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Permalink Reply by Skip Peel - Mineral Consultant on July 27, 2018 at 2:19

Much ado about nothing.  The European LNG import facilities are private ventures and will be built regardless of anything politicians/governments do.  Europe will also facilitate pipeline connections to Russia.  Although fuel switching is critical for the environment wherever it occurs, the fact is Europe will buy from whichever supplier offers the lowest price. 

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Permalink Reply by Joe Ring on July 31, 2018 at 4:00

You are correct Mr. Peel, sales, of anything, are usually dictated by the lowest price, without sacrificing quality.  However, Russia is getting about $13.00 per 1000 cubic feet for gas sold to the EU nations and exporters of LNG from the US can deliver at $5.50 and make a profit.  If you want to kick Russia's ass, then we could take a lot of the market share from them, by selling to the EU.  Gearing up for exports of LNG and acquiring permits was retarded by, yes you guessed it, the Obama Administration.  Another consideration is that we had better get ahead of Egypt and Israel, who have formed an alliance to speed up the construction of LNG exporting facilities, for the EU market.  This is a result to Egypt's giant Natural gas discovery in the Eastern Mediterranean and Israels's domestic natural gas supply.   Get your ass moving President Trump!!

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Permalink Reply by Skip Peel - Mineral Consultant on July 31, 2018 at 4:54

Russia won't be selling for $13 mcf when competition shows up in European markets.  They can sell for a lot less, if they have to.  As alternate supplies become available, prices will drop and Europe will buy from the lowest price supplier.  Most of U.S. LNG will go to markets where it has a price advantage.  And all buyers will look for the cheapest price.

I am all for Europe having alternative supplies and not giving Russia a monopoly for political and security reasons.  It just not going to end up being a major U.S. market for logistic and competition reasons.  I'll add the cut-and-paste of an article that I sent to business associates yesterday.  Note that there are plenty of facilities and trains approved and past their FID.  The projects that have not reached that point aren't hobbled by regulations, they are questionable as to demand and financing.  The facts do not support that the LNG industry is negatively impacted by regulations.  And cutting the corners or simply doing away with regulations won't help those projects that can not compete on a market basis.  Trump has not a thing to do with the current or near term future state of the U.S. LNG industry.

Coming Up - The Next Round of U.S. Liquefaction Plants and LNG Export
Terminals Sunday, 07/29/2018 Published by: Housley Carr rbnenergy.com

Exceprts. Emphasis added is my own.

Now, seven years later, five liquefaction trains — four at Cheniere Energy’s Sabine Pass LNG
facility in Louisiana and one at Dominion’s Cove Point LNG in Maryland — with a combined
capacity of more than 23 million tonnes per annum (MMtpa) are up and running, and 20
liquefaction trains with a combined capacity of nearly 49 MMtpa have their FIDs in hand and are
under construction. Figure 1, from RBN’s new LNG Voyager Report (click here for more
information.) shows the status of all 25 trains, including the 10 “mini-trains” being built at Kinder
Morgan’s Elba Liquefaction project in Georgia.

Given that 1 Bcf/d of natural gas equals approximately 7.6 MMtpa, the five currently operational
trains could send out the LNG equivalent of about 3 Bcf/d, and the 20 units being built could send
out an additional 6.4 Bcf/d, for a total of 9.4 Bcf/d — more than one-ninth of total U.S. gas
production today, not even accounting for the usual 10% losses in the liquefaction process. And
that’s just the beginning. At least another dozen and a half liquefaction/LNG export projects are in
various stages of pre-FID, pre-construction development. Four Gulf Coast projects that together
would export the LNG equivalent of 6.8 Bcf/d (about 52 MMtpa) already have FERC approvals in
hand: Lake Charles LNG, Magnolia LNG, an expansion of Cameron LNG, and Golden Pass LNG
— the first three in southwestern Louisiana and the fourth just across the state line at the
southeastern edge of Texas.

Another 13 projects totaling nearly 24 Bcf/d (180 MMtpa) have applications pending at FERC, and
two projects with just under 2 Bcf/d (14 MMtpa) are in the pre-filing process. All but three of the 15
liquefaction/LNG export projects in various stages of filing or review at FERC are located along the
Gulf Coast — six in Texas, five in Louisiana and one in Mississippi. The exceptions are Jordan
Cove in Oregon; the (small) Eagle LNG project in Jacksonville, FL; and the Alaska LNG Project in
Nikiski, AK.

From zero in 2015, U.S. LNG exports are expected to increase to more than 10 Bcf/d in 2023,
assuming all of the U.S. LNG export projects that have reached FID get built as planned, and at least
one more awaiting FID comes online by 2023. That would bring U.S.-sourced LNG up to nearly
20% of global LNG trade.

https://rbnenergy.com/coming-up-the-next-round-of-us-liquefaction-p...
export-terminals

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Permalink Reply by Skip Peel - Mineral Consultant on July 31, 2018 at 8:47

E.U. unlikely to build up to 11 plants to import LNG from U.S., as Trump says

by Steven Mufson July 30  washingtonpost.com

Europe is unlikely to veer from its current plans to build a small number of new plants for importing liquefied natural gas, energy experts said, casting doubts on President Trump’s claims Monday that he had secured commitments from the European Union for the construction of nine to 11 plants to boost U.S. exports.

In comments at the end of a joint news conference with Italian Prime Minister Giuseppe Conte on Monday, Trump portrayed the commitment as a victory in his “fantastic meeting” with European Commission President Jean-Claude ... last week.

But while there have already been about a dozen proposals on the drawing boards, no more than three or four new plants will be built anytime soon. That’s because the existing 24 LNG import facilities now operating in Europe are running at about a quarter of their capacity, said Thierry Bros, senior fellow at the Oxford Institute for Energy Studies.

What’s more, there are limited tools the E.U. can use to speed up construction of new plants by private companies.

“We have enough capacity. We may need a little bit more in some dedicated areas. Otherwise I don’t see how we can need 11” new plants, Bros said. “There may be a few more to be needed such as one in Croatia. But all the others are there, and at end of day it is private money going into it even if regulated.”

LNG will also have to compete against three large gas pipeline projects — two from Russia and one from the Caspian Sea. The NordStream 2 will deliver gas from Russia to Germany.

The TurkStream will bring gas from Russia to Turkey and then Central Europe, circumventing Ukraine. And the Shah Deniz 2, which just started transporting gas from the Caspian to Turkey, will be extended into Greece, Albania and Italy.

“The E.U. does not decide how many LNG terminals to build; those are commercially driven decisions,” Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, said in an email. “Those that are built will source gas from the most competitive sources, which may or may not be U.S. LNG. The market will decide whether the E.U. takes more LNG from the U.S., not Juncker.”

Over the past three years, Europe’s gas consumption has grown 17.5 percent to 470 billion cubic meters, Bros said. LNG imports accounted for 12.5 percent of that total, and they will increase as Europe’s domestic gas production declines and as consumption grows. Existing facilities for the import of LNG could meet 40 percent of current European demand.

During his visit to Washington last week, Juncker was more circumspect than Trump about plans for new port facilities. “We are ready to invest in infrastructure and new terminals which could welcome imports of LNG from the United States and elsewhere — but mainly from the United States, if the conditions were right and prices competitive,” Juncker said in a July 25 speech at the Center for Strategic and International Studies.

According to the law firm King & Spalding, there are two LNG terminals under construction in Spain.

LNG faces stiff competition from Russia, where the costs of production are very low. In addition, the cost of shipping gas by pipeline is much less than the cost of liquefying natural gas, sending it by special tanker and turning it back into gas form.

Total chief executive Patrick Pouyanné said during a recent visit to Washington that U.S. shale had set a “ceiling” on Russian gas prices by establishing a price at which U.S. gas is available. But that doesn’t mean Russia won’t undercut the United States or other LNG exporters.

Even among LNG producers, there is a lot of competition. Qatar and Australia are the biggest exporters and will rival the United States even after new U.S. export facilities come online. And if prices rise, that might justify more rapid development of major discoveries off the east coast of Africa.

The plans for major LNG expansion in Europe and Asia also run afoul of some activists in the United States who say the exports will leave U.S. consumers vulnerable to international swings in prices. Last week, the Industrial Energy Consumers of America filed comments on an Energy Department study that said gas prices could double by 2040 thanks in part to export growth.

“IECA is not against LNG exports,” the group said. “We are against excessive LNG exports which would result in U.S. prices being dictated by global demand like crude oil is today.”

 

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Permalink Reply by Bill R on July 31, 2018 at 15:19

Would it be nice if it worked like agreements between Grade school boys and girls?

You know, "show me yours and I will show you mine"

These Tariff agreements should read, "Buy $100M of ours and we will buy $100M of yours" without fines, embargo's, or sanctions.

Just be sure they understand that if they do not follow the guidelines, they will be cut off entirely... everything... completely...

Who knows, maybe this time it will? Or is she going to take a look then run away laughing?!?

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Permalink Reply by Skip Peel - Mineral Consultant on July 31, 2018 at 16:04

Politics doesn't enter into the LNG equation.  Unless you count retaliation for tariffs.  Market forces rule regardless of political spin.

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Permalink Reply by Joe Ring on August 1, 2018 at 9:23

I cannot understand how you think that politics and world power of markets, all markets, does not play into agreements by heads of nations.  Market manipulation happens every day, particularly in commodities, as well.  Your unfailing belief in the rule of supply and demand, is overrated.  I don't think that it is even recited in text books any longer.   

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Permalink Reply by Skip Peel - Mineral Consultant on August 1, 2018 at 10:09

Joe, it's okay that you don't understand.  We can just agree to disagree.

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