In this issue

 

Houston-based Sanchez Energy said it has made further progress with the Catarina shale-gas wells underpinning plans for a liquefaction plant in South Texas. Sanchez and its partner Targa said they would build the LNG plant and pipelines on the western part of the Eagle Ford. 

A ‘facility development permit’ has been granted to Royal Dutch Shell for development of up to 13 mtpa LNG Canada project, to be near Kitimat on British Columbia’s Pacific coastline. Green light from the provincial regulator, BC Oil and Gas Commission, marks another step towards a final investment decision, though project partners still need to finalize cost projections on EPC works. 

Canada's National Energy Board (NEB) has awarded its first 40-year LNG export license to the Shell-led LNG Canada Development Inc. Project developers, including PetroChina, were seeking a 6.1% annual tolerance and a maximum annual export quantity of 38.056 Bcm of natural gas. 

Expanding US LNG exports beyond 12 billion cubic feet per day (Bcf/d) would benefit the US economy while maintaining cheap gas prices at home that give the domestic industry a competitive  edge. In disregard of stalling demand in Japan, South Korea and China, analyst project a mid-term 20 Bcf/d of external demand for US LNG and suggest that stepping up exports to 12-20 Bcf/d could reap $7-20 billion annually from 2026 to 2040 in today's prices. 

With the liquefaction process at Cheniere Energy’s Sabine Pass terminal now in full swing, it looks like the first cargo will leave the Louisiana facility as planned in the third week of January. Cheniere officially flipped the switch on December 30, after having invested close to $11 billion in the first US LNG export project. 

Neal Shear, interim chief executive at Cheniere Energy, has been given the green light to continue in his post until June 15, 2016. He succeeded the famed Charif Souki, who was replaced on December 13 because of policy differences with new shareholders, notably the activist investor Carl Icahn. 

US gas prices are likely to stay low for longer, as the Energy Information Administration (EIA) expects gas production to rise by 1.5 Bcf/d in 2016 despite declining rig counts – largely thanks to improved efficiency in shale gas drilling. 

Tuesday, 16 February 2016

Natural gas production across all major US shale regions are seen declining. Substantial drop in rig counts since mid-2014 can no longer be compensated by productivity gains, hence EIA analysts anticipate gas production will decline from 44.3 billion cubic feet per day in December to just over 43.9 Bcf/d in January 2016. 

The U.S. has been using the anti-Russian sentiment in the Baltic countries to foster LNG deals with Lithuania. Next in line might be Turkey, as the country is at the brink of a gas supply shortage, exacerbated by the risk of a cut in Russian supplies. 

EU leaders reckon that Nord Stream-2 contradicts efforts to reduce Europe's energy dependency and undermines Poland and Ukraine’s role as gas transit countries. The pipeline extension is meant to transport another 55 Bcm of Russian gas to Germany, but there is little need for additional volumes as long as CCGT profit margins stay negative. 

Shale gas from the US has been brand marked as ‘a new rival’ by the Gas Exporting Countries Forum (GECF) as it undermines the alliance’s strategy on pricing and production volumes. Leaders of Russia and Iran, whose countries hold 44% of global gas reserves, have forged closer ties at the side-lines of latest Gas OPEC meeting in Tehran to rise by 1.5 Bcf/d in 2016 despite declining rig counts – largely thanks to improved efficiency in shale gas drilling. 

Shale gas from the US has been brand marked as ‘a new rival’ by the Gas Exporting Countries Forum (GECF) as it undermines the alliance’s strategy on pricing and production volumes. Leaders of Russia and Iran, whose countries hold 44% of global gas reserves, have forged closer ties at the side-lines of latest Gas OPEC meeting in Tehran to rise by 1.5 Bcf/d in 2016 despite declining rig counts – largely thanks to improved efficiency in shale gas drilling. 

Pieridae Energy, the developer of the Goldboro LNG project in the Canadian province of Nova Scotia, has forged a shareholder relationship with Orlan of Poland, strengthening its European ties beyond the long-term sales agreement with E.ON Global Commodities. 

Houston-based Targa Resources Partners and Sanchez Energy have committed to invest an intital $125 million and $115m, respectively, to build a LNG processing plant and feed-gas pipelines that will exclusively target resources in the Eagle Ford Shale in southern Texas. 

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.