Posts Tagged ‘LNG’

When it comes to defining LNG in cars, patience is a virtue

When pushing for greater use of natural gas vehicles, advocates know patience is a virtue. A lot of patience.

One recent tangle, a regular Gordian knot, has been the question of how LNG used as a transportation fuel should be measured and taxed. Should it be by weight, like kilograms, or volume, such as diesel and gasoline gallon equivalents (DGE or GGE).

This is no small picky detail that excites policy wonks. It matters a great deal to current and future LNG vehicle owners and state tax collectors.

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Mexican LNG exports will not come soon

Recent reports say Japan wants to import LNG from Mexico after 2020. While Mexico could add liquefaction facilities at one or more of its three LNG import terminals, it would need to overcome some hurdles before it could export LNG.

Sempra’s Energia Costa Azul terminal on the Pacific Coast of northern Baja California rarely imports cargoes, but the hurdle for exports from Costa Azul would be access to gas. This import terminal would not have been built 15 miles north of Ensenada if there had been enough gas production nearby to meet demand.

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Peace agreement in gas-rich Mozambique sets the stage for elections

After two years of sporadic clashes, Mozambique’s Frelimo government and Renamo, the main opposition party signed a peace agreement in August, improving prospects for the October elections in the gas-rich southern African nation.

The presidential and parliamentary elections on October 15 will mark the end of president Armando Guebuza’s second and final term in office.

The election takes place as Mozambique becomes an attractive investment destination following huge gas discoveries by Italy’s Eni and US’ Anadarko. The discoveries, estimated at 100 trillion cubic feet have the potential to transform Mozambique into one of the world’s leading LNG exporters.

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India’s gas pricing dilemma: A ‘Modi’cum of liberalization?

The new Narendra Modi government in New Delhi prolonged the suspense this week over what tack it will take on the controversial domestic gas pricing issue.

It had been expected to signal which way it is inclined ahead of a September 30 deadline to announce its final decision on gas prices.

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Has the UK natural gas market’s year-long downtrend gone into reverse?

The UK gas market has been on a downtrend throughout the year after a mild winter left storage facilities entering summer already at high levels. Qatar has also kept up a steady flow of LNG cargoes throughout the year, sending daily gas prices down from the mid 60s pence/therm in January to the lowest point of the year at 34.60 p/th on July 11.

But the market now seems to have turned 180 degrees, with a sharp jump in prices since mid-August. With higher winter demands on the way, July’s lows may not be seen again this year.

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Regional price spreads: predicting the future of LNG

On March 11, 2011, a magnitude 9.0 earthquake and tsunami devastated a large portion of Japan’s eastern coastline killing nearly 16,000 people and causing infrastructure damage estimated at more than $225 billion. The consequent nuclear disaster at the Fukushima Power Plant ultimately resulted in the closure of all of Japan’s nearly 50 nuclear reactors.

In a move to compensate for lost electric generation capacity, Japanese imports of LNG jumped nearly 23% to 86.7 million mt during the 2012-2013 fiscal year, up from imports that totaled 70.6 million mt during the fiscal year just prior to the disaster.

The precipitous jump in demand for LNG from post-Fukushima Japan changed the global gas market irrevocably. Since March 2011, spot Asian gas prices have averaged roughly $15.65/MMBtu compared to prices that trended around $7.00/MMBtu during the two-year period from 2009-2011.

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UK gas supplies comfortable, retail prices steady

The UK gas market is looking comfortably supplied at present and wholesale prices reflect this. The average daily gas price assessed by Platts across July 2014 was 37.52 pence/therm, down 5% from June’s 39.50 p/th average, and down a huge 43% from the 65.28 p/th average for July last year.

The shift downwards has been evident throughout the year. The average day-ahead price to date this year is 49.80 p/th, down 27% compared with a 67.99 p/th average across 2013 as a whole.

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Petrodollars: The Western Canadian LNG business attempts to launch

 Exports of LNG from the US aren’t the only potential growth story for North America. LNG shipments out of Western Canada are also on tap. Ashok Dutta, in this week’s Oilgram News column Petrodollars, reviews the start-and-go status of the various projects.

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East Africa must avoid LNG delays to compete with rivals

Mozambique and Tanzania are locked in a race to be first to export gas from East Africa, so much so that the region may emerge as a strong competitor to Qatar and Australia in the battle to capture key export markets in Asia.

Geographically, East Africa is ideally placed to supply LNG to Japan, China, India and South-East Asia all of whom rely heavily on LNG imports.

LNG from East Africa should be cheaper than from Australia but such an advantage may be wiped out if Mozambique and Tanzania are unable to develop their potential before a glut of other new supplies depress prices.

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The changing face of global gas, or, chasing the arbitrage

The fate of US LNG import terminal projects was sealed as the amount of relatively low-cost gas produced onshore soared in the middle of the last decade. Most of them were scrapped before getting off the drawing board, but the more advanced of them, notably Cheniere’s Sabine Pass, went on to become export terminals, in a radical and apparently successful bid to salvage their backers’ fortunes.

That well-documented transformation was only made possible by the yawning price difference opening up between the depressed Henry Hub and the rest of the world.

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