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THE Natural Gas Thread Pt. 2

General discussions of the systemic, societal and civilisational effects of depletion.

Re: THE Natural Gas Thread (merged)

Unread postby sparky » Tue 04 Jul 2017, 16:01:15

.
More gas on the market
and a good bit of geopolitics to boot , Qatar announce a 30% increase in production

http://uk.reuters.com/article/uk-gulf-q ... 9P1TU?il=0
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Re: THE Natural Gas Thread (merged)

Unread postby dissident » Tue 04 Jul 2017, 22:39:07

sparky wrote:.
More gas on the market
and a good bit of geopolitics to boot , Qatar announce a 30% increase in production

http://uk.reuters.com/article/uk-gulf-q ... 9P1TU?il=0


The US shenanigans with LNG "replacement" for Russian pipeline gas are a retarded joke. The US has nowhere near the capacity of 150 bcm per year of exports needed to displace Russian supplies to the EU. The US is a net natural gas importer and its suppliers can't ramp up their supply for re-export to the EU. Since Brussels parasite bureaucrats need to prove their fealty to Uncle Scam 24/7, Russia needs to transition to LNG exports to the EU. Pipelines are a double edged sword since they involve long term contracts which under current supply drop conditions implies long term losses. The LNG spot market is the most flexible option. Let EU-tards eat LNG cake and pay 50-100% more for natural gas compared to what they pay now for Russian supplies.

Gazprom is building LNG plants with access to the Baltic Sea but it should re-scope this project:

http://www.gazprom.com/about/production/projects/lng/
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Re: THE Natural Gas Thread (merged)

Unread postby sparky » Wed 05 Jul 2017, 03:57:13

.
There has been some action toward this , the Yamal gas is supposed to feed three LNG trains of liquefiers
a small detail it's a joint project with China and French companies involved , in fact the Chinese loaned the money to Total and the main operator Novatek , under sanctions ,Siemens of Germany will provide the turbines
the LNG is to be delivered through the North East passage to China with a Fleet of special tankers build by the Korean Daewood operated by a Russian company
as a purely technical exercise I would be curious to see the local climate influence on the plants efficiency
the gas has to be cooled a lot ,
Qatar is doing it with ambient temperatures around 45Dg C
Yamal winter temperature is around - 45DgC

the LNG versus high pressure pipeline is usually better for the pipes but it require a peaceful and steady political environment , while LNG is way more flexible
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Re: THE Natural Gas Thread (merged)

Unread postby dashster » Mon 17 Jul 2017, 01:28:26

Yoshua wrote:US conventional nat gas peaked in 2008. US coal peaked in 2008. Shale gas accounts for two thirds of US gas production today.


According to figures at the EIA
https://www.eia.gov/dnav/ng/hist/n9050us2a.htm

marketed conventional US natural gas production peaked in in the early 1970's.
2008 had total production (potentially including shale) of 21,112,053, while the early 1970's had [21,920,642; 22,493,012; 22,531,698; 22,647,549; 21,600,522] of conventional natural gas production from 1970 to 1974.

The EIA data also shows that conventional plus shale gas production hit a monthly high in July 2015 and a yearly high in 2015. The front page currently has an article saying that the EIA is predicting that coal will go from 30.4% of 2016 US electricity production to 31.3% in 2017 and that natural gas will go from 33.8% to 31.1%. The article blames the change on rising natural gas prices. So it will be more than interesting to see if the 2015 peak can be exceeded, that is, see whether or not the shale bubble has burst as predicted by David Hughes for the Post Carbon Institute.
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Mon 17 Jul 2017, 10:55:08

"...conventional US natural gas production peaked in in the early 1970's." Actually that chart doesn't appear to distinguish conventional NG production from unconventional reservoirs. Granted there's been a recent boom in unconventional production the Rockman was drilling and frac'ng unconventional reservoirs in the 1970's. Others were doing so in the 1950's. But though the data isn't available the vast majority of NG production, until recently, has been from conventional reservoirs.

Given the Marcellus Shale has been the primary source of the recent NG boom tracking it might be the best predictor. According to EIA the NG rig count in the MS shale has doubled in the last year (and still increasing slowly) but is still less then half of where it peaked in 2012.
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Re: THE Natural Gas Thread (merged)

Unread postby dashster » Mon 17 Jul 2017, 11:34:32

ROCKMAN wrote:"...conventional US natural gas production peaked in in the early 1970's." Actually that chart doesn't appear to distinguish conventional NG production from unconventional reservoirs. Granted there's been a recent boom in unconventional production the Rockman was drilling and frac'ng unconventional reservoirs in the 1970's. Others were doing so in the 1950's. But though the data isn't available the vast majority of NG production, until recently, has been from conventional reservoirs.

Given the Marcellus Shale has been the primary source of the recent NG boom tracking it might be the best predictor. According to EIA the NG rig count in the MS shale has doubled in the last year (and still increasing slowly) but is still less then half of where it peaked in 2012.


If we assume that fracking gas wasn't as significant back then, then the higher numbers in the 1970's included a higher percentage of conventional natural gas so that would be the peak. If we don't assume that, I don't know what would make conventional natural gas high in the 1970's, then decline, only to hit a peak in 2008 (if a true claim). Why would they find and/or produce more conventional natural gas three decades later?
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Mon 17 Jul 2017, 16:21:55

Didn't say production of NG from conventional reservoirs didn't peak some years ago...just don't have data to establish an exact date. But did point out that much of the current production is coming from the unconventional Marcellus Shale formation.

Just not exactly sure of the distinction. Many of the MS wells have been more economical ventures then many of the conventional completions over the last few decades. Especially those completed offshore in the GOM. As pointed out many times when the Rockman's new company began about 8 years ago we spent $240 million (just our share) drilling deep conventional reservoirs in S Louisiana. And the NG prices fell below $5/MCF about 5 years ago and we have a drilled such well a well in the last 5 years. Meanwhile the MS has been picking up the slack nationally at the lower price.
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Sun 30 Jul 2017, 13:38:58

And finally the dumb ass politicians in PA are going to charge NG producers a severance tax...maybe. Unlike Texas and many other states PA has never collected a severance tax from companies that produce oil/NG. Several years ago the Rockman calculated the ST the state would have collected just that one year if it had the same rate as Texas: $370 million. BTW Louisiana charges almost 3X as much ST on oil as Texas:

"One of the top natural gas-producing states in the country, Pennsylvania's Senate-passed plan, which must still be approved by the state's GOP-majority House of Representatives, would increase drillers' costs in the state by imposing a severance tax of 2 cents per thousand cubic feet on natural gas production to generate an estimated $80 million this year for the state." But Texas collects at a rate almost 4X greater: 7.5% of market value of gas produced. And Louisiana: 16.3¢ per MCF regardless of how low NG prices go.

And the argument that companies won't drill as much in PA if it imposed a ST is obviously BS: look at the number of wells drilled in Texas and Louisiana.

But they are going to tax consumers much heavier:

"In addition, the proposal would levy a 5.7-percent natural gas gross receipts tax on home heating bills expected to yield approximately $400 million."

Texas has collected many tens of $BILLIONS in ST over the years. And PA = ZERO
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Sun 30 Jul 2017, 14:19:21

Another indication of the UK's potential energy vulnerability:

July 26 (Reuters) - The extension of an outage at Norway's Kollsnes gas processing plant on Wednesday lifted British gas prices on expectations of tighter supply over the next few months.

More at

http://www.rigzone.com/news/oil_gas/a/1 ... ish_Prices
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Re: THE Natural Gas Thread Pt. 2

Unread postby Tanada » Fri 13 Oct 2017, 08:57:48

ROCKMAN wrote:baha - Nothing wrong with being optimistic about coal consumption declining to a very minimal level...many decades down the road. But not next year or even next decade. And that decline will be delayed if the price of NG/LNG increases 3X to levels seen not that many years ago. Consumers, especially those in developing economies, will demand the lowest cost energy. Likewise renewables could SLOWLY reduce coal consumption.

As long as the world is consuming near record levels of coal TODAY such optimism seems borderline delusional. Not trying to hurt anyone's feelings but as you imply the numbers can't be ignored.


Any idea how long the recent glut of Natural Gas is going to last? When I bought my first house back in 2004 I was slammed with a cold winter and natural gas prices over $11/ccf. I invested money in a super efficient super modern furnace and a year later the price of natural gas was plummeting. By the end of 2006 prices were back at the long term average and then they fell even further. Thus my furnace investment that would have saved me roughly a thousand dollars per year was suddenly saving me less than two hundred compared to the old unit.

The reason so many thousands of gas burning electric plants have been built is mostly economic, directly from the cost of the fuel and indirectly from the ease of permitting a gas burner compared to a coal burner.

Take away the permitting obstacles and bring the price of natural gas above the 2000 price on a long term consistent basis and there is zero economic incentive to not build new coal burners. Thus IMO the decline in coal burning is fully dependent on Natural Gas remaining cheap on the BTU basis.
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Re: THE Natural Gas Thread Pt. 2

Unread postby GoghGoner » Thu 28 Dec 2017, 08:25:24

Wow, the New England spot market was over $50 yesterday. Shale really generated the demand. This cold snap is interesting, future markets have largely discounted it but if we have continued cold it will definitely impact the mindset that we have plenty of NG to power everything.

Total U.S. gas consumption jumped 31 percent to 115.7 billion cubic feet on Tuesday from Friday. That's the most ever for this time of year in PointLogic Energy data back to 2007. Not only have more homes converted to the fuel from oil in Connecticut through Maine, the region's generators are more reliant on gas to produce electricity than anywhere else in the country.

Read more: http://www.lowellsun.com/news/ci_315551 ... z52YrBGCZX
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Re: THE Natural Gas Thread Pt. 2

Unread postby coffeeguyzz » Thu 28 Dec 2017, 14:06:15

There is a great deal of supply of natgas available, just not in New England.
On Tuesday, when Algonquin Citygate spot went over $35/mmbtu, NY Mercantile Exchange January price dropped to $2.63/mmbtu.
That's heckuva spread, thanks in large part to New England's blocking two huge pipelines from delivering plentiful, cheap Appalachian Basin natgas.

This gas price is directly, dramatically impacting electricity prices with ISO spot well above $100/$200 Mwh several days running now (5 to 10 times normal pricing).
Even went over $500/Mwh this morning.
30% of the fuel presently burned for electricity generation is oil ... an obscenely high amount with astronomically high cost.
This, due to the residents' staunch opposition to pipeline build out.
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Re: THE Natural Gas Thread Pt. 2

Unread postby GoghGoner » Mon 01 Jan 2018, 08:28:52

One of more interesting developments in 2018 will be that the US NG prices will no longer be entirely set by the US market. There has been very little relationship between NG futures and the global commodity cycles since I have started watching the market. With exports to Mexico increasing and especially the new LNG capacity, it is a brave new world for the US NG consumer. Like other commodities (metals, coal, oil, etc...), US power prices will rise and fall with China's economic fluctuations.

https://instituteforenergyresearch.org/analysis/u-s-become-major-lng-exporter/

There is currently only one operational liquefied natural gas (LNG) export terminal in the United States; it has been operating since early 2016. Cheniere Energy is exporting LNG at its Sabine Pass facility with three trains and a capacity of about 2 billion cubic feet per day. Its total capacity is expected to be 3.5 billion cubic feet per day when all 5 trains are completed. Cheniere is in the process of getting contracts and financing for a sixth train.

There are five additional LNG projects under construction with a total capacity of about 7.5 billion cubic feet per day that will come online in 2018 and 2019, making total U.S. LNG export capacity about 10 or 11 billion cubic feet per day within just a few years. Four more projects with a capacity of almost 7 billion cubic feet per day are approved but not yet under construction. These terminals will make the United States one of the top three LNG exporters in the world; the other two major exporters are Australia and Qatar.[i] Australia is expected to overtake Qatar as the world’s largest LNG exporter by 2020.[ii]
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Re: THE Natural Gas Thread Pt. 2

Unread postby coffeeguyzz » Mon 01 Jan 2018, 09:51:22

With the rapid advances being made with the floaters - FSRUs and FLNGs - LNG use could spread fairly quickly throughout the globe in relatively remote areas.
As dramatic a cost reduction that Tellurian anticipates using pre-fabbed modular construction, the Golar-led ship centric technology will be an absolute game changer.

This is occurring simultaneously with advancing downstream hardware catering to the micro grid market.
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Re: THE Natural Gas Thread Pt. 2

Unread postby GoghGoner » Fri 05 Jan 2018, 12:35:17

Record spot prices and future prices drop. Traders are looking ahead to warmer weather. Can't wait to see next week's inventory drop.

http://247wallst.com/energy-economy/2018/01/05/natural-gas-sets-new-price-record-ahead-of-northeast-storm/

At the major pipeline feeding New York City, Transco’s Zone 6, natural gas prices averaged $140.06 per million BTUs on Thursday, a jump of more than $91 per million BTUs in a single day. Thursday’s national average spot price rose by about $6 to $16.78.

According to Natural Gas Intelligence (NGI), Wednesday’s was the highest price spot price ever recorded in the United States. Before then, the highest price paid for a million BTUs was $125 in the “polar-vortex” winter of 2013–2014.
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Re: THE Natural Gas Thread Pt. 2

Unread postby coffeeguyzz » Fri 05 Jan 2018, 14:52:15

GG
The intraday price yesterday at Transco Zone 6 actually hit $175/mmbtu.
This is WHOLESALE pricing.

Wanna see the difference some pipelines can make?
Story today on Cleveland.com by John Funk, plain dealer, describing RESDENTIAL rates for Dominion's Ohio customers of $3.07/mmbtu ... falling next week to $2.74/mmbtu.
At 18 Mcf/month average household useage, customers will pay about 60 bucks for heat and hot water.

The folks in New England who stymied pipeline buildout are showing the world the consequences of their choices.
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Re: THE Natural Gas Thread Pt. 2

Unread postby Outcast_Searcher » Fri 05 Jan 2018, 15:51:15

GoghGoner wrote:Record spot prices and future prices drop. Traders are looking ahead to warmer weather. Can't wait to see next week's inventory drop.

http://247wallst.com/energy-economy/2018/01/05/natural-gas-sets-new-price-record-ahead-of-northeast-storm/

At the major pipeline feeding New York City, Transco’s Zone 6, natural gas prices averaged $140.06 per million BTUs on Thursday, a jump of more than $91 per million BTUs in a single day. Thursday’s national average spot price rose by about $6 to $16.78.

According to Natural Gas Intelligence (NGI), Wednesday’s was the highest price spot price ever recorded in the United States. Before then, the highest price paid for a million BTUs was $125 in the “polar-vortex” winter of 2013–2014.

Really. You're going to claim a spot shortage during a record coal spell implies what? (Not doom of course, since even though you're a doomer you get your feelings hurt if someone calls you on it.) So go ahead - you tell us -- what are you implying beyond a short term localized price spike due to a record weather event?

And what inventory drop specifically would that be in a world awash in natural gas? Because somehow, in the big scheme of things, I can't imagine it being significant, despite whatever FUD you're trying to sell.
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Re: THE Natural Gas Thread Pt. 2

Unread postby GoghGoner » Sun 07 Jan 2018, 08:27:14

I don't disagree with Coffeeguy that this is a localized price spike due to politics. That is definitely a valid point. Spot prices were up in all major regions but that is expected during an Arctic blast. It looks like we are past the blast and ng traders are focused on the warming trend which I hope they are right since I am sick and tired of the cold weather. If I was going to bet on the futures right now, I would be bullish on prices since inventories are lower than the five-year average and weather is unpredictable. I don't see any shortages developing this winter since supply is more than ample.

In the future, I don't see such a rosy picture for the US consumer. Companies like RRC are not profitable at these prices and demand is forecasted to keep increasing. The decline rates for these wells is very high and any slowdown in drilling causes an almost immediate impact on supply. We have built and continue to build so much infrastructure around the Appalachian region that is more and more dependent on this finite resource. This boom and bust has happened before but times changes and our debt-ridden economy may be more fragile than ever. I'll be watching and learning from whatever happens here.
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Re: THE Natural Gas Thread Pt. 2

Unread postby coffeeguyzz » Sun 07 Jan 2018, 14:58:34

GG
We will all be watching events unfold as having ample supplies of affordable energy is a very real life and death situation for so many in brutal wintertime conditions.

From my several years' observations on Appalachian Basin supply ...

Check out Enno's site for well performance for 2016/2017 wells in Susquehanna, Greene, Washington and Bradford counties.
Not only is the initial production extremely high, output is strong for many months.
Range has been severely impacted by the delays in the Mariner East 2 and 2X pipeline build out.
For contrast, watch the production numbers for EQT in 2018 as they plan on dozens of 15,000 foot long laterals now that the Rice acquisition has provided significant contiguous acreage.

Should you go to Ohio's oilandgas site from their DNR, you can see a mini explosion in production numbers as well as an expansion into Jefferson and Harrison counties.

One of the bigger 'sleeper' issues in the AB is the subdued expansion of the productive fairway arcing from southwest towards northeast.

XTO just drilled, not yet brought online, a Utica well in Armstrong county, northeast of Pittsburgh.
This large area has been grossly under developed for many reasons - and will probably never rival Susquehannah/Bradford counties, but the Deep Utica continues to surprise to the upside along the north central tier.

Seneca just announced they will exclusively target the Utica in their areas of Elk, McKean and Cameron counties.

There should be many, many decades of high production to come. (DOE recent report on NGLs - a Primer - pegs AB output approaching 50 Bcfd in future. Excellent report to read, IMHO).
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Re: THE Natural Gas Thread Pt. 2

Unread postby GoghGoner » Thu 11 Jan 2018, 12:04:20

Wow, another record. That was one hell of a cold snap and we are using more NG than ever.

https://www.ft.com/content/95820496-0837-3b0f-b777-f080aedd09fc

The US withdrew a record volume of natural gas from storage last week as extreme cold froze cities from Chicago to Boston.

Gas inventories fell by 359bn cubic feet to 2.767tn cu ft in the week to last Friday, the Energy Information Administration said in a report. The weekly decline was a quarter larger than the previous record drop of 288bn cu ft in January 2014.


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