fracturing if the projects are approved.

Japan, India to study LNG pricing — Channel NewsAsia, Singapore

[This same article appears under the Asia heading, below. —SPB webmaster]

TOKYO: Japan and India on Wednesday launched a joint research project into pricing structures in LNG markets, the Japanese government said, amid complaints that energy-hungry Asia is paying above the odds.

Japan is the world's top importer of liquefied natural gas. Asian buyers pay far more than those in North America because the price is index-linked to oil on the continent.

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

Asia

Japan, India to study LNG pricing — Channel NewsAsia, Singapore

[This same article appears under the United States heading, above. —SPB webmaster]

TOKYO: Japan and India on Wednesday launched a joint research project into pricing structures in LNG markets, the Japanese government said, amid complaints that energy-hungry Asia is paying above the odds.

Japan is the world's top importer of liquefied natural gas. Asian buyers pay far more than those in North America because the price is index-linked to oil on the continent.

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

Northeast

USGS releases survey on Utica Shale gas resources, USA (Oct 5) — LNG World News

The Utica Shale contains about 38 trillion cubic feet of undiscovered, technically recoverable natural gas (at the mean estimate) according to the first assessment of this continuous (unconventional) natural gas accumulation by the U. S. Geological Survey.

The Utica Shale lies beneath the Marcellus Shale, and both are part of the Appalachian Basin, which is the longest-producing petroleum province in the United States. The Marcellus Shale, at 84 TCF of natural gas, is the largest unconventional gas basin USGS has assessed. This is followed closely by the Greater Green River Basin in southwestern Wyoming, which has 84 TCF of undiscovered natural gas, of which 82 TCF is continuous (tight gas). [Red & bold emphasis added.]

Webmaster's comment: Natural gas abundance lies virtually at the Northeast's and New England's feet. Downeast LNG is a wasted and wasteful effort.

Gulf of Mexico

GE technology to power Cheniere Energy's LNG export facility in Louisiana — Oil & Gas Financial Journal

GE Oil & Gas will supply gas compression trains for Cheniere Energy’s Sabine Pass liquefaction expansion project in Cameron Parish, La., about 170 miles west of Baton Rouge. Adding liquefaction capabilities will transform the existing Sabine Pass LNG terminal into the first LNG terminal capable of importing and exporting liquefied natural gas (LNG) in the US.

Caribbean

Paulwell: JPS to source LNG (Oct 4) — Jamaica Observer, Kingston, Jamaica, West Indies

ENERGY Minister Phillip Paulwell says that the Jamaica Public Service Company (JPSCo) will now be responsible for sourcing the Liquified Natural Gas (LNG) needed to fuel its new generation plant.

Meanwhile, Paulwell said the Government was not anticipating any legal backlash from Korean conglomerate Samsung Corporation following its decision to put the LNG project into private hands.

Alaska

Energy firms agree on plan for Alaska gas pipeline (Oct 4) — Wall Street Journal, New York, NY

A consortium of energy companies said it is moving forward with a project to build an Alaskan natural-gas pipeline to export liquefied natural gas to Asia, at a potential cost of more than $65 billion. Tom Fowler has details on The News Hub.

Hawaii

LNG: Smart public policy or bridge to nowhere? [Opinion column] — Honolulu Civil Beat, Honolulu, HI

On Thursday, Civil Beat reported that the State has made up its mind on importing liquefied natural gas (LNG) to Hawai‘i. According to the Lieutenant Governor, “We are no longer assessing whether LNG makes smart public policy. We are trying to figure out what it takes logistically and what we need to do to establish that.”

Canada

Canada assures India of stable LNG supply — New York Daily News

India can depend on Canada as a reliable supplier of liquified natural gas (LNG) for decades to come, the country's Minister of Natural Resources, Joe Oliver, said Monday.

Canada is the world's third-largest gas producer and has significant supply reserves of up to 1300 trillion cubic feet or 37 trillion cubic metres in natural gas resources. [Red & bold emphasis added.]

Depressed North American price makes LNG a risky business (Oct 5) — Edmonton Journal, Edmonton, AB

...Cheniere Energy, owners of the only approved U.S. LNG export terminal project in Louisiana, signed a deal with foreign customers that is based on North American gas prices, not the hoped-for oil-linked index used in Asia. The difference is huge.

If the trend started by Cheniere sticks, some of B.C.’s touted LNG projects — which assumed their customers would pay the higher price — will not be built. Even before the Cheniere deal, Eurasia Group, a global energy consulting firm, was predicting that market conditions — another phrase for plenty of competition — will limit Canadian exports to about 3 billion cubic feet (bcf/d) out of two large Kitimat-area facilities.

While China could import as much LNG as Japan with their new terminals, their own shale gas potential makes that a risky bet. They could even become exporters, competing with North American, Middle East and Australian shippers.

“Chinese companies are buying U.S. and Canadian shale gas assets to learn shale gas drilling operations and technology to take back to China,” said Yosida. [Red & bold emphasis added.]

United States

TEPCO trying to import shale gas from U.S. to lower electricity cost — The Japan Daily Press, Nagoya, Japan

As the season grows colder and colder, consumers expect electricity costs to go higher and higher as well. But if negotiations between Tokyo Electric Power Co (TEPCO) and U.S. energy companies go well, this might not be the case in the next few years. By importing shale gas for half the price it pays for liquefied natural gas, rates will not balloon anymore.

Drowning in natural gas: Is the answer exports? [Opinion column] — OilPrice.com

The US has an overabundance of natural gas and production is rising despite a reduction in the number of natural gas rigs in operation. Yet the US is only scratching the surface of its natural gas reserves that can be unleashed by fracking. One answer to this overabundance is exports, so why is it such a sensitive issue? [Red & bold emphasis added.]

Natural gas: Clouds fog hopes of global export boost — Financial Times, UK

[I]n North America, technologies such as hydraulic fracturing and horizontal drilling have opened up vast resources of shale gas previously considered too difficult or uneconomic to develop. The resulting production rise has forced gas prices to 10-year lows. Terminals built to import LNG are being altered to export instead. Canada, too, is progressing plans to export gas.

...North America’s LNG exports will probably be indexed to US Henry Hub prices, in contrast to most other long-term LNG contracts, which are linked to oil prices.

“In the end, the LNG export market is not expected to experience the boom some predict,” says Mr Day. [Red emphasis added.]

BG sees decades more of oil-linked LNG sales — Reuters

Liquefied natural gas (LNG) will continue to be benchmarked to oil prices for several more decades, outgoing BG Group Chief Executive Frank Chapman said on Monday, despite complaints by top Asian importers that supplies are unaffordable.

Producers have defended the practice of selling LNG linked to oil prices amid a growing backlash by consumer countries who want the fuel to reflect fundamentals specific to oversupplied and comparatively cheap gas markets.

Cargoes exported from U.S. terminals would be linked to cheap domestic Henry Hub prices plus a small premium which nevertheless is heavily discounted to prevailing global LNG prices. [Red & bold emphasis added.]

US example: Gas replaces coal as the favoured fuel — Financial Times, UK

Ten years ago, America was preparing to import gas. Now, some estimate the new reserves will last 100 years. [Red & bold emphasis added.]

Mexico

Peru LNG ships cargo to Mexico (Oct 5) — LNG World News

The cargo is being hauled by the 173,400 cubic-meter Barcelona Knutsen, and it is sailing to Mexico’s Manzanillo terminal.

China

Tanker road blast kills five in China's Hunan province — BBC News

CLARIFICATION: This was reported as an LNG tanker truck incident, but some subsequent reports indicate either an LPG (propane) or LNG tanker truck wreck, release, and explosion. The truck's tank containment does not appear to have the hemispherical ends typical of a pressurized propane tank, indicating perhaps an LNG tank. The manner in which the rupture occurred also implies LNG (boiloff building up pressure within the tank perhaps due to the relief mechanism damaged by the wreck, resulting in tank rupture).

The following Shanghai List article, Incredible Footage Shows A Huge Gas Explosion In China, contains a video (the second one on the page) taken from a car being delayed by the wreck. The gas release can be seen, and an explosion ensues.

[An LNG tanker truck] carrying liquefied natural gas [SIC] has exploded in central China, killing five people, including three firefighters.

Seven vehicles, including two fire trucks, were destroyed in the blast and 50 people had to be evacuated from their cars, state media reported. [Red, yellow & bold emphasis added.]

Webmaster's comment: This incident provides an example of what a relatively small release can do.

New Brunswick

Canaport LNG May Convert to LNG Exporting

New role mulled for N.B. LNG plant (Oct 4) — The Chronicle Herald, Halifax, NS

A liquefied natural gas plant and terminal in New Brunswick could be converted into an export facility to help develop the region’s onshore oil and gas industry, says the president of Corridor Resources.

Phillip Knoll told an energy conference Thursday in Halifax that Canaport LNG in Saint John is underutilized and a candidate to make the switch.

“There are international parties very interested in that,” he said during a panel about onshore development.

Knoll said he also thinks companies would be interested in converting the Repsol-led operation, which is reported to be for sale.

Canaport, partially owned by Irving Oil, could be converted to an export facility in about 18 months, he said. [Red, yellow & bold emphasis added.]

Webmaster's comment: Repsol has previously indicated Canport LNG is for sale [see: Repsol courts suitors for LNG asset sale (2012 Jul 27); Gas Natural CEO says approached by Repsol regarding LNG asset sales (2012 Jul 24); Repsol may sell Canaport LNG, report says (2012 Jul 20)].

This just piles on the bad news for Downeast LNG. There are no prospects for Downeast LNG to switch to an export project, even in the unlikely event it were to obtain a FERC permit to import — the natural gas feeding Canaport's exports would be from Nova Scotia and New Brunswick gas fields, not passing through Maine.

New England

EIA: New England gas pipeline reflects seasonal flow changes, USA (Oct 4) — LNG World News

The Algonquin Gas Transmission (AGT) Company, a main source of natural gas supply into New England, has traditionally operated near capacity only during the high-demand winter season. But so far in 2012, it has operated at much higher levels year-round as rising natural gas demand from the power sector, coupled with reduced liquefied natural gas (LNG) imports, have increased flows on pipelines into the region, EIA said in a report.

Northeast natural gas prices frequently increase in winter, as high demand and supply constraints separate local prices from the U.S. Gulf region (this separation is commonly referred to as “basis”, or the price difference between a natural gas trading location and the Henry Hub in Louisiana). But short periods of higher prices have also occurred in the last two summers.

In the Boston area, average daily summer basis (June-August) has increased every year, from a $0.31 per million British thermal units ($/MMBtu) average in 2009 to an $0.81/MMBtu average in 2012. In addition, the highest summer basis level has increased every year as well, from a $0.59/MMBtu maximum in 2009 to $6.28/MMBtu in 2012. The number of over-$1/MMBtu basis days hit 22 days this summer, up from seven days in 2011. There were no over-$1/MMBtu basis days in the summers of 2009 or 2010.

Liquefied natural gas (LNG) deliveries into New England have been declining in recent years, as low domestic prices provide an unattractive market to LNG shippers. LNG sendout into New England averaged about 0.5 Bcf/d from June to August 2005-2010. This level dipped slightly to about 0.43 Bcf/d during the summer of 2011 and over half of that (54%) arrived via the the Canaport LNG facility in New Brunswick, Canada, which began commercial operation in July 2009. But this summer, total LNG sendout into New England averaged only 0.11 Bcf/d, and there were periods in the first half of May and early June where little LNG entered the New England market. [Red & bold emphasis added.]

Webmaster's comment: Although pipeline constraints exist, the ultimate solution is already ongoing.That solution is pipeline expansion and new pipelines to deliver domestic-sourced natural gas — not constructing yet another surplus LNG import terminal as Downeast LNG is proposing that would increase US dependence on overseas LNG while simultaneously increasing the US trade deficit. Pipeline development is reducing both.

Gulf of Mexico

Golden Pass Products wins approval from U.S. DOE to export LNG — LNG World News

Golden Pass Products said it has received authorization from the United States Department of Energy to export domestically produced natural gas as liquefied natural gas from the Golden Pass LNG terminal in Sabine Pass, Texas, to nations that have existing Free Trade Agreements (FTA) with the U.S.

The proposed expansion of Golden Pass is an opportunity to capitalize on America’s abundant natural gas resources. The Energy Information Administration’s Annual Energy Outlook 2012 shows that the U.S. has substantial gas supplies that can support gas exports, including LNG exports, over the longer term. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG does not want the public to believe this is happening.

Qatar, ExxonMobil joint venture wins its first U.S. LNG export permit (Oct 5) — The Daily Star, Lebanon

Qatar’s Golden Pass Products LLC received permission to export liquefied natural gas from the U.S., in what may become the Persian Gulf state’s first venture for selling LNG produced in another country.

The Energy Department permit will allow Golden Pass, owned 70 percent by state-run Qatar Petroleum International and 30 percent by ExxonMobil Corp., to export the chilled fuel to nations that have free-trade agreements with the U.S., according to a statement posted on the company’s website.

The emirate joins companies such as Cheniere Energy Inc., Sempra Energy and Dominion Resources Inc. in seeking to export LNG from the U.S. to take advantage of higher prices elsewhere. U.S. natural gas prices averaged $2.96 per million British thermal units in July, or 16 percent of Japan’s average LNG import price, according to New York futures prices and data compiled by Bloomberg. [Red & bold emphasis added.]

Caribbean

Paulwell: Jamaica aiming to introduce liquefied natural gas by 2015 — Caribbean Journal, Miami, FL

Jamaica is planning to introduce Liquefied Natural Gas in Jamaica by 2015, despite a recent decision by the government to remove itself from the process of fuel selection.

Paulwell said that, following meetings in South Korea, Japan and Jamaica, he had “firm assurance from the Jamaica Public Service that they will be able to undertake this LNG project within the timeline established, and will achieve a 30 percent reduction in the price of electricity to the consumer.”

Alaska

Pegged at $45-65B — (Week of Oct 7) — Petroleum News, Anchorage, AK

Producers say LNG project would require competitive oil, gas fiscal terms

[F]or the project to proceed from concept selection to pre-FEED (front-end engineering and design) the companies said in a diagram of key decision points, requires a competitive oil tax environment, predictable and durable LNG project fiscal terms and resolution of AGIA (Alaska Gasline Inducement Act) issues.

Existing oil production facilities “need to be available over the long-term for producing the associated gas for an LNG project. For these reasons, a healthy, long-term oil business, underpinned by a competitive fiscal framework and LNG project fiscal terms that also address AGIA issues, is required to monetize North Slope natural gas resources,” they said in the letter to Parnell.

The Alaska Legislature has been unable to agree on oil tax changes and the administration has said oil tax changes will be proposed when the new Legislature convenes in January.

Ship pilot: Valdez best for LNG exports (Week of Oct 7) — Petroleum News, Anchorage, AK [Paid subscription]

Port Valdez would be better than a Cook Inlet port for safely exporting large volumes of liquefied natural gas, or LNG. So concludes an experienced ship captain, Jeff Pierce, who prepared a navigational risk analysis for the Alaska Gasline Port Authority. The study was presented at the Alaska LNG Su....

Companies make progress on Alaska LNG project [Press release] (Oct 3) — Office of Governor Sean Parnell, AK

Today’s letter and attachments from the producers and TransCanada provide details on the team they have assembled and the team’s activities in developing a project, building on their previous work to commercialize North Slope gas. The documents include a project timeline and a cost range covering various stages in the project development schedule and work plan. The documents also provide new details regarding the components of an Alaska LNG project, including a liquefaction facility, gas production and storage, a large-diameter pipeline, and a gas treatment plant.

Given the massive size of the North Slope conventional gas resource (35 trillion cubic feet of reserves and more than 200 trillion cubic feet of undiscovered, technically recoverable resources) and the scope of the project as described by the companies, an Alaska LNG project will be one of the largest in the world.

Continuing concerns (Week of Oct 7) — Petroleum News, Fairbanks, AK

Southcentral utilities tell task force about latest gas supply situation

[T]he region still faces potential gas supply shortfalls in the next few years, with the possibility of power cuts or worse, should the flow of gas from Cook Inlet gas fields fall short of peak gas demand, especially during the winter. That was the overriding message from a Sept. 26 meeting of the Anchorage Mayor’s Energy Task Force, in which some Southcentral utilities presented their analyses of the short- to medium-term gas supply and demand situation, as projections of available gas supplies show continuing declines.

Cook Inlet Natural Gas Storage Alaska, or CINGSA, brought its new gas storage facility online in April and since then has been filling the facility’s underground reservoir, in preparation for the coming winter.

The utility executives said that they are working on “plan B,” a contingency plan to keep the lights and heating on in Anchorage and other Southcentral communities, should local gas supplies drop below needed levels. And, given the short timeframe available to put a contingency plan into place, the only feasible options seem to be the import of liquefied natural gas or compressed natural gas from elsewhere into the region, to supplement local gas resources. Should these two options fail to materialize, the only other possibility would appear to be a periodic switch over to the use of liquid fuels such as diesel, rather than gas, for power generation.

For some time the utilities have been investigating the possibility of importing liquefied natural gas, or LNG, into Southcentral Alaska, perhaps by converting the LNG export facility at Nikiski on the Kenai Peninsula into an import and regasification terminal. The utilities have been looking into LNG markets, pipeline transportation, shipping opportunities and the question of the optimum import point, including the Port of Anchorage, Kenai and Whittier, Thibert said. The concept of importing compressed natural gas, or CNG, has also gained some traction — this option would offer the advantage of the ability to purchase gas at relatively low prices on the U.S. West Coast.

Webmaster's comment: What's wrong with this picture? Alaska has an immense natural gas resource, but Alaskans may have to import LNG to keep the lights on and homes warm. Still, Alaskan LNG exports to Japan continue.

US Senator Lisa Murkowski welcomes Alaska LNG agreement (Oct 5) — LNG World News

While exports are central to a gas line project, Murkowski repeated her belief that North Slope gas should also be used to provide affordable energy to Fairbanks and Southcentral communities.

As the top Republican on the Senate Energy and Natural Resources Committee and the Senate Interior and Environmental Appropriations Subcommittee, Murkowski is responsible for overseeing the federal agencies involved in permitting an export project, including the U.S. Department of Energy and the Federal Energy Regulatory Commission (FERC). [Red emphasis added.]

Alaska LNG pipeline to cost $65B or more (Oct 5) — CBC News

A liquefied natural gas project in Alaska could cost more than $65 billion US and would represent a mega-project of "unprecedented scale and challenge," officials behind the project told Gov. Sean Parnell.

It does not specify the terminus for any line, only that it would run from the North Slope about 800 miles to south-central Alaska.

Energy firms in Alaska LNG project - Analyst blog (Oct 5) — NASDAQ

The project will comprise an 800 mile pipeline, which will run from North Slope to South-Central Alaska. It also includes the construction of a liquefaction plant and storage tanks. For the LNG terminal, as many as 22 different sites are being considered by the companies participating in the project. [Red & bold emphasis added.]

TransCanada: No current plans to seek more state funds (Oct 5) — Anchorage Daily News, Anchorage, AK

TransCanada Corp. has no immediate plans to ask the state of Alaska for additional funding to advance a major gas line project, an executive with the company said Friday.

Under the Alaska Gasline Inducement Act, or AGIA, TransCanada is eligible for up to $500 million in reimbursable costs for its work. Reimbursement to date is about $200 million, according to a spokesman for the Alaska gas pipeline office.

Alaska's $65 billion natural gas pipeline (Oct 5) — Energy Digital

With a glut of stranded natural gas supplies, Alaskan energy giants seek new markets with a massive pipeline

With natural gas supplies booming in North America, Alaska proposes a plan to reach new markets where supplies are short and the fuel could be sold at a higher price.

The natural gas supply glut in Alaska has inspired a group of energy companies to potentially invest up to $65 billion to build an 800-mile pipeline to export the stranded natural gas to Asia. For the rest of America, however, the proposal could mean that the cheap, abundant source of domestic energy could end up costing more as it reaches the global market.

Increasing supplies in the global market could put pressure on natural gas shipped from other ports, and the industry may have to expand exports of low-priced US natural gas.

Webmaster's comment: Alaska's 'gas glut' is a glut only from the perspective of natural gas producers and exporters — there is no 'glut' for Alaskan residents, where there threaten to be natural gas shortages in upcoming winter months.

Oil companies release proposed LNG pipeline [sic] plan (Oct 4) — Alaska Public Telecommunications

The plan offers some broad, if vague, details on how much a pipeline would cost. The companies estimate the entire project will cost between $45-65 billion. That’s quite a swing, and at the upper end, a price point that’s three times higher than TransCanada’s estimate three years ago.

The companies illustrate that a pipeline would be for export. And it would end somewhere at a liquefaction plant at tidewater. But that’s as far as specific go for geography. It could be anywhere in Southcentral Alaska.

Alaska plan intensifies gas race to Asia (Oct 4) — The Globe and Mail, Toronto, ON

The Alaska Southcentral LNG project would include construction of a 1,300-kilometre pipeline from Alaskan North Slope gas fields to southern waters, near Valdez or Anchorage, where a new terminal would load liquefied natural gas on to tankers.

Its projected costs are so high, however, that some are already questioning how it could be profitable. Indeed, its backers make clear in a letter released this week that “additional commercial agreements as well as support from the State of Alaska will be required in order to progress this world-class opportunity.”

Alaska has advantages. It is located geographically nearer Asian markets, and would use gas supplies that could be considered more certain than B.C.’s shale gas, little of which is yet in production. And its timing makes clear that B.C. projects have an increasingly narrow window to construct, lest they find their opportunity seized by others, said Jihad Traya, Calgary-based associate director of North American natural gas for IHS CERA.

That is, if it can get built. According to a preliminary estimate by Roger Marks, an Anchorage-based petroleum economist, it would cost $8 to $9 per thousand cubic feet to load the gas on to the new pipe, carry it south and stuff it onto a tanker. That’s not including the cost of producing that gas – low, but not zero – or shipping it to market, which could add another $1 to $2. Add it up, and there’s not much left for profit relative to gas prices in Japan, which are now at $15 and are expected to settle in the $12-to-$15 range in future. [Red & bold emphasis added.]

Webmaster's comment: Considering Cheniere's offer to sell US-produced LNG to Japan at bargain-basement prices, Alaska's pipeline-to-LNG--export project may be a 'mega-boondoggle.'

Alaska producers envision LNG export ‘mega-project’ (Oct 4) — Alaska Natural Gas Transportation Projects

The Oct. 1 letter from executives of ExxonMobil, ConocoPhillips, BP and pipeline company TransCanada stressed that their project is in its early stages of planning. They estimated a decision on whether to actually build the project is at least three years away, and if they do build it, the first LNG wouldn't flow before the early 2020s.

The letter to Parnell from Randy Broiles of ExxonMobil Production Co., Trond-Erik Johansen of ConocoPhillips Alaska Inc., John Minge of BP Exploration Alaska and Tony Palmer of TransCanada said the project concept today envisions an 800-mile, 42- to 48-inch diameter pipeline that would carry 3 billion to 3.5 billion cubic feet of gas per day. Some of that gas would be consumed in Alaska and some would be used to run the liquefaction plant and pipeline compressor stations.

The letter says the companies have assessed 22 sites along the Southcentral Alaska coast for location of the LNG plant and tanker port. It did not indicate a preferred site.... [Red & bold emphasis added.]

British Columbia

Pricing developments could scuttle Christy Clark’s LNG ambitions (Oct 5) — Alberta Oil, AB

As you may have heard, B.C. Premier Christy Clark was in Calgary this week to chat with Alberta Premier Alison Redford about Enbridge Inc.’s Northern Gateway pipeline, which proposes to ship over 500,000 barrels per day of bitumen from Bruderheim, Alberta to Kitimat, B.C.

The meeting did not last long. Nor did it go well.

Clark’s opposition to Northern Gateway seems to be at least partly rooted in a sort of cockiness that B.C. can afford to pass on this opportunity – as limited as that opportunity may be from a B.C. perspective – because it’s just a matter of time before millions of tonnes of LNG are shipped from B.C.’s coast to Asia markets willing to pay US$10 per mcf and more for the stuff. B.C. has “bigger fish to fry” than the Northern Gateway, Clark told reporters in Calgary after her tete-a-tete with Redford.

But Clark’s tough talk this week makes one wonder if she’s been paying attention to what’s been going on in the LNG space of late.

[A]s Cheniere Energy gets set to export LNG from Louisiana based on North American Henry Hub prices, which are much cheaper than oil-indexed prices, that poses risks for proponents of B.C. LNG export terminals, who are looking to strike long-term sales deals based on the traditional pricing structure. [Red & bold emphasis added.]

West Coast LNG advocates face tough road ahead (Oct 5) — The Globe and Mail, Toronto, ON

Big dreams for [liquefied] natural gas exports from Canada’s West Coast may face a rude awakening as a result of the cost and difficulty of constructing mega-projects that must find customers in an increasingly saturated global market.

“Based on our model, most of these LNG projects will likely get shelved once the true costs are calculated,” Peter Doig, an analyst with GMP Securities in Calgary, wrote in a recent research note to clients.

Foreign buyers are ... increasingly less willing to buy LNG through expensive oil-linked contracts, with some Japanese buyers looking to sign solely cheaper gas-price-contracts in North America.

Far more LNG is being contemplated than the market is likely to need. That suggests some projects will not succeed. Bentek, a U.S. energy forecasting and analysis firm, believes only two Canadian LNG projects will be built by 2020. [Red & bold emphasis added.]

Webmaster's comment: LNG industry developers seem to run from nutso idea to nutso idea, ignoring their recent nutso financial catastrophes.

U.S. low-price gas deal shifts landscape for LNG (Oct 3) — The Vancouver Sun, Vancouver, BC

VICTORIA/CALGARY — British Columbia’s first major liquefied natural gas export terminal is facing a significant new challenge after a rival U.S. exporter signed a deal undercutting the hoped-for price for selling gas into Asian markets.

David Calvert, an Apache Corp. vice-president and manager of the Kitimat LNG terminal said U.S.-based Cheniere Energy Inc. set a dangerous precedent by agreeing to sell gas from its proposed Louisiana export terminal based on heavily discounted North American gas prices.

Apache needs contracts based on oil prices to justify the cost of the planned $4.5 billion LNG export plant and pipeline in British Columbia, Calvert said. The plant is a joint venture of Apache, EOG Resources Inc. and Encana Corp.

“We remain convinced that oil-linked pricing is critical to the viability of our Canadian LNG industry.” [Red & bold emphasis added.]

Oregon

Archeological sites to be part of LNG pipeline [sic] hearings (Oct 5) — The Daily Astorian, Astoria, OR

The public hearings and archeological reviews – mandates of the federal permitting process – are the next steps in a long-developing plan to construct a liquefied natural gas terminal in Warrenton, which would be used to export domestic and Canadian resources to overseas markets in Asia. The steps also come as the Oregon Court of Appeals continues to deliberate on a case that will decide whether Clatsop County can deny project developer Oregon LNG a land-use permit to place a pipeline through the county.

United States

Shale gas TEPCO's new hope / Utility wants to cut costs, electricity charges with alternative fuel — The Daily Yomiuri, Japan

Tokyo Electric Power Co. could hold down fuel costs and reduce high electricity charges by importing inexpensive shale gas from U.S. companies.

The average price of LNG is about 16 dollars to 18 dollars per 1 million British thermal units--a BTU is about 27.75 cubic meters. If the LNG [were] imported straight from the United States it would cost only 3 dollars per [million BTU].

Webmaster's comment: Japan would not be buying US LNG for $3 per million BTU, but would be buying LNG at around $3 per million BTU plus a surcharge, probably resulting in the cost to Japan being around half the price it is currently paying.

How does selling US natural gas at half the world price impact the US trade deficit? What would the impact of that greater world demand for cheap US natural gas be on natural gas prices here in the US?

TEPCO 'in talks to buy shale gas from U.S.' — The Daily Yomiuri, Japan

If the negotiations go well, the utility could curb fuel costs by procuring U.S. shale gas for about half the price it currently pays for liquefied natural gas. As a result, it may not need to raise electricity rates further.

The utility currently imports LNG from Middle Eastern nations, Australia and Malaysia, as well as other countries. As U.S. shale gas is significantly cheaper than other energy sources, its import could cost the company only about half the price it currently pays to import LNG, even if the cost of liquefying U.S. shale gas for shipping is included, the sources said. [Red & bold emphasis added.]

North America

How the LNG projects measure up (Oct 4) — The Globe and Mail, Toronto, ON

Caribbean

Government vows to introduce LNG by 2015 — The Daily Observer, St John’s, Antigua

Paulwell said that ... the government will remove itself from the process of fuel source selection and instead focus on creating the legislative and regulatory framework, which its aims to establish and promulgate during this fiscal year.

LNG project lives — The Gleaner, Kingston, Jamaica, West Indies

The government has disbanded the steering committee overseeing the introduction of liquefied natural gas (LNG) with immediate effect, even as its gives its commitment to institute the alternative fuel source in Jamaica by 2015.

At the same time, Government has decided to remove itself from the process of fuel source selection and instead focus on creating the legislative and regulatory framework, which Energy Minister Phillip Paulwell said they aim to establish and promulgate during this fiscal year.

Giving an update on the LNG project in Parliament on Tuesday, Paulwell said the steering committee will be replaced with a body which includes members of the Jamaica Energy Council, the Office of Utilities Regulation and the Ministry of Science, Technology, Energy and Mining.

The LNG volte-face [Opinion column] — Jamaica Observer, Kingston, Jamaica, West Indies

The government's unexpected abandonment of Liquefied Natural Gas as a possible alternative to national fuel came as a surprise, following negotiations involving multiple participants dealing with the different aspects of the ambitious concept. We bemoan the significant financial loss related to the hyperactivity over the years involving experts - both foreign and local - with bids and counter bids, all of which, at the end of the day, determined that the project was unaffordable. It was naturally anticipated that impact and feasibility studies at the start of the evaluation process would have indicated the viability of the project. It must be speculated, therefore, that a new influence has come to bear on the project rendering it redundant.

British Columbia

Meet Alfred Sorensen, Canada’s accidental LNG architect (Oct 2) — Alberta Oil, Edmonton, AB

Alfred Sorensen’s plan to carve out a global supply role for Canadian natural gas began almost by fluke. Sorensen, the energy trader who co-founded Galveston LNG Inc. and sold the Kitimat LNG project to Apache Corp. and EOG Resources for just over $300 million, was attending an investor symposium in London in 2007 when he ran into the chief executive officer of a major North American gas producer.

On a late July afternoon five years later, Sorensen, 51, marvels at the extent of his oversight. “Even a layman could understand that if they could crack the technology, there was enough of this stuff that we’d be able to light up North America and see it from Mars,” he says.

Webmaster's comment: From his orbit in alternate reality, can Downeast LNG's Dean Girdis see how well lit up the Northeast is by the sea of natural gas we're drowning in?

Northeast

Md. LNG terminal fight heads to court — equities.com

PRINCE FREDERICK, Md. -- Both sides asked a judge Monday to rule in their favor without trial in a fight over a proposal to build a multi-billion-dollar terminal in southern Maryland to export liquefied natural gas.

Sierra Club attorney Roy L. Mason said the intent of the original agreement has to be considered and neither side was contemplating exports when the terminal was first built to import natural gas.

Dominion attorney David Hensler said if the language of the agreement is clear there is no need to ask about the intent at the time.

Caribbean

Statement to Parliament on Energy and update on LNG Project by Minister Phillip Paulwell — Jamaica Information Service, Kingston, Jamaica, West Indies

Mr Speaker, I would like to give a timeline of events that have brought us to where we are today in respect of LNG. Jamaica has been exploring the use of natural gas as an alternative fuel source since 2001. In that regard, Jamaica had executed a Memorandum of Understanding (“MOU”) with Trinidad & Tobago for the development of an onshore liquefied natural gas (“LNG”) project in Jamaica based on LNG supplied by Trinidad & Tobago.

In the press two Sundays ago, a report stated that the Government was about to, and I quote: “…announce plans to abandon its long-stated intention to introduce liquefied natural gas (LNG)”. Today I wish to categorically state that this is not the case.

Mr. Speaker, I am happy to reiterate to this Honourable House and to the people of Jamaica that LNG will indeed be introduced into Jamaica by 2015 – and that plans are well underway for this.

Government ... will remove itself from the process of fuel source selection and instead focus on creating the legislative and regulatory framework, which we aim to establish and promulgate during this fiscal year.

The LNG Steering Committee will now be disbanded with immediate effect, and be replaced with a body that includes members of the Jamaica Energy Council, the OUR and MSTEM. With the termination of the work of the LNG Steering Committee, there will be no need to access the remaining 2.6 million US dollars that was originally budgeted.

Following a number of meetings in Korea, Japan and Jamaica – I am pleased to announce to this House that I have a firm assurance from the JPSCO that they will undertake this LNG project within the timelines established, and will achieve a 30 percent reduction in the price of electricity to the consumer.

Clarity needed on LNG - PSOJ — The Gleaner, Kingston, Jamaica, West Indies

WITH ENERGY Minister Phillip Paulwell scheduled to address the House of Representatives today, the Private Sector Organisation of Jamaica (PSOJ) says it wants him to provide clarity on the way forward for the implementation of liquefied natural gas (LNG).

There have been jitters in the society ever since The Sunday Gleaner reported that the Government was set to announce it would not be proceeding with the implementation of LNG as planned.

Paulwell to update nation on LNG plans — Go-Jamaica, Kingston, Jamaica, West Indies

Energy minister, Phillip Paulwell, is expected to put an end to speculation on the status of the government’s liquefied natural gas (LNG) programme with a statement to the House of Representatives today.

Video: 'Let go off oil' — Jamaica Observer, Kingston, Jamaica, West Indies

"How long can we stay on oil? As long as we want, but everything will be closed down and prices will go through the roof," Gunning told Jamaica Observer journalists at yesterday's Monday Exchange held at the newspaper's Beechwood Avenue headquarters in Kingston.

"In terms of LNG, I have my concern about it, because what comes up from the earth is gas and then they have to compress it and cool it for it to become a liquid, so it takes a lot of energy to do that and you have to factor in the transportation cost.

"You have to transport a lot of it in smaller containers, as opposed to if you had just straight gas. So you have to compare the cost of both. The problem is that we are depending on Trinidad, and Trinidad's supplies (of LNG) are expected to run out in about 10 years. I don't know how sustainable it is for us to be depending on Trinidad. If your supply is going to run out in 10 years, I am not sure how sustainable that will be," added Gunning.

The real solution, the energy specialist said, lies with the introduction of renewable sources of energy, particularly solar energy. [Red & bold emphasis added.]

British Columbia

Canadian gas producers dreaming big - again [Opinion column] — The Globe and Mail, Toronto, ON

To deliver western Canadian natural gas to coastal LNG terminals, two pipeline projects have been announced: The Spectra-BG Natural Gas Transportation System and TransCanada’s Coastal GasLink. Both are driving toward completion by the end of the decade. Cumulatively, almost 6 Bcf/d of gas could be carried to the coast if these pipes are approved and built. For a sense of scale, Canada’s exports to the U.S are 5.5 Bcf/d, down from a peak of almost 10 Bcf/d in 2005.

Apache Kitimat chief says Cheniere deal changed expectations — Bloomberg

A recent deal by Cheniere Energy Inc. to sell liquefied natural gas based on Henry Hub pricing has made it difficult to sign long-term LNG contracts based on oil prices, the head of Apache Corp.'s Canadian LNG export projects said.

Calvert said that new projects like the Kitimat LNG project, which is being planned to export Canadian gas to Asia from the British Columbia port of Kitimat, need long-term contracts based on oil prices rather than gas prices. [Red & bold emphasis added.]

Webmaster's comment: By its aggressive Henry Hub-linked low pricing, Cheniere Energy is killing much of the gold-rush mentality driving the move to export LNG from the US and Canada. It will likely drive the world LNG price down, eliminating huge profits that North American and world LNG exporters would otherwise have received.

Contracts pose threat to liquefied gas export plans — Calgary Herald, Calgary, AB

“We remain convinced that oil-linked pricing is critical to the viability of our Canadian LNG industry,” he said.

“The bottom line is for LNG producers to provide the stability buyers are looking for and for us to make the significant capital investments required for greenfield LNG projects, we must have long-term contracts with prices that reflect these critical consideration and realities.”

Calvert said U.S.-based Cheniere Energy Inc. recently signed a contract to sell gas from its proposed Louisiana export terminal — an addition to its regasification import terminal — based on North American gas prices, a dangerous precedent because of the discounted market here. [Red & bold emphasis added.]

Gas line to run north of Terrace — Terrace Standard-News, Terrace, BC

THE POSSIBILITY of more liquefied natural gas (LNG) plants in the region could now mean at least one pipeline running north of Terrace toward the coast.

But Spectra could have company to the north of Terrace depending upon work being done by Petronas, another LNG giant owned by the Malaysian government.

HERE’S a quick guide to northwest liquefied natural gas plant and pipeline projects.

BC LNG. Also called Douglas Channel LNG, this is the smallest of the ones up for development.

Kitimat LNG. Apache, Encana and EOG own the Pacific Trails Pipeline which would feed a plant they would also own with 1 billion cubic feet of gas a day.

Canada LNG. Shell is a major partner in this project along with three Asian companies.

BG/Spectra Energy. The LNG plant would go on Ridley Island near Prince Rupert, being fed by a pipeline that could deliver up to 4 billion cubic feet of gas a day.

Petronas/Progress Energy. This is another plant that would go near Prince Rupert, on Lelu Island, and it is also the subject of a feasibility study.

Canada

Canada losing the race to sell LNG [Opinion column] — The Globe and Mail, Toronto, ON

Canada’s bid to export natural gas to Pacific markets should be a slam dunk. British Columbia has giant reserves of gas located relatively near tidewater, and Asia is begging for more of it.

The problem comes down to price: Canadian gas producers want to sell using contracts linked to oil prices, which are far higher than gas prices in a North American market currently suffering a supply glut. That was the basis for developing Kitimat LNG, a new project supported by Apache Corp., Encana Corp. and EOG Resources that received the first liquefied natural gas export licence ever issued by the National Energy Board.

Then it ran into a roadblock, one that may send tremors through the broad range of plans for LNG export plans. Cheniere Energy Inc. signed a contract to sell gas from its Sabine Pass terminal not at oil-linked prices, but according to North American gas prices set at Henry Hub. Those prices have been so low in recent years that many of the continent’s gas wells are struggling to break even, and gas drilling has witnessed a huge decline.

That has created an expectation in Asian markets that North American gas can be bought on the cheap – and erected an important obstacle for Canadian gas exports. Kitimat LNG, for example, initially expected to make a final investment decision in late 2011 or early 2012. Now, it’s still trying to sort out contracts.

United States

EIA: US marketed gas production levels off in H1 — LNG World News

The U.S. Energy Information Administration (EIA) said in a report that U.S. marketed natural gas production has flattened since late 2011, mainly in response to lower natural gas prices. Nevertheless, volumes remain at historically high levels.

Purchase of bulk gas: Govt negotiating with American LNG supplier — Business Recorder, Pakistan

ISLAMABAD: To deal with the looming gas shortfall during upcoming winter the government is negotiating with an American Liquefied Natural Gas (LNG) supplier for purchase of bulk gas, a senior petroleum ministry official told Business Recorder.

Pakistan may tap US gas reserves to quench energy thirst (Oct 3) — The Express Tribune, Karachi, Pakistan

Addressing a press conference here on Tuesday, [Adviser to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain] said huge reserves of shale gas had been discovered in the US, “therefore, we are considering investing in a shale gas field to ensure gas supply to Pakistan.”

Passamaquoddy Bay

New objections raised against proposed Down East LNG import terminal — Bangor Daily News, Bangor, ME

ROBBINSTON, Maine — Opponents of a long-proposed liquefied natural gas, or LNG, import terminal in the Washington County community of Robbinston have filed three new objections to the $600 million terminal that would be sited on Mill Cove near the St. Croix River’s confluence with Passamaquoddy Bay.

The two most recent filings with FERC by the Save Passamaquoddy Bay opponents to the project claim that two environmental studies — one undertaken in 1976 by University of Maine researchers and another in 2004 by U.S. Environmental Protection Agency researchers — suggest that any offshore construction associated with the project would disturb long-settled heavy metals, including mercury, that entered the St. Croix River as effluent from an upstream paper mill in Baileyville and remain in the muddy riverbed.

“Constructing a 4,000-foot jetty and pier would require disturbing 4,000 feet of muck, which would reintroduce mercury into the water,” Robert Godfrey of Eastport, a researcher and spokesman for Save Passamaquoddy Bay, said Saturday. “That raises all sorts of issues about how that would impact plankton, fish and marine mammals, not to mention the subsistence fishers downstream. There are Passamaquoddies who rely on fishing for food, and there’s an executive order that dates back to the Clinton presidency, an ‘Environmental Justice’ memo of understanding among federal agencies that says they are not to allow projects that allow economic or physical harm to minorities or economically disadvantaged populations.”

Godfrey said Saturday that he finds it “disturbing” that the findings of the 2004 mercury study, which involved EPA researchers, weren’t included in a the most recent statement of environmental effects submitted by Downeast LNG with the assistance of the EPA.

“Did EPA or Downeast LNG know about [the 2004 study] and not produce it, or was it pure incompetence?” Godfrey asked when interviewed by phone on Saturday. [Red, yellow & bold emphasis added.]

Washington Co. LNG foes file new complaints — Mainebiz

Downeast LNG first proposed the terminal in 2004, raising objections in December 2011 from opposition group Save Passamaquoddy Bay, which complained that the company was not meeting deadlines for providing environmental data to federal regulators.

The new complaints — two filed in September and another in July — focus on a 1976 University of Maine study and a 2004 U.S. Environmental Protection Agency study that suggest offshore construction in the bay would upset long-settled heavy metals, like mercury, that entered the water from a Baileyville paper mill upstream.

The new filings claim that the company ignored the later EPA study in its most recent environmental impact statement. [Red, yellow & bold emphasis added.]

Webmaster's comment: Mainebiz's article headline misleads the public, an error often repeated by the Bangor Daily News (although not in the BDN's latest article, above): Save Passamaquoddy Bay does not oppose LNG facilities in Washington County. Save Passamaquoddy Bay opposes inappropriate LNG terminal siting in Passamaquoddy Bay. Even the LNG industry's own terminal siting best practices indicated Passamaquoddy Bay cannot be made to conform to the industry's own terminal siting best practices. (See LNG Terminal Siting Standards Organization for more on this topic.)

Additionally, Mainebiz glosses over our filing regarding Downeast LNG's proposed 1.76-miles of 20-foot-tall vapor fences.

Northeast

Md. LNG terminal fight heads to court — CBS Baltimore, Baltimore, MD

Dominion Resources has proposed spending up to $3 billion to upgrade the LNG terminal to export increasing amounts of natural gas being produced by new hydraulic fracturing techniques. The Sierra Club opposes exports, which it says could harm the bay and nearby Calvert Cliffs State Park, increase natural gas prices and promote hydraulic fracturing, which critics say harms the environment.

Concerns over fracking not 'unfounded' [Letter to the editor] (Sep 27) — The Baltimore Sun, Baltimore, MD

In a recent article about opposition to conversion of the Cove Point liquefied natural gas import terminal to an export terminal, The Sun reports that: "The gas industry says such complaints (about pollution) are unfounded and that any problems related to "fracking" are isolated cases" ("Dominion's LNG export bid sparks legal dispute," Sept. 21).

If that is the case, why does the gas industry oppose the repeal of federal legislation exempting hydraulic fracturing from the Clean Water Act, The Safe Drinking Water Act and the so-called "Superfund" Act covering disposal of toxic wastes? If industry believes fracking is safe, it should have no fear of the same pollution control laws that apply to the rest of American industry.

Southeast

Cambridge Energy withdraws DOE LNG export application — LNG Law Blog

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

Cambridge Energy, LLC has withdrawn its application to the U.S. Department of Energy (DOE) for authority to export LNG from its proposed deepwater LNG export terminal. Cambridge stated that it was withdrawing its application because the Deepwater Port Act of 1974 does not address the export of LNG from a deepwater port and no appropriate agency could be identified to provide regulatory oversight of the company's proposed deepwater LNG export terminal. [Red emphasis added.]

Gulf of Mexico

Cambridge Energy withdraws DOE LNG export application — LNG Law Blog

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

Cambridge Energy, LLC has withdrawn its application to the U.S. Department of Energy (DOE) for authority to export LNG from its proposed deepwater LNG export terminal. Cambridge stated that it was withdrawing its application because the Deepwater Port Act of 1974 does not address the export of LNG from a deepwater port and no appropriate agency could be identified to provide regulatory oversight of the company's proposed deepwater LNG export terminal. [Red emphasis added.]

Caribbean

The economics of LNG (Sep 30) — The Gleaner, Kingston, Jamaica, West Indies

Energy consultant Winston Hay says that while plans for use of LNG for power generation in Jamaica are in principle sound, the uncertainty around the cost of that fuel should not be ignored.

"The aggregate costs of delivering the gas to the liquefaction facility, the liquefaction process itself, transport by specially constructed vessels to the FSRU, operational costs of the FSRU and Jamaica Gas Trust, delivery by pipeline (yet to be constructed) to the end-users, etc, will all increase the price of gas from LNG significantly above that of the gas extracted from the earth," Hay said.

Further, he notes, commodity prices are not necessarily determined by production costs.

Hay points out that the Jamaican Government has never stated the LNG price on which its calculations of the economics of electricity generation are based, neither has it recently stated the likely source of LNG supply.

Alaska

Alaska cozies to Asia for natural gas — UPI

Top executives at BP, ConocoPhillips and Exxon Mobil have considered LNG deliveries to Asian markets as an attractive option for Alaskan reserves.

New gas hopes: Japan turns from nuclear, reviving hopes for Alaska natural gas line to tidewater [Op-ed column] (Sep 30) — Daily News-Miner, Fairbanks, AK

Timing can be everything, as we learned from the huge discovery of shale gas in the Lower 48, which displaced our North Slope gas. The market is Japan, Korea and Taiwan and other Asian countries. The timing is right, but the window is small. We need to act fast.

The lesson that we must remember is that in the world of gas marketing, things happen fast and the window in any market is open for only so long. We have learned from our experience with the proposed natural gas pipeline in 2006 that Alaska has to move decisively when the opportunity affords itself, not just when it is politically convenient. We cannot afford to lose the opportunity to market our gas as LNG.

Webmaster's comment: Former Alaska Governor and US Senator Frank Murkowski knows what Downeast LNG turns a blind eye to: the LNG import market that Downeast LNG is claiming to serve has vanished.

Parnell, Sullivan promote Alaska LNG in Asia — Alaska Journal of Commerce, AK

[A] spokesman for TransCanada says the company, which has teamed up with the North Slope producers on LNG, is “encouraged” by the results from its recent solicitation of interest. Under terms of a state contract, TransCanada recently solicited market interest in a gas project although expressions of interest were nonbinding.

Governor promotes Alaska gas in Pacific Rim (Sep 28) — LNG World News

Governor Parnell recently met with the CEO of KOGAS to discuss Alaska’s longtime role as a reliable exporter of LNG to Asia, and the state’s roadmap to significantly boost those exports with a major Alaska gas pipeline to tidewater.

Alaska’s plans to export LNG to Asian markets is huge for oil and gas majors (Sep 28) — Trefis, Boston, MA

We think that feasibility needs to be examined from financial, political, and business perspectives. According to a 2010 estimate, an 800 mile pipeline project from northern Alaska to a southern port may cost between $20 billion and $26 billion. As per industry estimates, the total project cost could lie anywhere between $40 billion to $50 billion, factoring in a pipeline and liquefaction plant. We think that a project of this scale and complexity entails phenomenal capital commitment which can only be justified if the terms of the contract are stable and competitive. According to estimates submitted by these companies, the North Slope holds more than 35 trillion cubic feet of discovered gas. We think that this ought to take care of any concerns regarding adequate availability of gas for export.

Canada

Canada pitches Japan, Korea on ‘safe, reliable’ LNG supplies (Week of Sep 30) — Petroleum News, Anchorage, AK

Canada’s Natural Resources Minister Joe Oliver told an international LNG conference in Tokyo earlier in September that five export projects could be shipping 9 billion cubic feet per day of Canadian gas to Asia by 2020 — two-thirds of Canada’s current gas output and by far the most optimistic target any government official has set to date for an LNG industry that has yet to make a final investment decision for even one project.

Oliver’s sales pitch to top energy officials and business leaders in Japan and South Korea conveyed a clear message: the government of Prime Minister Stephen Harper is now pinning greater hopes on LNG than on oil sands crude exports into Asian markets.

But not everyone shares Oliver’s boosterish view that Canada can launch several LNG projects this decade.

United States

An unconventional truth — Energy Global

The US natural gas market has been transformed by the unconventional gas revolution over the past five years in particular, providing the country with an energy landscape that few could have predicted. According to Big Spenders, gas from shale accounted for barely 2% of US natural gas production a decade ago. Today it is approaching 30% and rising.

North America, one of the world’s largest importers of natural gas, is now beginning to sustain demand with its own supply, which could have significant impact on the LNG industry. Indeed, ExxonMobil has spent billions of dollars building LNG receiving terminals that may never reach their intended capacity.

Webmaster's comment: "Could have significant impact on the LNG industry"? The impact US unconventional natural gas production has had is already more than obvious to everyone but the above article's author.

With success, natural-gas industry eyes exports — Business Mirror, Makati City, Philippines

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.

American Public Gas Association, the trade group for utilities like Philadelphia Gas Works, has said that exports would produce “predictable and disastrous” results for household consumers.

“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.]

India, US to boost cooperation (Sep 29) — GulfNews.com, Dubai, United Arab Emirates

Washington: India and the US are exploring the possibilities of large-scale cooperation in the generation and storage of power from renewable sources like solar and wind power to make power cuts in India a thing of the past.

The US has also granted permission to the Gas Authority of India Ltd (GAIL) for the export of LNG (liquefied natural gas) from the Sabine Pass terminal in the US to India.

Go slow on allowing natural gas exports [Editorial] (Sep 27) — The Santa Fe New Mexican, Santa Fe, NM

So successful is natural gas production that a new debate is bubbling up — whether to allow the export of liquefied natural gas overseas. That can’t happen without approval from the U.S. Department of Energy, with a decision on applications for export unlikely until after the presidential election. The decision is shaping up to be a big political issue — a group of 20 Democrats recently petitioned DOE to do an environmental study before approving the exports. Much of the gas is being extracted through fracking, which injects a cocktail of water, sand and chemicals to unlock natural gas from underground rock. Its long-term effects are unknown and hotly debated. Republicans, and other Democrats (including Senate candidate U.S. Rep. Martin Heinrich) want the DOE to speed up the export process, citing the need for jobs.

Stopping any rush to export — applications for exporting some 18 billion cubic feet a day already are in — also will help ensure that whatever extracting is done of this resource, is done safely. It does no good to harvest natural gas and leave behind polluted water or damaged lands. Circumstances could change, but for now, the United States should keep its natural gas for use domestically — where it can do the most good for the nation. [Red emphasis added.]