In this issue

 

Keen to accelerated the commissioning of Train-5 at Sabine Pass LNG, Cheniere Energy has filed a request with the Federal Energy Regulatory Commission (FERC) for permission to inject feed gas into the new liquefaction train “at the earliest time possible, but no later than September 6” so that it can remain on schedule.

TransCanada, a major North American pipeline operator, has placed into service the Topolobampo Pipeline at a cost of $1.2 billion. Spanning over a distance of 348 miles (560km), the pipeline will provide export capacity of 670 million cubic feet of natural gas per day (MMcbf/d) from Texas to the Mexican states of Chihuahua and Sinaloa. Mexico is importing U.S. shale gas to cover rising demand from its power sector. 

Cheniere Energy is working towards having Corpus Christi liquefaction Trains 1 and 2 substantially completed in the first half of 2019, and Train-2 in the second half of next year. Engineering is still ongoing at Train-3 which is 67.8% complete, according to a FERC filing.

The spread in natural gas prices between the Permian Basin, as priced at the Waha Hub in western Texas, and the U.S. national benchmark Henry Hub in Louisiana has grown considerably. Prices at Waha are now nearly $1/MMBt lower than Henry hub due to growing production and pipeline constraints that limited the onward transport of the rising gas supply from the Permian Basin. 

Nearly two-thirds of oil and gas sector leaders, surveyed by the Norwegian classification society DNV GL, have increased spending on gas projects in 2018; hence natural gas is expected to overtake oil as the world’s primary energy source in the mid-2030s. Thereafter, the energy transition will enter its final phase-out of fossil fuels, with hydrogen and renewables set to gain momentum. 

Improved execution of oil & gas upstream projects is now being achieved thanks to greater corporate discipline, more pre-FID planning and reduced project scope. This allows project delivery to finally hit the mark after a period of dismal performance on project returns, a new Wood Mackenzie report shows. 

Despite harsh rhetoric, both China and the United States can still avoid a damaging trade war, industry participants hope. Strikingly, China has not included US agricultural products and LNG on a list of possible traffic, signaling the importance of natural gas in the power sector as Beijing strives to reduce air pollution. 

Skepticism abounds if the LNG Canada projects will ever be built in British Columbia but Shell Canada’s President Michael Crothers is adamant that project partners want to start construction at the end of this year. Seeking to swiftly monetize Canada’s abundant natural gas reserves, JV partners are going through a process with two remaining EPC contractors who are bidding for the scope of work at the liquefaction plant in Kitimat. 

U.S. gas companies have been persistently waiting for new Appalachia takeaway capacity – notably the Rover Phase-2 pipeline – to come online this year so the region can provide the bulk of 2018’s dry production growth. Analysts at the consultancy Energy Aspects anticipate output gains in the Lower 48 will grow by 7.3 bcf/d year-on-year, of which 4.0 bcf/d is scheduled to come from Appalachia region. 

Developing Alaska’s Arctic National Wildlife Refuge (ANWR) would substantially increase U.S. crude oil and natural gas production after 2030. The state of Alaska holds an estimated 36 billion barrels of crude oil and 137 trillion cubic feet of natural gas, so after the Trump administration lifted an ANWR drilling moratorium in December 2017, wildcatters are rushing north to tap America’s Arctic resources. 

Woodside Petroleum is close to making a decision about whether to continue to invest in Sempra Energy’s Port Arthur LNG project in Texas. Speaking at the World Gas Conference in Washington, Woodside CEO Peter Coleman put into questions the adequacy of return from any financial involvement in the venture.

‎The TechnipFMC-Kiewit partnership has selected as EPC contractors for transforming Sempra Energy’s LNG import terminal at Costa Azul in northern Mexico into a medium-scale export plant. The project will be built under a lump-sum EPC contract.

Dry natural gas production in the United States is about to reach a fresh record of 81 Bcf per day, spurring LNG export growth and pushing down prices this year. According to the U.S. Energy Agency (EIA), Henry Hub prices are forecast to average $2.99/MMBtu for the full year 2018, but notch up to $3.08/MMBtu in 2019. 

Gaining access to shale assets in Argentina, Qatar Petroleum has acquired a 30% stake in ExxonMobil’s prolific Vaca Muerta oil and gas play in the onshore Neuquén basin in Argentina. The deal is hoped to bring fresh drive to shale drilling in Argentina which had been rather slow due to local price controls for natural gas. However, President Mauricio Macri's right-of centre government lately doubled wellhead gas prices for existing fields and introduced incentive prices for new developments. 

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.