[ROCKMAN]

Gary - I know what you mean...mums the word. LOL. A few hundred Gulf Coast geologists know how to destroy the US economy with a much smaller amount of explosives than an LNG tanker. We never broadcast it but a writer did pen a novel about the method. Hopefully the bad guys never read his work.

[Synapsid]

ROCKMAN:

Was that writer Kurt Cobb?

[ROCKMAN]

Nope. And the writer's name dies with me. LOL. But I wasn't exaggerating about the huge potential damage to the US economy with an incredibly small effort. I know it's a dirty tease but I won't offer even the tiniest hint.

[ROCKMAN]

From Rig Zone: Reuters - China's first floating LNG import terminal is expected to start operation next month just in time to help ease a looming winter supply crunch in the world's top energy consumer. "It will be ready to supply clean energy to Tianjin city next month," Beijing Daily said. To address a looming gas crunch, Beijing has been asking energy companies to boost gas supplies by maximising production at domestic fields, raising gas imports and prioritising supplies to public transportation and residential users over the winter period.

The first phase of the floating LNG project, costing 3.3 billion yuan ($539 million), is designed to have an annual receiving capacity of 2.2 million tonnes or 3.0 billion cubic metres, CNOOC has said. The second phase of the project will involve the construction of a conventional onshore LNG terminal, with a receiving capacity of no less than 6.0 million tonnes a year. CNOOC received last month its first cargo of LNG from Qatar at its new 3.5 million tonne-per-year terminal at Zhuhai in the southern province of Guangdong. The Zhuhai terminal, CNOOC's fifth, brings its total annual receiving capacity to 21.3 million tonnes. Or 29 billion cubic meters...about 1 trillion cu ft.

[ROCKMAN]

Little by little our Canadian cousins are figuring out how to get their fossil fuels to Asia. From Rig Zone:

CNOOC Signs Land Deal for LNG Terminal in Canada. REUTERS - CNOOC has signed a sole proponent agreement with the provincial government of British Columbia to examine the development of a liquefied natural gas terminal at Grassy Point along Canada's west coast. The deal brings the Aurora LNG project one step closer to reality. The joint venture includes Japan's Inpex Corp and JGC Corp.

"We intend to do everything we can to responsibly and economically advance the development of an LNG facility and export terminal at Grassy Point," said Kevin Reinhart, chief executive of Nexen, a fully-owned subsidiary of CNOOC. Reinhart, speaking at the premier's office in Vancouver, added that CNOOC and its joint venture partners have the expertise, financial capacity and track record of responsible development, along with the unique access to Asian markets, needed to make a success of the opportunity.

There are currently no LNG export terminals in Canada, though British Columbia has made the development of the nascent industry its top economic priority as it looks to tap into surging Asian demand for natural gas. "As the global economy struggles to get back on its feet, we here in B.C. have a singular opportunity to transform our economy, to create 100,000 direct new jobs in every single corner of our province," Premier Christy Clark told reporters.

[ROCKMAN]

OTOH: The global market for shipped natural gas is entering key years of change in 2014 with several new buyers emerging while big new supplies will only slowly become available from 2015, resulting in a tight market for years to come. Demand for liquefied natural gas (LNG) has been rising for years, driven mostly by booming Asian demand and a loss of nuclear power in Japan and more recently South Korea. Import needs are set to rise further in 2014 as China and Latin America are becoming increasingly active buyers. Looking towards 2014, rising Chinese import capacity and continued strong demand out of Latin America suggest global LNG markets are heading towards another tight year

OTOOH: Reuters - The U.S. Department of Energy said on Friday it has conditionally approved more exports of liquefied natural gas from Freeport LNG in Texas, a move that could lead to more shipments of the fuel in coming years. The approval is the fifth by the U.S. government since 2011 to countries with which it does not have a free trade agreement. The last approval, on Sept. 11, was for Dominion Resources in Cove Point Maryland

[ROCKMAN]

Now the Chinese are going after “our” NG. Next thing you know they’ll be going after “our” oil.

Reuters - China's Sinopec Corp is in serious talks on a site for a potential LNG export terminal in British Columbia, the province's Minister of Natural Gas Development said on Tuesday. Rich Coleman said the Chinese company had explored numerous sites in the province and had also entered partnership discussions with another company. “They are here seriously looking for an opportunity" Coleman said. Sinopec owns significant natural gas properties in two of Canada's most prominent shale-gas fields that, once developed, could feed into Pacific Coast LNG plants

[ROCKMAN]

Reuters - Japan's top shippers plan to order around 90 new LNG tankers worth about $18 billion by 2020 as they gear up to transport rising volumes of the superchilled fuel from North America and Australia. The expansion plans reflect rising LNG demand in nuclear-free Japan to generate electricity and also in other Asian countries such as China and South Korea. Global LNG trading volume is expected to grow to 400 million tonnes in 2020 from 250 million tonnes in 2012.

Mitsui O.S.K. Lines Ltd., Japan's second-largest shipping company, plans to increase the number of its LNG carriers to 110 by 2020 from about 70 now, a spokesman said. Nippon Yusen KK, the No.1 shipper in the country, plans to raise its LNG tanker strength to 100 by 2020 from about 70 now while third-biggest shipper Kawasaki Kisen Kaisha Ltd aims to order about 20 new LNG tankers before the end of the decade. A Kawasaki Kisen spokesman said the company owns some of its existing tankers jointly with its customers or other shippers and the new ships may be also bought jointly with others to keep its balance sheet healthy. The order plan may change, depending on how many nuclear reactors will restart in Japan, said an official at the LNG carrier division of Mitsui O.S.K. "We will place an order only after we sign a long-term contract with our LNG customers who could be producers or buyers," he said.

[ROCKMAN]

One big muther. I read some time ago it would have a displacement equivalent to that of 6 modern aircraft carriers. From RigZone:

Royal Dutch Shell reported Tuesday that the 1,600-foot hull for its Prelude floating liquefied natural gas (FLNG) facility has been floated out of the dry dock in South Korea. Once completed, the Prelude FLNG facility will be THE LARGEST FLOATING VESSEL EVER BUILT - although Shell is reportedly already planning an even bigger FLNG unit. The Prelude FLNG project is scheduled to begin production in 2017. Located at the Prelude gas field, some 300 miles offshore Western Australia, it will extract gas from a field estimated to contain approximately three trillion cubic feet and convert it to LNG. Shell expects the project to produce around 3.6 million tons of LNG per year.

Shell's FLNG approach will allow it to produce LNG at sea before transferring it directly to ships that will transport the LNG to customers. This will enable the development of gas resources that would be regarded as "stranded" when using traditional methods of getting these resources to market, from clusters of small remote fields to large, stranded gas fields.

[ROCKMAN]

As they say depletion, like rust, never sleeps. Former OPEC member becoming an LNG importer:

Reuters - Indonesia has signed its first LNG import deal, signaling the beginning of a sea change for a country that has been one of the top exporters of the fuel for decades. State oil and gas company Pertamina will buy 0.8 million tonnes of LNG a year from U.S.-based Cheniere Energy for 20 years beginning in 2018, Pertamina said in an emailed statement received on Thursday. The deal comes as Indonesia faces a decline in LNG production while domestic demand for gas in Southeast Asia's largest economy is rising steadily by at least 10 percent annually.

The imported gas will be supplied by an LNG project currently under construction near Corpus Christi in Texas, and will be directed to Pertamina's LNG receiving terminals such as the West Java floating storage regasification unit (FSRU) off the coast of Jakarta. The supplies will supplement the increasing amount of LNG Indonesia is keeping at home for its growing domestic gas market.

[ROCKMAN]

And all this time some folks thought they were saving that NG for US consumers:

Reuters - Alaska has signed an agreement with major oil and gas firms to build an 800-mile pipeline to bring natural gas from the state's North Slope to a proposed export plant and on to Asia. The project, expected to cost between $45 billion and $65 billion, would be one of the largest projects of its kind in the world and would free gas stranded for decades without a market. The project, which would liquefy the gas for shipment in tankers overseas, is expected to take ten years to build. Asian nations like Japan and South Korea are spending billions to buy liquefied gas from North America to meet growing demand for energy now that nuclear output has fallen after the Fukushima accident in 2011.

Energy companies have proposed building 30 LNG export terminals in North America over the next decade or so, including the Alaska project, though it is unlikely that all these will be built. The Alaska deal was signed with TransCanada Corp and the three major producers of Alaskan North Slope oil - Exxon Mobil Corp, BP PLC, ConocoPhillips, and allows the state to invest in the project. Producers have been re-injecting about 8 billion cubic feet per day of gas back into fields as the original plan to send it to other U.S. states was derailed by the shale gas boom .

{Actually part of the reason to inject the NG back down was pressure maintenance to increase the oil recovery. But the economics of such efforts usually includes a kiss at the back end when a market develops for that injected NG. Also, just a very rough guess: how can they spend $50+ billion on just this one project to do this? At the current LNG prices those reserves represent somewhere between $500 BILLION and $1.5 TRILLION in cash flow. And maybe even more.}

[ROCKMAN]

And not just Alaskan LNG going to Asia from the west coast of North America. And to think some folks still believe fossil fuels (oil, LNG, refined products and coal) won’t be shipped from this continent to Asian markets when there are $TRILLION to be made by companies, royalty owners and the US/Canadian govts.

JGC Corporation announced Tuesday that a contract has been awarded by Chevron to a joint venture to provide engineering, procurement and construction services for the proposed Kitimat LNG plant to be built in Bish Cove, British Columbia, Canada. JGC LNG projects account for 30 percent of LNG production globally.

Chevron and Apache each hold a 50 percent interest in the proposed plant, which will have an annual capacity of 11 million tons per year. On the Pacific coast of British Columbia, Kitimat LNG is the most mature of the proposed LNG projects in Western Canada.

[Plantagenet]

As global oil production stagnates and then starts to fall NG use will expand ---- Its good to see all these LNG projects moving ahead because we're going to need them pretty quickly

[Plantagenet]

As global oil production stagnates and then starts to fall NG use will expand ---- Its good to see all these LNG projects moving ahead because we're going to need them pretty quickly

Ya sure. Ya can't even get near a gasoline pump anymore, with all those pesky CNG Priuses scampering around trying to suck on your gasoline fumes.

1. CNG doesn't come out of gasoline pumps---it comes out of CNG pumps.

2. Prius doesn't have a CNG model-----yet.

[ROCKMAN]

P - Oddly the “pump” issue reminds me of the words of an old fart about 40 years ago. He was ranting about the damn oil companies planning on drilling more oil wells. He said: “We don’t need more damn oil wells…we need more damn gasoline wells.”

So maybe what we really need is more damn CNG wells. Might a well demand some more damn CTL and GTL wells while we’re at it.

[Plantagenet]

maybe what we really need is more damn CNG wells. Might a well demand some more damn CTL and GTL wells while we’re at it.

Good idea. If you've got the capital to drill CNG wells, I've got a great prospect down by the Big Rock Candy Mountain, next to the cigarette trees and lemonade springs.


Drill baby drill

[ROCKMAN]

British Columbia sees a big LNG future. Next thing you know they'll be waning to export oil from the shore.

"Boasting a direct sea route across the Pacific Ocean to lucrative Asian markets, British Columbia could become a major LNG export hub within the next decade. In fact, seven liquefaction projects representing tens of billions of dollars in capital investment have been proposed along the Western Canadian province's extensive coastline. Proposed British Columbia LNG export terminals, and their prospective developers, include:

•Kitimat LNG, Apache Canada Ltd. and Chevron Canada
•LNG Canada, Shell Canada Ltd., PetroChina Company Limited, Korea Gas Corp., Mitsubishi Corp.
•Pacific Northwest LNG, Progress Energy Canada (PETRONAS and JAPEX)
•Prince Rupert LNG, BG Group
•Douglas Channel LNG, BC LNG Export Co-operative LLC (LNG Partners and Haisla Nation)
•Woodfibre LNG Project, Woodfibre Natural Gas Limited (Pacific Oil & Gas Limited)
•Aurora LNG, Nexen (CNOOC Limited), INPEX Corp. and JGC Corp.

The proposals are under different stages of review, and it remains to be seen how many of them will actually be developed. Nevertheless, stakeholders in British Columbia's workforce development efforts are already taking steps to ensure that enough qualified people are available to do the tens of thousands of potential jobs in the province's nascent LNG sector. "We're on a very committed path to ensuring that we have the correct number of people with the right skills at the right time to satisfy this large LNG industry that's going to be coming to British Columbia," said Gary Herman, Interim CEO with the British Columbia Industry Training Authority (ITA), which is a governmental agency that manages the province's skilled trades training system.

"We have about $48 billion of projected investment between 2013 and 2022 in the LNG sector of B.C. which is obviously a key component of the provincial economy," he continued. The $48 billion investment scenario, which assumes that five of the proposed plants will become fully operational, calls for approximately 60,000 jobs during a 2016-2017 peak construction period and roughly 75,000 jobs during operations, Herman said. Examples of skilled trades that will be in demand during construction include mechanics, electricians, steamfitters, carpenters and heavy equipment operators, according to ITA. The need for many of these trades should extend into operations as well given the need to maintain equipment at liquefaction terminals, added Herman, pointing out that other hot operations jobs should include engineers, instrumentation technicians and drivers."

[ROCKMAN]

A long piece but if interested gives a bit of insight to US LNG exports, domestic energy production and the POTUS view of NG as the bridge to the future. In particular one of those unintended consequence: the successful efforts of some environmental groups opposing NG development helped motivate one electrical generator to mothball their NG fired generators and restart their coal fired system.

Reuters - The decision by an Australian power company to mothball a natural-gas plant and restart two coal-fired units seems wrong on many levels, but strangely, it has implications for U.S. liquefied gas exports. Stawell Power Corp, an electricity producer owned by Queensland state, said last week it would shut for three years its 385 MW Swanbank E power station while restarting two coal units with a combined 350-MW capacity at its Tarong plant. The decision was framed in terms of economics, with the company saying it made more sense to sell the gas to other users than to use it to generate power, and that returning to coal would improve its competitiveness.

Australia used large discoveries of conventional and coal-seam gas to embark on projects costing more than $200 billion that will make it the world's biggest exporter of LNG by 2018. But the LNG push has also had some nasty side effects for Australia. Domestic gas prices are roughly double those in the United States. The three LNG projects under construction in Queensland are based on coal-seam gas as a feedstock. However, there have been issues in securing sufficient reserves and there is mounting opposition to producing the gas, which requires multiple wells and small pipelines across large areas, much of which is prime agricultural land. This has led to an unlikely coalition of farmers and environmentalists, making it harder for energy companies to explore for new resources. Just how green groups will feel about Stanwell's decision to shut a gas-fired plant and re-open coal units remains to be seen, but it's hard to escape the conclusion that their protests against coal-seam gas have not only raised prices, but also doubts about the future of Australia's ambitious LNG plans.

The United States travelled a different path with its shale gas bonanza, using it for domestic consumption as it lacked the infrastructure to export the fuel as LNG. This saw benchmark U.S. natural gas prices drop by about 88 percent from the peak in December 2005 to a low in April 2012. While prices have recovered since then to close on Feb. 7 at $4.77 per million British thermal units, this is still about half what users pay in Australia and less than a quarter of LNG costs for major Asian consumers such as Japan and South Korea. This cheap gas has helped give the United States back its manufacturing mojo, with more than $90 billion of industrial projects under construction and lower energy costs boosting manufacturing competitiveness.

Now the United States is seeking to use some of its shale gas to enter the LNG market, looking to Asian buyers who are keen to lower costs. While a study commissioned by the U.S. Department of Energy found that exporting LNG would provide a net benefit to the nation and not raise costs for domestic users, there are reasons to be skeptical. Similar arguments were advanced in Australia, namely that coal-seam reserves were so abundant that there would be plenty of gas for exporters and local users alike. The reality has turned out to be somewhat different: Domestic gas costs have doubled in Australia in the past five years, while electricity costs rose by 28 percent in the three years from 2010 to 2012.

While planned U.S. LNG exports of 60 million tonnes a year still represent a relatively small amount of total U.S. natural gas production, it means that there will be more competition for supplies among users, with the possible consequence of higher prices, assuming output doesn't grow at a faster pace. This doesn't mean that the United States would be better off economically if it disallowed LNG exports. What it does mean is that similar to Australia there will be winners and losers, not just mainly winners as could be currently argued is the case for U.S. shale gas.