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Passamaquoddy Bay & LNG

Gulf of Mexico

Cheniere unit inks deal with Bechtel for LNG trains — Houston Business Journal, Houston, TX

The deal hinges on financing arrangements, with construction for the third and fourth trains at Cheniere's LNG terminal in Cameron Parish, La., expected to begin in the first half of 2013. Sabine Liquefaction had previously inked a deal with Bechtel for construction of the first two liquefaction trains in August.

Sabine Liquefaction has entered into four long-term, 20-year sale and purchase agreements that in aggregate represent approximately 90 percent of the nominal capacity of the four liquefaction trains. Operations for the first liquefaction train are expected to commence as early as 2015.

Contract signed for two LNG export units — The Advocate, Baton Rouge, LA

A Cheniere Energy Partners LP subsidiary and Bechtel Oil, Gas and Chemicals Inc. have entered into a $3.8 billion lump sum contract for the engineering, procurement and construction of the third and fourth natural gas liquefaction
units at the Sabine Pass LNG export terminal in Cameron Parish.

The units are being built next to existing facilities at the Sabine Pass LNG terminal, which include five tanks with storage capacity of 16.9 billion
cubic feet equivalent; two docks that can handle vessels up to 265,000 cubic meters; and vaporizers with regasification capacity of 4.0 billion cubic feet per day.

British Columbia

Chevron to buy 50% of Kitimat LNG project as it expands Canadian presence — Platts

In a sweeping change of ownership, Chevron is taking control of Canada's Kitimat LNG project, with two of the three partners bowing out after failing in their attempts over the past year to secure offtake customers in Asia.

The shuffle announced Monday will see Chevron holding 50% of the joint venture through its wholly owned Chevron Canada, with Apache handing over the operator's role while raising its equity stake to 50% from 40%. Encana and EOG Resources will each relinquish their 30% stakes.

In addition, Chevron will acquire a 50% interest in the proposed Pacific Trail Pipeline, connecting the Spectra Energy pipeline from British Columbia's Horn River and Liard basins with a liquefaction plant and tanker terminal at the deepwater port of Kitimat on the northern British Columbia coast.

Chevron to buy stake in Kitimat LNG from Encana, EOG — Reuters

Analysts say the addition of a deep-pocketed partner increases the likelihood that the multi-billion dollar Kitimat LNG -- the most advanced of a handful of gas-export facilities slated for British Columbia's northern coast -- will be completed.

Other Canadian LNG facilities are planned by Royal Dutch Shell Plc, Malaysia's Petronas, BG Group Plc and others, making British Columbia a rival to the U.S. Gulf coast, where nine projects have been announced and one, Cheniere Energy Inc's, Sabine Pass project, is already under construction.

Chevron has existing LNG projects in Australia, Africa and South America. Adding the Canadian operation will let it tap high-priced export markets and escape a domestic gas market that remains depressed because of burgeoning production from shale gas fields.

Chevron Canada to acquire interest in western Canada LNG operations — NASDAQ

Chevron Canada will operate the LNG plant, while Apache Canada will operate the upstream assets.

The transaction is expected to close in the first quarter, subject to certain government approvals.

Chevron buys operating interest in Kitimat LNG, Canada — LNG World News

Chevron Corporation announced that its indirect Canadian subsidiary, Chevron Canada Limited, will acquire a 50 percent operating interest in the Kitimat liquefied natural gas (LNG) project and proposed Pacific Trail Pipeline (PTP), and a 50 percent interest in approximately 644,000 acres of petroleum and natural gas rights in the Horn River and Liard Basins in British Columbia, Canada.

Under the terms of the agreements, Chevron Canada Limited will acquire all of the interests currently owned by affiliates of EOG Resources Canada Inc. and Encana Corporation in the proposed Kitimat LNG Project and PTP. Thereafter, Chevron Canada Limited will equalize interests with an Apache Corporation subsidiary, resulting in Chevron Canada Limited and Apache each holding a 50 percent interest in both the Kitimat LNG Project and PTP. Operatorship of both facilities will transfer to Chevron Canada Limited.

Additionally, Chevron Canada Limited will acquire approximately 110,000 net acres in the established Horn River Basin from Encana, EOG and Apache, and approximately 212,000 net acres in the Liard Basin from Apache. Chevron Canada Limited and Apache will each hold a 50 percent interest and Apache will operate these two natural gas resource developments.

Chevron buys Encana, EOG stake in Kitimat LNG terminal — Bloomberg

Chevron joins Royal Dutch Shell Plc (RDSA) and Malaysia’s Petroliam Nasional Bhd in pursuing gas exports from western Canada to Asian markets, where the heating and power plant fuel sells at a premium to North American prices. The Kitimat project has a license from Canadian regulators to export 10 million metric tons a year of the liquefied fuel.

The Kitimat project is 400 miles (650 kilometers) north of Vancouver. The Pacific Trail pipeline would stretch 290 miles, connecting the terminal to a pipeline system owned by Spectra Energy Corp. (SE)

EOG Resources to sell its Kitimat LNG facility stake and a portion of its Horn River Basin acreage — Canadian Newswire

"While we still believe in the viability of the Kitimat project, our decision to exit is consistent with EOG's focus on domestic onshore crude oil production, which is generating more immediate reinvestment opportunities," said Mark G. Papa, Chairman and Chief Executive Officer.

Kitimat LNG closer to reality as Chevron to buy out Encana, EOG — The Globe and Mail, Toronto, ON [Paid subscription]

Apache Corp., which had previously led the project, had not signed a single “off-take” agreement to sell liquefied natural gas to Asian buyers. Apache had expected to make a final investment decision in early 2012 and has spent hundreds of millions of dollars to prepare its site, not far from Kitimat, B.C., for construction. But without sales agreements, making a decision to build the project has proven impossible.

The deal may, however, encounter some opposition from first nations groups. Chevron has been the target of substantial activist attention after being ordered by an Ecuadorian court to pay $18-billion related to alleged environmental contamination. Chevron has not paid the amount, saying the mess was [cleaned] up and the judgment was based on a fraudulent process. But that issue may hurt Chevron’s prospects in B.C., an area where the environment is an especially delicate issue.

Encana’s commitment to Kitimat LNG created a capital exposure that “would have been too large and it makes sense for [Encana] to focus capital on shorter cycle time oil opportunities rather than long cycle time LNG,” CIBC World Markets Inc. analyst Andrew Potter said in a note. And having Chevron on board “moves the dream of Western Canadian LNG exports closer to reality, which will bring some benefit to all Western Canadian producers.”

Chevron buys into Canadian LNG export terminal — Hydrocarbon Processing

Chevron is buying into two massive shale-gas fields in western Canada and a facility to ship that gas to Asian buyers, as the efforts to export North America's massive natural-gas resources speed up.

In recent years, energy companies have discovered so much gas in North America's shale rocks they have created a glut that sent prices for the fuel tumbling. So companies have been racing to try to export liquefied natural gas; LNG is created by cooling natural gas to 260 degrees below zero Fahrenheit, at which point it turns into a compact liquid and can be shipped around the world on giant tankers.

Apache and its two initial partners, EOG and EnCana, announced plans two years ago to build a $3 billion export terminal in Kitimat, British Columbia, but the project has run into strong competition. The United States is weighing allowing LNG export from the Gulf Coast and Alaska, and Canada is moving ahead with LNG exports from British Columbia.

Chevron buying stake in Canadian LNG, pipeline projects — FuelFix

Meanwhile, early site work is under way on the Kitimat LNG facility that is being built at Bish Cove in northern British Columbia. Plans call for two liquefaction trains, each with expected capacity of 5 million tons of LNG per year. The facility has secured export rights from the Canadian government.

The 290-mile Pacific Trail Pipeline will provide a direct connection between the Spectra Energy Transmission pipeline system and the Kitimat LNG terminal, the companies said.

Gulf of Mexico

Cheniere picks Bechtel to engineer LNG expansion at Louisiana export site — Hydrocarbon Processing

Cheniere said it intends to give Bechtel a notice to proceed (NTP) with construction for the third and fourth liquefaction trains upon achieving acceptable financing arrangements and making a final investment decision.

Caribbean

WAPA has list of prospective fuel suppliers [The Virgin Islands Daily News, St. Thomas] (Dec 21) — Equities.com

Dec. 21--ST. CROIX -- A day after the V.I. Water and Power Authority was granted a rate increase that begins in January, WAPA Executive Director Hugo Hodge Jr. announced Thursday that the utility has a short-list of companies to provide alternative sources of base load fuel.

The authority is embracing liquefied petroleum gas, or propane, and liquefied natural gas, or LNG.

On Nov. 9, WAPA received responses from 13 companies -- five for bundled propane and 8 for bundled LNG. After the initial evaluation, WAPA has selected Vitol, Trafigura and Geogas/Polaris Consortium for follow-up regarding propane and Pacific Rubiales Energy, Gasfin, Cheniere and LNG Enterprise for follow-up talks about LNG supply needs.

The expectation of an abundant and relatively cheap supply of natural gas resulting from the shale gas industry in the United States has spurred an increasing regional interest in natural gas as a fuel for power generation, according to Hodge.

British Columbia

The LNG opportunity: don’t squander it [Opinion] — The Vancouver Sun, Vancouver, BC

The problem with natural gas is that once pulled out of the ground, the resource is gone. When the total stock of gas is exhausted, so are the government revenues that flow from the associated royalties and taxes. Unfortunately, governments can easily become dependent on non-renewable resource revenues when the boom is on. These revenues can be substantial and will typically be accompanied by public demands to spend immediately. [Red & bold emphasis added.]

Oregon

Citizen-group lawsuit challenges Coast Guard approval of LNG project — MELODIKA.net

Three citizen groups have sued the U.S. Coast Guard in federal court to challenge the agency's April 24, 2009, approval of Oregon LNG's proposal for a liquefied natural gas terminal on the Columbia River in Warrenton, Oregon, and the LNG tanker traffic that would result on the river.

The Daily Astorian reports that the suit raises concerns about environmental threats like explosions and that the terminal would take up almost 100 acres of public land. An LNG tanker is 20 stories in height and more than three football fields in length and about 125 of these tankers would make the inbound and outbound trip on the river annually. The Daily Astorian says further that a fully loaded tanker leaving the terminal would hold "a staggering eight percent of total U.S. daily gas consumption" and proposed connecting pipelines would cross "hundreds of miles" of "farms, forests, the Columbia River Estuary and residential properties."

Reportedly, the suit alleges violations of federal law because the Coast Guard's approval came before required Environmental Impact Statement preparation, without analyzing the harm to endangered species and lacking mandatory consultation with "fisheries agencies." [Red & bold emphasis added.]

Webmaster's comment: The same Coast Guard-approval prior to EIS issuance exists with the proposed Downeast LNG terminal. The Coast Guard changed its rules, and now ignores environmental impacts from projects for which it analyses waterway suitability.

The Oregon lawsuit will provide a precedent applicable to the Coast Guard's Downeast LNG waterway approval.

State tells feds: Examine LNG plan carefully for impacts on Oregon waters (Dec 21) — The Daily Astorian, Astoria, OR

WARRENTON — Oregon public agencies have urged the Federal Energy Regulatory Commission to take a hard look at the possible environmental impacts of a liquefied natural gas terminal in Warrenton.

The scoping comments were filed by the Oregon Department of Justice to FERC on behalf of the Oregon Department of Forestry, the Oregon Department of Water Resources, and others.

United States

Don't kill the shale-gas boom [Opinion] — Worcester Telegram & Gazette, Worcester, MA

A policy that discriminates against producers in favor of consumers by restricting foreign sales will hurt both. The gas boom will recede as an engine of growth. For years, Americans have complained about trade deficits. Now that we have something more to sell, we shouldn't turn away customers.

Webmaster's comment: The free market philosophy dictates that natural gas prices will move to the level the buyer's are willing to pay, exporting or not; drilling activity will settle to the market demand.

Revisions to the auxiliary installations, replacement facilities, and siting and maintenance regulations (Dec 20) — Federal Energy Regulatory Commission (FERC)

[The linked file is a PDF document; 184 KB]

The Natural Gas Act (NGA) requires that prior to the construction or extension of any natural gas facilities, the Federal Energy Regulatory Commission (Commission) must issue a certificate that authorizes a natural gas company to undertake the proposed activity. However, under the Commission’s regulations, the construction of auxiliary installations or replacement facilities, while subject to the Commission’s NGA jurisdiction, are not treated as the construction or extension of facilities, and thus do not require certificate authorization. The Commission proposes to revise its regulations to clarify that all activities related to the construction of auxiliary installations and replacement facilities must take place within a company’s certificated right-of-way using previously approved work spaces. In addition, the Commission proposes to add landowner notification requirements for auxiliary installations, replacement facilities, and other jurisdictional activities performed within the right-of-way. [Red & bold emphasis added.]

Maine

Franklin County towns looking into natural gas pipeline — Morning Sentinel, Waterville, ME

Summit Natural Gas could build pipeline extension in 2014 if interest is sufficient, development director says

Officials in Farmington, Jay, Livermore Falls and Wilton are gathering data to weigh local interest in building a new natural gas pipeline.

The gas line would be connected to a [natural gas] line that has already been supplying Verso Paper in Jay since 1998.

Another company, Maine Natural Gas, already has the commission's approval to operate in Maine and has started laying a supply line to the new MaineGeneral regional hospital site. That company hopes to install [natural gas pipeline] infrastructure to serve Augusta and through the Kennebec Valley, to Waterville, Winslow and Fairfield.

Webmaster's comment: Although Downeast LNG wants the public to believe otherwise, there is no shortage of natural gas in Maine, as this article indicates. (Pipelines would not be built if supply were insufficient.) The optimum solution — that is currently being implemented in Maine and New England — is pipeline delivery infrastructure.

Bold idea aims to slash Maine's power bills — Morning Sentinel, Waterville, ME

Under a legislator's plan, as much as $170 million a year could be saved by buying natural gas from out of state.

Maine has a chance to trim $170 million a year from electricity bills, cut its reliance on oil and take advantage of historically low power costs, but lawmakers first must authorize state government to help bring natural gas here from new gas fields in the Northeast.

[Newport Republican Rep. Kenneth Fredette’s] proposal has tentative support from Gov. Paul LePage....

And LePage, who frequently cites the state’s high energy costs as a deterrent to business expansion, has had Fletcher working over the past two years to expand natural gas pipelines.

Pipeline companies are scrambling to move more of the low-cost gas from the Utica and Marcellus fields into New England.

One venture will boost capacity on the Tennessee Gas Pipeline in New York and New Jersey, with plans to extend into New England. Another, due for completion in 2016, will increase capacity on the Algonquin Gas Transmission pipeline through Connecticut and Massachusetts. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG's Dean Girdis disingenuoulsy argues to FERC that it is nigh impossible to build or expand pipelines in Maine and New England, as justification for the languishing Dowenast LNG import terminal proposal.

Gulf of Mexico

Pangea submits South Texas LNG export application (Dec 20) — Gasworld

Natural gas for the South Texas Project will be supplied by customers through an associated pipeline that will likely connect to nine major interstate and intrastate transmission pipelines. As a result, the feed gas for the facility can be sourced from almost any point on the US natural gas pipeline grid through direct physical delivery or by displacement, including gas from the Eagle Ford Shale and conventional production in South Texas. [Red & bold emphasis added.]

Total lines up behind Sabine Pass LNG expansion plan (Dec 21) — ICIS Heren, London, England, UK

French energy major Total has consolidated its position in the US liquefaction sector signing a 20-year sale and purchase agreement with Cheniere Energy to lift LNG from the Houston-based company's proposed fifth train at its Sabine Pass project.

Cheniere sanctioned the first two 4.5mtpa trains at Sabine Pass in August and is planned to complete the financing arrangements for Trains 3 and 4 in the first quarter of 2013. The deal with Total paves the way for the company to push ahead with marketing the remaining capacity for the fifth train, which would bring total liquefaction capacity to 22.5mpta, increased from 18mtpa.

Cheniere Partners enters into lump sum turnkey contract with Bechtel for trains 3 and 4 at Sabine Pass Liquefaction (Dec 21) — OilVoice

Cheniere Energy Partners, L.P. announced that its subsidiary, Sabine Pass Liquefaction, LLC ("Sabine Liquefaction"), and Bechtel Oil, Gas and Chemicals, Inc. ("Bechtel") have entered into a lump sum turnkey contract for the engineering, procurement and construction of the third and fourth liquefaction trains to be constructed adjacent to the Sabine Pass LNG terminal located in Cameron Parish, Louisiana (the "Trains 3&4 EPC Contract"). Sabine Liquefaction intends to give Bechtel a notice to proceed ("NTP") with construction for the third and fourth liquefaction trains upon achieving acceptable financing arrangements and making a final investment decision. Construction for the third and fourth trains is expected to begin in the first half of 2013. Sabine Liquefaction issued NTP to Bechtel and commenced full construction for the first two liquefaction trains in August 2012.

British Columbia & Alberta

What’s driving demand in the Duvernay? (Dec 21) — Financial Post, Don Mills, ON

“Celtic could be a part of a longer-term West Coast LNG scheme that could see JVs or further acquisitions down the road,” RBC analyst Greg Pardy said in a note. “Given the capital intensity of the play, we expect players to seek partnerships to gain access to capital. Developing large land positions will require multibillion-dollar investments. We also see the potential for the larger players to acquire companies that complement their acreage positions as the play’s sweet spots emerge.”

The Duvernay has been also gaining ground over Horn River. The dry-gas deposit located in British Columbia was seen as the most likely beneficiary of Canada’s LNG plans given its proximity to the West Coast, but is now seen out of favour at $4 per bcf breakeven costs.

“Part of the Duvernay is very high in rich liquids,” says Mr. Gwozd, who says the “slower sister” Horn River could still come on line once the LNG plans kick off in earnest. “In the Duvernay, gas is the cake and you get a lot of icing with liquids — the amount of liquids they are producing can double the net value of the product — you can get an additional $3 for the liquids for a total value of $6.”

United States

Energy Department accepting comments regarding LNG exports (Dec 20) — JDSupra, Sausalito, CA

The Department of Energy (DOE) has issued a notice regarding the availability of the study that it had commissioned to explore the cumulative impact of liquefied natural gas (LNG) exports. The notice sets a January 24, 2013, deadline for filing initial comments (deadline for reply comments is February 25, 2013). The study is available for viewing.

Through the looking glass: U.S. energy exports to the Middle East? [Opinion] (Dec 20) — Brookings Institution

That the global energy landscape is changing is now conventional wisdom: technology developments in drilling techniques have unlocked vast quantities of previously uneconomic “unconventional” oil and gas, meaning that U.S. is on track to increase oil production this year at its fastest rate on record. Natural gas, a commodity we thought we would have to be importing just a few years ago, is now so abundant that it is too cheap to produce in many parts of the country, and there are plans afoot to export it in the form of LNG. Much has been made of the potential for U.S. energy independence – a chimerical concept both practically (we are still likely to import at least half of our crude oil for the foreseeable future) and economically (even in the unlikely event that the U.S. ever produces as many barrels of oil as it consumes, domestic consumers will still be exposed to price shocks as long the country remains integrated in the global economy). [Red & bold emphasis added.]

Nova Scotia

Goldboro LNG information session well received (Dec 19) — Guysborough Journal, Guysborough, NS

As the room reached peak capacity, Pieridae VP Thom Dawson spoke to those assembled and offered to answer all questions after a brief presentation. “We are specifically here at this site for the Maritimes and Northeast Pipeline -- that pipeline is critical whether you are bringing gas into North America or taking it out of North America,” began Dawson, going on to explain the difference between the Pieridae LNG project and previous attempts to utilize the pipeline for LNG projects by Keltic Petrochemicals and Maple LNG.

After the presentation Dawson reiterated the importance of meeting this time frame when The Journal asked him why this project would succeed where others had failed. “There is a window to get it done..the energy market shifts over time. If you can get it done in that window then you can get it constructed. If the commercial activity doesn't get done then it will just fade away and the economics will go somewhere else. We are subject to the same volatility as those guys (Maple and Keltic). The big difference for them was that shale gas showed up and that was a game changer in North America.” [Red & bold emphasis added.]

Webmaster's comment: Pieridae's Goldboro LNG proposal includes reversing direction of natural gas in the Maritimes and Northeast Pipeline to export US and Canadian natural gas as LNG from Goldboro, Nova Scotia. This complicates even further Downeast LNG's ill-fated import project to send natural gas south.

Gulf of Mexico

Magnolia LNG files at DOE to export to FTA Nations (Dec 19) — LNG Law Blog

Magnolia LNG, LLC, an affiliate of Australian company Liquefied Natural Gas Limited, filed an application with the U.S. Department of Energy to export, on behalf of itself and others, 0.54 Bcf of natural gas per day, or approximately 4 million tons per year of domestically produced LNG, over a twenty-five year period. Magnolia LNG proposes to export the LNG from a terminal it will construct, own and operate near Lake Charles, La. to nations having a Free Trade Agreement with the United States.

Webmaster's comment: This is yet another new US LNG export terminal project. Is Downeast LNG still not getting the picture?

LNG Limited unit files with US DOE to export LNG (Dec 19) — LNG World News

Liquefied Natural Gas Limited of Australia said that on the 18 December, the company’s wholly owned subsidiary, Magnolia LNG, filed an application with the US Department of Energy, Office of Fossil Energy (US DOE/FE) to export up to 4 million tonnes per annum (mtpa) of LNG to countries that have Free Trade Agreements (FTA) with the United States of America.

The Magnolia LNG project site is some 90 acres with direct access to the Calcasieu Channel and an industrial canal along which LNG ships already supply LNG to the existing Trunkline LNG terminal.

Two underutilised gas pipelines traverse the site, with another two pipelines located within three miles of the site. These pipelines are able to physically access the US gas market and the Henry Hub.

Magnolia LNG has commenced preparing its Pre‐File Application with FERC, the lead US agency for processing and co‐ordinating all approvals, including environmental approvals, for US LNG projects.

Webmaster's comment: The existing natural gas import pipelines are "underutilised." Is Downeast LNG even awake?

Liquefied Natural Gas eyes US pipelines (Dec 19) — Finance News Network, Australia

The company expects approval early next year and says it has secured an exclusive site access agreement with the Port of Lake Charles Harbour in the US state of Louisiana, where it has pegged its production and export facility.

Cheniere, Bechtel sign Sabine Pass contract (USA) — LNG World News

Cheniere Energy Partners said that its subsidiary, Sabine Pass Liquefaction and Bechtel Oil, Gas and Chemicals have entered into a lump sum turnkey contract for the engineering, procurement and construction of the third and fourth liquefaction trains to be constructed adjacent to the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.

The liquefaction trains will be built next to the existing facilities at the Sabine Pass LNG terminal, which include five tanks with storage capacity of 16.9 billion cubic feet equivalent (“Bcfe”), two docks that can handle vessels up to 265,000 cubic meters and vaporizers with regasification capacity of 4.0 billion cubic feet per day (Bcf/d). Sabine Liquefaction has entered into four long-term, 20-year sale and purchase agreements that in aggregate represent approximately 90 percent of the nominal capacity of the four liquefaction trains.

Cheniere locks in LNG capacity (Dec 18) — The Motley Fool

Cheniere Energy is entering into a sale and purchase agreement with a subsidiary of Total for approximately 2 million tons per annum. Cheniere's Sabine Pass terminal can readily accommodate up to 4 LNG trains; this deal comprises roughly the amount left on Cheniere's train 5, which it plans to have by 2018. In this video, Motley Fool energy analyst Joel South breaks down the numbers for us and tells us what that means in terms of revenue.

Cheniere and Total sign 20-year LNG agreement for exports from Sabine Pass (Dec 17) — PennEnergy, Tulsa, OK

Sabine Liquefaction is currently developing five liquefaction trains adjacent to the Sabine Pass LNG terminal. The first two trains are under construction and the third and fourth trains are expected to commence construction in 2013. As previously announced, a partial assignment agreement was entered into between Sabine Liquefaction and Total, allowing Sabine Liquefaction to gain access to services under Total's terminal use agreement with Sabine Pass LNG, L.P., including Total's berthing and storage capacity, making further expansion of the LNG export capabilities at the Sabine Pass LNG terminal possible.

Port of Lake Charles files comments supporting Cameron LNG exports (Dec 20) — LNG Law Blog

The Lake Charles Harbor and Terminal District (Port of Lake Charles) filed comments at FERC in support of Cameron LNG, LLC's (Cameron LNG) application to construct facilities for the export of LNG. The Port anticipates that Cameron LNG's project will result in increased revenues and other economic benefits for the local and state economy.

Officials say wider canal can boost natural gas exports (Dec 19) — Fuel Fix

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

During a state Senate Transportation Committee hearing at the Capitol in Austin, the heads of the Texas Department of Transportation and the Port of Houston Authority summarized and elaborated on the findings of a report last week that described the effects on Texas of the $5.25 billion project that will nearly triple the canal’s capacity.

The report said the bigger canal mainly will allow for more exports to Asia, including natural gas as soon as companies get government permits to liquefy the gas for export in special tankers.

The report noted that liquefied natural gas tankers, too large to traverse the canal now, will be able to get through after the expansion is complete sometime before the end of 2015.

Caribbean

Most LNG not going to US (Dec 20) — Newsday, Port-of-Spain, Trinidad and Tobago, West Indies

THE majority of this country’s liquefied natural gas (LNG) exports are not going to the United States. This was disclosed by Trinidad and Tobago’s Ambassador to the US, Dr Neil Parsan when he participated in an energy panel hosted by the Council of the Americas in Washington DC recently.

He ... mentioned that the country has had to diversify its export portfolio away from the United States (US) to countries such as Chile, China, Italy, Kuwait, the Netherlands, the United Arab Emirates and Brazil.

Webmaster's comment: Trinidad and Tobago's energy minister has previously projected that US imports of LNG from the island nation will drop to zero. The US has a rapidly declining need for LNG imports, and appears to be well on the way to LNG exporting — a reality that Downeast LNG refuses to face.

British Columbia

Minister Lake says a Pembina LNG policy prescription 'does not make sense' [Blog] (Dec 19) — The Hook, Vancouver, BC

[Pembina Institute analyst Matt Horne] wrote that provincial plans to ramp up gas extraction threaten to make impossible emissions goals set as part of the BC Liberals' climate policies. He went on to make three recommendations to limit the damage. Lake embraced two of them but dismissed part of the third -- the idea that B.C. send some revenues gained from gas extraction to buying countries so they can pay for climate protecting initiatives.

Oregon

State of Oregon requests FERC to consider environmental effects of fracking from Oregon LNG project (Dec 20) — LNG Law Blog

The State of Oregon filed comments at FERC requesting consideration of the environmental effects of hydraulic fracturing in FERC's environmental review of the Oregon LNG export terminal project.

Battle over LNG might head to high court (Dec 20) — The Daily Astorian, Astoria, OR

The legal battle over a liquefied natural gas terminal in Warrenton may be considered by the Oregon Supreme Court.

The Oregon Pipeline Company filed an appeal asking the state’s highest court to accept a review of the case and reverse a decision the Oregon Court of Appeals made in August.

The Oregon Court of Appeals upheld the lower court’s decision, with a panel of three judges voting unanimously.

Canada

Could Canada become second biggest LNG exporter? (Dec 20) — Energy Live News, London, England, UK

Canada has huge gas reserves, including conventional as well as shale gas but demand for its gas its set to see a small drop in the near future.

Experts put this down to declining demand from the US which is really Canada’s only external customer, especially after the States’ recent boom in shale gas.

“By 2020 both Qatar and Australia will have greater LNG export capacity than Canada will likely have at that stage. High infrastructure costs and the commitment to oil-indexed pricing may make it difficult for a Canadian LNG sector to accelerate if US LNG takes off.” [Red & bold emphasis added.]

United States

Natural gas exports could backfire for US (Dec 20) — Futurity

STANFORD (US) — Investing in natural gas export facilities “is a bet against what US firms excel in—developing and commercializing new technologies and products,” says economist Frank Wolak.

“[T]here’s a significant risk here that I don’t think people are necessarily factoring in,” says Wolak, an economics professor at Stanford University.

Along the coasts of Texas and Louisiana the early 2000s saw the construction of a number of liquefied natural gas (LNG) receiving terminals, intended to meet a predicted increase in natural gas imports.

“Those facilities are now sitting vacant,” says Wolak, “because the price of natural gas in the United States has fallen so much.” Many are converting themselves into export facilities in hopes of huge profits.

“It’s hard to see why this technology can’t be exported to the rest of the world,” says Wolak.

If that happens, a US export facility could be finished only to find a few new shale gas revolutions in other parts of the globe overturning its intended markets. [Red & bold emphasis added.]

Webmaster's comment: The US is already selling its fracking and horizontal drilling technology to the rest of the world.

Shale gas exports will aid US and its allies [Opinion] (Dec 20) — Financial Times, London, England, UK

...A plentiful and inexpensive supply of natural gas from shale rock has led to cheaper electricity for consumers and industry, the revival of US manufacturing and greater US energy independence.

...America has sufficient resources available to satisfy domestic needs for more than 90 years.

After decades of energy insecurity, the US has abundant domestic resources to serve its own natural gas needs today and far into the future. Natural gas exports cannot revive the US economy alone but they can help lead us toward a more robust energy future, a worthy and achievable goal. [Red & bold emphasis added.]

LNG exports: The winners and losers (Dec 19) — StateImpact, PA

The push for exports makes sense for producers who have become the victims of their own success. U.S. Natural gas prices have plummeted in recent years due to increased production in gas plays like the Marcellus Shale. The price of natural gas in the U.S. now hovers around $3.50 per million British thermal units. But in Europe that same amount of gas fetches more than $10. So exports would help producers by reducing domestic supply and increasing prices. The report, conducted for the DOE by the economic consulting firm NERA, says exports make sense as long as there’s a glut of natural gas with low production costs in the U.S. and a high demand overseas. The study concludes that new LNG export terminals would result in just slight increases in the price of natural gas.

But the report does say LNG exports will depress real wages, due to increased costs in fuel.

Should the U.S. export liquefied natural gas? (Dec 18) — The Motley Fool

It's no secret that the U.S. is awash with natural gas. A massive glut has kept prices depressed for quite some time now, motivating companies to export the stuff to international markets, where it fetches a higher price.

Who wins and who loses if the U.S. exports LNG? (Dec 20) — The Motley Fool

As the NERA report acknowledged, the benefits of LNG exports to the U.S. economy would not be evenly distributed. The most obvious and largest beneficiaries will be companies that explore for and produce natural gas in North America, such as Chesapeake Energy,, Ultra Petroleum, EXCO Resources, and Devon Energy. Due to a sustained period of low gas prices, these and other gas producers have been forced to curtail gas drilling and instead shift their resources toward liquids-rich opportunities, which are more profitable.

In sharp contrast to domestic gas producers, energy services companies, and coal companies, American manufacturers, especially those whose energy costs are a large share of their total operating costs, will likely be negatively affected by a rise in U.S. natural gas prices, albeit to varying degrees. [Red & bold emphasis added.]

New York Times has about-face on gas (Dec 18) — OilPrice.com

...The Times, in a Sunday editorial, said Washington should accelerate the approval process for LNG. Just last year, however, the newspaper was sounding the alarm over the "natural gas rush."

The Times said it viewed current LNG export restrictions as "anachronistic" given recent studies that suggest such exports could result in net economic benefits for the country. NERA's report for the U.S. State Department, however, finds the economic benefits won't be the same for all socioeconomic groups. For some in the United States, there won't be any benefit at all.

Former energy secretaries make pitch for LNG exports — Fuel Fix

“Exports can buttress U.S. geopolitical leadership and trade, while at the same time continuing to support low domestic natural gas prices and a renaissance in domestic manufacturing,” said Bill Richardson and Spencer Abraham in a Financial Times opinion piece.

Richardson was former President Bill Clinton’s energy secretary. Abraham served under former President George W. Bush.

The former energy secretaries also argue that if U.S. oil and gas producers had broader access to foreign markets, they would have extra financial incentive to capture natural gas now lost through flaring at drill sites in some parts of the country.

Panama

Officials say wider canal can boost natural gas exports (Dec 19) — Fuel Fix

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

During a state Senate Transportation Committee hearing at the Capitol in Austin, the heads of the Texas Department of Transportation and the Port of Houston Authority summarized and elaborated on the findings of a report last week that described the effects on Texas of the $5.25 billion project that will nearly triple the canal’s capacity.

The report said the bigger canal mainly will allow for more exports to Asia, including natural gas as soon as companies get government permits to liquefy the gas for export in special tankers.

The report noted that liquefied natural gas tankers, too large to traverse the canal now, will be able to get through after the expansion is complete sometime before the end of 2015.

Southeast

Sierra Club and municipal gas utilities continue opposition to LNG exports — LNG Law Blog

Sierra Club and the American Public Gas Association (APGA), which represents municipal gas utilities, each filed protests at the U.S. Department of Energy (DOE) opposing Southern LNG Company, L.L.C.'s application to export LNG to countries without a Free Trade Agreement with the United States. Sierra Club opposes the application arguing that DOE has not considered the potential environmental harm from increased hydraulic fracturing and the increase in domestic gas prices which could result from increased gas exports. APGA's protest focuses on the increase in domestic gas prices that could result from approval of additional LNG exports.

APGA files motion with DOE to intervene in opposition to SLNG export application — LNG World News

American Public Gas Association (APGA) filed a motion with the Department of Energy (DOE) to intervene in opposition to an application by Southern LNG (SLNG) to export approximately 0.5 billion cubic feet per day (Bcf/d) of LNG from an existing LNG import terminal on Elba Island, Georgia to any country with which the United States does not have a Free Trade Agreement with.

To date, 20 applications have been filed at DOE to export 28.67 Bcf per day of LNG to Free Trade Agreement Countries. This equates to approximately 45% of U.S. daily consumption. [Red & bold emphasis added.]

Canada

Canada likely to become world's second-largest LNG exporter: report — Global Times, Beijing, China

Canada has the potential of becoming the world's second largest liquefied natural gas (LNG) supplier in the near future, largely driven by demand of emerging markets, a report released Monday said.

United States

Japan’s LNG in crucial pricing shift — Financial Times, London, England, UK

Japan’s liquefied natural gas industry, the world’s largest, is starting to move away from using crude oil-linked contracts and is instead partially pricing agreements to US gas quotes – a critical step towards the creation of a truly global natural gas market.

Kansai Electric Power last month became the latest buyer to sign an innovative long term agreement where LNG prices are linked to daily settlements at Henry Hub in Louisiana, the US gas futures pricing point.

Kepco’s move, which could lead to a 30 per cent reduction in LNG import costs, follows similar deals by Japanese utilities including Tokyo Gas, Osaka Gas and Chubu Electric Power and trading houses Mitsui, Mitsubishi and Sumitomo.

Gazprom has been forced to de-link its prices from the oil market, lowering cost for Germany’s Eon and RWE, Italy’s Eni, and France’s Gaz de France, and Poland.

With the push among both European and Japanese to negotiate more flexible gas contracts, the link to US natural gas prices is going to accelerate, said Tilak Doshi of the Energy Studies Institute in Singapore. “Convergence [among regional markets] will happen a lot faster than people expect,” he says. [Red & bold emphasis added.]

Update 1-U.S. lawmaker calls for new natural gas export study — Reuters

A government-sponsored study that found natural gas exports would benefit the U.S. economy was deeply flawed and should be repeated with more recent data, a key Democratic lawmaker said on Monday.

...Representative Edward Markey of Massachusetts said the report relied on government estimates of U.S. natural gas demand from two years ago when the full implications of the shale gas boom were not understood.

The study also failed to compare the benefits of exports versus the benefits of industrial use of cheap natural gas, Markey said.

Markey 'disappointed' with LNG study — UPI

Markey, ranking member of the House Natural Resources Committee, said a report submitted to the U.S. Department of Energy on gas exports was outdated and contained "key missteps."

Plan for U.S. natural gas exports brings talk of economic boon, fears of failure (Dec 17) — Fox News

Not long ago, the U.S. was facing the prospect of spending billions to import pricey natural gas from overseas to heat our homes, fuel electrical generation and run our city buses. The industry was furiously building terminals to handle what was sure to be enormous ship traffic from places like Qatar and the United Arab Emirates.

The gas industry, currently suffering from too much of a good thing, sees dollar signs in the lucrative export market. Domestic manufacturers, like Dow, argue there is much more value to the economy from exporting finished goods than from shipping an important natural resource overseas.

Five U.S. natural gas companies set to soar from an export boom — Trefis, Boston, MA

• Cheniere Energy Inc.
• Dominion Resources Inc.
• Chevron Corp.
• Veresen Inc.
• KBR Inc.

US to benefit from LNG exports to India, China: Report — Zee News, Noida, India

"Natural gas demand in these countries is growing rapidly as a result of expanding economies, improving wealth and a desire to use cleaner burning fuels. LNG will be an important component of their natural gas supply portfolio. These countries demand more than they can produce and the pricing mechanism for their LNG purchases reflects this," it said.

Export natural gas to accelerate our clean energy future — The Energy Collective

Gas producers clearly stand to benefit from export. One of the lesser known realities of the gas fields is that today's prices are not sustainable as they don't offer producers enough value to drill profitably. Even accounting for the cost of gas liquifaction and shipment, the spread between U.S. prices and global prices ensures them a better profit from export than they currently get at home.

Webmaster's comment: The pro-export reasoning that exporting would create sustainable pricing appears to be disingenuous. The law of supply and demand dictates that if prices are not sustainable, then drilling would slow down, causing the supply to drop and price to rise — without having to export. Would anyone be surprised if the pro-export natural gas industry is not revealing the whole truth?

Lugar seeks free-trade LNG export footing for NATO allies — Oil & Gas Journal, Houston, TX

Richard G. Lugar (R-Ind.), the Senate Foreign Relations Committee’s ranking minority member, introduced legislation to place other members of the North Atlantic Treaty Organization on the same footing as US free trade partners when it comes to receiving LNG exports.

The bill stems from a report, “Energy and Security from the Caspian to Europe”, which Lugar released Dec. 12. Senate Foreign Relations Committee staff members prepared the report, which outlines rationale to diversify Eastern Europe’s gas supplies with LNG exports.

New Brunswick

Canada: LNG tanker due at Canaport terminal December 20 — LNG World News

Repsol YPF SA’s Canaport terminal in Canada is expected to get one liquefied natural gas cargo onboard the 138,000 cbm Bilbao Knutsen from Trinidad and Tobago on December 20, according to shipping data.

[Canaport LNG] has a maximum send-out capacity of 1.2 billion cubic feet (BCF) or 28 million cubic metres of natural gas per day.

Webmaster's comment: Canaport LNG is suffering from lack of demand, operating at around 33% capacity.

New England

Corridor boosts gas sales into New England — The Chronicle Herald, Halifax, NS

Corridor Resources Inc. has landed a deal to sell two-thirds of its production in the first quarter of 2013 into the energy-hungry New England states.

Corridor chief executive officer Phillip Knoll said the strategic location of the company’s McCully gas field in New Brunswick is paying off.

Webmaster's comment: US natural gas pipeline infrastructure expansions to deliver more gas from the Macellus Shale to New England could spoil Corridor's plans in the future.

Southeast

FERC requests further action for two applicants on pre-filing requests — LNG Law Blog

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

FERC has requested that Gulf LNG Liquefaction Company (Gulf LNG) and Southern LNG Company, L.L.C./Elba Express Company, L.L.C. (Southern LNG) provide additional information before their requests to initiate the pre-filing environmental review process for their respective LNG export terminals projects are considered.

Gulf of Mexico

Cameron LNG Terminal Pipeline files at FERC to reverse flow — LNG Law Blog

Cameron Interstate Pipeline, LLC (Cameron Interstate) filed an application at FERC to construct facilities to reverse the flow of gas on its pipeline to transport domestically-produced gas to the Cameron LNG terminal for processing, liquefaction and export. Cameron Interstate states that during a recent open season, it received confidential expressions of interest for 100% of the proposed incremental firm transportation capacity. [Red, yellow & bold emphasis added.]

Calhoun LNG abandons LNG import project — LNG Law Blog

Calhoun LNG, L.P. and Point Comfort Pipeline (Calhoun) have requested that FERC vacate their certificate authorizations for construction of an LNG import terminal and interconnected pipeline at the Port of Port Lavaca-Point Comfort in Calhoun County, Texas. Calhoun states that changes in U.S. natural gas markets that have dramatically limited the prospects for substantial LNG imports into the United States. [Red, yellow & bold emphasis added.]

Webmaster's comment: Another LNG import project bites the dust due to lack of need. Downeast LNG just looks the other way, pretending not to notice that the world has changed against them.

FERC requests further action for two applicants on pre-filing requests — LNG Law Blog

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

FERC has requested that Gulf LNG Liquefaction Company (Gulf LNG) and Southern LNG Company, L.L.C./Elba Express Company, L.L.C. (Southern LNG) provide additional information before their requests to initiate the pre-filing environmental review process for their respective LNG export terminals projects are considered.

USA: Cheniere, Total ink Sabine Pass LNG deal — LNG World News

Cheniere Energy Partners said that its subsidiary, Sabine Pass Liquefaction, has entered into a liquefied natural gas (LNG) sale and purchase agreement (SPA) with Total Gas & Power North America under which Total has agreed to purchase 91,250,000 MMBtu of LNG annually plus 13,500,000 MMBTU of seasonal LNG volumes upon the commencement of train five operations.

Sabine Liquefaction is currently developing five liquefaction trains adjacent to the Sabine Pass LNG terminal. The first two trains are under construction and the third and fourth trains are expected to commence construction in 2013. As previously announced, a partial assignment agreement was entered into between Sabine Liquefaction and Total, allowing Sabine Liquefaction to gain access to services under Total’s terminal use agreement with Sabine Pass LNG, L.P., including Total’s berthing and storage capacity, making further expansion of the LNG export capabilities at the Sabine Pass LNG terminal possible.

Cheniere Energy (CQP) signs LNG agreement with Total (TOT) — iStockAnalyst

Total will purchase LNG on an FOB basis, under which LNG will be loaded onto Total's vessels, for a purchase price indexed to the monthly Henry Hub price plus a fixed component. [Red & bold emphasis added.]

Total agrees to 20-year deal to buy LNG from Cheniere's export project — Fox Business

Cheniere Energy Partners LP (CQP) reached an 20-year deal under which Total SA (TOT, FP.FR), the France-based energy major, has agreed to purchase nearly half the volume of a fifth train planned for Cheniere's liquefied natural-gas export facility that is being developed in Louisiana.

The pact--along with additional indications of interest--allows Cheniere to move ahead with the development of the fifth train. The company's LNG-export project at its Sabine Pass operation initially was designed and permitted for as many as four modular LNG trains. A sixth train also is being considered.

Editorial: LNG gives Southwest Louisiana big economic boost (Dec 14) — American Press, Lake Charles, LA

Earlier this week, Sempra Energy announced it was filing its permit application with FERC for conversion of its Cameron LNG terminal at Hackberry. Its pre-filing application has already received approval.

Excelerate Energy discusses plans at open house (Dec 16) — The Port Lavaca Wave, Port Lavaca, TX

The vessel, known as a Floating Liquefaction Storage and Offloading vessel or FLSO, will be fabricated in South Korea and will then be brought by barge to the United States. Land-based construction will also take place at the port.

“The land-based fixed infrastructure will be constructed while the vessel is being built in South Korea and the pipeline header will also be constructed during that time frame. It’s about three years from when we say it’s a go to when it’s in operation, “ Cook said.

The way the facility would work is natural gas would be brought into the facility via existing pipeline and the facility would then be used to supercool and condense natural gas to its liquid form and would be exported via LNG carriers. LNG customers would then transport it to various countries to provide energy.

British Columbia

BC to lead Canada in gas investments, report says — LNG World News

“British Columbia faces the challenge of developing on two fronts: unconventional shale gas production and infrastructure to support liquefied natural gas exports,” said Len Coad, Director, Environment, Energy and Technology Policy.

Exports of LNG from British Columbia are a potential emerging market for natural gas. Several companies have announced plans for LNG liquefaction plants, pipelines, and/or export facilities in British Columbia. This analysis does not assume that all projects will proceed. If that were to happen, Canada would go from no LNG exports to being the second-largest LNG supplier in the world over a very short period. For this report, the Conference Board assumed that four LNG trains will be constructed, totalling 20 million tonnes per annum of capacity.

B.C. poised for global prominence as LNG exporter — The Vancouver Sun, Vancouver, BC

Demand for B.C. LNG is expected to grow from zero in 2012 to one trillion cubic feet (TCF) per year while exports via existing pipelines to the U.S. will decline by the same amount over that time. [Red & bold emphasis added.]

Three musts if BC wants to ship gas to Asia — The Tyee, Vancouver, BC

The greenhouse gas pollution produced by the wells, pipelines, processing plants and liquefaction facilities needed to fulfil British Columbia's liquefied natural gas (LNG) aspirations will make it impossible for the province to meet its climate change commitments. Yet, the province says it still intends to "maintain leadership on climate change and clean energy."

Climate leadership also means contributing to global solutions. The LNG plans fall short here too because it feeds a natural gas-hungry world that will likely be 3.5 degrees warmer by century's end. Natural gas might be cleaner than coal (a popular refrain of LNG proponents), but burning it still moves the planet closer to dangerous and irreversible climate change, that is, until there are much stronger climate policies around the world.

Hawaii

Hawaii Gas goes forward with LNG plan (Dec 15) — The Maui News, Wailuku, HI

KAILUA-KONA, (AP) - Hawaii Gas is proceeding with plans to bring liquefied natural gas to Hawaii for the first time.

Canada

Why Canada is better bet for gas exporters — Financial Times, London, England, UK

North America presents companies seeking to export natural gas to Asia with an intriguing conundrum: do they put their faith in the US or in Canada?

[N]either the US nor Canada offers ideal conditions for export and both present significant risks. Companies are starting to place bets based on how they expect those challenges to stack up.

Canada ... has a long history as a gas exporter to the US, and the idea that production should be retained in the country for the benefit of home-grown manufacturers holds much less sway there. Its problem is that compared to the US, which has well-developed pipeline connections to the coast and port facilities that can be converted to export LNG, it will need much greater investment in infrastructure.

Future of Canadian natural gas lies in shale development: Conference Board (Dec 16) — The Globe and Mail, Toronto, ON

The next decade will be a tough one for Canada’s ailing natural gas industry, marked by depressed prices, a continuing plunge in exports to the United States and lower production, the Conference Board of Canada says.

The U.S. is on the road toward self-sufficiency in natural gas thanks to new shale deposits and fracturing technology, squeezing what has been a lucrative export market for Canadian gas. [Red & bold emphasis added.]

United States

US congressman questions conclusions of DOE-commissioned LNG export study — Platts

In a Friday letter to Energy Secretary Steven Chu, Markey, the senior Democrat on the House of Representatives' Natural Resources Commission, said study by NERA Economic Consulting used a "deeply flawed methodology" which may have "led to conclusions that severely underestimate the negative impacts of large-scale natural gas exporting."

In addition, the congressman said the NERA report "misinterpreted" the results of 2009 study on energy and climate change legislation Markey co-authored with Representative Henry Waxman, Democrat-California, and ranking member of the House Energy and Commerce Committee. [Red & bold emphasis added.]

Webmaster's comment: One inaccurate assumption the NERA report made is the selling price of US LNG. There have already been two deals struck to sell US LNG to Asia at Henry Hub-based prices — prices far lower than the study assumes. Such pricing is bound to increase demand for US LNG, driving up the natural gas price at home in the US.

Japan shifts to LNG dependency from nuclear, eyes US fuel — Energy Tribune, Houston, TX

Along with purchases from Qatar and Australia, the country is looking to buy LNG from the U.S., he also revealed. However, other officials have stated that the U.S. is primarily considering meeting its domestic demand first. [Red & bold emphasis added.]

New York Times editorial: Benefits to exporting LNG — Akron Beacon Journal, Akron, OH

EDITORIAL Sending Natural Gas Abroad

The United States has traditionally maintained tight control over the export of natural gas, a fuel that it once imported, allowing it to be sold only in cases deemed to be in the “public interest.” But those restrictions have become anachronistic.

New York Times convinced of LNG benefits — UPI

An editorial in The New York Times said it's been "persuaded" by a U.S. report touting the economic benefits of U.S. liquefied natural gas exports.

US Senator Lugar calls for LNG exports to NATO allies — LNG World News

In the report commissioned by Lugar, SFRC Republican staff members present the strategic rationale for strong diplomacy to diversify natural gas in Eastern Europe via LNG exports to NATO and stronger U.S. engagement on the completion of the next stage of the so-called Southern Corridor, a strategic initiative to link oil and gas supplies from the Caspian basin to Europe. The report argues that, “The United States with our European allies have an unprecedented opportunity to advance broad natural gas diversification. The Southern Corridor is vital for such a strategy in Central and Southeastern Europe and Turkey.”

The LNG for NATO Act introduced today would amend the Natural Gas Act to place NATO allies on the same footing as all free trade partners under an automatic licensing regime for natural gas exports. Recently, the Department of Energy released its own report that found net domestic economic benefits to LNG trade under any scenario.

Southeast

Report a boost for LNG export — Savannah Morning News, Savannah, GA

In August, Southern LNG, a Kinder Morgan company, joined the queue of what now are 15 facilities requesting permission from the U.S. Department of Energy to export to Non-Free Trade Agreement countries. Elba is 12th in line, and its application is pending.

Last week, Southern LNG and Elba Express Company, which runs the pipeline out of the facility, moved the process forward by submitting a National Environmental Policy Act pre-filing application with the Federal Energy Regulatory Commission [FERC]. The NEPA process requires an assessment of environmental effects and engagement with the community.

Southern LNG already received approval from the DOE in June to export up to 0.5 billion cubic feet per day, roughly equivalent to 4 million tons per year of LNG, from the Elba Island terminal to Free-Trade Agreement countries. It’s one of 17 facilities that have received such approval. [Red & bold emphasis added.]

Gulf of Mexico

Excelerate holds open house on LNG plant in Port Lavaca (Video) (Dec 13) — Victoria Advocate, Victoria, TX

Company officials held an open house at the Bauer Community Center on Thursday as part of the permitting process with the Federal Energy Regulatory Commission, Denise Madera, communications director for Excelerate, said.

Cook said they are hoping to sell gas to countries in Asia and South America once the project is up and running.

Webmaster's comment: These FERC-required open houses have no veracity requirements; developers can (and do, in our experience) mislead and outright lie to the public, even in FERC staff presence, without consequence.

Caribbean

AES Dominicana opens LNG distribution terminal (Dec 13) — LNG World News

AES Dominicana have just opened Latin America’s first LNG distribution terminal, saving the Dominican Republic over a $billion a year, as it seeks to cut its dependence on petroleum based power generation.

Other Latin American countries are set to follow suit by securing LNG as their primary source of energy. Together with the results of the Macroeconomic Impacts report, this can pave the way forward for the US to go ahead and export LNG to its neighbours, once the approval and development stages have been given the “green light”. [Red & bold emphasis added.]

Webmaster's comment: The Dominican Republic's first LNG import terminal was commissioned in 2000. The terminal is now distributing LNG to users in the island republic.

LNG 360° Forum: Latin America & Caribbean — LNG 360° Forum

15–17 January 2013, Houston, Texas

Commercial and Strategic Developments to Capitalize on LNG Partnerships and Projects in the Americas

The LNG 360 Forum Latin America and Caribbean will bring together major producers – importers and exporters, members of government, project investors, shippers and all other major stakeholders within the Americas to address the commercial and strategic challenges, and share the current developments for capitalizing on LNG partnerships and projects in the Americas. The focus of the event will be to highlight upon the opportunities within the region but also to address such issues as availability and sustainability of energy supply; installation of new energy sources for natural gas and the possibility of the USA exporting to this burgeoning market place.

Hawaii

Liquid natural gas coming to Hawaii — West Hawaii Today, Kailua-Kona, HI

Hawaii Gas is in the middle of a federal permitting process to bring liquefied natural gas to the Aloha State for the first time.

The first phase, for which Hawaii Gas filed an application with the Federal Energy Regulatory Commission in August, would allow the company to ship liquefied natural gas from the mainland to Hawaii, where it would be stored in mobile containers and used as an emergency backup for the company’s customers who received synthetic natural gas or propane via pipelines on Oahu, Vice President for External Affairs Joe Boivin said.

Webmaster's comment: Hawaii is sitting atop an unlimited supply of free, renewable volcanic geothermal energy. Paying to import hydrocarbon LNG to Hawaii to fire electrical generators is just plain nuts.

United States

Scientists ask Obama to hold off on natural gas exports (Dec 13) — The State Journal, Charleston, WV

Among those on the conference call was former Mobil Oil Corp. Executive Vice President Louis W. Allstadt, who added his concern about the new processes.

"Several years ago friends asked me what I thought about drilling near a local lake, the water source for the village of Cooperstown, N.Y., 150 feet from the lake," Allstadt said.

"The more I read about how New York was going to regulate the process and the more I caught up on how the drilling had changed and what the process entailed, the more concerned I got," he said. "I'm not the only one that's been associated with the industry that has concerns over what's going on and how it's being done. I think it's moved very fast and before people really got a good handle on the technology." [Red & bold emphasis added.]

Fracking’s future (Jan–Feb 2013) — Harvard Magazine, Cambridge, MA

[E]xports require multibillion-dollar investments in facilities for liquefaction of gas and in the ports through which liquefied natural gas (LNG) can be shipped. Exxon Mobil Corporation, the largest producer of natural gas in the United States, has taken steps to form a $10-billion partnership for LNG exports. If this and other investments proceed, and the prices realized for LNG are high enough to justify further shale-gas drilling, the U.S. economy could benefit from significant energy exports—and the importing countries might also realize environmental benefits. China, where coal is the principal fuel source, could profit in particular: a cleaner source of energy would mean less local pollution from coal (including emissions of particulates, sulfur, mercury, etc.). And the global environment would benefit overall from a reduction in—or lessened growth of—CO2 emissions. (China became the leading source of such emissions in 2006.)

Webmaster's comment: One must realize that liquefying, transporting, and regasifying LNG has a high energy-consumption cost — environmental benefits to importing countries come at an environmental cost to the exporting country. Plus, growing Third World Countries, such as China, are not simply replacing coal-fired energy with imported natural gas — they are adding new natural gas-fired energy production, so there is a net increase in hydrocarbon fuel consumption.

Alaska

Market picture for LNG export project complex — Homer News, Homer, AK

The market situation for an Alaska gas pipeline and liquefied natural gas project may be getting more complicated and uncertain, a respected U.S. energy analyst said Nov. 28.

The Asia liquefied natural gas market is changing and the chief uncertainties that have been long recognized are whether Japan will restart its nuclear plants and rely less on LNG for power, whether China will continue its program to expand LNG import facilities or rely more on domestic gas or gas imported by pipeline, and whether Russia will go ahead with ambitious plans to build new pipelines and move gas from huge discoveries in East Siberia to the Pacific, [National Bureau of Asia Research director of research and energy security Mikkal Herberg] said.

If shale gas export is approved and an enlarged Panama Canal allows it to be carried in large, efficient LNG tankers, this could undercut Alaska gas, which must bear the cost of building 800 miles of new pipeline from the North Slope.

Even if Congress allows some shale gas to be exported, the pricing link will be to the U.S. Henry Hub gas price index, which will provide a break in the current pricing structure of linking LNG to crude oil, Herberg said. [Red & bold emphasis added.]

Energy Dept. might speed up terminal approvals — KTOO-FM, Juneau, AK

Charles Ebinger from the Brookings Institution says the state should skip the pipeline and build an export terminal in Prudhoe Bay.

Ebinger says a terminal off of the North Slope would take significantly less time to build than a pipeline, meaning the gas could get to market sooner.

British Columbia

B.C.’s LNG plans on same scale as oil sands: Clark — (Canadian Press) Financial Post, Don Mills, ON

“Energy output from LNG will likely be as big as the total energy output today from the oilsands,” she said.

Experts in the LNG industry do not completely agree with Clark’s Alberta oilsands comparison, but are on board in describing the opportunity as monumental and one that should be fast tracked.

She said her government is committed to working with the gas industry to build a pipeline from the province’s northeast natural gas fields to an LNG terminal in northwest B.C. near Kitimat, from where the product will be shipped to Asia.

Webmaster's comment: With the two recent deals to price LNG being sold to Japan at Henry-Hub based levels, the dollar signs now in developers' and Premier Clark's eyes may be about to shrink.

Wind could power LNG growth — The Vancouver Sun, Vancouver, BC

LNG arguably presents the biggest economic opportunity B.C. has seen in decades, but how the province chooses to power the liquefaction facilities will impact future generations — especially First Nations and those in remote communities.

The issue facing B.C. decision makers is whether LNG proponents will use electricity to compress and cool the natural gas into liquid (called electric drives), or instead use “direct drives” fuelled by natural gas to self-generate power at the plant. The sheer amount of energy involved means this decision has huge environmental implications for British Columbians in the form of increased greenhouse gas emissions.

Even using efficient electric drives, BC Hydro estimates that just one of these proposed LNG facilities would consume 9,600 GWh of electricity annually. That’s equal to the electricity consumed each year by Vancouver, Burnaby and Richmond combined. Meeting all the energy needs of one LNG plant with clean and renewable wind energy will reduce British Columbia’s overall greenhouse gas emissions by a phenomenal 5.1 million tonnes each year. That’s like eliminating all residential, commercial and transportation emissions from Vancouver, Victoria, Abbotsford, Kelowna and Kamloops combined. And that’s just for one plant — there are at least five LNG export facilities proposed.

Column: Clean LNG energy still a possibility — Nanaimo News Bulletin, Nanaimo, BC

The B.C. government transferred Crown land on Douglas Channel to the Haisla for an LNG project planned by Shell, PetroChina and Korea Gas. And Sterritt said he started getting signals from Victoria that the industry doesn’t want to buy power from outside producers to drive LNG cooling and compression. Instead it wanted to power it directly with gas, using equipment called “mechanical drives” rather than electrical drives.

...If LNG producers are allowed to use single-purpose mechanical drives, no renewable energy can ever be added. And as more LNG producers rush into B.C., reserves that would have lasted 75 to 100 years could be depleted in 30.

United States

EPA backs Sierra Club on LNG export review — EnergyWire [Paid subscription]

The Sierra Club has won support from an important ally in its push for a federal assessment of the environmental impacts that could stem from liquefied natural gas exports: U.S. EPA.

The agency has urged the Federal Energy Regulatory Commission in recent weeks to weigh the upstream implications of increased natural gas production when approving export terminals in Maryland and Oregon.

Dominion Resources Inc.'s proposal to re-engineer its LNG import terminal in Cove Point, Md., to accommodate exports "represents an opportunity for FERC and DOE to jointly and thoroughly consider the indirect and cumulative environmental impacts of exporting LNG," EPA said in a filing on the scope of the project's environmental review.

The Sierra Club has been on the front lines -- and largely alone -- in its across-the-board opposition to proposals for facilities that would ship millions of tons of natural gas abroad each year. The group has intervened with DOE on projects around the country, arguing that exports should not move forward until a federal review of shale gas production has been conducted under the National Environmental Policy Act.

Ultimately, he said, "One of two things needs to happen. The most sensible would be for FERC to acknowledge [that the review] is a two- step process" that includes a big-picture analysis that looks at how exports drive production, how much hydraulic fracturing that would entail and what alternatives exist to the projects. Both DOE and FERC could then refer to that assessment as needed in the course of their project-specific reviews. The "inefficient" alternative, he said, would be if FERC did not conduct that review, and DOE had to do a supplemental environmental analysis to meet its legal obligation to answer those questions. [Red & bold emphasis added.]

More than 100 leading medical, scientific experts urge White House to halt rush to expanded shale gas fracking for export purposes [Press release] — PRNewswire

Signed by top U.S. medical professionals, researchers, and other scientists, the petition reads in part: "There is a growing body of evidence that unconventional natural gas extraction from shale (also known as 'fracking') may be associated with adverse health risks through exposure to polluted air, water, and soil. Public health researchers and medical professionals question the continuation of current levels of fracking without a full scientific understanding of the health implications. The opening of LNG export facilities would serve to accelerate fracking in the United States in absence of sound scientific assessment, placing policy before health."

Seth B. Shonkoff, PhD, MPH, executive director, Physicians, Scientists & Engineers for Healthy Energy (PSE), and environmental researcher, University of California, Berkeley, said: "The question here is very simple: Why would the United States dramatically increase the use of an energy extraction method without first ensuring that the trade-off is not the health of Americans in exchange for the energy demands of foreign nations? Health professionals are coming together today to urge the White House to make sure that we have the facts prior to making this decision. The only prudent thing to do here is to conduct the needed research first." [Red & bold emphasis added.]

Senate Bill would boost NATO LNG sales (Dec 12) — HispanicBusiness.com

A bill in the U.S. Senate would encourage exports of liquefied natural gas to NATO countries to address an over-reliance on gas supplies from Russia and Iran.

Sen. Richard Lugar, R-Ind., said Wednesday his LNG for NATO Act, which would make changes to the export licensing rules for LNG, was important to U.S. national security because it would help diversify energy supplies among its NATO allies.

United States: New research finds shale natural gas production emits less fugitive methane that previously reported (Dec 12) — Mondaq

Shale natural gas production emits significantly less fugitive methane than previously thought, concluded researchers at the Massachusetts Institute of Technology (MIT) in a November 26, 2012, study published in Environmental Research Letters. According to the researchers, "it is incorrect to suggest that shale gas-related hydraulic fracturing has substantially altered the overall [greenhouse gas] intensity of natural gas production."

...the MIT study determined that actual fugitive methane emissions average approximately 50 Mg per well after taking into account flaring and green completions technology, both of which are widely used by industry and required under most state regulatory regimes (as well as under new Environmental Protection Agency rules). The MIT researchers evaluated actual production data from approximately 4,000 horizontal shale natural gas wells, and found a potential for about 228 Mg of fugitive methane emissions per well. The researchers cautioned that estimates about fugitive methane emissions had been "inappropriately used in analyses of the GHG impact of shale gas" insofar as actual emissions are reduced by an average of 178 Mg per well by flaring and green completion technology. [Red & bold emphasis added.]

Webmaster's comment: In comparison, renewable sources of energy release no greenhouse gases, or are greenhouse gas neutral.

Nova Scotia

Permit extension eyed for LNG site — The Chronicle Herald, Halifax, NS

The company that abandoned its multimillion-dollar liquefied natural gas terminal project in Bear Head wants three more years to try and get it back off the ground.

“A robust LNG spot market is beginning to emerge as a key factor in the progress of this facility.”

Increased demand for liquefied natural gas from China and India has import companies looking for options to divert the cargo periodically, which is where the Bear Head terminal could come into play.

Meanwhile, just a few hours away in Guysborough County, preliminary work is forging ahead on Pieridae Energy Canada’s proposed $5-billion Goldboro LNG storage and export terminal. That project has just entered the environmental planning process, with an announcement related to the terminal expected near the end of the first quarter of 2013.

Webmaster's comment: So, there are two Nova Scotia LNG terminal projects, both apparently wanting to export to Asia. The Pieridae Energy project wants to reverse direction of the Maritimes & Northeast Pipeline, to export US natural gas as LNG.

Gulf of Mexico

New liquified natural gas terminal to be built in Ingleside — The Ingleside Index, Ingleside, TX

Pangea LNG North America Holdings has had the site under option since June. A separate pipeline project would connect the LNG plant to the gas transmission network. If the project moves ahead on schedule, the plant could be in operation by 2018.

It is the third LNG plant proposed for the area. Cheniere has had plans for a plant on the north shore of Corpus Christi Bay for some time, and the recent purchase of the former Naval Station Ingleside by Oxy is seen as making way for a second liquid gas plant.

British Columbia & Alberta

AltaGas Ltd. grabs lead in LNG infrastructure race — Alberta Oil, Edmonton, AB

Included in the public company’s assets is the only natural gas pipeline currently in place to serve the LNG export industry taking shape on Canada’s west coast. AltaGas acquired the pipeline, which cuts across northern British Columbia and touches the emerging export hub of Kitimat, when it purchased Pacific Northern Gas Ltd. (PNG) in December 2011 for about $145 million.

There are currently seven west coast LNG projects proposed or in development with a combined capacity of more than 10 billion cubic feet per day (bcf/d). Lance Mortlock, partner with Ernst & Young’s oil and gas practice in the Calgary office, figures four of those plants are probably feasible, but even those four might not all get built. “We’ve seen a lot of cost escalation in the past few months,” he says.

United States

US Senator Lugar unveils bill to authorize LNG exports to NATO allies — Platts

The bill would amend the Natural Gas Act to give NATO allies the same treatment as free trade agreement nations for natural gas exports, the statement said. By law, the Department of Energy must quickly approve LNG exports to free trade agreement countries. However, DOE can limit or block exports to non-FTA nations.

US should let NATO allies tap natural gas exports-Senator Lugar — Reuters

The U.S. Congress should give European allies access to burgeoning supplies of U.S. natural gas, Republican Senator Richard Lugar said on Wednesday, proposing a new law that he said would improve energy security in a critical region.

Lugar, the veteran top Republican on the Senate Foreign Relations Committee, said his bill would advance U.S. interests by helping allies in the North Atlantic Treaty Organization (NATO) reduce their dependence on natural gas from Russia, and also would help Turkey wean itself from Iranian supplies.

Lugar: U.S. natural gas exports could break Russian dominance — The Washington Times, Washington, DC

[W]e should allow exports of U.S. natural gas, now abundant thanks to shale gas, to all our NATO allies. America has surpassed Russia as the world’s largest natural gas producer. At current consumption rates, we have an estimated 100-year supply, and prices have fallen so low that new drilling activity is drying up. We could easily export some of this surplus as LNG without causing consumer gas prices to spike here at home. I have drafted the LNG for NATO Act, which would let America sell gas to our friends in NATO without going through the cumbersome export licensing requirements under current law. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG cannot hide their unimportance regarding US, Northeast, and New England energy supply and security.

Lugar sees natural gas exports as tool in U.S. arsenal — The Wall Street Journal

What’s undeniable is that the U.S. energy boom, which has made the U.S. the world’s biggest natural-gas producer and put it on track to surpass Saudi Arabia in oil production within a decade, has the potential to be a game changer not just at home, but around the world. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG's Dean Girdis might have better luck building an LNG import terminal in Saudi Arabia or Qatar.

Natural gas producers win — Wealth Daily, Baltimore, MD

Here are a couple of the key points from the report:

• The report examined the impact of LNG exports in 63 scenarios — and found exports to be a net benefit for the economy under each of the conditions.
• ...

Webmaster's comment: So much for Downeast LNG president Dean Girdis's claims that importing is needed!

U.S. natural gas prices reshaping global market — MarketWatch

The U.S. natural gas bonanza is pushing suppliers in other regions to lower prices in some contracts even before the country ships its first cargo of liquefied natural gas overseas.

The supply glut unleashed by hydraulic fracturing has made U.S. natural gas much cheaper than anywhere else in the world. The price differential is a powerful incentive for companies seeking to export it, and the first cargoes are expected in the middle of this decade. But the ripple effect is already being felt, as companies in Japan, Chile and other countries are already trying to factor in the U.S. market's stable prices to change the way natural gas has been traded globally for years.

[I]n November, BP Plc.'s (BP, BP.LN) Singapore business agreed to supply Japanese utility Kansai Electric Power Co. Inc. with about 700,000 million cubic feet a day of natural gas for 15 years at a price linked to Henry Hub, the U.S. natural gas trading center. A person familiar with the deal said the price was a third below current Japanese LNG import prices.

Also, the British oil and gas giant in February inked a deal with another Japanese utility, Chubu Electric Power Co. Inc. , for 700,000 million cubic feet a day of LNG at prices partially tied to U.S. natural gas.

Now that Japan has had some success, more deals linked to U.S. natural gas should follow, said Vikas Dwivedi, global oil and gas strategist at Macquarie Group.

[W]ith the pricing cat is now out of the bag, LNG buyers will negotiate harder for U.S. natural gas market to be used as at least a partial price benchmark, said Faisel Khan, global oil and gas analyst at Citi.

Webmaster's comment: Oooops! There goes the "exporting LNG to Asia will bring huge profits" argument. Plus, as the price is pushed downward, there will be more demand for US LNG, driving the price higher for US consumers than the Department of Energy's reports have predicted. There may even be a meltdown in profitability for all those proposed LNG export terminals — just as happened with the mad rush to build all those LNG import terminals (that aleardy spell Downeast LNG's doom, even as Downeast LNG blindly continues to pursue a FERC permit).

Alaska

Alaska Governor, KOGAS officials discuss LNG exports to Korea — LNG World News

This meeting furthers the Parnell administration’s ongoing effort to generate interest from Asian utilities and governments in a large-scale Alaska LNG project. Alaska’s major energy companies and TransCanada Corp. are working on such a project to commercialize the North Slope’s vast gas reserves, focusing on LNG exports from tidewater in Southcentral Alaska.

Alaska courts Asia for LNG options — UPI

"These efforts are critical because an Alaska project must compete with other large-scale LNG projects under development around the world," [Alaska Gov. Sean Parnell] said in a statement.

Governor Parnell has meeting with Korea Gas Corp to discuss Alaska's natural gas — Alaska Native News, Homer, AK

Opportunities for the export of large quantities of natural gas to Asia were discussed at a meeting between Alaska's Governor Parnell and the Chief Executive Officer and President of Korea Gas Corp. (KOGAS).

The Governor's talks on Monday, were a continuation of the administration's efforts the drum up interest from the governments and utilities along Asia's Pacific Rim in Alaska's North Slope natural gas. This newest meeting with the world's largest liquid natural gas buyer, that supplies gas to power plants, gas utilities and other buyers around the world,was also utilized to bring the Corporation up to speed, giving them updates on the LNG export project.

British Columbia & Alberta

Coastal First Nations chiefs dispute LNG processing (Dec 10) — Merritt Herald, Merritt, BC

VICTORIA – On Friday, as the federal government was giving the green light to a Malaysian investment of billions more into northern B.C.’s liquefied natural gas megaproject, Coastal First Nations chiefs held their quarterly board meeting in Vancouver.

A major topic was the Haisla Nation, the Kitimat partner that abruptly quit its voluntary association with the Haida, Gitga’at and other communities over its plans to develop LNG exports.

...Both [Haisla Chief Councillor Ellis Ross] and Coastal First Nations executive director Art Sterritt confirmed to me that they remain solidly against the Enbridge proposal. The disagreement is over how to power the processing of LNG, which the Haisla are pioneering with provincial assistance.

Rivals upbeat after CNOOC-Nexen deal — UPI

"(The CNOOC-Nexen) approval by the Canadian government marks an important step in our plans to develop a liquefied natural gas export business," Progress Energy Chief Executive Officer and President Michael Culbert said in a statement.

Oil giants eye LNG business in B.C. — The Vancouver Sun, Vancouver, BC

Imperial Oil Ltd. and its parent, Exxon Mobil Corp., are in the early stages of planning a liquefied natural gas export business from the West Coast, Imperial president and CEO Bruce March said Monday.

The new business would build on their $3.1-billion acquisition of natural gas producer Celtic Exploration Ltd., gas holdings they already own in Alberta and B.C.'s Horn River shale gas play.

United States

A huge natural gas line explosion just lit up West Virginia [PHOTOS] — Business Insider, New York, NY

The northbound lanes of Interstate 77 are closed in the Sissonville area, from Tuppers Creek to Pocatalico due to what's being called a major gas line explosion.

"The flames are shooting 50, 75 to 100 feet. There's fire everywhere," said Carper reporting from the scene on 58-WCHS. "Gas company is on the scene working with emergency officials to get the gas shut off, then we'll assess if we have injuries or casualties. At this time it's a fairly chaotic scene."

...

"Several structures are involved. The fire is so hot it's like a [bleve]. It's caused houses to melt and burn way far away," he said. "Many structures are on fire in a large fire area stretching hundreds and hundreds of feet."

(Photo credit: Bill Murray)

Webmaster's comment: Although this was a natural gas pipeline fire blowing across two lanes of an interstate highway, rather than an LNG facility fire, it provides an example of the kind of fire, heat, and hazard Downeast LNG's proposed terminal and natural gas pipeline adjacent to highway US-1 could present.

Passamaquoddy Bay

Proposed Downeast LNG import terminal continues to draw objections — Bangor Daily News, Bangor, ME

“The Dec. 3, 2012, NERA [National Economic Research Associates] Economic Consulting Report to the Department of Energy indicates that LNG exports would be beneficial to the U.S. economy,” said Robert Godfrey of Eastport, a researcher and spokesman for Save Passamaquoddy Bay. “It further states that the more LNG exported, the greater the economic benefit.

“The report is a clear, scientific indication that the proposed Downeast LNG import project would be contrary to the public interest. There is no valid purpose or need for the proposed Downeast LNG project.”

Dean Girdis, president of Downeast LNG, said Monday his company has no comment about the Dec. 7 FERC filing related to the economic viability of LNG imports. ... [Red, yellow & bold emphasis added.]

Webmaster's comment: Dean Girdis did not comment about economic viability because it is clearly evident that there is no economic justification for the project.

As expected, Girdis is critical of SPB's photosimulation of his proposed 30'-tall vapor fence — yet Downeast LNG had not supplied FERC with the applicant's own photosimulation, because Girdis and Downeast LNG knew the vapor fence is a visual abomination, and submitting such a filing would have drawn the public's attention to it.

Gulf of Mexico

Jackson County grants tax exemptions to Gulf LNG Energy, Ingalls Shipbuilding — GulfLive.com, MS

Gulf LNG Energy received an exemption on nearly $828.5 million in true property value, and Ingalls Shipbuilding received an exemption on nearly $9.6 million.

Sempra: Cameron Liquefaction project moves forward, USA — LNG World News

Sempra Energy announced it has reached another important milestone to add natural gas liquefaction and export facilities to its existing Cameron LNG terminal in Hackberry, La., filing its permit application with the Federal Energy Regulatory Commission (FERC) requesting approval to begin construction of the project. The project has been progressing successfully through the FERC pre-filing process, which was initiated in April.

The liquefaction facility will utilize Cameron LNG’s existing facilities, including two marine berths capable of accommodating Q-Flex-sized LNG ships, three LNG storage tanks of 480,000 cubic meters, and vaporization capability for regasification services of 1.5 billion cubic feet (Bcf) per day. The new liquefaction facility will be comprised of three liquefaction trains with a total export capability of 12 million tonnes per annum of LNG, or approximately 1.7 Bcf per day. The facility is expected to begin delivering LNG to international markets in 2017.

Sempra seeks US permit to begin building Cameron LNG export facilities — Hydrocarbon Processing

The federal agency [FERC] will review the application and conduct an environmental study of the project prior to acting on the permit.

Additional permits and approvals will be required before construction on the Cameron liquefaction project can be completed and the project becomes operational.

Norway ships LNG cargo to U.S. (Dec 7) — LNG World News

The 147,208 m3 Arctic Lady departed Hammerfest on 5 December, and it is due to arrive at Sabine Pass LNG terminal on December 22.

U.S. Senator Landrieu welcomes LNG export study (Dec 7) — LNG World News

U.S. Senator Mary L. Landrieu, D-La., released statement on a Department of Energy commissioned report showing that the United States can responsibly export liquefied natural gas.

Alaska

Alaska governor proposes $355 million LNG investment (Dec 8) — Reuters

Alaska's governor he will introduce legislation allowing the state to provide $355 million in seed money for a liquefied natural gas project that promoters hope will eventually ship North Slope natural gas to Asian markets.

State officials, after years of promoting an overland, 1,700-mile line to deliver natural gas to U.S. markets, have recently concluded that the domestic market is saturated with new natural gas and lacks room for an influx of Alaska supplies.

Officials are now pushing for an LNG project that would encompass an 800-mile pipeline carrying 3 bcf to 3.5 bcf a day from the North Slope to a southern Alaska port for delivery to Asian by tanker. [Red & bold emphasis added.]

Alaska governor announces plan to finance small LNG project on North Slope — Platts

Parnell also sees the Slope LNG plant as a possible temporary solution for natural gas needs in south-central Alaska, where existing gas fields are being depleted and utilities are planning to import LNG or compressed natural gas from outside Alaska.

British Columbia & Alberta

Petronas to triple gas reserves after takeover of Progress — The Star, Malaysia

PETALING JAYA: Petroliam Nasional Bhd (Petronas) is expected to almost triple its international unconventional gas reserves to one billion barrels of oil equivalent (boe) after the takeover of Canada's Progress Energy Resources Corp.

As at end-January 2012, Petronas had 380 million boe in unconventional gas reserves, a relatively low figure compared with other oil and gas giants. The deal marks Petronas' largest ever overseas acquisition, eclipsing the US$2bil it paid for a 40% stake in Santos Ltd's Gladstone liquefied natural gas (LNG) project in Australia in 2008.

Petronas sees LNG exports from $11-bln Canadian facility by 2018 — Reuters

Malaysian state oil firm Petronas expects to begin exports by 2018 from an $11-billion liquefied natural gas (LNG) facility it plans to build in Canada with Progress Energy Resources Corp, to meet demand from long-term customers in Asia.

Petronas, Progress, say government greenlight of takeover was vital to expansion — The Vancouver Sun, Vancouver, BV

The two companies released a joint statement Sunday night welcoming the Conservative government's decision, which was announced on Friday along with the approval of Chinese state-owned CNOOC's bid for Calgary-based Nexen Inc.

On Sunday the companies said they plan to proceed with the construction of the Lelu Island export facility, continue developing natural gas production in the Montney region of northeast B.C. and northwest Alberta, and will eventually install a natural gas transmission pipeline which would run from the production fields to the export facility.

Canada approves Petronas' $6 bln Progress Energy deal — Proactive Investors

The acquisition of Progress gives Petronas, a Malaysian state-owned company, gas reserves to build a liquefied natural gas export facility along the British Columbia coast at a cost of $9 billion to $11 billion, the companies said recently.

Petronas has the world’s largest LNG-producing site in Sarawak, Malaysia, according to its website, and also operates the world’s largest LNG carrier fleet.

Petronas to complete Progress deal Dec 12 (Dec 11) — Business Times, Kuala Lumpur, Malaysia

Following the acquisition, the companies will make a final investment decision on a proposed liquefied natural gas terminal in British Columbia in late 2014, according to a joint statement on their websites. The facility may cost US$9 billion to $11 billion, with the exports expected in 2018, they said.

Prime Minister Stephen Harper’s government initially rejected the takeover on grounds that it wasn’t deemed to be to Canada’s net benefit. Petronas appealed and made “significant” commitments in areas of governance, transparency, employment and capital investment, according to a Dec. 7 statement by Canada’s industry ministry.

Petronas making big progress in Canada — Business Times, Kuala Lumpur, Malaysia

Petronas president and chief executive officer Tan Sri Shamsul Azhar Abbas said Petronas will bring its liquefied natural gas (LNG) experience and expertise in developing the LNG infrastructure in western Canada, thereby further cementing its position as a major long-term global LNG player.

Petronas unveils growth O&G plans in Canada after US$5.3b Progress takeover cleared — The Star, Malaysia

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has unveiled three investment components in Canada which would involve building a pipeline and facilities after it cleared the last obstacle to the US$5.3bil takeover of Progress Energy Resources Corp.

He said the first component included the Pacific Northwest LNG, which would involve building a LNG export facility on Lelu Island in the District of Port Edward.

The second component was the continued upstream development of natural gas production in the Montney region of northeast British Columbia and northwest Alberta.

There would also be the eventual installation of a natural gas transmission pipeline to move natural gas from the production fields to the LNG export facility. The pipeline would be built by a third-party pipeline company.

Imperial Oil planning LNG export business from West Coast — Financial Post, Don Mills, ON

TORONTO — Imperial Oil Ltd. and its parent, Exxon Mobil Corp., are in the early stages of planning a liquefied natural gas export business from Canada’s West Coast, Imperial president and CEO Bruce March said Monday.

“We are in the very early stages of looking at LNG off the B.C. coast and Celtic reserves would be underpinning a potential LNG strategy,” he said.

Nexen decision puts spotlight on LNG investment (Dec 9) — The Globe and Mail, Toronto, ON

One important uncertainty is how open Ottawa will be to foreign construction of LNG terminals. On Friday, Prime Minister Stephen Harper signalled that the federal government will examine a host of new factors, including the leverage foreign governments have on the companies they control, and the degree of influence state-run companies have in a particular sector.

Oregon

$7.5B Oregon LNG site may dry up coastal lakes, enviros say — Law 360 [Paid subscription]

An Oregon conservation group on Friday pressed the Federal Energy Regulatory Commission to weigh the environmental costs of a proposed $7.5 billion liquefied natural gas export facility, saying the plant's “tremendous” need for water threatens to dry out nearby lakes and wetlands.

Editorial: A volatile future for gas — The Register-Guard, Eugene, OR

Projected economic effects of exports are uncertain

A contractor for the U.S. Department of Energy has concluded that natural gas exports would produce a net benefit for the U.S. economy. The finding will help clear the way for approval of liquefied natural gas export terminals, including one proposed for the International Port of Coos Bay. Yet it’s hard to place much confidence in the analysis, given the volatility of the natural gas industry.

Hawaii

FERC, Hawaii PUC sign agreement on information sharing (Dec 7) — Federal Energy Regulatory Commission (FERC)

The Federal Energy Regulatory Commission (FERC) and the Hawaii Public Utilities Commission (HPUC) have formally agreed to share information regarding energy issues and regulatory practices. FERC Chairman Jon Wellinghoff and HPUC Chair Hermina Morita signed a Memorandum of Understanding (MOU) Nov. 10, 2012, at the annual meeting of the National Association of Regulatory Utility Commissioners.

Initial topics for discussion include:

...

• Regulatory issues associated with the import and use of natural gas.

Canada

Canada: Minister approves Petronas investment in Progress Energy — LNG World News

PETRONAS’ well-established and extensive network of LNG customers will add value to Canada’s natural gas resources and provide a strategic alternative to the traditional North American natural gas market. This will also generate substantial economic benefits to the local communities in terms of employment, increasing skill levels and other economic multiplier benefits.

United States

Gas tanker Ob River attempts first winter Arctic crossing (Dec 7) — BBC News

The carrier, Ob River, left Norway in November and has sailed north of Russia on its way to Japan.

The Norwegian LNG plant at Hammerfest was developed with exports to the US in mind. But the rapid uptake of shale in America has curbed the demand for imported gas. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG wants Americans to ignore news like this.

ConocoPhillips’ Bullock: U.S. must seize energy opportunity, Special Feature (Dec 7) — BIC Magazine, Baton Rouge, LA

With so much riding on the success of energy production, it is fortunate the industry has been enjoying an unexpected resource boom in the United States. According to Bullock, the rapid growth in production from shale isn’t just good news in the Gulf Coast, it is good news for those in the heartland as well.

• Shale gas production has grown from virtually zero in 2000 to 30 percent of all U.S. gas production in just over 10 years.
• North America now has roughly a 100-year natural gas supply at today’s production rates.
• The United States no longer needs to import liquefied natural gas (LNG), which helps the United States’ balance of trade.
• Natural gas in the field is selling at bargain prices and these are helping consumers with home heating and electricity costs.
• The abundance and low price of natural gas is helping attract manufacturers back to the United States.

[Red & bold emphasis added.]

Webmaster's comment: This is more reality that Downeast LNG wants to pretend does not exist.

DOE study showing net economic benefits from LNG exports kicks off important period for industry (Dec 8) — JD Supra,Sausalito, CA

The NERA study is notable first for its robust conclusion that all scenarios studied predict "net economic benefits from allowing LNG exports" for the United States. Moreover, NERA found that net economic benefits to the U.S. economy would be expected to increase as the level of LNG exports increased, in every market scenario examined. Such conclusions will make it increasingly difficult for LNG export critics from Capitol Hill, the environmental activist community, and some industrial sectors to argue for restrictions on macroeconomic grounds.

Webmaster's comment: Thus, LNG imports, such as proposed by the sole-remaining LNG-import-only proposal left in North America, Downeast LNG, would be harmful to the US economy.

USA: Sierra Club comments on DOE LNG export study (Dec 7) — LNG World News

“The law requires the Department of Energy to determine if more natural gas exports are in the public interest – so it is baffling that this report omits the serious threats increased fracking and gas production pose to our water, our air, and the health of our families.

“Even if we consider what’s actually included in this analysis, increased gas exports are expected to result in higher gas prices and lower wages for American families, meaning we pay the price here while the companies shipping gas overseas rake in the profits.” [Red & bold emphasis added.]

FAQs: Natural gas (Dec 7) — International Energy Agency, Paris, France

What impact has the United States success had on the global market?

As recently as 2008, it was widely viewed that import requirement for LNG in the United States was likely to increase over the coming decades. However, soaring unconventional gas production led to a sharp drop in import requirements and a sharp revision of expectations for the United States in the international gas trade. The recent slump in LNG imports in the United States has had a significant impact on global gas markets. Following the global economic crisis in 2008, there was a general drop in global gas demand. The United States suddenly had no need to buy LNG at a time when ample supplies, mostly from Qatar, were entering the market. This led to a “gas glut” – where there was more gas on the markets than was needed – and gas spot prices in the United States and in Europe consequently dropped. Since 2010, global demand has recovered substantially, but LNG imports in the United States have remained very low due to growth in cheap domestic gas production. As such, the United States is no longer an attractive LNG market; additionally, the United States is now considering exporting LNG from places such as Texas. [Red & bold emphasis added.]

Webmaster's comment: This is even more news that Downeast LNG wants the public and FERC to ignore.

Should we export natural gas? [Opinion] — Slate

I think the Post's error is overinvesting in thinking about this as a trade policy question. If you think about the standard advice that would be given to a low-income country that stumbled upon vast oil reserves, what we'd say is that it's important for this oil wealth to be deployed in a way that advanced long-term prosperity. You don't just want to feed luxury goods consumption by a narrow elite and a few white elephant public works. The smart countries take their money and invest in the kind of infrastructure and education services that promote a robust and diverse economy, while doing so with tax levels that remain friendly to business and entrepreneurship. Restricting natural-gas exports is a bit kludgy compared to a totally optimal policy framework, but it's a reasonable approximation of one. We'd be bolstering the incomes of the poor and the middle class while promoting a more diverse economy via a de facto tax whose incidence would fall largely on land and thus have little incentive-side impact. [Red emphasis added.]

Geopolitics likely to trump economics in US LNG export question — The Energy Collective

The bottom line is that U.S. LNG exports are more of a political decision than an economic one. This is especially relevant given the U.S. Department of Energy’s long standing difficulty of accurately forecasting energy pricing (and for that matter, many other organizations as well). In fact, I might argue that the decision is ultimately geopolitical.

Chances are geopolitical forces will continue to propel U.S. LNG exports from the U.S. Gulf coast. Asian buyers have made clear that they would prefer the security (and possibly the pricing) of this multi-producer, liquid market. U.S. LNG exporter groups are hoping this will translate into reap-able premiums but this could prove short lived. Competing exporters from Alaska and British Columbia will have to consider the pricing formula that would outweigh the pro-U.S. inclination. And Qatar, Argentina, Russia and Australia will all be watching.

Shale threatens LNG exports [Opinion] — Financial Review, Australia

Now America is on track to overtake Russia as the largest gas producer by 2015, the International Energy Agency says, even as companies such as BHP Billiton shift drilling rigs from gas-rich shales to currently more valuable oil and liquids-rich shales. It has already overtaken Russia, Iran and Qatar to hold the largest estimated reserves.

Efficiency of shale gas production is accelerating. For example, productivity per rig rose sevenfold from 2007 to 2012 at the Fayetteville shale in Arkansas, an analyst at Denver-based Bentek Energy, Tony Sweet, told a coal trading conference last week. [Red & bold emphasis added.]

World

BP ‘in LNG contract linked to US gas price’ — Financial Review, Australia

Oil giant BP will reportedly sell liquefied natural gas to Japan in a contract based for the first time on United States domestic gas prices, rather than the usual link to the much higher price of crude oil.

US domestic gas prices reflect the glut of shale gas production in the country.

The price of the BP gas, which will be sourced from its production in Egypt and the Caribbean region, will be up to 30 per cent lower than oil-based pricing and will sound further alarm bells for the high-cost Australian LNG export industry, analysts say.

Webmaster's comment: The collapse of US LNG export profitability has begun even before the US has finished even one new LNG export terminal, thanks to Cheniere Energy's earlier deal to sell LNG to Japan at Henry Hub-based prices. BP has jumped over Cheniere, having existing LNG export terminals elsewhere in the world.

The World LNG Price War has begun!

Gas glut slashes export prices — The Australian, Surry Hills, New South Wales, Australia [Paid subscription]

THE worldwide expansion of gas production may force Australian exporters to settle for lower prices after a Japanese company negotiated a landmark contract pegged to US domestic gas prices.

The deal between Kansai Electric Power and BP is the first contract in Japan to be linked to gas rather than oil prices.

Northeast

Dominion sees opportunity in natural gas exports — (AP) Chem.Info

The company acquired Cove Point in 2002 and began receiving ships in summer 2003. Dominion finished an expansion project in 2009 that increased the facility's storage and production capacity by nearly 80 percent. It has a storage capacity of 14.6 billion cubic feet and a daily send-out capacity of 1.8 billion cubic feet, according to the company's website.

Webmaster's comment: It was evident long before 2009 that Cove Point LNG's expansion was unneeded; however, the ball was already too far down the road to stop. Cove Point LNG has received no LNG this year, and in 2011 it tried to get FERC to force an LNG supplier to deliver to the Maryland terminal since terminal had so little LNG in storage it was in danger of warming up up to the point of decommissioning.

Alaska

Congress divided over possibility of LNG exports — KTOO-TV, Juneau, AK

The report did not examine Alaska’s export potential. The state already exports some Cook Inlet gas to Japan, and any increased North Slope production would ship to Asia, as well. Though, it would require a pipeline costing tens of billions of dollars to build.

EIA includes Alaska LNG project in annual reference case forecast (Week of Dec 9) — Petroleum News, Anchorage, AK

The U.S. Energy Information Administration is including a North Slope liquefied natural gas export project in the reference case of its annual forecast of domestic energy markets.

United States

The natural gas revolution reversing LNG tanker trade — The Washington Post, Washington, DC

“Like any job, there’s going to be some downtime,” Keraga said.

In this case, a lot of downtime. Dominion Resources’ Cove Point terminal, originally designed in the 1970s, can import liquefied natural gas — or LNG — from up to 220 tankers a year. But this year only one tanker has unloaded here, back in May.

[T]hanks to the surge in shale gas from deposits in places that include Pennsylvania, Texas and Louisiana, the United States is awash with cheap natural gas and could soon turn into a net exporter rather than a net importer.

Natural gas liquefaction dates to the 19th century, and the first commercial plant was built in Cleveland in 1941. Natural gas becomes a liquid at minus 260 degrees Fahrenheit. Storing it as a liquid has great advantages; natural gas in its gaseous state takes up 600 times as much space as it does when a liquid.

In 1959, the first specialized LNG tanker — a converted World War II freighter — carried LNG from Lake Charles, La., to Britain. In 1964, Britain began importing LNG from Algeria. Five years later, the United States shipped LNG from Alaska’s Kenai Peninsula to Japan.

LNG project angst builds in US energy industry — AOL Energy

As of the end of October, the Department of Energy (DOE) had 18 applications pending for authority to export liquefied natural gas (LNG).

Of the 18 pending applications, 15 want authority to export to nations without US Free Trade Agreements (FTAs). Export permits for FTA countries are virtually automatic, but most major LNG importers worldwide, like Japan and Taiwan, do not have FTAs with the US.

Column-US watchdog has little power to prevent LNG exports: Kemp — Reuters UK

Current law requires the Department of Energy to approve export applications unless it can show they are not in the public interest, which will be hard to do given that a detailed economic study has now concluded the extra revenues from export sales will more than offset the impact of higher domestic gas prices on consumers and energy-consuming businesses.

If policymakers want to restrict exports more severely or ban them outright, the only way would be to get Congress to change the law. Some legislators have already expressed concerns that cheap "American gas" should be kept at home and reserved for U.S. consumers and businesses.

The Natural Gas Act states that no one can import or export natural gas from the United States to a foreign country without first obtaining permission from the Secretary of Energy. But it then goes on immediately to state that permission shall be given unless the secretary finds the proposed imports or exports "will not be consistent with the public interest". (15 USC 717b(a)).

Analysis: US gas exports clear hurdle with new study — Hydrocarbon Processing

The looming prospect of the US becoming a major exporter of natural gas underscores how the energy revolution is transforming the nation's economic prospects. Just a few years ago, many energy companies were planning to build facilities to import liquefied natural gas into the US.

Fracking for foreigners? New report from Feds backs more natural gas exports — PR Watch

How times have changed. Ten years ago the United States was looking at importing natural gas via massive liquefied natural gas (LNG) terminals, yet to be built. Now the country appears to be getting ready to significantly increase exports of LNG.

Do U.S. consumers really want the United States to get into the business of fracking for foreigners?

The push back on the flawed report, produced for the Department of Energy (DOE) by a private global consulting firm that has worked for the deregulation of the energy market, was immediate and came from some unexpected quarters. The U.S. chemical company Dow said the report failed to take into account the increased reliance of American manufacturers on natural gas, and environmentalists also cried foul.

[O]nce the spigot of gas exports to various countries is turned on, it is very hard to turn off. As the DOE explains, due to the terms of global trade agreements that the United States has entered into, (which become binding federal law when enacted), we are legally obliged to export to the nations covered by those agreements. [Red & bold emphasis added.]

Analysis: Prices, not policy, will shape U.S. gas exports — Reuters

"It was a positive report, but it doesn't radically change my view on exports," said Katherine Spector, head of commodities strategy at CIBC World Markets. "A lot of it will come down to economics."

The industry has been stung by swings in the gas market in the past. A decade ago, companies were scrambling to build terminals to import natural gas into the United States as domestic production fell.

Since the shale gas boom, those projects -- which cost billions of dollars -- are mostly gathering dust. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG is hankering to be a costly dustcatcher.

New DOE study supports LNG shipments overseas — Akron Beacon Journal, Akron, OH

America’s new energy bonanza is the natural gas found in shale rock, and there’s a heavy push to build terminals where it can be liquefied and exported. The natural gas industry says exports will boost the economy. But opponents argue that exports will drive up prices in the United States and are bad for American consumers, manufacturers and energy security. [Red & bold emphasis added.]

The math doesn’t add up on the US’s ambitions to export natural gas — Quartz

Over the years, the US natural gas industry built a dozen terminals to import liquefied natural gas for fuel-hungry Americans, and until recently also had plans for 11 new and expanded LNG import terminals. None of them is currently in use—the US, awash in its own gas, requires none from anywhere else. In fact, the US has so much gas that, if the industry has its way, those existing terminals and some of the proposed ones—16 in all—will be converted into export facilities in the coming years.

The current natural gas futures price for December 2017, when the first export terminals can feasibly be up and running, is $4.90 per 1,000 cubic feet. So let’s use that as a price assumption. That gas has to be moved to a liquefaction plant, which adds $1 per 1,000 cubic feet, according to the DOE report. Liquefaction itself adds $2.14. Then it has to be shipped to, say, China, which adds another $2.87. Once there, it has to be converted back into gas, for another 88 cents. Then that gas has to be piped to its end user, for another $1.50.

In total, you get $13.29 per 1,000 cubic feet, which is far from the low US price (currently $3.63 per 1,000 cubic feet) that everyone on the Asian side is thinking of when they cry out for access to the US market.

if faced with competition from US exports, lower-cost drillers in Qatar and elsewhere are likely to undercut the American interlopers by shrinking their profit margins. That is why the DOE report concludes that, under current status quo projections, there will be “no US LNG exports.” [Red & bold emphasis added.]

Southeast

Two LNG export projects request FERC to initiate Pre-Filing procedures — LNG Law Blog

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

Gulf LNG Liquefaction Company, LLC (Gulf LNG) has asked FERC to initiate the pre-filing environmental review process for its proposed two-phased liquefaction and export project that will be integrated with Gulf LNG Energy, LLC's existing LNG terminal near Pascagoula, Miss. Gulf LNG anticipates in-service dates of September 2018 and March 2019 for Phases I and II, respectively.

Southern LNG Company, L.L.C. (SLNG) has asked FERC to initiate the pre-filing environmental review process for its proposed two-phased liquefaction and export project that will be integrated with SLNG's existing LNG terminal at Elba Island, Ga. SLNG anticipates in-service dates of December 2015 and December 2016 for Phases I and II, respectively. [Red & bold emphasis added.]

Gulf of Mexico

Two LNG export projects request FERC to initiate Pre-Filing procedures — LNG Law Blog

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

Gulf LNG Liquefaction Company, LLC (Gulf LNG) has asked FERC to initiate the pre-filing environmental review process for its proposed two-phased liquefaction and export project that will be integrated with Gulf LNG Energy, LLC's existing LNG terminal near Pascagoula, Miss. Gulf LNG anticipates in-service dates of September 2018 and March 2019 for Phases I and II, respectively.

Southern LNG Company, L.L.C. (SLNG) has asked FERC to initiate the pre-filing environmental review process for its proposed two-phased liquefaction and export project that will be integrated with SLNG's existing LNG terminal at Elba Island, Ga. SLNG anticipates in-service dates of December 2015 and December 2016 for Phases I and II, respectively.

Alaska

Alaska excluded from Department of Energy's natural gas study — KTUU-TV, Anchorage, AK

The study's authors say they didn't include LNG export from Alaska, due to the state's specific circumstances being unique in the nation.

"(T)here is no natural gas pipeline interconnection between Alaska and the Lower-48 states, the macroeconomic consequences of exporting LNG from Alaska are likely to be discrete and separate from those of exporting from the Lower-48 states," Begich's office quoted from the report in a Thursday statement.

Complex market picture for Alaska LNG export project — Alaska Journal of Commerce, Anchorage, AK

The market situation for an Alaska gas pipeline and liquefied natural gas project may be getting more complicated and uncertain, a respected U.S. energy analyst said Nov. 28.

The Asia liquefied natural gas market is changing and the chief uncertainties that have been long recognized are whether Japan will restart its nuclear plants and rely less on LNG for power, whether China will continue its program to expand LNG import facilities or rely more on domestic gas or gas imported by pipeline, and whether Russia will go ahead with ambitious plans to build new pipelines and move gas from huge discoveries in East Siberia to the Pacific, Herberg said.

[T]here is possible new competition for Alaska gas from exported shale gas. A huge political fight is developing in Congress over whether inexpensive U.S. shale gas should be exported as LNG, Herberg said. If shale gas export is approved and an enlarged Panama Canal allows it to be carried in large, efficient LNG tankers, this could undercut Alaska gas, which must bear the cost of building 800 miles of new pipeline from the North Slope.

British Columbia

Haisla split with Coastal First Nations over LNG project — CBC News

A Haisla chief said his members left the coalition of about a dozen bands from the north and central coast of B.C. over the group's opposition to some of the liquefied natural gas plants to be built in Kitimat.

[Haisla chief councillor Ellis Ross] said his members were taken aback when the neighbouring Gitga'at, another member of the coalition, and the Coastal First Nations came out in recent weeks with concerns about air pollution from two LNG plants in which the Haisla have partnered with Apache Canada Ltd. [Red & bold emphasis added.]

First Nations: Haisla quits advocacy group over stand on LNG plants — (The Canadian Press) The Province, Vancouver, BC

KITIMAT — The Haisla First Nation has parted ways with an aboriginal advocacy group over its opposition to some of the liquefied natural gas plants to be built in Kitimat.

Haisla Chief Councillor Ellis Ross said the split follows the coalition’s comments about potential emissions from several LNG projects in which the Haisla have partnered with private companies.

Haisla split with Coastal First Nations in dispute over LNG — CFTK-TV, Terrace, BC

[Art Sterritt of Coastal First Nations] says some member nations are concerned about the use of gas-powered technologies at the plants, and the potential for air pollution along the coast.

Now’s the time to seize opportunity offered by natural gas [Opinion column] (Dec 5) — The Vancouver Sun, Vancouver, BC

B.C. enjoys vast natural gas reserves that are growing as technology improves and new discoveries are made. We have more than enough natural gas to meet our energy needs for 100 years, even as we expand our use of natural gas in areas like low-emissions transportation, electricity generation, and as a complement to renewable energy like wind and solar.

United States

EIA projections show U.S. energy production growing faster than consumption — LNG World News

EIA issued its Annual Energy Outlook 2013 (AEO2013) Reference case, which highlights a growth in total U.S. energy production that exceeds growth in total U.S. energy consumption through 2040.

The United States becomes a net exporter of natural gas earlier than estimated a year ago. Because quickly rising natural gas production outpaces domestic consumption, the United States will become a net exporter of liquefied natural gas (LNG) in 2016 and a net exporter of total natural gas (including via pipelines) in 2020.

Webmaster's comment: The US massive natural gas resource — and the massive rate of production — obliterates Downeast LNG's dreams of success.

Thoughts on a long-awaited natural gas exports study (Dec 5) — Council on Foreign Relations, New York, NY

Earlier today, the Department of Energy released a long-awaited (and long-delayed) study on the macroeconomic impacts of liquefied natural gas (LNG) exports. The study, prepared by the consultants NERA, is the most in depth look at the economics of LNG exports published to date. That means it’s long, and will take a while to digest. Here are a few quick observations and context. I’ll write another post later on differences between the NERA results and what I reported in my own LNG exports study earlier this year.

The study, like any, has some non-trivial limitations. It assumes full employment, which makes it impossible for natural gas exports boost U.S. employment (through a positive demand shock) in the short run. This is a particularly important limitation for the scenarios with large LNG exports by 2015, since the economy will presumably remain substantially away from full employment by then. It is unclear from the text, but as best I can tell, blocking U.S. exports in the model does not lead to higher exports from Canada, even when the economic incentive for Canada to export is very strong. This is misleading, and important, since exports from Canada would have the same negative consequences for the United States as U.S. exports, but would have fewer of the positive ones. (In particular, Canadian exports would also depress real U.S. wage income.) I would also be interested to drill down on the manufacturing output and employment estimates. The study lumps together all natural gas production in determining the demand that gas production creates for manufactured inputs. To the extent that shale gas is more manufacturing intensive than other gas production, this will underestimate manufacturing employment. [Bold red emphasis added.]

Reactions vary to DOE study on macroeconomic effects of LNG exports — LNG Law Blog

The reactions to the U.S. Department of Energy's release yesterday of the NERA study on the macroeconomic effects of LNG exports on the U.S. economy have been varied. Reuters provides a general overview of the study and reactions.

[Other reactions reported are by Senator Ron Wyden (D-OR), Senator Lisa Murkowski (R-AK), Senator Jim Inhofe (R-OK), and the Sierra Club.]

Overnight energy: Gas export battle rages despite positive report [Blog] — The Hill, Washington, DC

“My staff has already spotted some concerns [with the report],” Wyden told reporters in the Capitol on Thursday. “Particularly they are concerned that the projection that they used for purposes of saying ‘this would be the amount exported’ is significantly under what is now already evident.” [Red & bold emphasis added.]

Pushback, skepticism follow key DOE report on US LNG exports — Platts

"While the study concludes that exports increase total welfare, there is, of course, welfare transfers (i.e. winners and losers)," said Hedgeye Energy, which is a part of investment research firm Hedgeye Risk Management.

"In short, the losers are US consumers and manufacturers, while the winners are primarily the owners of the resource," [Hedgeye Energy,] said. "Given that the left-leaning Obama administration is unlikely to really get behind LNG exports ... we expect the permitting process to remain slow."

The Industrial Energy Consumers of America pointed out what it called a number of weaknesses with the study. For instance, DOE's study did not compare the benefits of exporting gas with the benefits of increasing use domestically, it said. [Red & bold emphasis added.]

Manufacturers pushing hard against LNG exports — Fuel Fix

Manufacturers terrified that rising natural gas prices threaten their bottom lines are stepping up pressure on the Obama administration to limit exports of the fossil fuel in the wake of a study that said selling more overseas would broadly benefit the United States.

[C]hemical and manufacturing industry leaders insist if the Energy Department approves too many export licenses, natural gas prices would be pushed skyward, jeopardizing some $90 billion in planned capital spending.

There may be more legal challenges, including petitions asking FERC to rehear cases it has already decided. And Book notes it’s possible public comments challenging the new government-backed study could be submitted as part of each application reviewed by the Energy Department, “conceivably (slowing) approvals down even more.” [Red & bold emphasis added.]

Dow Chemical: DOE report on LNG exports short changes manufacturing and U.S. competitiveness [Press release] — MRO Magazine

“The report issued by the DOE on liquefied natural gas (LNG) exports is flawed, misleading, and based on outdated, inaccurate and incomplete economic data,” stated Andrew N. Liveris, Dow’s chairman and chief executive officer. “The report fails to give due consideration to the importance of manufacturing to the U.S. economy. Manufacturing is the largest user of natural gas in the U.S., and creates more jobs and more value to the U.S. economy from natural gas than any other sector. The value of every unit of energy used by the manufacturing sector is multiplied by as many as 20 times from the production of thousands of high value products though the value chain. Compare this to the 1-time value created by exporting energy as liquefied natural gas. Furthermore, for every manufacturing job created on the factory floor 5-8 more are created in the larger economy.” [Red & bold emphasis added.]

Natural gas exports could boost U.S. economy — but will anyone buy the stuff? [Blog] — The Washington Post, Washington, DC

[T]here’s one oft-overlooked aspect of this debate that could make all the bickering moot. It’s still entirely possible that U.S. energy companies won’t find it economical to ship all that much natural gas overseas in the near future. If so, that would mean natural gas exports could become a relative non-issue, regardless of what members of Congress think.

Webmaster's comment: Since Cheniere Energy has arranged to sell US LNG to Japan at going-out-of-sale prices, it very well may be that exporting LNG will not be profitable. It may also be possible other such arrangements will bloom, as Japan is insisting — driving up foreign demand and resulting in significantly higher natural gas prices in the US than the NERA report anticipates.

Natural gas exports bring big benefits to economy, but domestic prices could rise — The Oregonian, Portland, OR

Broadly speaking, [Oregon Sen. Ron Wyden] said the study confirmed a price impact, but only considered a fraction of the supply that companies have already applied to export. The DOE has already approved export applications equal to 40 percent of daily U.S. gas consumption, and has applications pending to export another third of U.S. daily consumption. [Red & bold emphasis added.]

Should US export natural gas? Study for DOE fuels fiery debate. — The Christian Science Monitor

One of the key energy battles of the next decade is emerging now: what to do with the new natural gas geyser now whooshing onto the domestic US energy market. Keep it at home, or export a big part overseas? [Red & bold emphasis added.]

DOE report on LNG exports: A green light — Forbes

The long-awaited (and twice delayed) report “Macroeconomic Impacts of LNG Exports from the United States” was released yesterday. This study was commissioned by the Obama Administration to look specifically at the economic impacts associated with potentially large-scale liquefied natural gas (LNG) exports. The key point of the study was to “estimate expected levels of U.S. LNG exports under several scenarios for global natural gas supply and demand” and to evaluate whether LNG exports would have net export benefits even if higher domestic gas prices resulted from this activity.

The economic losers are other gas-dependent industries, such as the chemical industry, where Dow and others are anticipating significant investments to take advantage of competitively priced gas. Dow, in particular, is investing $4 billion to build a 1.5 million tonne-per-year ethylene plant in Freeport, Texas LNG exports would also have a non-zero price impact on the electricity sector, which has increasingly turned to gas as the fuel on the margin.

US LNG exports to boost economy — Live Trading News, Singapore

The United States has huge above and below ground supplies of Nat Gas.

Data from more than 24,000 recently drilled wells show the US has 890 trillion cubic feet equivalent of recoverable Nat Gas. That is a huge resource. After years of study, the US Department of Energy DOE has released a report that examined increased Liquified Nat Gas LNG exports.

[B]enefits increase as the level of exports increase. And increasing exports could/would raise domestic pricing. The DOE estimates that increase could range from 0.22 to 1.11 per mcf.

Webmaster's comment: The report indicates that the US economy would benefit more as LNG exports increase.

Importing LNG is the exact opposite of exporting. Therefore, the economic report to the Department of Energy indicates that Downeast LNG would be bad for the US economy and contrary to the public interest.

USA: Senator Murkowski applauds release of LNG export study — LNG World News

Murkowski said that based on the findings of the most recent study, it may be time to revisit the approval process for exporting LNG to non-FTA countries.

Webmaster's comment: Sen. Murkowski wants Alaska to export LNG. Of course, southcentral Alaska is planning to import LNG, due to having already exported so much of its natural gas there they will soon be unable to heat their homes.

USA: CLNG welcomes DOE LNG export study — LNG World News

“We are pleased that the Department of Energy has published its macroeconomic impact report,” said Bill Cooper, president of the Center for Liquefied Natural Gas [CLNG]...."

Webmaster's comment: Bill Cooper and his organization do not care if it is exporting or importing, as long as it is profitable to the LNG industry.

U.S. LNG Export Industry to be Worth $47 Billion a Year by 2020 — OilPrice

Already more than a dozen LNG projects have been proposed by various energy companies across the US, all planning to export to Europe and Asia where gas commands a far higher price, however the White House has always been very reluctant to approve any of these projects and create a huge natural gas export market for fear of causing domestic utility bills to increase.

Booming U.S. natural gas production to export LNG to Thailand? — OilPrice

...Thailand is interested in importing U.S. liquefied natural gas. During a seminar entitled "Thailand's Economic Outlook" held in Bangkok on 30 November in the wake of the Obama-Shinawatra meeting, Strategic Committee for Reconstruction and Future Development chairman Virabongsa Ramangkura told his audience that during Obama’s visit, Prime Minister Shinawatra urged the U.S. government to assist in supplying LNG to Thailand, seeking a commitment of 2.5 million tons a year of LNG over the next two decades. Virabongsa, who is also chairman of the Bank of Thailand's executive board, added that since 2007 the U.S. has increased its natural gas capacity by 500,000 tons annually, with plans to boost production by exploring further offshore maritime resources, noting, "The U.S. is starting to become a large exporter for energy products now."

Mexico

Peru LNG sends cargo to Mexico — LNG World News

Peru LNG shipped a cargo of liquefied natural gas to Mexico on December 3, according to PeruPetro S.A.

The cargo is being hauled by the 173,600 cubic-meter Castillo de Santisteban and it is due to arrive at Mexico’s Manzanillo LNG terminal on December 10.

Northeast

Dominion sees economic opportunity for Maryland, Mid-Atlantic following Department of Energy natural gas export study — (PR Newswire) Sys-Con Media, Woodcliff Lake, NJ

Dominion said that many benefits could come to Maryland and the Mid-Atlantic region if its Dominion Cove Point LNG facility in Lusby, Md., is approved as a site where the liquefied natural gas could be loaded on tankers and shipped to friendly nations.

Webmaster's comment: Dominion has a completely idle Cove Point LNG terminal white elephant, due to lack of need for imports resulting from the sea of domestic natural gas beneath the surface of the US Northeast (and virtually at New England's doorstep). Does Downeast LNG get the picture?

British Columbia

First Nation wary of Kitimat LNG industry emissions — The Vancouver Sun, Vancouver, BC

The Gitga’at First Nation says it is concerned that huge volumes of pollutants could be pumped into the air associated with the development of a liquefied natural gas industry at Kitimat, affecting the health of the aboriginal community.

The Gitga’at concerns mark the beginnings of a push-back on environmental issues over the development of an LNG industry on the northwest coast. So far, LNG has been immune from the opposition that has engulfed proposals to transport crude from the Alberta oilsands to West Coast ports.

He said the issue is not just emissions from the projects proposed for Kitimat — two large LNG facilities and one smaller one — but also from tankers. Estimates on the number of tankers a year that would ply Douglas Channel in and out of Kitimat run from 500 to 1,000.

“A lot of these vessels planned for these places basically have to pass through our territory twice — right in front of our village,” he said. “We have everything to lose. It’s one thing if there an accident, but we are also trying to look at all the emissions.” [Red & bold emphasis added.]

Webmaster's comment: With each LNG ship transit, the Gitga'at Hartley Bay community would fall within what the US Department of Energy considers to be LNG ship Hazard Zones 2 and 3 — a violation of SIGTTO best practices.

Haisla First Nation withdraws from anti-Northern Gateway group — The Globe and Mail, Toronto, ON

The Haisla First Nation has pulled out of an organization that has ardently fought the proposed Northern Gateway pipeline and called for greener practices in the export of natural gas.

Part of the dispute is grounded in the techniques used to compress and liquefy natural gas for export – and what greenhouse-gas emissions result. The difference is technical, but Coastal First Nations has backed using electric drives, which can be powered by hydro, rather than mechanical drives situated inside the export terminals that are powered by burning gas.

“What we have to know from a first nations side is, first, that we have accurate information, and second, that if we do get those promises and commitments [on safety measures], is the Crown and the proponent going to live up to them?” [Haisla Chief Councillor Ellis Ross] said. He added: “We can’t really put our faith in promises. We can’t do that. It has to be detailed out in exactly what’s going to happen.”

Ewart: Petronas puts economic pressure on Ottawa — Calgary Herald, Calgary, AB

Just days after Ottawa said it wasn't prepared to sign off on the Petronas-Progress deal, it also extended its review of the much more controversial $15.1-billion takeover offer from the Chinese state oil company CNOOC for Calgary-based international oil and gas producer Nexen.

Harper has promised new rules for foreign state-controlled firms seeking to buy Canadian companies would be in place before the holidays.

Oregon

Wyden offers concerns over study on impacts of exporting LNG — The Daily Astorian, Astoria, OR

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

U.S. Sen. Ron Wyden has demanded that American consumers be protected in light of a new report that indicates that exporting more liquefied natural gas will raise prices at home.

His comments come as regulators consider the Oregon LNG application for a terminal in Warrenton – one that started out as an importing facility and is now being considered for exports.

The U.S. Department of Energy has already approved LNG exports that equal nearly one-third of the U.S. daily natural gas consumption, and has a similar volume of applications pending. The agency has an obligation to consider the potential impact of this massive volume of exports. [Red & bold emphasis added.]

United States

6 things you should know about the economics of natural gas exports — Oregon Public Broadcasting, OR

The Department of Energy released a study Wednesday that found exporting natural gas would have a net benefit the U.S. economy, causing losses in labor and investment income but creating larger increases in income for natural gas producers, shareholders, and property owners.

Here are six things you should know about the economics of exporting liquefied natural gas, based on the new study:

1. You Have a Say
2. There Are Winners and Losers
3. More Exportation Means More Net Benefit
4. U.S. Gas and Electricity Costs Will Rise — a Little
5. There Could Be a Hard Hit For a Limited Number of Industrial Sectors
6. Exporting LNG Might Not Be Profitable

Webmaster's comment: And...

7. Cheniere Energy and Japan are already arranging US LNG exports at bargain-basement prices, meaning there will likely be greater demand for US exports, causing even higher-than-anticipated natural gas prices for US consumers and industry.

Long-awaited study says gas exports would boost US economy — The Hill, Washington, DC

“Across all these scenarios, the U.S. was projected to gain net economic benefits from allowing [liquefied natural gas] exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased,” states the report from NERA Economic Consulting released Wednesday

“In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports,” it adds.

DOE has been waiting on the study as it weighs over a dozen applications to export gas from the Gulf Coast, Oregon and other areas to nations that do not have free-trade agreements with the U.S.

DOE said it would take public comment on the study, and that the report will inform its reviews of 15 export applications.

“Following the closing of the reply comment period, the Department of Energy will begin to act on the 15 applications on a case-by-case basis. The study released today will be one of the inputs considered during evaluation of those applications,” the department said.

Overall the report finds little effect on prices in the initial years of exports, but notes a growing impact as years go by and exports grow. [Brown, red & bold emphasis added.]

Webmaster's comment: How does exporting domestic natural gas impact US energy security, manufacturing, and US economy in the future? Alaska is having to wrestle with this issue, having exported its natural gas resource since 1969, and now Anchorage is planning to import LNG in order to heat Alaskan homes.

Government report predicts big economic boost from natural gas exports — Fuel Fix

The 230-page report commissioned by the Energy Department and prepared by NERA Economic Consulting provides an empirical endorsement for natural gas exports sought by producers eager to sell the fossil fuel in Asian and European markets where it commands prices three to five times higher than the United States.

In all 16 scenarios it studied, NERA found that the “U.S. would experience net economic benefits from increased liquefied natural gas exports,” even if they were uncapped by U.S. regulators. According to the analysis, those net economic benefits increases as the level of LNG exports increased.

But natural gas exports would cause some pain for American consumers, according to the report, including “higher energy prices and lower consumption.” The analysis also found that by raising energy costs, increased natural gas exports would depress real wages and the return on capital in all other industries.

Webmaster's comment: The report assumes Asia would continue to pay 3–5 times the US price. However, Japan is already making headway to purchase LNG at US Henry Hub-based prices.

More US natgas exports would raise prices-Sen. Wyden — Reuters

A long-awaited study commissioned by the U.S. Energy Department confirms that allowing more exports of liquefied natural gas would raise domestic prices, Senator Ron Wyden, the incoming chair of the Senate Energy Committee, said on Wednesday.

Wyden offers concerns over study on impacts of exporting LNG — The Daily Astorian, Astoria, OR

[This article also appears under the Oregon heading, above.]

U.S. Sen. Ron Wyden has demanded that American consumers be protected in light of a new report that indicates that exporting more liquefied natural gas will raise prices at home.

His comments come as regulators consider the Oregon LNG application for a terminal in Warrenton – one that started out as an importing facility and is now being considered for exports.

The U.S. Department of Energy has already approved LNG exports that equal nearly one-third of the U.S. daily natural gas consumption, and has a similar volume of applications pending. The agency has an obligation to consider the potential impact of this massive volume of exports. [Red & bold emphasis added.]

UPDATE 1-US LNG exports to help economy, govt-backed study says — Reuters

Sending surplus U.S. natural gas abroad will benefit the country's economy more than harming it, a highly anticipated U.S. study said on Wednesday, offering the Obama administration a basis for possibly allowing more exports.

But the NERA Economic Consulting study, commissioned by the Energy Department, is still far from the end of the road for the government's review process.

The department is now setting aside more than two months to gather public input on the report.

Following the end of the comment period, the department said it would begin to make decisions on the 15 queued applications on a case-by-case basis.

Nod to gas exports in U.S. study seen downplaying consumer cost — Bloomberg

The report “doesn’t account for what we consider to be a massive increase in demand projected from growth in manufacturing,” Peter Molinaro, vice president for federal and state government affairs for Midland, Michigan-based Dow Chemical Co. (DOW), said in an interview. “Industrial demand for manufacturing is discounted in this report.”

The market would determine the appropriate level of exports, according to the study.

Webmaster's comment: In other words, "big energy profits are good for the American consumer who ends up paying more for domestic natural gas."

Economists: LNG exports would be good for nation's economy — The World, Coos Bay, OR

Although domestic households and industries would pay more for gas, so would overseas consumers, and the increased value of those exports would raise the “welfare” of Americans, said analysts for NERA Economic Consulting.

NERA predicted that natural gas prices could jump as much as 33 cents per thousand cubic feet initially and up to $1.11 per thousand cubic feet after five years of gradually increasing exports. Labor and investment income would fall about $10 billion in 2015 and $45 billion in 2030, according to the study. [Red & bold emphasis added.]

Webmaster's comment: How would supplying gas overseas cause overseas consumers to pay more for it?

Study: LNG exports could fuel big economic boost — San Antonio Express-News, San Antonio, TX

According to the Wednesday's report, natural gas suppliers would benefit from exports, but climbing prices caused by steadily increasing exports would squeeze electric utilities, energy-intensive companies and manufacturers that rely on the fuel as a building block to create fertilizers, plastics and other products. [Red & bold emphasis added.]

Study predicts natural gas exports boost US economy — The Baltimore Sun, Baltimore, MD

Some environmental groups also oppose LNG exports, and the Sierra Club in particular is contesting Dominion's plans to convert its Cove Point terminal from an import site to one for shipping LNG overseas.

A Calvert County Circuit Court judge has yet to rule on whether Sierra has a right to block the project. The environmental group opposes it in the belief that exporting LNG would spur more drilling for shale gas using a controversial technique called hydraulic fracturing, or "fracking." Environmentalist contend fracking can pollute air and water, which the industry disputes. Most state regulators have sided with industry so far, though Maryland has not permitted any "fracking" for shale gas in its mountainous west as state officials study the potential environmental impacts.

Study: Exporting natural gas a boon to U.S. despite price hikes — The Bellingham Herald, Bellingham, WA

America’s new energy bonanza is the natural gas found in shale rock, and there’s a heavy push to build terminals where it can be liquefied and exported. The natural gas industry says exports will boost the economy. But opponents argue that exports will drive up prices in the United States and are bad for American consumers, manufacturers and energy security.

“If exports are approved, the winners are mainly those in the natural gas business and those holding their stock,” [Massachusetts Rep. Edward Markey] said in a statement. “This report confirms that if natural gas exports move forward on a large scale there will be a massive wealth transfer from working Americans to oil and gas companies.” [Red & bold emphasis added.]

Update:DOE-commissioned study shows LNG exports generally good for U.S. — NASDAQ

[H]igher energy costs would eat into workers' wages but be offset by higher earnings from natural gas investments, the report said. [Red & bold emphasis added.]

US can send more gas abroad — Energy Tribune, Houston, TX

“The fracking revolution has changed everything – for the last 50 years this country has been built to import energy, but now we are in a position to export,” Flynn said, referring to the drilling method known as hydraulic fracturing. [Red & bold emphasis added.]

US LNG exports create net economic benefits: DOE study — Platts

Net benefits are highest if the US produces large quantities of shale gas at low cost, if world demand for gas increases rapidly and if LNG exports from other regions are limited, the study said.

Webmaster's comment: CAVEAT: "Net benefits are highest if the US produces large quantities of shale gas at low cost, if world demand for gas increases rapidly, and if LNG exports from other regions are limited" — and if the US does not sell LNG to overseas markets at cut-rate prices, as Cheniere Energy has already bargained to do with Japan.

Report bolsters the case for large U.S. natural gas exports — The New York Times, New York, NY

Only a decade ago, it appeared that the country’s domestic gas supplies were drying up and that huge amounts of expensive gas in liquefied form would have to be imported from Trinidad, Africa and the Middle East. But over the last few years, a technological revolution has occurred in shale gas fields across the country, driven by hydraulic fracturing and horizontal drilling. That has produced a glut that has driven the price of natural gas down by two-thirds since 2008. [Red & bold emphasis added.]

Webmaster's comment: The report completely disintegrates Downeast LNG's contention that yet another idle LNG import terminal is needed.

New Brunswick

Canada: Canaport LNG to receive cargo — LNG World News

Repsol YPF SA’s Canaport terminal in Canada is expected to get one liquefied natural gas cargo onboard the 266,000 cbm Umm Slal from Qatar on December 15, according to port data.

Webmaster's comment: Canaport LNG is merely fulfilling its long-term contract obligation to buy LNG from Qatar. Canaport is suffering from lack of demand for its resulting natural gas.

East Coast

USA: Three LNG cargoes imported in October — LNG World News

[This article also appears under the Gulf of Mexico headings above and below.]

Two cargoes were delivered to the Everett LNG terminal while the Elba Island terminal received one cargo.

The country imported four LNG cargoes in September.

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

Gulf of Mexico

USA: Three LNG cargoes imported in October — LNG World News

[This article also appears under the East Coast headings above.]

Two cargoes were delivered to the Everett LNG terminal while the Elba Island terminal received one cargo.

The country imported four LNG cargoes in September.

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

Five LNG cargoes re-exported in January-October (USA) — LNG World News

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

British Columbia

Petronas to sweeten payoff if Ottawa okays Progress deal — The Globe and Mail, Toronto, ON

Malaysia’s state-owned Petronas has made an 11th-hour public commitment to dramatically expand its proposed natural gas export plant on Canada’s West Coast if Ottawa approves its $6-billion takeover of Progress Energy Resources Corp.

In making its ruling, Ottawa also plans to release a new foreign investment framework that aims to achieve two competing goals: attracting international capital, including from state-owned companies, to help develop the country’s rich resource sector, while reassuring Canadians that it will not allow foreign governments to gain control of strategic sectors.

Petronas and Progress announce go-ahead for $9-billion LNG plant at Prince Rupert — The Vancouver Sun, Vancouver, BC

If Ottawa ultimately approves the takeover, the partners would have sufficient natural gas reserves to expand the size of their LNG plant, to be located on Lelu Island within the port of Prince Rupert, Culbert said.

The Petronas-Progress project is the fourth major LNG project planned for B.C.'s northwest coast. None have reached the final investment decision stage and there is speculation that the proponents could consolidate their projects.

Petronas and Progress promise bigger LNG plant if Ottawa approves $6B takeover — Financial Post, Don Mills, ON

With Ottawa rejecting Petronas’s $6-billion takeover bid for Progress in October, and still to rule on a revised takeover offer, the two companies said Tuesday they are moving ahead on the pre-engineering phase of a $9-billion to $11-billion liquefied natural gas export facility on Lelu Island, building on joint ventures struck more than a year ago.

If the takeover bid is a go, the LNG plant, named Pacific Northwest LNG, will export two billion cubic feet a day of liquefied natural gas. If the bid is not approved, the two companies will continue as separate entities and work on a plant with the capacity to export 1.2 billion cubic feet a day. Either way, the project will proceed at an “aggressive” pace.

Petronas-Progress LNG export project moves to next phase — (Canadian Press) CTV News

Industry Minister Christian Paradis, who has the job of deciding whether the foreign takeover is of net benefit to Canada, rejected the deal in October, but left the door open to the companies to re-file their proposal.

Canada: Petronas, Progress move forward with LNG project — LNG World News

If the proposed acquisition of Progress by PETRONAS, that is currently being reviewed by the federal government is approved, the throughput of natural gas at the LNG export facility is expected to increase by approximately 60 per cent to 6 million tonnes per annum per train which will also result in concurrent enhancements to the productivity and efficiency of related upstream activities.

Progress, Petronas move to design phase for LNG export proposal in Canada — Hydrocarbon Processing, Houston, TX

The big energy companies, which are awaiting Canadian government approval for their multibillion dollar tie-up, said a detailed feasibility study for the proposed facility has been completed and the project is now moving into the pre front-end engineering design, or pre-FEED, phase.

Oregon

Local fishing industry group supports Oregon LNG project — LNG Law Blog

The Lower Columbia Alliance for Sustainable Fisheries filed a letter at FERC in support of Oregon LNG's proposed bi-directional LNG terminal to be located at Warrenton, Ore., and the related pipeline. The group, consisting of mostly commercial, charter boat, and sport fishing families and businesses in the Lower Columbia that cater to the fishing industry, supports the project as an alternative to renewable wave energy device projects that could close off fishing grounds in the area.

United Kingdom

UK will be $30 billion better off with wind instead of gas, says report — Renewable Energy World

Funded by the WWF-UK and Greenpeace, the report compares two scenarios for the UK’s electricity generation mix in 2030.

In the first, there is steady growth in offshore wind capacity through to 2030. In the second there is no new offshore wind after 2020 and the UK instead relies on significantly more gas.

Webmaster's comment: Research replication by an impartial researcher would add confidence to potential investors and government officials, and give more impetus to renewable energy development.

Passamaquoddy Bay

Save Passamaquoddy Bay files two new objections to Downeast LNG (Nov 29) — The Calais Advertiser, Calais, ME

Save Passamaquoddy Bay this week filed two new objections with the Federal Energy Regulatory Commission against a 30-foot vapor fence and a 4,000-foot-long jetty that Downeast LNG wants to construct in Robbinston.
The vapor fences, according to the objection that was filed, would consist of a 30-foot fence along the entire land-side property line, a 25-foot fence inside the outer fence, and two 20-foot inner fences. Save Passamaquoddy Bay included a photo simulation of what the fence would look like from the road, indicating the road side of the fence to be more than one-half mile long.

Footer says they hope to get final FERC approval by springtime, at which point they will reapply for their state permits. If Downeast LNG receives all its permits, Footer said they don’t have a set time frame on when they could start construction on the terminal.

“Once we get the federal permits it’s our plan to reapply for the state permits,” Footer said. “After that process, I don’t know how long it will take. We will have to confirm with the state at that point about when we can start construction.

Webmaster's comment: The State of Maine previously commented to the FERC docket that a Submerged Lands Permit, required for the jetty and pier, is unlikely since the jetty protrudes 3,000 feet longer into the waterway than allowed. Downeast LNG has no way to secure the jetty from public access, as explained in our recent FERC filing. Plus, Canada will not allow LNG ship transits. Downeast LNG may as well set their time frame to "never."

New England

USA: Gas net imports from Canada continue to decline (Dec 2) — LNG World News

[This article also appears under the Canada heading, below, and the United States heading, below.]

Net imports of natural gas from Canada have been falling for years. Rising shale gas production in the United States, especially in the Northeast, is key among several factors affecting this trend, the U.S. Energy Information Administration (EIA) said in a report.

Northeast: Canada helps supply natural gas to the Northeast in addition to gas coming from the Gulf of Mexico through several major long-haul pipelines and from the Everett LNG terminal near Boston. For the January-to-August periods, natural gas imports from Canada to the Northeast decreased by 19% on average annually since 2007 and by 26% from 2011 to 2012. Two factors contributed to this trend. First, natural gas imports through Maritimes & Northeast Pipeline into New England from the Canaport LNG terminal and from Sable Offshore Energy production have declined from around 0.5 Bcf/d at its peak to about 0.15 Bcf/d today. Second, significant natural gas production increases in the Marcellus Shale region over the past few years have displaced Canadian imports into the northeastern United States. In fact, in the past year, several major projects began services in the Northeast targeted at exporting Marcellus natural gas to Ontario, Canada. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis wants you to believe this is not true.

Gulf of Mexico

FERC issues Order to Cameron LNG, LLC on comments on Draft Resource Reports 11 and 13 — Equities.com

Enclosed please find our comments on draft Resource Reports 11 and 13 for the planned Cameron LNG Liquefaction Project proposed by Cameron LNG, LLC (Cameron LNG). Please revise the resource reports to address our comments.

Caribbean

LNG plant to carve US$200m off oil bill (Dec 2) — The Gleaner, Kingston, Jamaica, West Indies

South Jamaica Power Company (SJPC) will commence site preparation this month for the 360 megawatt (MW) liquefied natural gas plant on which construction is scheduled to begin in the second quarter of 2013.

"The introduction of LNG expects to bring 30-40 per cent reduction in overall cost of electricity to Jamaica. Based on an analysis done by JPS, the new plant will help achieve a 30-per cent reduction in the system heat rates by 2015 when operating natural gas," stated SJPC in its EIA.

British Columbia

Canada: Gitga’at First Nation concerned about environmental impacts of LNG plants — LNG World News

“Our community lives downstream from the proposed LNG plants,” said Arnold Clifton, Chief Councillor of the Gitga’at First Nation. “The prevailing winds bring pollutants from Kitimat down the Douglas Channel into our territory. We are concerned that our people will suffer if these plants are allowed to burn natural gas to power the liquefaction process.”

Current LNG proposals could bring upwards of 1000 tanker trips per year through Gitga’at traditional territory. [Red & bold emphasis added.]

Ramped-up global LNG market confronts possible local producers (Dec 1) — The Vancouver Sun, Vancouver, BC

Until five years ago, Canada and the United States expected that they'd be [LNG] customers, at the mercy of the international gas market, rather than exporters as the continent's reserves of conventional or easily accessed gas declined.

Those unconventional reserves are immense - particularly in places such as northeast British Columbia. B.C. hopes to have three LNG production facilities on stream by 2020, and producers here have an eye on Japan and China as probable export markets. It could put about $1 billion per year in additional gas royalty revenue into the treasury - gas is trading at $15 per unit in Asia compared to less than $3 per unit in North America, although it's expected that Asian buyers will want a better price on long term contracts with B.C.

Canada

USA: Gas net imports from Canada continue to decline (Dec 2) — LNG World News

[This article also appears under the New England heading, above, and the United States heading, below.]

Net imports of natural gas from Canada have been falling for years. Rising shale gas production in the United States, especially in the Northeast, is key among several factors affecting this trend, the U.S. Energy Information Administration (EIA) said in a report.

Northeast: Canada helps supply natural gas to the Northeast in addition to gas coming from the Gulf of Mexico through several major long-haul pipelines and from the Everett LNG terminal near Boston. For the January-to-August periods, natural gas imports from Canada to the Northeast decreased by 19% on average annually since 2007 and by 26% from 2011 to 2012. Two factors contributed to this trend. First, natural gas imports through Maritimes & Northeast Pipeline into New England from the Canaport LNG terminal and from Sable Offshore Energy production have declined from around 0.5 Bcf/d at its peak to about 0.15 Bcf/d today. Second, significant natural gas production increases in the Marcellus Shale region over the past few years have displaced Canadian imports into the northeastern United States. In fact, in the past year, several major projects began services in the Northeast targeted at exporting Marcellus natural gas to Ontario, Canada. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis wants you to believe this is not true.

United States

USA: Gas net imports from Canada continue to decline (Dec 2) — LNG World News

[This article also appears under the New England heading, above, and the Canada heading, above.]

Net imports of natural gas from Canada have been falling for years. Rising shale gas production in the United States, especially in the Northeast, is key among several factors affecting this trend, the U.S. Energy Information Administration (EIA) said in a report.

Northeast: Canada helps supply natural gas to the Northeast in addition to gas coming from the Gulf of Mexico through several major long-haul pipelines and from the Everett LNG terminal near Boston. For the January-to-August periods, natural gas imports from Canada to the Northeast decreased by 19% on average annually since 2007 and by 26% from 2011 to 2012. Two factors contributed to this trend. First, natural gas imports through Maritimes & Northeast Pipeline into New England from the Canaport LNG terminal and from Sable Offshore Energy production have declined from around 0.5 Bcf/d at its peak to about 0.15 Bcf/d today. Second, significant natural gas production increases in the Marcellus Shale region over the past few years have displaced Canadian imports into the northeastern United States. In fact, in the past year, several major projects began services in the Northeast targeted at exporting Marcellus natural gas to Ontario, Canada. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis wants you to believe this is not true.

Article evaluates likelihood of construction for proposed U.S. LNG export projects — LNG Law Blog

An article in Oil & Gas Journal [subscription required] provides a qualitative assessment of proposed U.S. LNG export terminals to determine which are most likely to advance towards construction and commissioning. The article is the first of a two-part analysis. The second article will examine the projects on a quantitative basis.

Liquefied natural gas exports will help, not harm economy, environment [Opinion blog] — The Hill, Washington, DC

The success of America’s economy stands at a crossroads. The U.S. Department of Energy should move forward with the approval of LNG export projects. The current delay in authorizations for projects ready to move forward is limiting our ability to engage in an American opportunity. As such, the approval freeze is also placing an arbitrary cap on our ability to grow, improve our balance of trade and restore the U.S. economy.

Webmaster's comment: This column's author is Bill Cooper, president of the Center for Liquefied Natural Gas. His job is to promote LNG import, exports, ...whatever, so long as it generates a profit for his membership; America's economy and the environment have nothing to do with it.

Thailand urges US to supply LNG long term (Dec 2) — MarineLink.com, New York, NY

During President Obama's recent visit Thai Prime Minister, Yingluck Shinawatra sought agreement with US for LNG supply over next 20-years.