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Passamaquoddy Bay & LNG

Southeast

Shell joins Kinder Morgan in US LNG export pact — ICIS, London, England, UK

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

Shell and Southern Liquefaction Co, a Kinder Morgan subsidiary and unit of Elba Island terminal operator El Paso, have established a joint venture company to advance and operate the liquefaction project, the companies said in a joint statement on Monday. The deal, subject to regulatory and corporate approvals, will see El Paso take a controlling 51% stake in the joint venture, with Shell holding the remaining equity.

Although Shell signed a preliminary agreement with the Freeport LNG project in 2012 to lift an unspecified amount of LNG from the planned 21.25mtpa Texas-based project, plans to monetise its US assets as LNG had lagged behind other LNG portfolio suppliers, such as UK-based BG Group and Spain's Gas Natural Fenosa.

Gulf of Mexico

Shell joins Kinder Morgan in US LNG export pact — ICIS, London, England, UK

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

Shell and Southern Liquefaction Co, a Kinder Morgan subsidiary and unit of Elba Island terminal operator El Paso, have established a joint venture company to advance and operate the liquefaction project, the companies said in a joint statement on Monday. The deal, subject to regulatory and corporate approvals, will see El Paso take a controlling 51% stake in the joint venture, with Shell holding the remaining equity.

Although Shell signed a preliminary agreement with the Freeport LNG project in 2012 to lift an unspecified amount of LNG from the planned 21.25mtpa Texas-based project, plans to monetise its US assets as LNG had lagged behind other LNG portfolio suppliers, such as UK-based BG Group and Spain's Gas Natural Fenosa.

LNG a big topic at area coastal meeting — The Port Lavaca Wave, Port Lavaca, TX

Michael Hightower, the Water for Energy project lead for Sandia National Laboratories, gave a general overview of LNG and its importance to the Texas gulf coast.

Caribbean

T&T not seeking to acquire Repsol's stake in Atlantic — Breaking News Trinidad & Tobago, Trinidad and Tobago, West Indies

Repsol is selling a basket of [LNG] assets inclusive of its stake in Point Fortin-based Atlantic, and whether it is sold to Shell, China's state-owned Sinopec, India's state-owned GAIL, or Russia's state-controlled Gazprom is speculative. What is certain is that it will not be sold to T&T's state-owned National Gas Company (NGC), if Energy and Energy Affairs Minister Kevin Ramnarine, and a report by Spanish newspaper Cinco Dias are correct.

The basket of assets includes the re-gasification plant Canaport, in Canada, where Repsol has a 75 per cent stake; a 20 per cent share in a liquefaction plant in Camisea, in Peru; its stake in Atlantic (formerly Atlantic LNG); a 25 per cent stake in an 800 megawatt electricity plant in Spain, called Bahía de Bizkaia Electricidad; gas contracts, and a fleet of liquified natural gas (LNG) carriers (ships). Repsol owns 20 per cent in Atlantic Train 1; 25 per cent in Train 2; 25 per cent in Train 3; and 22.22 per cent in Train 4.

Caribbean LNG – the steel pan paradigm [Blog] — rudolf-huber.com

The Caribbean would be the perfect region for LNGification. It has not happened yet which is a shame as the immaculate pearl it evokes in our phantasies has been tarnished. But things are about to change, very dramatically so.

Luckily for the Caribbean, things are about to change significantly. Mid and small scale LNG distribution was in its infancy for the longest time. Now it becomes a practical reality. And incidentally with the enormous rise of shale in the US, a reliable nearby and comparatively cheap and stable source of gas is available. How does it work?

Webmaster's comment: Maybe more Caribbean islands will start to receive LNG, maybe not; however, US LNG exports are likely going to those countries that pay the highest prices, and small Caribbean islands may not fit that description.

Alaska

LNG imports could have lasting impact on Cook Inlet gas market, price, economist says — Peninsula Clarion, Kenai, AK

As Alaska lawmakers discuss looming gas shortages predicted by utilities, many on both sides of the gavel have made mention of how importing liquefied natural gas to meet immediate demand might affect the existing market and production levels in the future.

Representatives from a research firm predicting the gas shortages and officials from other utilities were asked by lawmakers recently if importing LNG would disincentivize Cook Inlet exploration or the need for a North Slope gas pipeline. They have also been asked how importing likely higher-priced LNG would affect local gas prices for consumers in the long-term.

Webmaster's comment: The Anchorage region has exported its natural gas since 1969. Now, that the domestic natural gas is used up, they must figure out how to keep their houses warm. This is one example of how the unfettered free market can backfire.

British Columbia

Energy companies join forces to plan new LNG facility in B.C. — Times Colonist, Victoria, BC

The new joint venture, AltaGas Idemitsu, was formed to supply both liquefied petroleum gas and liquefied natural gas (LNG) to Idemitsu Kosan.

AltaGas did not say whether the LNG plant it is considering would be built in Kitimat or Prince Rupert, only that the gas would come from AltaGas’s subsidiary, Pacific Northern Gas Ltd., which has a natural gas pipeline running to both Kitimat and Prince Rupert.

United States

Bipartisan bill would equate NATO members and Japan as FTA nations for gas exports — LNG Law Blog

U.S. Senators John Barrasso (R-WY), Jim Inhofe (R-OK), and John Cornyn (R-TX) today introduced the "Expedited LNG for American Allies Act of 2013," a bill which would amend the Natural Gas Act's gas export provisions to include North Atlantic Treaty Organization (NATO) member nations and Japan as equivalent to countries with a Free Trade Agreement with the United States. Additionally, the Act would allow exports to any other nation if the Secretary of State, in consultation with the Secretary of Defense, finds that exports of natural gas to that country would promote the national security interests of the United States. Senators Mark Begich (D-AK), Tom Coburn (R-OK), Mike Enzi (R-WY), Heidi Heitkamp (D-ND), John Hoeven (R-ND), Ron Johnson (R-WI), Mike Lee (R-UT), and David Vitter (R-LA) are also cosponsors of the bill.

US senators unveil bill to allow LNG exports to NATO allies, Japan — Platts

Japan, one of the world's most prolific LNG importers, is not an FTA nation, but it has urged US officials to allow LNG exports in the wake of the Fukushima earthquake that shut down the nation's nuclear energy supplies.

The bill introduced Thursday would require DOE to approve gas exports to NATO members and Japan. The legislation would also require DOE to approve gas exports to any other country if the Secretary of State, in consultation with the Secretary of Defense, finds that exports to that country would promote the national security interests of the US, the sponsors said.

Update 1-US ban on LNG exports would violate WTO rules - experts — Global Post

WASHINGTON, Jan 31 (Reuters) - The United States would violate global trade rules and damage its credibility if it decides to subsidize steel, chemical and other manufacturers by restricting exports of liquefied natural gas after years of pressing other countries like China to drop restrictions on natural resource exports, experts said.

The United States generally does not restrict exports to give domestic companies a price advantage, or subsidy, and typically objects when other countries impose export bans.

"One of the biggest recent WTO cases was one that the U.S. brought against China's quantitative restrictions on exports of raw materials. The United States won that case on the basis of Article XI of the GATT," Bacchus said.

Passamaquoddy Bay & Maine

Dead River, Boston company to offer compressed natural gas via truck in Maine — Bangor Daily News, Bangor, ME

Boston-based Xpress, which was founded in early 2011 and currently trucks liquified natural gas to two paper mills in Maine, has built Maine’s first CNG compression station, or “mother facility,” in Baileyville, according to John Nahill, CEO of Xpress.

CNG is easier to store and transport via tractor-trailers, and can reach customers in areas that aren’t currently served by traditional pipeline infrastructure. The CNG comes off the Maritimes and Northeast pipeline in Baileyville, where it is compressed at Xpress’ “mother facility,” and then trucked to clients, Nahill said.

While Xpress will continue to serve its industrial customers with LNG, Dead River Co. will sell and supply CNG from Xpress’ terminal to commercial and institutional customers that typically use at least 75,000 gallons of heating oil annually.

While Xpress is based in Boston, the majority of its operations are in Maine, including 18 of its 22 employees, Nahill said. The company got its start supplying LNG to Woodland Pulp & Paper in Baileyville, which has since transitioned to running on CNG. Xpress now supplies LNG by truck to Lincoln Paper & Tissue and the paper mill in Madison. Nahill said the company has invested $20 million in its Maine operations. [Red, brown & bold emphasis added.]

Webmaster's comment: Reporter Error: Baileyville Woodland Pulp & Paper mill has not transitioned to CNG — it runs on conventional natural gas via a pipeline connected to the Maritimes and Northeast Pipeline.

In Maine? Need CNG? Truck loads will soon be available — NGT News

XNG currently trucks LNG to Maine-based industrial customers, such as the pulp and paper mills in Madison and Lincoln. The company will soon also begin delivering CNG via a terminal in Baileyville, which is located on the Canadian border near the Bay of Fundy. Dead River Co. will sell and supply CNG from this terminal to commercial and institutional customers.

"The reality is most areas of the state of Maine will never see a natural gas pipeline. The cost is simply prohibitive," says Bob Moore, president of Dead River Co. "Our partnership with Xpress Natural Gas presents an immediate solution to Maine companies with high energy use who are looking for alternatives."

New England

From off the coast of Massachusetts: A cautionary tale about natural gas infrastructure — Conservation Law Foundation (CLF), Boston, MA

The front page of the Boston Globe last week presented a powerful, timely and cautionary tale about two liquefied natural gas terminals that sit off the coast of Gloucester and Salem. Those terminals are the tangible reminder of a massive push undertaken by energy industry insiders to build such terminals. The intensity of that push, which began to build around 2002, becoming most intense during the 2004 to 2007 period and then petering out in the years since, contrasts sharply with the reality described in the Globe article: that those two offshore terminals have sat idle for the last two years.

Southeast

Are there really benefits to US LNG Exports? — Commodities Now

Shell and Kinder Morgan said they agreed to modify an existing LNG terminal near Savannah, Ga., so that it could accommodate future LNG exports. Last year, the project received the green light to export more than 500 million cubic feet of natural gas per day to countries with free-trade agreements with the United States. An August filing was for non-FTA countries. Kinder Morgan's CEO Richard Kinder said that, once finalized, the project would put even more momentum behind U.S. natural gas developments and help with the overall trade balance between the United States and other countries. Overall net benefits, however, remain to be seen, as the "impacts will not be positive for all groups in the economy." [Red emphasis added.]

British Columbia

Japan in market for shale-gas LNG — Petroleum Economist

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

JAPAN is hoping to meet its energy demand – and cut its growing import bills – by sourcing liquefied natural gas (LNG) from US shale-gas developments and possibly increasing its domestic nuclear power-generation capacity.

[Tokyo Gas’ vice president of European LNG Hiroshi Kondo] added that the government is hoping to import LNG sourced from US and Canadian shale-gas developments.

AltaGas, Japanese firm have LNG pact — The Vancouver Sun, Vancouver, BC

A Calgary company whose north central B.C. pipeline system is at the centre of several West Coast liquefied natural gas export proposals is proposing a facility of its own.

The same pipeline system has a deal to supply the BC LNG Export Co-Operative, which expects to open its $450-million barge-based Douglas Channel LNG Project in the second quarter of 2015.

AltaGas and Japan-based Idemitsu form partnership to export gas to Asia — Financial Post, Don Mills, ON

...North America is awash in natural gas from emerging shale formations, like those in northeastern British Columbia. The supply glut has depressed prices, causing many companies to look at ways to export the gas to markets where the price is several times higher. [Red & bold emphasis added.]

United States

Japan in market for shale-gas LNG — Petroleum Economist

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

JAPAN is hoping to meet its energy demand – and cut its growing import bills – by sourcing liquefied natural gas (LNG) from US shale-gas developments and possibly increasing its domestic nuclear power-generation capacity.

[Tokyo Gas’ vice president of European LNG Hiroshi Kondo] added that the government is hoping to import LNG sourced from US and Canadian shale-gas developments.

Plunge in NGLs prices add to US gas producers' woes — Petroleum Economist [Paid subscription]

Prices for ethane and propane fell 48% and 32%, respectively, in 2012, data released by the Energy Information Administration (EIA) shows, placing further stress on the already difficult economics of unconventional natural gas.

Spot ethane prices hit an all-time low of $0.22.5 per gallon in December 2012, compared with $0.78/g at this time last year. Propane has fallen to $0.80/g from $1.39/g in the same period....

Australia tipped the big loser as energy giants push US to approve gas exports — Energy Tribune

AUSTRALIA and other gas exporting nations stand to lose billions of dollars if large-scale US gas exports are approved, according to oil giant ExxonMobil, which has stepped up pressure on the US government to take the economic benefits for itself.

The push for US exports has come after a shale gas glut in the US depressed domestic prices, making them potentially competitive as a source of LNG for Asia. [Red & bold emphasis added.]

New Brunswick

[The following three New Brunswick articles also appear under the Caribbean heading, below.]

Repsol LNG sale due in coming weeks: source — Reuters

Goldman Sachs is advising Repsol on the sale, which the oil firm has said it wants to carry out in one block rather than hiving off the assets, in which it is not the sole shareholder.

However, some analysts have expressed doubts that the company could fetch interest for the whole block, particularly from a company like Shell.

Repsol likely to sell global LNG assets to Shell — Hydrocarbon Processing

The board of Spain's Repsol will analyze and likely approve at its meeting Wednesday the sale of the oil company's liquefied natural gas assets to Royal Dutch Shell, reports Cinco Dias in its Tuesday Internet edition, citing people close to the operation.

Repsol's LNG assets are located in Peru, Trinidad and Tobago, Canada and Spain. [Red & bold emphasis added.]

Shell could get its hands on Repsol's LNG assets — ShareCast

According to Spanish daily Cinco Dias, Respol is studying the possible sale of its LNG assets in Peru, Trinidad and Tobago, Canada and Spain for around €2.0bn, less than an initial estimate of €3.0bn.

However, analysts have expressed some doubts behind Shell's rationale for the deal. Peter Hutton of RBC Capital Markets was cited as saying by Reuters: “We find the logic of such a deal difficult from Shell’s perspective. We would not expect it to show much interest in Repsol’s stakes in either Atlantic LNG or Canaport, but there may be some synergy on Peru LNG.” [Red & bold emphasis added.]

Passamaquoddy Bay

Town of Saint Andrews voices continued opposition to Downeast LNG project — LNG Law Blog

The mayor of the Town of Saint Andrews, New Brunswick, sent a letter to FERC voicing the Town's continued opposition to the proposed Downeast LNG import project due to the potential impacts of the project on, among other things, local tourism. [Red, yellow & bold emphasis added.]

Webmaster's comment: The Town of St. Andrews, the Province of New Brunswick, and the Government of Canada are holding firm against Downeast LNG. Downeast LNG has no probability of receiving the product it requires.

Southeast

Partners to export LNG from Elba — Savannah Morning News, Savannah, GA

For more than a decade, imports of liquefied natural gas have come into the LNG terminal at Elba Island in the Savannah River to be transformed back into gas and transported along a pipeline to the Southeast U.S.

Now, with vast new reserves of domestic shale gas – the result of a hydraulic fracturing process known as fracking – filling the country’s domestic needs, the opportunity to export natural gas has companies looking to reverse the process. [Red & bold emphasis added.]

Shell and Kinder Morgan announce plans to export LNG from the United States [Press release] (Jan 28) — WebWire

Shell US Gas & Power LLC (Shell), a subsidiary of Royal Dutch Shell plc, and Southern Liquefaction Company, LLC, a Kinder Morgan company and unit of El Paso Pipeline Partners, L.P. (NYSE: EPB), today announced their intent to form a limited liability company to develop a natural gas liquefaction plant in two phases at Southern LNG Company, LLC’s (Southern LNG) existing Elba Island LNG Terminal, near Savannah, Ga.

Subject to various corporate and regulatory approvals, Shell and Kinder Morgan affiliates have agreed to modify EPB’s Elba Express Pipeline and Elba Island LNG Terminal to physically transport natural gas to the terminal and to load the liquefied natural gas (LNG) onto ships for export.

“This announcement underscores how the abundance of natural gas in the U.S. is changing the energy landscape,” said Marvin Odum, President of Shell Oil Company. “With a measured, phased approach, exports of cleaner burning natural gas can help meet the world’s rising energy needs while also giving a boost to the U.S. economy.” [Red & bold emphasis added.]

Shell plans US export of gas to Asian markets — Radio Australia, Australia

Shell's plan to export LNG from the United States is expected to increase competition for Australia in its traditional Asian markets.

The rise of the industry in the US has created a glut of gas, causing prices to collapse and potentially giving Asian countries access to cheaper energy.

"The US has a significant amount of gas and potentially a low cost development environment compared to Australia at the moment, so I think it just shows their outlook is that there could higher rates of return with US projects." [Red & bold emphasis added.]

Shell signs on to natural gas export project (Jan 28) — (AP) Equities.com

The proposal is one of nearly two dozen similar ones, all hoping to export U.S. natural gas to Europe and Asia, where the fuel is two times to three times more expensive than in the U.S. Domestic natural gas prices have fallen dramatically in recent years as drillers have learned to tap underground shale formations that hold enormous reserves of natural gas under several states.

The terminal company, Southern LNG Co., applied for an export permit from the Department of Energy last March. The application is under review. It is one of 23 proposed liquefied natural gas export applications at the Energy Department seeking to export 31 billion cubic feet of natural gas per day, about half of current U.S. daily consumption. [Red & bold emphasis added.]

Update 1-Shell, Kinder plan to export natgas from United States (Jan 28) — Reuters UK

NEW YORK, Jan 28 (Reuters) - With U.S. natural gas prices stuck at much less than half global levels, Royal Dutch Shell and Kinder Morgan Inc said on Monday they are teaming up to export liquefied natural gas from a terminal that was originally built to import gas.

More energy companies with access to low-priced, abundant U.S. gas supplies are trying to take advantage of much higher global prices by boosting exports. But regulators have yet to approve the plan, and some U.S. businesses and consumers bristle at an idea that they fear could mean higher domestic prices.

"If you're a company and your business is importing LNG in the U.S., your business model isn't going to work unless you flip it around and start exporting," Dave Pursell, managing director with energy consultancy Tudor, Pickering, Holt & Co told Reuters via telephone from Houston. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG isn't going to work. There is not even enough room for the proposed LNG import terminal, let alone adding liquefaction and export capability. Dean Girdis's project is way-doomed, even according to the rest of the LNG industry.

Shell, Kinder Morgan join forces to develop Elba Island Liquefaction Plant (USA) (Jan 28) — LNG World News

The total project is expected to have liquefaction capacity of approximately 2.5 million tonnes per year (mtpa) of LNG or 350 million cubic feet of gas per day (Mmcfd). In June 2012, the Elba Island terminal received approval from the U.S. Department of Energy (DOE) to export up to 4 mtpa (500 Mmcfd) of LNG to Free Trade Agreement (FTA) countries. In August 2012, the terminal submitted a filing to the DOE seeking approval to export up to 4 mtpa (500 Mmcfd) of LNG to non-FTA countries. Phase I of the project, approximately 1.5 mtpa (210 Mmcfd), requires no additional DOE approval.

Shell, Kinder Morgan to export natural gas from U.S. (Jan 28) — Bloomberg Businessweek

LNG terminals built to import the fuel to the U.S. have begun seeking permission to export, as new production methods have boosted North American supply. There are more than 20 proposed LNG export terminals in the U.S. seeking permits allowing processing of about 31 billion cubic feet a day, according to the U.S. Department of Energy. [Red & bold emphasis added.]

Shell joins project to export LNG from US (Jan 28) — Financial Times, UK

Shell has been deliberating over whether to commit to investing in US LNG exports, and by joining an existing project it avoids going to the back of a long line of proposals seeking approval from the US Department of Energy.

The Elba Island project received a licence last year to export LNG to countries with which the US has a free trade agreement, and applied in August to sell to countries with which there is no such agreement.

Shell, Kinder Morgan to jointly export LNG from the United States (Jan 28) — The Economic Times, India

El Paso Pipeline Partners LP, a Kinder Morgan unit, and Shell will form a limited liability company to develop a natural gas liquefaction plant at Southern LNG Co LLC's existing terminal.

The Elba Island LNG Terminal near Savannah received U.S. Department of Energy approval in June to export up to 4 million tonnes per year (mtpa) of LNG to countries that have free trade agreements with the United States.

Gulf of Mexico

DOE denies Sierra Club’s rehearing and stay request re Sabine Pass LNG export authorization — LNG Law Blog

On Friday, the U.S. Department of Energy (DOE) issued an order denying Sierra Club's request for rehearing and stay of DOE's Final Opinion and Order, which granted Sabine Pass Liquefaction LLC's application to export LNG from the Sabine Pass LNG terminal to countries without a Free Trade Agreement with the United States. DOE reaffirmed its denial of Sierra Club's motion for late intervention in the case and, since Sierra Club was thus not a party, DOE ruled that Sierra Club lacked standing to request rehearing and stay of the Final Opinion and Order. In the order, DOE found that granting Sierra Club's late intervention would unduly prejudice the applicant and "have a chilling effect on the financing of construction as well as the construction activities themselves – all at the predictable expense of the applicant." [Red emphasis added.]

Webmaster's comment: Had the Sierra Club registered as an intervenor in a timely manner, the results might have been different.

US Sabine Pass export terminal ahead of schedule, company official says — Platts

Most LNG projects -- particularly in Australia, although Angola LNG has given no explanation for its late start-up -- are experiencing cost-overruns and delays because of labor shortages and higher material prices.

"However, this is not the case in Louisiana," [the president of Cheniere LNG International Jean Abiteboul] said.

"As of today, we are ahead of schedule, and in mid-[2015], we expect the first exports of LNG," he told the European Gas Conference.

Trunkline LNG submits Draft Environmental Reports at FERC for the Lake Charles LNG export project — LNG Law Blog

Trunkline LNG Company, LLC filed revised drafts of Resource Report No. 1 (General Project Description) and Resource Report No. 10 (Alternatives) at FERC for the pre-filing environmental review of the Lake Charles Liquefaction Project.

Magnolia LNG signs site lease option agreement, USA — LNG World News

Liquefied Natural Gas Limited announced the signing of a Site Option to Lease Term Sheet (Site Term Sheet) with the Lake Charles Harbour and Terminal District Authority (Port Authority), in relation to LNG Ltd’s proposed Magnolia LNG Project (MLNG).

The project comprises the proposed development of an 8 mtpa LNG project on a 90 acres site, in an established LNG shipping channel in the Lake Charles District, State of Louisiana, United States of America. The development is based on the staged development of 4 x 2 mtpa LNG production trains using LNG Ltd’s wholly owned OSMR® LNG process technology and the completed LNG plant front end engineering and design of LNG Ltd’s Gladstone Fisherman’s Landing LNG Project in Queensland, Australia.

Caribbean

[The following three Caribbean articles also appear under the New Brunswick heading, above.]

Repsol LNG sale due in coming weeks: source — Reuters

Goldman Sachs is advising Repsol on the sale, which the oil firm has said it wants to carry out in one block rather than hiving off the assets, in which it is not the sole shareholder.

However, some analysts have expressed doubts that the company could fetch interest for the whole block, particularly from a company like Shell.

Repsol likely to sell global LNG assets to Shell — Hydrocarbon Processing

The board of Spain's Repsol will analyze and likely approve at its meeting Wednesday the sale of the oil company's liquefied natural gas assets to Royal Dutch Shell, reports Cinco Dias in its Tuesday Internet edition, citing people close to the operation.

Repsol's LNG assets are located in Peru, Trinidad and Tobago, Canada and Spain. [Red & bold emphasis added.]

Shell could get its hands on Repsol's LNG assets — ShareCast

According to Spanish daily Cinco Dias, Respol is studying the possible sale of its LNG assets in Peru, Trinidad and Tobago, Canada and Spain for around €2.0bn, less than an initial estimate of €3.0bn.

However, analysts have expressed some doubts behind Shell's rationale for the deal. Peter Hutton of RBC Capital Markets was cited as saying by Reuters: “We find the logic of such a deal difficult from Shell’s perspective. We would not expect it to show much interest in Repsol’s stakes in either Atlantic LNG or Canaport, but there may be some synergy on Peru LNG.” [Red & bold emphasis added.]

Alaska

Sea change on horizon for LNG industry -- what does it mean for Alaska? (Jan 28) — Alaska Dispatch, Anchorage, AK

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

North America's liquefied natural gas industry is gearing up to shift into reverse.

A decade ago the industry was certain North America would be importing billions of cubic feet of gas a day to slake consumers' growing thirst for the fuel in an era of declining domestic production.

Before 2000, North American had just two operating LNG-import terminals. But in the next 11 years, two mothballed import terminals restarted and expanded, and eight new terminals were built in the United States, plus one in Canada and two in Mexico.

But mostly those terminals are idle, as obsolete as a Rust Belt factory. At least five of them didn't import a droplet of LNG in 2012 through November.

All the executives, bankers and politicians were wrong. U.S. gas production didn't decline, it grew astoundingly thanks to new techniques to blast oil and gas from stingy strata of shale deep underground.

In 2012, net LNG imports averaged about 0.4 bcf a day.... [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis is more wrong now than when he started his project. The amount of LNG imported into the entire US in all of 2012 was less than the proposed capacity of Downeast LNG.

British Columbia

Idemitsu to build LNG plant with AltaGas on Canada’s West Coast — Bloomberg Businessweek

“We have never been in the LNG or gas business before,” Tsukioka said. “But given the recent big changes in the environment, it doesn’t make sense as a Japanese energy company not to have LNG and gas in our portfolio.”

Pipeline company forms LNG partnership — Calgary Herald, Calgary, AB

A Calgary company whose north central B.C. pipeline system is at the centre of several West Coast liquefied natural gas export proposals is proposing a facility of its own.

Calgary-based AltaGas Ltd. and refiner Idemitsu Kosan Co., Ltd. of Tokyo announced overnight they will form a 50-50 partnership to pursue opportunities involving exports of liquefied natural gas (mainly methane) and liquefied petroleum gas (mainly propane) from Canada to Asia.

AltaGas owns the gas pipeline system leading to Kitimat and Prince Rupert on the B.C. coast that could be expanded and used to supply facilities that are targeting exports of two million tonnes per year of LNG by 2017 and 700,000 tonnes of LPG by 2016.

AltaGas to pursue LNG export facility with Japanese partner — Alberta Oil, AB

LNG customers tend to be more comfortable dealing with the devil they know than the devil they don’t know and might be reluctant to sign sales contracts with partners that have no history of reliably delivering LNG to overseas markets for multiple years.

Another challenge is competition. From Qatar, to Australia to East Africa and the United States, companies are building – or proposing to build – scores of LNG export projects to supply energy-needy markets in the Pacific Rim.

[Also,] Japan has started to send serious signals that it can no longer tolerate paying oil-indexed prices for LNG and other Asian countries may follow their lead.

AltaGas partners with Japan’s Idemitsu on gas export projects — The Globe and Mail, Toronto, ON

...Calgary-based AltaGas will look for a gas supply source, and look to expand capacity on the Pacific Northern Gas Ltd. pipeline system, which AltaGas acquired in 2011.

“The work that the partnership has to do over the next several months is securing supply and sales contracts,” Ms. Stein said.

Idemitsu partners with AltaGas to export LNG, LPG from Canada to Japan — Hydrocarbon Processing

The venture expects to use AltaGas' 500-kilometer natural gas pipeline linking gas-rich Alberta to Kitimat on the Pacific coast.

Several Japanese companies are trying to line up supplies of US and Canadian gas, encouraged by gas there costing less than a quarter of the price of LNG imported into Japan from suppliers in the Asian region. Export projects being looked at include both the shipping of gas from the west coast of Canada and via the Gulf of Mexico.

Under the plan, the two companies intend to buy gas in the open market to feed the terminal, rather than invest in gas production, the spokesman said.

AltaGas and Japan-based Idemitsu form partnership to export gas to Asia — Lethbridge Herald, Lethbridge, AB

...North America is awash in natural gas from emerging shale formations, like those in northeastern British Columbia. The supply glut has depressed prices, causing many companies to look at ways to export the gas to markets where the price is several times higher.

AltaGas and Idemitsu are also studying exporting liquefied petroleum gas, such as butane and propane, across the Pacific with shipments starting as early as 2016. That would include logistics, plant refrigeration and storage facilities.

AltaGas, Idemitsu Kosan plan to export LNG from Canada to Asia — LNG World News

The Partnership will undertake feasibility studies for the development and construction of liquefaction facilities as part of the proposed project to export LNG to markets in Asia. The feasibility study is expected to be completed by early 2014. The pipeline capacity required to transport natural gas to the liquefaction facility is expected to be provided by AltaGas’ wholly owned subsidiary Pacific Northern Gas Ltd. Subject to consultations with First Nations, and the completion of the feasibility study, permitting, regulatory approvals and facility construction, the proposed LNG exports could begin as early as 2017.

United States

USA: FERC issues report on land based LNG spills (Jan 28) — LNG World News

The staff of the Federal Energy Regulatory Commission (FERC) has prepared a report, in Docket No. AD13-4-000, examining potential changes to LNGFIRE3, the solid flame model required by the U.S. Department of Transportation’s regulations at Title 49, Code of Federal Regulations (CFR), Part 193 for predicting radiant heat from liquefied natural gas (LNG) pool fires on land.

FERC staff concludes that LNGFIRE3, as currently prescribed by 49 CFR Part 193, is appropriate for modeling thermal radiation from LNG pool fires on land and is suitable for use in siting on shore LNG facilities. The report is available for public viewing on the FERC’s website using the eLibrary link. [Brown & bold emphasis added.]

Webmaster's comment: FERC's conclusion is seriously flawed, as Save Passamaquoddy Bay is prepared to illustrate in the future.

Congressmen supporting LNG exports received $11.5 million from Big Oil, electric utilities — DeSmogBlog

On Jan. 25, 110 members of the U.S. House of Representatives - 94 Republicans and 16 Democrats - signed a letter urging Energy Secretary Steven Chu to approve expanded exports of liquified natural gas (LNG).

A DeSmogBlog investigation shows that these 110 signatories accepted $11.5 million in campaign contributions from Big Oil and electric utilities in the run-up to the November 2012 election, according to Center for Responsive Politics data.

Big Oil pumped $7.9 million into the signatories' coffers, while the remaining $3.6 million came from the electric utilities industry, two industries whose pocketbooks would widen with the mass exportation of the U.S. shale gas bounty. Further, 108 of the 110 signers represent states in which fracking is occuring.

It's one thing to say it, quite another to depict it, but the inescapable conclusion is that Congress is for sale on the issue of LNG exports, bought off by Big Oil and the electric utilities industry. [Red, yellow & bold emphasis added.]

LNG exports under fire (Jan 28) — Wyoming Business Report, WY

Among those voicing support in the public comment period that ended Jan. 24 is Wyoming Gov. Matt Mead. He said studies conducted by the DOE make a case for letting industry and the market decide what should be allowed for such infrastructure.

Others voiced more pointed arguments against the possibility, including Iris Marie Bloom, director of Protecting Our Waters. In a blog entry last week she detailed negative effects she said were ignored by the DOE studies, including raised domestic prices for natural gas; greenhouse gas emissions; the possibility of explosions; and a delay of investment in renewable energy.

New Mexico’s Governor files comments supporting LNG exports (Jan 28) — LNG Law Blog

New Mexico Governor Susana Martinez sent a letter to U.S. Department of Energy Secretary Chu in support of LNG exports and, citing employment, investment and balance of trade benefits, urged DOE to approve the pending LNG export applications.

Sea change on horizon for LNG industry -- what does it mean for Alaska? (Jan 28) — Alaska Dispatch, Anchorage, AK

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

North America's liquefied natural gas industry is gearing up to shift into reverse.

A decade ago the industry was certain North America would be importing billions of cubic feet of gas a day to slake consumers' growing thirst for the fuel in an era of declining domestic production.

Before 2000, North American had just two operating LNG-import terminals. But in the next 11 years, two mothballed import terminals restarted and expanded, and eight new terminals were built in the United States, plus one in Canada and two in Mexico.

But mostly those terminals are idle, as obsolete as a Rust Belt factory. At least five of them didn't import a droplet of LNG in 2012 through November.

All the executives, bankers and politicians were wrong. U.S. gas production didn't decline, it grew astoundingly thanks to new techniques to blast oil and gas from stingy strata of shale deep underground.

In 2012, net LNG imports averaged about 0.4 bcf a day.... [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis is more wrong now than when he started his project. The amount of LNG imported into the entire US in all of 2012 was less than the proposed capacity of Downeast LNG.

Nova Scotia

Caution: Fracking ahead (Jan 26) — The Chronicle Herald, Halifax, NS

“Reversing the Maritimes Northeast Pipeline is hardly a new idea,” said Hughes of the pipeline currently carrying Sable gas to the New England states.

One proposal, admittedly in its early stages, by Pieridae Energy would see the pipeline reversed and carrying cheap American shale gas to a proposed $4.5-billion export terminal at Goldboro. [Red & bold emphasis added.]

New England

Fracking may have spared Fall River from LNG plant (Jan 25) — SouthCoastToday.com

A story appeared this week in the Boston Globe that went largely unnoticed in SouthCoast: Two very, very expensive underwater LNG terminal facilities have sat idle for two years off the North Shore.

Now investors in this $750 million pair of white elephants have to try to figure out what to do with them — dismantle them or sit and wait until natural gas prices turn the United States into an LNG importer again.

Without dedicated opposition ... today we might be staring at an idle monstrosity that doesn't have the advantage of being out of sight beneath the ocean waves.

With a suddenly abundant domestic supply, prices have plummeted and imports virtually ceased.

Perhaps [Hess Energy's Gordon Shearer] saw this coming in 2011 when he pulled the plug on the [Fall River LNG import terminal] project. But if that's the case, perhaps he owes Weaver's Cove opponents a debt of gratitude for keeping him waiting long enough to escape investing hundreds of millions in a boondoggle and keep his executive job at Hess. [Red, yellow & bold emphasis added.]

Webmaster's comment: Save Passamaquoddy Bay has been trying to provide the same favor to Downeast LNG's president Dean Girdis, but he'll have none of it — he'd rather bankrupt the company with his proposed white elephant LNG import terminal investment.

Northeast

Northeast deep freeze causes skyrocketing natural gas prices (Jan 25) — Yahoo News

The EIA's Friday report stated that natural gas pipelines from the west and south into New England are constrained, limiting supplies. Demand is high and "gas prices are now high enough that it may be economically attractive to use oil for power generation in some cases," the EIA stated.

Bloomberg reported that New England is now relying on power plants fueled by oil and coal in spite of shifting away from those resources in recent years.

New England has historically depended on higher-priced imports of liquid natural gas due to a lack of local storage facilities, lack of locally produced natural gas, remoteness from the rest of the North American natural gas grid and high seasonal demand peaks.

Webmaster's comment: Expanding pipeline infrastructure is the long-term solution to providing the Northeast with access to the massive domestic natural gas that sits virtually at New England's doorstep.

Alaska

Japan's LNG consumption up in 2012 as Alaska officials eye resource potential (Jan 25) — Alaska Dispatch, Anchorage, AK

As Alaska officials eye the possibility of a large-scale liquefied natural gas project for exportation to Asia, news comes that Japan’s LNG use rose 15 percent in 2012, according to Bloomberg News.

British Columbia

Canadian LNG export project awards first contracts (Jan 25) — Oil & Gas Journal

BC LNG Export Co-Operative LLC, an entity formed in 2011 to promote LNG exports from the Douglass Channel LNG project in British Columbia, recently finalized contract awards both for feed-gas and for LNG purchase and offtake for Train 1.

Hawaii

Say aloha to LNG: No FERC approval required for Hawaiian company’s LNG operations — Energy Legal Blog

In a decision that may have ramifications for the construction and operation of small liquefied natural gas (LNG) terminals and liquefaction facilities, FERC determined in a January 17 order that it had no jurisdiction over the approval of a proposed Hawaiian LNG operation.

At issue was an application by Hawaii-based The Gas Company, LLC seeking authorization to engage in operations that involved taking delivery of LNG International Shipping Organization (ISO) containers shipped from the Continental United States, revaporizing the LNG, and injecting it into the company’s distribution system or to end users’ facilities. The Gas Company believed its proposed activities were associated with the operation of an LNG terminal and therefore required authorization from FERC under section 3 of the Natural Gas Act.

FERC agreed with The Gas Company that the LNG at issue would be “transported in interstate commerce by waterborne vessel,” but decided that the facilities that would be used to receive, load, and unload LNG containers for The Gas Company did not constitute “natural gas facilities” since the facilities are used to receive, load, and unload containers with other products besides LNG. Therefore, the facilities at issue were not an LNG Terminal, and FERC concluded that it did not have jurisdiction under section 3 of the Natural Gas Act. [Red & bold emphasis added.]

Webmaster's comment: So, if the same facility were to also import LPG, it would not be an LNG terminal? It's importing LNG! FERC's decision defies logic and perhaps even the Natural Gas Act, but is consistent with FERC's palsy-walsy relationship with the energy industry.

United States

Natural gas exports for U.S. jobs, growth, and trade — The Energy Collective

We are the world’s leading producer of natural gas and a global leader in overall natural gas resources, with technically recoverable shale natural gas and total recoverable U.S. natural gas estimated by:

• U.S. Energy Information Administration (EIA) – 542 trillion cubic feet (Tcf) shale; 2,203.3 Tcf overall.
• ICF International – 1,942 Tcf shale; 3,505 Tcf overall.
• Potential Gas Committee – 687 Tcf shale; 1,898 Tcf overall.

...Will these LNG export projects be built in the United States, or will potential U.S. projects be shelved because competing facilities elsewhere were built first? That’s what the LNG debate really comes down to. A number of studies, including this one from Brookings, have said exports’ impact on domestic natural gas prices will be modest – while the overall lift to our economy will be significant – so that’s not the key issue. The real point is whether America’s vast natural gas resources will be put to work for Americans, creating jobs and projecting growth throughout the economy.

Webmaster's comment: The author ignores the issue of what depleting US domestic resources would mean to America's future.

The “dumbest” energy investment you could make (Jan 25) — The Daily Reconing

You likely know the backdrop. The U.S. is producing more oil and gas than we could have dreamed just a decade ago. And with more of this abundant energy filling U.S. pipelines and storage facilities it’s only natural for the talking heads to start yapping about exports.

The problem is, when you talk about exports (natural gas in this case) you have to talk about very long-term trends. You can’t just take today’s information and extrapolate it out for the next 20 years. In fact, that’s a loser's game that the LNG industry has already faced!

[W]hile the shale boom is big news for the U.S., our economy and our energy security, it’s not a good bet in the world market. And remember, the stats above are GROWTH from current production to 2030. So putting it in perspective, currently the U.S. produces a little over 24Tcf, and the Middle East, Africa and Russia, combined will produce an ADDED 57Tcf over the next 17 years.

It all comes down to who gets the cheaper gas. And there’s no way that unconventional [US] shale gas is cheaper to produce than conventional gas out of the Middle East, Africa, Russia or even Australia. [Red & bold emphasis added.]

Natural gas fundamental analysis January 28, 2013 forecast (Jan 25) — Fx Empire Network, Tel Aviv, Israel

The U.S. won’t rival Qatar and Australia as the world’s largest liquefied natural gas exporter as it keeps fuel at home to drive an industrial renaissance, Royal Dutch Shell Plc (RDSA) Chief Executive Officer Peter Voser said. The U.S. may export 50 metric million tons a year of LNG by the end of the decade, or about 10 percent of the projected world market, Voser said today in a Bloomberg TV interview in Davos, Switzerland. That’s below the 120 million tons a year he said is predicted by some forecasters and less than Qatar’s current annual production of 77 million tons. Australia is projected to pass Qatar by the end of the decade.

An LNG export terminal will probably be one of several ways Shell uses North American gas, alongside projects to turn gas into liquid fuel such as diesel to power trucks and ships and feed chemicals plants, Voser said.

Natural gas export plans threaten historic alliances [The Oklahoman, Oklahoma City] (Jan 25) — equities.com

Low natural gas prices have led producers throughout the country to focus their attention on both increasing oil production and encouraging more natural gas consumption.

The efforts have led chemical makers and other manufacturers to expand domestic operations and consider moving production back to the United States from the Middle East and Asia because of the relatively low fuel costs.

One of the more controversial strategies to increase natural gas consumption is the effort to build liquefied natural gas export terminals to send the fuel to Europe and Asia, where it is selling for up to five times as much as here at home.

Insight: LNG exports threaten US chemical sector (Jan 25) — ICIS

NEW YORK (ICIS)--The heads of US chemical companies are lining up against exports of liquefied natural gas (LNG) as this threatens to bring the highly advantageous local price up toward a global level.

US LNG would be shipped to terminals abroad where there is the greatest demand – and highest price. The prospect of LNG exports only became feasible after the US shale gas boom, which has flooded the market with cheap gas.

But LNG exports would mostly take the form of dry gas whereas US crackers consume natural gas liquids (NGLs) such as ethane and propane. So why the concern?

One reason is that the overall greater demand from LNG exports would raise natural gas prices, bringing ethane and propane up with it. In addition, drilling could shift to more dry gas fields, crimping NGLs production and resulting in higher prices.

So while LNG exports may not directly impact ethane feedstock for the chemical sector, higher natural gas prices in the US resulting from exports could restrict investment in other manufacturing sectors – many of which are customers of the chemical industry.

LNG and shale changing the energy landscape (Jan 25) — Investors Chronicle

After reviewing BP's recently published Energy Outlook 2030, it's hard not to conclude that the group - along with much of the oil and gas complex - must have been completely blindsided by the development of the US shale oil and gas industry.... [Red & bold emphasis added.]

US senators clash over merits of LNG export study (Jan 25) — Platts

In a letter sent Friday to Energy Secretary Steven Chu, Senator Lisa Murkowski, an Alaska Republican, forcefully backed a DOE-commissioned study on LNG export which Senator Ron Wyden, the Oregon Democrat and soon-to-be committee chair, has called "seriously flawed."

In a January 10 letter to Chu, Wyden criticized the report for not considering the impact of LNG exports on gas demand growth in sectors such as transportation and industry. The study, Wyden wrote, "fails to fully assess the impacts of rising natural gas prices on homeowners and businesses."

Wyden's committee is planning to hold a hearing on LNG exports next month, Murkowski said.

More than 100 in House press administration to allow gas exports (Jan 25) — The Hill, Washington, DC

A bipartisan group that includes more than 100 members of the House sent a letter to Energy Secretary Steven Chu on Thursday pressing him to move forward with liquefied natural gas (LNG) exports.

A pair of senior Democrats — Sen. Ron Wyden (D-Ore.) and Rep. Edward Markey (D-Mass.) — has aired qualms about the study. They worry expanding LNG exports too rapidly would raise domestic energy prices, undercutting manufacturers’ newfound competitiveness in the process.

The head of Royal Dutch Shell — the world’s largest supplier of liquefied natural gas — echoed that sentiment in a Friday interview with Bloomberg TV at the World Economic Forum in Davos, Switzerland.

“Exports will happen. But I hope that the U.S. will actually keep most of the gas back because it will help them to industrialize parts of the U.S. more,” said Shell CEO Peter Voser, who added his firm is considering constructing a U.S. export terminal.

Webmaster's comment: Shell wants the US to restrain its exports — but plans to build its own US LNG export terminal!

CLNG, Dominion, GE discuss benefits of LNG exports (USA) (Jan 25) — LNG World News

On January 24, the final day of the Department of Energy (DOE) comment period for its macroeconomic study, the Center for Liquefied Natural Gas (CLNG) hosted representatives from small business, labor, Dominion and GE, at a Capitol Hill briefing to discuss the benefits of LNG exports across all industries.

Why secretary of State permits pipelines – and other anachronisms (Jan 25) — The Christian Science Monitor

One of the hottest topics in Washington this year will be how to export energy, whether LNG, crude oil, or refined products.

If all of this sounds needlessly complicated, that is because it is. Of these, FERC is widely agreed to be the most business friendly, with the smoothest and most professional process. The BIS, which is in charge of permitting for exports of crude oil, is not an agency that is very familiar with the energy industry, though it has a reputation for working fairly well with businesses through its role in permitting exports of high technology, potential 'dual-use' goods.

One of the big lessons from the permits of LNG exports is that the Department of Energy is pretty much flying blind on this. The report on the impact of LNG exports on the US economy was delayed for almost a full year, and then it was released with little fanfare. Now, several months later, there is still no decision. [Red & bold emphasis added.]

Webmaster's comment: One might even say that, as Save Passamaquoddy Bay has witnessed, FERC is too business friendly, at the expense of the public interest.

Japanese companies file comments at DOE in support of U.S. LNG exports to non-FTA nations (Jan 25) — LNG Law Blog

The Federation of Electric Power Companies of Japan and Japanese utilities Osaka Gas and Chubu Electric filed comments at the U.S. Department of Energy in support of U.S. LNG exports to countries without a Free Trade Agreement (FTA) with the United States.

North America & Asia

Asian LNG prices to stay oil-linked: Facts Global Energy consultancy (Jan 25) — Platts

"The incremental volumes over the next few years are coming from Australia and they are linked to oil, and in 2016-2017 we could see some US projects coming online, so Henry Hub linkage will increase a bit, but the incremental volumes will still be linked to oil," Fesharaki said.

Future Canadian LNG projects would also be linked to oil due to their unique cost structure. While the price of feed-gas in Canada would be quite similar to Henry Hub, the additional pipeline transportation fees to bring the gas over large distances from fields to specific projects on the West coast, combined with high Canadian greenfield LNG terminal costs, would mean the Canadian projects would have to price their LNG with some kind of oil linkage, Fesharaki said.

Northeast

Caution urged in LNG project [Editorial] — The Exponent Telegram, Clarksburg, WV

Dominion is moving forward with its plans to spend $2.5 to $3.5 million to reconfigure an import facility into a natural gas liquefaction plant designed for export.

[W]ith Dominion’s strong presence in West Virginia, we are sure to be a key player in that our natural resources will be shipped abroad.

As with all great things, however, Dominion must be cautious. There is little doubt that Dominion will disturb environmentally sensitive areas to complete its project. We hope Dominion has substantial safeguards in place to keep the environment protected and affected as little as possible.

Gulf of Mexico

Dow Chemical disavows Texas LNG export project it co-owns — Bloomberg

Dow Chemical Co., the largest U.S. chemical maker by revenue, said it won’t invest in a proposed $6.5 billion natural gas export project at a Texas terminal it partly owns.

Dow, which uses gas to make components for everything from hair spray to cat food to vehicle upholstery, doesn’t have an “active role” and “has no interest in” the Freeport LNG export venture in which the chemical company holds limited partner status, said George Biltz, Dow’s vice president of energy and climate change.

North American energy producers are scrambling to build export terminals for liquefied natural gas, or LNG, as growing supplies of the fuel from shale formations have overwhelmed homegrown demand and collapsed prices. Like Freeport, many of the proposed export ventures are slated to be built adjacent to LNG import facilities constructed in the mid-2000s when luminaries such as then-Federal Reserve Chairman Alan Greenspan were warning of an imminent gas shortage that would create the need for massive inflows of foreign supplies.

Those gas shortages never materialized, thanks to advances in horizontal drilling and hydraulic fracturing that unleashed previously untouchable reserves and boosted U.S. production of the fuel to a record. With most of the LNG import projects remaining largely idle, the new proposals transform erstwhile importers into would-be exporters. [Red & bold emphasis added.]

Study finds big economic impact from natural gas — The Advertiser, Lafayette, LA

The report looked only at temporary jobs created by the construction of the facilities, although many more permanent jobs will be created in drilling and engineering, Dismukes said.

The proposed projects include liquid natural gas (LNG) export terminals, gas-to-liquids facilities, ethane crackers and methanol and ammonia plants. Ethane crackers produce ethylene used in alcohol- and plastic-based products, and LNG can be used to fuel large vehicles like 18-wheelers, Dismukes said.

British Columbia

Kitimat LNG gets Federal ok— Ship & Bunker

The plant, one of three proposed LNG export facilities at Kitimat, is backed by Apache Canada Ltd. and Chevron Canada Ltd and is being constructed on Haisla Nation reserve land at Bish Cove, approximately 650 kilometres (400 miles) north of Vancouver.

If everything moves forward smoothly, the first LNG shipments from Kitmat could take place in 2018 or 2019, while full capacity will probably take until next decade, according to the investment news site Seeking Alpha.

United States

FERC issues notice of availability of the report: Recommended Parameters for Solid Flame Models For Land Based Liquefied Natural Gas Spills under AC13-4 — Electric Light & Power

The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared a report, in the above-referenced docket, examining potential changes to LNGFIRE3, the solid flame model required by the U.S. Department of Transportation's regulations at Title 49, Code of Federal Regulations (CFR), Part 193 for predicting radiant heat from liquefied natural gas (LNG) pool fires on land.

The report investigates the effects of matching both individual modeling parameters/correlations to measured experimental data and overall radiant heat predictions to measured results from field experiments. The review specifically addresses experimental data from the Phoenix large scale LNG fire tests on water conducted by Sandia National Laboratories between 2008 and 2011 and from the Montoir large scale LNG fire test over land conducted by Gaz de France in 1989. FERC staff concludes that LNGFIRE3, as currently prescribed by 49 CFR Part 193, is appropriate for modeling thermal radiation from LNG pool fires on land and is suitable for use in siting on shore LNG facilities. The report is available for public viewing on the FERC's website ( www.ferc.gov ) using the eLibrary link.

Any person wishing to comment on the report may do so.

Webmaster's comment: This article contains a FERC error regarding how to file, stating comments could be filed using the eComment feature of FERC's eLibrary. That is incorrect. FERC subsequently provided a correction. Here is a link to FERC's published Eratta Notice containing the correct Commenting procedure: http://www.utilityproducts.com/news/2013/01/24/ferc-issues-errata-notice-to-1-23-13-notice-of-availability-of-the-report-recommended-parameters-for.html

Download the highly-technical FERC report:
http://elibrary.ferc.gov/idmws/common/OpenNat.asp?fileID=13159100 (PDF; 1.2MB)

Over 200,000 public comments delivered to the Department of Energy criticizing flawed economic study on natural gas exports [Press release] — Sierra Club

Coalition says that exporting natural gas unfairly transfers wealth from the middle-class to already-rich energy companies, while causing irreparable damage to American public health and environment.

WASHINGTON, DC- Catskill Citizens for Safe Energy, CREDO, the Delaware Riverkeeper Network, Food & Water Watch, and the Sierra Club delivered over 200,000 public comments, including extensive technical comments and a companion economic analysis report, along with a letter signed by 80 organization to the Department of Energy (DOE) expressing outrage over an economic study on exporting natural gas overseas that it is reviewing.

The coalition’s comments emphasize that liquefied natural gas (LNG) exports would lower wages and employment in the U.S., while enriching energy companies by billions of dollars, including their overseas investors – as even the NERA study acknowledges. Exports would also require a big increase in fracking to supply LNG tankers, leaving communities across the country with costly environmental damage and health threats.

“The public should be outraged to hear that domestic supplies of gas would be shipped overseas and that households which rely on a paycheck will see no benefit, which is clearly stated in the report,” said Deb Nardone of the Sierra Club. “Most Americans rely on a paycheck. Meanwhile communities all across the country are left footing the bill to clean up contaminated water supplies and with increased medical bills due to air pollution. Exporting fracked gas is clearly not in the best interest of the United States. DOE and President Obama must not accept this flawed study.”

"The Department of Energy study fails to provide a true and honest picture of what LNG exports mean for our nation, “ said Maya van Rossum, the Delaware Riverkeeper. “LNG exports will subject more and more communities to the devastation caused by gas drilling. LNG exports also means that this country will fall behind in the present and future race to become leaders in sustainable energy, providing true energy security, jobs that will last generations, growing investments in this nation's energy expertise, and helping us to avoid the worst case scenarios that global climate change will bring if we stay on the fossil fuel treadwheel." [Red & bold emphasis added.]

Lawmakers urge exports of U.S. natural gas — Fuel Fix

The United States can safely export more of its natural gas bounty without causing prices to skyrocket, 110 lawmakers told Energy Secretary Steven Chu on Thursday.

The lawmakers — 89 Republicans and 21 Democrats — said market forces will keep prices in check, even if American producers sell natural gas to European and Asian markets where gas fetches three and four times as much as it does in the U.S.

The issue is shaping up as politically regional, with lawmakers from drilling hotbeds broadly lining up in support of exports. Among the chemical and manufacturing sector, however, the divide is less clear. [Red & bold emphasis added.]

White House pressed on LNG exports — UPI

[U.S. Sen. Jim Inhofe, R-Okla.], a member of the Senate Environment and Public Works Committee, called on U.S. Energy Secretary Steven Chu to stand behind a push for exports of LNG. He said the United States could capitalize on natural gas production gains by getting more reserves to the foreign market.

OpenSecrets.org, a website compiling campaign contributions, said Inhofe, over his career, has received the bulk of his support from the oil and natural gas industry. [Red & bold emphasis added.]

Odd couple: Will Dow Chemical and Ed Markey's opposition to natural gas exports cripple America's energy advantage? [Opinion] — Forbes

Since the 1990s, Dow Chemical, America’s largest chemical company, has tried to brand itself as forward thinking on energy and environmental issues. It reduced the carbon footprint of its manufacturing processes—a win-win situation that actually saved the company money while gathering plaudits from activists.

And, over the last decade, lavishly supported by federal tax policy and handouts guided to it by the powerful Massachusetts Congressional delegation led by Markey, Dow expanded its “green” product line. It began turning out advanced insulation products, diesel engine filters and lithium-ion batteries.

The sizable government largesse helped forge a pragmatic bond between top Dow officials and Markey, an outspoken campaigner for climate change initiatives and against shale gas development. They haven’t always been on the same page. For example, Markey has opposed a chemical security measure, which Dow has backed. But that issue is small potatoes compared to climate change, one of Markey’s signature issues.

In 2009, Dow broke ranks with many manufacturers to aggressively support the American Clean Energy and Security Act, the Democrats’ cap-and-trade bill, jointly sponsored by him and Waxman in 2009. Many on the left and the right savaged the bill as both weak and a pork-fest. After barely passing in the House it went down to bi-partisan defeat in the Senate in 2010. Although it never became law, it provided a huge political boost to Markey and Waxman—and Dow’s support was crucial. And now Markey and Dow are aligned once again.

Webmaster's comment: This article attempts to paint Dow as a climate-change hypocrite, somehow arguing that exporting LNG — a greenhouse gas — makes the world "greener." The author refers to flawed assumptions in the recent LNG export study reports — such as flawed supply and demand logic, assuming increased natural gas drilling will somehow increase domestic supply while at the same time domestic prices would rise In actuality that sustained drilling would only be economical if the resulting natural gas were exported.

Don't restrict free trade on liquefied natural gas exports [Opinion] — UPI

...Free trade in energy, as in other goods, will make us better off. The argument applies equally to exports as imports; export energy in order to purchase other goods that we are less efficient at producing.

Webmaster's comment: Really? The US used to be an oil exporter. Now, it has to import oi at a high price. Is the US better off now for having previously depleted its oil resources by exporting its domestic supply?

AGA not opposed to U.S. LNG exports — Rigzone

AGA has examined data on geologic formations, utility infrastructure, economic factors, and federal and state policies to shape a forward-looking view of natural gas, and expects that for the next decade and beyond, domestic natural gas supplies will be sufficiently robust to meet growth in demand across all sectors, including with respect to LNG exports. This Promise of Natural Gas highlights the fact that the country has experienced a transformational shift in the perceived role of natural gas from an energy source sometimes seen as unreliable and scarce ten years ago, to one that is now recognized as a foundation fuel for a clean and secure energy portfolio.

Webmaster's comment: Downeast LNG doesn't want to hear it.

Manufacturers are blocking the free flow of LNG (Jan 23) — EnergyBiz

The America’s Energy Advantage is trying to either prevent or to limit the flow of such fuel to Asia and Europe where it could fetch much higher prices. That’s because those energy intensive businesses say that the increased demand will put upward pressure on natural gas prices -- all at a time when they are trying to regain their economic footing and put people back to work.

Altogether, 11 LNG receiving facilities exist here and 9 of those are asking U.S. regulators if they can be converted to export terminals. Most of the applications are coming from the Gulf States, which have already been receptive to their LNG import facilities and which would likely support any changes to their operations. In April 2012, federal energy regulators voted to allow Cheniere Energy to retrofit its Sabine Pass, and it should begin shipping operations 2014. [Red & bold emphasis added.]

Webmaster's comment: The 12th US LNG import terminal, Excelerate Energy's Gulf Gateway Deepwater Port in the Gulf of Mexico, has decommissioned due to lack of need.

Championing the freedom to export [Opinion] — Politico

At issue is the freedom to export. In fact, both history and trade law take a dim view of export restraints. Indeed, the notion that the federal government has the power to limit the freedom to export is at odds with U.S. tradition and law.

It’s true the WTO allows an exception for export restraints imposed with the goal of conserving “exhaustible natural resources.” However, U.S. proponents of export restraints have said their goal in disallowing exports is to keep the domestic price of a vital commodity low, thus affording an advantage to domestic industry. That’s not conservation; in fact, it’s exactly the practice the WTO prohibits.

Webmaster's comment: So, according to the US Chamber of Commerce, depleting "exhaustable natural resources" should have no bearing on LNG export decisionmaking, despite the WTO position against doing so. For the US Chamber, the reason used by export opponents is what cancels out the WTO logical position. The US Chamber's reasoning is known as ignoratio elenchi — using an argument unrelated to the actual issue at hand.

Caterpillar and U.S. Chamber oppose LNG export restrictions — LNG Law Blog

Caterpillar, based in Peoria, Illinois, released a statement that it opposed limitations on LNG exports because they would discourage economic growth and be counterproductive to U.S. efforts to keep other countries from embracing similar policies.

U.S. Senators support increased LNG exports — LNG Law Blog

Senator David Vitter (R-LA), Senator Jim Inhofe (R-OK), and Senators Mary Landrieu (D-LA) and freshman Heidi Heitkamp (D-ND) sent letters to U.S. Department of Energy (DOE) Secretary Chu urging DOE to approve additional exports of LNG.

Former Pennsylvania Governor Rendell supports LNG exports — LNG Law Blog

Edward G. Rendell, the Democratic former Governor of Pennsylvania, submitted a letter to U.S. Department of Energy (DOE) Secretary Chu in support of LNG exports and urging DOE to approve the pending applications to export LNG.

Sen. Lisa Murkowski, R-Alaska, holds a news briefing on liquid natural gas exports and nuclear energy [Press release] (Jan 23) — Power Engineering

Of course [Japan is] very interested in what we refer to as the, the shale gas boom over here and how they might be able to tap into that recognizing that issue of exports is still, yet unresolved, and will be a subject of discussion for us as we commence this session. But, it was also an opportunity to talk about Alaska's gas, which is for all intents and purposes, separate from the discussion about lower 48 shale gas. We've got a conventional gas it, it's not subject to some of the same concerns and issues that may surround fracking of lower 48 gas. Transportation side of it, we are, I kept showing them the map of the world and it's a very convenient map, because there's nothing but wide open water between Japan and north to Alaska. It's a pretty direct shot. I reminded them of the forty years that Alaska and Japan have been engaged in a trade relationship for Alaska's Cook Inlet LNG. It, a relationship that ended in just three months before the tsunami. And, ended because a different host of issues, but suffice to say that that in and of itself leaves a leaves a gap, leaves a hole in meeting the energy needs that the Japanese have clearly identified.

New England

$750M at sea: Gloucester LNG terminals sit idle (report) — Boston Business Journal, Boston, MA

Offshore natural gas terminals built near Gloucester, Mass. by Excelerate Energy and GDF Suez SA have reportedly not received a shipment of natural gas in two years, amid a glut of domestically produced gas.

Excelerate has already dismantled a similar facility in Mexico, the Boston Globe reports. Texas-based Excelerate spent about $350 million to develop the Northeast Gateway Deepwater Port, an LNG terminal off Gloucester, which opened in 2008. GDF Suez spent about $400 million building the Neptune Deepwater Port, nearby.[Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG refuses to learn from others' mistakes — and even from its own mistakes — insisting on throwing its own $millions down a bottomless hole. Ego trumps good business sense at Downeast LNG.

2 costly LNG terminals sit idle — The Boston Globe, Boston, MA [Paid subscription]

Built to great fanfare just a few years ago, two liquefied natural gas terminals off the coast of Gloucester haven’t processed a drop of fuel in two years for the New England market, and now appear to be little more than $750 million worth of unused buoys and pipes sitting idle in in the ocean. The facilities had counted on selling imported natural gas into a New England market with high fuel prices, only to see that business radically undercut by much cheaper gas from within the continental United States.

Costly North Shore LNG terminals sit idle — Telegram.com

[A]s soon as each facility opened, the bottom fell out of the natural gas market and neither offshore terminal has received a drop of imported fuel in more than two years.

Now the companies are stuck with $750 million worth of unused buoys and pipes sitting idle in the ocean.

“There was a lot of panic and rushing to build new LNG terminals at the time,” said Seth Kaplan, a vice president of the Conservation Law Foundation. “There was no careful thought about whether they were needed — and they weren't needed.”

[O]ne of the companies, Excelerate Energy, has already dismantled a similar offshore terminal it owns in the Gulf of Mexico — just seven years after opening it — because of the poor outlook for LNG imports.

The low prices also claimed another controversial LNG terminal. Hess LNG had proposed building a facility at Weaver's Cove in Fall River, but eventually abandoned it in 2011, citing the changing market conditions for LNG imports.

[The Distrigas Everett LNG import terminal] has experienced a huge drop in imports as domestic supplies have soared. It now has one primary customer, the Mystic Power Station electric plant next door, under a long term contract that does not expire until late next decade. Shipments to the Everett facility arrive via huge tankers that, because of terrorist concerns, require a small navy of Coast Guard ships and other armed escorts.

Webmaster's comment: It could not be any clearer — Downeast LNG is doomed.

Gulf of Mexico

USA: Sabine Pass LNG to offer USD 1 billion of senior secured notes — LNG World News

Sabine Liquefaction intends to use the net proceeds from the offering to pay capital costs in connection with the construction of the first two LNG liquefaction trains at its facility in Cameron Parish, Louisiana and fees and expenses incurred associated with the offering.

Caribbean

Shale forces rethink in Trinidad and Tobago (Jan 22) — Petroleum Economist [Paid subscription]

TRINIDAD and Tobago’s economy is powered by natural gas. The industry accounts for about half the country’s GDP, generates nearly two-thirds of the government’s revenues, attracts most of its foreign investment and lines the sovereign wealth fund. The country’s decision to export its gas has served it well, making it one of the wealthiest nations in the Caribbean. But the surge in US shale-gas production, a wave of new liquefied natural gas (LNG) export projects around the world and major gas discoveries offshore east Africa and elsewhere have ushered in a new era for the gas sector. The assumptions upon which Trinidad and Tobago’s industry were based no longer apply, forcing the country to rethink its energy strategy to ensure its future. Atlantic LNG, the 3 million tonnes per year (t/y) production train and export terminal, started operations in 1999 and is the heart of Trinidad and Tobago’s gas industry.... [Red & bold emphasis added.]

British Columbia

Feds clear way for Kitimat LNG plant — The Province, Vancouver, BC

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

The Kitimat LNG plant is one of three proposed LNG export facilities at Kitimat, which would be fed by gas pipelines from northeast B.C. for export to Asian and other markets.

Meanwhile, a recent study indicates that profits from selling U.S. liquefied natural gas abroad may be elusive, belying the $60-billion US race for export licences as the price gap between Asia and North America shrinks from record levels.

The difference between U.S. and Asian gas is poised to drop by more than 60 per cent by 2020, leaving exporters facing a loss of as much as $6 million US per tanker, according to calculations by Bloomberg based on data from Rice University in Houston. [Red & bold emphasis added.]

Ottawa set regulations for Kitimat LNG project (Jan 22) — CFTK-TV, Terrace, BC

The Haisla Natural Gas Facility Regulations have been created under the First Nations Commercial and Industrial Development Act.

The regulations have been in the works since a deal was signed between Canada, B.C. and the Haisla last March. It established the B.C. Oil and Gas Commission as the regulator for the liquefied natural gas facility proposed by Apache and Chevron.

Bennett predicts a natural gas boom as way cleared for LNG plant (Jan 22) — The Globe and Mail, Toronto, ON

British Columbia is on the verge of a natural gas development boom that will rival anything Alberta has experienced, according to B.C.’s Community Minister.

Mr. Bennett said the plant, the first of six that have been proposed for the West Coast, will open up B.C.’s massive gas fields and allow the resource industry to thrive like it never has before in the province.

At a press conference in Vancouver, Mr. Bennett and John Duncan, federal Minister of Aboriginal Affairs and Northern Development, jointly announced regulatory changes that they said have now cleared the way for construction of the Kitimat LNG plant.

$5 billion pipeline moves ahead — Daily Commercial News, Markham, ON

The project involves the construction of a 750-kilometre pipeline to deliver natural gas from the North Montney region near Fort St. John, B.C. to a Liquid Natural Gas (LNG) export facility in Port Edward near Prince Rupert.

The Pacific Northwest LNG Project is a proposed LNG export facility, on Lelu Island within the District of Port Edward on land administered by the Port of Prince Rupert.

The project will include two trains, or liquefaction plants, when initially constructed, as well as an export terminal and jetty to accommodate ocean-going LNG carriers.

In addition, TransCanada proposes to extend its existing NOVA Gas Transmission Ltd. (NGTL) system in northeast B.C. to connect both to the Prince Rupert gas pipeline and to additional North Montney gas supply from Progress Energy and other parties.

United States

ANGA statement in support of LNG exports [Press release] — America's Natural Gas Alliance (ANGA)

... North America's abundant supplies of natural gas will be a big part of the supply picture. Our natural gas resource is vast. The shale gas resource has revolutionized the scale and future energy supply in this country. [Red & bold emphasis added.]

Huntsman, Dow turn up the heat on LNG export debate — Houston Business Journal, Houston, TX

While America’s Energy Advantage, a new organization lobbying to put caps on LNG exports, gained a new corporate ally this week, the National Association of Manufacturers lost at least one key petrochemical company member concerning the debate.

Japan looking for assurance on LNG export policy: US senator — Platts

During US Senator Lisa Murkowski's recent trip to Asia, the Alaska Republican said Japan's deputy prime minister Taro Aso pressed her for assurance that the US could soon begin exporting liquefied natural gas to address his country's urgent energy needs.

It was an assurance she could not give, the top Republican on the Senate Energy and Natural Resources Committee told reporters Wednesday.

Feds clear way for Kitimat LNG plant — The Province, Vancouver, BC

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

The Kitimat LNG plant is one of three proposed LNG export facilities at Kitimat, which would be fed by gas pipelines from northeast B.C. for export to Asian and other markets.

Meanwhile, a recent study indicates that profits from selling U.S. liquefied natural gas abroad may be elusive, belying the $60-billion US race for export licences as the price gap between Asia and North America shrinks from record levels.

The difference between U.S. and Asian gas is poised to drop by more than 60 per cent by 2020, leaving exporters facing a loss of as much as $6 million US per tanker, according to calculations by Bloomberg based on data from Rice University in Houston. [Red & bold emphasis added.]

Gulf of Mexico

Sabine Pass LNG submits monthly construction progress report — LNG Law Blog

Sabine Pass LNG, L.P., filed a status report at FERC on the progress of construction of its LNG export terminal in Cameron County, La. The report indicates that engineering was now 39.1% complete; procurement was 30.2% complete; and construction work was 5.0% complete at the end of December. The overall project completion was 18.0% against a target plan of 18.0%. The overall project schedule is progressing ahead of the contractual schedule basis. Early targets for Train 1 substantial completion and Train 2 substantial completion are 43 and 47 months, respectively, against the contractual basis of 49 and 58 months for Train 1 and Train 2.

British Columbia

First Canadian LNG export facility — Energy & Capital

[T]he Douglas Channel project will be the first to come online, making BC LNG the first major Canadian exporter of LNG.

Asian markets have been attractive to LNG suppliers since the start of the North American shale boom due to their much higher natural gas retail price. While natural gas was selling for $3.57 per million Btu in the U.S. last week, the Globe and Mail reports, it was a whopping $17.35 in Japan and South Korea.

But lately BC LNG has been faced with a problem.

“What we're seeing is that the Asian marketplace is now beginning to embrace the North American gas indices as the pricing forum,” said Tom Tatham, managing director of BC LNG.

In addition to the change in selling price, the project has also faced a number of other setbacks. Completion was initially scheduled for early 2014. Tatham cited “various reasons” for the year-long delay on the project.

Feds clear way for LNG export plant on First Nations reserve at Kitimat B.C. — Medicine Hat News, Medicine Hat, AB

Aboriginal Affairs and Northern Development Minister John Duncan says new regulations will allow the Kitimat LNG plant to be built on the Haisla First Nation's Bees Indian Reserve.

Proposed Kitimat LNG facility on Haisla First Nation closer to reality — Beacon News, Calgary, AB

The Haisla Natural Gas Facility Regulations were created under the FNCIDA, a First Nations-led initiative that allows the government to work with both them and provincial bodies to create regulations for complex commercial and industrial development projects on reserves.

Chevron is one of two companies along with Apache Canada that are behind the project.

Harper Government opens door to overseas energy markets, jobs and economic growth for Haisla First Nation [Press release] — Sys-Con Media

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/22/13 -- The Honourable John Duncan, Minister of Aboriginal Affairs and Northern Development, today announced new regulations that will allow the proposed Kitimat LNG liquefied natural gas facility on the Haisla First Nation's Bees Indian Reserve No. 6 to proceed.

The Kitimat LNG facility is being constructed on Haisla Nation reserve land at Bish Cove, approximately 650 kilometres (400 miles) north of Vancouver. The proposed two-train Kitimat LNG Project, currently progressing through the Front-End Engineering and Design (FEED) phase, has a Canadian National Energy Board license to export 10 million tons per annum of LNG.

BC LNG Export Co-Operative makes first contract awards [Press release] (Jan 21) — Sys-Con Media

HOUSTON, Jan. 21, 2013 /PRNewswire/ -- BC LNG Export Co-Operative, LLC announced today that it has finalized Contract Awards for both Feed Gas Supply and LNG Purchase and Off-take for Train #1 of the Douglass Channel LNG Project. The Douglass Channel LNG Project is expected to produce approximately 700,000 metric tones of per annum of liquefied natural gas from the initial planned production facility beginning in Q2 2015.

The Contract Award for LNG Purchase and Off-take was made jointly to Golar LNG Limited and LNG Partners, LLC. The Contract award for Feed Gas Supply was made to LNG Partners, LLC.

The Douglas Channel LNG Project is being jointly developed by the Haisla Nation and Douglas Channel Gas Services Ltd., and is expected to be Canada's first operational LNG export project.

Golar inks Canada LNG supply deal — Upstream

London-based tanker-operator Golar LNG and privately held LNG Partners have agreed to buy all the output from the Douglas Channel LNG project in British Columbia, Canada.

The project was the second to be awarded an LNG export license by Canadian regulators in 2011, behind one granted to the Kitimat LNG project proposed by Apache and Chevron.

Backers of ... rival projects include Shell, Malaysia's Petronas, BG Group and others, making British Columbia a rival to the US Gulf Coast, where nine projects have been announced and one - Cheniere Energy's Sabine Pass project - is already under construction.

Douglas Channel LNG Project finds buyer — EnergeticCity.ca

Initially, the plant is expected to produce 700,000 tonnes of LNG a year. Golar will purchase both the feed gas supply and LNG purchase and off-take for train #1, beginning in the second quarter of 2015.

Hawaii

Abercrombie reasserts support for LNG — Honolulu Civil Beat, Honolulu, HI

Gov. Neil Abercrombie stressed the need for Hawaii to move toward liquefied natural gas to reduce energy costs during his State of the State speech on Tuesday.

United States

Huntsman signs with anti-LNG group after Dow exits NAM — Platts

US industry continued to choose up sides on the issue of liquefied natural gas exports Tuesday with chemical giant Huntsman announcing it was joining America's Energy Advantage, a new trade group dedicated to limiting gas exports from the US.

The move comes hot on the heels of Dow Chemical's withdrawal Friday from the National Association of Manufacturers.

Utilities and petrochemical makers have lined up against unrestricted LNG exports while terminal developers, shipping companies and oil and gas producers are pushing for fewer restrictions on exports of the fossil fuel.

Huntsman joins campaign against natural gas exports — Fuel Fix

The rift over exports of U.S. natural gas widened Tuesday, as The Woodlands-based chemical company Huntsman Corp. joined a coalition campaigning against more foreign sales of the fossil fuel.

The company announced it had joined America’s Energy Advantage, a group spearheaded by Dow, Celanese Corp., and other chemical companies and manufacturers worried that more natural gas exports would raise energy and feedstock costs, blunting their current competitive advantage.

“Completely unfettered U.S. exports may enrich a few LNG exporters in the short term,” said CEO Peter Huntsman. “But real, sustained and broad-based growth in the U.S. economy will come from a balanced approach that considers the needs of American manufacturers and consumers.”

Huntsman joins coalition to grow American manufacturing and jobs [Press release] — equities.com

THE WOODLANDS, Texas, Jan. 22, 2013 /PRNewswire/ -- Huntsman Corporation (NYSE: HUN) today announced that it has joined a coalition of U.S. manufacturers and others opposed to proposals from LNG exporters to permit the unlimited export of American natural gas. The coalition, America's Energy Advantage, seeks to promote rational energy policies designed to use America's newly developed shale-based low cost natural gas to provide the economic basis to spur significant new investment in American manufacturing and its related industries and services.

Since 2000, American manufacturers, farmers and consumers have been hit with four massive price shocks in the cost of natural gas, each resulting in an economic impact contributing to the loss of countless American jobs. With the advent of America's development of shale-based natural gas, this volatility has tempered dramatically, and the U.S. now enjoys a domestic natural gas market that exhibits the availability and stability that make investment in new manufacturing possible, leading to the creation ─ rather than loss ─ of skilled, well paid jobs. Huntsman is among those many companies planning to now expand its operations in the U.S. in light of its stable, lower cost natural gas market, having recently committed over $150 million in capital to new projects here and evaluating additional projects in the U.S. worth approximately $250 million more.

Maine

Top economies face fuel price spike as LNG supply drops — (Reuters) Bangor Daily News, Bangor, ME

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

NEW YORK — Global prices for liquefied natural gas are rising toward record highs this year as increasing demand runs up against stuttering supply, threatening to drive up fuel costs in some of the world’s biggest economies.

“The supply situation is worse than we thought it would be,” said independent LNG analyst Andy Flower, who tracks global export and import volumes. “LNG production declined last year and it doesn’t look as though it will increase by much this year.”

The shale gas boom means there will probably be new supplies from the United States on the world market, although a debate is raging between domestic producers and consumers over allowing more than one project to go ahead....

Webmaster's comment: The US is drowning in domestic natural gas. This article once again demonstrates how foolhardy Downeast LNG's proposal is to import expensive overseas LNG to Maine.

Gulf of Mexico

Magnolia LNG project to boost jobs, USA — LNG World News

The company expects to make a final investment decision to move forward with the project in late 2014, after it secures permits and completes financing. The mid-scale LNG facility would be located on 90 acres at the port’s Industrial Canal, off the Calcasieu Ship Channel. Magnolia LNG would produce 4 million metric tons of liquefied natural gas per year, and construction would begin in 2015 pending the company’s attainment of permits and final financing.

Magnolia’s project would be positioned for direct access to several existing gas pipelines. Using its patented Optimized Single Mixed Refrigerant process, or OSMR™, Magnolia LNG would produce liquefied natural gas more efficiently with fewer emissions than other LNG processes. OSMR adds conventional combined heat and power technology with industrial ammonia refrigeration to enhance the performance of the liquefaction process. Magnolia LNG would distribute to domestic markets as well as countries that have free trade agreements with the U.S. The company also will explore a potential expansion to 8 million metric tons per year in the future.

LNG Limited moves ahead with $2.2B export facility in Louisiana — ProactiveInvestors Australia

A wholly owned subsidiary Magnolia LNG LLC executed an exclusive site access agreement with the Port of Lake Charles Harbour & Terminal District (Port), in the US State of Louisiana, on which it is proposed to develop a 4mpta LNG production and export facility.

The proposed project site has direct access to a number of existing underutilised gas pipelines, which directly access the highly liquid US gas market.

Osaka Gas believes US will soon approve Freeport LNG exports to Japan — Hydrocarbon Processing

Osaka Gas and Chubu Electric Power Co. recently signed a 20-year contract with Freeport LNG Development to import up to 2.2 million tpy each of LNG from Freeport's facility on the US Gulf Coast. The facility is slated to start operations in 2017. The Freeport contract will be effective once the US grants a license.

Several LNG projects have sought the DOE's approval to ship their output overseas. So far only Cheniere Energy has received all the necessary permits to export from a terminal in Louisiana to countries that do not have free-trade agreements with the US, mostly in Asia, which are the biggest buyers of LNG.

The list of applicants include Freeport LNG in Freeport, Texas, partly owned by ConocoPhillips and Dow Chemical; Golden Pass LNG near Sabine Pass, Texas, a project backed by ExxonMobil and Qatar Gas; and Cameron LNG in Cameron Parish, La., owned by Sempra Energy. [Red & bold emphasis added.]

Caribbean

Trinidad ships LNG cargo to Puerto Rico — LNG World News

The cargo is being carried by the 71,500 cbm SCF Arctic, and it is due to arrive at the Peñuelas LNG terminal on January 22.

British Columbia

Kitsault Energy believes Kitsault, BC to be the quickest and lowest cost to start a LNG Plant and Energy Export Terminal based on preliminary findings [Press release] — Fort Mill Times, Fort Mill, SC

An export terminal at Kitsault for LNG operation will have the shortest natural gas pipeline for the projects currently proposed in that region, saving 100 to 300 kilometers of pipeline at a cost savings of 1 to 3 Billion CAD / USD. The infrastructure in place in and around Kitsault will also allow for an accelerated start to the creation of an LNG plant and energy export facility. Kitsault already has staff housing, utilities, land, as well as multiple airport facilities, including an unused long runway airport at Nass Camp, one hour from Kitsault and 75 minutes from Terrace. Kitsault can also be accessed by float plane, helicopter, and road. Land exists to establish a runway in Kitsault itself. Surrounding Kitsault are many thousands of acres of Crown land.

Pipeline spat set to boil over at energy board — Financial Post, Don Mills, ON

A long-simmering regulatory feud between Spectra Energy Corp. and TransCanada Corp. subsidiary Nova Gas Transmission Ltd. (NGTL) over infrastructure development in the remote northeast corner of British Columbia is set to boil over before the National Energy Board as the energy regulator weighs whether to approve a $330-million addition to TransCanada’s B.C. pipeline system.

Spectra has fought the application, arguing that TransCanada is sparing shippers from paying the true cost of additions to its sprawling, 24,000-kilometre Nova system.

TransCanada and Spectra have each proposed multibillion-dollar pipelines to connect B.C.’s monster shale gas fields to the coast.

“Essentially they’re moving their gas 100 kilometres for free,” said a person familiar with the hearing. “Spectra, or any other competitor up there, would never be able to charge the same toll that Nova can.”

Canada: BC LNG export finalises contract awards — LNG World News

Golar LNG Limited confirmed that the BC LNG Export Co-Operative has finalized contract awards for both feed gas supply and LNG purchase and off-take for train #1 of the Douglas Channel LNG Project (DC Project).

Golar’s participation in the project and its commitment to the LNG off-take remains subject to the company reaching agreement with the current proponents of the DC Project for financing of the facilities, and receipt of all permits required for the project to proceed on a firm basis.

BC LNG lines up buyers and suppliers — Calgary Herald, Calgary, AB

CALGARY — Suppliers and buyers have been lined up for one of the smallest of several proposed West Coast Canadian liquefied natural gas export terminals, its proponents have announced.

But the company which had vowed to be the first to ship LNG from Canada in 2014 now says it won’t be able to start shipping from a $400-million barge-based liquefaction plant near Kitimat until the second quarter of 2015.

BC LNG inks Asian sales contract (Jan 20) — The Globe and Mail, Toronto, ON

[T]he agreement by BC LNG Export Co-operative LLC to sell roughly 700,000 metric tonnes of natural gas a year also comes as a warning that Asian buyers may not make Canadian gas producers rich. In fact, the sales contract, which will see some gas go to one of the world’s largest LNG ship owners, values gas according to depressed U.S. and Canadian prices, rather than the far more lucrative international prices that are tied to oil. [Red & bold emphasis added.]

Webmaster's comment: North American LNG is being sold to Asia at bargain basement prices. The mad rush to export LNG is already beginning to bite the industry's rear end, just as did the mad rush to import LNG.

Hawaii

Macquarie Infrastructure Company’s Hawaii Gas business clears federal hurdle to transporting containerized LNG — Your Industry News, Aberdeen, Scotland, UK

In a decision published yesterday, the FERC declined to assert jurisdiction over Hawai’iGas’ proposal, thereby removing a potential federal hurdle to the project. Hawai’iGas sought FERC approval in an August 2012 filing.

The project remains subject to satisfaction of state and local regulatory requirements.

In anticipation of the required approvals, Hawai’iGas has secured the equipment necessary for the vaporization of LNG and two LNG shipping containers. The company plans to employ up to 20 containers in a continuous cycle of transport of liquefied natural gas from the U.S. mainland to Hawaii.

United States

Top economies face fuel price spike as LNG supply drops — (Reuters) Bangor Daily News, Bangor, ME

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

NEW YORK — Global prices for liquefied natural gas are rising toward record highs this year as increasing demand runs up against stuttering supply, threatening to drive up fuel costs in some of the world’s biggest economies.

“The supply situation is worse than we thought it would be,” said independent LNG analyst Andy Flower, who tracks global export and import volumes. “LNG production declined last year and it doesn’t look as though it will increase by much this year.”

The shale gas boom means there will probably be new supplies from the United States on the world market, although a debate is raging between domestic producers and consumers over allowing more than one project to go ahead....

Webmaster's comment: The US is drowning in domestic natural gas. This article once again demonstrates how foolhardy Downeast LNG's proposal is to import expensive overseas LNG to Maine.

Deloitte: US LNG market makes O&G cost reductions critical — LNG World News

Mr Cann said US exporters would have a significant competitive advantage as a result of their extremely low production costs and enormous gas volumes driven by shale gas.

U.S. Chamber of Commerce pushes for LNG exports — LNG World News

The U.S. Chamber of Commerce continued its push for liquefied natural gas (LNG) exports, following President and CEO Thomas J. Donohue’s remarks recently during his annual State of American Business Address. Donohue declared that USA has a historic opportunity to develop more American energy swiftly and responsibly.

“We have more natural gas then anybody in the world,” said the Chamber’s Executive Vice President for Government Affairs Bruce Josten at the press conference following Donohue’s State of American Business Address. “We clearly should be establishing mechanisms to export natural gas. Let me remind you that we are signatures in the WTO, which prohibits restrictions of exporting raw materials. We can’t go around the world lecturing and encouraging other countries to open up their markets and then turn around and close ours on raw material that we have boatloads of. We should get it all, we should bring it to our market, and really use it to the attract manufacturing…that went aboard a decade ago.” [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG wants the public to ignore US vast natural gas resources, and import expensive LNG from overseas.

United States: Liquefied natural gas exports, carbon fees, and more - ML Strategies’ Weekly Energy and Environmental Update — Mondaq

Work continues in D.C., even as administration and Hill officials prepare for inaugural festivities. The incoming chair of the Senate Energy and Natural Resources Committee, Senator Ron Wyden (D-OR), sent a letter on January 10 to Energy Secretary Steven Chu advising the agency to not grant export licenses for liquefied natural gas until the deficiencies of an agency-sponsored study are corrected. Senator Bernie Sanders (I-VT) is planning to introduce legislation in February to impose a carbon fee, and the National Climate Assessment Development Advisory Committee released a draft of its National Climate Assessment on January 11.

The explosive fight over LNG exports — Investing Daily

The stakes are high. Over the years, there has been a manufacturing exodus from the US among industries that depend on cheap natural gas as a major input. Producers of chemicals, plastics and fertilizers would benefit from a continuation of the multi-year slump in US natural gas prices.

New England

EIA: Supply issues lifting New England natural-gas prices (Jan 18) — NASDAQ

NEW YORK--Lower supplies from locations as diverse as Nova Scotia, Yemen and Europe and strong demand are lifting New England natural-gas prices and will likely mean a winter of volatile prices for gas and electric power, the Energy Information Administration said Friday.

Webmaster's comment: This is the argument Downeast LNG uses to justify its persistent presence as the last LNG import-only project left in the 48 states. In reality, pipeline expansion from prolific supplies in the Northeast is the long-term and most sensible answer to delivering more and more-affordable natural gas to New England, including Maine.

Gulf of Mexico

Sierra Club protests Cameron LNG FERC export application (Jan 17) — LNG Law Blog

Sierra Club and Gulf Restoration Network (GRN) filed a motion to intervene and protest at FERC in response to Cameron LNG, LLC's (Cameron) application to construct facilities to export LNG near its existing LNG import terminal in Cameron Parish, La., and related pipeline facilities. As in other LNG export cases, Sierra Club, now with GRN, alleges that Cameron's proposal will cause significant environmental harm and increase domestic gas prices.

Magnolia LNG and Louisiana Governor Jindal announce LNG terminal project in Lake Charles (Jan 18) — LNG Law Blog

The Louisiana Economic Development agency reports that Louisiana Governor Bobby Jindal and Magnolia LNG announced the company's plans to develop a $2.2 billion mid-scale LNG production and export facility at the Port of Lake Charles, La. The terminal will use Magnolia LNG's patented Optimized Single Mixed Refrigerant (OSMR) process to produce LNG more efficiently with fewer emissions than other LNG processes. Maurice Brand, Magnolia LNG Managing Director and Joint Chief Executive Director, said that "Southwest Louisiana's attractive infrastructure and strong workforce made Lake Charles an ideal location for our planned facility." The company expects to make a final investment decision on the project in late 2014.

Governor Bobby Jindal and Magnolia LNG annouce plans for $2.2 billion export facility at Port of Lake Charles (Jan 18) — Power Engineering, Tulsa, OK

The company expects to make a final investment decision to move forward with the project in late 2014, after it secures permits and completes financing. The mid-scale LNG facility would be located on 90 acres at the ports Industrial Canal, off the Calcasieu Ship Channel. Magnolia LNG would produce 4 million metric tons of liquefied natural gas per year, and construction would begin in 2015 pending the companys attainment of permits and final financing.

Magnolia LNG will seek federal Department of Energy free trade agreement approval in 2013. The company will submit a pre-filing application to the Federal Energy Regulatory Commission in March, before it completes the selection of project partners by June 2013. The company plans to begin hiring in early 2015, with commercial operations to begin in 2018.

$2.2 billion LNG liquefaction facility announced for Port of Lake Charles (Jan 18) — gCaptain

Magnolia’s project would be positioned for direct access to several existing gas pipelines. Using its patented Optimized Single Mixed Refrigerant process, or OSMR™, Magnolia LNG would produce liquefied natural gas more efficiently with fewer emissions than other LNG processes. OSMR adds conventional combined heat and power technology with industrial ammonia refrigeration to enhance the performance of the liquefaction process. Magnolia LNG would distribute to domestic markets as well as countries that have free trade agreements with the U.S. The company also will explore a potential expansion to 8 million metric tons per year in the future.

Natural gas facility proposed in Lake Charles (Jan 18) — The Advocate, Baton Rouge, LA

The proposed project is the second major industrial announcement this week for the Port of Lake Charles, where G2X Energy Inc., of Houston, said it plans to build a $1.3 billion plant to turn natural gas into gasoline.

Magnolia is a newly formed, wholly owned subsidiary of Liquefied Natural Gas Ltd., which is headquartered in Perth, Australia. Magnolia said its project would be positioned for direct access to several existing natural gas pipelines.

Alaska

Utilities say diesel best short-term solution for power generation (Jan 17) — Peninsula Clarion, Kenai, AK

Natural gas fields in the region are being depleted and gas will have to be imported from somewhere else beginning in 2014, Pete Stokes, a consultant with Petrotechnical Resources of Alaska, a firm advising regional utilities, told the task force.

At this point LNG appears to be more practical because the technology is well-proven, Robert Gibb, a consultant working for the utilities’ supply group, told the mayor and the task force. However, neither LNG or CNG could be brought in by 2014 to fill the gap, so diesel, used in the smallest possible increments, is the only workable short-term option, he said.

Webmaster's comment: This area near Anchorage has been selling its natural gas future to Japan since 1969. The resource has been used up, and the area must now pay to import in order to heat area homes. Should the US Department of Energy take a lesson from Alaska when determining LNG exports from elsewhere in the US?

Hawaii

Hawaii Gas wins FERC approval to bring LNG to state (Jan 18) — LNG World News

As Hawaii’s only franchised gas utility, the Company is already in compliance with most of the necessary state and federal statutes required for the safe transport and use of LNG. It must also seek approval from the Hawaii Public Utilities Commission.

HawaiiGAS clears hurdle to import containerized LNG (Jan 18) — Hawaii 24/7, Hilo, HI

At current prices, LNG is about 25 percent less expensive than the feedstock used to produce the synthetic natural gas (SNG) distributed to HawaiiGAS utility customers.

The market includes Hawaii’s approximately 1.4 million residents and approximately 7.3 million visitors. HawaiiGAS manufactures synthetic natural gas, or SNG, for its utility customers on Oahu, and distributes Liquefied Petroleum Gas, or LPG, to utility and tank and bottled gas customers throughout the state’s six primary islands.

HECO: Company will need waiver from EPA rules for LNG switch (Jan 17) — Honolulu Civil Beat, Honolulu, HI

Hawaii’s energy sector is increasingly debating whether or not the state should begin importing LNG for its energy needs since Gov. Neil Abercrombie announced last year that his administration was considering the fuel. Environmental groups and clean energy advocates oppose the move and argue that it will derail the state from moving forward on its renewable energy goals.

LNG imports will also require a long-term commitment on the part of the state to use natural gas, something that worries clean energy advocates.

Limited Hawaii LNG shipments not subject to federal rules (Jan 17) — Star Advertiser, Honolulu, HI

Hawaii Gas, formerly known as The Gas Company, submitted an application to FERC in August seeking approval to ship 20 containers of LNG to Honolulu Harbor. After unloading the LNG tanks Hawaii Gas would convert the liquid fuel back into gas form and inject it into an existing Hawaii Gas pipeline. Hawaii Gas filed its FERC application under Section 3 of the Natural Gas Act.

However, FERC in it ruling said it was dismissing the request in part because Hawaii Gas’ is not proposing to build an LNG terminal as envisioned under the Natural Gas Act. In addition, FERC’s jurisdiction under the act is limited to facilities used to import or export natural gas between the U.S. and a foreign country, according to the ruling.

“We have concluded that the proposed project would not constitute an LNG terminal as contemplated by Congress. Therefore, in this case we find no basis for asserting Section 3 authority over the described facilities or operations, “ according to the ruling. [Red & bold emphasis added.]

Company clears hurdle to bring LNG to Hawai’i (Jan 17) — Maui TV News, Maui, HI

“Now that the FERC is releasing jurisdiction for this phase of the operation to the state, HAWAI’IGAS will complete the process of obtaining the appropriate state and local permits so that the service can commence before the anticipated closure date of the Tesoro refinery,” said Jeff Kissel, CEO of HAWAI’IGAS.

HAWAI’IGAS expects to be prepared to receive a first container of LNG in about 60 days, or in sufficient time to provide emergency back-up service prior to the April 30 closure of the Tesoro refinery.

United States

Report: Dow Chemical leaves major trade group over LNG export policy (Jan 18) — The Hill, Washington, DC

Dow Chemical is leaving the National Association of Manufacturers (NAM) because of a disagreement on liquefied natural gas (LNG) export policy, according to a Dow Jones report.

Dow, along with a handful of other manufacturers, launched a coalition last week that urged the White House to limit LNG exports.

"Earlier this week, with no discussion or notification, NAM adopted a new position on this issue which places the interest of oil and gas producers above the interests of its manufacturer members. For these reasons, Dow has chosen to withdraw from membership," the company said. [Red & bold emphasis added.]

Future global LNG flows and the realities of East African Gas (Jan 17) — OilVoice

...In North America, LNG imports have almost been fully eliminated by shale.

US LNG exports remain the largest source of supply uncertainty, although we think the export volumes approved could be higher than current consensus estimates. The US has the largest number of LNG projects under proposal globally, although it is unclear how much capacity will be approved. Current estimates for US LNG exports approved by 2020 range from 40-50mtpa (consensus) to a high side of 100mtpa (5-12bcf/d). The US DOE report on LNG exports which is scheduled for release in December will provide the first insights into the volumes of LNG that will be approved.

Webmaster's comment: Downeast LNG wants the United States to ignore the sea of domestic natural gas at its disposal — and to import more-expensive, unneeded LNG from overseas.

API calls on DOE to speed up U.S. LNG export approvals (Jan 18) — LNG World News

API Chief Economist John Felmy told reporters Thursday that exporting some of the nation’s massive natural gas resources would spur additional energy production, job creation and economic growth and that the U.S. Department of Energy should promptly approve pending applications for authorization to export natural gas.

Allowing LNG exports would send positive signals, experts say (Jan 18) — Oil & Gas Journal

Authorizing US LNG exports would send positive signals not just to producers, but also to capital markets that would in turn finance new transportation systems, experts suggested at a conference on American energy exports.

In the US ... ASME (formerly the American Society of Mechanical Engineers), has said that transportation infrastructure improvement is badly needed—not just for pipelines, but also for roads, bridges, and railways, said Richard Myers, vice-president for policy development, planning, and supplier programs at the Nuclear Energy Institute. “Unless we dramatically improve it, we won’t have much exporting credibility,” he warned.

API calls on DOE to approve U.S. LNG exports 'without delay' (Jan 17) — Rigzone

Proponents of export restrictions feel restrictions are justified because gas is a strategic resource, Felmy commented.

"But if exports are approved, more natural gas could be produced, which would enhance energy security. And by serving friendly European and Asian markets, this would provide competition for gas exports from Russia, which has been charged with using oil and gas to bully other nations," said Felmy, citing the recent study by Deloitte.

"Natural gas that is exported benefits the GDP a single time, when it is sold," according to the AEA website. "The energy that powers manufacturing boosts GDP by a factor of eight because of the multiplier effects." AEA noted that manufacturing growth appeared to be slowing, rising 4.3 percent in 2011 after increasing 11.2 percent in 2010.

EIA in its January 2012 analysis reported that U.S. LNG exports would increase natural gas prices, but U.S. gas markets would balance in response to increase natural gas exports primarily through higher natural gas production. However, consumers would see an increase in their natural gas and electric bills even while consuming less gas on average.

As of Jan. 4, DOE had received 23 applications to export domestically produced LNG from the U.S. Lower 48 states. The total amount of gas proposed for export to countries with whom the United States holds Free Trade Agreements (FTA) totals 31.41 billion cubic feet per day (Bcf/d). The amount of LNG association with non-FTA applications is 24.80 Bcf/d. [Red, brown & bold emphasis added.]

Webmaster's comment: The pro-export argument that exports would increase US production and energy security is specious. Yes, it would increase production; however, classic market principles indicate that supply would balance with demand — the additional production would go aboad as exported LNG; there would be no net gain in energy security. In fact, one could argue that energy security would be reduced, since US natural gas supply would be going overseas, not staying in the ground, available later for domestic consumption.

Exporting natural gas would merely pad the pockets of the natural gas industry, at the expense of the energy-buying American industry and public.

Mayors, API separately urge DOE to authorize LNG exports (Jan 17) — Oil & Gas Journal

A group of US Midcontinent mayors and the American Petroleum Institute separately urged the US Department of Energy to authorize LNG exports.

Oil industry battles back on natural gas exports (Jan 17) — Fuel Fix

The American Petroleum Institute’s chief economist, John Felmy, held a conference call with reporters to tout the benefits of increased exports of liquefied natural gas, while an ExxonMobil executive used the company’s policy blog to take aim at the critics. Mayors from Tulsa, Oklahoma City and Houston also urged the Energy Department to swiftly approve natural gas export licenses.

[America's Energy Advantage] members say there’s a big difference between exporting natural gas — a raw material — and exporting a finished product built in the United States with that fossil fuel, where the U.S. can claim a bigger economic impact as it moves through the value chain.

More comments filed on DOE LNG export study (Jan 18) — LNG Law Blog

Comments in support of U.S. LNG exports were filed at the U.S. Department of Energy by NiSource Gas Transmission & Storage, the Virginia Oil and Gas Association, the Canton Regional Chamber of Commerce, and the Pennsylvania Chamber of Business and Industry. Indian oil company ONGC Videsh Limited also submitted supportive comments, suggesting that there should be no distinction for the purposes of LNG exports between countries that have a Free Trade Agreement (FTA) with the United States and non-FTA countries, and adding that "considering U.S. desire to wean…countries like India away from certain countries sanctioned by [the United States] for energy requirements," consideration should be given to permitting U.S. LNG exports to India on a preferential basis with no restrictions.

World

Insight-update 1-Top economies face LNG price spike (Jan 18) — (Reuters) Yahoo Finance

Global prices for liquefied natural gas are rising toward record highs this year as increasing demand runs up against stuttering supply, threatening to drive up fuel costs in some of the world's biggest economies.

After a record, unexpected drop in LNG output in 2012, production is expected to grow only marginally this year.

Demand, meanwhile, continues to march higher, driven by energy-hungry Asia's rapid economic growth, Japan's near total shutdown of its nuclear industry and a drought in Brazil that has forced the South American nation to buy emergency fuel supplies at high prices.

Webmaster's comment: LNG prices are climbing while US natural gas supplies grow, and yet Downeast LNG blindly continues to advocate that the US import more of the expensive fuel from overseas suppliers.

New Brunswick

Repsol to sell LNG assets for €2 billion in order to salvage debt rating (Jan 15) — OilPrice

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

In an attempt to reduce its debt and keep its investment grade debt rating Repsol SA (REPYY), Spain’s largest energy company, aims to sell €4.5 billion worth of assets before 2016. A current deal will see it sell its liquefied natural gas (LNG) assets for an estimated €2 billion, with the exchange expected to be completed by the beginning of February.

As Spain’s sovereign debt has improved, and helped by the €1.9 billion sale of other assets, Repsol has managed to improve its own debt situation. The deal to shift its LNG assets, including a 4.4 million metric ton capacity plant in Pampa Melchorita, Peru, the Atlantic LNG plant in Trinidad and Tobago, the Bahia de Bizkaia regasification plant in Bilbao, Spain, and the Canaport facility in Canada, will all work to further strengthen its debt position. [Red & bold emphasis added.]

Gulf of Mexico

Two more DOE LNG export applications filed — LNG Law Blog

Gasfin Development USA, LLC (Gasfin) has filed an application with the U.S. Department of Energy (DOE) to export over a 25-year term up to 74 Bcf/year of LNG (approximately 1.5 million metric tons) to nations having a Free Trade Agreement with the United States. Gasfin would export the LNG from the proposed Gasfin LNG Export Project, a mid-scale natural gas liquefaction and LNG export terminal to be located along the Calcasieu River in Cameron Parish, La.

Trunkline LNG Export, LLC (TLNG Export) filed an application with DOE to export, on its own behalf and also as agent for third parties, over a 25-year period up to 15 million metric tons of LNG per year from the Trunkline LNG Company, LLC terminal located at Lake Charles, La. TLNG Export states that it is not seeking to export any additional volumes of LNG from the Lake Charles facility than those proposed by Lake Charles Exports, LLC in DOE/FE Docket No. 11-59-LNG. TLNG Export is seeking authority to export LNG both to nations that have a Free Trade Agreement and those nations that do not have a Free Trade Agreement with the United States. [Red & bold emphasis added.]

Caribbean

Repsol to sell LNG assets for €2 billion in order to salvage debt rating (Jan 15) — OilPrice

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

In an attempt to reduce its debt and keep its investment grade debt rating Repsol SA (REPYY), Spain’s largest energy company, aims to sell €4.5 billion worth of assets before 2016. A current deal will see it sell its liquefied natural gas (LNG) assets for an estimated €2 billion, with the exchange expected to be completed by the beginning of February.

As Spain’s sovereign debt has improved, and helped by the €1.9 billion sale of other assets, Repsol has managed to improve its own debt situation. The deal to shift its LNG assets, including a 4.4 million metric ton capacity plant in Pampa Melchorita, Peru, the Atlantic LNG plant in Trinidad and Tobago, the Bahia de Bizkaia regasification plant in Bilbao, Spain, and the Canaport facility in Canada, will all work to further strengthen its debt position. [Red & bold emphasis added.]

United States

Overnight Energy: Senior DOE official to talk natural-gas exports (Jan 15) — The Hill, Washington, DC

STATE OF PLAY: A senior Energy Department (DOE) official will discuss the United States’s role in energy export markets during a Wednesday event at the U.S. Chamber of Commerce.

David Sandalow, secretary for policy and international affairs with DOE, will offer the keynote address. As the administration’s emissary, Sandalow might offer clues as to where President Obama is heading on liquefied natural-gas (LNG) exports.

The event also will feature two panels — one on the implications U.S. energy has on global trade, and the other on global supply chain.

U.S. Chamber of Commerce : Jan 16 - U.S. Chamber: Liquefied natural gas (LNG) exports make sense — 4-traders

WASHINGTON, D.C.-The U.S. Chamber of Commerce today continued its push for liquefied natural gas (LNG) exports following President and CEO Thomas J. Donohue's remarks last week during his annual State of American Business Address. Donohue declared that we have a historic opportunity to develop more American energy swiftly and responsibly.

Industry executives/experts voice support of LNG exports — LNG Law Blog

Several energy industry executives and experts wrote in National Journal's Energy Experts Blog in support of LNG exports in response to the question of what American policy should be on energy exports. For example, Jack Gerard, President and CEO of the American Petroleum Institute, writes that "blocking the free trade of natural gas by the enactment of protectionist policies would undermine U.S. efforts to promote free trade globally and hamper the ability of the natural gas industry to expand production, create new jobs, and increase economic growth."

New Brunswick

Repsol expected to sell Canadian and global LNG assets by February — Financial Post, Don Mills, ON

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

Repsol SA, Spain’s largest energy company, expects to sell liquefied natural gas assets for about 2-billion euros (US$2.7-billion) by early February, according to a person familiar with the matter.

GDF Suez SA, the biggest buyer of gas in Europe, was “looking” at Repsol’s LNG assets, Suez’s Chief Executive Officer Gerard Mestrallet said in an interview in October. Asked last week about Repsol’s LNG assets, Mestrallet said the question “very relevant,” declining to comment further.

Webmaster's comment: GDF Suez owns two LNG import terminals in New England — the Distrigas LNG terminal in Everett, Massachusetts, and the Neptune LNG deepwater port 10-miles offshore from Boston terminal in Massachusetts Bay.

Repsol said to expect $2.7 billion LNG sale by February — Bloomberg

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

The oil driller is trying to keep its investment-grade debt rating by selling 4.5 billion euros of assets by 2016 and paying down borrowings. Moody’s Investors Service cut its rating to one level above junk and gave the company a negative outlook after Argentina seized its YPF business in April without compensation. YPF made up almost half of Madrid-based Repsol’s oil reserves.

The credit rating was also reduced to one level above junk by Fitch Ratings and Standard & Poor’s, which set the company’s debt outlook at negative and stable, respectively. Repsol reported net debt dropped 1.9 percent in the third quarter to 12.9 billion euros compared with the second quarter.

Among assets offered for sale were a stake in a liquefaction plant in Pampa Melchorita, Peru, with an annual capacity of 4.4 million metric tons, and the Atlantic LNG plant in Trinidad and Tobago, in which GDF already owned a stake.

They also include the Bahia de Bizkaia regasification plant in Bilbao, Spain, and the Canaport facility in Canada, which pipes natural gas to markets in northeast North America. [Red & bold emphasis added.]

Gulf of Mexico

USA: Pangea applies to export LNG to non-FTA countries — LNG World News

This is another major step in the process of developing a new LNG export terminal on a 550-acre site fronting the north shore of Corpus Christi Bay. On November 29, Pangea filed an application with DOE seeking export authority to countries with which the U.S. has Free Trade Agreements. Pangea is seeking authority to export up to 8 million metric tons per year of LNG, equal to approximately 400 billion cubic feet per year of natural gas.

Caribbean

Repsol expected to sell Canadian and global LNG assets by February — Financial Post, Don Mills, ON

[This article also appears under the New Brunswick heading, below.]

Repsol SA, Spain’s largest energy company, expects to sell liquefied natural gas assets for about 2-billion euros (US$2.7-billion) by early February, according to a person familiar with the matter.

GDF Suez SA, the biggest buyer of gas in Europe, was “looking” at Repsol’s LNG assets, Suez’s Chief Executive Officer Gerard Mestrallet said in an interview in October. Asked last week about Repsol’s LNG assets, Mestrallet said the question “very relevant,” declining to comment further.

Webmaster's comment: GDF Suez owns two LNG import terminals in New England — the Distrigas LNG terminal in Everett, Massachusetts, and the Neptune LNG deepwater port 10-miles offshore from Boston terminal in Massachusetts Bay.

Repsol said to expect $2.7 billion LNG sale by February — Bloomberg

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

The oil driller is trying to keep its investment-grade debt rating by selling 4.5 billion euros of assets by 2016 and paying down borrowings. Moody’s Investors Service cut its rating to one level above junk and gave the company a negative outlook after Argentina seized its YPF business in April without compensation. YPF made up almost half of Madrid-based Repsol’s oil reserves.

The credit rating was also reduced to one level above junk by Fitch Ratings and Standard & Poor’s, which set the company’s debt outlook at negative and stable, respectively. Repsol reported net debt dropped 1.9 percent in the third quarter to 12.9 billion euros compared with the second quarter.

Among assets offered for sale were a stake in a liquefaction plant in Pampa Melchorita, Peru, with an annual capacity of 4.4 million metric tons, and the Atlantic LNG plant in Trinidad and Tobago, in which GDF already owned a stake.

They also include the Bahia de Bizkaia regasification plant in Bilbao, Spain, and the Canaport facility in Canada, which pipes natural gas to markets in northeast North America. [Red & bold emphasis added.]

British Columbia

TransCanada registers more success — Resource Investing News, Vancouver, BC

“I think what we’ve determined in North America is that we have more resources than we’re going to need for our own consumption and the focus therefore has turned to export markets,” said TransCanada CEO Russ Girling in an interview with CTV. “Western Canada has one of the largest and best deposits of shale gas in North America and it has a great opportunity to capture a significant share of the growth in the global LNG market by putting these kinds of projects together.” [Red & bold emphasis added.]

The proposed pipeline is set to transport natural gas primarily from the North Montney gas-producing region near Fort St. John, BC to the recently announced Pacific Northwest LNG export facility in Port Edward near Prince Rupert, BC, according to a TransCanada press release.

The project is the second major deal that TransCanada has been awarded within the space of a year, and will go a long way towards helping the company maintain its momentum in the markets. The first deal came last summer, when the pipeline giant saw its stock surge after being chosen by a Royal Dutch Shell-led consortium to build the $4-billion Coastal GasLink pipeline between Northeastern BC shale fields and an LNG facility proposed for Kitimat, BC.

Webmaster's comment: Natural gas will eventually run out. Unless renewable energy is developed to replace conventional forms of energy, selling off our natural gas assets is selling off our energy future.

Editorial: It's great to hear praise for industry — The Province, Vancouver, BC

In his recent book, Civilization, British historian and Harvard Prof. Niall Ferguson argues that six "killer apps" — competition leading to capitalism, science, the rule of law, medicine, the consumer society, and the work ethic — transformed Europe and, over time, the west, from a "miserable backwater" of underdevelopment into the world's wealthiest civilization. Ferguson fears that too many people in the west, who live lives of great wealth as a result of industry, have forgotten how we acquired our lives of unprecedented comfort and opportunity.

Webmaster's comment: Environmental law is apparently to be excluded in The Province's view of the world.

Oregon

Interior urges wildlife protection in Oregon LNG project (Jan 14) — Law360 [Paid subscription]

Environmental regulators urged the Federal Energy Regulatory Commission on Monday to require that Oregon LNG include measures to protect threatened wildlife and plants in its proposal to build a liquefied natural gas terminal in northwest Oregon.

The Fish and Wildlife Service told FERC in a letter that the construction and operation of the Oregon LNG Export Project could disturb threatened fish and bird habitats, obstruct sensitive waterways and tear up federally listed plants.

United States

The argument for and against LNG exports — The Motley Fool

In short, this situation is thus: The United States has a lot of natural gas and needs to decide what to do with it. One side (the petroleum industry) wants to turn it into liquefied natural gas (LNG) and export it. The other side (big manufacturing companies) wants to keep it at home and use it in manufacturing.

The answer is simply thus: We have a lot of natural gas, and there are a lot of needs for it both at home and abroad. It has the potential to bring in a great deal of money to the economy and create jobs. But which way it should be done all comes down to where you stand on free trade, and which industry you are more loyal to. After all, beauty is in the eye of the beholder.

Gas exports from U.S. surge as sanctions undermine Iran — Fuel Fix

U.S. sales (EPD) jumped 27 percent last year as those from Iran fell 18 percent, according to the Energy Department and Joachim Grieg & Co., an Oslo-based shipbroker. Tanker rates will rise 6.7 percent to a record $32,000 a day in 2013, RS Platou Markets AS estimates. The U.S. surge is boosting demand for export terminals and shares of Enterprise Products Partners LP, which operates one in Houston, will gain 10 percent in a year, analyst forecasts compiled by Bloomberg show.

Iranian sales are being curbed by European Union sanctions that prohibit any vessel insured in the 27-nation bloc from carrying the country’s energy products. That applies to about 90 percent of the world’s merchant fleet. LPG, which is used for cooking and in petrochemicals, is a byproduct of natural-gas output and the U.S. is producing more than ever as it taps deposits from previously inaccessible shale rocks.

Extracting natural gas yields 10 percent propane and butane, accounting for about 60 percent of global LPG supply, according to the Paris-based World LP Gas Association. The rest comes from refining crude oil. Residential demand accounts for 49 percent of consumption, according to Pareto.

Critics of LNG exports undermining domestic, global strategic benefits — Fuel Fix

The ongoing shale gas boom here in the United States has proven itself to be no flash in the pan; estimates of domestic shale reserves range from 300 trillion cubic feet to as many as 900 tcf. Investment in natural gas extraction projects has poured into regions across the country, from North Dakota to Pennsylvania. However, the domestic market for natural gas will soon be saturated with such high levels of production and low domestic prices. That, in turn, could lead to a decline in the investment in manufacturing and otherwise that has come with the shale gas boom. [Red & bold emphasis added.]

API: Restricting LNG exports could impact U.S. economy — LNG World News

“Short-sighted efforts by a few industrial users to restrict exports in an apparent attempt to control prices would deprive American families of the wider benefits of lower costs and increased job creation,” said Gerard. “America’s newfound abundance of natural gas resources is a boon to all domestic manufacturing through lower energy costs, lower costs on raw materials and reduced heating bills. Restricting exports of energy as a ‘strategic resource’ makes no more sense than unnecessarily restricting the export of chemicals, agriculture products or cars, and such a backward move could violate international trade rules.”

Webmaster's comment: If there were no energy, there would be no chemicals, agricultural products, or cars to export.

Banning LNG exports will hurt jobs and economy — Shopfloor, Washington, DC

Proposals that seek to limit LNG or coal or any other product would have far-reaching negative effects on the United States and should be rejected. Such restrictions limit economic opportunities and stifle job growth rather than provide a source of increased economic growth.

New Brunswick

Canada: Canaport gets LNG cargo — LNG World News

Repsol YPF SA’s Canaport terminal in Canada received one liquefied natural gas cargo from Qatar onboard the 263,000 cubic metre Al Ghuwairiya on January 13, according to port data.

Gulf of Mexico

Pangea LNG files application to export LNG to Non-FTA Nations — LNG Law Blog

Pangea LNG (North America) Holdings, LLC (Pangea), filed an application with the U.S. Department of Energy (DOE) seeking a 25-year authorization to export domestically produced LNG up to the equivalent of 398.5 Bcf/year to nations without a Free Trade Agreement with the United States. Pangea proposes to export the LNG from its proposed South Texas LNG Project to be located at the Port of Corpus Christi in Ingleside, Texas.

Alaska

Southcentral utilities lean toward the use of diesel fuel (Jan 13) — Anchorage Daily News, Anchorage, AK

Southcentral Alaska utilities are considering the use of diesel for power generation in the event of a predicted natural gas supply shortage around 2014-15, Robert Gibb, associate director of Navigant Consulting, told the Mayor's Energy Task Force in Anchorage last week.

The utilities have been investigating the potential import of liquefied natural gas or compressed natural gas to cover a shortfall. But with significant uncertainties surrounding these options, the utilities now tend to favor diesel as a safe short-term solution, despite the relatively high cost.

Although on an "energy equivalent basis" diesel may cost five times as much as gas, diesel power generation would, at least initially, represent a relatively small proportion of total generation.

The possibility of trucking LNG from the North Slope is on the table, but that option would require hundreds of LNG trucks to travel down the Haul Road from the Slope every day, with gas supplies coming to a halt if for some reason the road had to be closed, and with the possibility of weather causing delays in truck movements.

Webmaster's comment: Southcentral Alaska has been exporting its natural gas resources to Asia since 1969, and the supply has been depleted, so it will no longer be available to heat local homes. The bill for that shortsightedness is about to come due.

British Columbia

TransCanada tasked with $5 billion pipe — UPI

The pipeline would transport about 2 billion cubic feet of natural gas per day from fields near Fort St. John, British Columbia, to an expected liquefied natural gas export facility near Prince Rupert, along the provincial coast. The company expects the pipeline to enter into service by the end of 2018, subject to regulatory and corporate approval.

Canadian pipeline projects — Energy & Capital

Last week TransCanada announced it had been chosen by the Canadian arm of Malaysian company Petroliam Nasional Bhd (Petronas) for the Prince Rupert Gas Transmission project, an LNG pipeline worth roughly $6.58 billion.

The pipeline would move LNG from British Columbia's Montney shale deposit to Progress Energy Canada's planned export facility in Port Edward.

Northwestern US & Canada

Selection of TransCanada to build pipeline to third LNG export terminal raises possible conflict issues — LNG Law Blog

An article in the Alaska Dispatch discusses Progress Energy's recent selection of TransCanada to build a pipeline to an LNG export terminal in Prince Rupert Sound, B.C. The article focuses on whether that decision, coupled with TransCanada's selection to build a pipeline to an LNG export terminal at Kitimat, B.C., presents a conflict of interest with TransCanada's involvement with the Alaska Pipeline Project.

Will TransCanada's new projects hurt chances for Alaska LNG? — Alaska Dispatch, Anchorage, AK

Alaska's pipedream to export its vast riches of natural gas were pounded again last week, as the same pipeline builder licensed to build and operate a mega-gasline in Alaska announced it had been selected to build a potentially competing project in western Canada.

It's the second such Canadian line that TransCanada has won the right to design and build in recent months, raising questions about where the pipeline builder -- eligible for up to $500 million in a state subsidies to build the Alaska line -- will focus its attention in the coming years.

United States

Throwing cold water on natural gas exportation — The Motley Fool

The catch-22: The high cost of processing means that overseas prices need to stay high and local prices need to remain low, but if new sources of natural gas are delivered to these overseas markets via tanker, the price will drop in that market and the spot price margin will narrow. So by bringing natural gas closer to a global market, LNG exporters could wreak havoc on their own profit margins. [Red & bold emphasis added.]

Mexico

Peru LNG cargo heads for Mexico — LNG World News

Peru LNG shipped a cargo of liquefied natural gas to Mexico on January 9, according to PeruPetro S.A.

The cargo is being hauled by the 173.400 cubic-meter Sevilla Knutsen, operated by Knutsen OAS Shipping, and it is due to arrive at the Manzanillo terminal tomorrow.

Passamaquoddy Bay

LNG company president unbowed by Canadian opposition to proposed plant in Robbinston (Jan 11) — Bangor Daily News, Bangor, ME

ROBBINSTON, Maine — Despite opposition from several fronts, Downeast LNG, Inc. will push ahead to seek approval for a liquified natural gas terminal in Robbinston, company president Dean Girdis said Thursday.

This week, St. Andrews Mayor Stan Choptiany sent a letter to the United States Federal Energy Regulatory Commission reaffirming the town council’s disapproval of an LNG terminal directly across the St. Croix River from the town.

The town of St. Andrews and the government of Canada will continue to oppose the project, according to Mayor Stan Choptiany and New Brunswick Southwest MP John Williamson.

“The idea that a U.S. company is going to dictate what comes through Canadian waters is not only laughable but is offensive,” Williamson stated. “A private firm is not going to dictate what comes through Canadian waters.” [Red, brown & bold emphasis added.]

Webmaster's comment: This news article simply reconfirms what we already know: Canada prohibits LNG transits through Head Harbour Passage and Passamaquoddy Bay. Downeast LNG's Dean Girdis can make all the claims he wants about passage through that waterway, but it does not change the reality that his proposed project can never receive LNG.

Caribbean

US$4-million LNG flirt ends - Government looks to another form of gas as it pushes for cheaper electricity — The Gleaner, Kingston, Jamaica, West Indies

After a decade of expensive flirting and the expenditure of some US$4 million, the Government has finally ended its attempt at introducing liquefied natural gas (LNG) as the solution to the country's high electricity prices.

Energy Minister Phillip Paulwell last week blamed the unavailability of the supply of LNG at reasonable prices as the reason for the reversal of a decision which had found favour with successive administrations over the past decade. [Red & bold emphasis added.]

British Columbia

LNG plans for Kitimat turns doom town to boom town, says mayor — The Vancouver Sun, Vancouver, BC

Rich Coleman, B.C. minister for energy, mines and natural gas, said the province is in negotiations with at least three LNG development proposals in the Kitimat area.

Two others are proposed for the Prince Rupert area, about 120 kilometres northwest of Kitimat, and billionaire Krishnan Suthanthiran has proposed that Kitsault, a northwest mining ghost town he bought for $7 million in 2005, be used for an LNG export facility.

Partnership paves way for LNG facility — Journal of Commerce

The proposed Kitimat Liquid Natural Gas (LNG) export facility has taken a major step forward as Chevron Canada Limited signs a series of merger and acquisition transactions to construct the project and develop shale gas in northeastern, B.C.

Under the new joint venture, Chevron will operate the plant and the pipeline, while Apache will operate the upstream assets.

Canada : CEO - LNG will be a major driver of TRANSCANADA in the years to come [TendersInfo (India)] (Jan 11) — Equities.com

... "Western Canada has one of the largest and best deposits of shale gas in North America and it has a great opportunity to capture a significant share of the growth in the global LNG market by putting these kinds of projects together."

Canada : $5 BILLION natural gas project development approval received by TransCanada [TendersInfo (India)] (Jan 11) — Equities.com

Natural gas will be transported by pipeline from near Fort St. John in the east of the province to a liquefied natural gas export facility planned for the British Columbian coast.

Hawaii

Fuel switch could bring big savings for HECO [The Honolulu Star-Advertiser] (Jan 12) — Equities.com

"Even assuming Hawaii can consistently access affordable LNG, it is unclear how infrastructure facilitating the use of fossil fuel energy will assist Hawaii in developing renewable energy resources," the Sierra Club said in a filing responding to Hawaii Gas' application.

United States

U.S. Voters: American natural gas should be used for American economic growth — Melodika.net

"As our country continues to face sustained economic and employment challenges, manufacturing has been one of the few sectors to actually add jobs," said Jennifer Diggins, Director, Public Affairs, Nucor Corporation. "There is no doubt this is in large part due to the affordability of natural gas. Natural gas is fueling our recovery by providing a competitive advantage to energy-intensive, trade-exposed industries, like steel, that compete against nations that unfairly subsidize their exports. Today's survey confirms that the American public values family-supporting manufacturing jobs and recognizes the important role natural gas plays in their homes and communities."

API: Efforts to restrict energy exports misguided — Melodika.net

API President and CEO Jack Gerard called new coalition efforts to restrict exports of liquefied natural gas (LNG) misguided and warned that restricting trade would have negative impacts on the U.S. economy and American families.

Fight over LNG exports pits energy industry against manufacturers, chemical industry (Jan 12) — The Daily Caller,

A coalition of businesses – including Dow Chemical, the country’s largest steel producer Nucor and the world’s leading aluminum producer Alcoa – has joined to promote the benefits of limiting liquified natural gas exports.

“Our vast resources have allowed us to become the world’s biggest producer of natural gas,” Gerard said. “Misguided economic theories and ill-considered policies could have disastrous consequences, disrupting the benefits to the wider economy, the trend of bringing manufacturers back home, and imperiling the billions of revenue energy investments bring to our government.” [Red & bold emphasis added.]

LNG exports likely to become much less profitable (Jan 11) — TribLive, Pittsburgh, PA

“The idea that the world will be flooded with spot LNG is not going to happen,” said Frank Harris, global head of LNG at Wood Mackenzie Ltd. in Edinburgh. “Returns are already getting squeezed. By the end of the decade, the LNG market looks better supplied, and spot cargoes from the U.S. won‘t necessarily look so attractive.”

“Applications for export licenses are around 29 billion cubic feet a day,” Kenneth B. Medlock III, the study‘s author, said from Houston. That‘s equivalent to about 48 percent of domestic consumption in October, according to the Energy Department. “I doubt we‘ll see more than 6 billion,” he said.

US LNG exports could help boost allies abroad-former DOE heads (Jan 11) — Reuters

WASHINGTON, Jan 11 (Reuters) - The United States can help its allies by selling part of its abundant gas reserves abroad, and do so without sacrificing the resurgent manufacturing sector, two former U.S. energy secretaries said on Friday.

Technological innovations have dramatically increased U.S. natural gas output, putting the country on the path to potentially be a net exporter of gas after years of fears that the nation would have to rely on foreign sources to meet its energy needs.

Natural gas export fight heats up (Jan 11) — Energy Tribune

A Democratic senator lambasted the Energy Department Thursday for a recent analysis that concluded exports of liquefied natural gas would benefit the U.S. His comments came on the same day a group of industrial users of gas banded together to fight against unfettered exports.

America’s Energy Advantage defines its mission against LNG exports (Jan 11) — Houston Business Journal, Houston, TX

There is a new, unified voice that is speaking out against liquefied natural gas exports: America’s Energy Advantage.

The group of five companies and one organization went public Jan. 10 with its mission to restrain unlimited U.S. natural gas exports and encourage the government to carefully consider all impacts of exporting natural gas.

America’s Energy Advantage has decided that in order to have its position against mass amounts of exports heard loud and clear, it must educate the government and the public. Its member organizations, including the American Public Gas Association, The Dow Chemical Co. and Celanese Corp., have united to do this.

British Columbia

Canadian Government welcomes Progress-TransCanada Pipeline deal (Jan 10) — LNG World News

Joe Oliver, Canada’s Minister of Natural Resources, released the following statement regarding TransCanada Corporation’s announcement it has been selected by Progress Energy Canada Ltd. to design, build, own and operate the proposed $5 billion Prince Rupert Gas Transmission Project.

TransCanada to build pipelines for Petronas — Business Times, Kuala Lumpur, Malaysia

TransCanada, which is also behind the planned Keystone XL oil pipeline to the United States from Alberta, said on Wednesday that it plans to build a C$5 billion line, the Prince Rupert Gas Transmission Project, to carry 2 billion cubic feet of gas per day from the massive Montney shale gas field in northeastern British Columbia.

The destination is an LNG export facility being planned by Petronas's Progress Energy Canada unit at Port Edward, near Prince Rupert, British Columbia.

TransCanada to build 750 km pipeline for Progress from Fort St. John to Prince Rupert (Jan 10) — Beacon News, Calgary, AB

When completed, the Prince Rupert Gas Transmission project will deliver 2 billion cubic feet of gas everyday.

The capacity will be expandable and the pipeline will be equipped and able to deliver 3.6 billion cubic feet of gas a day to the Pacific Northwest LNG facility.

Ewart: B.C. gas boom competes with oilsands — Calgary Herald, Calgary, AB

The announcement Wednesday by TransCanada Corp. that it has signed to build a second gas pipeline in northern B.C. to proposed liquefied natural gas plants and the Christmas Eve news that U.S. giant Chevron had taken on the lead role in the Kitimat LNG project has underscored B.C.'s rise as an energy province.

Oregon

Incoming Senate energy chair stands firm in opposition to expanded LNG exports (Jan 10) — Platts

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

The developers and backers of the Jordan Cove Energy Project, which have asked the US Department of Energy for a permit to export LNG to countries that do not have free-trade agreements with the US, say the terminal would create more than 120 much-needed, high-paying jobs and turn Oregon into a lucrative gateway for LNG exports to Asia.

But Wyden has held firm to his opposition of expanded LNG exports, saying the Jordan Cove project and others like it could cause natural gas to trade as a global commodity, similar to oil. That would mean US consumers could expect to encounter volatile swings and price shocks for future natural gas supplies, he has said.

“Export applications, which are typically for 20 years or more, and the associated LNG export terminals, will reshape the North American natural gas market for years to come,” Wyden wrote. “The shortcomings of the NERA study are numerous and render this study insufficient for the department to use in any export determination.”

Hawaii

HECO: We need liquefied natural gas (Jan 10) — Honolulu Civil Beat, Honolulu, HI

"All of the studies to date show that LNG, assuming that we can get it off the American continent and is priced at American pricing, will be cheaper," he said.

Imports from locations such as Australia, Alaska and Canada are expected to be priced on the international market with costs much higher, according to the study.

But while HECO is working to attract more large-scale renewable energy projects, Alm said that the state should be looking toward LNG, especially in light of the news this week that Tesoro is closing its oil refinery on Oahu. Experts say the loss will make Hawaii more vulnerable to major disruptions in the international oil market.

United States

U.S. voters: American natural gas should be used for American economic growth [Press release] — PR Newswire

WASHINGTON, Jan. 10, 2013 -- /PRNewswire/ -- America's Energy Advantage (AEA) today released the results of a public opinion survey that shows U.S. taxpayers believe American natural gas should be used in this country for domestic economic gain. America's Energy Advantage is a recently formed coalition that advocates for the use of abundant, affordable supplies of natural gas to fuel U.S. economic growth through the emerging renaissance in American manufacturing and keeping prices low for consumers. The America's Energy Advantage survey also showed that consumers have serious reservations about indiscriminate natural gas exports, and believe the government should proceed with caution and deliberation when considering exports of liquefied natural gas (LNG). MWR Strategies conducted the survey of more than 1,000 registered voters with a margin of error of +/- 3.1%. The complete results of the survey are available on www.americasenergyadvantage.org/survey.

U.S. LNG profit seen elusive as price gap closes: Energy markets — Bloomberg

Profits from selling U.S. liquefied natural gas abroad may be elusive, belying the $60 billion race for export licenses as the price gap between Asia and North America shrinks from record levels.

The difference between U.S. and Asian gas is poised to drop by more than 60 percent by 2020, leaving exporters facing a loss of as much as $6 million per tanker, according to calculations by Bloomberg based on data from Rice University in Houston. The U.S. share of the global LNG market will be in “single digits,” according to Royal Dutch Shell Plc (RDSA), which has stakes in more than 25 percent of the world’s liquefaction capacity. [Red & bold emphasis added.]

Markey stands with American people and manufacturers on natural gas exporting (Jan 10) — Equities.com

WASHINGTON, Jan. 10 -- The Ranking Democratic Member of the House Natural Resources Committee issued the following news release:

A group of American manufacturers today released a new poll that finds voters are opposed the export of liquefied natural gas (LNG) by an almost 5 to 1 margin. Rep. Ed Markey (D-Mass.), who has called for a "time out" on exports of American natural gas while the impacts of such policy can be better known, today said that this poll showed the American people and American industries understand the benefits of low-cost, domestic natural gas.

"We have a critical decision to make about how to use our newly found natural gas bounty," said Rep. Markey, who is the Ranking Member of the Natural Resources Committee. "Are we going to follow the will of the American people and use our natural gas here at home to lower consumer electricity bills, bolster American manufacturing, reduce global warming pollution, and get off foreign oil? Or are we going to follow the will of the oil and gas industry and export America's competitive advantage to China and increase energy prices here at home? I stand with the American people and oppose large-scale exports of domestic natural gas."

U.S. Senator Wyden raises concerns about DOE LNG export study — LNG World News

The study, authored by NERA Economic Consulting for DOE, is seriously flawed, Wyden wrote. He is requesting the Department correct the flaws before using it as part of any LNG export decisions.

DOE is currently accepting public comments on the study, which is expected to be used in decisions to grant LNG export permits. As of January 4, there were 20 LNG export applications pending at DOE to countries without free trade agreements, totaling 22.6 billion cubic feet per day. DOE has already approved one application to export 2.2 Bcf/d to non-FTA nations.

Wyden highlights flaws in DOE export study — Politicalnews.me

In light of the shortcomings in the NERA study, Wyden reiterated his request that DOE establish clear criteria for approving natural gas export applications. He has called for the Administration to ensure that the U.S. economy, including a resurgence of investment in manufacturing and other industries, is not harmed by large-scale natural gas exports. Wyden noted in his letter that even the NERA study concluded that large portions of the economy would be harmed by natural gas exports.

Wyden sees flaws in DOE-commissioned LNG export study (Jan 10) — Oil & Gas Journal

The senator asked [US Energy Secretary Steven Chu] to have DOE correct the study’s flaws before using it as a basis for any LNG export decisions.

Gas users call for limits on LNG exports — Financial Times, London, England, UK

The increasingly vocal campaign for curbs on LNG exports has made Dow and other chemical companies unlikely allies of environmental campaigners worried about pollution from shale gas production. They are pitted against companies such as BG Group, ConocoPhillips, ExxonMobil and Dominion, which are involved in projects to build plants to liquefy gas for export.

America’s Energy Advantage defines its mission against LNG exports — Houston Business Journal, Houston, TX

America’s Energy Advantage has decided that in order to have its position against mass amounts of exports heard loud and clear, it must educate the government and the public. Its member organizations, including the American Public Gas Association, The Dow Chemical Co. (NYSE: DOW) and Celanese Corp. (NYSE: CE), have united to do this.

Update 2-US industry group campaigns to limit natgas exports (Jan 10) — Reuters

WASHINGTON, Jan 10 (Reuters) - U.S. industrial companies whose costs have dropped due to the country's natural gas bonanza launched a campaign on Thursday to promote domestic gas consumption, attacking a recent government-sponsored analysis of the issue that favored more exports.

"Unfettered exports would be disastrous for the economy," said Peter Molinaro, vice president of North America government affairs for Dow Chemical, at a press conference unveiling the group.

US LNG exports could help boost allies abroad-former DOE heads — Reuters

WASHINGTON, Jan 11 (Reuters) - The United States can help its allies by selling part of its abundant gas reserves abroad, and do so without sacrificing the resurgent manufacturing sector, two former U.S. energy secretaries said on Friday.

"It's not a trade off," said Bill Richardson, who headed the U.S. Energy Department during the Clinton administration. "What we are offering the international community and our friends by exporting natural gas is a form of energy security."

Richardson and Spencer Abraham, who served as energy secretary during the second Bush administration, have joined forces to throw their support behind LNG exports. In December the pair penned an op-ed in the Financial Times in backing exports.

Manufacturers go to war with oil industry over gas exports (Jan 10) — The Hill, Washington, DC

Dow Chemical, Eastman Chemical, Alcoa and others have launched a coalition called “America’s Energy Advantage” to warn against “unfettered” exports, alleging it would harm U.S. manufacturing growth and cost jobs.

A pair of senior Democrats, Sen. Ron Wyden (D-Ore.) and Rep. Edward Markey (D-Mass.), are also warning that the exports could harm consumers and domestic manufacturing.

Key Democrat urges more transparent criteria on LNG export decisions (Jan 10) — Platts

A key Democratic senator on Thursday reiterated his concerns that a study commissioned by the US Department of Energy on LNG exports is "seriously flawed" and should not be used by the agency to grant permits to companies wishing to ship domestically produced natural gas to countries that do not have free trade agreements with the US.

Senator Ron Wyden, an Oregon Democrat who is the incoming chairman of the Senate Energy and Natural Resources Committee, said in a letter to Energy Secretary Steven Chu the study uses outdated data that contradicts more recent projections by the Energy Information Administration on future US energy consumption.

"The shortcomings of the NERA study are numerous and render this study insufficient for the department to use in any export determination," Wyden wrote. "The NERA study would need to be updated with new EIA projections, more realistic market assumptions, regional impacts of the proposed actual export terminals, and evaluations of the actual impacts on consumers and businesses of exporting LNG."

The study also does not take into account the potential impact of Canadian LNG exports on US prices, Wyden wrote.

Incoming Senate energy chair stands firm in opposition to expanded LNG exports (Jan 10) — Platts

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

The developers and backers of the Jordan Cove Energy Project, which have asked the US Department of Energy for a permit to export LNG to countries that do not have free-trade agreements with the US, say the terminal would create more than 120 much-needed, high-paying jobs and turn Oregon into a lucrative gateway for LNG exports to Asia.

But Wyden has held firm to his opposition of expanded LNG exports, saying the Jordan Cove project and others like it could cause natural gas to trade as a global commodity, similar to oil. That would mean US consumers could expect to encounter volatile swings and price shocks for future natural gas supplies, he has said.

“Export applications, which are typically for 20 years or more, and the associated LNG export terminals, will reshape the North American natural gas market for years to come,” Wyden wrote. “The shortcomings of the NERA study are numerous and render this study insufficient for the department to use in any export determination.”

Blocking LNG exports helps a few, hurts many — Forbes

The ongoing shale gas boom here in the United States has proven itself to be no flash in the pan; estimates of domestic shale reserves range from 300 trillion cubic feet to as many as 900 tcf. Investment in natural gas extraction projects has poured into regions across the country, from North Dakota to Pennsylvania. However, the domestic market for natural gas will soon be saturated with such high levels of production and low domestic prices. That, in turn, could lead to a decline in the investment in manufacturing and otherwise that has come with the shale gas boom. [Red & bold emphasis added.]

Webmaster's comment: Still, Downeast LNG muddles on as if the US natural gas boom is not happening.

SBE Council chief economist weighs in on the benefits of energy exports [Press release] (Jan 10) — Small Business & Enterpreneurship Council, Vienna, VA

Key points regarding natural gas production were highlighted by Keating. He observed, “Advancements in technology have opened up vast resources of natural gas in shale rock that were previously not accessible. There is no reason to believe that such innovation and production will cease in the future. As a result, natural gas prices have plummeted in the U.S., and since prices remain high in other parts of the world, the potential exists for significant benefits to be derived from exporting liquefied natural gas. That’s a win-win for the U.S. economy, the small businesses and their employees that support the energy sector, and job creation.”

Webmaster's comment: Mr. Keating seems to believe there is an infinite supply of natural gas in the ground.

Comments supporting LNG exports filed at DOE (Jan 10) — LNG Law Blog

Comments in support of LNG exports were filed at the U.S. Department of Energy (DOE) by the Marcellus Shale Coalition, the Calvert County Board of Commissioners, and the Youngstown/Warren Regional Chamber. The National Regulatory Research Institute submitted its own study supporting LNG exports that it had prepared for state utility commissions.

API: IHI study shows shale gas development to generate new jobs and revenues (USA) — LNG World News

“While a few companies have questioned exporting U.S. energy – particularly natural gas, believing it could raise prices for them – analyses from Brookings, Deloitte, and others show the impact on prices at home would be minor. The U.S. Department of Energy says exports would be an overall plus for our economy.”

Webmaster's comment: The reports completed for the US Department of Energy, rather than the US Department of Energy, made the statement. And, Sen. Wyden indicates the reports are seriously flawed.

Historic mistakes should guide US on LNG exports — Oil & Gas Journal

Political opposition to LNG exports by the US brings to mind monumental energy mistakes of the past.

In a market with constant supply, new demand indeed would raise price. For now, however, US gas supply can expand to accommodate new consumption. Indeed, supply now tends to overreact to indications of demand growth as many producers respond to any uptick in price.

What this history means for LNG is that politicians should let the market decide how much of it, if any, the US exports.

Webmaster's comment: 'Letting the market decide' is also fraught with problems. Look at all those idle LNG terminals that the market decided were needed for imports.

More weigh in on controversial LNG export debate — Houston Business Journal, Houston, TX

...Bloomberg recently compiled data showing that LNG exports may not be as profitable as previously supposed since the price of gas in Asia, where most LNG exports would go, is expected to drop. [Red & bold emphasis added.]

Five LNG cargoes imported in November, USA — LNG World News

Two cargoes were delivered to the Everett LNG terminal while the Elba Island, Sabine Pass and Cameron terminal received one cargo each.

Southeast

LNG terminal waits for decision — Georgia Public Broadcasting, GA

The LNG import terminal on Elba Island, near Savannah, Ga., has a pending application before the Obama administration to add export facilities.

Gulf of Mexico

Cheniere moving closer to approval for LNG exports at Corpus Christi (Jan 8) — Corpus Christi Caller-Times, Corpus Christi, TX

Port of Corpus Christi commissioners on Tuesday approved a temporary lease for Cheniere Energy that moves the company closer to becoming one of the first major exporters of the nation's newfound surplus of cheap natural gas.

Regulators want to see that the company owns or has control over all of the land used for construction and operation of the project. It already controls about 1,000 acres. But it needed additional space for temporary fabrication yards during construction. Commissioners approved a two-year, 110-acre lease for $1.2 million, with an option to extend for five years if regulatory permits are in place.

Southern LNG responds to protests on LNG export application — LNG Law Blog

Southern LNG Company, L.L.C. (SLNG), filed an answer to the motions to intervene and protests filed by Sierra Club and the American Public Gas Association (APGA) on SLNG's application at the U.S. Department of Energy to export LNG from SLNG's Elba Island, Ga., terminal to countries without a Free Trade Agreement with the United States. SLNG opposes APGA's and Sierra Club's motions to intervene and argues that they did not show that SLNG's application was inconsistent with the public interest. [Red & bold emphasis added.]

Webmaster's comment: Southern LNG's argument is immaterial to intervenor status.

British Columbia

In B.C.’s Kitsault, a ghost town transforms into a gas hub (Jan 8) — The Globe and Mail, Toronto, ON

The potential success of Mr. Suthanthiran’s proposal, like others, would depend on factors that include financing, regulatory approvals, long-term deals with customers and negotiations with aboriginal groups in B.C., said Jihad Traya, associate director of North American natural gas with energy consultancy IHS Cera in Calgary.

[I]f LNG is proving irresistible to a broad array of dreamers, it’s also showing the tenuousness of some of their plans, some of which are not – or at least, not yet – clearly grounded in solid commercial arrangements.

Kitsault Energy plans to explore establishing a pipeline for natural gas, LNG plant, and a dedicated export terminal for LNG, at Kitsault — Your Industry News

KITSAULT, located 500 miles (800 km) north of Vancouver, British Columbia and 85 miles (140 km) north of Prince Rupert, British Columbia, Canada, is a purpose-built resource community with complete community infrastructure and housing for more than 1000 residents.

The well maintained Kitsault town site features over 90 occupant-ready family homes, and approximately 150 two and three and 3 bedroom condominium units. The community facilities include a complete community complex with an aquatic centre, community recreation rooms, an indoor arena for basketball, a curling ring and racquetball courts and much more. The town’s well maintained amenities include restaurant facilities, a shopping center, a post office, a bank, a supermarket, a medical centre, as well as numerous outdoor amenities.

Big gun Chevron shows up for LNG play [Opinion column] — Terrace Standard, Terrace, BC

In a June 2012 study of LNG markets, PFC Energy stated, “The ability to secure equity in the entire value chain is a critical value creator and it also enhances security of supply as buyers have direct knowledge of and participating interests in the projects that supply them.”

In other words, the potential customers want a slice of the LNG plant, pipeline and gas field pies.

TransCanada Corporation : TransCanada to run $5.1 billion pipeline project — 4-traders

TransCanada Corp. (TransCanada Corporation) said Wednesday it has been chosen by Progress Energy Canada Ltd. to build, own and operate a 5 billion Canadian dollar ($5.1 billion) pipeline project that would transport natural gas to a new liquefied-natural-gas export terminal planned off Canada's west coast.

The Pacific Northwest LNG export terminal in British Columbia was proposed as part of the multi-billion takeover of Progress Energy Resources Corp. by Malaysian state-run energy giant Petroliam Nasional Bhd, which closed last month.

TransCanada plans $5.1 billion pipeline to LNG terminal — Bloomberg Businessweek

The Prince Rupert Gas Transmission project has a proposed initial capacity of 2 billion cubic feet a day from the Montney region to the planned liquefied natural gas terminal in Port Edward, British Columbia, TransCanada said today in a statement. The pipeline may begin operation in 2018, subject to government and corporate approvals.

TransCanada also plans a C$1 billion to C$1.5 billion extension of its Nova Gas Transmission Ltd. pipeline to reach additional gas supply in the North Montney region, according to today’s statement. That pipeline could begin operation in 2015.

Progress Energy awards TransCanada $5-billion natural gas project — CTV News

TransCanada will design, build, own and operate the proposed Prince Rupert Gas Transmission project for Progress. It will also extend an existing transmission line to connect with the Prince Rupert line to serve Progress and other gas suppliers.

Pacific Northwest LNG selects operator of feed-gas pipeline — Energy Global, UK

Progress Energy Canada Ltd. (an amalgamation of PETRONAS Carigali Canada Ltd. and Progress Energy Resources Corp.) has selected TransCanada Corp. to design, build, own and operate the proposed CAN$ 5 billion Prince Rupert Gas Transmission project. This proposed pipeline will transport natural gas primarily from the North Montney gas-producing region near Fort St. John, British Columbia to the recently-announced Pacific Northwest LNG export facility in Port Edward near Prince Rupert, B.C. Progress and TransCanada expect to finalise definitive agreements in early 2013, subject to approvals by their respective Boards.

Progress Energy selects TransCanada for gas pipeline project — LNG World News

Progress and TransCanada expect to finalize definitive agreements in early 2013, subject to approvals by their respective Boards. TransCanada will immediately commence Aboriginal and stakeholder consultation and preparation of the relevant regulatory filings for this project under B.C. jurisdiction.

Hawaii

Report finds potential cost savings from Hawaiian LNG imports (Jan 8) — LNG Law Blog

A report by FACTS Global Energy evaluating the impacts of imports of LNG into Hawaii concludes that, under a base case LNG demand forecast, using small, U.S.-built, Jones Act compliant LNG carriers, conventional onshore terminals can deliver LNG from the U.S. West Coast to Oahu 31-47% cheaper than oil through 2030. The report finds that the savings are cut roughly in half if LNG is sourced from Canada and shrink dramatically when sourced from Alaska or Australia. Read more in the Honolulu Civil Beat article.

Report says natural gas will bring major cost savings to Hawaii (Jan 7) — Honolulu Civil Beat, Honolulu, HI

Environmental groups, who are increasingly opposed to importing LNG to Hawaii, immediately raised questions about the impartiality of the study.

Jeff Mikulina, executive director of Blue Planet Foundation, pointed out that Hawaii Gas is a client of FACTS Global Energy, as the report discloses.

"Although FACTS takes great pains to claim that they don't have any vested interests in whether or not Hawaii imports LNG, there is a clear, unavoidable conflict of interest: FACTS works for Hawaii Gas, who has petitioned (federal regulators) to import LNG to Hawaii," wrote Mikulina by email.

The study was conducted to help develop a working plan for liquefied natural gas. Currently, Hawaii is almost completely dependent on oil for its energy needs.

"We don't stop smoking by switching from cigarettes to cigars. Similarly, we don't wean ourselves off of fossil fuels by simply switching to a different fossil fuel," Robert Harris, executive director of the Sierra Club, said in an email. [Red & bold emphasis added.]

United States

US LNG exports could speed transition from oil price indexing — Rigzone

Liquefied natural gas (LNG) exports from the United States could speed up the transition from oil price indexation of natural gas supply contracts, according to the findings of new Deloitte study of the impact of U.S. LNG exports.

"Much attention has been paid to the impact of U.S. LNG exports on the U.S. market, but not much study has been done on the global impact," said Tom Choi, natural gas market leader for Deloitte MarketPoint and co-author of the report, at a Tuesday media briefing in Houston.

..."Since supplies for U.S. LNG exports are expected to be pegged to U.S. gas prices rather than oil prices, the incremental volumes could result in global gas markets transitioning more rapidly to prices set by 'gas-on-gas' market completion."

The third [Deloitte] study assumes no Canadian LNG exports will occur to isolate the impact of U.S. LNG exports. In reality, U.S. and Canadian LNG exports will likely compete against each other to some degree, and the impact of U.S. LNG exports would be partially mitigated by offsetting actions from Canadian exporters, Deloitte noted. [Red & bold emphasis added.]

Deloitte: US LNG exports will face complex market dynamics — Oil & Gas Journal

Deloitte researchers analyzed global gas markets if 6 bcfd of US LNG were to be shipped to either Asia (2 bcfd each to Japan, South Korea, and India) or Europe (3 bcfd each to UK and Spain). The 6 bcfd is not a projection but rather an assumption to evaluate gas markets, said the report, the third in a Deloitte series (OGJ Online, Dec. 16, 2011).

He believes gas markets will transition toward a more competitive price regime, in part because US LNG sold to Asia-Pacific buyers is not indexed to oil prices. [Red & bold emphasis added.]

Webmaster's comment: They'll be exporting US natural gas at fire-sale prices, depleting US energy security, while simultaneously increasing prices at home.

Deloitte studies the global impact of US LNG exports (Jan 8) — Oil & Gas Financial Journal

The study says that global price and geopolitical implications of US LNG exports could be much more dramatic than any US price increase, including possibly hastening the transition away from oil price indexation of gas supply contracts.

In a few short years, the Shale Revolution has created a 180-degree shift in thinking. Prior expectations that the US would become a major importer of LNG have been replaced by the possibility that the US will become a major LNG exporter. This is all due to the abundance of exploitable natural gas from unconventional resources, such as shale formations. [Red & bold emphasis added.]

Will exporting natural gas raise U.S. prices? New report says not really — StateImpact Texas, TX

According to Deloitte’s report, “Prices are projected to decrease fairly significantly in regions importing U.S. LNG, but only marginally increase in the U.S.”

Webmaster's comment: In other words, exporting LNG would raise US prices — really. The US would be selling off its natural gas future at fire-sale prices, just as has happened in the Anchorage region of Alaska that has been exporting LNG since 1969, depleting domestic supply, and is now planning to import LNG in order to heat local households.

Comments filed on DOE LNG export study (Jan 8) — LNG Law Blog

Comments touting the economic benefits of exporting U.S. produced LNG to countries without a Free Trade Agreement with the United States were submitted to the U.S. Department of Energy (DOE) by Pennsylvania state legislators and the West Virginia Chamber of Commerce. The Fertilizer Institute filed a comment criticizing the Export Study for underestimating the contributions of the fertilizer industry, which has benefited from declining domestic natural gas prices, to the U.S. economy. The comments can be found on DOE's website.

Industry lobbies U.S. for more natural-gas exports — Philly.com, Philadelphia, PA

Pennsylvania natural-gas producers are stepping up a campaign to lobby the White House to allow more fuel exports and accelerate drilling in the Marcellus Shale region.

Nine state representatives, 17 state senators, and the Pennsylvania Chamber of Business and Industry have sent nearly identical letters to President Obama urging him to expedite the approval process for exporting liquefied natural gas.

The chemical and fertilizer industries, which are big consumers of natural gas, have opposed exports because they fear higher prices at a time they are undergoing a revival. Environmental groups also are opposed, because exports will require more drilling to satisfy demand.

Northeast

Pennsylvania lawmakers make case for LNG exports — Fuel Fix

The Pennsylvanians’ push comes as the Obama administration weighs whether to grant applications from 15 countries to export up to 21.5 billion cubic feet of natural gas daily to countries that don’t have free trade agreements with the United States.

Dominion declares LNG victory for Cove Point — FierceEnergy

The Circuit Court ruling determined that Dominion Cove Point's agreement with environmental agencies allows it to build liquefaction facilities inside the plant's fenced area and export liquefied natural gas even though the Sierra Club had contended that Dominion needed its permission to build.

Dominion Cove Point is one of the nation's largest liquefied natural gas (LNG) import facilities. In 2009, Dominion completed an expansion project that increased Cove Point's storage and production capacity by nearly 80 percent.

British Columbia

Energy plan for B.C. ghost town to be unveiled — CBC News

The former mining town was built to house 1,000 people but was abandoned in the 1980s after commodity prices crashed.

Suthanthiran originally planned to create an eco-tourism resort at the site but now wants to create a liquefied natural gas plant, export terminal, and possibly an oil refinery.

"Historically, the problem that you have when you want to start a project like this [is] housing and infrastructure for the people working, and we already have that,” he said. [Red & bold emphasis added.]

Kitsault Energy considers building LNG plant in Canada — LNG World News

Kitsault Energy said it plans to explore building a pipeline for natural gas, LNG plant, and a dedicated export terminal for LNG, at Kitsault, British Columbia, Canada.

Kitsault, located 500 miles (800 km) north of Vancouver, British Columbia and 85 miles (140 km) north of Prince Rupert, British Columbia, Canada, is a purpose-built resource community with complete community infrastructure and housing for more than 1000 residents.

Kitsault Energy plans to explore establishing a pipeline for natural gas, LNG plant, and a dedicated export terminal for LNG, at Kitsault, British Columbia, Canada [Press release] — Financial Post, Don Mills, ON

The well maintained Kitsault town site features over 90 occupant-ready family homes, and approximately 150 two and three and 3 bedroom condominium units. The community facilities include a complete community complex with an aquatic centre, community recreation rooms, an indoor arena for basketball, a curling ring and racquetball courts and much more. The town’s well maintained amenities include restaurant facilities, a shopping center, a post office, a bank, a supermarket, a medical centre, as well as numerous outdoor amenities.

Kitsault Energy has also begun the process of consulting with LNG energy partners, as well as local, provincial and federal governments.

Community Corridor Part 3: — Vancouver Media Co-op, Vancouver, BC

Looking Ahead to the LNG Canada/Coastal GasLink Project and Building Mutual-Aid Networks Across Turtle Island

If 2012 has been one thing in British Columbia, it has been the explosion of shale gas and pipeline projects on the northern map. The long-time-coming Pacific Trails Pipeline (PTP) and Kitimat LNG (KLNG) project came to light in a significant way in the orbit of radical grassroots organizing after months of NGO Northern Gateway darkness. In addition to PTP, a slew of other huge LNG processing terminal/shale gas pipeline projects have come to surface including LNG Canada/Coastal GasLink, BG/Spectra, and Petronas/Progress after help from the free-trade hungry, deregulation-happy Harper government. Of all these projects, LNG Canada/Coastal GasLink is currently the largest, most probable, and most threatening. The Harper conservatives have turned over a good part of the Turtle Island territory to not only resource-hungry corporate industry, but also open to ecological devastation and the violation of indigenous community sovereignty. In a November 2012 essay, Russell Diablo paints a clear picture of the Harper government’s first nations termination policies.

The Community Corridor, which is currently being developed, aims to ... combine their efforts in an organized, integrated support network across Turtle Island. Many of these current communities are indigenous, but the Community Corridor will be inclusive to those and farming, anarchist, and permaculture communities alike.

United States

United States: New DOE study fuels debate over LNG exports (Dec 31) — Mondaq

The U.S. Department of Energy (DOE) engaged the controversy over exporting liquefied natural gas (LNG) with its December 5 publication of Macroeconomic Impacts of LNG Exports from the United States. Prepared for DOE by NERA Economic Consulting, the report concludes the domestic economy will benefit from LNG exports and thereby paves the way for approval of LNG export applications pending DOE approval. But, given the lead times for building export terminals and that only four of the 15 pending applications are expected to be approved in 2013, significant exports are unlikely in the near term. To be considered, initial public comments on the report must be submitted to the Department by January 24, 2013, reply comments by February 25, 2013.

EIA: Average spot gas prices fell 31 percent in 2012 (USA) — LNG World News

The decline in average wholesale natural gas prices was roughly uniform throughout the United States. Most trading points averaged within plus or minus $0.25 per MMBtu of Henry Hub. Average annual prices for natural gas fell 30%-34% at 5 of 10 major trading points in 2012 compared to 2011. An increased supply of natural gas significantly contributed to higher inventories and lower prices nationwide. Total dry natural gas production for the Lower 48 states rose to an average of 63.6 billion cubic feet per day (Bcf/d) in 2012, an increase of almost 4%, or 2.6 Bcf/d, over 2011, versus a rise in consumption of about 3%, or 2.2 Bcf/d, according to data from Bentek Energy LLC. Much of this increase can be attributed to increased production from the Pennsylvania portion of the Marcellus Shale Basin, as well as the adoption of more efficient drilling techniques and the continued targeting of liquids-rich shale gas formations. [Red & bold emphasis added.]

New Brunswick

Canada: Canaport to get LNG cargo from Trinidad — 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 January 11, according to shipping data.

Gulf of Mexico

FERC to prepare environmental assessment for Sabine Pass modification project — LNG Law Blog

FERC issued a notice of intent to prepare an environmental assessment (EA) for the Sabine Pass Liquefaction Modification Project, which involves construction and operation of a heavies removal unit; condensate storage, metering and send-out facilities, four gas pipeline meter stations, natural gas liquids truck loading facilities, and other facility modifications to the Sabine Pass LNG terminal in Cameron County, La. Comments on the scope of the EA are due February 4, 2012.

Sierra Club and American Public Gas Association 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 Gulf Coast Liquefaction Company's application to export LNG to countries without a Free Trade Agreement with the United States. Consistent with their previous filings in other dockets, Sierra Club's protest argues 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, while APGA's protest focuses on the increase in domestic gas prices that could result from approval of additional LNG exports.

Alaska

Q&A: Commissioner Sullivan notes new Asian interest after Alaska LNG sales trip (Jan 6) — Alaska Dispatch, Anchorage, AK

Alaska's effort to develop the largest natural gas field in North America is basking in a burst of sudden attention from potential Asian buyers and investors, says a key state official.

As commonly envisioned, the fabled gas line project would likely extend some 800 miles to Valdez or some other port. There, the gas would be liquefied at a plant and loaded onto ocean-going ships.

British Columbia

Kitsault owner to unveil LNG plan — The Vancouver Sun

The owner of the vacant B.C. townsite of Kitsault is floating an ambitious plan to establish a liquefied natural gas plant, export terminal and possible oil refinery at the isolated northwest coast location. Krishnan Suthathiram, who bought the townsite at the head of Alice Arm in 2005, said he is developing a plan to turn the town into an energy export hub....

Canada

Key liquefied natural gas issues in 2013 include environmental assessments, applications for export and foreign investment — The Lawyers Weekly, Markham, ON

All five major Canadian LNG projects in are in the west. With Apache-operated Kitimat LNG the only one near completion, there is speculation that some consolidation is in the cards. And with billion of dollars in investment needed, all eyes are on expected changes to Investment Canada rules.

Ignasiak points out that, although Canadian LNG export license requirements have been streamlined in that there is no longer a need for a hearing, there are still fairly rigorous environmental assessment requirements for the actual facilities, which can add to project timelines, especially when coupled with First Nations consultation and accommodation.

“At one time you needed both a federal and a provincial environmental assessment,” Stuben says, “you only have to complete either the provincial or the federal assessment process.”

United States

US LNG export projects—2 (conclusion): Projected financial performance supports building at least a few — Oil & Gas Journal [Paid subscription]

John Paisie JEA Consulting Group Toledo, Ohio The projected financial performance of proposed US LNG export plants supports the building and commissioning of at least a few of them. The proposed plants, however, face large risks. Potential supply-demand shifts in both the US and destination markets could result in price shifts much greater than the 10% used in this article's sensitivity analysis. Competitors can also act to damage the financial viability of proposed US LNG plants by, for instance, changing their pricing approach so that US exports will no longer be attractive. The success of such defensive strategies will depend in part on growth in global demand for natural gas in compar... [Red & bold emphasis added.]

United States: Exports of LNG and the public interest: The Department Of Energy releases its report on the impact of LNG exports on the U.S. economy — Mondaq

In announcing the Report's availability, the Department made clear that the findings in the Report were those of NERA, and not the Department. The deadline for filing initial public comments on the Report is January 24, 2013, and reply comments are due no later than February 25, 2013.

The Department currently is reviewing 15 applications that propose to export a total of almost 12 billion cubic feet per day of natural gas from the lower 48 states to Non-FTA Nations. In a conditional authorization issued by the Department in May 2011 for the proposed Sabine Pass Liquefaction Project, the Department stated that it would have to review the potential cumulative impact of the Sabine Pass authorization and any future LNG export authorizations on the U.S. economy when considering subsequent applications to export LNG to Non-FTA Nations.

Northeast

MD Judge: Dominion can export LNG from Cove Point — The State Journal, WV

With U.S. natural gas production decreasing and imports rising in the last decade, the old LNG import and storage facility at Cove Point on the western shore of the Chesapeake Bay was revived for imports in the early 2000s. Dominion expanded the facility's import capacity in 2008 but, already in 2009, found that the new boom in shale gas was making that capacity obsolete. The company proposed to reconfigure the facility for liquefaction and exports.

Webmaster's comment: Downeast LNG ignores the news, blindly pouring more money and effort down a pit that the rest of the industry is smart enough to avoid.

United States

The conundrum of exporting natural gas [Blog] — Bacon's Rebellion, VA

The problem is that it takes time to build such facilities and by the time they are built, global markets for natural gas could erode as quickly as they have expanded. Other countries are busy trying to follow the American example with fracking and if they succeed, would-be American exporters could lose their race against time.

Northeast

Dominion Resources gets court’s OK to export liquefied natural gas from Maryland facility — Tribune-Review, Pittsburgh, PA

Sierra Club sued to block construction of the terminal to import natural gas in the 1970s, and settled the case in return for gaining the right to approve plans for expansion. The group said it won‘t grant such permission, according to the court ruling.

Dominion still needs approval for the project from the Federal Energy Regulatory Commission and permission from the Energy Department to export liquefied natural gas to countries such as Japan, which are not covered by a free-trade agreement.

Dominion wins ruling in fight with Sierra Club over natural gas exports (Jan 4) — Examiner.com, Washington, DC

Dominion and the Sierra Club have had an agreement in place since 2005, which describes activities that would be environmentally acceptable at the Cove Point LNG site.

In its decision to fight Dominion, the [Sierra Club] admitted that exporting LNG would not cause environmental damage around the site itself, but would encourage fracking in nearby states.

Gulf of Mexico

CCISD involved in lawsuit challenging school finance system (Jan 4) — The Port Lavaca Wave, Port Lavaca, TX

Sargas to build power plant at port

The barge-mounted plant would be permanently located in an area leased from the port and would be south of the existing closed-down ES Joslin power station. Jim Burnette, consultant with Texas Energy Development Services, said in October that it would be above the 100-year flood plain. TEDS is the exclusive developer for Sargas.

The way the facility is expected to 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.

Alaska

As Japan's LNG demand grows so do export opportunities for Alaska — Alaska Dispatch, Anchorage, AK

A Japanese consortium has already opened an office in Alaska with members including Japan Petroleum Exploration Co., Idemitsu Kosan Co., Nippon Oil and Energy Corp., Mitsubishi Gas Chemical Co. and Nippon Telephone and Telegraph Corp.

Alaska U.S. Sen. Lisa Murkowski advocated for Alaska LNG export in an April letter to President Obama. Sen. Murkowski wrote, "Alaska's natural gas would provide a comparatively clean, sustainable, and entirely reliable energy source to our friends in Japan. Alaska's natural gas resources do not present the concerns and controversies surrounding natural gas exports from the Lower 48.”

United States

Exports of American natural gas may fall short of high hopes (Jan 4) — The New York Times, New York, NY

HOUSTON — Only five years ago, several giant natural gas import terminals were built to satisfy the energy needs of a country hungry for fuels. But the billion-dollar terminals were obsolete even before the concrete was dry as an unexpected drilling boom in new shale fields from Pennsylvania to Texas produced a glut of cheap domestic natural gas.

Now, the same companies that had such high hopes for imports are proposing to salvage those white elephants by spending billions more to convert them into terminals to export some of the nation’s extra gas to Asia and Europe, where gas is roughly triple the American price.

Just like last time, some of the costly ventures could turn out to be poor investments.

“It will be easier to export the technology for extracting shale gas than exporting actual gas,” said Jay Hakes, former administrator of the Energy Department’s Energy Information Administration. “I know the pitch about our price differentials will justify the high costs of L.N.G. We will see. Gas by pipeline is a good deal. L.N.G.? Not so clear.” [Red & bold emphasis added.]

Webmaster's comment: Since there were already three regional LNG import terminals several years ahead of Downeast LNG when it founded, Downeast LNG was obsolete even before entering FERC permitting.

Northeast

Dominion may export LNG from Cove Point, Maryland court rules — Bloomberg

Dominion Resources Inc. can export liquefied natural gas from Cove Point, Maryland, a state court ruled. The Sierra Club had sought to block LNG exports on the land.

Judge sides with Dominion Resources In LNG dispute — CBS Baltimore, Baltimore, MD

A Prince George’s County Circuit Court judge on Friday granted a declaratory judgment sought by Dominion after the Sierra Club opposed the energy company’s plan.

[T]he judge agreed with Dominion that the 2005 agreement unambiguously allows Dominion to construct, operate and maintain additional facilities for the liquefaction of natural gas, and to export LNG by pipeline from the Cove Point terminal to tankers docked at an offshore pier.

Maryland court says Dominion can export LNG from Cove Point terminal — Platts

[Judge James Salmon] said since 2005 there has been a dramatic increase in the availability of natural gas in the US and there are "great profits" to be made by exporting LNG to Japan and other countries where natural gas prices are more than double what they are in the US.

"In my opinion, the agreement unambiguously does give Dominion the right to use the Cove Point facility for the export of LNG," Salmon said, noting that the Sierra Club had attempted to circumvent the plain language of the agreement.

Court ruling favorable for Dominion Cove Point LNG expansion — LNG Law Blog

The Circuit Court for Calvert County, Md. issued an order holding that a 2005 agreement among Dominion Cove Point LNG, L.P., Sierra Club and Maryland Conservation Counsel, Inc., permits the construction of additional facilities for liquefaction of natural gas within the fenced area of the existing Dominion Cove Point LNG terminal site and the export of LNG from the terminal.

Dominion wins case over LNG export — The Baltimore Sun, Baltimore, MD

Circuit Court Judge James P. Salmon said Dominion has the right to export LNG there, despite an agreement the company signed in 2005 giving Sierra and another environmental group a say over the company's expansion of the southern Maryland facility.

The judge ruled in a 10-page opinion that the compact does not specifically prohibit export from the terminal, so the club has no say over the export project. The agreement only requires the company to get the groups' approval if it wishes to expand beyond the fenceline of its existing 323-acre complex near Lusby, he said. Dominion originally sought the groups' permission to expand, but has since said it can convert the terminal within its existing area.

Dominion Cove Point moves closer to liquefaction project after court verdict — RTT News

Dominion said Friday that it will move forward with engineering, marketing and regulatory review processes after a declaratory judgment confirmed its right to build liquefaction facilities at its Dominion Cove Point facility on the Chesapeake Bay in Lusby, Md.

Dominion stated that it has entered the Federal Energy Regulatory Commission's pre-filing process in anticipation of filing an application in 2013. Engineering studies are continuing and are expected to be completed soon. Terminal services agreements are under negotiation with potential customers, including Sumitomo Corporation, a major Japanese trading company.

Gulf of Mexico

USA: APGA files motion in opposition to Cheniere LNG export application — LNG World News

APGA [American Public Gas Association] filed a motion to intervene and protest in response to the application by Cheniere Marketing, LLC to export approximately 2.1 billion cubic feet per day (Bcf/day) of LNG from the proposed Corpus Christi Liquefaction Project to any country that the United States does not have a Free Trade Agreement (FTA) with.

To date, 20 applications have been filed at the Department of Energy (DOE) to export 28.67 Bcf/day of LNG to FTA countries. This equates to approximately 45 percent of our daily consumption. APGA members unanimously approved a resolution to oppose the export of LNG at the 2011 APGA Annual Conference. [Red & bold emphasis added.]

British Columbia

1st Nations wield clout (Week of Jan 6) — Petroleum News, Anchorage, AK

Acting under a common rallying cry of Idle No More, thousands of aboriginals have participated in rolling protests across Canada over the past month, staging flash mobs, a hunger strike by an Ontario chief, a rail blockade and sustained social media campaigns.

Bill Gallagher, a former Canadian government regulator, oil and gas lawyer and Native treaty negotiator, has no doubt that before mining, forestry and pipeline projects can move ahead an accommodation must be found with First Nations.

“As long as industry keeps pushing projects in the regulatory process and lawyers are doing all of the speaking, the element of trust never gels,” Gallagher said. “The process is seen as stacked in favor of industry and you have these constant challenges.”

The implications of Chevron's big move into gas export pipelines in B.C. — Rabble.ca

The plan for KLNG [Kitimat LNG] had been that profit for the operation would come from the difference between the North American market price and the higher Asian price. But, in October and November, 2012, it became clear that Apache and the KLNG consortium would struggle to find the contracts they were looking for, when "Cheniere Energy, owners of the only approved U.S. LNG export terminal project in Louisiana, signed a deal with foreign customers that is based on North American gas prices, not the hoped-for oil-linked index [Japan Cleared Customs price] used in Asia. The difference is huge."

On November 20, 2012, Apache-contracted surveyors doing work for PTP were intercepted on Unist'ot'en territory. The field workers, employees of a smaller land surveying and engineering company Can-Am Geomatics out of Fort St. John, B.C., had set GIS and mapping equipment some 20 kms west of the Unist'ot'en resistance camp. They were ordered to vacate the territory immediately and told that industry activity was unwelcome on Wet'suwet'en territory. The surveyors returned the next morning and were engaged in the Unist'ot'en's Free Prior and Informed Consent Protocol, but were denied access to the territory. They had come to retrieve their materials left behind the previous day which were instead confiscated by the resistance camp. [Red & bold emphasis added.]

What is the right power solution for province's LNG industry? [Opinion column] — The Vancouver Sun, Vancouver, BC

Greenhouse gases are a global issue. Emissions created in one location do not sit in that region, or affect it specifically. The concern is the world tally, not the regional output. And on a world scale, the greenhouse gas output from B.C. LNG will be very small, indeed.

Even if you take the view that "every little bit helps" (and we probably should) it must be remembered that when LNG is produced in B.C., it will be shipped to Asia. There it will displace coal-fired and nuclear electric generation. The result, even allowing from the energy used to make LNG, will be a net reduction in what actually matters: global greenhouse gas output and the all-too-clear risks of nuclear energy.

Webmaster's comment: This opinion article's author makes a flawed inference. Most, if not all, of the LNG exported from British Columbia would be used for new energy projects, not to simply "replace" other hydrocarbon or nuclear fuels. Since the Asian economy is growing rapidly — especially in China — exported LNG would be used for new energy projects; meaning, the exported LNG would be contributing new greenhouse gases to the environment.

Chevron buys stake in Kitimat project — Break Bulk

Chevron Canada will operate the Kitimat LNG project and rthe pipeline that will bring gas from northeastern British Columbia to the deepwater port at Kitimat for export to Asia. Chevron will also purchase half the petroleum and natural gas rights in the Horn River and Liard Basins in British Columbia with Apache retaining ownership of the balance. Apache will manage the upstream assets. The companies did not disclose the amount Chevron agreed to pay for stakes in the planned LNG export terminal and the shale-gas discoveries in northern British Columbia.

Nova Scotia

NSP not interested in importing LNG (Jan 2) — The Chronicle Herald, Halifax, NS

Nova Scotia Power has looked into using imported liquefied natural gas but says it is not an economical fuel choice right now.

The power company recently told the provincial regulator that it does have an option to acquire LNG imports but isn’t using it.

...There is speculation that Canaport would be converted to an export facility because of higher overseas demand.

Pieridae Energy Canada announced plans in October to develop a $5-billion LNG [export] plant and terminal in Goldboro. [Red & bold emphasis added.]

Webmaster's comment: It would be absurd news if NSP were to import LNG.

Maine

Lincoln mill hopes to have natural gas deal announced soon — Bangor Daily News, Bangor, ME

LINCOLN, Maine — Lincoln Paper & Tissue LLC leaders hope within a few months to have a deal made to get their mill machinery operating on natural gas that isn’t trucked to the facility, co-owner Keith Van Scotter says.

The LePage administration has committed to helping natural-gas suppliers and Maine businesses prepare to run a branch line — a 6- to 8-inch pipe — about 60 or 70 miles from the Old Town area through Lincoln and into the Katahdin region, where it would supply the two Great Northern Paper Co. mills, state energy office officials have said.

Private investors would build the branch sometime this year. It would extend from Maine’s largest natural gas conduit, the Maritimes and Northeast Pipeline, which stretches from Canada to Portland. It is among three gas pipelines in Maine, officials said.

Webmaster's comment: This is further evidence that Maine has no shortage of natural gas. Quite simply, Downeast LNG is chasing its own shadow, and wants the public to join in the fantasy.

Despite this article's reporter's contention that the Maritimes and Northeast Pipeline ends in Portland, it actually extends south to Dracut, Massachusetts.

LePage’s energy director to step down (Jan 2) — Bangor Daily News, Bangor, ME

AUGUSTA, Maine — The man who has led Gov. Paul LePage’s energy office for the past two years is stepping down and being replaced by an adviser to departing U.S. Sen. Olympia Snowe, LePage’s office announced Wednesday.

Kenneth Fletcher, a Republican who served four terms in the Maine House before taking the job of leading LePage’s energy office, will step down effective Friday. Patrick Woodcock will take over the energy office reins on Monday, LePage spokeswoman Adrienne Bennett said.

New England

EIA: Key New England gas pipeline reflects seasonal flow changes (USA) (Dec 27) — LNG World News

The Algonquin Gas Transmission (AGT) Company, a main source of natural gas supply into New England, has traditionally operated near capacity only during the high-demand winter season.

But so far in 2012 (Jan 1-Sept 20), it has operated at much higher levels year-round as rising natural gas demand from the power sector, coupled with reduced liquefied natural gas (LNG) imports, have increased flows on pipelines into the region.

Webmaster's comment: In other words, domestic natural gas trumps LNG imports — something Downeast LNG would like the public and regulators to ignore.

Northeast

LNG gains political value as Japan's needs soar (Jan 3) — The Japan Times, Tokyo, Japan

Alaska looks to be key source if pipeline plan goes through

[This article also appears under the Gulf of Mexico and Alaska headings on this SPB webpage.]

...Alaska, the only place in the U.S. where LNG exports are currently allowed, along with eight other countries, accounted for just 7 percent of last year's imports.

That is likely to change within the next decade.

"Alaskan LNG has many advantages for Japan, starting with cost. Not only is the gas cheap, but so is transportation. It only takes about a week for the tankers to arrive in Japan" says Kojiro Abe, trade representative for Alaska's Japan office. "America's political stability compared to some other LNG suppliers, and the safety of the sea lane from Alaska to Japan is a huge advantage as well."

In addition to Alaska, Japan hopes to buy up to 30 million metric tons per year of LNG from terminals in Louisiana, Texas, and Maryland. Last summer, Osaka Gas Co. and Chubu Electric Power Co. announced they'd signed contracts with a Texas firm to liquefy 4.4 million tons annually of LNG that will start arriving in Japan from 2017, assuming the final approvals are granted by mid-2013, as expected.

Gulf of Mexico

LNG gains political value as Japan's needs soar (Jan 3) — The Japan Times, Tokyo, Japan

Alaska looks to be key source if pipeline plan goes through

[This article also appears under the Northeast and Alaska headings on this SPB webpage.]

...Alaska, the only place in the U.S. where LNG exports are currently allowed, along with eight other countries, accounted for just 7 percent of last year's imports.

That is likely to change within the next decade.

"Alaskan LNG has many advantages for Japan, starting with cost. Not only is the gas cheap, but so is transportation. It only takes about a week for the tankers to arrive in Japan" says Kojiro Abe, trade representative for Alaska's Japan office. "America's political stability compared to some other LNG suppliers, and the safety of the sea lane from Alaska to Japan is a huge advantage as well."

In addition to Alaska, Japan hopes to buy up to 30 million metric tons per year of LNG from terminals in Louisiana, Texas, and Maryland. Last summer, Osaka Gas Co. and Chubu Electric Power Co. announced they'd signed contracts with a Texas firm to liquefy 4.4 million tons annually of LNG that will start arriving in Japan from 2017, assuming the final approvals are granted by mid-2013, as expected.

Contract signed for two LNG export units (Jan 2) — 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.

In addition, Sabine Liquefaction recently announced that it has begun working with Bechtel on the preliminary engineering for its fifth and sixth units and expects to begin the regulatory process for approval in the first half of 2013.

American Public Gas Association protests Cheniere Marketing's LNG export application — LNG Law Blog

The American Public Gas Association (APGA), a trade organization for publicly owned natural gas distribution systems, filed a protest at the U.S. Department of Energy (DOE) opposing Cheniere Marketing, LLC's (Cheniere) application to export LNG to countries without a Free Trade Agreement with the United States. APGA argued that approval of Cheniere's application would not be consistent with the public interest because approval would increase domestic natural gas prices and jeopardize potential growth in the manufacturing sector and the transition away from more environmentally damaging fossil fuels. [Red emphasis added.]

Sierra Club files protest on Cheniere Marketing DOE export application — LNG Law Blog

Sierra Club filed a protest at the U.S. Department of Energy (DOE) opposing Cheniere Marketing, LLC's application to export LNG from a proposed terminal near Corpus Christi, Texas 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 that may result from increased gas exports. [Red emphasis added.]

Alaska

LNG gains political value as Japan's needs soar (Jan 3) — The Japan Times, Tokyo, Japan

Alaska looks to be key source if pipeline plan goes through

[This article also appears under the Northeast and Gulf of Mexico headings on this SPB webpage.]

...Alaska, the only place in the U.S. where LNG exports are currently allowed, along with eight other countries, accounted for just 7 percent of last year's imports.

That is likely to change within the next decade.

"Alaskan LNG has many advantages for Japan, starting with cost. Not only is the gas cheap, but so is transportation. It only takes about a week for the tankers to arrive in Japan" says Kojiro Abe, trade representative for Alaska's Japan office. "America's political stability compared to some other LNG suppliers, and the safety of the sea lane from Alaska to Japan is a huge advantage as well."

In addition to Alaska, Japan hopes to buy up to 30 million metric tons per year of LNG from terminals in Louisiana, Texas, and Maryland. Last summer, Osaka Gas Co. and Chubu Electric Power Co. announced they'd signed contracts with a Texas firm to liquefy 4.4 million tons annually of LNG that will start arriving in Japan from 2017, assuming the final approvals are granted by mid-2013, as expected.

Japan LNG imports slip a bit in November (Dec 31) — Alaska Dispatch, Anchorage, AK

...A single spot shipment of 2 bcf with a delivered price of $13 per million Btu. The shipment left the ConocoPhillips plant at [Nikiski, Alaska] on Oct. 25 aboard to the LNG Gemini, arriving at Kansai Electric’s LNG regasification terminal in Japan on Nov. 7.

British Columbia

Kitimat LNG project receives Christmas Eve boost — Energy Tribune

Established LNG project operator Chevron bought out two minority stakeholders in the Kitimat LNG export project located in British Columbia, Canada in a deal announced on Christmas Eve.

Chevron took over EnCana and EOG‘s 30 percent stakes each in Kitimat and stepped in as plant and Pacific Trail Pipeline operator. Apache will hold the remaining 50 percent and operate the natural gas production facilities feeding the plant.

Could Chevron jumpstart the North American natural gas sector? (Jan 2) — Resource Investing News, Vancouver, BC

Kitimat LNG’s project moved a step closer to reality last week when Chevron (NYSE:CVX) announced that it will buy out the minority positions that Encana (TSX:ECA,NYSE:ECA) and EOG Resources (NYSE:EOG) hold in the endeavor. In doing so, Chevron has established itself as a 50-percent owner in a project that is ready for construction, but has fallen victim to a number of delays amid uncertainty surrounding sales contracts.

Apache previously led the project, but never signed an offtake agreement to sell LNG to Asian buyers, an article in The Globe and Mail states. The company originally expected to make a final investment decision earlier in 2012; however, without guaranteed sales agreements, the decision to move the project forward proved impossible.

Chevron’s intent was highlighted when it immediately confirmed that it will work with First Nations in the northwest to help the proposed facility move forward. The conciliatory move seems to be a response to ongoing public forums and a very public war of words between Enbridge and First Nations groups that lie along the proposed Northern Gateway pipeline route.

Natural gas plans drive wind energy uptake (Jan 1) — Windpower Monthly

CANADA: Wind energy developers in the Canadian province of British Columbia are looking to gas, a traditional energy sector rival, to drive massive new demand for electricity.

Chevron takes over operatorship of Kitimat LNG, pays low price (Dec 31) — Seeking Alpha

In June, Apache caught investors' attention by announcing that it "has unlocked and secured the highest quality shale reservoir in North America." In its Analyst Day presentation, Apache disclosed long-term test results from three wells it had drilled on its 424,000 net acre leasehold in the Liard Basin. The horizontal appraisal well, the D-34-K, which had been completed with a 2,900' lateral section and 6 frac stages, tested at 21 MMcf/d over a 30-day period and produced 3.1 Bcf in the first 12 months. Apache believes the well "to be the most prolific shale gas resource test in the world" and estimates its EUR at 18 Bcf.

[T]he transaction highlights challenges facing North American LNG exports. While natural gas resources on the continent appear sufficient to support both the domestic consumption and LNG exports, capital requirements for liquefaction, pipeline and processing infrastructure are immense and lead times are extensive. Even assuming a flawless execution, first LNG shipments from Kitimat are probably a 2018-2019 event, while full capacity is unlikely to be reached until next decade. To recover the upfront investment and earn a minimum return required, the project will need to operate seamlessly and profitably for many years thereafter. It is no surprise that even for well established, large-capitalization operators such as EOG and Encana the risk and timing of cash flows of an integrated gas project of this magnitude may be an insurmountable challenge.

Webmaster's comment: Once Cheniere's LNG exports begin — at Henry Hub bargain-basement prices — the gold-rush investments being made in LNG export facilities may become the same white elephants that US and Canadian LNG import terminals have become.

Chevron could boost Canada's LNG prospects (Dec 31) — Ship & Bunker, Vancouver, BC

"The billion dollar question is what a 10 million tons per annum LNG facility will cost at Kitimat?" Greg Pardy, an analyst with RBC Capital, said in a report.

"If Australia's experience is any guide, $2,500 to $3,000 per tpa [tonne per annum] may not be unreasonable, suggesting a $25-billion to $30-billion price tag for Kitimat."

Canada: Imperial and Exxon enter race to export LNG from British Columbia (Dec 28) — Mondaq

Imperial Oil Ltd. ("Imperial") and its parent, Exxon Mobil Corp. ("Exxon"), are entering the race to export liquefied natural gas ("LNG") from Canada's west coast to markets in Asia. Speaking at the Canadian Association of Petroleum Producers Oil & Gas Investment Symposium in Toronto on Monday, Imperial President and CEO Bruce March announced that Imperial and Exxon have begun planning for a LNG export business located in British Columbia.

Chevron takes advantage of short-term uncertainty (Dec 28) — Investing Daily, Falls Church, VA

The deal’s estimated price tag of $1.3 billion, for example, is a drop in the bucket compared to the more than $21 billion in cash Chevron has on its balance sheet.

On the other hand, the most recent projection of Kitimat’s ultimate cost is $15 billion. Those costs are likely to go higher by the time the project is completed later this decade.

[A]ll supply is essentially trapped on the North American continent. That which isn’t consumed here must go into storage, and that means a supply glut that’s grown to record proportions. Most producers have dramatically slashed new drilling of natural gas, instead shifting their focus toward much more favorably priced oil and natural gas liquids. [Red & bold emphasis added.]

Chevron hopes to converse with First Nations on proposed LNG (Dec 27) — CFTK-TV, Terrace, BC

The Coastal First Nations have voiced concern about the planned natural gas liquefaction plant and export terminal and a Wet'suwet'en clan has led protests against the Pacific Trails Pipeline which would transport the gas to the facility from BC's Northeast.

Opinion: Natural gas production is an opportunity at B.C.’s feet (Dec 27) — The Vancouver Sun, Vancouver, BC

...Because of booming U.S. shale gas production, Canadian exports to the U.S. could all but dry up by 2035. For Canada just to maintain consistent production levels over the next 25 years, B.C.’s gas resources will need to be developed along with the infrastructure to deliver it. [Red & bold emphasis added.]

Haisla gain control of valuable B.C. land (Dec 26) — The Globe and Mail, Toronto, ON

If development proceeds, the Haisla stand to become one of Canada’s wealthiest first nations – and they stand to enable connections with Asia that could boost the fortunes of great swaths of the country’s energy industry. Which means that Mr. Ross stands directly inside a tangle of outsized ambitions.

...Mr. Ross now finds himself seeking to balance the interests of his own community – some now want a swimming pool, for example – with those of Canada and of other first nations in the area, many of whom will need to be persuaded to allow pipelines to cross their land so gas can move to the coast.

Chevron subsidiary acquires operating interest in Kitimat LNG project (Dec 26) — Oil & Gas Financial Journal

Chevron Canada Ltd., an indirect Canadian subsidiary of Chevron Corp. (NYSE: CVX), will acquire a 50% operating interest in the Kitimat liquefied natural gas (LNG) project and proposed Pacific Trail Pipeline (PTP), and a 50% 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 Ltd. will acquire all of the interests currently owned by affiliates of EOG Resources Canada Inc. and Encana Corp. in the proposed Kitimat LNG Project and PTP. Thereafter, Chevron Canada Ltd. will equalize interests with an Apache Corp. subsidiary, resulting in Chevron Canada Ltd. and Apache each holding a 50% interest in both the Kitimat LNG Project and PTP. Operatorship of both facilities will transfer to Chevron Canada Ltd.

Chevron to buy stake in Kitimat LNG from Encana, EOG (Dec 26) — Arab News, Jeddah, Saudi Arabia

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.

Oregon

Comments filed on scope of FERC Environmental Review of the Oregon LNG project (Jan 2) — LNG Law Blog

Comments were filed by state and federal agencies, environmental groups, municipalities and individual citizens on the scope of FERC's environmental review of the Oregon LNG export project and related pipeline.

United States

In U.S., the lure of export may further fuel natural gas boom (Jan 2) — Yale Environment 360, New Haven, CT

...Shale gas extraction, made possible through advances in hydraulic fracturing and horizontal drilling technology, had increased domestic supplies and reduced prices to such an extent that the project no longer made economic sense. Similar battles over the siting of LNG import terminals played out across the United States in the last decade, with as many as 40 terminals proposed from California, to Texas, to Maine — all based on a perceived need, now proven incorrect, for huge quantities of imported natural gas.

Although there have been previous ebbs and flows of LNG activity in North America, this time really is different in one significant respect: Large-scale shale gas extraction is unprecedented, controversial, and presents health The rush toward export projects is driven by low natural gas prices in the U.S. and higher prices in Europe and Asia. and environmental risks that are as yet poorly known. Moreover, federal, state, and local regulation is still playing catch-up with the boom, particularly in parts of the country that did not previously have significant gas production. Because LNG exports will stimulate additional shale gas extraction, the environmental consequences of this increase should be comprehensively studied as part of any decision to approve new export terminals. A go-slow approach will also allow time for regulators to put in place necessary environmental protections.

...As a result of the shale gas revolution, domestic natural gas supplies are not dwindling — they are booming. Natural gas recently equaled coal in its share of U.S. electricity generation for the first time ever. And those LNG import terminals? The ones that got built are now largely sitting idle as domestic pipelines are awash in domestic gas. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG wants to be another idle import terminal.

Report finds US energy production growing, consumption down (Dec 26) — The Hill, Washington, DC

U.S. energy consumption declined 3 percent between January and September compared with that period last year, according to data the U.S. Energy Information Administration (EIA) released Wednesday.

Energy production, however, rose 2 percent through the same time frame. Fossil fuel development increased 3.14 percent, while renewable energy production fell 2.8 percent. [Red & bold emphasis added.]

Webmaster's comment: ...So much for Downeast LNG's the US-is-desperate-for-LNG blather.

U.S. natural gas doesn't need protectionism [Opinion] (Dec 28) — Bloomberg

Domestic prices of natural gas have dropped over the last few years because of rising American production. The price of natural gas in international markets, however, remains high. To profit from the price difference, natural-gas producers have sought federal permits from the Energy Department to export some of their production as LNG and to construct export terminals.

Wyden is not entirely wrong to fear increases in prices. In the short run, the price of natural gas is likely to rise -- with or without LNG exports -- as production comes back in line with demand. More exports will clear the glut more quickly. In the long run, however, the impact of liquefied-natural-gas exports on prices is significantly more uncertain and dependent upon the long-term capacity of suppliers to increase production in response to higher demand.

LNG exports still iffy, even if they win approval (Dec 28) — The Christian Science Monitor

[J]ust because the DOE approves LNG terminals does not mean that a boom in LNG exports will necessarily follow. A recent report commissioned by the DOE actually predicts that there will be very few exports, unless there is a major increase in demand from Asia and no new production in Europe. This scenario would cause prices to increase by $1.09 per thousand cubic feet and the United States would export about 8.4 trillion cubic feet of gas.

"The math doesn't add up on the US's ambitions to export natural gas," a recent article in Quartz, a digital news site, makes the case for low exports. Author Steve LeVine goes through the price assumptions and says that there is a possible profit for US drillers by shipping it abroad, but concludes that already established and lower-cost producers (notably Qatar and Norway) would undercut American exporters. [Red & bold emphasis added.]

Mexico

Manzanillo LNG to get cargo from Peru (Dec 28) — LNG World News

The cargo is being hauled by the Barcelona Knutsen, a 173,400 cubic-meter tanker, operated by Knutsen OAS Shipping, and it is due to arrive at Manzanillo terminal in Mexico.

World

Gas exporting group requests pricing coordination (Dec 25) — LNG World News

The 13-member Gas Exporting Countries Forum will practice supply and demand management to achieve a fair price, the group’s secretary-general, Leonid Bokhanovsky said.

The forum unites 12 countries as full members and 3 as observers. The full members possess 70 percent of the world’s gas reserves and account for 42 percent of gas production, 38 percent of transport through gas pipelines, and 85 percent of the liquefied natural gas (LNG) business.

The GECF members are Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad & Tobago, Venezuela, and Oman.

Webmaster's comment: In other words, this would establish an OPEC-like cartel — price-fixing that would be illegal if being planned in the US. One wonders what may happen to these plans when US LNG comes onto the world market at Henry Hub-based fire-sale prices.