In this issue

 

The State of Alaska has approved ExxonMobil’s plan for the engineering and construction to expand the Point Thomson project on the North Slope oil and gas fields to increase future production and the prospects for the Alaska LNG project.

Kinder Morgan, the US pipeline and energy company, has taken the final investment decision (FID) with partners to proceed with the $1.7-billion Gulf Coast Express Pipeline Project that will boost natural gas supplies from the Permian Basin for LNG export plants and domestic users after having secured sufficient firm transportation agreements with shippers.

Consumption of natural gas in China is anticipated to triple to reach 57 billion cubic feet per day (Bcf/d) by 2040 and bullish analyst houses like Sanford C. Bernstein expect the country’s demand to surpass that of the United States, the current No.1 gas consumer, “sometime between 2040 and 2050.” In the first seven month of this year, the worth of US LNG exports exceeded $139 million, already 2% more than the 2016 total, according to figures by the US-China Economic and Security Review Commission. 

Rising exports of “abundant US natural gas” is estimated to support up to 452,000 new jobs and give a $73 billion boost to the economy by 2040 – at a “minimal impact on the natural gas prices,” according to a study by the American Petroleum Institute (API). The resource base is now seen as “larger, less expensive and more price responsive,“ API Chief Strategy Officer Marty Durbin commented. 

American government representatives have been reaching out to Japanese officials in the hope to find informal avenues of increasing the volume of US LNG exports to the Asia-Pacific region. The topic dominated the latest US-Japan economic dialogue meeting in Washington, and the deal-making continued at the LNG Producer-Consumer Conference in Tokyo. 

Mitsui OSK Lines, the Japanese ship owner with a LNG fleet of 70 vessels, has given the name “Energy Liberty” to a new-build vessel with a rarely used storage tank. The new-build tanker will transport LNG from the Cove Point liquefaction plant in Maryland, U.S., all the way to Tokyo Bay in Japan. 

Electrifying remote Indonesian islands through ships, or barges, that generated electricity using LNG, is at the centre of a research plan supported by the governments of Indonesia and Japan. Tokyo hopes to export the new technology to other island nations in Asia Pacific. 

Demand for natural gas is forecast to outpace the increase in domestic supply. India's gas market is expected to grow at compounded annual growth rate of 7% by 2020, driven by new gas infrastructure and increasing domestic production, according to Wood Mackenzie figures. 

Integrating North America’s abundant shale gas resources into global markets keeps prices subdued: NBP averaged at $10/mmBtu in 2011-14 and by 2016 lost more than half of its value, hovering around $4.63/mmBtu. According to Societe Generale analysis, natural gas is now in a unique position to help regions transition away from coal- and oil-fuelled power generation.

In the face of oversupplied global gas markets and rising LNG trade, the International Energy Agency (IEA) has voiced concerns that the transformation from regional to more flexible, interdependent gas markets is creating new security challenges. In the short-term, global portfolio players are expected to provide the needed additional flexibility from their currently open selling positions.

CEOs of the three gas liquefaction and export facilities near Gladstone in Queensland, Australia, have struck a deal with Prime Minister Malcolm Turnbull, promising to fill the expected shortfall and address any additional needs by offering gas on “secure and affordable” to domestic customers.

Encouraged by a seismic survey of Atlantic coast acreage, Argentina has announced it will auction offshore oil and gas exploration rights near its northeastern sea border next year. The energy ministry hopes the subsalt basin off Brazil continues south which could lead to discovery of attractive conventional fields that help reverse Argentina’s energy deficit. 

Kinder Morgan, the US pipeline company, has received permission from US regulators to advance with further work on storage for its export project at Elba Island near Savannah in the state of Georgia. Elba Island is an existing LNG import terminal being transformed into an export plant to produce an initial 2.5 mtpa. 

NextDecade, developer of the Rio Grande liquefaction plant in Texas, has received tax incentives for its project planned for the Port of Brownsville because of its jobs and investment potential.

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.