For an industry that is just over 50 years old, liquefied natural gas (LNG) has matured rapidly and is now part of an upheaval in the global energy market. The liquefied natural gas trade has quadrupled over the last two decades and is set to double over the next two.
Source: LNG industry trends | Deloitte US
Falling natural gas prices would be even lower if not for a growing U.S. export market — both via pipeline to Mexico and through liquefied natural gas shipments around the world.Warm winter weather has been hard on U.S. natural gas producers, who have watched prices do nothing but slide since the end of last year. Natural gas futures are down 22 percent since the beginning of the year, having run up in late 2016 on the expectation that winter heating demand would result in much more gas coming out of storage.
Source: Mexico to the rescue of U.S. frackers
Golden Pass Products received a permit from the Federal Energy Regulatory Commission this week for its proposed $10 billion liquefied natural gas project from their Sabine Pass terminal.The company is authorized “to site, construct, and operate the proposed project located in Jefferson County, Texas,” as described in the application and “subject to the environmental conditions” in the order, which include wetlands mitigation, the authorization order said.The project would include three liquefaction trains, gas treatment facilities, a self-generation power plant and expansion of the company’s current pipeline system.Golden Pass said in a news release in July that the project “is expected to generate about 3,800 jobs” in the United States during 25 years of operations, with more than 200 permanent jobs at the Sabine Pass site, in addition to “thousands of direct and indirect jobs” during construction.Total capacity of the facility would be 15.6 million metric tons of LNG per year.
Source: Feds approve $10 billion Golden Pass LNG project – Beaumont Enterprise
Cheniere Energy’s Sabine Pass terminal in Louisiana has exported LNG cargoes to Kuwait, the U.A.E. and Jordan this year. Read more on this here:
Reversing Middle East Dependence: U.S. Begins Exports Of Shale Gas To Oil-Rich UAE And Kuwait
Houston-based Cheniere Energy Partners LP (NYSE MKT: CQP) was given the green light by U.S. regulators on Oct. 12 to begin stocking tankers with liquefied natural gas from a second plant at its Sabine Pass terminal, according to Bloomberg.The newly approved volumes of LNG could double the amount the U.S. sends abroad, Bloomberg reports.
Source: Cheniere Energy Partners LP approved to export more LNG from Sabine Pass terminal – Houston Business Journal
Cheniere Energy (LNG -0.2%) has started a four-week shutdown of its Sabine Pass LNG export terminal in Louisiana to repair gas flares that have not functioned properly, Argus Media reports.
The facility was scheduled to receive ~20.8M cf of gas yesterday after receiving the same amount the previous day, but the volumes are negligible compared with the average intake of 1.18B cf/day during the first half of September, indicating that production from trains 1-2 at Sabine Pass had stopped.
Sabine Pass could continue to export during the shutdown, as the five LNG storage tanks at the terminal have combined capacity equivalent to ~17B cf of gas, while a typical LNG cargo is equivalent to 3B-3.5B cf of gas, so four or five exports are possible during the shutdown if the tanks are relatively full.
Source: Cheniere’s Sabine Pass LNG starts four-week shutdown – Cheniere Energy, Inc (NYSEMKT:LNG)
A new report from Drewry Shipping expects the shipping market for liquefied natural gas (LNG) to strengthen in the next few years and warned that the number of vessels may be inadequate to deal with expected demand.In Drewry’s latest LNG Forecast and cited by LNG World Shipping on Thursday, analysts estimate some 125 million metric tons of new production capacity is currently under construction. The LNG market will likely grow and, thus, more vessels will need to be built to transport more supply around the world.“As a majority of the supply from plants under construction has been contracted on long-term agreements, it is likely that LNG will be traded, so requiring more vessels,” observed Shresth Sharma, lead LNG shipping analyst for Drewry.
Source: Long-term Outlook for LNG Shipping is Bright but Vessel Shortage Looms | OilPrice.com
Rosneft and Venezuelan PDVSA have signed an agreement on the basic terms of a joint venture for the extraction, preparation and monetization of gas fields of Patao, Mejillones and potentially of Rio Caribe.
Source: Russian Oil Giant Rosneft Plans to Build LNG Plant in Venezuela – CEO
Kinder Morgan Inc. (NYSE: KMI) reported Thursday morning that two company subsidiaries have received authorization from the Federal Energy Regulatory Commission (FERC) to proceed with the company’s Elba Liquefaction Project on Elba Island, near Savannah, Ga. The company also received approval to proceed with a modification project to expand the Elba Express Pipeline.The $2 billion Elba Liquefaction Project expects to have the first of 10 liquefaction units up and running by the second quarter of 2018, with the rest entering service by the end of the year.
Source: Kinder Morgan Gets Go-Ahead for LNG Project (NYSE: KMI) – 24/7 Wall St.
After spot liquefied natural gas prices plummeted by two-thirds since May 2014 amid a global glut, European traders are trying to assess how much of the fuel will arrive in the region.These five questions dominated discussions at the LNG summit Monday in Amsterdam at Flame, Europe’s biggest annual gas conference.
When will the glut end?
Over the next five years, Australia and the U.S., the biggest new producers of LNG, will add more than 120 million metric tons of annual capacity, said Andrew Walker, vice president for strategy at Cheniere Energy Inc.’s marketing unit. That’s more than a third of current total capacity.Cheniere in February started the first exports of U.S. shale gas in liquefied form, while Australia is on track to overtake Qatar as the biggest LNG supplier by 2018.“The global market is going to an oversupply situation,” Luis Sanchez, head of LNG trading at Uniper Global Commodities, said at the conference. “U.S. LNG volumes are coming, new Australian LNG volumes are coming.”The market may become balanced by early to mid-2020s, according to Ajay Shah, a vice president at Royal Dutch Shell Plc, which supplies about 15 percent of global LNG. Centrica Plc also sees gas markets heading to equilibrium in the next decade, with “price formation reverting to fundamentals,” said Nazim Osmancik, the utility’s director of fundamentals.
Source: LNG Traders Have Five Issues on Their Mind After Price Collapse – Bloomberg