Small-Scale LNG Plants an Important Market for M-U NatGas
Last week MDN told you about a small (tiny) LNG export facility in Port St. Joe, Florida (see Small Florida LNG Export Facility NOT Subject to FERC Regulation). Typically when we talk about LNG and exports, we’re talking about huge facilities located along a coastline, with mega tankers pulling up to load liquefied natural gas. Not so with Port St. Joe and with many other small LNG facilities. In fact, not all LNG facilities are aimed at exporting (most small facilities are not). But added together, a large number of small LNG facilities is a great market for Marcellus/Utica natural gas.
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A story out of Port St. Joe, Florida, involving LNG, caught our attention for a couple of reasons. Nopetro LNG plans to construct and operate as many as three liquefaction trains that will liquefy up to 3.86 billion cubic feet per year of natural gas for export and delivery to markets in the Caribbean, Central America, and South America. That’s 3.86 Bcf for an entire year, not per day. Modern facilities that export LNG from the Gulf Coast, like Sabine Pass, export close to 4 Bcf per day. The facility proposed by Nopetro is minuscule in comparison. It will receive natural gas from St. Joe Natural Gas Company Inc. Nopetro recently asked the Federal Energy Regulatory Commission (FERC) to declare that it (FERC) does not have jurisdiction and regulation over such a tiny facility. FERC agreed!
Europe wants to buy more American natural gas in response to the Russian invasion of Ukraine. What does it mean for Pennsylvania? The Philadelphia Inquirer tackled that question in an article on Saturday. The answer to the question of what Europe’s desire for more U.S. natgas means for PA (and by extension West Virginia and Ohio) is, “not much.” Why? Because we don’t have enough pipelines built to carry our molecules to the Gulf Coast which is where most of the LNG export plants are either already pumping out LNG, or in the process of getting built to do so. Lack of pipelines constrains our gas and holds our region back. Lack of pipelines is a big problem for both the M-U and (now) for Europe.
Every now and again we find it helpful to raise our heads, take a step back, and look at the big energy picture. We in the Marcellus/Utica don’t live in a bubble, although sometimes it seems that way. What happens in other countries does, to some extent, have the ability to influence what happens in energy markets here in the northeast. The question is how much of an influence do world energy markets have on us? We spotted an article appearing in Abu Dhabi that got us thinking. We found the ideas in the article interesting. The thesis is that the world is currently in the beginning of a worldwide global natural gas crisis–and that the crisis is going to get “much worse” before it gets better. If that’s true, it has implications for us here in the M-U.
Two weeks ago MDN brought you the news that New Fortress Energy (NFE) has withdrawn a request to extend a previously-issued permit required to build an onshore LNG liquefaction plant in Wyalusing, PA (see 
According to Reuters, at least a dozen U.S. shale gas executives met yesterday in Houston, TX, with European energy officials to discuss expanding U.S. fuel supplies to Europe. Among those in the meeting were “top executives” from Chesapeake Energy, Coterra Energy (formerly Cabot Oil & Gas), and EQT Corp., the largest natural gas producer in the U.S. Individual meetings are planned between the execs and representatives from Latvia, Estonia, and Slovakia. It seems that Europe has finally opened its eyes (and its mind) to the benefits of American natural gas.
We spotted two different articles published over the past couple of days about the recently nixed Marcellus LNG export plant that was planned for Wyalusing (Bradford County), PA (see 
There’s a lot of finger-pointing going on about why a project to build a tiny $60 million LNG plant in South Philadelphia has come off the rails (i.e. dead). The developer for the project, Liberty Energy Trust, says Philadelphia Gas Works (PGW), the owner of the site, dithered around and took too much time to settle on a plan and now the “opportunity has passed” to build the project. Liberty has moved on to bigger and better things. PGW says developer Liberty Energy Trust tried to make “unacceptable changes” to the terms of the deal to develop the site and blames the company for not sealing the deal. Neither side has declared the project 100% dead, but it sure looks that way to us.
We keep hearing how the Bidenistas have softened their hardcore opposition to natural gas (and all fossil energy) given the war in Ukraine. We hear words mouthed by the administration, and Biden himself, that seems to indicate maybe, just maybe, the administration will stop its targeting of natural gas–at least for a while. And yet the actual actions we see coming from the administration, like the actions of the Bidenistas at the Federal Energy Regulatory Commission (FERC), say otherwise. Example: Biden’s FERC recently released a draft environmental impact statement (EIS) for the Commonwealth LNG export facility located in Louisiana (full copy below). The draft EIS says the facility will have “significant impacts” on so-called “environmental justice communities.” That’s a loud and clear signal that this much-needed LNG project will have trouble getting approved by the hardcore leftists at Biden’s FERC.
Two weeks ago MDN brought you the news that New Fortress Energy has withdrawn a request to extend a previously-issued permit required to build an onshore LNG liquefaction plant in Wyalusing (Bradford County), PA (see 
In what appears to be an adoption of talking points from left-wing Democrats like Sen. Elizabeth “Pocahontas” Warren, the normally-balanced Wall Street Journal is blaming LNG exports for higher natural gas prices here at home. The article attempts to make the case that a gradually increasing amount of LNG exports has led to high electric prices in the U.S. The article is flawed in many ways.
Since Russia illegally and immorally invaded Ukraine on February 24, the stock price for Marcellus/Utica natural gas drillers has skyrocketed based on the fear that Russia will cut off natural gas to Europe in response to their response to the war (sanctions on Russia). The Russia/Ukraine war has stoked concerns that Europe will need much more natgas from the U.S. and therefore the U.S. will have to drill and pump more gas to supply it, making gas drillers an attractive investment.
Pipeline giant Energy Transfer (builder of the Rover and Mariner East pipelines here in the M-U) is planning a large-scale LNG export facility in Lake Charles, Louisiana located on the Calcasieu ship channel. The project will convert Energy Transfer’s existing Lake Charles LNG import and regasification terminal to become an LNG export facility. Yesterday ET announced it has signed a pair of 20-year deals with ENN, a Chinese company, to deliver a total of 2.7 million tonnes (mt) per year to the ChiComms (Chinese Communists).