[Plantagenet]

It would be great if you posted the price comparison between Russian pipeline gas to Europe and US tanker LNG to Europe

No one can predict what energy prices will be a few years from now----don't you even know that?

We'll all just have to wait until the US LNG terminals get built, and a tanker fills up in Baton Rouge and offloads in Europe to see what the price is.

[Strummer]

No one can predict what energy prices will be a few years from now----don't you even know that?

Ah, ok. Yet you claim that:

It makes a lot of sense for the EU to try to diversify who they get their energy from.

So it makes sense to invest billions into the infrastructure and sign long-term binding contracts, even if no one can predict if it makes sense? Got it now

[Withnail]

No one can predict what energy prices will be a few years from now----don't you even know that?

We'll all just have to wait until the US LNG terminals get built, and a tanker fills up in Baton Rouge and offloads in Europe to see what the price is.

By what process of alchemy would LNG be cheaper than piped gas under any scenario?

[Plantagenet]

Just as the US is building export LNG terminals, the EU is building LNG import terminals.

….the Baltic states…. have attempted to diversify. Lithuania has built a $330m floating liquefied natural gas (LNG) import terminal that will start working by the end of the year. Poland is also due to complete a large LNG terminal this year.

Such ventures reflect the hope that Europe might be able to replace some Russian gas with LNG imports


I suppose its possible that this LNG terminal building in the US and EU is all just a coincidence, but perhaps there is something to this LNG stuff after all….

[radon1]

I suppose its possible that this LNG terminal building in the US and EU is all just a coincidence, but perhaps there is something to this LNG stuff after all….

Sure. But this "something" does not have to make economic sense, does it.

[Strummer]

Here we go again... do you know what the capacity of those terminals is, in relation to the capacity of the Russian pipelines and the overall EU demand? Do you know how many of those terminals would have to be built to seriously compete with the pipelines, what the total cost of this infrastructure would be (and the prices resulting from those costs)? I guess you don't.

[Plantagenet]

Here we go again... do you know what the capacity of those terminals is, in relation to the capacity of the Russian pipelines and the overall EU demand? Do you know how many of those terminals would have to be built to seriously compete with the pipelines, what the total cost of this infrastructure would be (and the prices resulting from those costs)?

I posted Such ventures reflect the hope that Europe might be able to replace some Russian gas with LNG imports [emphasis added]

Do you see the word "some"? The word "some" in this kind of usage means part or a portion. No one is talking about displacing all of the Russian gas.

Get it now?

Cheers!

[Strummer]

Any idea how much is this "some" supposed to be? Let me guess, the answer is "no one knows".

[Sixstrings]

I doubt the PBS Newshour would say american LNG will have 20% market share in five years if it were just some fantastical idea that can never happen.

Doesn't get more mainstream than PBS.

Poland already has LNG import terminals, and is building a new big one. Poland already imports some Qatari gas -- if they can unload from Qatar, they can unload it from the US too, I would think.

Free market will sort it out, let the best man win! Viva free people having a choice, competition, it's all good.

It's like how spacex forced the Russian launch service to lower its prices. Competition is good, for everybody.

[kublikhan]

Oh, sure we get it. But it would be great if you posted the price comparison between Russian pipeline gas to Europe and US tanker LNG to Europe, so that we know what the hell are you actually talking about.

Currently the US prices are higher. Russian gas prices are currently around $11 MMBTU. US export prices for LNG are running around $13 MMBTU. Also, the US prices are trending up while Russian prices are trending down. US prices have gone up about almost a dollar a year for the last 10 years. Back in 2004, a MMBTU of US LNG was less that $5. The price Japan pays for LNG is even higher. $14 currently, going as high as $18 in 2012.

Sources:
Russian Natural Gas Monthly Price

Price of Liquefied U.S. Natural Gas Exports

Japan Liquefied Natural Gas Import Price

1 MMBTU = 1 Thousand Cubic Feet

[dissident]

Current prices are totally meaningless indicators. If the USA had to supply 163 billion cubic meters of gas (as LNG) to the EU per year instead of the current Russian supply, then those prices would shoot up like crazy. You can't have your cake and eat it too. Nope, the only realistic LNG suppliers to the EU are Qatar and Iran with only a small fraction coming from the USA. But Iran is not run by a loyal regime.

This thread highlights the absurd nature of typical politically charged debates. The total absence of any serious numbers. This way all sorts of BS can be spewed, over and over.

For the next 5 years at least there will not be enough supply and port infrastructure for the EU to transition to LNG and "give Putin the finger" (the poor, poor dears). In the meantime Russia will be completing massive pipeline projects to China to supply it with over 100 billion cubic meters of gas. Even if there is plenty of happy talk about new reserves coming online, it is mostly a zero sum game. The EU is going to up the creek without a paddle in the next few years. It better get its sh*t together.

[Keith_McClary]

Poland already has LNG import terminals, and is building a new big one. Poland already imports some Qatari gas -- if they can unload from Qatar, they can unload it from the US too, I would think.

Free market will sort it out, let the best man win! Viva free people having a choice, competition, it's all good.

Are private investors putting up the money for these terminals? Do they have long term contracts?

[Ulenspiegel]

The NGL terminal capacity in Europe is already sufficient to replace the Russian imports, however, the available amount of LNG is not.

So P, please provide evidence that the US LNG would make a difference and make good arguments why Europeans should buy LNG, that is much more expensive than the current NG delivered by pipelines!

Until now you have only provided hot air.

[radon1]

make good arguments why Europeans should buy LNG, that is much more expensive than the current NG delivered by pipelines!

In case Europe is at war with Russia, an alternative supply route is available via the LNG terminals.

[Strummer]

Europe at war with Russia would mean NATO at war and that's never going to happen.

The West will of course keep trying to gain control of Russia's resources by different subversive tactics, just as we do now, but that's about as far as it will go.

[Subjectivist]

make good arguments why Europeans should buy LNG, that is much more expensive than the current NG delivered by pipelines!

In case Europe is at war with Russia, an alternative supply route is available via the LNG terminals.

If Europe goes to war shipping and ports change from assets to priority targets over night.

[ROCKMAN]

OK let’s hit the points one by one:

“Oh, sure we get it. But it would be great if you posted the price comparison between Russian pipeline gas to Europe and US tanker LNG to Europe, so that we know what the hell are you actually talking about.” Obviously you don’t know the rules of propaganda: you don’t post facts that weaken your argument. LOL. And yes: the uses NG to make LNG. Just like they use iron ore to make steel. Thus NG is not LNG...LNG is LNG. NG and LNG are two different commodities that trade very differently. Not a very difficult situation to understand...if you keep your head out of your ass. LOL.

“…suppose its possible that this LNG terminal building in the US and EU is all just a coincidence, but perhaps there is something to this LNG stuff after all”. There is no significant building of LNG terminals in the US at the moment. Most of the reports are about permits to build IN THE FUTURE being issued. Very few projects have begun.

And: “Are private investors putting up the money for these terminals? Do they have long term contracts?” AFAIK all new LNG terminal projects are being built by public companies. And no company will build such a facility without a GAURENTTED LONG TERM CONTRACT in place. The capex is too large and price volatility to great. That’s why all the contracts in the US are tied to Henry Hub pricing. That’s why predicting future US NG isn’t critical: if HH goes up so does the contract price. And if shipping costs go up so does the contract price. Essentially the profit margin is locked in. No one can afford risking tens of $BILLIONS with the uncertainties of future energy markets decades down the road.

And: “In case Europe is at war with Russia, an alternative supply route is available via the LNG terminals.”. If/when the EU goes to war with Russia (unlikely) or if the EU loses NG supplies from Russia to China (much more likely IMHO) none of the existing LNG export capacity will be available to the EU. As mentioned above all the LNG exports will be under long term contracts to existing buyers. The only way for the EU to purchase that LNG is to buy it from those other buyers. Which means the EU would have to pay more for the LNG then it’s worth to the contracted buyers. Obviously that won’t be very affordable.

“I doubt the PBS News hour would say American LNG will have 20% market share in five years”. The discussion has nothing to do with US LNG sales to the world. It’s about potential sales to the EU. But since the subject has been brought up let’s address this utter bullsh*t. In 2013 Qatar alone exported 100 BILLION cubic meters of LNG. The US exported 81 MILLION cubic meters. And the UAE, #10 on the list of exporters, shipped 7 BILLION cm. IOW the #10 LNG exporter shipped 90X as much LNG in 2013 as the US did. And Qatar: 1,300X as much. If 10X the volume of the PROPOSED new LNG terminals were built as currently permitted (let alone existing ones) even little UAE would still be exporting gobs LNG more than the US. A “20% market share in 5 years’ goes beyond ridiculous: it’s clinically insane. LOL.

[Keith_McClary]

The NGL terminal capacity in Europe is already sufficient to replace the Russian imports, however, the available amount of LNG is not.

Are you saying there is unused capacity equal to Russian imports?

[dissident]

The NGL terminal capacity in Europe is already sufficient to replace the Russian imports, however, the available amount of LNG is not.

America does not have the export capacity for 163 bcm equivalent LNG per year. And last time I checked the biggest LNG port in the EU, South Hook, had the capacity to supply 25% of the UK's demand of 52 bcm. In total the EU has under 190 bcm of LNG import capacity and there is very little that is spare.

[ROCKMAN]

d - Just so folks don't loose sight of a minor detail: essentially the US is NOT an exporter of LNG and won't have any meaningful capacity to do so or years...and quite possibly forever. It has been more than 3 years since even one single tanker of US NG has been shipped out of the country. What little has been shipped were RE-EXPORTS. We have to wait to see how much new capacity is added from the NEW permits recently granted. Especially since 20% of current liquefaction capacity isn't being utilized with a big increase in capacity about to come online from Down Under:

"The advent of LNG has revolutionized the way the commodity is transported and has brought increased parity to traditional pipeline relationships. In that regard, the United States’ natural gas boom was right on time. However, somewhat slow to react to market demand, the US may just be missing its window. Since 2000, global LNG demand has risen by an estimated 7.6 percent per year. Nowhere is this increase in demand more apparent than in Asia, which comprises two-thirds of the global LNG market. Japan and South Korea account for roughly half of that, but less mature markets in China, India, and Taiwan have seen their imports grow an average of 16 percent per year since 2009.

Demand is only going up and by 2019 the LNG market is expected to expand by one-third. More generally, natural gas is expected to occupy an ever-larger share of the global energy mix – 25 percent by 2035. So where’s the problem? On the supply side, where growth is outpacing demand by leaps and bounds. Today, the LNG trade represents approximately 10 percent, or 322 billion cubic meters (bcm), of global gas demand. However, current liquefaction capacity sits at 406 bcm, which translates to a utilization rate of only 79 percent. Toward 2019, this capacity is expected to more than double. Approximately 80 percent of future capacity will be sourced from Australia, Canada, East Africa, Russia, and the United States. In the early goings, the field – namely Australia – has the jump on North America.

With the final investment decision (FID) already in place for seven new LNG projects, Australia is set to become the world’s largest LNG exporter by 2018. The impending volumes – approximately 80 bcm – are already contracted at 91 percent under long-term contracts. Expansion and greenfield schemes could bring the country’s export capacity to more than 200 bcm by 2020. In Africa, low domestic demand has helped spur LNG growth and the continent’s liquefaction capacity now comprises a quarter of the world total. Huge offshore finds in Mozambique and Tanzania have already caught the eye of Indian investors, who look to take advantage of the relative geographic convenience. In 2028, the continent is set to overtake the Middle East as the largest net LNG exporter. Russia, while also slow to react, cannot be counted out. President Vladimir Putin has sought to aggressively expand his country’s Asian market share following the conflict in Ukraine. While profitability is certainly is a concern, the government has demonstrated a willingness to push through prestige projects. The upcoming Power of Siberia pipeline will dampen LNG growth in China moving forward. The country is also working closely with India on nuclear and LNG cooperation.

Back to the United States, a long regulatory process and a historical preference to keep hydrocarbons at home have delayed efforts to export LNG. Moreover, the relatively useless LNG import facilities, constructed pre-shale boom, serve as a reminder of how quickly fortunes can change. Currently, the US re-exports approximately 1.5 bcm of LNG overseas, but has not shipped domestic LNG abroad since 2011. That should change in 2015, when the Sabine Pass liquefaction facility comes online. The project will export up to 26 bcm per year to free trade and non-free trade agreement partners. Beyond that however, the Federal Energy Regulatory Commission (FERC) and Department of Energy (DOE) have been stingy with their approval.