LNG

Shell has temporarily suspended its $3 billion share buyback programme, citing legal constraints linked to its pending acquisition of ARC Resources. The $16.4 billion deal would expand Shell’s position in the Montney Shale – a key source of feedgas supply for LNG Canada.

Gaztransport and Technigaz (GTT), the French maritime LNG storage technology company, has received an order from its partner, the South Korean shipyard Samsung Heavy Industries (SHI), for the storage tank design for a floating unit ordered by Canada’s Cedar LNG project in British Columbia.

Pembina Pipeline Corp., the Canadian natural gas and energy transportation and terminals company, and its Cedar floating LNG partner, the Haisla First Nation of British Columbia, have reached a positive investment decision and will proceed with the near-shore FLNG project on Haisla traditional territory on the Douglas Channel near Kitimat.

Chart Industries, the US LNG equipment-maker and industrial gases company, has received a key order from the Cedar floating LNG project being developed in the Canadian Pacific province of British Columbia.

Pembina Pipeline Corp., the Canadian natural gas and energy transportation and terminals company, and its Cedar floating LNG partner, the Haisla Nation of British Columbia, have reached landmark deals on LNG offtake, construction and financing.

Cheniere Energy, the largest US liquefied natural gas exporter with its two plants at Corpus Christi in Texas and Sabine Pass in Louisiana, said the Sabine expansion project known as SPL Stage 5 has signed a long-term Integrated Production Marketing gas supply agreement with the US unit of Canadian producer ARC Resources.

Nov 5 (LNGJ) - ARC Resources, the Canadian company based in Calgary and with a diverse portfolio in the Montney basin, entered into a long-term gas supply agreement to deliver about 150 million cubic feet per day of natural gas from ARC's Sunrise facility to a shareholder in LNG Canada, the export project under construction on the Pacific Coast of British Columbia.

   ARC made the announcement as it delivered record quarterly production of an average 353,657 barrels of oil equivalent per day and generated funds from operations of C$765 million (US$615M).

The British Columbia Oil and Gas Commission has just highlighted the massive volumes of shale gas reserves to underpin LNG export projects in the Canadian province with the Montney Shale alone having 1,965 trillion cubic feet of gas-in-place unconventional resources.

The LNG Canada project led by Royal Dutch Shell will initially produce 14 million tonnes per annum of LNG and has an option to increase its capacity to 28 MTPA.

The Shell project includes a US$5-billion pipeline of 670 kilometres being developed by TransCanada Corp. to bring the feed-gas from the Montney in northeast BC to the Pacific Coast.

Feed-gas for Chevron’s Kitimat plant will come from the large upstream shale-gas resources in the 322,000 net acres it has in the Horn River and Liard Basins, also in northeast BC.

Chevron will then transport the gas on the proposed Pacific Trail Pipeline to the liquefaction plant site at Bish Cove, also near Kitimat.

While the BC Commission put the Montney Shale resources in place at around 1,965 Tcf, for the project being developed by Chevron in partnership with Woodside of Australia will use some of the Liard Shale’s 848 Tcf and the Horn River Shale’s 448 Tcf.

The northern natural gas basins account for nine of 10 new wells in the province and currently account for 4.9 billion cubic feet per day, or 77 percent, of BC's output.

“The 42 Tcf of Montney gas booked as market-ready reserves since horizontal drilling and hydraulic fracturing arrived to enable development in 2005 are only 2 percent of the resources, “ said the Commission in its 40-page report.

In the last five years natural gas production has increased by 23 percent resulting in increased loads within the existing pipeline delivery points for the Montney, Horn River and Liard basins.

Most of the gas within these regions is transported by pipelines by Enbridge and TransCanada.

“In 2005, the onset of Montney horizontal drilling with hydraulic stimulation created a new supply of gas. This was followed by Horn River development in 2010. Further development of the Horn River basin has now ceased, awaiting economic gas demand,” stated the Commission.

Chevron has recently revived its almost dormant LNG project originally proposed with Apache Corp. for Bish Cove near Kitimat by applying to regulators for export capacity of up to 18 MTPA.

The prolific Montney formation covers 130,000 square kilometres at various depths of BC and the neighbouring province of Alberta.

The provinces split the geology evenly by area, but BC has about 60 percent of the gas estimated to figure in the Montney marketable reserve forecast, or 271 Tcf of the formation’s total 449 Tcf of marketable gas.

The Commission listed the leading BC Montney shale developers and they include participants in the LNG Canada project, Shell and Petronas of Malaysia.

Other asset holders are Encana Corp., ARC Resources, Tourmaline Oil, Painted Pony Energy, Murphy Oil Corp., Canadian Natural Resources Ltd., Canbriam Energy and Crew Energy.

Shell and its Asian partners, also including PetroChina, Japan's Mitsubishi and Korea Gas Corp. have started work at the brownfield site near Kitimat, a former energy products terminal acquired by Shell in 2011 when the delayed Chevron project had already cleared its Bish Cove site to be ready for construction.