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Permalink Reply by tc on December 18, 2015 at 6:38

If only they could find a technology breakthrough to drastically cut the cost turning NG into LNG then exports would really soar.

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Permalink Reply by Skip Peel - Mineral Consultant on December 18, 2015 at 13:00

I would hate to be the CEO or member of a board faced with making a decision to go forward with a construction commitment of a billion or so dollars.  The future for LNG is so uncertain at this point in time.  Those managers and directors get paid well to make those decisions and I expect most have some experience in making big bets. 

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Permalink Reply by tc on December 19, 2015 at 2:22

But for a very few CEOs its like being a kid in a candy store at Christmas and the manager announced that they will soon have a "everything most go sale".  All those bargain choices.

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Permalink Reply by tc on December 19, 2015 at 2:17

Its easier to make those bets when you aren't using your own personal money and get to collect rewards for years before the results of your bets are determined.

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Permalink Reply by Skip Peel - Mineral Consultant on December 22, 2015 at 4:37

Chevron agrees deal to sell Australian Gorgon LNG to Chinese firm

Tue Dec 22, 2015 2:03am GMT  reuters.com/

SYDNEY Dec 22 (Reuters) - Chevron Corp on Tuesday said it has agreed to sell up to 1 million tonnes a year of liquefied natural gas (LNG) from its Australian Gorgon project to China Huadian Green Energy Co over 10 years starting in 2020.

The non-binding heads of agreement comes amid a deterioration in Asian LNG prices LNG-AS, aggravated by mounting supply from Australia, which aims to overtake Qatar as the world's top producer in coming years.

The price has slid two-thirds since 2014 to under $7 per mmBtu.

"This is an important step in the commercialisation of Chevron's natural gas holdings in Australia," Pierre Breber, executive vice president of Chevron Gas and Midstream, said in a statement.

Chevron in January signed a contract with South Korea's SK LNG Trading Pte Ltd to supply 4.15 million tonnes of LNG from Australia over a five years starting in 2017.

The Gorgon Project combines the development of the Gorgon field and the nearby Jansz-Io field and is capable of producing 15.6 million tonnes of LNG a year.

China Huadian Green Energy is a subsidiary of state-owned power generator China Huadian Group.

The Gorgon Project is a joint venture between Chevron, which holds a 47.3 percent stake, ExxonMobil and Royal Dutch Shell, each with 25 percent, and three Japanese utilities. (Reporting by James Regan; Editing by Richard Pullin)

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Permalink Reply by Skip Peel - Mineral Consultant on December 22, 2015 at 6:14

American LNG Exporters Turn to Europe as Asian Demand Sputters

Tim Loh  Christine Buurma  Harry Weber HarryRWeber   bloomberg.com

December 21, 2015 — 6:01 PM CST Updated on December 22, 2015 — 8:39 AM CST

 

American suppliers no longer see need to brush up on Korean

For years, U.S. gas companies looking to export liquefied natural gas dreamed of a booming Asia. Now, with demand there falling and the first shipment weeks away, Europe has emerged as the unlikely savior.

European gas production is down and countries there want to get more of the heating and power plant fuel from places other than Russia –- a major supplier, but one that’s brought plenty of headaches.

“It’s going to make a lot more sense for the U.S. gas to flow into the European market,” said Jason Bordoff, director of Columbia University’s center on global energy policy. “European energy security” comes from having “a diversity of supply," he said.

It’s the latest twist in the U.S. gas boom. A decade ago, Cheniere Energy Inc. was building LNG import terminals on the Gulf Coast because people thought the U.S. didn’t have enough of the fuel. Then came the shale revolution, prompting Cheniere to convert its Sabine Pass facility to export LNG. The first tanker is set to dock there as soon as next month.

Five U.S. liquefaction projects are now being built and they could have a combined capacity to ship 7.76 billion cubic feet of LNG a day by 2019, according to Bloomberg New Energy Finance. That’s enough to put the U.S. in the company of Russia and Qatar, the world’s largest gas exporters.

Companies like Annova LNG LLC are adapting to the shifting market. A couple of years ago, Annova President David Chung was brushing up on his Korean, thinking that’s the language buyers would speak. Increasingly, the Houston-based company is finding English will do.

“We have definitely been surprised by the level of interest in Europe,” said Mitchell Walk, director of LNG for the company, which is backed by Chicago-based electricity producer Exelon Corp.

Slowing Asian demand for gas is one factor behind the shift. China will only accept 77 percent of contracted cargoes in 2015 amid the country’s slowest economic growth since 1990, according to industry consultant IHS Inc.

Then there’s the fact that Asian gas prices are more heavily linked to crude oil than in Europe. In February 2014, spot LNG to northeast Asia fetched a record $19.70 per million British thermal units, according to the World Gas Intelligence publication in New York. Now, after the worst oil rout in a generation, it’s closer to $7 -- not much higher than European prices -- reducing the incentive to ship U.S. product halfway around the world.

U.S. gas has fallen 35 percent this year. Futures for January delivery were down 3.8 cents, or 2 percent, to $1.873 at 9:13 a.m. in New York.

“At a time when the Asian market is growing less strongly than before and there are so many export terminals under construction, a lot of this LNG is going to have to go to Europe,” said Massimo Di Odoardo, research director for European gas at Wood Mackenzie Ltd. in London.

Europe will probably double LNG imports between 2014 and 2020, the International Energy Agency projects. One reason for that is the Netherlands, where officials are slashing output at Europe’s most prolific gas field, Groningen, after years of earthquakes tied to drilling. Just a few hours south, at the country’s first LNG import terminal in Rotterdam, Rolf Brouwer is hoping to make up for the shortfall.

“We’re ready to accept more ships,” said Brouwer, managing director of the Gate terminal, which opened in 2011. “Some of that supply could potentially come from the U.S.”

Lithuania’s importing LNG, too. The small country on the Baltic Sea illustrates the continent’s concern about being dependent on Russia -- and why it is looking more and more to the U.S. For years, the former Soviet republic procured all its oil and gas from Russia. And while the countries share a border, Lithuania paid some of Europe’s highest prices for the fuel, the country’s Energy Minister Rokas Masiulis said at a November conference in Istanbul.

Frustrated by that, Lithuania decided to build a floating LNG import terminal. Before the facility could even open, it negotiated a 23 percent discount from Gazprom PJSC, Russia’s energy giant, Masiulis said.

In February, Lithuanian gas trader Litgas signed an agreement with Cheniere to gain access to U.S. LNG.

“By being firm on this decision, we will always have the power in negotiations,” Masiulis said at the conference with a grin. "I would clearly recommend this to other countries in Europe and the world."

 

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Permalink Reply by Dry Hole on December 22, 2015 at 15:17

 Farmers have an old saying " YOU HAVE TO BE THERE WHEN IT'S BAD SO YOU CAN BE THERE WHEN IT'S GOOD" ----- trying to predict future supply and demand cycles for commodities is HARD !

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