In this issue

 

Japan's Jera Co, a joint venture of Tepco and Chubu Electric, has started to sell excess contracted LNG to EDF Trading under a deal sealed in late May to divest up to 1.5 mtpa to the London-based trading arm of the French utility. Sluggish gas demand in Japan makes utility buyers seek to offload over-contracted volumes.

Dominion has filed a report to FERC on the progress of construction work at its 5.25 mtpa Cove Point LNG terminal in Maryland, stating the regas project was now 38% complete and would be on track to start operation in late 2017.

Overstating its optimism, Gazprom has suggested China’s gas demand will exceed 260 Bcm in 2016 and edge close to 300 Bcm/year by 2020. Actual figures show a cautious recovery, with demand up 0.3 million tons, or 27%, to 1.43 million tons y-o-y in May. South Korea, in contrast, saw a 5.8% decline in LNG imports last month – the fifth month in a row of y/y declines.

An oversupply in global gas markets is here to stay until the end of the decade, as the LNG glut is unlikely to be soaked up by utility buyers. IEA Executive Director Fatih Birol explained that cheaper coal and continued strong renewables growth were blocking gas from expanding more rapidly in the power sector.

Nova Scotia-based Goldboro LNG and Woodfibre LNG in Squamish, BC, are seeking to take a financial investment decision by the end of this year. Woodfibre’s prospects just got boosted by signing-up a major Chinese buyer, while the offtake of Goldboro’s entire Train 1 is underpinned by a firm commitment from Germany’s Uniper.

While the US is aggressively ramping up its liquefaction and export capacity, Canada is still facing difficulties of getting its huge land-locked gas bounty in Alberta to the market. “Our former biggest market – the US – has become our biggest competitor,” industry executives agreed at a conference in Vancouver.

Four commissioning cargoes from Sabine Pass have been shipped to customers in Brazil, India and the United Arab Emirates. The US Department of Energy has published data on liquefied natural gas exports for the first quarter of 2016, showing prices of LNG sold from the Cheniere’s facility at Sabine Pass ranging from $3.35 per million British thermal units to $3.77/mmBtu. 

Philippine’s major power and gas utility, First Gen, is in talks with LNG suppliers as it seeks to secure a long-term import contract over 0.5-1 mtpa to help fuel new gas power projects in Luzon. “Over the past year, we’ve been speaking with over 20 suppliers but terms vary greatly,” Jose Aldon, CEO, AXI LNGas, senior advisor to First Gen told LNG North America.

Hawaiian Electric Company (HECO) has filed for regulatory approval for a 20-year LNG import contract with Fortis that would help supply gas to power plants on O’ahu, Hawai’i Island and Maui starting from 2021. Shifting from fuel oil to natural gas is estimated to lead to up to $3.7 billion in customer savings.

Segolene Royale, the French minister of the Environment, Energy and Marine Affairs, has told parliament she will examine ways to ban LNG imports sourced from shale gas. Three of France’s main energy companies – Total, EdF and Engie – have contracts to receive LNG cargoes from the US Gulf Coast.

Advancing a competing project, the former Cheniere CEO Charif Souki has filed an initial plan with regulators for Driftwood LNG on the US Gulf Coast to produce 26 mtpa. Souki is throwing his weight behind this new project together with ex-BG Group LNG chief Martin Houston.

Shares in Cheniere Energy surged over 6% on the day when the first US LNG exporter named a new CEO, ending a quarrel at the top of the firm. The former head of Calpine Corp Jack Fusco, who was once VP for Goldman Sachs, is now at the helm of Cheniere, replacing interim CEO Neal Shear.

Florida-based Eagle LNG has announced it started the construction of its Florida liquefaction plant in the port city of Jacksonville to supply the marine fuels market and other sectors from 2017.

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.

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.”