"For much of the state of Maine, the environment is the economy"
2016 July 20
Kinder Morgan on Thursday said its units Elba Liquefaction and Southern LNG received approval from the Federal Energy Regulatory Commission for the Elba liquefaction and export project.
In its statement, Kinder Morgan informed its units have also received FERC certificates of public convenience and necessity for the EEC modification project and SNG Zone 3 expansion project, respectively.
Trinidad and Tobago’s sole LNG producing company, Atlantic LNG said production at its 14.8 mtpa Point Fortin facility is “suffering badly” from gas supply shortages in the country.
“Atlantic is suffering badly from gas supply shortages every day. The Atlantic plant is now at record low levels of utilisation and we are failing to deliver on our LNG commitments,” Atlantic’s CEO Nigel Darlow said in a statement.
The onshore Jamaica LNG terminal, known as the Old Harbour project, is expected to be completed by mid-2018, according to a statement by the Jamaican government on 1 June.
The island’s information service stated that a supply agreement has been finalised by developer New Fortress Energy and utility Jamaica Public Service.
Agreements have also been reached with Chinese engineering, procurement and construction (EPC) provider China Power, which is building the terminal.
In the short term, New Fortress Energy is providing a floating storage unit (FSU) to Montego Bay. The FSU, which is expected to be the 138,000cbm Golar Arctic, is expected to be installed by the end of the year. Anglo Dutch Shell was named by sources as one of the likely term suppliers for the Jamaica LNG supply, but this could not be immediately confirmed.
“I’m concerned the governor wishes to drive ahead a project that is marginal at best and uneconomic at worst,” [Senate Resources chair Cathy Giessel, R-Anchorage] said.
A confluence of depressed LNG and oil markets has challenged the current and more traditional equity financing structure, with each participant — the state, BP, ConocoPhillips and ExxonMobil — financing equal shares of the project that could cost upwards of $50 billion or more.
An oversupplied LNG market has chopped the near-term price of the commodity by more than two-thirds over the last two years, which eats into the potential profits of the Alaska LNG Project. And the project’s 800-mile pipeline from the Slope to Nikiski is a major cost that will always eat into its margins. It’s also a major cost most competing LNG projects worldwide don’t have to deal with.
Additionally, current oil prices are less than 50 percent of what they were when the current project structure was approved in 2014, which has hit all the producers’ bottom lines and on some level impaired their financial ability to make the requisite $10 billion-plus investment in the Alaska LNG Project, Meyer said.
ANCHORAGE, Alaska -- Big oil producers here are expressing serious doubts about moving forward with a multibillion-dollar liquefied natural gas export project in the state at a time when world energy markets are flooded with fuel and natural gas prices are half of what they were two years ago.
But that isn't stopping Alaska Gov. Bill Walker (I), who insists the state can commercialize the 34 trillion cubic feet of natural gas available on the North Slope even if one or more of its oil industry partners decides not to move forward with the proposed project.
"We need to recognize that under the current path, this project is not going forward," [Keith Meyer, the new head of the state's independent Alaska Gasline Development Corp.,] told state legislators at a recent joint hearing of the Alaska House and Senate resources committees.
"BP understands the state's fiscal need for a new revenue source in the mid-2020s," [BP senior manager Dave Van Tuyl] said. "But we don't want to rush into the largest energy project in North America that only ends up losing lots of money for all of us."
"You've seen a fundamental change in market conditions," state Sen. Peter Micciche (R) said. "And if the people that have the most experience on the planet are concerned about the viability of this project, I think we should share in that concern." [Colored & bold emphasis added.]
B.C.’s LNG export dream has hit a bump in the road after a major merger was quashed.
[T]he Hawaii Public Utilities Commission has decided not to allow the merger between Hawaiian Electric Companies and NextEra Energy, citing concerns about whether the merger is in the public interest.
The decision effectively kills the LNG export agreement with FortisBC. [Colored & bold emphasis added.]
Global Sustainability Research says 'gas glut' and alternative energies behind B.C. LNG delays
Another delayed liquefied natural gas plant in B.C. has some wondering if the whole industry is in trouble.
An analyst with Global Sustainability Research says the delays are partly due to a 'global glut' bringing down energy prices around the globe.
David Hughes says he believes market conditions won't be favourable for LNG in B.C. for at least five years, if ever.
"While the gas production in North America has gone up, production in the rest of the world has gone up even more," [LNG Canada CEO Andy Calitz] said. "So it looks like gas prices ... are going to remain low for the foreseeable future."
A downturn in the global energy market makes Canadian-produced LNG unprofitable in Asian markets while Hughes says there are further issues compounding Canada's sale of LNG to China as that country is investing in its own energy sources. [Colored & bold emphasis added.]
"The whole global energy industry is in turmoil," [LNG Canada CEO Andy Calitz] said.
[G]lobal oil and gas prices will have to recover before the companies involved can move forward, he added. [Colored & bold emphasis added.]
LNG Canada announced Monday it would delay indefinitely its decision to proceed beyond 2016. The group started engineering work in 2014, supported by Shell, Korea Gas, Mitsubishi of Japan and PetroChina as venture partners.
International gas consortium hits the brakes on B.C. final investment decision until markets improve, but a top Texas analyst is less optimistic for province.
LNG Canada — a partnership of Royal Dutch Shell, Korea Gas, Mitsubishi and PetroChina — made the announcement Monday, throwing more cold water onto the B.C. government’s hopes to complete such a deal before next year’s provincial election.
Even if oil and gas prices recover from their current collapse, “headwinds” include competing with Russian gas pipelines, the growth of renewable energy in China, and massive U.S. production.
It’s the “upfront capital expense” that puts B.C. in an unattractive light for investors, he argued, not just current prices. Only one scenario would see B.C. build one single project, he argued — if global demand suddenly accelerated “dramatically.” [Colored & bold emphasis added.]
Hawaiian Electric Industries (HEI), parent company of the state's dominant electric utility Hawaiian Electric Co., announced Tuesday that it is not for sale following regulatory rejection of its acquisition by Florida-based NextEra Energy.
In the wake of the NextEra merger rejection, HEI also withdrew an application to import liquefied natural gas from Canada — a major component of its power supply plan now under review by the Public Utilities Commission.
A company statement said HEI remains "committed to transitioning to 100% renewable energy in the most cost-effective way possible while ensuring reliable service," but it is unclear how the withdrawal will affect regulatory review of the PSIP. [Colored & bold emphasis added.]
Citibank analysts predict that with the current glut of LNG in the global market and resulting low prices, U.S. LNG supplies will not be shipped to Asia anytime soon even with the widened Panama Canal. The widened canal can now accommodate larger ships carrying LNG. “The Panama Canal expansion, inaugurated on June 26, was once expected to be a game changer for U.S. LNG exports to Asia… [b]ut against the backdrop of this major transition in the global LNG market, the prospects for U.S. LNG into Asia via the expanded canal look less promising, at least in the short-term.” The report projects that U.S. LNG will stay in the Western Hemisphere for the near future since it will not be profitable to ship the supplies all the way to Asia. [Colored & bold emphasis added.]
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