In this issue

 

As the US-China trade war escalates, Beijing says it has “no chance but to retaliate” new trade tariffs imposed by the Trump administration. Effective September 24, the Chinese President Xi Jinping implemented a 10% tariff on US LNG imports , casting a shadow over projected new US export terminals. China used to be the No.2 buyer of US LNG, but state-owned PetroChina already suspended buying American gas and opted to enter a 22-year purchase agreement with Qatargas.

Before the turn of 2018/19, Germany will decide where to locate its first LNG import terminal. The German economy and energy minister Altmaier announced this move as “a gesture to our American friends” that could help ease tensions over the Nord Stream-2 pipeline project, led by Russia’s Gazprom.

Exports of natural gas from the U.S. to Mexico by pipeline exceeded 5 billion cubic feet per day (Bcf/d) for the first time in July 2018, according to Genscape data, after several key interconnectors were commissioned. By the end of 2018, anther four of six major strategic pipelines within Mexico will start up, giving further scope for export of constraint Permian production in western Texas.

Trinidad and Tobago is increasing sources of feed-gas for the Atlantic LNG plant at Point Fortin on Trinidad. To that end, the government of Trinidad and Tobago has signed an agreement with Venezuela to purchase 0.15 Bcf/d of natural gas from Venezuela’s offshore Dragon field.

Global gas trade expanded last year by 63 billion cubic metres, or 6.2%, with growth in LNG outpacing growth in pipeline trading, according to the latest BP Statistical Review of World Energy. The apparent absence of a glut shows, according to analysts, that any surplus LNG resulted in bouts of unsustainably low prices rather than a build-up of idle capacity.

The global trend towards urbanization will increase business activities within some of the world fast-growing port cities, driving demand for Floating LNG power vessels. MarketsandMarkets analysis sees the FLNG power vessel market to expand from currently $860 million to nearly $932 million by 2023.

Higher relative cost to produce natural gas from the Haynesville region has led to a gradual decrease in shale gas production over the past five years. The Haynesville formation lies at a greater depth than Marcellus, so drilling costs are significantly more expensive. This caused a sharp drop in monthly dry gas production from a peak at 7.4 billion cubic feet per day (Bcf/d) in January 2012 to less than half that level by early 2016, according to EIA figures. Output rebounded since then to 6.4 Bcf/d in June 2018.

Gross natural gas production across the United States has risen by more than 10% in recent month, spurred by new drilling and completion techniques that propelled up output from Appalachian Basin in the Northeast, the Permian Basin in western Texas and New Mexico, and the Haynesville Shale in Texas and Louisiana. The contribution of these three regions has increased from 15% to nearly 50% of total gas production.

Cheniere Energy, the leading US LNG exporter, has signed its latest supply agreement with Switzerland-based independent commodities trader Vitol. Cheniere said its marketing unit will provide 700,000 tonnes per annum for 15 years to Vitol on a free-on-board basis whereby the buyer provides the shipping.

Monday, 01 October 2018

Pieridae Energy of Canada, developer of the Goldboro LNG export project in the Atlantic coast province of Nova Scotia to supply German customers, has named Melanie Litoski as its Chief Financial Officer from the start of October. Litoski succeeds Mario Racicot who has just retired from the post.

Monday, 01 October 2018

US LNG decreased by one shipment on the week ending September 21 to five cargoes, four from the Sabine Pass plant in Louisiana and one from Cove Point in Maryland. Three more carriers were lifting cargoes, two at Sabine and one at Cove Point. “Cove Point LNG facility received an LNG vessel on September 16, two days after the landfall of Hurricane Florence in North Carolina,” noted the weekly report from the Energy information Administration (EIA).

Tellurian, developer of the proposed 27 mtpa Driftwood LNG export plant and three affiliated pipelines, has received a draft environmental impact statement from US regulators allowing it to stay on track for a start-up in 2023.

The US Department of Energy (DoE) has issued a short-term order to Freeport LNG, under development at Quintana Island in Texas, to export up to 2.14 billion cubic feet per day (bcf/d) of natural gas as LNG over a two-year period to both free-trade and non-free trade agreement countries.

Financing models of the U.S. shale oil and gas industry – often small wildcatters – has for long been characterised by negative free cash flow as expectations of rising production and cost improvements led to continuous overspending in the sector. Over the last few months, however, IEA analysts have noticed a “notable improvement in financial condition,” though the overall health of the industry remains fragile. 

News Nudges

Former KBR CEO joins Teekay LNG

Bill Utt, the former President and CEO of US energy and LNG engineering company KBR, has been appointed as a new member of the Teekay LNG Partners board. The New York-listed affiliate of the shipping company has a global fleet of 207 ships and its LNG carriers are operated with ownership portions ranging from 30% to 100%.


KinderMorgan seeks to advance with Gulf LNG

Kinder Morgan, one of the main US pipeline operators, said it could now move forward with modifying its Gulf LNG import facility in Mississippi to handle exports as it is already doing with its Elba Island plant near Savannah, Georgia. The existing Gulf terminal at the port of Pascagoula in Mississippi could be taken forward by other parties, supported by Kinder, CEO Steve Kean told investors in New York.


NextDecade starts FERC process for Galveston LNG

Houston-based NextDecade, developer of the Galestone LNG project, has requested the start of its authorization process through FERC to produce an initial 16.5 mtpa from a proposed liquefaction facility near Texas City. The Galveston Bay venture has already received a Department of Energy permit to ship cargoes for 20 years to nations with a Free Trade Agreement with the US and a non-FTA permit was pending.