Posts Tagged ‘LNG’

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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The Latin American quandary: lots of shale gas, not a lot of production

Imports of liquefied natural gas to Latin American are up 18% so far this year, according to Bentek, a unit of Platts, buoyed by growing demand from Mexico and Brazil. But, with so much recoverable indigenous supply, why is Latin America paying top dollar for imported gas?

According to the US Energy Information Administration, technically recoverable shale gas resources in Argentina are the second largest globally at 802 trillion cubic feet, Mexico’s reserves are the sixth largest at 545 Tcf, while Brazil ranks tenth with reserves estimated at 245 Tcf.

Accessing these shale reserves requires political will and costly investments, factors that have combined in various ways across the region to impede domestic production and make LNG an easy, though short-sighted solution to growing demand for electricity in Latin America.

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Natural gas vehicle investments are for the long-term

Investing in vehicles powered by CNG or LNG is a long-term commitment and takes guts.

Patience is a virtue seldom found among many people these days, especially investors. Long-term investments, regardless of what serious professionals say, seem to be for old fuddy-duddies who are stuck somewhere in the 20th century.

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Energy Economist: South American hydropower fluctuates, and LNG markets feel the impact

A butterfly flapping its wings in the Andes may or may not have some unforeseen global consequence, but the falling of a raindrop will. South America has a natural gas deficit and a highly variable demand load, owing to its over-dependence on hydroelectricity and the variations in electricity generation that produces. Countries in the region have turned to LNG as a backstop, passing the volatility of hydro generation through to the spot market for LNG. Ross McCracken discusses the issue in this month’s excerpt from Platts Energy Economist.

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Michigan comes to Australia: Chevron MD draws stark comparison on LNG wages

The state of Western Australia is almost half the size of Russia but home to only 2.5 million people, almost 2 million of whom live in and around the state capital of Perth.

The pleasant city has grown rapidly on the back of Australia’s resources boom. The region’s fast-growing mining, oil and gas industries have seen sleek new office towers rise above the city’s older Victorian heritage buildings, staffed by neatly attired office workers pacing purposefully to well paid jobs, A$4 ($3.76) ‘flat white’ coffees in hand.

So it was a resource industry-friendly city in which to hold the Australian Petroleum Production and Exploration Association’s annual conference and trade show, which ran April 6-9 and attracted a record-breaking 3,600 delegates, making it – according to the organizers – the biggest oil industry conference in the southern hemisphere.

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Backers of US LNG exports want to weaken Russia’s hold, but it may not matter

Shortly after President Obama said there would be “costs” for Russian military intervention in Ukraine, a Republican US senator tried to focus the crisis on US liquefied natural gas exports.

“The United States has abundant supplies of natural gas just waiting to be exported to our allies,” said Senator John Barrasso, a Wyoming Republican and vocal supporter of giving potential US exporters unfettered access to the global market. “If President Obama is serious about helping the people of Ukraine, he will immediately expedite the approval process for liquefied natural gas exports. American natural gas exports would help Ukraine free itself from Russian energy and Putin’s political manipulation.”

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SPR oil put up for sale on the day Ukraine’s new chief is in town

One trader speaking to a Platts reporter had this to say about the decision by the Department of Energy today to sell 5 million barrels of oil from the Strategic Petroleum Reserve.

“The Gulf Coast market has plenty of barrels,” he said. “They should have done it a few weeks ago when the Gulf Coast was tight due to all the weather delays.”

A few weeks ago, however, Arseniy P. Yatsenyuk wasn’t in Washington. He’s the interim President of Ukraine, and he’s in DC today.

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Will LNG prices in Asia continue to be oil-linked?

The simple answer to that question is that there is no simple answer.

Historically, LNG prices were linked to oil because LNG was displacing oil and that practice continued until US LNG export projects were proposed. Buyers from the US export projects will get LNG based on Henry Hub gas prices because in most cases they will be responsible for buying US gas and transporting it by pipeline to their contracted export projects to be liquefied.

That access to those Henry Hub-priced supplies has spurred buyers to seek gas-indexed prices in their new purchase contracts, displacing traditional oil-indexed prices.

A number of buyers, especially in Japan, are pushing proposed British Columbia export projects to use the US benchmark Henry Hub gas price as the index for LNG.

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