LNG

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AzariLoveIran

LNG

Post by AzariLoveIran »

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monster_gardener
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Location: Trolla. Land of upside down trees and tomatos........

Frack not good but beats Nuke War............

Post by monster_gardener »

AzariLoveIran wrote:.


Shell Gas revolution in US


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Thank you Very Much for your post, Azari.

Thank you for the link. Something that I would not have seen otherwise.

Interesting piece....... Lots of implications........... Russia down..........IIRC Turkey, Oz, and US/uz up..........

I am concerned about the bad corporate environmental culture of the frackers.......... Groundwater contamination here we come....... :(

Beats Nuke war though........

Note:

Previously heard this......

Maybe also a Frack bubble........ there is so much exploitation because the price is high but it is dropping

Also a warning to those landowners selling rights...... get your money up front....... It's good to get a percentage too but you may end up with water you can burn and virtually no cash......
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AzariLoveIran

Re: LNG

Post by AzariLoveIran »

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Best play in American Gas bonanza, is LNG



FT : Shale gas: Terminal decline no longer


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As Cheniere built its LNG terminal, the oil industry was unlocking the vast reserves of gas trapped in dense shale rocks that stretch from Pennsylvania to Texas. Techniques such as “fracking” (hydraulic fracturing of the rock) and horizontal drilling triggered a production boom. Thanks to shale, the US in 2010 overtook Russia as the world’s largest gas producer.

With shale causing an unexpected supply glut in the US, Cheniere, which began life as a small oil explorer, took a radical decision: instead of importing LNG, it would export it. The volte-face highlights both the scale of a revolution that has transformed America’s energy outlook and how the repercussions of that boom are beginning to be felt far beyond the US.

Cheniere is one of a number of companies that plan to export surplus US gas – and at much lower prices than those set by other producers. For global energy markets, that is a change of potentially huge proportions. “This is going to have big implications for traditional exporters of gas,” says Fatih Birol, chief economist at the International Energy Agency, the west’s industry monitor. “All of them are worried. They have a competitor entering the market that produces gas at much lower cost.”

This development could recast a world gas trade long dominated by a handful of energy superpowers – countries including Russia, Qatar and Algeria. The pipelines that connect Russia’s west Siberian fields with consumers in Europe and the LNG tankers that ply their way from the Gulf and south-east Asia to Japan have created a network of dependency that has evolved over generations.

Those relationships are facing an unprecedented challenge. From the UK to Argentina, from South Africa to Mexico, countries are waking up to the potential value of domestic shale gas reserves. Suddenly, a new wave of gas producers looks set to emerge that could threaten the old oligopoly.

The changes mean that for producers such as Gazprom of Russia, the future looks a lot less certain than it did a decade ago. Some of its customers, such as Poland, are exploring unconventional deposits that could drastically reduce their reliance on Russian imports. China, too, has so much of its own shale gas that it could ditch long-standing plans to import big amounts from Russia through a new pipeline from Siberia.
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The geopolitical fallout will stretch out over decades. What will have a more immediate impact on global markets is the way US exports of gas are being priced.

For decades, LNG has been sold under 20-year contracts indexed to the price of oil. Cheniere’s export contracts are linked instead to US gas prices, which have been driven to 10-year lows by the shale gas glut. Cheniere’s deals are a “major milestone”, says Jonathan Stern, professor at the Oxford Institute for Energy Studies, part of Oxford university. “For the first time, someone with a real project and real customers is saying, ‘We can sell LNG to Asia on a different basis – that is, not indexed to the price of oil’.”

It is difficult to exaggerate the significance of this shift and its consequences for the business model of the big gas suppliers. Companies including Gazprom could come under mounting pressure from customers to reconfigure their contracts and loosen the oil price link.
LNG exports: Lucrative liquefaction amid the alligators

The Sabine Pass liquefied natural gas plant in Louisiana feels more like a nature reserve than the flashpoint of a global energy revolution, writes Ed Crooks. A turtle and a four-foot alligator splash in ditches alongside the pipework, untroubled by human activity. Another alligator sprawls across an access road, daring the plant staff to move him on.

In the main control room, two men watch their screens, keeping an eye on the levels of LNG in five huge tanks and monitoring the pipelines between the plant and the spider’s web of connections stretching off to the rest of the US. From time to time they sell a batch of the gas that boils off the LNG at the 10-year low prices now prevailing in the American market.

Only 64 people work at the facility. The two high-technology docks, designed to connect to LNG tankers safely even in rough seas, have been idle since February.

All that is about to change. In three months Cheniere Energy, the owner of Sabine Pass, expects to start a $10bn project that will allow exports of LNG. As one Japanese visitor put it recently, this is the gas plant that the whole world is watching.

Turning a facility that was designed to import LNG into an export terminal may sound tough but it should be a lot cheaper than building a plant from scratch. Sabine Pass already has the tanks, pipelines and docks needed for such a project. All that is required is the $10bn liquefaction plant – the fridge-like facility that converts gas into LNG by cooling it to about minus 160C.

A 200-acre patch of drained marshland, cleared of brush, has been earmarked for Sabine Pass’s four liquefaction “trains” or plants. When they are built, Cheniere will be able to export 18m tonnes of LNG a year. It has already sold 89 per cent of that capacity to buyers from the UK, Spain, India and South Korea.

Cheniere has so far made good progress in raising the necessary $10bn. In February Blackstone, the private equity firm, pledged $2bn towards the cost of the terminal. Cheniere has also lined up $4bn in loans from eight banks to help fund construction.

On April 17 it passed a crucial milestone when it won approval from the Federal Energy Regulatory Commission to build the plant. Cheniere’s shares, which have doubled in the past year, hit a four-year high.

Not only will US exports be cheap – they could also be plentiful. Eight projects with a total export capacity of 120m tonnes a year have been proposed, according to Wood Mackenzie, a consultancy. If all are approved and built, the US could become one of the world’s biggest LNG producers. Qatar, the current world leader, has a production capacity of 77m tonnes a year.

Neighbouring Canada also has ambitious export plans: its National Energy Board recently granted licences for two planned LNG export terminals in Kitimat, a port on the northern Pacific coast in British Columbia, which will have a combined capacity of 12m tonnes a year.

“Let’s suppose that by the end of the 2010s there is 60bn-100bn cubic metres a year of LNG from the US and Canada going into Asia, adding 20 per cent to the global LNG trade,” says Prof Stern. “The world will never be the same again.”

Though troubling for established gas suppliers, the upheaval is good news for consumers. More gas should mean lower prices and less likelihood of supply shortages. “Greater diversity of supply is a good thing in a market that’s growing fast,” says De La Rey Venter, head of global LNG at Royal Dutch Shell. “Any country where gas makes up 20-30 per cent of the energy mix doesn’t feel comfortable being beholden to just two or three suppliers.”

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Cheniere’s LNG import terminal at Sabine Pass, on the Texas-Louisiana border, went into service in 2008. But as the shale gas boom destroyed US demand for imported LNG, it became all but redundant. “We thought – if there’s so much gas in the US, what’s to stop us exporting it like other countries?” says Mr Abiteboul.

What ensured interest from customers was its approach to pricing. The LNG trade kicked off in the 1970s when Japanese utilities started importing large volumes of the fuel from countries such as Indonesia under long-term contracts indexed to the so-called Japanese crude cocktail, also known as JCC. South Korea and Taiwan followed suit, and the JCC link became standard for Asian buyers. Russian pipeline exports to Europe are similarly oil-indexed.

The contracts were also “take or pay”, meaning buyers agreed to take a certain volume of gas and to pay a penalty if they took less. Gas suppliers prefer such rigid arrangements because they give them the certainty they require to invest in production and transport infrastructure.

Cheniere is doing it differently. “We are going to introduce the freedom of the North American gas market to other countries,” says Charif Souki, chief executive. In a departure from take-or-pay, Cheniere’s customers can take less LNG than specified in the contract. In addition, gas from Sabine Pass will be sold at a price indexed to Henry Hub, the main US gas benchmark, which trades at less than $2 per million British thermal units. After liquefaction, transport and other costs, LNG could be imported into Asia for less than $9 per mBtu – compared with a long-term contractual price of $17 per mBtu in Japan.

The advantage for Cheniere is that it will be both buying and selling gas on the same basis, freeing it from the risk of swings in the price of oil. The switch to Henry Hub pricing is a “paradigm shift”, says Prof Stern. “You now have this head of steam building up in Asia where they’re asking: ‘why are we paying the highest price in the world – $17 – for a product that sells for $2 in the US?’ ”

Buyers quickly took advantage of Cheniere’s offer. Last October, BG Group of the UK signed a 20-year contract – the first long-term LNG purchase agreement from a project on the US Gulf Coast. Korea Gas Corp, one of Asia’s largest LNG buyers, Spain’s Gas Natural Fenosa and Gail, a state-owned Indian company, followed. Cheniere has now sold 16m tonnes a year of LNG – or nearly 90 per cent of Sabine Pass’s export capacity. “To sign four contracts in three months is a record in the industry,” Mr Abiteboul says. “A lot of potential customers were disappointed.”

For a company such as BG, which has a huge LNG trading business, the advantages were obvious. It can take Cheniere’s cheap gas and sell it at a huge mark-up in Asia. “This opens up a whole new arbitrage opportunity for buyers,” says Matthew Hagopian of Linklaters, the law firm.

Meanwhile, consumers – especially Japan – are also taking an active interest. Japan has seen its LNG demand grow strongly since last year’s Fukushima disaster, which led to a shutdown of most of its nuclear power plants. On a trip to the US last September, Seishu Makino, Japan’s senior vice-minister of trade and industry, asked Steven Chu, US energy secretary, to allow LNG exports to Japan, for which there is no trade agreement with the US. A Japanese trade ministry official said last month that Tokyo was looking to secure supplies from three export projects in the US – Cameron in Louisiana, Cove Point in Maryland and Freeport in Texas.

Producers are also reacting to the emergence of a new rival: Qatar. Worried about losing market share to the US, the Gulf state has been rushing to sign long-term supply deals with South Korea and Taiwan.

...

Many are sceptical, however, about whether the US will really become a big exporter. Already, some US lawmakers have expressed concern that exporting LNG could drive up the cost of gas at home, endangering the revival in the petrochemical and manufacturing industries that rely on low gas prices and potentially driving up utility bills for consumers. Environmentalists are also opposed, arguing that exports will lead to the increased use of fracking – a process they say can pollute ground water.

In a reflection of how politicised the issue has become, the administration of President Barack Obama last month delayed the release of a report on the economic impact of LNG exports. In that context, few expect all the eight proposed projects to be approved. Even those that are could take years to get off the ground, as environmental challenges and regulatory hurdles slow the construction of liquefaction facilities.

Many also doubt whether the Cheniere cost advantage will persist. “It’s generally accepted that Henry Hub trades at an unsustainably low level,” says Mr Venter, arguing that the increasing use of gas in US industry and power generation will gradually push up domestic prices. “People who believe Henry Hub will stay low for two decades are taking a big risk.”

Cheniere officials counter this view by pointing to the BG Group contract. The fact that a big operator in international LNG markets was willing to take a long-term bet on Henry Hub shows that the level of risk is acceptable, they maintain.

Despite all the caveats, the emergence of the US as a big exporter could presage significant changes in the global gas market. “In the US, we have 4,000 gas suppliers,” says Mr Souki at Cheniere. “It is a very competitive industry and it responds to market incentives. Connecting that to the other countries has enormous implications from a geopolitical standpoint for the rest of the world.”

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AzariLoveIran

Re: LNG

Post by AzariLoveIran »

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Natural Gas Opportunities


390520-13387941461412165-Herr-Hansa.jpg
390520-13387941461412165-Herr-Hansa.jpg (31.92 KiB) Viewed 1499 times

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Milo
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Re: LNG

Post by Milo »

Shale gas/oil/whatever they call it this week, is a ponzi scheme.

"Using coal-fired electricity to wring oil out of rocks is like feeding steak to the dog and eating his Alpo. "

http://goo.gl/qRinX

Or here's a good one, "there are no economically viable ways yet known to extract and process oil shale
for commercial purposes".


http://edocket.access.gpo.gov/2011/pdf/2011-9120.pdf

Or,

"the cost of extracting this gas with existing technology would be probably be more than $200 per barrel of oil equivalent"

http://goo.gl/Z7Bws

Or you can watch Gasland, where they show energy companies fracking their way across the US. They use fracking, until the hydrocarbons run out (far sooner than they 'estimated'), and then move on, like some medieval court raping the local women from town to town.

http://goo.gl/0VFEl
anderson
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Re: LNG

Post by anderson »

Oil shale and shale gas are two different products, Milo. Two completely different products. Oil shale is for extracting oil.
Shale gas is about natural gas - methane.
AzariLoveIran

Re: LNG

Post by AzariLoveIran »

anderson wrote:.

Oil shale and shale gas are two different products, Milo. Two completely different products. Oil shale is for extracting oil.

Shale gas is about natural gas - methane.

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Milo in "chicken curry" business .. not in Oil & Gas :lol:

for him, Oil is Oil, no matter coconut, Olive, crude Oil .. all the same

and

Gas he knows only from farting :lol:


Milo, stop the nonsense and invest in Canada's future


:D :D :D

:D :D

:D


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Typhoon
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Re: LNG

Post by Typhoon »

As LNG starts out as nat gas, I'm wondering about this little outfit over in Canada:

Freehold Royalties Ltd.

http://www.freeholdroyalties.com/

Azari, you're a Canadian are you not? That is when you're not busy playing an Iranian. Any comments? About FR.
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Typhoon
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Re: LNG

Post by Typhoon »

anderson wrote:Oil shale and shale gas are two different products, Milo. Two completely different products. Oil shale is for extracting oil.
Shale gas is about natural gas - methane.
Quite right.

The energy content of shale oil is about that of a baked potato. No one has, of yet, figured out a cost effective method of extraction.
May the gods preserve and defend me from self-righteous altruists; I can defend myself from my enemies and my friends.
anderson
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Re: LNG

Post by anderson »

Another area with large potential is harvesting methane clathrates in coastal and continental shelf areas. There are thought to be trillions of cubic feet off North Carolina, in the Arctic Sea / Beaufort Sea / Alaska / MacKenzie River delta area, in Siberia, and off Japan. The Japanese, along with the Canadians and others, have done a pilot project in the Mallik field in the MacKenzie Delta area.

http://en.wikipedia.org/wiki/Mallik_gas_hydrate_site

It's not proven yet that the resource can be economically extracted near term, but estimates reserves for clathrate based methane is actually higher than for all other sources of methane.
Last edited by anderson on Mon Jun 18, 2012 2:41 pm, edited 1 time in total.
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Enki
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Re: LNG

Post by Enki »

Invest in America's future. Ban hydro-fracking!
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
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Typhoon
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Re: LNG

Post by Typhoon »

Enki wrote:Invest in America's future. Ban hydro-fracking!
Why?
May the gods preserve and defend me from self-righteous altruists; I can defend myself from my enemies and my friends.
Milo
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Re: LNG

Post by Milo »

Shale gas is a scam too, read:

http://goo.gl/Z7Bws
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Enki
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Re: LNG

Post by Enki »

Typhoon wrote:
Enki wrote:Invest in America's future. Ban hydro-fracking!
Why?
Well...if you can make a compelling case why the people in Pennsylvania whose drinking water was ruined and had methane coming out of their taps coincidentally after they started fracking, then I'll change my position.
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
-Alexander Hamilton
anderson
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Re: LNG

Post by anderson »

Milo wrote:Shale gas is a scam too, read:

http://goo.gl/Z7Bws
Nothing in that link to justify calling shale gas "a scam."
Milo
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Re: LNG

Post by Milo »

Enki wrote:
Typhoon wrote:
Enki wrote:Invest in America's future. Ban hydro-fracking!
Why?
Well...if you can make a compelling case why the people in Pennsylvania whose drinking water was ruined and had methane coming out of their taps coincidentally after they started fracking, then I'll change my position.
Yes, that's when shale hydrocarbon extraction is 'successful'!

When it's not, you still get that, but it loses more money than they can conceal.
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Typhoon
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Re: LNG

Post by Typhoon »

Milo wrote:
Enki wrote:
Typhoon wrote:
Enki wrote:Invest in America's future. Ban hydro-fracking!
Why?
Well...if you can make a compelling case why the people in Pennsylvania whose drinking water was ruined and had methane coming out of their taps coincidentally after they started fracking, then I'll change my position.
Yes, that's when shale hydrocarbon extraction is 'successful'!

When it's not, you still get that, but it loses more money than they can conceal.
Why not provide some evidence for your assertions?
May the gods preserve and defend me from self-righteous altruists; I can defend myself from my enemies and my friends.
Milo
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Re: LNG

Post by Milo »

Typhoon wrote:
Milo wrote:
Enki wrote:
Typhoon wrote:
Enki wrote:Invest in America's future. Ban hydro-fracking!
Why?
Well...if you can make a compelling case why the people in Pennsylvania whose drinking water was ruined and had methane coming out of their taps coincidentally after they started fracking, then I'll change my position.
Yes, that's when shale hydrocarbon extraction is 'successful'!

When it's not, you still get that, but it loses more money than they can conceal.
Why not provide some evidence for your assertions?
Above there's several links. One is to a movie if reading is all hurty for you.
AzariLoveIran

Re: LNG

Post by AzariLoveIran »

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Between 40 and 80 billion cubic meters of liquefied natural gas will be exported each year, starting from 2015


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A report this week by Eurasia Group, the New York-based political risk consultancy, said :

"Resource nationalism is the biggest political risk to U.S. LNG (exports), with many opponents to exports concerned about the impact on domestic natural gas prices."

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Interesting article



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Azrael
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Re: LNG

Post by Azrael »

One issue with LNG is that LNG tankers may be excellent terror targets.
cultivate a white rose
anderson
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Re: LNG

Post by anderson »

Azrael wrote:One issue with LNG is that LNG tankers may be excellent terror targets.
Well, for one, those are double-hulled ships - super study.
Second, in the cold liquid form, I don't think there would be an explosion risk. Liquids don't explode. Vapour-air mixtures explode in the presence of a spark, but not liquid. So if some terrorist were able to set off a bomb that would breach the container, it's not like the whole tank would instantly blow up as a giant bomb. Though the gas would pour out and boil pretty quickly, and that cloud of methane gas would then provide a risk of smaller explosions and probably a nasty fire on deck.

Anyway, ColSun/Typhoon has a few more letters after his name in physics than me; he might be able to expand further.
AzariLoveIran

Re: LNG

Post by AzariLoveIran »

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Enki
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Re: LNG

Post by Enki »

Only if we tax the hell out of it. It creates very few jobs. A bunch of temporary ones for the initial bit, but few lasting ones. A very small number of people will profit handsomely.
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
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anderson
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Re: LNG

Post by anderson »

Well...as the article touches on, you need to look beyond the immediate benefits of money made from selling the gas and the people that work directly in the industry and the businesses that support the local extraction operations. To really examine benefits, you need to look at the larger picture. Cheap, abundantly available natural gas means cheap, abundantly available energy. Lower home heating costs, lower costs to run gas fired boilers in industry, lower electricity costs for plants generating from gas. Which leads to lower costs for consumers and lower electrical and heating costs for businesses - leading to higher competitiveness. Lower feedstock costs for petrochemical industry, which touches on a lot of things.
When energy gets cheaper and more abundant, you see benefits across the economy; it's priced into everything.
"Taxing the hell out of it" basically kills all of this, and ends up reducing the benefits for everybody.
Last edited by anderson on Thu Jun 21, 2012 3:44 pm, edited 1 time in total.
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