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Permalink Reply by jffree1 on August 24, 2017 at 1:05

Cheniere Energy Delivers First US LNG Cargo to Lithuania

U.S.-based natural gas exporter, Cheniere Energy, Inc. LNG delivered Lithuania its first liquefied natural gas cargo (''LNG'') from the United States as part of a deal with the country's state-owned gas trader, Lietuvos Duju Tiekimas in Jun 2017.

Lithuania Aims to Reduce Reliance on Russian Gas

The former Soviet state, presently a member of both NATO and the European Union, struck the deal with Cheniere Energy to reduce its dependence on Russian energy giant Gazprom and thereby diversify its gas suppliers. Although the U.S. Embassy in Lithuania stated that the government was not involved in the deal, Lithuania believes the deal will help strengthen relations between the two countries.

In 2014, Russia's annexation of Crimea alarmed the former Soviet states. Lithuania anticipates that reducing dependency on Russia for energy will decrease the tension in the region. It became the second country in the region to have received U.S. liquefied natural gas cargo from Cheniere Energy after Poland . Lithuania has been importing liquefied natural gas from Norway's Statoil ASA STO to add more supply options in the country. Lithuania expects to import half of its gas consumption as liquefied natural gas in 2017.

Cheniere Energy: Expanding its Export Footprint

The gas exported by Cheniere Energy will cater to clients in Lithuania, Latvia and Estonia. The cost of shipment from the company's export terminal on the U.S. Gulf Coast to Klaipeda terminal in the Baltic state is low enough to compete with the gas delivered through Russian pipelines. The supply of gas is expected to increase in the coming years.

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http://www.nasdaq.com/article/cheniere-energy-delivers-first-us-lng...

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Permalink Reply by William C. Morrison on August 25, 2017 at 7:17

Good news.  Our allies need to be independent of Russia.   By supplying them with US gas we are supporting our NATO allies.  Good business for us.

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Permalink Reply by Martin on August 26, 2017 at 6:47

Earlier this year I read an article that the German National bank (Deutsch Bank ?) expected the US LNG imports to make up 25% of all their NG imports. Russia was also 25%. The viewpoint was that the US imports would prevent the Russians from 1) Raising their prices beyond market and 2) Cutting off the supply for political leverage. Which they have done in the past.

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Permalink Reply by Tom Pendergast on August 29, 2017 at 21:51

Latvia, which is north of Lithuania and south of Estonia, has no LNG receiving terminals.

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Permalink Reply by William C. Morrison on August 30, 2017 at 2:47

True.  But Latvia has the Incukalns underground storage facility for the LNG.  All three Baltic states are closely aligned regarding importing LNG including Finland.  I am supposing it is the availability of an ice free port that is the key factor.

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Permalink Reply by Martin on August 30, 2017 at 4:50

If I properly recall the article, the Latvian port has a leased LNG terminal vessel. Latvia has also been buying LNG from Norway.

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Permalink Reply by William C. Morrison on August 30, 2017 at 5:53

It really is unimportant, what is important is that LNG from Louisiana is making it to that part of the world.  And it may piss off the Russians, which is just fine by me.  And since I have an interest in local gas well it bodes well for me.

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Permalink Reply by Tom Pendergast on August 30, 2017 at 6:45

The Independence is a floating LNG receiving terminal in Lithuania.  Soon after it began importing LNG, Gazprom began discounting its pipeline deliveries to Lithuania as well as other European destinations.  In addition, Gazprom stopped linking its gas prices to crude oil and began linking them to the major European gas hubs.  One result is that now Gazprom has increased its European pipeline deliveries to record highs.

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Permalink Reply by Tom Pendergast on August 30, 2017 at 8:29

Further clarification:  The Independence is an FSRU (floating storage and regasification unit).  Its anchor supplier is Statoil of Norway which has a 5-year contract to supply Independence with enough LNG to maintain minimum operations with other suppliers such as Cheniere or Qatargas filling in anything above that which may be needed.  Cheniere's was a spot-market transaction.

Unlike the other two Baltic countries, Latvia is blessed with large sandstone formations with impermeable capstone layers for storing natural gas.  The biggest is Incukalns.  This is great for balancing seasonal variations in demand for natural gas in the region, not just in the Baltic states but also in nearby municipal regions of Russia, Poland and perhaps even Finland. 

The current pipeline that runs from the Independence north to Incukalns in Latvia is adequate to keep that formation well filled.  It can be easily expanded should market conditions support it.

With this diversification of supply from Norway, the US and Qatar, Gazprom no longer enjoys a monopoly advantage and has accepted the dictates of market forces.

Apparently, there are a couple of small-scale LNG carriers that can offload LNG from the Independence and transport it to Finland.  I don't know if this is actually being done.

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