Replies to This Discussion

Permalink Reply by Les Bamburg on February 15, 2011 at 16:16

Essay, trading companies like Sumitomo conduct business in all markets so this does not necessarily indicate the planned destination of cargos. 

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Permalink Reply by essay on February 16, 2011 at 1:35

Am I mistaken that the ENN memorandum does imply a specific destination, i.e., distribution in China?  Obviously I am aware that this is all purely speculative at this point, while it works through the labyrinth of high finance.  I'm also well aware of the problems with LNG's balance sheet.

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Permalink Reply by Les Bamburg on February 18, 2011 at 4:30

Essay, you are correct that ENN's business model indicates their need for additional LNG supply for China.  In some cases LNG players will swap off cargos to save shipping costs or meet other needs.  So ENN could receive supply indirectly by swapping Sabine Pass cargos for some Australia sourced cargos with someone that needs LNG supplies for Belgium.

 

Initially I did not realize ENN was the former XinAo Gas.  I actually met two LNG buyers from that company at a conference in Malaysia about 3 years ago.  One of their business lines is NGV's.    

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Permalink Reply by essay on February 18, 2011 at 12:21

Thanks Les, that is interesting.  Doing fuel cargo swaps makes sense, I looked it up and a modest shipping premium on LNG tanker going to Asia through the canal would be $500,000, probably even more compared directly to Australian gas.

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Permalink Reply by adubu on May 27, 2011 at 4:50

The FERC has authorized two other terminal in addition to Cheniere in Texas to Export LNG--- both in La. --Sabine and Hackberry

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Permalink Reply by Les Bamburg on May 27, 2011 at 8:19

Adubu, the following terminals have FERC authority to "re-export" imported LNG.

 

Sabine Pass (Louisiana)

Cameron (Louisiana)

Freeport (Texas)

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Permalink Reply by adubu on May 27, 2011 at 10:51

Les B -- that is correct and what I said above FERC has authorize 3 terminals to  re-export LNG  --- Sabine pass La. , Cameron La (aka Hackberry) and Freeport,Tx (aka Cheniere) FERC implys also they will begin to export LNG from onshore NG received by pipeline from onshore wells in addition to LNG stored from import tankers.

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Permalink Reply by Les Bamburg on May 28, 2011 at 4:03

Adubu, Cheniere owns & operates Sabine Pass LNG - not Freeport LNG.  The Cameon LNG project is not known as Hackberry.  Your original note used the term export which may implied by some to mean export of US sourced natural gas.

 

By the way, FERC has not yet indicated if they will authorize the Sabine Pass LNG export project.  We should know in late 2011. 

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Permalink Reply by adubu on May 28, 2011 at 13:16

Les B== I surrender we are nit picking about locations of cheniere LNG plants

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Permalink Reply by kittycatmama on May 31, 2011 at 4:40

Ok, you guys, give us "rubes" a crash course in natural gas exports.

Question, Haynesville Shale Gas is not liquified, right? So, do these ports have a process to liquify and then export this gas? Treat me like a first grader on this one. I can't be the only one who doesn't get this whole concept

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Permalink Reply by Les Bamburg on May 31, 2011 at 6:20

KCM, you are correct that Haynesville Shale gas is not liquified.

 

None of the three LNG terminals currently have the ability to liquify natural gas deliveried to the terminal.  Instead they simply reload LNG onto a ship that was imported at an earlier date by ship for storage.  The was not a service originally planned for the terminals as the intent was to vaporize the imported LNG and deliver to the gas pipeline.

 

Currently two of the terminals (Sabine Pass & Freeport) have announced plans to install liquefaction facilities so they can export US produced natural gas delivered to the terminal.  Neither project has yet started construction.

 

By the way, it is unlikely the exported natural gas would include Haynesville Shale production unless new pipelines are installed that would connect the region to the terminals.

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Permalink Reply by ALongview on May 31, 2011 at 7:16

From Cheniere's website:

 

Access to Gas Supply

Cheniere’s Sabine Pass LNG facility in Cameron Parish, Louisiana, is ideally situated to capitalize on continued unconventional gas development.  The Gulf Coast and Midcontinent regions contain five of the six major US shale plays, including the Barnett, Haynesville, Woodford, Fayetteville/Arkoma, and Eagle Ford, and three of the largest tight-sands plays, including the East Texas, Anadarko and Gulf Coast plays.  The natural gas productive capacity in this region therefore represents a major portion of current and future U.S. production. Advanced Resources International, in a report commissioned for Cheniere's DOE filing, states that in 2010 about half of U.S. unconventional productive capacity (nearly 19 Bcfd) was sourced from the Gulf Coast/Mid-Continent corridor.

A number of large-diameter interstate pipelines have been built in recent years to connect these emerging unconventional basins to major gas market hubs, particularly in the Perryville area of northeastern Louisiana.  The Sabine Pass LNG Terminal can deliver to and potentially receive natural gas from eleven interstate and intrastate pipeline systems in the Gulf Coast.  These pipelines will allow Sabine Pass and its customers to purchase and receive gas from the emerging unconventional basins, as well as the historically prolific Gulf Coast Texas and Louisiana onshore gas fields.

 

Les,  are you thinking that it would be Eagle Ford gas and the Haynesville and others would fill the domestic void that would be left?

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