For years we’ve had a Canadian LNG export project on our radar, bringing you news about the project, hoping that prodigious amounts of Marcellus/Utica gas would be used at the plant. The project is called the Goldboro LNG project, planned by Pieridae Energy for the coast of Nova Scotia. In July 2018 we told you Pieridae was getting close to a final investment decision (FID) to build the $10 billion project (see Canadian Goldboro LNG Inches Toward Final Investment Decision). The FID never happened, and now it will be delayed again, according to a statement released yesterday by Pieridae.
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Category: CNG/LNG
Investor Bails on Nova Scotia Bear Head LNG Export Project
LNG Limited (LNGL), based in Australia, has been working on a couple of North American LNG export projects over the past half-decade or more. One of them, called Bear Head, would be built in Nova Scotia, Canada and (potentially) export Marcellus/Utica molecules. The other, Magnolia LNG, would be located in Louisiana and yes, potentially export M-U molecules as well. LNGL was in the process of selling itself and its LNG projects to Singapore investor LNG9 PTE for $75 million. LNG9 has just canceled the deal, leaving the future both the Bear Head and Magnolia projects in question.
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China Resumes U.S. LNG Imports, NatGas Price Inches Higher
There’s at least a partial truce in the ongoing tariff war between the U.S. and China. President Trump began slapping tariffs on certain Chinese imports in retaliation for China’s longstanding policy of ripping off U.S. intellectual property, stealing our trade secrets, and in some cases blocking our goods and services from selling in their country. We’ve had a grossly unfair trade situation with China taking advantage of the U.S. for decades (under weak presidents). Trump had the you-know-whats to put a stop to it. The so-called trade war escalated and China slapped tariffs on certain commodities we used to sell there–including LNG (natural gas). We haven’t sold an LNG cargo to China in over a year. Until now. China is suddenly waiving their 25% tariff on U.S. LNG. Four U.S. LNG cargoes are steaming to the Orient right now.
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Analysts Say NatGas, LNG Demand for 2020 “Unpredictable”
Commenting on their latest short-term gas and LNG outlook report, energy consulting firm Wood Mackenzie says worldwide gas supplies have been impacted by the triple whammy of coronavirus, oil price crash and LNG oversupply. While WoodMac expects LNG demand to grow by a modest 6% this year, “the numbers will need constant revision as economies around the world feel the force of the growing pandemic.” WoodMac also says, “the narrative for the rest of 2020 could not be more unpredictable.” Meanwhile, according to NGI, global natgas prices are currently in a “freefall” hitting new lows in Asia and Europe.
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Shell Pulls Out of Lake Charles LNG Project, Energy Transfer Stays
Is this the beginning of a pullback from LNG project? Scared of the impacts of the coronavirus and the price of oil crashing, Royal Dutch Shell is pulling out of a 50/50 joint venture partnership with Energy Transfer (ET) to build a new LNG export facility in Lake Charles, Louisiana. In corporate speak, Shell says, “This decision is consistent with the initiatives we announced last week to preserve cash and reinforce the resilience of our business,” and “the time is not right for Shell to invest.” Translation: We’re scared. And who can blame them? All of a sudden there are LNG cargoes sailing the oceans with no place to unload (see LNG Cargoes All Dressed Up with Nowhere to Go).
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Dominion Energy Buys 50% Stake in Jacksonville LNG
Last May MDN told you about JAX LNG in Jacksonville, Florida–a joint project between Pivotal LNG (a subsidiary of Southern Company Gas) and NorthStar Midstream (a pipeline company in the Bakken Shale), touted as the “first” small-scale LNG plant to be located along the shoreline, allowing it to fuel up LNG ships–ships that use LNG as fuel, instead of diesel–and also allowing the LNG to be loaded onto trucks and trains for transportation to power plants and industrial/commercial operators (see First US “Small-Scale” LNG Facility Launches in Jacksonville, FL). Last week Dominion Energy bought Pivotal from Southern, and along with it Pivotal’s 50% stake in JAX LNG (and 100% ownership of another LNG facility in Alabama). Yes, there is potentially a tie-in with the Marcellus/Utica.
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Aborted Loan Threatens Gulf Coast, Nova Scotia Cracker Projects
LNG Limited, based in Australia, has been working on a couple of North American LNG export projects over the past half-decade or more. One of them, called Bear Head, would be built in Nova Scotia, Canada and (potentially) export Marcellus/Utica molecules. The other, Magnolia LNG, would be located in Louisiana and yes, potentially export M-U molecules as well. LNG Limited is in the process of selling itself and its LNG projects to Singapore investor LNG9 PTE for $75 million, a deal expected to close around the end of May. However, LNG Limited needs more cash to keep the doors open until then. First Wall Street Capital Corp. recently bailed on giving LNG Limited a bridge loan to get them through.
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LNG Cargoes All Dressed Up with Nowhere to Go
It seems no market has been left untouched by the COVID-19 coronavirus. Not even the LNG (liquefied natural gas) market. Force majeures–cancelations of LNG contracts due to circumstances “beyond our control”–are now an almost daily occurrence. Big tankers full of LNG often leave a port without a final destination, receiving instructions along the way on where the ship will unload the LNG. A cascading number of force majeures has some of those ships sailing around, “all dressed up but nowhere to go.”
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New Fortress Convinces Jamaica to Use CNG for Bus Fleet
We continue to be impressed with New Fortress Energy and its aim to own as much of the LNG supply chain as possible. The company is building an LNG (liquefied natural gas) liquefaction plant in northeast Pennsylvania (see Work Continues to Clear Site for NEPA Landlocked LNG Export Plant). They plan to truck and use rail cars to get the Marcellus LNG to a new dock facility they plan to build on the New Jersey shoreline of the Delaware River (see DRBC Reconsiders New Fortress LNG/NGL Shipping Dock on Dela. River).
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Jones Act Discussed on ‘Shale Gas News’ Radio Program
Shale Gas News is a weekly radio program that plays on three radio stations in Pennsylvania. Last weekend’s show featured a segment with Colin Grabow, a policy analyst at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies. Grabow’s research focuses on domestic forms of trade protectionism such as the Jones Act and the U.S. sugar program. Yes, the Jones Act again! During the segment, Grabow describes what the Jones Act is and how it negatively affects U.S. shale gas exports to places like New England and Puerto Rico (see Puerto Rico Imports Russian LNG Thanks to U.S. Jones Act).
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First 5 Elba Island LNG Mini-Plants Now Online Exporting Marc Gas
Last December the very first load of Marcellus molecules liquefied at the Elba Island, Georgia LNG export facility was loaded onto a ship and headed to Pakistan (see Elba Island Finally Exported First Marcellus LNG Cargo on Friday). Elba Island is a series of 10 small liquefaction units, and December’s cargo was from one (maybe two) of those units. Since that time the first four of Elba’s “mini-trains” have come online (see KM’s Elba Island LNG Makes Rapid Progress, Units 1-4 Now Online). You can now add a fifth train to that number.
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DRBC Reopens Public Comment, New Hearing for LNG Export Dock
Last June the DRBC (Delaware River Basin Commission) approved a request by New Fortress Energy to build a $96 million 1,600-foot-long pier/dock on the Delaware River, to be used for docking and loading two ships at a time with LNG (see DRBC Approves New Fortress LNG/NGL Shipping Dock on Dela. River). After being hounded by THE Delaware Riverkeeper and the Sierra Club for months over that approval, DRBC voted in September to “reconsider” its earlier decision (see DRBC Reconsiders New Fortress LNG/NGL Shipping Dock on Dela. River). The DRBC has just announced it will hold a “trial-like” hearing on the project with both sides, New Fortress and Riverkeeper (and no one else) offering testimony.
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Banpu Ponders Entering U.S. LNG Export Market
Banpu, Thailand’s largest coal mining company, loves American shale gas. Over the past several years Banpu has invested ~$500 million in the PA Marcellus, going as far as building a new regional office in northeastern PA (see Banpu Opens New $5M Marcellus Operations Office in NEPA). Recently the company announced a deal to buy Devon Energy’s Barnett Shale assets in Texas (see Banpu Invests Another $770M in Shale – but Not in PA Marcellus). It seems Banpu is not yet done with American shale energy.
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Despite Coronavirus Fear, U.S. LNG Exports Continue at Brisk Pace
We can’t tell you how many stories and headlines we’ve seen over the past few weeks that proclaim the coronavirus is killing the oil and natural gas markets (not to mention the stock market). The theory goes that China is scaling back the production of consumer crap that Americans buy because Chinese workers are dropping like flies. Less production equals less need to import oil and gas, resulting in, what? A worldwide economic recession? Depression? End of Days? Run for the hills! U.S. LNG exports are frequently mentioned as being negatively impacted by the coronavirus. Except…they aren’t. Here’s a contrarian view.
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US Produces Too Much LNG Right Now, but Shortage Coming in 5 Yrs
LNG (liquefied natural gas) is one of two primary new “demand centers” for the natural gas produced in the Marcellus/Utica. The other demand center is gas-fired electric power plants. Last week S&P Global held its 19th annual S&P Global Platts LNG Conference in Houston. The message was loud and clear: U.S. LNG producers are being told to either shut in some of their production (for now), or find new markets (beyond Asia and Europe). Otherwise, prices for LNG will continue to crash worldwide and new plants may not get built.
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Shell Annual Outlook Says LNG Demand to Double by 2040
Royal Dutch Shell, one of the world’s supermajors (oil and gas driller), is, in fact, one of (perhaps THE) largest producer of LNG, or liquefied natural gas, in the world. The company has just released its fourth annual LNG Outlook 2020 (full copy below) which highlights key trends in 2019 and hauls out the crystal ball to predict where things are heading over the next 20 years. Shell says global demand for LNG is expected to double to 700 million tonnes by 2040. Why? Because natgas emits less carbon dioxide into the atmosphere than other alternatives.
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