In this issue

 

Anticipating a speedy energy transition globally, the global classification society DVN GV says upstream players are adapting to this trend by shifting to faster, leaner and cleaner hydrocarbon production techniques. Oil and gas demand is forecast to peak in 2023 and 2034, respectively, prompting upstream players to favour a greater number of smaller reservoirs with shorter life-spans. 

Coal-to-gas switch policies in China’s energy sector are expected to boost the country’s LNG demand by a 12 million tons in 2018, exceeding last year’s record growth of 8 mt. Already today, China’s energy hunger lies behind half of global LNG demand growth and Wood Mackenzie says: “Given China is only through its five year clean air policy, this growth story is far from finished.” 

AES Colón – a $1.15 billion LNG import terminal and adjacent combined-cycle power plant – is being fast-tracked in Panama. The project comprises the first LNG regas terminal in Central America and a CCGT with 381 MW capacity. Commercial operation was slated to start on September 1.

The International Energy Agency (IEA) has called on Saudi Arabia, Russia, Iraq, the UEA, Nigeria and Venezuela to step up efforts to diversify their economies to be able to cope with volatility of shale gas supply, and uncertainties over the pace of demand growth. In its Outlook for Producer Economies, the IEA assesses how the world’s six resource-dependent economies might fare until 2040 under a variety of price and policy scenarios. 

Since the Trump administration threatened fresh sanctions against Iran, the oil-rich country has substantially scaled down its production and exports of crude oil and natural gas. In May 2018, the White House said it would withdraw from the Joint Comprehensive Plan of Action (JCPOA) and reinstate sanctions against the regime in Teheran. 

Unplanned downtime can cost an LNG facility as much as $4 million per day. With potential costs so high, profitability is largely linked with unplanned downtime. According to GE Power estimates, unplanned shutdowns in the process industry globally cost 5% of total annual production — that’s as much as $30 billion a year.

Dresser-Rand, part of Siemens Group, has commissioned an LNGo-HP (high-pressure) micro-scale natural gas liquefaction system for Altagas Ltd. in Dawson Creek, British Columbia, Canada. Producing approximately 30,000 gallons of LNG per day since January 25, 2018, the Dawson Creek facility allows Altagas to scale production in line with demand. The LNGo-HP system converts diesel and other fuels to natural gas, enabling users to monetize stranded gas deposits.

Sempra Energy, developer of the Cameron LNG export plant in Louisiana, has received its draft environmental impact statement from regulators for the proposed Port Arthur LNG project in Texas, comprising the largest liquefaction Trains planned so far for a Gulf Coast venture.

Federal Energy Regulatory Commission (FERC) has approved Williams’ request to place its Atlantic Sunrise pipeline project into full service. Operations commenced in early October, increasing design capacity of the Transco pipeline for natural gas from Marcellus Shale by 1.7 billion cubic feet per day (Bcf/d), or approximately 15%, to 15.8 Bcf/d.

As the US-China trade war escalates, Beijing says it has “no chance but to retaliate” new trade tariffs imposed by the Trump administration. Effective September 24, the Chinese President Xi Jinping implemented a 10% tariff on US LNG imports , casting a shadow over projected new US export terminals. China used to be the No.2 buyer of US LNG, but state-owned PetroChina already suspended buying American gas and opted to enter a 22-year purchase agreement with Qatargas.

Before the turn of 2018/19, Germany will decide where to locate its first LNG import terminal. The German economy and energy minister Altmaier announced this move as “a gesture to our American friends” that could help ease tensions over the Nord Stream-2 pipeline project, led by Russia’s Gazprom.

Exports of natural gas from the U.S. to Mexico by pipeline exceeded 5 billion cubic feet per day (Bcf/d) for the first time in July 2018, according to Genscape data, after several key interconnectors were commissioned. By the end of 2018, anther four of six major strategic pipelines within Mexico will start up, giving further scope for export of constraint Permian production in western Texas.

Trinidad and Tobago is increasing sources of feed-gas for the Atlantic LNG plant at Point Fortin on Trinidad. To that end, the government of Trinidad and Tobago has signed an agreement with Venezuela to purchase 0.15 Bcf/d of natural gas from Venezuela’s offshore Dragon field.

Global gas trade expanded last year by 63 billion cubic metres, or 6.2%, with growth in LNG outpacing growth in pipeline trading, according to the latest BP Statistical Review of World Energy. The apparent absence of a glut shows, according to analysts, that any surplus LNG resulted in bouts of unsustainably low prices rather than a build-up of idle capacity.

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.