In this issue

 

Dredging works are progressing at Freeport LNG to accommodate a second ship dock. Works began in early February 2016 and once completed in 2018, the Freeport facility will be able accommodate Qatari Q-max as well as the optimum-designed vessel of just over 170,000 cubic metres capacity to transit the Panama Canal.

The US Federal Energy Regulatory Commission (FERC) has given the green light to Cameron LNG to build two additional liquefaction Trains and five in total for almost 25 mtpa in production. Sempra can now proceed with building Train 4 and Train 5 under a similar design as the three other trains under construction, as well as a tank with 160,000 cubic metres of storage.

Within hours of the opening of the first booking period, the Panama Canal Authority (ACP) has filled all 25 available slots. First commercial transit through the expanded Canal is due on June 27, with a maximum of four slots available per day – one of which reserved for LNG vessels.

The first cargo of US LNG to head for Europe is expected to land in Portugal. Galp Energy purchased the cargo shipped from Cheniere’s Sabine Pass terminal which is expected to arrive at the Portugal’s import terminal at Sines in late April or early May.

Passing of “The Energy Policy Modernization Act” in the US Senate by a vote of 85-12 was hailed by LNG project developers as a ‘watershed moment’. The bill will speed up projects as it requires the Department of Energy to make a permit decision within 45 days of an export project’s completion for the environmental review.

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.

News Nudges

US to stay ‘net exporter’ past 2018

The United States’ status as a net exporter is expected to continue for the rest of this year and past 2018 because of growing U.S. natural gas exports to Mexico, declining pipeline imports from Canada, and increasing LNG exports the US Energy Administration (EIA) forecasts. Meanwhile, Wood Mackenzie principal analyst, Patrick Kirby forecasts oil pricing dynamics will increase, through near-term $50-60 range.


Texas oil and gas boost

The Texas Alliance of Energy Producers said natural gas prices in July averaged $2.84 per thousand feet, increasing the value of Texas-produced gas by 2.3 percent to nearly $1.9 billion. Sizeable year-on-year improvements in the rig count, drilling permits and the value of Texas-produced crude oil and natural gas combined to push the Texas Petro Index up in July to 176.9, the eighth straight monthly increase. However, it is in oil where Texas and the US are excelling. “OPEC production curtailments did not achieve the desired price outcome,” said spokesman Karr Ingham. “Oil supplies remain plentiful because domestic producers are becoming increasingly efficient at producing crude oil at lower costs, so a $45 per barrel (US) oil market provides more incentive than in the past,” added Ingham, referring to the West Texas Intermediate (WTI) US benchmark oil price.


Florida LNG bunkering

Jax LNG, the port bunkering project in Jacksonville in Florida, has received a Letter of Acceptance (LOA) for the facility from the United States Coast Guard and approval to conduct ship-to-ship LNG fuel operations with the LNG barge “Clean Jacksonville”. The expectation is that ship-to-ship LNG bunkering will start in early 2018. Jax LNG already supplies fuel for the LNG-fueled container ships of US shipping line TOTE Maritime. The fuel is supplied by Pivotal LNG.