In this issue

 

Since the U.S. shale oil and gas revolution ended the need to import crude oil from Mexico, the trade balance shifted and U.S. energy exports have been exceeding imports from Mexico for each of the past three years. In 2017, overall U.S. energy exports to Mexico hit a record high of $25.8 billion in 2017, more than twice as much as the $11.1 billion value of imports from Mexico.

The first cargo to be exported from the new Cove Point liquefied natural gas export plant on Chesapeake Bay in Maryland has arrived at the UK port of Milford Haven and is only the second US shipment to be sent to Britain since US LNG exports began in 2016, while almost 40 shipments have been sent to other European nations, mainly in the South. 

Harvey Gulf International Marine, the US small-scale fleet owner and liquefied natural gas bunkering specialist, has filed for Chapter 11 bankruptcy protection, though the move would not affect LNG operations.

“Gemmata”, a tanker with 138,000 cbm capacity operated by Shell Shipping, has set sail from Cove Point LNG export facility in Maryland, lifting the first cargo. The tanker departed just after midnight on March 2, awaiting orders, according to shipping data which indicates Shell wants to sell it into the spot market. 

American shale gas exporters are beefing up their business with Chinese gas buyers: In February 2018, Cheniere and CNPC signed two contracts for longterm LNG offtake from Sabine Pass and Corpus Christi, a new facility under construction in Texas. These deals were preceded by preliminary export agreements from the Delfin LNG project off Louisiana’s coast, and the proposed Alaska LNG project. 

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.

News Nudges

FERC ends plans for Puerto Rico LNG expansion

“Aguirre Offshore GasPort requests that FERC vacate its 2015 order authorizing the construction and operation of LNG import terminal facilities along the southern shore of the Commonwealth of Puerto Rico near the municipality of Salinas,” FERC said, adding: “In its request to vacate, Aguirre stated that it no longer intends to proceed with the project, that no construction has been undertaken, and that no facilities are in service.” The Aguirre project company filed its last status report in June 2018 to the regulator to keep its permit process up to date, but later gave notice that the venture was not proceeding. The FERC notice has finally pulls the curtain down for now on plans for LNG expansion in Puerto Rico. Excelerate Energy had previously agreed to provide a floating storage and regasification unit (FSRU) for the Aguirre project in 2019, but was forced to cancel its contract with the bankrupt Puerto Rico Electric Power Authority. The FSRU was to have been deployed offshore Salinas and would also have had a 6.4 kilometres pipeline to provide regasified LNG to the Aguirre power station.