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.
Is it cheaper to pay for the price spikes of spot LNG cargoes during the winter season or for building new pipelines in New England? That is the key question to solve surging gas-to-power demand in this unique corner of the United States.
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.
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.