In this issue

 

Paso Norte Pipeline Group (PNP), the developer of a new US-Mexico interconnector, has launched a 30 day open season inviting shippers to express interest in delivering natural gas from the Permian Basin in the western part of Texas to under-supplied markets in Central and Western Mexico. The bidding process and consultations will last until March 5, 2018. 

Bogged down by gas shortage and high electricity prices, Australia is re-evaluating the scale and speed of its next wave of LNG export projects. Any slow-down in project development would leave more room for US spot LNG cargoes finding a home in high-prices Asian markets.

US President Donald Trump has made reforms of the environmental permitting process for pipelines a key part of his $1.5 trillion infrastructure plan. Speeding up regulatory approvals will help fast-track both gas export pipelines to Mexico and interstate pipelines to transport cheap, domestic shale gas to the second wave of US LNG export projects. 

Imposing a more stringent output cap on the Dutch Groningen field, Europe’s largest onshore gas reservoir, due to another earthquake in the area, would leave Europe dependent on importing more natural gas from Russia through the Nord Stream pipeline, Wood Mackenzie warns, saying “upside potential from Norway will be limited until 2019.” Importing spot cargoes with US LNG could come to rescue. 

Prices for US gas flowing to the Canadian provinces of Ontario and Quebec have risen by a third over the first nine months of 2017, pushed up by a 25% rise in imports. Northbound cross-border pipeline deliveries hit 693 billion cubic feet (Bcf) from January through to the start of October, up from 556 Bcf in the previous year, according the US Department of Energy (DoE). 

China's National Development and Reform Commission (NDRC) imposed a cap on thermal coal prices imports through Qinhuangdao port at RMB750/t from 5 February. Strong demand due to colder-than-normal weather in January had propelled up prices to a record RMB780/t for FOB Qinhuangdao 5500 kcal/kg coal. According to WoodMackenzie estimates, the new price cap will have an impact from now until mid-March. 

Hard-nosed Chinese buyers are sniffing at the economics of US LNG supply deals, trying to find cheaper deals elsewhere.

Cheniere Pembina Pipeline Corp., the Canadian energy infrastructure company, said it was making progress with a range of natural gas projects in North America, including the Jordan Cove LNG export plant planned for the northwest US state of Oregon.

Sempra Energy, the California-based utility transforming the US Cameron LNG terminal into an export plant, is still planning an additional Mexican LNG export venture with national Petroleos Mexicano (Pemex), first studied three years ago. IEnova and Pemex refloated the idea of reconfiguring the Costa Azul terminal Mexico’s Pacific coast to export US pipeline gas to markets in Asia and South America.

LNG exporter Cheniere Energy, owner and operator of the Sabine Pass plant in Louisiana and developer of the Corpus Christi facility in Texas posted a full-year loss though edged towards a fourth-quarter profit after shipping 200 cargoes in 2017.

Chart Industries, the US LNG equipment-maker, was moving in a positive path with rising sales and fourth-quarter profits after restructuring, acquiring three new companies and winning a contract for a proposed new LNG export plant in Louisiana.

As exports from the US accelerate, Asia’s growing gas import requirements are largely met by LNG on flexible trade terms that usher in a “new global gas order,” according to International Energy Agency (IEA). In a buyers’ market, three major suppliers – Australia, the USA and Russia – are trying to court price-sensitive buyers across Asia, notably China. 

Defying fresh sanctions by the Trump administration, a Gaselys tanker carrying the first LNG exported by the Yamal facility in the Russian Arctic, has berthed at the Engie SA Everett import terminal in Boston on January 28. This marks the first time that natural gas from Russia reaches the United States.

The February 2018 futures contract for natural gas on the New York Mercantile Exchange (NYMEX) is trading at a discount to the current spot price. This pricing pattern provides economic incentives to withdraw natural gas from storage to avoid exposure to the spot market. 

News Nudges

Commissioning cargo departs from Corpus Christi Train-1

The first commissioning cargo has loaded and departed from Train-1 at Cheniere Energy’s Corpus Christi LNG export terminal in Texas. The LNG was loaded onto the 174,000 cubic metres capacity carrier “Maria Energy”, charted by Houston, Cheniere’s marketing unit. Start-up of Train-1 marks the first export of LNG from the state and from a greenfield liquefaction facility in the lower 48 states. All three Corpus Christi trains combined will produce up to 13.5 mtpa. The first two Trains are fully contracted and Train 3 is mostly contracted. Any excess capacity will be available for Cheniere Marketing to sell. Corpus Christi is being constructed at a cost of $15 billion.