NextDecade, the US project developer run by former Shell executive Kathleen Eisbrenner, has signed land agreements for a 1,000 acres site with deep water access to the Gulf of Mexico at Shoal Point, Texas, for the development of a “multi-billion dollar” LNG export facility.
The Point Comfort near-shore LNG project in Calhoun County, Texas., run by Lloyds Energy Group, has submitted an application to the US Department of Energy (DoE) to export shipments to countries with a US Free Trade Agreement (FTA).
Air Products, a leading US LNG equipment maker, has made a takeover approach to Yingde Gases – the largest gas services company in China. With this move, Air Products seeks to expand its foothold in this key market in Asia after completing a company overhaul.
Australia’s Liquefied Natural Gas Ltd, whose ventures include the Magnolia LNG plant in Louisiana and the Bear Head facility planned for Nova Scotia, has been asked by the Australian Securities Exchange (ASX) to explain reasons behind the 23% surge of its shares.
A project aimed at importing liquefied natural gas cargoes into the UK natural gas market at the port of Barrow-in-Furness in Cumbria, northwest England, from Louisiana on the US Gulf Coast is still alive after an offtake agreement was extended to November 2017.
Swing supply sets the price of oil and significantly influences that of natural gas. Though OPEC members seem to have finally overcome internal rifts and are starting to implement production cuts – the cartel has lost much of its clout to US wildcats drillers who have effectively emerged as the new price-setters. A marginal recovery in oil prices can prompt American shale drillers to produce more liquids as well as shale gas that helps underpin an expansion of US LNG exports.
To quote an American saying – and President-elect Donald Trump just got lucky with the discovery of the vast Wolfcamp Shale in Texas that holds oil and gas reserves worth up to $900 billion.
Manzanillo, a regasification plant at the Mexican Pacific Coast, has recently received a few cargoes from Sabine Pass. Cheniere, having exported it first cargo to Manzanillo in August for $4.23/mmBtu, has sent out another cargo in October and one more in November. Yet, such shipments will abate – they will be priced out by pipeline gas deliveries once the 12 new interconnectors are up and running.
The incoming year will see a boost in global LNG supply. Australia is expected to add 15 mpta to reach 66 mpta, catching up the top LNG exporter, Qatar, with 78 mtpa. In the US, start-up of Cove Point will gradually add 13.5 mtpa, while a further two trains at Sabine Pass will add another 9 mpta.
With the LNG overcapacity forecast to wane in the mid-2020s, IEA analysts say that timely investment in new gas supply projects is needed to pre-empt price volatility. Inter-regional natural gas and LNG trade is set to grow by 45% over the next 10 years and by 70% through 2040 as overcapacity is gradually absorbed and the market rebalances.
PetroChina recently commissioned new storage and regasification facilities at its Rudong terminal in Jiangsu province. Rudong could be the only Chinese import terminal to handle regasified Canadian LNG in 2020 – as 35% in the terminal is held by Woodfibre, the developer of an export plant at Squamish, north of Vancouver.
Carib Energy, a subsidiary of US shipping line Crowley Maritime Corp., is gearing up to export LNG in containers to Latin America after it was given a 20-year permit by the US Department of Energy (DoE) to export around 1.3 Bcf of natural gas.
Green light to ship US LNG to all destinations has been granted to the Elba Island LNG export project, where Shell is waiting in the wings as the main offtaker.
Exploration is gradually returning to profitability after five years of only single-digit returns. Dr Andrew Latham, VP of exploration at Wood Mackenzie commented: "The industry has a good chance of achieving double digit returns in 2017.
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.”