Exxon Mobil's Weapons of Gas Destruction
ExxonMobil has a loaded gun pointed at the U.S. natural-gas market -- and it isn't the only one.
The ammunition is liquefied natural gas. Exxon is scheduled to start up another three LNG projects in Qatar this year. They will produce more than three billion cubic feet a day of natural gas and freeze it for transportation. Europe and Asia are potential markets. But the U.S. could be a magnet for LNG cargoes, despite not really needing it, a paradox that spells low prices.
In Exxon's case, valuable liquids also produced in its Qatari projects take the market break-even price of the natural gas itself "towards zero," says Deutsche Bank analyst Paul Sankey. Factoring in processing and shipping costs, that gas can be landed in the U.S. for less than $2 per million British thermal units, reckons Noel Tomnay, head of global gas at Wood Mackenzie.
For the complete article:
http://rigzone.com/news/article.asp?a_id=77675&hmpn=1
The ammunition is liquefied natural gas. Exxon is scheduled to start up another three LNG projects in Qatar this year. They will produce more than three billion cubic feet a day of natural gas and freeze it for transportation. Europe and Asia are potential markets. But the U.S. could be a magnet for LNG cargoes, despite not really needing it, a paradox that spells low prices.
In Exxon's case, valuable liquids also produced in its Qatari projects take the market break-even price of the natural gas itself "towards zero," says Deutsche Bank analyst Paul Sankey. Factoring in processing and shipping costs, that gas can be landed in the U.S. for less than $2 per million British thermal units, reckons Noel Tomnay, head of global gas at Wood Mackenzie.
For the complete article:
http://rigzone.com/news/article.asp?a_id=77675&hmpn=1
Views: 45
Replies to This Discussion
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Permalink Reply by Les Bamburg on
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Pipeliner, just some corrections to the article.
Qatar owns the majority (~ 70%) of these projects - not ExxonMobil. Other owners include Total, Shell & ConocoPhillips.
Only one more train is likely to start-up before December.
LNG is not "frozen".
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Permalink Reply by Pipeliner on
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You are right, Jim. The top price you can get there for LNG is much better than in the USA or Europe.
Exxon Mobil has let the contracts to build a huge LNG plant in Papua New Guinea mainly to handle the Asian markets. I believe around $12 billion costs. KBR is joint ventured with the Japanese firm, JGC, to do the pipelines, which will be half onshore coming out of the Southern Highlands mountains and half off-shore. First LNG is slated for 2014.
This is as bad a country as it gets for installing pipelines, with many slopes on the mountains being 72 degrees or more. Regular pipeline equipment can not operate in this terrain, so pipe will be strung using helicopters and cable ways.
Once you come out of the mountains, the coastal plains are swamps, lakes and rivers infested with an estimated 70,000 crocodiles. I forgot to mention, some of the locals are both headhunters and cannibals.
That is sort of like what I found on Sumatra Island, that had a long history of cannibalism. The word for a human being there was "Long Pig".
http://www.lngpedia.com/kbr-jv-awarded-png-lng-upstream-projects-co...
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Permalink Reply by Pipeliner on
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Max,
I once worked with a Nigerian in Africa, who seened to know a lot about this. He said the favored cuts were the palms and the back of the arms between the shoulder and the elbow.
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Permalink Reply by Spring Branch,mineral owner on -
That is more information than I really needed.
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Permalink Reply by Les Bamburg on
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Jim, I am not aware of any huge US military presence in PNG or other countries in this region.
By the way US companies pay income taxes to both the host countries and the US. US companies (and individuals) are the only ones subject to this dual taxation. For example, BP pnly has to pay local income tax for a project and is not subject to UK income tax.
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Permalink Reply by Spring Branch,mineral owner on
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Do Royal Dutch and British Petroleum derive the same benefit from the US military? Or how about Sony?? Do we have the right to tax Sony's Papua New Guinea profits in exchange our military protection. It is not just oil the American military protects, Jim. I just don't buy your argument in this case. Our military does what it does because someone in power in this country had decided it is in this country's best interests. I really believe Obama could care less about Exxon.
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Permalink Reply by Spring Branch,mineral owner on
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I thought that would be your answer. How much oil isinKorea or anywhere else in the world where we have military operations? It is about oil only because it is about self interest. The self interest comes first, not the oil. What is there to force Exxon or any other corporation that might be like minded to remain a U.S. based corporation?
So we reward non-US based corporations by giving them free security and punish U.S. based corporations for that same security by layering all kinds of new taxes on them when we already have one of the highest Corporate tax rates in the world.
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Permalink Reply by Spring Branch,mineral owner on
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It has always been about self interest which in his case is oil, but in another time it could just as easily be about fiber optic cable or microchips or copper or whatever. It has been a tinder box just waiting to explode for about 40 years.
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Permalink Reply by Les Bamburg on
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Jim, just how many companies has ExxonMobil purchased in the last 30 years?
Let's see - does the US have a big military presence in Nigeria, Australia, England, Norway, The Netherlands or Angola?
The Middle East is not critical to the profits of most major US oil & gas companies.
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Permalink Reply by Les Bamburg on
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Jim, that was my point - Exxon has only been involved in the Mobil merger in the last 30 years - not multiple acquisitions.
Again my point was to say no military presence is required where the vast majority of ExxonMobil's profits are generated.
My glitch - I meant to say "The Middle East oil is not critical to the profits of most major US oil & gas companies."
Most of the affiliates you listed either are not big profit contributors or associated with natural gas. For instance Qatar and Yemen are both natural gas/LNG areas.
Finally - you may not have realized that ExxonMobil lost its interest in Saudi Aramco quite a number of years ago when the company was nationalized. -
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Permalink Reply by Spring Branch,mineral owner on
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No comment that we already have about the highest corporate tax rate in the world? You act as though Exxon , Chevron, etc pay no taxes. It is not now, nor should it ever be yours or Obama's decision as to the break up of Exxon. You praise of the Federal Government and condemnation of Exxon for a lack of efficiency is laughable. There is no less efficient organization in America than the Federal Government and way more than 58 % of the folks in this country know it. The Federal Government seems to be doing what you condemn.............buying other companies!
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