In this issue

 

With the first ever US LNG cargo having set sail from Sabine Pass in February, the share of LNG from North America will continue to grow and is forecast to reach nearly 18 Bcf/d by 2035, according to BP estimates.

Despite relatively low prices, production of US natural gas production reached a record high level of 79 Bcf/d in 2015, up 5% year-on-year, according to EIA figures. Five states – Pennsylvania, Ohio, West Virginia, Oklahoma, and North Dakota – produced most of the growth, offsetting declining gas output in much of the rest of the United States.

A decline in engineering quality is jeopardizing timely proceedings and project management for new LNG ventures, Neeraj Nandurdikar, analyst at Independent Project Analysis (IPA) of Ashburn told the LNG18 conference.

Not only will Iran’s oil exports rise, once sanctions are untangled, the Islamic Republic is also gearing up to boost natural gas and liquids production. EIA analysts anticipate Iran’s non-crude liquids production to grow by 150,000 b/d by the end of 2016, and by an additional 100,000 b/d by the end of 2017, dependent on how speedily the 24 development phases of South Pars will progress.

Once sanctions are lifted, Iran aims to sell gas to Persian Gulf states, notably Oman, for export as LNG to global markets. The head of National Iranian Gas Export Co. (NIGEC), Alireza Kameli, specifically referred to a proposal to build a gas pipeline from Iran to Oman which would enable Iran “to take advantage of the gas refineries and liquefaction facilities in Oman."

LNG Ltd has received the Federal Energy Regulatory Commission (FERC) authorization to site, construct, and operate facilities to liquefy and export domestically produced natural gas from its Magnolia LNG terminal in the Lake Charles District, Louisiana.

The US Department of Energy (DoE) has granted an authorization to Kansas-based Flint Hills Resources to export around 120,000 gallons per day of LNG over a 20-year period from an existing small-scale liquefaction facility in George West, Texas.

Supporters of a proposed $6 billion LNG export venture on the Columbia River have decided to call an end to the project, known as Oregon LNG. They told regulators they were not moving ahead with the terminal or the permits and asked them to stop the permitting process.

Frustration seems to have given way to open threats as Malaysia’s Petronas has set an ultimatum on March 31, piling pressure on the Canadian federal government to approve the contested $36 billion Pacific NorthWest LNG project. If no federal approval is given by the end of this month, Petronas will walk away from the C$36 billion liquefaction and export venture, a source close to project sponsors said. Yet, environmental regulators stay adamant as they seek further details and decided in late March to extend the EIS review by a further three months.

The 130-acre site of the Dominion Cove Point LNG terminal in Lusby, Maryland, is undergoing a significant transformation. Built in 1978 as a regas terminal, the site is now integrating liquefaction capabilities that will produce more than 5 mtpa. IHI/Kiewit, a joint venture of IHI E&C and Kiewit Energy Company, carries out EPC works for the project, which are on track for completion in late 2017. As of March 2016, the project is more than 60% ready.

A 20-year gas sales agreement with the world’s largest gas buyer JERA, a joint venture of Chubu and Tokyo Electric, is likely to help remove a regulatory stumbling for the Jordan Cove LNG project on the coat of Oregon. Federal Energy Regulatory Commission (FERC) on March 11 rejected the application for the $7.5 billion project, stating that public benefits from the proposed Pacific Connector pipeline are less than its potential for adverse impacts on landowners and communities.

Jamaica’s leading energy company, JPS, has now several critical elements in place to proceed with a 190 MW power project in Old Harbour Bay, St Catherine. JPS chief executive Kelly Tomblin said the project is about to reach financial close and an EPC contract with Power China will be finalised within the next two weeks.

Painting a bleak picture for US LNG exports over the next 5 years, Wood Mackenzie’s sensitivity analysis suggests that rising domestic gas prices in the US, gas vs coal competition in power markets and “Russian action to protect market share” are likely to see half of America’s liquefaction capacity shut in the near future.

A Canadian LNG export project, controlled by Indonesian billionaire Sukanto Tanoto and his Pacific Oil and Gas company, has taken the lead as the first venture in British Columbia is likely to be developed after years of stalemate. Woodfibre LNG received environmental approval from the federal ministry in Ottawa in late March, paving the way for the liquefaction plant and export terminal to be planned and built near the town of Squamish, north of Vancouver.

News Nudges

LNG Ltd remains to standby to ship US cargoes to India and the UK

LNG Ltd. has substantially reduced its net losses as it is waiting in the wings to start building two fully-approved liquefaction plants amid preliminary agreements to ship cargoes to the UK and India. The Australian developer of two North American LNG export projects has fully approved plans to build the Magnolia LNG plant at Lake Charles in the US state of Louisiana and at Point Tupper in Richmond County in the Canadian Atlantic Coast province of Nova Scotia. The company recently posted a consolidated half-year net loss of$13.6 million, down substantially compared with $80.2 million in H1-2015. CEO Roger Whelan pointed out that “Project development expenditure decreased from $68.4M (2015) to just under $7M in the 2016 period, reflecting the company’s liquidity management plan and sole focus on completing the marketing of Magnolia LNG’s offtake capacity.”


British Columbia courts utilities to invest into LNG fuel use

The Canadian province of British Columbia is calling for investments by Canadian utilities and others to build liquefied natural gas fuel infrastructure to help establish BC as a marine bunkering centre on the Pacific Coast capable of providing LNG to an increasing number of vessels. “Amendments to the Clean Energy Act will enable utilities to increase incentives provided to shipping companies for the conversion of vessels to run on LNG, invest in LNG bunkering infrastructure and increase the supply and use of renewable natural gas (RNG),” Energy and Mines Minister Bill Bennet said referring to bio-methane and made from waste.”