Dwindling resources in Trinidad & Tobago – once a stalwart LNG exporter – combined with attacks on Nigeria’s gas export infrastructure, have cut short supply into the Atlantic Basin. This is creating a short-term window of opportunity for American LNG exporters to supply cargoes to South America, not Europe.
Investors fear that a proposed US border adjustment tax could slam earnings of oil and gas companies in the Canadian province of Alberta. Industry leaders are wary about a possible negative impact of President Donald Trump’s proposed tax on energy costs in the United States and future export volumes of oil products and natural gas from Canada.
Spain is expected to take the lion’s share of US LNG in Europe as Gas Natural has started to offtake more cargoes on a regular basis in 2017, according to S&P Global Platts analysis. The Iberian Peninsula, dubbed ‘island market’ due to its poor pipeline interlinks to France and the rest of Europe, has recently imported a number of spot LNG cargoes from the United States – yet the impact on Continental European gas hubs is very limited indeed.
With global LNG markets poised to see around a third in LNG supply growth over the next five years – the next wave of supply will be slowly forthcoming. Spencer Dale, BP Energy Group chief economist sees a “temporary lull” while markets try to absorb the initial wave, then he assumes growth to “resume at a more moderate pace.”
SK E&S, a leading South Korean gas and power company, has become the frontrunner in burning imported shale gas from the United States to generate electricity at its 1,800 MW power plant at Bongam-ri – just a few miles from the border with North Korea.
Global commodities trader Trafigura plans to invest in an LNG regasification and import facility in Teesside in northeast England as expands its UK gas business and seeks an outlet for cargoes from the US Gulf Coast.
Re-load and re-export of LNG cargoes, notably from the US Gulf Coast, is now possible from the AES Dominicana Liquefied Natural Gas reception terminal after the operator modified the terminal accordingly.
Dresser-Rand, now part of Siemens Power and Gas, has commissioned its first micro-scale natural gas liquefaction system at the Ten Man LNG facility in Pennsylvania. The modular, portable LNGo technology enables distributed production of LNG and can be installed in a short period of time to meet local gas demand.
Woodfibre LNG, the privately-held venture firm backed by Indonesian billionaire Sukanto Tanoto and his Pacific Oil and Gas company, has filed for a 40-year export licence to ship cargoes from Canada to Asia. Early works for construction of the 2.1 mpta liquefaction facility are already underway near the town of Squamish, just north of Vancouver.
Egypt and Jordan joined the LNG-buyers’ club by using an FSRU in 2015, which offers a faster, cheaper alternative to land-based regas terminals. In the long run Egypt will develop the Zohr gas field, but in the short-term, it remains reliant on LNG to meet its natural gas demand. At odds, around 82% of the Jordan’s electricity is currently generated via imported LNG and there is still upside – making both countries an outlet for spot LNG cargoes from the United States.
Uncertainty and speculation about US President Donald Trump’s connection with Russia has been fuelled by his appointment of Rex Tillerson, the former ExxonMobil CEO, as Secretary of State. This choice brings public scrutiny to an “exaggerated Russia and ExxonMobil connection”, says Anna Belova, GlobalData’s senior oil & gas analyst.
Just like Egypt, Jordan’s gas needs far exceed its production and supply from Egypt has been interrupted since a 2011 blast that destroyed the pipeline linking Jordan with Egypt. Looking for an alternative, secure option to import natural gas, Jordan arranged with Golar to set up the country’s first FSRU Eskimo at the port of Aqaba in May 2015, underpinned by a 5-year SPA with Shell.
Australia’s Texas LNG, the midscale LNG projects planned for the port of Brownsville, has entered into its second marketing phase after signing up customers from China and Southeast Asia.
Lake Charles-based 8 mtpa Magnolia LNG, under development in Louisiana, has signed a Heads of Agreement (HoA) with Vessel Gasification Solutions Inc. (VGS) in relation to shipping cargoes to India. The non-binding HoA between Magnolia and VGS stipulates a future free-on-board (FOB) Sale and Purchase Agreement (SPA) over 20 years of up to 4 mtpa, half of the planned initial capacity at the Louisiana plant.
FERC allows Jordan Cove to re-apply
Jordan Cove LNG, the Canadian-run export project for the US northwest state of Oregon, has been given permission by the US Federal Energy Regulatory Commission (FERC) to file a new application with an amended design. “Through feedback from stakeholders and extensive engineering work, we have designed a more efficient facility that does not require a power plant, and will reduce overall environmental impacts,” stated the developer Veresen Inc., based in Calgary, Alberta. Jordan Cove has now formally removed its proposal to build a 420 MW power plant adjacent to the facility planned for Coos Bay. Veresen said that by doing so the facility could be more efficiently and effectively operated with a smaller infrastructure footprint.
Eagle’s Jacksonville LNG project advances
Eagle LNG Partners has filed an application with FERC to site, built and operate natural gas export facilities on the St. Johns River in Jacksonville, Florida. The proposed project consists of three liquefaction trains and, at full build-out, will be capable of producing up to 39,286 barrels LNG per day, or roughly 1 mtpa. “If Eagle LNG receives permission from FERC to begin construction by the first quarter of 2018, we anticipate completion of the project in 2019,” Dick Brown, CEO of Eagle LNG commented. The produced LNG is meant to be transported to markets in the Caribbean and Latin America, mainly for power generation. Apart from the Jacksonville project, Eagle LNG is also currently is constructing the Maxville LNG project and a marine bunkering terminal at Talleyrand, both near Jacksonville, Florida. Both of the latter projects are due operational this summer.