[seahorse3]

Australian LNG plant cancelled

http://perthnow.com.au/business/companies/woodside-will-not-go-ahead-with-an-lng-processing-plant-at-james-price-point/story-fnhohek5-1226618536271

[ROCKMAN]

Seahorse – Gets complicated when there are so many players with different agendas, eh? Here’s a link describing that floating LNG plant…truly amazing: would have 6X the displacement of the largest aircraft carrier. Aside from avoiding a fight with onshore environmentalists it also avoids some of the local politics and unions. They can build it wherever labor costs are lowest. I suspect somewhere in Asia. The other big advantage: all fields eventually deplete. With a floater the simple cruise to the next field. Especially useful if govt decides it doesn’t want to export its resources and changes the rules.

http://www.shell.com/global/aboutshell/ ... 52011.html

[seahorse3]

Yes, this LNG is complicated and just shows that this dream of transitioning from oil to gas is much more complicated than the "assumption" its just going to be a seemless transition. It doesn't even matter why its complicated, whether it is the complications of drilling, building the infrastructure, or politics, its all the same, complicated at every level. So, hopefully the big fields will quit declining so we can iron out all the complications for a seemless magical transition.

[SeaGypsy]

There has been a massive and apparently successful campaign against this project. The WA Government and local aboriginal corporation will be mighty upset, missing out on big bucks. The floating version has barely rated a mention in the MSM here, or by protesters. The price of gas would not have helped leverage this project, nor the $60-120 an hour wage expectation of remote resource workers in the region.

[Buddy_J]

Yes, this LNG is complicated and just shows that this dream of transitioning from oil to gas is much more complicated than the "assumption" its just going to be a seemless transition. It doesn't even matter why its complicated, whether it is the complications of drilling, building the infrastructure, or politics, its all the same, complicated at every level. So, hopefully the big fields will quit declining so we can iron out all the complications for a seemless magical transition.

No transition is really seamless, but sometimes you have to look terribly hard to find it. For example, the recent transition in the US to more and more wind driven electrical generation has gone mostly unnoticed, the increase in American natural gas production, the decrease in American crude use and increase in production, all of these have been building up and out over the past decade, and to be honest, for Joe Sixpack, it has been pretty seamless. Peak oil turned out to be a slow growth in oil production rather than a decline, Japan can turn off their nukes and still keep manufacturing Toyotas and Hondas for other countries with LNG with nary a hiccup. Germany did the same.

To me those types of transitions are simply amazing, wholesale fuel switching of any type, and the more the professionals see those types of examples in action, the more they are going to assume that maybe the transition away from oil, already underway, might go the same way. Citi being the most recent example.

http://business.financialpost.com/2013/ ... =5e13-c046

[SeaGypsy]

Citibank

Total Assets: $1.365 trillion dollars

Total Exposure To Derivatives: $55.51 trillion dollars

http://www.occ.gov

What garbage Buddy, we are talking about small percentages only so far, there has been no 'wholesale transition'; seamless or otherwise.

[Buddy_J]

What garbage Buddy, we are talking about small percentages only so far, there has been no 'wholesale transition'; seamless or otherwise.

If one of the worlds largest manufacturing economies can do this in a year, and the supply of Toyotas and Hondas keeps coming forth, and this country has NO indigenous resources base of their own, then not only has a wholesale fuel switching transition already happened in a first world country, but it took less than a year. You might not like it, but if the worlds third largest economy with NO fossil fuel resources can do it, the US with massive amounts of indigenous fossil fuel resources and the fastest increasing oil production on the planet the last few years certainly can certainly be expected to do at least as well.

[seahorse3]

Buddy there hasn't been an American transition to NG. Joesixpack is still driving gas cars, not NG. When they start driving NG cars, then I will agree we have made the transition. Boone Pickens is trying to transition fleet trucks, but is having a hard go at it.

[SeaGypsy]

Planet Buddy, where transition has occurred seamlessly.

[ROCKMAN]

Buddy – Not sure how we would define “seamless” or “wholesale”. Maybe just lay the numbers out and let folks characterize it themselves. Unfortunately my emphasis focuses only one Texas. Not only more installed wind power than any other state but as much as #2 (CA) and #3 combined. And despite the hype about the “first offshore wind farm” planned off the New England coast, Texas has already claimed that distinction. About 5 years ago Texas award offshore wind leases. The only negative responses involved concerns about the birds. In addition the project off Galveston is already under way with a 600 turbine project about to start offshore of Corpus Christi. Almost 10% of all electricity in Texas is generated from over 40 different projects. Not a “whole sale” change per se but a good start and doesn’t include any of the offshore projects yet.

The wind boom in Texas was assisted by expansion of the state’s Renewable Portfolio Standard, use of designated Competitive Renewable Energy Zones, expedited transmission construction, and the necessary Public Utility Commission rule-making. Despite many discussions on other sites I’ve seldom seen anyone bring up Texas. Perhaps not enough publicity even with the habit of too much bragging down here. LOL. Maybe some folks just think because we’re the largest oil producer the state wouldn’t support alternatives. The state is obviously a big supporter of all energy sources. And the oil/NG industry, again despite preconceived notions, doesn’t worry much about alternate energy sources competing with us IMHO…the Peak Oil Dynamic has taken care of that. Since all of us in the oil patch buy electricity anything that lowers the cost is just fine.

Maybe the fact that our economy has always been geared towards energy production the transition to alts would appear more seamless to us than most other states. Texas isn’t the only state with significant wind source to develop. And historically we’ve had relatively inexpensive electricity compared to some other regions. So just odd IMHO that we should be the obvious leader in the development of alternative energy sources.

[ROCKMAN]

Perhaps not so much for the EU. The article shows the complexity of LNG export. Some EU LNG terminals are having to be idled while others are forced to accept LNG purchases but are forced to redirect because the locals can't afford the market price. They can sell the loads to the higher priced markets but have to eat the transport costs so it's still a net loss. The Asian LNG demand is forcing prices to levels about 50% higher than what the EU market can afford. But here's the killer: take or pay contracts. TOP contracts aren't new...been around for many decades. When a consumer is concerned about future supplies they guarantee to a supplier they'll buy a certain future volume with prices typically tied to a benchmark. But if the consumer's demand drops or the price is more than then can afford they are screwed. And if they don't take delivery the financial penalty can be huge. The best way out financially sometimes is to take delivery and pay to transship the loads to another market. I gather the situation is even more complicated than the article describes. TOP contracts can be very convoluted. Decades ago I worked for a large US NG pipeline company that essentially destroyed itself with by signing some very bad TOP contracts and had to liquidate themselves to another p/l company.

http://www.downstreamtoday.com/news/art ... a_id=40773

[ROCKMAN]

Responding to another post about the "great surge" in US LNG exports some expect it occurred to me that some folks might not be aware of the nature of all US NG exports.

Mexican demand for U.S. gas exports has surged by 92% over the last 5 years. And with proposed new export projects slated to take up to 10% of U.S. production, Mexico could be the surprise driver of marginal demand and gas prices. There are currently 14 pipeline systems carrying US NG to Mexico. Currently about 7 bcf/day is exported to Mexico, or about 2.5 trillion cu ft per year. A typical LNG export facility can do about 1 bcf per day so it will take a significant expansion of LNG export terminals to even match what we are now shipping to Mexico. So yes…the US will be exporting a fair bit of NG in the near future but it will continue to be done, as it has for decades, via pipelines as opposed to LNG tankers. In fact, according to the U.S. Energy Information Administration, all of the in-progress pipeline projects on the U.S.-Mexico border could result in a doubling of American natural gas exports to Mexico by the end of 2014. The primary future of US NG imports is tied to pipeline systems and not LNG.

[lowem]

Meanwhile, there's some action over at my side. Channel News Asia reported earlier that :

Singapore is ramping up efforts to become Asia's hub for liquefied natural gas (LNG). Temasek Holdings LNG unit, Pavilion Energy, says it wants to raise its investments in infrastructure and assets, with the aim of trading LNG in Asia within the next three months. Already Asia's energy hub, Singapore has big ambitions to become the go-to market for LNG in the Asian region. The company is set to increase funding to its initial authorised capital of S$1 billion and invest in LNG infrastructure, terminal and assets in Asia ... according to the International Energy Outlook 2013, natural gas is the world's fastest-growing fossil fuel ... in line with economic growth and increasing wealth, developing Asia is expected to account for much of that demand, led by China, India and Southeast Asia.

One of the reasons for the push locally is for diversification of NG sourcing for the power plants. There's also some movement toward CNG for commercial transport and private vehicles, though recently some taxi drivers I've talked to recently have been somewhat less enthusiastic regarding NG prices and the queues at the few fueling stations available.

(Oh, and hello again everyone. It's been a while since last post here, after sorting out some medical and work issues).

[WildRose]

Welcome back, lowem!

There's also this, from the Globe and Mail re: Malaysia's investment in British Columbia LNG:

http://www.theglobeandmail.com/report-o ... e14714323/


Also, learned the other day that 80% of Los Angeles' buses run on CNG.

[ROCKMAN]

Even though Malaysia has been on a rather steady plateau since 1990 peaking at 755k bopd in 2004 the govt recognized their future PO many years ago and began aggressively typing up foreign energy sources. But NG has been on a steady increase from zero in 1892 to 2+ tcf recently. Like Mexico, Malaysia Petronas generates about 40% of their govt’s budget. But unlike PEMEX Petronas has been given the capital to develop other energy resources. Not as big an exposure as China and much less recognized by the rest of the world. But with deals like the Canadian LNG folks will likely start paying closer attention. Just a guess but it might be Malaysia is as much or more focused on delivering Canadian LNG to other markets as their own country.

[ROCKMAN]

LNG-Powered Trains Could Arrive by 2017. From: http://www.downstreamtoday.com/news/art ... a_id=40943

This in particular caught my eye: “Unit coal trains, which make long, unbroken journeys with a single cargo, are the most likely to use LNG initially”

Interesting dynamic: we burn less diesel so we can haul coal more cheaply to the west coast from where we ship it to China so they continue to expand coal-fired power plants with the help of cheaper US coal. And if it works that well with coal unit trains it should be just as viable with the expanding oil unit train systems so we can more economically develop the Canadian oil sands and ship it to US refineries cheaper so we can make more gasoline to burn in our ICE’s.

Can we find a silver lining in there somewhere?

[ROCKMAN]

And perhaps in the future coming from our Kiwi friends: Reuters – New Zealand is hoping the first deep water wells to be drilled in the country in nearly 15 years will reignite interest in its offshore oil and gas basins, mostly ignored since some early discoveries in the 1970s. New Zealand's remoteness, rough seas, and limited domestic demand for gas given its small population have curbed interest in the region by global exploration companies. But the development of floating LNG facilities, spearheaded by Royal Dutch Shell PLC, means gas could be processed for shipping without having to build an expensive onshore plant, making any finds more commercially attractive. Houston-based Anadarko Petroleum Corp, whose exploration success in Mozambique established the African country as a potential gas exporter, plans to drill two deep water wildcat wells in a joint venture with Australia's Origin Energy Ltd. The programme snaps a decades-old lull in deep-water drilling since U.S.-based Hunt Petroleum halted exploration in the Great South Basin off the country's southern tip in the early 1980s, due to harsh conditions and political red tape. "The formations we're looking at are large, they look like they have the potential to meet our criteria for multiple trillions of cubic feet of gas," said Alan Seay, a spokesman at Anadarko in New Zealand. "We're seeing similar-sized formations to what we've seen in places like Mozambique," he added, pointing to the results of seismic and other research.

[KaiserJeep]

Pack enough high explosives around these tanks and one might create a fuel/air bomb:



It's not easy of course, and such tampering would immediately be evident upon inspection. But a fuel/air bomb has a much larger explosive yield than having a ship-killer rocket punch a hole in such an LNG tanker, which would cause a large fire but not a large explosion.

Hopefully, we won't let such tankers close to large populations without such cargo inspections.

[ROCKMAN]

Gary - Read an interesting report a long time back about that possibility. Sorry...didn't save the link. Turns out the range of methane concentrations when it's explosive is rather narrow. 10% - 15%???? Pure methane won't explode. The fuel-air bomb in the US arsenal actually requires a very precise dispersal system. So it sounds like to really get the big bang from an LNG tanker the gas has to be released slowly and then confined somewhat. Not impossible but sounds a lot more complicated than popping lose with an RPG. I think hitting a tank car of ammonia or HCl in a populated area would cause more terror. Either that or take over the airwaves and run a continuous loop of Honey Boo Boo show. LOL.

[KaiserJeep]

Well, I don't want to get too explicit in a public Forum, but I can think of a way that would probably work, as could most people with basic thermo-godammic and chemical training. I could even more easily turn a tanker full of refined gasoline or diesel or benzene into such a bomb.

But the important point is that if you board and inspect outside of the destructive radius of such a bomb, and you do 100% inspection, you are covered.

Even the low yield fire scenario is nightmarish - if there are people anywhere near. But maintain the proper buffer zones between such ports and residences/businesses, and the risks are manageable.

It's one of the USCG missions, called "Port Security".