Arctic Gas Go Away Come Again Some Other Decade
Pipeline Story
"CALGARY -- Abundant cheap supplies of natural gas from new shale deposits, plus growing imports of liquefied natural gas flowing into the United States, push back by 15 years the need for Arctic gas and make it difficult for higher-cost gas from Western Canada to compete, says pipeline executive Steve Letwin."
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"Enbridge moves 15% of the natural gas in Texas, the largest producing state in the United States. The Calgary-based company, Canada's largest oil pipeline operator, is proposing the $1.5-billion LaCrosse Pipeline. That pipeline would link shale gas producers in the Fort Worth, Barnett and Haynesville regions of Texas and Louisiana to the U. S. southeast, where power markets are developing. Enbridge also runs a large offshore pipeline system in the Gulf of Mexico."
How about we started exporting this stuff to Europe? Is this a realistic scenario?
"CALGARY -- Abundant cheap supplies of natural gas from new shale deposits, plus growing imports of liquefied natural gas flowing into the United States, push back by 15 years the need for Arctic gas and make it difficult for higher-cost gas from Western Canada to compete, says pipeline executive Steve Letwin."
More...
"Enbridge moves 15% of the natural gas in Texas, the largest producing state in the United States. The Calgary-based company, Canada's largest oil pipeline operator, is proposing the $1.5-billion LaCrosse Pipeline. That pipeline would link shale gas producers in the Fort Worth, Barnett and Haynesville regions of Texas and Louisiana to the U. S. southeast, where power markets are developing. Enbridge also runs a large offshore pipeline system in the Gulf of Mexico."
How about we started exporting this stuff to Europe? Is this a realistic scenario?
Views: 13
Replies to This Discussion
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Permalink Reply by sesport on
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You need to get Les over here. I've had this discussion with him before. I think I remember that he pointed out we don't have any liquification plants. I'll have his peeps call your peeps and set up something. :0)
In other words, bump until Les (or somebody else with the knowledge) can get to this.
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Permalink Reply by Les Bamburg on -
Keith, it would be very challenging for LNG from the US to compete against other potential natural gas supply sources for Europe. For example Europe currently has access to natural gas imports via pipeline from Russia, North Sea, Algeria & the Middle East. In addition LNG supplies are available from Trinidad, Nigeria, Algeria, Egypt & Middle East. There are several potential projects on the drawing board to expand the transportation capacity and/or add other sources.
Delivery of LNG to Europe from the US would likely cost more than $10 per MMBtu which is higher than most of those current sources. Remember the US imports ~ 8 Bcfd of natural gas so there is quite an opportunity to increase US production and displace imports. Also, new climate change policies should allow natural gas to capture a larger share of the power and transportation fuel markets.
There is a proposal (Kitimat LNG) to export Western Canadian natural gas as LNG to the Asian market. I recently did a quicky review of that project to assess the delivered LNG cost. This project has a least some chance of successfully competing against several of the proposed Australian LNG projects.
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Permalink Reply by The_Baron on
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We already do export to Mexico, see the data here:
http://tonto.eia.doe.gov/dnav/ng/ng_move_expc_s1_m.htm
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Permalink Reply by Les Bamburg on
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KB, historically the US has exported some natural gas to Mexico - primarily from South Texas and into Baja California. But with the growth in Mexico's natural gas production and start-up of two LNG import terminals in Mexico, imports from the US have dropped to near zero. This is likely to continue for the next several years until Mexico adds more natural gas fuelled power generation.
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Permalink Reply by Grillin' - MmmMmm on
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True, Jim, particularly in light of the fact that Mexico has fallen woefully short of developing their own natural gas reserves. In northern Mexico there is an extension to some of the large South Texas gas fields that Mexico really hasn't developed like we have in the US. The government is so contorted that they can't get it done and won't allow others to come and do it for them. If Mexico got serious, they could find more nat gas. Here's hoping they don't, though!
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Permalink Reply by Les Bamburg on
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Keith, there is another way to view the economics of exporting LNG from the US to Europe. Basically the delivered price would have to be equal to Henry Hub plus the cost of liquefaction plus shipping or ~ $4-5 per MMBtu. Historically natural prices in Europe have been similar to US prices so there is not sufficient incentive to justify the incremental cost.
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Permalink Reply by Grillin' - MmmMmm on
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I did a similar study on Kitimat and came up with similar results. I think price of oil has to be high (to drive Japan LNG prices up) or gas in Canada has to be really low. The differential between the two is what drives the economics. I saw where 2 Japanese companies have signed on as partners with Kitimat LNG, with on signing a long term gas delivery deal.
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Permalink Reply by P.G. on
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Natural Gas prices won't go anywhere so long as it is primarily competing with Coal.
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Permalink Reply by sesport on
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Actually, ng is becoming more favorable in its competition with coal BECAUSE of the price right now.
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Permalink Reply by P.G. on
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Imagine what NG could do to the Petroleum markets! Imagine what the transportation industry could do for NG prices should NG become a primary energy source for it!
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Permalink Reply by sesport on
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Don't stop at transportation, imagine it fueling industrial & energy plants!
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Permalink Reply by sesport on
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PG - This is what I keep saying, look at what sectors are the largest % of ng use.
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