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2011 June


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2011 Jun
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New LNG Import Terminals Not Viable

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Top

2011 June 30

US Natgas Production Up, Prices & Imports Down

Barclays: US nat gas edges lower supply concerns — Commodity Online

The increase in supply roughly matched that predicted by more contemporaneous pipeline flow data, meaning the market was not necessarily caught off-guard by the robust production increase reported. On a y/y basis, production is running well ahead of last year by 4.6 Bcf/d, led by growth in Louisiana and "Other States."

The success of shale gas, in particular from the Haynesville and Marcellus, in boosting these volumes is unmistakable. More recent pipeline data and rig count levels suggest production has not yet turned the corner to declines. Elsewhere in the data, net trade in April helped considerably to balance the market.

Low cost US production is obviating the need to import higher-priced gas elsewhere and is indeed making deeper inroads into Mexico, a trend we discussed recently in Natural Gas Weekly Kaleidoscope: Fueling Mexico, June 21, 2011. [Red bold emphasis added.]

Massive undiscovered oil and gas reserves in the Cook Inlet region — OilPrice.com

Since oil and gas production began in the Cook Inlet region in 1958, more than 1.3 billion barrels of oil and 7.8 trillion cubic feet of gas have been produced, yet the new USGS assessment shows that significant undiscovered gas remains.

The USGS assessment of undiscovered gas resources ranges from 4.976 to 39.737 trillion cubic feet (95 percent and 5 percent probability, respectively. Of this total, about 72 percent is estimated to be found in conventional accumulations, 25 percent in coalbed gas accumulations, and 3 percent in tight gas accumulations. [Red bold emphasis added.]

Webmaster’s Comments: And yet, they are planning to import LNG, because they have run out of gas for local home heating and area electricity generation.

Natural gas, war of words (Jun 29) — Grist

According to a 2006 report in New Brunswick's Telegraph-Journal, [Canada Prime Minister Stephen Harper] had promised to "pursue 'all diplomatic and legal means' to prevent LNG tankers from transiting Head Harbour Passage. Should Canada do this, one FERC official admitted that the Passamaquoddy (Bay) projects would be dead in the water." [Red bold emphasis added.]

Webmaster’s Comments: Downeast LNG has known for five years that it cannot transit LNG to its proposed terminal. And yet, Downeast LNG's president Dean Girdis would rather pick a losing fight with Canada than relocate to ensure his project could obtain the LNG essential for his project. Hubris apparently beats good business sense at Downeast LNG.

Canada's NEB Reports releases data on Canaport LNG imports — LNG Law Blog

Canada's National Energy Board (NEB) has released recent data on LNG imports to the Canaport terminal located in New Brunswick. Platts LNG Daily [subscription required] reports that the 5.63 Bcf of LNG imported to Canaport LNG in April represents an approximately 50% decline from March 2011 LNG import levels. [Red emphasis added.]

Thanks are in order after Weaver’s Cove withdrawal [Op-ed column] — The Jamestown Press, Jamestown, RI

Hess recently put in their requests to withdraw to FERC. There is a waiting period until July 5, at which point FERC can accept or reject the requests. Then the remaining item is to determine what might happen with the land in Fall River, which Fall River is ably handling.

Mullings gets LNG project — The Gleaner, Kingston, Jamaica, West Indies

SIX MONTHS after removing the liquefied natural gas (LNG) project from the portfolio of then Energy Minister James Robertson, Prime Minister Bruce Golding has returned the responsibility of overseeing the project to the energy ministry.

Jamaica: LNG committee gets more time to finalise recommendations — LNG World News

A special committee has been given three weeks to come up with final recommendations on the future of the Liquefied Natural Gas (LNG) Project.

The committee has been mandated to look into suggestions from the Office of the Contractor-General to restart the bidding process.

Reactions differ on USGS Cook Inlet oil and gas survey — Juneau Empire, Juneau, AK

Alaska’s U.S. senators have expressed delight at a recent assessment by the U.S. Geological Survey that reports a significant untapped natural gas reserve in Cook Inlet. Others say this may only be good news on the surface.

“When you develop fuels, they create jobs but those jobs will always go away and you always feel the dislocation of those jobs like those plants that have gone away,” he said. “So if we invest in renewable energy like wind or tidal or geothermal, we can have flat-cost power and the jobs it produces are forever.” [Red bold emphasis added.]

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2011 June 26

Place Nuclear On The Agenda [Editorial] — The Gleaner, Kingston, Jamaica, West Indies

[W]e again declare our support for any decision to halt the [LNG] agreement with the Exmar consortium, given the prima facie evidence that the bidding process was infested with irregularities - and perhaps worse.

The Office of the Contractor General (OCG), which probed the bid, pointed to what, on the face of it, seems to be grave conflicts of interest and lack of transparency.

For example, the official who managed the technical side of Jamaica's plan to transition from oil to LNG had a separate, private business arrangement with Exmar, yet was part of a group that evaluated its bid. The same person was also deemed to have excluded one potential bidder that could have seriously challenged Exmar.

Additionally, a principal of one of Exmar's partners was a former chairman of the vehicle used by the Government for the LNG project and may have operated with insider information.

Alaska's Big Ooops!

Webmaster’s Comments: The following is a classic failure by numerous parties to plan and execute a viable energy policy, instead bowing to big energy's financial interests. They've been allowing domestic natural gas exporting in the form of LNG to Japan since 1969, but now — "Oops! Our hair is on fire!" — there is insufficient natural gas for Fairbanks' own use. (Ironically, Alaska has abundant natural gas deposits on the North Slope — an inaccessible 800+ miles from Fairbanks.)

With numerous LNG export projects at play in the Lower-48 of the US, is this same destiny in store?

With Southcentral utilities moving to import LNG, GVEA should analyze options [Editorial] (Jun 25) — Daily News-Miner, Fairbanks, AK

In the closest thing we've seen to a decision about natural gas supplies in some time, the utilities in Southcentral Alaska said this week they must import Liquified Natural Gas by 2014 or face an energy crisis.

[W]e … don't know how an increase in the gas supply through imports would change the economics of natural gas as a fuel in Fairbanks. The gas won't be cheap, by Anchorage standards, but it wouldn't be as high as oil. This would not automatically lower the price of natural gas in Fairbanks.

Utilities need more natural gas (Jun 25) — Anchorage Daily News, Anchorage, AK

A working group of Southcentral Alaska utilities and the Donlin Creek mine has determined that it will be necessary to start importing liquefied natural gas (LNG) into the Cook Inlet region starting in 2014, Daniel Helmick, manager of regulatory affairs for Municipal Light & Power, told the Regulatory Commission of Alaska (RCA) on June 22.

Helmick said that, taking into account projected gas demand, known Cook Inlet drilling plans and plans for the implementation of new, more efficient power generation, the utilities anticipate a shortfall of 2 billion cubic feet of gas in 2014. That shortfall could climb to 29 billion cubic feet in 2017, jumping to 47 billion cubic feet in 2018 if gas is needed to generate power for the Donlin Creek mine, if the mine goes into operation in that year."

We don't have time to study this issue to death and we don't have time to adjudicate it to death," he said. "It's a crummy deal, but it's a deal we've got."

Port offers help for small vendors (Jun 25) — The World, Coos Bay, OR

Jordan Cove Energy Partners said again this week that it has no immediate plans to export liquefied natural gas from its proposed terminal on Coos Bay's North Spit.

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2011 Jun 25

US Has 13% of World Natural Gas Supply

LNG Imports are Moot

Column - Welcome to the Gas Century: John Kemp (Jun 24) — Reuters

Unconventional gas from shale and coal-bed methane has doubled the estimated technically recoverable gas resource in less than a decade, ensuring that gas will remain abundant and relatively low cost.

The IEA now puts technically recoverable resources at 404 trillion cubic metres of conventional gas and another 380 trillion cubic metres from unconventional sources, equivalent to 250 years worth of current production, according to the 2010 World Energy Outlook.

In a recent survey, the U.S. Energy Information Administration (EIA) put world shale resources at 6,622 trillion cubic feet (188 trillion cubic metres) distributed across China (20 percent), the United States (13 percent), Argentina (12 percent), Mexico (10 percent), Australia (6 percent) Canada (6 percent) and Europe (10 percent). [Red bold emphasis added.]

Gas producers urged to diversify exports — Emirates 24/7, Dubai, United Arab Emirates

The [Washington-based International Monetary Fund] said the additional supply has discontinued plans for sizable LNG imports into the US, adding that some even suggest that the US could turn into a “significant gas exporter” in the coming period. [Red bold emphasis added.]

Hey, there's another side to the energy argument — The Dallas Morning News, Dallas, TX

"The resulting boom is transforming America's energy landscape. As recently as 2000, shale gas was 1% of America's gas supplies; today it is 25%. Prior to the shale breakthrough, U.S. natural gas reserves were in decline, prices exceeded $15 per million British thermal units, and investors were building ports to import liquid natural gas. Today, proven reserves are the highest since 1971, prices have fallen close to $4 and ports are being retrofitted for LNG exports." [Red bold emphasis added.]

Decision on LNG lost opportunity for region (Jun 20) — Providence Business News, Providence, RI [Paid subscription]

Hess LNG’s decision last week to abandon plans for a liquefied natural gas terminal in Weaver’s Cove in Fall River is a lost economic opportunity in a region that can least afford it.

Webmaster’s Comments: The Providence Business News ignores Weaver's Cove Energy's lack of economic viability as well as the project's failure to select safe siting, even as indicated by the world LNG industry (see LNG Terminal Siting Standards Organization for more on safe LNG terminal siting).

These are the same project-killing realities facing Downeast LNG.

Live editorial: LNG terminal is right on track [Editorial] (Jun 23) — (Mississippi Press) GulfLive.com

ANOTHER INDICATION that Jackson County is on the cutting edge of alternative energy is the arrival of the first shipment of liquefied natural gas to the new Gulf LNG terminal at the Port of Pascagoula.

Webmaster’s Comments: The Mississippi editorial board apparently doesn't read anyone else's news. Gulf LNG is a too-late project. The US is in a 100-year-long natural gas glut, and does not need more LNG import capacity. It is likely that Gulf LNG will sit idle.

Southern Union Company acknowledges receipt of acquisition proposal from the Williams Companies, Inc. (Jun 23) — Southern Union Company, Houston, TX

Southern Union Company today confirmed receipt of a proposal by The Williams Companies, Inc. to acquire all of the outstanding shares of Southern Union for $39.00 per share in cash. The Directors of Southern Union will review the proposal in due course, consistent with fiduciary duties and in accordance with the terms and conditions of Southern Union’s previously announced merger agreement with Energy Transfer Equity, L.P.

Southern Union Company, headquartered in Houston, is one of the nation’s leading diversified natural gas companies, engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates one of the nation’s largest natural gas pipeline systems with more than 20,000 miles of gathering and transportation pipelines and one of North America’s largest liquefied natural gas import terminals, along with serving more than half a million natural gas end-user customers in Missouri and Massachusetts. For further information, visit www.sug.com.

Failed diplomacy in LNG bid (Jun 24) — The Nassau Guardian, Nassau, Bahamas

A series of U.S. Embassy cables document the unsuccessful diplomatic maneuvers made over two administrations to get a go-ahead for liquefied natural gas (LNG) pipelines from Florida to The Bahamas.

The cable noted that Minister Miller had alleged in a radio interview that the environmental group Re-Earth’s opposition to LNG was getting more media attention than it normally might because the group’s leader, Sam Duncombe, is white.

A source close to AES told The Nassau Guardian that while the project was never officially taken off the table, it is not now being aggressively pursued.

LNG in 2014 for Alaska (Jun 26) — Petroleum News, Anchorage, AK

A working group of Southcentral Alaska utilities and Donlin Creek mine has determined that it will be necessary to start importing liquefied natural gas into the Cook Inlet region starting in 2014, Daniel Helmick, manager of regulatory affairs for Municipal Light & Power, told the Regulatory Commission of Alaska June 22. The utilities are in the process of negotiating commercial arrangement for LNG supplies, working together to share the cost of solving a shared problem, Helmick said.

Webmaster’s Comments: Let's get this straight — Alaska has been shipping Cook Inlet-source LNG to Japan since1969. But now, since they've shipped most of the natural gas to Japan, Alaska needs to import LNG to Cook Inlet in order for local utilities to generate power and for people to heat their homes.

Prior to the current shale gas glut, developers in the Lower-48 claimed the US needed to import LNG in the name of energy security. Now, there are numerous Lower-48 LNG export projects in play to ship vast domestic supply overseas — reducing US energy security.

These are examples of how the free-market, if not thoughtfully regulated, can abuse the country's best energy-security interests.

Importing LNG: 'That's just the way it is' (Jun 24) — Alaska Dispatch, Anchorage, AK

In a presentation this week to the Regulatory Commission of Alaska, members of the Long Term Gas Supply Work Group said nothing can prevent the state with one of the largest untapped supplies of natural gas in the world from importing gas to provide heat and electricity for the state's most populous region. [Red & bold emphasis added.]

Deputies practice marine chases (Jun 24) — The World, Coos Bay, OR

Thursday's waterborne maneuvers marked the finale of a week's worth of a regional marine training held in Coos Bay. The sheriff's office is doubly concerned about preparedness this year, because if and when LNG tankers arrive in the bay, the sheriff's office is charged with protecting them.

Jordan Cove LNG argues no additional NEPA analysis needed (Jun 22) — LNG Law Blog

[June 21], Jordan Cove Energy Project, L.P. responded to a filing submitted by the Western Environmental Law Center which suggested further NEPA analysis is required because project developers may be considering using their Jordan Cove LNG terminal for LNG exports as well as imports. In its reply, Jordan Cove LNG argues that no additional analysis under the National Environmental Policy Act (NEPA) is needed for the present project application because no formal request for export authorization has been offered and, should Jordan Cove LNG seek to export LNG, a separate application to FERC would be required and subject to additional NEPA analysis.

Industry consultants: LNG exports from Canada could affect Henry Hub gas prices (Jun 23) — LNG Law Blog

Consultants with Bernstein Research issued a report this week stating that LNG exports from the proposed liquefaction projects in Western Canada could raise the Henry Hub natural gas price by $2.54/MMcf in 2019 and $1.73/MMcf in 2020.

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2011 Jun 21

Wet Gas Is So Plentiful, Drillers Are Giving Natgas Away

To import less oil, U.S. must export more gas — Forbes

Facing a supply glut, in recent years natural gas drillers like Chespeake Energy, EOG Resources and SandRidge Energy have all shifted investment dollars away from gas in favor of higher-priced oil. That’s spurred a boom in new oil plays like the Bakken of North Dakota and the Eagle Ford shale of south Texas. As a result, U.S. crude oil production was up 150,000 barrels per day to 5.51 million bpd last year, despite downturns in Alaska and the Gulf of Mexico. The Energy Information Administration forecasts Lower-48 growth of 230,000 bpd this year.

But ironically, going after oil instead of gas isn’t helping reduce the gas glut at all, because in virtually every oil field you’ll also find associated gas. With the price of oil so high the drillers are incentivised to give away the gas for free and just make money on the liquids. In the Woodford shale of Oklahoma, Continental Resources says the gas they produce is so “wet” with other liquids like butane and propane that they can get $8 per mmbtu, far more than the going rate of $4.32 for dry gas.

Thus, this drilling for liquids helped U.S. gas production hit an all-time record in 2010 of 26.8 trillion cubic feet.

(AMM) Shale gas driving demand in US, oil in its twilight: IEA — Metal Bulletin [Paid subscription]

A shale gas "revolution" is in full swing in the United States, where domestic gas will drive out imported liquefied natural gas (LNG) and make North America an "island market" where low prices stimulate demand, particularly in power generation and the chemical industry, according to the International Energy Agency (IEA). [Red bold emphasis added.]

Encana-PetroChina deal collapse ‘an embarrassment’ — Financial Post, Dons Mills, ON

China’s largest oil company was paying a huge premium for the assets — $5.4-billion for half of a play and for the privilege of learning how to extract shale gas using new technology from one of the sector’s leaders. Encana’s entire market capitalization is $22-billion.

Meanwhile, gas prices are weak, PetroChina is learning the technology from others and the strategy of exporting the gas to Asia from Western Canada looks complicated and controversial. It includes building pipelines, liquefied natural gas terminals and starting new tanker traffic in a region where First Nations are militant and volatile. Those with similar strategies are sure to take note.

Encana ends talks with PetroChina over potential Cutbank Ridge joint venture — (The Canadian Press) Toronto Star, Toronto, ON

Encana has a 30 per cent stake in the proposed Kitimat LNG terminal on the northern B.C. coast, where natural gas would be condensed into a liquid and shipped to Asia Pacific customers on specialized tankers.

The nixing of the PetroChina joint-venture has no bearing whatsoever on Encana’s LNG prospects, Boras said. [Red emphasis added.]

Cove Point LNG responds to criticisms of proposed revisions to tariff — LNG Law Blog

Dominion Cove Point LNG, LP has filed responses at FERC to criticisms of its proposed changes to the tariff for its LNG regasification terminal. Shell NA LNG and BP Energy Co. both have responded with additional filings.

First LNG cargo arrives (Jun 20) — Sun Herald, Biloxi, MS

It had arrived on Saturday and unloaded the first cargo of LNG, called a commissioning cargo because this was the first time the super-cold product was introduced to the terminal.

Webmaster’s Comments: …An expensive, unnecessary addition to US natural gas oversupply.

Freeport LNG terminal to receive tanker July 5, ship data show — Bloomberg

The tanker, Grace Cosmos, can carry 146,794 cubic meters of LNG, or about 3.16 billion cubic feet when converted to a gas.

County seeks reimbursement for LNG dispute — The Daily Astorian, Astoria, OR [Paid subscription]

Clatsop County filed a motion in Circuit Court Monday seeking reimbursement for more than $60,000 in attorney fees incurred in the legal dispute over the county’s jurisdiction of the Oregon Pipeline LLC land-use application.

The motion claims the county should not be liable for the fees, which total $61,758, because of several legal maneuvers by Oregon Pipeline that resulted in unnecessary delays in the proceedings.

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2011 Jun 20

US Has 100-Year Natural Gas Supply

Natural gas: Price and prejudice (Jun 2) — Seeking Alpha

[A]ccording to the Potential Gas Committee, the United States possesses a total resource base of 1,898 trillion cubic feet (Tcf) as of year-end 2010. This is the highest resource evaluation in the Committee’s 46-year history, exceeding the previous record-high assessment by 61 Tcf. Most of the increase arose from reevaluation of shale-gas plays in the Gulf Coast, Mid-Continent and Rocky Mountain area. According to EIA, U.S. total nat gas reserves are estimated at 2550 Tcf (more than one century of supply) from which Shale gases account for 830 Tcf (Marcellus, Haynesville, Barnett and Fayetteville basins account for 600 Tcf). The U.S. economy is becoming self sufficient in terms of nat gas supply. Yet, one should always keep in mind that potential/technically recoverable resources are not the equivalent of proved reserves. [Red bold emphasis added.]

Global energy consumption jumped last year at fastest pace in decades — The Times-Picayune, New Orleans, LA

"Ten years ago, everybody thought the U.S. was going to be come a big net importer of natural gas," Finley said. Instead, shale plays, like the Haynesville formation in northwest Louisiana, have "really changed the game," with the U.S. becoming the biggest producer of natural gas in the world over the last three years. [Red bold emphasis added.]

LNG terminals planned for West Coast have enough gas to go around: executives (Jun 13) — (The Canadian Press) Brandon Sun, Brandon, MB

CALGARY - Northeastern British Columbia's shale fields contain more than enough natural gas to feed a myriad of West Coast export terminals in the works, energy executives said at an industry conference [Jun 13]. [Red bold emphasis added.]

Prospects of LNG exports from the United States to Japan (Jun 13) — Energy Tribune, Houston, TX

First, with regards to US natural gas spare capacity, currently daily consumption of natural gas in the US is approximately 62.4 Bcf/d while “technically recoverable” gas resources is estimated at 1,836 tcf out of which 616 tcf (unproved shale gas volume is 827 tcf per EIA, Annual Energy Outlook 2011) is attributed to shale gas [5]. If these results are combined with the Department of Energy’s latest determination of proved gas reserves, the US has enough natural gas for the next hundred years. It should be noted that spare capacity, in a capitalistic system, does not necessarily mean domestic production minus domestic consumption. In an open market, a commodity will chase the highest price quoted for it globally. [Red bold emphasis added.]

Bait and switch: Energy independence slogan yields to free trade in LNG debate (Jun 3) — Press Action, Washington, DC

[T]imes have changed, mainly as a result of the tremendous growth of production from shale gas plays across North America. “We now have estimations that total gas resources can meet current demand levels for at least 100 years,” Dave McCurdy, the American Gas Association’s president and CEO, said in a recent statement announcing the release of a new study on U.S. gas supply.

Instead of taking this large domestic resource base and marshaling it in a way to greatly reduce the nation’s dependence on oil, LNG import terminal owners, with the blessing of regulators and the support of natural gas producers, are pushing forward with their plans to export natural gas.

During the previous decade, the gas industry stressed the importance of “energy independence” in seeking to gain approval of LNG import terminal projects. Today, in their pleas for permission to export natural gas, LNG companies, such as Sabine Pass Liquefaction LLC, are extoling the benefits of an “open exchange of goods, including energy, with international trade partners.”

Wince said strong shale gas production in the U.S. is sustainable for the foreseeable future. “We have 59 years of drilling years left in Marcellus. It’s similar in all shales,” he said, according to the Platts report. [Red bold emphasis added.]

NOAA releases regulations addressing potential impacts of Neptune LNG operations on marine mammals (Jun 13) — LNG Law Blog

The National Oceanic and Atmospheric Administration (NOAA) has released regulations that will govern enforcement of prohibitions against takings of marine mammals, including by incidental harassment, during the normal operations and maintenance of the Neptune LNG deepwater port located offshore Massachusetts.

FERC announces EA for nitrogen injection project at Everett LNG terminal — LNG Law Blog

FERC announced this morning that it will prepare an Environmental Assessment (EA) for the Everett LNG import terminal's proposed nitrogen injection system. According to the announcement in today's Federal Register, public comments on the project are due by July 14, 2011.

Sabine Pass Liquefaction answers comments of Kinder Morgan, Chevron — LNG Law Blog

Sabine Pass Liquefaction, LLC has filed its response to comments in FERC's proceeding examining Sabine Pass Liquefaction's request for expedited review of its proposed bi-directional LNG processing transactions.

Chinese VP in Cuba to meet on economic ties (Jun 4) — Reuters

A unit of China National Petroleum Corp is expected to begin work later this year on a $6 billion project to expand and upgrade an oil refinery in Cienfuegos on Cuba's southern coast, with plans including construction of a liquefied natural gas terminal.

Uncertain future for LNG: analyst — Calgary Herald, Calgary, AB

At least four export facilities are being eyed for British Columbia, the most advanced being the Kitimat LNG terminal by Apache Corp., EOG Canada and Encana Corp., which just wrapped up regulatory hearings for an export license.

South of the border [in the US], there are almost a dozen other proposals for [export] terminals in the Gulf and on the east coast.

In BC, pipes spell double trouble — The Dominion

VANCOUVER—The struggle against the proposed Enbridge pipeline, which has galvanized First Nations throughout northern BC and earned popular support from people across the country, has become one of the highest profile Indigenous and environmental issues in Canada. Concerns are mounting that in Enbridge's shadow, other energy projects are slipping under the radar—with potentially explosive consequences.

The Kitimat Summit Lake (KSL) gas pipeline, also called the Pacific Trails Pipeline, is of emerging concern to Wet'suwet'en land defenders and local residents. If built, this pipeline would connect to an existing Westcoast Energy Pipeline at Summit Lake, near the geographical centre of BC, and cut west to Kitimat.

“Nobody showed up for the first open house in Houston—three people I think—so they cancelled all the other open houses. There was never another open house on the KSL pipeline,” said Glenda Ferris, a long time environmentalist who lives in the Buck Creek Valley near Houston BC. “There was never even a news article about this pipeline in the local papers...They did this all under the table,” she said. [Red bold emphasis added.]

Petronas invests in Canadian shale play as it considers LNG exportsl (Jun 13) — LNG Law Blog

Petronas has secured a 50% stake in three shale gas fields in British Columbia, partnering with Canadian company Progress Energy Resources Corp. Bloomberg reports that under the terms of the agreement, Petronas would more than double its initial investment should the companies decide to construct an LNG export project on the Canadian west coast. Petronas would own 80% of the LNG export terminal.

Progress Energy wants consolidated process for LNG export projects in Canada (Jun 14) — LNG World News

Progress Chief Executive Michael Culbert (image) said federal and provincial authorities should consider combining regulatory proceedings for multiple plants and pipelines, with so many proposals now in the works.

“This can be a well-orchestrated process, where we benefit from using the right-of-way once. If construction is all done at the same time, at least you’re going down the same right-of-way,” Culbert said.

Oregon ethics commission clears Brent Foster, former counsel to Attorney General John Kroger (Jun 13) — The Oregonian, Portland, OR

After his resignation, a separate review at Kroger's request by Dale Koch, former presiding judge of Multnomah Circuit Court, found no evidence that Foster gave improper legal advice on liquid natural gas plants in Oregon as LNG supporters had charged.

But Koch noted that Foster used his work email in late 2009 to request permit approvals from Wasco County for a solar panel installation at his house. It wasn't appropriate for Foster to use government email that included his title to communicate with county officials, Koch wrote. But he added that it didn't appear Foster was seeking special treatment, and declined to refer the case to the ethics commission. Kroger decided to refer the case "in an abundance of caution."

TransCanada completes Guadalajara pipeline — (Reuters) Yahoo News

The 307 km (192 mile) line will carry as much as 500 million cubic feet of natural gas a day from a liquefied natural gas import facility near Manzanillo, Colima, on the country's Pacific coast, to nearby power plant.

Vopak, Enagas buy Altamira LNG terminal (Jun 3) — LNG Law Blog

[June 2], Vopak and Enagas announced their purchase of the Altamira LNG import terminal in Mexico. Vopak will take a 60% stake while Enagas will own the remaining 40% of the terminal, which was previously owned by Shell, Total, and Mitsui.

Experts say North American LNG exports could break into world markets — PennEnergy, Tulsa, OK

Alaska and British Columbia have an important distance advantage over non-Australasian LNG shipments to North Asia, especially those from Atlantic Basin and Mediterranean sources. “North Asia high-priced spot markets, which are principally supplied from Atlantic Basin and Mediterranean sources, can accommodate BC’s Kitimat LNG planned export capacity displacing some LNG supplies from the Middle East”, stated Dr. Tom Woods of RBAC.

USCG to establish Advisory Committee for Marine Transport of Chemicals (Jun 13) — LNG Law Blog

The U.S. Coast Guard announced this morning that it will establish a Chemical Transportation Advisory Committee to advise the agency on the safe and secure marine transport of certain materials in bulk, likely including LNG. [Red emphasis added.]

Pickens critical of proposals to export U.S. natural gas overseas (Jun 13) — LNG Law Blog

Speaking to the Pittsburgh Tribune-Review, famed oil investor and natural gas production supporter T. Boone Pickens said that "[i]t's bad public policy to export natural gas – a cleaner, cheaper domestic resource – and import more expensive, dirtier OPEC oil." The article goes on to cite other industry players and politicians' concerns with U.S. LNG export proposals and the possible effects LNG exports could have on the North American gas market.

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2011 June 18

Sea of Natgas Staves Off Imports

Update 1-US April LNG imports fall 20 pct -DOE (Jun 2) — Reuters

NEW YORK, June 2 (Reuters) - U.S. imports of liquefied natural gas in April plummeted 20 percent from the same month a year ago as ample domestic supply and slumping prices deterred spot shipments, the Department of Energy said on Thursday.

LNG imports fell to 33.1 billion cubic feet from 41.6 billion cubic feet in April 2010, the data showed. The drop echoes similar declines in January, February and March. [Red bold emphasis added.]

LNG cargo diverted from Canada to UK (Jun 2) — UpstreamOnline.com [Paid registration required]

The South Hook LNG terminal in Wales will receive a cargo on 3 June from Qatar which was previously destined for the Canaport terminal in Canada, shipping data showed today. [Red bold emphasis added.]

Loren Steffy: Energy seesaw is mighty uncomfortable (Jun 17) — Houston Chronicle, Houston, TX

Our energy conundrum is on display at the Texas-Louisiana border.

That's where Houston-based Cheniere Energy operates its Sabine Pass liquefied natural gas plant, although "operates" implies a little more activity than it's had since opening two years ago. The facility has struggled because weak natural gas prices have undercut the market for imports.

Thanks largely to the boom of extracting natural gas from shale formations, the U.S. finds itself awash in natural gas, even as international demand for the fuel grows. [Red bold emphasis added.]

Natural gas prices slump to new low (Jun 16) — The Street

"Over the last five, six years, we've gone from importing LNG (liquefied natural gas) to now looking to exporting. We're swimming in natural gas because of all the shale [resources]."

The U.S. is the biggest producer of natural gas. Kay notes that the recent pullback of natural gas rig counts and increase in oil rig counts doesn't necessarily mean that natural gas production has fallen significantly -- given that natural gas is often a byproduct of oil drilling. [Red bold emphasis added.]

Canada’s shale-gas producers race to new markets (Jun 16) — Petroleum Economist [Paid subscription required]

BIG NATURAL gas players in British Columbia and Alberta are scrambling to find new markets in Asia as an outlet for promising shale-gas discoveries. As US gas production surges, Canada’s is flagging in the face of lower export demand from its traditional market and suppressed prices. Companies with significant gas holdings in the provinces, such as Encana, Apache and EOG Resources, are so concerned they will be unable to sell their Horn River gas to the US that last week they applied to Canada’s National Energy Board for a 20-year permit to liquefy and ship it to Asia under long-term contracts with companies such as South Korea’s Kogas and PetroChina. They are joined by South Africa’s Sasol, which has agreed to study the potential for gas-to-liquids developments in a C$1 billion ($1.02 billion) deal with Calgary-based Talisman Energy that closed this week. [Red bold emphasis added.]

Progress CEO outlines plans for British Columbia LNG export project (Jun 16) — LNG Law Blog

Speaking this week at a conference, Progress Energy Resources CEO Michael Culbert said that his company plans to partner with Petronas to build an LNG export facility in British Columbia featuring two liquefaction trains with capacities of approximately 3.7 million mt/year each. Culbert said that the first train would be built over the next four to five years and then would be followed by the second train. According to Platts Gas Daily [subscription required], Culbert said that Progress will conduct a feasibility study on the project beginning in September 2011.

Industry analysts say United States could export 1 Bcf/d of LNG by 2020 (Jun 16) — LNG Law Blog

Bentek Energy analysts said yesterday that they expect the United States to export approximately 1 Bcf/d of LNG from 2018 through 2020. According to Platts LNG Daily, the analysts predicted that U.S. LNG exports will begin in 2015. [Red bold emphasis added.]

Bearish on US natural gas, bullish on international LNG (Jun 15) — Investing Daily

Although the Kenai LNG port in Alaska is the nation’s sole export terminal, the US is home to several import facilities. Built before the shale gas revolution transformed the US market, these liquefaction terminals operate at a fraction of their capacity because the country no longer needs to import LNG. [Red bold emphasis added.]

Natural gas prices could double soon (Jun 14) — KECI-TV, MT

The United States is also the world's biggest natural gas producer, accounting for 19.2% of global supply, according to the most recent statistics from the IEA. And many European and Asian markets have a thirst for U.S. quality natural gas.

"U.S. is the Middle East of the natural gas market," he said. "If we can ship to Europe or India or wherever, natural gas prices will move higher to catch up with what importers are willing to pay, even though [U.S. and European prices] won't ever reach parity." [Red bold emphasis added.]

US summer natural gas prices again expected to be stable: NGSA (Jun 14) — Platts

"This is the third year in a row that we've seen a stable market for natural gas. We anticipate that the trend has legs not only because of the shale plays now being developed but because of all our supply sources," NGSA President and CEO Skip Horvath said in a statement. [Red bold emphasis added.]

Fracking sets off boom in gas supplies (Jun 12) — Pittsburgh Tribune-Review, Pittsburgh, PA

Geologists increased estimates of the amount of gas in the Marcellus formation. In 2002, the Geological Survey pegged Marcellus to hold 1.9 trillion cubic feet of natural gas. By 2008, researchers raised the estimate to more than 500 trillion cubic feet. [Red bold emphasis added.]

Cheap US gas threatens Australian LNG (Jun 12) — LNG World News

Some of the biggest Chinese energy customers, whose growing requirements have helped drive Australia’s LNG construction boom, are now also looking to source their own LNG from North America.

Wood Mackenzie believes the rush of key Asian players into North America is based on achieving what no one thought possible until recently — exporting gas from the US.

The stunning emergence of shale gas and coal-seam gas as a viable source has turned all that on its head, with the rapid delineation of new gas reserves swamping US gas markets and driving down prices.

Fortunately for BHP and Woodside, their import terminal plans never got off the ground. Others weren’t so lucky, with LNG import terminals in the country now lying idle due to depressed US gas prices.

The rapid surge in US gas reserves has already threatened Australia. The new gas source displaced LNG from Qatar, and there were fears that the Qatari LNG could swamp Asian markets instead and eat into the volumes being chased by Australian companies. [Red bold emphasis added.]

U.S.A., energy exporter? - Txchnologist.com (Jun 3) — International Business Times, UK

Less than a decade ago, major American energy companies were investing billions in constructing new terminals for importing liquefied natural gas - the cooled, dense state of methane that makes it economical for it to be transported by ship. Today, some of those same companies are contemplating spending billions to retrofit those facilities in order to export LNG.

What happened in the interim? Natural gas boomed in the U.S., thanks to major discoveries of unconventional gas deposits in shale rock and new extraction techniques. In 2011, the U.S. Energy Information Administration raised its estimate for "technically recoverable" natural gas reserves in the U.S. from 353,000 billion cubic feet to 827,000 billion cubic feet. At $4 for every million BTU, natural gas isn't that much more expensive than coal, which trades at a little over $2 per million BTU but produces twice as much greenhouse gas and significantly more air pollution.

Despite increased demand and a push to replace coal-fired power with natural gas, the U.S. is suffering what experts call a "gas glut."

"The real problem for shale gas is demand - they don't know where to put all of it," says Ben Schlesinger, an independent consultant to the natural gas industry. Meanwhile, Europe is paying two to three times the prices in the U.S., and countries that are entirely dependent on LNG, including Japan, Taiwan and South Korea, are paying even more - between $20 and $30 per million BTU. [Red bold emphasis added.]

Gas flaring at Canaport site — Telegraph-Journal, Saint John, NB

Canaport LNG will be conducting maintenance at the terminal beginning the week of June 20. These maintenance activities will be carried out on the LNG storage tanks and the terminal will remain operational throughout the course of the maintenance. Flaring will be visible from some spots in the area surrounding the terminal for up to two weeks. This is a standard operation done to burn off small amounts of excess natural gas.

With LNG gone, North End's focus turns to traffic woes [Op-ed column] (Jun 17) — The Herald News, Fall River, MA

First, I would like to thank Joe Carvalho, Lilian Correia, Michael Miozza, and all of the other “Coalition” members for stopping Hess LNG’s proposed liquefied natural gas terminal from being established in our densely populated neighborhood. This small army of volunteers are largely responsible for stopping the proposed Hess LNG terminal.

Hess drops bid to build LNG plant in Fall River (Jun 14) — Boston Globe, Boston, MA

The company said it abandoned the Weaver’s Cove project because its imported gas would not be able to compete against inexpensive shale gas being produced in North America. Opponents, however, claimed at least partial credit.

A flurry of New England LNG projects were proposed in the early and mid-2000s, including one on a Boston Harbor Island and several in Maine. None has been built on land, although two offshore ports were built about 10 miles off Gloucester, where LNG is vaporized on ships and pumped through an underwater pipe to shore. [Red bold emphasis added.]

Energy Transfer Equity acquiring Southern Union, including Lake Charles LNG terminal (Jun 17) — LNG Law Blog

Energy Transfer Equity, L.P. announced yesterday that it will acquire Southern Union Company for a total of $7.9 billion, including $3.7 billion of existing Southern Union debt. The acquisition also includes the Lake Charles LNG import terminal and several gas pipeline assets.

Christie stands firm on LNG report (Jun 14) — Go-Jamaica, Kingston, Jamaica, West Indies

Just days after one of the main players described the contractor general's report on Jamaica’s liquefied natural gas (LNG) project as "shoddy", Contractor General Greg Christie said he stands firmly behind the findings, conclusions and recommendations contained in the document.

KM LNG gas export application put on hold (Jun 17) — Kitimat Northern Sentinel, Kitimat, BC

After three days of testimony and cross-examination last week, the National Energy Board hearing on KM LNG’s application to export natural gas via its proposed Kitimat plant was put on hold pending the results of talks between the company and the Gitxaala (Kitkatla) First Nation.

“The board allows Gixaala’s request to withdraw its motion. The hearing will proceed with the evidentiary and final argument stages. However, the board will refrain from rendering a decision on the application unless Gitxaala and KM LNG, prior to September 15, 2011, each notify the board that the settlement is final.”

While KM LNG had responded to Gitxaala concerns in many cases by saying they would be dealt with in the TERMPOL (Marine Terminal Review Process), the Gitxaala essentially argued that was putting the cart before the horse.

“Until the NEB actually sees the TERMPOL committee report, it is impossible for the NEB to know whether any identified risks have been sufficiently addressed in the context of the NEB’s public interest determination,” the motion pointed out.

Column: NDP gives partial answer on how it will pay for programs (Jun 14) — The Vancouver Sun, Vancouver, BC

VICTORIA -- While the B.C. New Democratic Party strongly opposes piping oil to the B.C. coast for shipment by tanker to Asian markets, the party is taking the opposite stance on trans-Pacific exports of natural gas.

“Natural gas is what we produce here in abundance, and we do sell it into a flooded market, mostly in the United States.” Flooded in the sense of too much product chasing too little demand, depressing prices. [Red bold emphasis added.]

No slowing appetite for LNG projects (Jun 14) — Calgary Herald, Calgary, AB

Canadian producers are increasingly partnering with China, Japan and Korea to develop shale gas in B.C. -estimated in the trillions of cubic feet -and possibly export it in a super-cooled form from LNG terminals off the West Coast.

The shale gas resource is so large the company will need to have more than one "monetization source" to develop it, with LNG being an option for its Horn River production, Romanow said at the industry conference.

Uncertain future for LNG: analyst — Calgary Herald, Calgary, AB

Producers hope to profit on prices currently $4 to $8 higher in Japan and Korea than in North America, and possibly see stronger prices at home even if competing export terminals spring up across the U.S.

The rationale makes sense in an open market context of supply and demand, but fundamentals can and do change quickly, noted Gerry Goobie, with Purvin & Gertz energy consultants.

Office of Energy Projects Energy Infrastructure update for May 2011 (Jun 16) — Office of Energy Projects, Federal Energy Regulatory Commission (FERC)

PDF fileThe following link will access a PDF file; 164 KB.

Golden Pass placed into service the Phase II facilities to its LNG terminal near Sabine Pass, Texas. The Phase II facilities will increase the sendout capacity of the terminal by 1 Bcf/d to 2 Bcf/d.

Macquarie looks to expand North American LNG business (Jun 16) — LNG World News

With natural gas prices looking under pressure and rangebound in the near future due to rising U.S. output from shale plays, O’Kane said the start up of its planned LNG export terminal with Freeport LNG in Texas in 2015 will lead to further opportunities to trade the fuel.

Paper: Exporting US natural gas will hike US price (Jun 12) — The Wall Street Journal

"Sending natural gas overseas is the medical equivalent of bleeding a patient in order to cure him," Murphy said. "I fear what this would do to prices."

Top

2011 June 17

After long fight is won, anti-LNG group hopeful, vigilant [Op-ed column] (Jun 16) — The Herald News, Fall River, MA

Little did I know that it would take nine years to kill the ill-conceived Weaver’s Cove/Hess-LNG project.

At the outset, the coalition stated that we were not opposed to LNG as a part of the country’s energy needs. Our sole and overriding concern was where this project looked to be located, in a densely populated neighborhood in the city’s North End. As a result of our concern, we named our group the Coalition for Responsible Siting of LNG Facilities, accentuating the term RESPONSIBLE to indicate our intention.

Our opposition faced several obstacles, not the least being the rather evident collusion between the Federal Energy Regulatory Commission, or FERC, and the company, Weaver’s Cove/Hess-LNG. Noting that the company had some 33 meetings with the FERC board over the course of the initial years of the project, while then Fall River Mayor Edward Lambert had to wait several months for a single meeting with that same FERC board.

Compounding the collusion was the fact that FERC Commission Chairman, Patrick H. Wood III, formerly worked for Baker Botts, the law firm representing Weaver’s Cove/Hess-LNG. Chairman Wood, ignoring any democratic concepts of a conflict of interest, refused to recues himself from FERC’s vote on siting the project. The U.S. Navy, stationed in Newport, R.I., had initially cited many concerns regarding the giant LNG supertankers transiting Narragansett Bay, but, mysteriously, these concerns were quickly dismissed and the Navy did a flip-flop on the issue. [Red emphasis added.]

Save the Bay reacts to LNG project withdrawal (Jun 14) — Portsmouth Patch, Portsmouth, RI

[Executive director of Save the Bay Jonathan Stone] noted that, while Hess cited unfavorable economics for its decision, “the project was always a bad idea for the bay. That's why Save the Bay fought this all the way. We reject the notion that Narragansett Bay has to be sacrificed in the pursuit of energy security.”

Finally, Weaver’s Cove LNG throws in the towel (Jun 15) — CLF Scoop, Conservation Law Foundation

Despite significant litigation, extensive public opposition, and questionable economics, WCE LNG persisted for years in its ultimately fruitless pursuit of state and federal approvals for the project. For a number of those years, CLF took a leadership role in pressing for comprehensive environmental review, calling for a regional analysis of LNG terminal siting in New England, and insisting that federal authorities take a hard look at clean energy alternatives.

Fall River LNG proposal suffered a thousand paper cuts, but died because of simple economics (Jun 14) — Mass. Market, MA

Now that Hess has decided to drop its plan for an offshore liquefied natural gas terminal in Fall River, you’ve got to wonder what took the company so long to finally pull the plug.

In the past winter, the two offshore LNG terminals – buoy systems that feed the gas into an underwater pipeline – in Massachusetts Bay went essentially unused. With all the new natural gas supplies discovered in North America in the past few years and the rising prices for LNG in Europe and Asia, importing gas by ship to these shores became much less profitable.

Fall River plans to buy land that was set aside for LNG plant (Jun 14) — The Providence Journal, Providence, RI

Hess LNG's decision to abandon plans for a liquified natural gas terminal in Fall River creates an opportunity for new development of waterfront land off Weaver's Cove that had been set aside for the project.

Hess said it will now "most likely" sell the property and Fall River Mayor William A. Flanagan said the city will look to buy it to "control our own destiny" in developing the waterfront land.

The Buzz: Hess drops LNG terminal plans (Jun 14) — FoxProvidence.com, Providence, RI

Hess LNG wanted to build a liquified natural gas terminal at Weavers Cover. A company spokesperson says it abandoned the project in part because its imported gas would not be able to compete against inexpensive shale gas. [Red bold emphasis added.]

Weaver’s Cove takes LNG proposal off the table (Jun 16) — The Jamestown Press, Jamestown, RI

Hess LNG released a press release Monday breaking the surprising news. “The significant increase in natural gas production from shale resources in North America resulting in lower prices as well as the growth in demand for LNG in the rest of the world,” Shearer said, “make it unlikely the company can secure supplies of LNG on economic terms attractive enough to ensure the sustained profitability of the project.” The proposal for the floating terminal was estimated to cost $700 million.

Although the press release from Hess is welcome news for most residents of the region, Wright said that he is remaining cautious. He said that he would not split up the LNG threat committee until he was 100 percent sure that the proposal was over. He still planned for the panel to meet last night at its regularly scheduled time at 6 p.m. at Town Hall. [Red bold emphasis added.]

Battle over LNG terminal comes to a surprise end [Editorial] (Jun 16) — The Jamestown Press, Jamestown, RI

Whatever the reason, we applaud the decision. It has been about a decade since Hess first announced plans to build an LNG terminal. The first proposed site was the Providence. Those plans were scrapped and Hess launched its campaign to construct the facility in Weaver’s Cove.

The people send a bad idea out of town [Opinion column] (Jun 15) — The Providence Journal, Providence, RI

It is a graceless exit, but a welcome one.

Hess LNG has ended its insulting quest to put a liquefied natural gas terminal where it didn’t belong.

Hess drops Fall River LNG bid (Jun 14) — SouthCoastToday.com, MA

"I don't think after you spend 10 years working on anything and it doesn't work that you feel great about it," Shearer said. "It certainly feels better than if we'd built it and we had no business going through it. Then we'd be several hundred million dollars invested and nothing to show for it. That would be an awful lot worse." [Red bold emphasis added.]

Webmaster’s Comments: …words Downeast LNG should be considering.

First LNG shipment arriving (Jun 15) — SunHerald.com, Biloxi, MS

PASCAGOULA -- The first tanker carrying liquefied natural gas was sitting offshore near the Gulf LNG terminal Wednesday, waiting to deliver a load of the super-cooled product sometime this week.

A second tanker is expected. The two are part of a commissioning process for the terminal, El Paso Corp. officials told the Sun Herald on Wednesday. The liquefied natural gas in the tankers will be used to cool down the plant, acclimating the tanks and pipes to the temperatures. LNG is natural gas cooled to –260 degrees, the point at which it becomes a liquid.

Webmaster’s Comments: Yet another soon-to-be-idle LNG import terminal.

DOE sets deadline for public comments in Lake Charles LNG export proceeding (Jun 14) — LNG Law Blog

The U.S. Department of Energy has set a deadline of August 12, 2011, for written comments in the Lake Charles LNG export proceeding.

Top

2011 June 13

New LNG Import Terminals Not Viable

Hess scraps Mass. LNG plans — (AP) WCVB-TV, Boston, MA

FALL RIVER, Mass. -- Hess LNG has withdrawn its plan to build a liquified natural gas terminal in Fall River, citing "unfavorable economics" for LNG in New England.

The decision announced on Monday was immediately applauded by members of the Massachusetts and Rhode Island congressional delegations and other officials who had opposed the Weaver's Cove project. They said the terminal would have posed unacceptable risks to the heavily populated area.

Hess drops plan for Fall River LNG terminal — (State House News Service) Boston Herald, Boston, MA

In a statement issued today, Hess LNG cited “unfavorable economics for liquefied natural gas in the New England region” as the reason for withdrawing its applications with federal and state agencies. [Red bold emphasis added.]

Hess drops bid to site LNG terminal in Fall River — SouthCoastToday.com, MA

“The decision was made several weeks ago,” said Hess LNG President and CEO Gordon Shearer. “It has become apparent that the market conditions both in North American markets and in the global gas markets have changed ... in a way that are very adverse to the project, and are not likely to reverse any time soon. [Red bold emphasis added.]

Hess LNG withdraws Fall River Weaver's Cove proposal — The Patriot Ledger, Quincy, MA

“The significant increase in natural gas production from shale resources in North America resulting in lower prices as well as the growth in demand for LNG in the rest of the world make it unlikely the company can secure supplies of LNG on economic terms attractive enough to ensure the sustained profitability of the project,” said Gordon Shearer, president of Hess LNG.

"The market has undergone a seminal shift, and we don't see a likely reversal soon," he said.

"The possibility of this project has been an albatross on our waterfront," [Mayor Will Flanagan] said, stating the city would use the purchase opportunity "to finally develop the property the way it should be developed." [Red bold emphasis added.]

U.S. Rep. McGovern's statement on Hess LNG withdrawing Fall River Weaver's Cove proposal — Congressman Jim McGovern, MA

“This is terrific news for the Southcoast,” Rep. McGovern said. “At long last, Hess has realized that we were going to continue to fight and fight until they pulled the plug on their ill-considered proposal. I look forward to working with local, state and federal officials to help promote safe and sensible development in Fall River.”

Timeline: the Hess LNG proposal — The Enterprise, Brockton, MA

LNG in Fall River is effectively dead. Scroll down to see how we got here. [Red bold emphasis added.]

Hess abandons fight for Fall River LNG terminal — NBC 10 News, Providence, RI

"…Over the years I've always referred to this as the fight of a thousand paper cuts, and I always insisted that it wasn't going to be any one filing." — former State Attorney Patrick Lynch (transcribed from video)

Update: Weaver's Cove abandons Fall River LNG plan — The Providence Journal, Providence, RI

The project was opposed by virtually all public officials in Massachusetts and Rhode Island. They expressed concern about how transporting LNG in Narragansett Bay could disrupt boating activities and traffic on bridges that cross the Narragansett and Mount Hope Bays.

"This is a victory for common sense and public safety and people up and down the Taunton River will be sleeping more soundly tonight knowing that this long fight has been won," said Sen. John Kerry. "We pulled out every stop to make sure the public was protected and after so many meetings and phone calls and letters, we got there." [Red bold emphasis added.]

Webmaster’s Comments: Unfortunately, Maine's Senators Snowe and Collins, and Representative Michaud do not have the same desire to protect Mainers' well-being as do the elected federal officials of Massachusetts and Rhode Island.

Hess abandons Weaver’s Cove LNG project — Providence Business News, Providence, RI

John Torgan, Narragansett Baykeeper at Save The Bay, promised to give Shearer “a big smooch.”

“This project was never appropriate for Narragansett Bay, so it’s official demise is long overdue.”

Hess LNG drops Weaver's Cove bid — EastBayRI.com, RI

The news is a major victory for the dozens, if not hundreds, of politicians, local citizens' groups, environmental organizations and others who had fought since 2002 to prevent the controversial terminal at Weaver's Cove. Rep. Raymond Gallison of Bristol, whose home lies on the shores of Mt. Hope Bay, said the withdrawal was a victory not just for Taunton and Fall River, but for residents across Rhode Island and Massachusetts.

Fall River's LNG backers disappointed by Hess withdrawal — Wicked Local Somerset, Somerset, MA

Hess LNG has been about as popular here as a heat lamp in the desert. But two city officials have consistently urged a different mindset in the past few years for one reason — jobs.

“I know there was a lot of stiff opposition,” [Ronald Rheaume, business manager of Local 1305 of the city carpenters’ union,] said with resignation. “I guess as Lambert (former Mayor Edward M. Lambert Jr.) said, they’d paper cut them to death — and I guess they did.”

Webmaster’s Comments: Improper LNG terminal siting was the problem from the beginning. Unfortunately, it took Hess Energy nearly a decade to learn that lesson.

Top

2011 June 11

New LNG Import Terminal a Likely Failure

New US LNG terminal to start up but may sit idle (Jun 8) — Reuters

NEW YORK, June 8 (Reuters) - El Paso's (EP.N) new liquefied natural gas terminal in Mississippi will begin operations next week but may join the ranks of idle import facilities in the U.S. as domestic gas production rockets.

"It is more than the end of an era -- it's beyond the end of an era. It will be the last terminal built in a long time," said Zach Allen, president of Pan Eurasian analysts in Raleigh North Carolina.

Nearly $5 billion has been poured into LNG import terminals over the past decade on the expectation that the United States would be a major importer of natural gas. But since the corner stones were laid, huge domestic production increases have unexpectedly evaporated the need for imports.

Brand new terminals expected to receive several cargoes a month now sit unused for much of the year. Resigned to that fate, one terminal operator -- Excelerate Energy -- has decided to dismantle its terminal offshore Louisiana after not receiving a cargo for years.

In an about-turn, other importers have instead applied for licenses to liquefy and export U.S. gas abroad.

[Project coordinator David Porco] said that Gulf LNG will look at re-export and possible liquefaction, but for now it is concentrating on getting the import terminal up and ready. [Red bold emphasis added.]

Freeport LNG Development, L.P.; Application for blanket authorization to export liquefied natural gas (Jun 9) — Federal Register

PDF fileThis link leads to a PDF file; 193 KB

SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy (DOE) gives notice of receipt of an application filed on April 21, 2011, by Freeport LNG Development, L.P. (Freeport LNG), requesting blanket authorization to export liquefied natural gas (LNG) that previously had been imported into the United States from foreign sources on a short-term or spot market basis. The LNG would be exported from the existing Freeport LNG terminal facilities on Quintana Island, Texas, in an amount up to the equivalent of 24 billion cubic feet (Bcf) of natural gas to any country that has the capacity to import LNG via ocean-going carrier, and with which trade is not prohibited by U.S. law or policy. Freeport LNG seeks to export the LNG over a two year period commencing on the date of the authorization on its own behalf or as agent for others. The application is filed under section 3 of the Natural Gas Act (NGA). Protests, motions to intervene, notices of intervention, and written comments are invited.

Protests, motions to intervene or notices of intervention, as applicable, requests for additional procedures, and written comments are to be filed using procedures detailed in the Public Comment Procedures section of this notice, no later than 4:30 p.m., eastern time, July 11, 2011. [Red bold emphasis added.]

Industry analysts say Kitimat and Freeport LNG export projects well-positioned (Jun 10) — LNG Law Blog

North American natural gas industry analysts told Platts LNG Daily [subscription required] that they do not believe that more than three or four North American LNG export projects will be completed, citing financing challenges, market conditions, and competition from other global players like Australia. Several analysts noted that the Kitimat and Freeport LNG export projects currently have advantages over competing export proposals. [Red bold emphasis added.]

Statoil, BP, and IPAA intervene and protest Cove Point LNG's requested tariff revisions (Jun 10) — LNG Law Blog

Statoil Natural Gas LLC, BP Energy Company, and the Independent Petroleum Association of America (IPAA) have filed requests to intervene in the rate proceeding examining Cove Point LNG's actions to revise its tariff provisions. All three pending intervenors expressed criticism of the proposed tariff revisions that would encourage LNG shippers at the Cove Point terminal to import LNG on a more regular basis. [Red bold emphasis added.]

Webmaster’s Comments: There are three interesting peculiarities going on here:

  1. Cove Point LNG is importing so little LNG, it is requesting FERC help to force regular imports in order to keep the facility cooled down. If the facility were to warm up, it would become inoperable.
  2. Energy-industry members are opposing LNG importing.
  3. Cove Poing LNG is considering converting exclusively to exporting LNG from nearby domestic-sourced natural gas.

Shale revolution hits snag along the Delaware: Kimmerle (Jun 10) — Reuters UK

Gas companies built a raft of regasification terminals to import LNG to alleviate predicted shortfalls in domestic production. Now surging output has caused prices to fall sharply and the gas companies are applying for permits to reverse the LNG terminals and use them to export domestic production. [Red bold emphasis added.]

Canadian natural gas future looks bright (Jun 9) — Calgary Herald, Calgary, AB

Not only does Canada have an abundance of resource, particularly as shale gas plays unfold in British Columbia and Alberta, its West Coast is closer to energy-thirsty Asian Pacific markets than competitors such as Qatar and Australia, said Paul Sullivan, global director of LNG with WorleyParsons, on Wednesday.

Natural gas prices in North America have yet to recover from the shock of shale gas plays flooding the market at the same time the recession dampened demand, falling 19 per cent during the first quarter of 2011 to average $4.19 US per mmBTU. [Red bold emphasis added.]

Liquid [sic] natural gas exports will need infrastructure push (Jun 13) — Daily Commercial News, Markham, ON

The National Energy Board is in the midst of weighing an LNG project proposed for Kitimat, B.C, on Canada’s northern Pacific coast. Lead partner Apache Corp., along with Encana Corp. and EOG Resources Inc., aim to start shipping LNG from there in 2015.

Royal Dutch Shell PLC has also mused about jumping on the West Coast LNG bandwagon. Nexen Inc. is actively hunting for a partner to help it develop its vast B.C. shale holdings, and its CEO has said LNG know-how would be a plus.

It’s clear to energy consultant Glass that there’s enough Asian demand to soak up Canadian supply, but he’s less sure about the logistics of connecting the two.

Even still, Glass stressed the need for Canada to seek out export markets outside the United States, which is likely to use gas from its own plentiful reserves first. [Red bold emphasis added.]

LNG pile on continues [Opinion] (Jun 10) — Kitimat Northern Sentinel, Kitimat, BC

First there is the KM LNG plant, involving natural gas majors Apache, EOG Resources and Encana, which is expected to be confirmed either late this year or early in 2012 at the latest.

Then there is the Haisla-LNG Partners joint venture, seemingly well positioned to service the needs of the mid-caps - of which there are more than a few, all with significant quantities of natural gas to sell.

And now Shell has confirmed it is also looking at building an LNG plant on our coast. [Red bold emphasis added.]

Imports, not exports, future of US LNG: panel (Jun 8) — Platts

Though Northeastern LNG import such as Repsol's Canaport facility and GDF Suez's Everett and Neptune terminals are located at the epicenter of immense supply growth coming from the Marcellus, Utica and Frederick Brook shale plays, they feed separate portions of the Northeast market, Repsol vice president of origination Vince Morrissette told attendees.

[P]ipeline constraints leading into New England markets which create exacerbated cash basis differentials in the winter remain in place despite new avenues of supply. And LNG into New England from Canaport or Everett remains one of the few options for reaching those constrained markets.

Webmaster’s Comments: The public is supposed to believe Repsol when its Canaport LNG in Saint John, NB, is only operating at around 21% of capacity, and believe Suez when its Neptune LNG offshore from Gloucester, Massachusetts, has taken almost no LNG cargos in two years. Repsol and Suez's financial interests are too sunk into importing LNG for their statements to have credibility.

New US Gulf LNG terminal to take first cargo June 13 (Jun 8) — Reuters

(Reuters) - The first liquefied natural gas tanker to arrive at El Paso's (EP.N) Gulf LNG terminal in Pascagoula, Mississippi, will dock and offload on Monday, June 13, El Paso business development executive David Porco told Reuters on Wednesday.

Webmaster’s Comments: Yet another LNG terminal goes into service in an already-over-saturated market.

Wedderburn trashes Christie's LNG report (Jun 10) — The Gleaner, Kingston, Jamaica, West Indies

Just over two weeks after the Office of the Contractor General (OCG) issued a report on Jamaica's liquefied natural gas (LNG) project, another of the main players has described the document as "shoddy".

Coordinator of the LNG project, Stephen Wedderburn, said his initial reading of the report has revealed several errors of fact, misrepresentations and unfounded conclusions which are damaging to his character.

Asian utilities 'eye stakes in Kitimat' (Jun 7) — UpstreamOnline

Asian utilities are interested in buying equity stakes in US independent Apache’s Kitimat LNG project in Canada, a senior executive said today.

Enbridge: spills are not inevitable (Jun 10) — Kitimat Northern Sentinel, Kitimat, BC

Enbridge officials say the chance of an oil spill on the water is far from inevitable, the record of new pipelines is clean and, contrary to public perception, not all First Nations are opposed to the project.

Webmaster’s Comments: Part of the consideration is the potential consequences, even if the event is unlikely.

Third time’s a charm for what opponents call ‘LNG fast track’ (Jun 1) — News Times, Portland OR

Before it passed the Oregon Senate Tuesday, HB 2700 had also been known as the “LNG Fast-Track” bill.

But the bill, despite the scary nickname, has passed on its third shot in the legislature.

What, exactly, its passage does for the two LNG proposals left in Oregon, Oregon LNG near Astoria and Jordan Cove near Coos Bay, is unclear.

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