In this issue

 

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.

The global trend towards urbanization will increase business activities within some of the world fast-growing port cities, driving demand for Floating LNG power vessels. MarketsandMarkets analysis sees the FLNG power vessel market to expand from currently $860 million to nearly $932 million by 2023.

Higher relative cost to produce natural gas from the Haynesville region has led to a gradual decrease in shale gas production over the past five years. The Haynesville formation lies at a greater depth than Marcellus, so drilling costs are significantly more expensive. This caused a sharp drop in monthly dry gas production from a peak at 7.4 billion cubic feet per day (Bcf/d) in January 2012 to less than half that level by early 2016, according to EIA figures. Output rebounded since then to 6.4 Bcf/d in June 2018.

Gross natural gas production across the United States has risen by more than 10% in recent month, spurred by new drilling and completion techniques that propelled up output from Appalachian Basin in the Northeast, the Permian Basin in western Texas and New Mexico, and the Haynesville Shale in Texas and Louisiana. The contribution of these three regions has increased from 15% to nearly 50% of total gas production.

Cheniere Energy, the leading US LNG exporter, has signed its latest supply agreement with Switzerland-based independent commodities trader Vitol. Cheniere said its marketing unit will provide 700,000 tonnes per annum for 15 years to Vitol on a free-on-board basis whereby the buyer provides the shipping.

Monday, 01 October 2018

Pieridae Energy of Canada, developer of the Goldboro LNG export project in the Atlantic coast province of Nova Scotia to supply German customers, has named Melanie Litoski as its Chief Financial Officer from the start of October. Litoski succeeds Mario Racicot who has just retired from the post.

Monday, 01 October 2018

US LNG decreased by one shipment on the week ending September 21 to five cargoes, four from the Sabine Pass plant in Louisiana and one from Cove Point in Maryland. Three more carriers were lifting cargoes, two at Sabine and one at Cove Point. “Cove Point LNG facility received an LNG vessel on September 16, two days after the landfall of Hurricane Florence in North Carolina,” noted the weekly report from the Energy information Administration (EIA).

Tellurian, developer of the proposed 27 mtpa Driftwood LNG export plant and three affiliated pipelines, has received a draft environmental impact statement from US regulators allowing it to stay on track for a start-up in 2023.

The US Department of Energy (DoE) has issued a short-term order to Freeport LNG, under development at Quintana Island in Texas, to export up to 2.14 billion cubic feet per day (bcf/d) of natural gas as LNG over a two-year period to both free-trade and non-free trade agreement countries.

Financing models of the U.S. shale oil and gas industry – often small wildcatters – has for long been characterised by negative free cash flow as expectations of rising production and cost improvements led to continuous overspending in the sector. Over the last few months, however, IEA analysts have noticed a “notable improvement in financial condition,” though the overall health of the industry remains fragile. 

Dealing a blow to US LNG aspirations, PetroChina considers suspending its US LNG purchases for delivery this winter. Location swaps of cargoes might help sort matter, with Japan and South Korea expected to step up imports of American LNG in order to sell some cargoes onward to Chinese buyers. 

One-in-five LNG cargoes setting sail from Sabine Pass are heading to Mexico this year while demand from Argentina and Brazil remains sluggish. Mexico imported 29 cargoes from the US in H1-2018, according to data from the U.S. Department of Energy (DoE). 

AES Colón – a $1.15 billion LNG import terminal and adjacent combined-cycle power plant – has just been inaugurated in Panama. The project comprises the first LNG regas terminal in Central America and a CCGT with 381 MW capacity. Start of commercial operation is slated for September 1.

Seeking to accommodate U.S. President Donald Trump’s demands for greater LNG sales to Europe, the European Commission President Jean-Claude Junker has said the EU would build more LNG import terminals. However, this does not mean imports will increase as the JKM-TTF spread remained wide enough over the past year for US cargoes to get a higher netback going to Asian than Europe.

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.