LNG

Abu Dhabi National Oil Company’s (ADNOC) is exploring investments in Canada’s upstream and LNG sectors through its affiliate XRG, upstream CEO Musabbeh Al Kaabi said at the at the Global Energy Show in Calgary this week.

Woodside Energy, the Australian liquefied natural gas producer, said it has a taken stakes in nine exploration blocks in the Santos Basin off southeastern Brazil.

Gazprom, the Russian natural gas company and LNG industry player, has had its credit rating raised because it's so close to the government it would be likely to receive “extraordinary state support in case of distress.”

By John McKay

Investment bankers in Europe have tipped Russia’s Gazprom, Norway’s Statoil, France’s Total, and BP and BG Group of the UK as the best medium-term buys for stock market investors in the energy sector, citing their liquefied natural gas activities as a positive sign.

Shares in Gazprom, which is the premium pick of most brokers, have surged to records in the New Year as the Russian natural gas monopoly and future LNG heavy-hitter has forecast a 10 percent rise in annual profits to more than $6 billion.

By Patti Schom-Moffatt, Director of Consultation and Communications, Kitimat LNG Ltd.
An LNG terminal project proposed for northern British Columbia has taken a major step forward to become North America’s first West Coast facility with an Agreement in Principle between the project company and the region’s Haisla First Nation tribe.

Kitimat LNG Inc., a Canadian energy infrastructure company, is proposing to build, own and operate an LNG receiving terminal located north of Vancouver.

BG Group of the UK, one of the world’s most active LNG players, is likely to boost deliveries to the US during 2006 as the biggest European capacity holder in regasification terminals there, and as it secures more off-take this year from Trinidad and Egypt.

The UK company cheered investors when it issued a very upbeat earnings statement earlier this month, with fourth-quarter profit more than doubling to a higher-than-forecast £504 million ($878M) and LNG operating profit trebling for the quarter and rising by 87 percent for the full year.

Donald A. Norman , Thomas J. Duesterberg , US Manufacturers’ Alliance

As recently as the 1980s and 1990s, much of the industrial strength of the United States derived from its abundant supplies and efficient production of energy resources. LNG promises to be an important source for new gas supplies in the US, as well as throughout the world.

Given the difficulties in gaining approval to develop new natural gas production in areas
where gas reserves are thought to be significant and, given the expected time frame before a pipeline from Alaska’s North Slope is constructed, LNG is our best hope for adding measurably to US gas supplies in the short-to-medium term.

LNG imports into the US totaled 631 billion cubic feet in 2005, or 2.8 percent of total natural gas consumption.

With more than 4,000 safe and timely deliveries of more than 200 million tonnes of LNG over the last 25 years, Malaysia’s MISC Berhad has grown from a humble player with a micro fleet of five to become the largest single owner-operator of LNG tankers in the world, with 21 LNG tankers and eight newbuilds expected to be delivered in 2008.

In terms of cubic capacity, MISC has approximately 10 per cent of the market share in the LNG segment.

MISC began its foray into the LNG transportation in 1983 with the delivery for Malaysian national energy group Petronas of its first LNG cargo to Tokyo Gas’s terminal in Sodegaura, Chiba.

From the 1980s up to 2002, MISC’s sole client has been PETRONAS, whose evolution into a major LNG producer and supplier has helped set in motion MISC’s own ventures into energy transportation.

The number of prospective projects is going to stop growing and the commercial window of opportunity for 2010-2012 will begin to close

Competition brings together large firms with equity LNG supply, large firms without equity stakes in liquefaction and independent developers

The number of prospective LNG terminal projects in North America has exceeded by a great margin the actual needs of the market.

It has become more than clear that of the sixty-odd approved, proposed and potential terminal projects tracked by the FERC, only some will see their way through to construction and eventual commissioning.

Saeid Mokhatab and David Wood

There is a distinct contrast between two prevailing LNG trading alternatives: 1) the traditional, risk-averse, long-term contract-dependent with a floor price and tough take-or-pay terms; 2) the free market, short-term and long-term trading terms with prices indexed to a volatile gas market benchmark price.

These trading alternatives - result in a quite different balance of risks and rewards among the parties in each case.

Long-term contracts give sellers the assurance that they have defined and secure outlets for substantial volumes of gas at prices usually indexed to market prices for competing fuels.