The Natural Gas Price Watch Thread

[airstrip1]

For a comparison...natural gas is going for about $12 in the U.S., and only a few years ago it was $2.

Given that the spot price in the UK is now double the US price you have to wonder about the efficiency of the global market in natural gas. The original post in this thread mentioned that tankers carrying this commodity were actually being diverted away from UK ports. This is not something you would expect if price was the main driver. Producers of Natural Gas in the North sea are still exporting some of their output. I wonder how long the UK government can let that continue when shortages really begin to bite.

[donshan]

Re: UK gas shortage.

Maybe the Government/Corporate position is similiar to Marie Antoinette paraphrased:

"The people have no gas, let them burn furniture!'

Corporations often discount future profits at 10 to 20%, which means take the money and run. "The future beyond 10 years does not exist, and is NOT our problem."

Same problem the USA BTW.

An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.
Laurence J. Peter

[donshan]

Re: UK gas shortage.

Maybe the Government/Corporate position is similiar to Marie Antoinette paraphrased:

"The people have no gas, let them burn furniture!'

Corporations often discount future profits at 10 to 20%, which means take the money and run. "The future beyond 10 years does not exist, and is NOT our problem."

Same problem the USA BTW.

An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.
Laurence J. Peter

[Leanan]

I tend to doubt that "tankers diverted to the US" story. From what I've heard, our LNG terminals are at their limits. That's why they are trying to build new ones, against stiff public resistance and at great expense.

[PWALPOCO]

Does anyone have a price history on UK NG ?

How "high" are these spot prices in comparison to previous winters ?

Paul

[Wildwell]

http://www.dti.gov.uk/energy/inform/ene ... ec2001.pdf

In all fairness it's been falling a great deal for many years.

[NTBKtrader]

Does anyone have a price history on UK NG ?

How "high" are these spot prices in comparison to previous winters ?

Paul

http://www.earthscan.co.uk/news/images/ ... _fig-2.jpg

http://www.dti.gov.uk/energy/inform/ene ... 2chart.gif

[PWALPOCO]

Wildwell / NBKTrader

Thanks for the information, interesting charts there.

Paul

[BabyPeanut]

Welcome to Dominion Cove Point LNG, LP (link)

Dominion Cove Point LNG, LP is located on the Chesapeake Bay in Cove Point, Maryland, south of Baltimore. It is the nation's largest liquefied natural gas (LNG) import facility. Dominion acquired Cove Point from Williams on Sept. 5, 2002, and began receiving ships in the summer of 2003. Explore the left-margin links to learn more about the facility and LNG.

Dominion Cove Point will play an increasingly critical role in coming years. Natural gas is the energy of choice for many Americans, and demand is expected to grow by at least 20 percent over the next decade. Although there are vast reserves of natural gas in the United States, many are not yet available.

Cove Point Expansion Project (link)

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Dominion plans to nearly the double capacity at its Dominion Cove Point liquefied natural gas (LNG) plant in order to move more natural gas to consumers in Mid-Atlantic and Northeastern states where it is in high demand. The expansion project also includes new pipeline projects to deliver the gas.

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Project Description

Dominion has asked the Federal Energy Regulatory Commission to approve an increase in the plant's daily output capacity from 1 billion cubic feet (Bcf) per day to 1.8 Bcf per day. Storage capacity at the terminal would increase to about 14.5 Bcf. One Bcf of natural gas is enough energy for about 3.4 million homes each day. Dominion Cove Point now has 7.8 Bcf of LNG tank storage.

The expansion project will add two storage tanks, bringing the total number at the site to seven. In addition, the expansion project will add two electric generator units to the existing three units.

Upon approval, Dominion Cove Point would expand its pipeline in Maryland to deliver more natural gas to interstate pipeline connections in Virginia. Dominion Transmission would build a new pipeline, a pipeline extension, two pipelines parallel to existing lines and two compressor stations in Pennsylvania to move natural gas to customers throughout the Northeast.

These pipeline projects are key to delivering new gas supplies to where they are needed in the Mid-Atlantic and Northeast. The Maryland project will bring more winter supplies to the Mid-Atlantic region, and the Pennsylvania projects will allow supplies to be stored in the summer and moved to the Northeast for use during the winter.



...snip...

Washington, DC will have natural gas. How convenient that they voted for that.

[Egon_1]

I sure would like to get a look at this report (can anyone lend me 427 euros?):

Press Release Source: Research and Markets Ltd

Natural Gas in Crisis: How Power Companies Can Keep The Lights On
Wednesday January 4, 5:45 am ET

DUBLIN, Ireland--(BUSINESS WIRE)--Jan. 4, 2006--Research and Markets ( http://www.researchandmarkets.com/reports/c27394 ) has announced the addition of Natural Gas in Crisis: How Power Companies Can Keep The Lights On to their offering.
Whether you are a power company, a consumer or an investor, the current crisis in European natural gas affects you. Is this just a short-term crisis or will it continue to impact power companies' ability to perform for years to come? For example forecasts for this winter in North America are dire, with some ISOs predicting rolling blackouts.

The crisis will be long term. In this latest report "Natural Gas in Crisis: How Power Companies Can Keep the Lights On", the tipping points are shown - human bungling, wishful thinking, and natural disasters -- leading up to the current crisis. More importantly, you'll discover the steps you can take now and over the next several months to stem this disastrous tide.

You'll learn:

Why North American natural gas supplies will stay tight now and for years to come.
Why LNG won't - and shouldn't -- rescue the North American power industry.
How gas exploration efforts are failing, and alternative sources proving less attractive, despite improvements in E&P technology.
Why decisions made in Ontario, Canada spell further chaos for the North American market.
How the crisis will spark fresh mergers and acquisitions.

You'll find solutions to this very real crisis, including:

Steps that your company can take now to ensure the lights will be on years from now.
How to change your capital investment plans to reflect the new energy reality.
How to ensure your company emerges as a winner, not a loser, from this crisis.

Natural Gas in Crisis examines the roots of the current natural gas crisis in North America, discussing its commercial, technological, political and environmental causes. Touted as the 'clean and inexpensive' fossil fuel, natural gas has tripled in cost over the past months as supply has been severely affected. Natural gas demand, which has risen rapidly over the past few years, is expected to skyrocket as the coal-fired power plants in Ontario, Canada are shut down and foolishly replaced by natural gas. This short-sighted move is sure to roil the North American energy markets further. Further, US production isn't able to keep up with current demand. Although exploration and production technology is improving and alternative sources for natural gas are being researched, these efforts won't yield enough supply to keep power plants running. LNG imports are being bandied about as the panacea to today's problem. This foolhardy strategy will only serve to make the US electricity industry dependent on supplies from overseas countries, many of them members of OPEC.

Topics covered in the report:

The Bubble Inflates
Big Trouble in Gasland
The Numbers Game
Offshore & Deepwater
LNG & Insecurity
Imaginary Pipelines
Look Smarter, Drill Smarter
Tight Sands and Gas Shale
Coal Bed Methane
Gas Hydrates: Reality or Illusion?
Landfill Gas & Others
Pause For Thought: Does Natural Gas Make Sense for Power Anymore?
The Reckoning & Future Strategy

Companies mentioned:

Houston Natural Gas
InterNorth
Enron
US Federal Trade Commission
Federal Power Commission
Federal Energy Regulatory Commission
New York Mercantile Exchange
Natural Gas Clearinghouse
Dynegy
US Energy Information Administration
Congressional Budget Office
California Public Utilities Commission
Minerals Management Service
OPEC
Interstate Oil and Gas Compact Commission
National Energy Research Laboratory
Gas Technology Institute

For more information visit http://www.researchandmarkets.com/reports/c27394

[TorrKing]

Norway is building a LNG terminal on it's west coast. The gas is to be transported mainly to England. If the strike lasts, the completion date (scheduled for 2007) may be seriously delayed.

They didn't say anything about UK at all in the Norwegian news, but this may be bad news for them.

Edit: The strike I am talking about is a strike in the construction business.

Torjus Gaaren

[Graeme]

The great game of global gas

THE colossi of the Gulf sea lanes are no longer Suezmax VLCC crude oil tankers but the huge refrigerated gas tanker ships with their distinctive domes, filled with superchilled LNG, the new black gold of Qatar or Abu Dhabi to the storage tanks and gasification plants of Europe or the Far East.

As the grim reality of Peak Oil dawns on an increasingly gas guzzling world, the smart money and Big Oil have rearranged the chessboard of international finance and power politics to stake their claim to the priceless reserves of the only hydrocarbon fuel that complement crude oil. Power generation, electricity, winter heating and industry are all derived from gas that, sometime after 2020, could emerge as the planet's dominant energy source.

But the world’s greatest gas fields still remain undiscovered. Western Siberia boasts more than one third of world’s global gas reserves and Grazprom, the Kremlin’s trillion dollar cash cow, alone supplies a fourth of Europe’s gas with the epic fields that dwarf even Qatar’s Ras Laffan. In a cosmic geological joke on human civilization, in fact that the world’s gas constellations are as concentrated in remote, unstable places as crude oil. This mean that the time scale for gas pipelines and LNG tankers is calculated in decades and tens of billions of dollars. Hence, the consortia and joint ventures that have emerged everywhere from Kazakhstan Siberia to Dolphin to South Pars in Iran.

khaleejtimes

[Graeme]

Govt relief over Kupe development

The Government and state-owned power company Genesis Energy are breathing huge sighs of relief at the announcement the billion dollar Kupe gas and oil field development will go ahead.
The joint venture owners of the field off the Taranaki coast today confirmed they were to develop the field, at an estimated cost of $980 million.
Construction was expected to start in Taranaki in September, with the first development well due to be spudded in the first half of 2007. Production is scheduled to start in mid-2009.

stuff
Link broken

[Graeme]

Kupe 'won't solve shortage'

Analyst Richard Hale says it is a much needed investment which will alleviate the supply shortfall but he says Kupe has long been factored into the supply-demand balance, so the country is still facing a supply crunch around 2015.

nzherald

[lawnchair]

I was bored for a minute and flipped through the advertisements in the back of the Economist. Always good for a chuckle. Anyone want to go in on privatizing the Royal Bahraini Equestrian Parks?

Anyway, I saw an advert from "Pakistan GasPort Limited" in Karachi. An LNG import terminal opening in 2Q 2008. They're looking for LNG supply contracts.

First thought is: "Pakistan?" A country with a sea-level border with Iran needs LNG imports?. I realize that border isn't always friendly, but wow. I believe they even share a continent with Russia.

Second thought: "The Economist?" How many agents are there who could provide LNG? Can't be more than a few dozens. Is it really sensible to buy a half-page ad in a generalist magazine?

Third thought: "2Q 2008?" That's a whole lot more fleet of foot than any Western LNG projects.

So, if even Pakistan is importing LNG, let alone China, India, Japan, and Korea, it will take some remarkable ship and terminal building to get North America in the game. And, we'd better pay a lot, too. After all, would you rather make three short roundtrips from supposed "lots-o-gas-land" to Pakistan or one long roundtrip to the US over the high seas?

I think world methane production will get sucked over the hump *real* quick like this.

[Twilight]

Sometimes there is already someone lined up, but there is an obligation to advertise in the interests of transparency, compliance or whatever. It's the same with the very, very specific job ads for senior administrators in government, companies and academic institutions. Invariably they already have a candidate, but there is an obligation to advertise the position anyway. Not even always a legal obligation, sometimes convention and a perverse sense of fair play. I view most such ads as a formality.

[evilgenius]

Marginal utility player I think. An agent to create demand while it doesn't exist and to suck it up during the off-peak times so that the vast infrastructure will be justified.

[Graeme]

Gas: an energy with a bright future

While oil resources are declining and countries are seeking to diversify their energy supply, there are large reserves of natural gas and an increasing number of uses to which it can be put. The future for gas therefore looks bright, argues Yves Mathieu in an article for 'Energies' magazine.

Gas exploration is a much more recent phenomenon than oil exploration and therefore opens up the prospect of new discoveries, observes Mathieu. In particular, deep gas and non-convential gas sources will provide new opportunities, he claims.

The liquefied natural gas (LNG) industry has developed more efficient processes that have lowered liquefaction costs and as a result, the transformation of natural gas into oil products is expected to prompt a new gas development sector - with prospects for the huge motor fuel market, concludes the author.

euractiv

[billp]

Have you looked at the Dave Hughes natural gas graphs?

http://www.prosefights.org/pnmgas/pnmgas.htm#davehughes

LNG, I've read on Internet, takes about 40% of its energy output to liqueify it.

Liquefied natural Gas (LNG) is natural gas liquefied either by refrigeration or by pressure to facilitate storage or transportation. It takes A LOT of ENERGY to produce, transport, and store LNG.

http://www.eroei.com/glossary/

http://www.theoildrum.com/story/2006/11/12/131115/83

Carter apparently outlawed natural gas to produce electricity, pnm employees told me.


http://www.prosefights.org/pnmelectric/pnmelectric.htm

[PraiseDoom]

LNG, I've read on Internet, takes about 40% of its energy output to liqueify it.

So what? If the alternative is to flare it, its better to lose 40% to create a barrel of crude than to sit around moaning about lack of oil when there are billions of barrels sitting there...in the form of natural gas.

Not that it matters much, as well as the world is handling post peak oil production rates, we'll probably even do better a century from now in a natural gas post peak world. Damn human ingenuity anyway...