CNG/LNG

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    Cheniere Energy Hires 13 Banks to Refinance Debt for LNG Facility

    Cheniere Energy’s Sabine Pass Liquefaction Project (LNG export plant) in remote Louisiana is currently liquefying natural gas and loading it on a ship for export. The first tanker was supposed to set sail in January, but now appears delayed due to some technical issues. We’ve followed the Cheniere LNG export story for some time because there is a Marcellus/Utica connection (see How a Louisiana LNG Export Facility is Connected to the Marcellus/Utica). In December, corporate raider Carl Icahn, who has his hooks in Cheniere, ousted the company’s co-founder and CEO, Charif Souki (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). Since the Cheniere LNG plant in Sabine Pass is tied to our region, we’re interested in what happens to the company. Which is why we were interested when we noticed Cheniere has hired 13 banks to help refinance $2.8 billion worth of debt, all of it directly or indirectly tied to the Sabine Pass facility…
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    LNG May Not be a Panacea for Marcellus/Utica NatGas Producers

    Last November MDN editor Jim Willis attended a Genscape/Bloomberg joint event in New York City (at Bloomberg’s offices) called “Gas and Power Winter Outlook 2015.” It was part advertisement for the Bloomberg terminal and the many fantastic resources available on their terminal, part advertisement for Genscape and the truly unique and innovative services they provide, along with a healthy sprinkling of predictions about where the natural gas market will head over the winter months. Jim enjoyed it a great deal because it provided perspective on the larger worldwide market and how it drives our markets here at home. One very interesting thing Jim learned was this: Asian countries in general, and Japan in particular, are reducing their need for LNG (liquefied natural gas) because, in the case of Japan, the country is starting up its nuclear energy program again, and because solar energy is coming online and providing a greater share of the country’s electric needs. With more nuclear and solar, Japan needs less LNG. Here in the U.S., particularly in the Marcellus/Utica region, we have pegged a lot of our hopes on a robust export market for our natural gas. But what if that market is disappearing right before our eyes? That’s kind of the upshot of a new report just released by economists at global consulting firm The Brattle Group. The report, called “LNG and Renewable Power: Risk and Opportunity in a Changing World” (full copy below), takes a close look at the competition playing out between renewable energy like solar and wind and natural gas-fired electric from LNG…
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    CLNG Merges with NGSA, Gets New Director from Former ANGA

    The downturn in oil and gas prices doesn’t only affect drillers, and midstreamers, and landowners, and supply chain companies. It also affects trade associations. Last November we told you that America’s Natural Gas Alliance (ANGA) merged with/became part of the American Petroleum Institute (see Two Top O&G Trade Groups to Merge: ANGA & API). Another two trade groups announced a merger yesterday. The Center for LNG (CLNG) announced it is merging with the Natural Gas Supply Association (NGSA). CLNG will retain its identity and become a division of NGSA. In addition, CLNG has a new executive director–Charlie Riedl. Charlie joins CLNG from ANGA. Here’s the low down on two more trade groups combining…
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    The Smartest Man in the Oil (& Gas) Patch: Rusty Braziel

    In 2015 MDN editor Jim Willis had the pleasure of sitting in on a one-day “State of the Energy Markets” presentation by RBN Energy, held in New York City. RBN, for those who don’t know, was founded by the former co-founder of Bentek Energy, Rusty Braziel. Rusty is a legend in the industry. He was there presenting, along with a few other seasoned pros that work for him at RBN. Great session. Jim learned a lot about the energy markets and how they work. And why they work the way they do. Rusty was a guest on Jim Cramer’s Mad Money program (on CNBC) last Friday. We have the video below. Jimmy Cramer calls Rusty “the smartest man on the oil patch” and the only person he consults with when it comes to the price of oil and gas and what’s happening. It’s high praise coming from Cramer. And well deserved. If you want to know why the price of oil (and gas) is doing what it’s doing, give this a watch and read…
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    New LNG Facility Green Lighted in Canada, Would Use Marcellus Gas

    Another LNG export facility along the East Coast of Canada has just received a green light from the Canadian National Energy Board (NEB). To be honest, this one was not previously on our radar. The facility would be built and owned by Hiranandani Group of Mumbai, India. They’re using a subsidiary company called Atlantic Coast (or AC) LNG Inc. The plan is to build the facility in Nova Scotia and (mostly) use Marcellus/Utica gas imported from the United States via the Maritimes & Northeast Pipeline (M&NE). Currently the M&NE flows from north to south, from Canada to the U.S. There is serious talk of reversing the flow. In fact, at some points for brief periods the flow already gets reversed, during peak demand periods in Canada. The NEB has granted AC LNG a permit to import up to 2.3 billion cubic feet per day (Bcf/d) of U.S. natural gas. The permit also grants them the right to export up to 2 Bcf/d from the terminal, if built. Some of the particulars…
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    Repsol Not Happy with Spectra’s Atlantic Bridge, Pipeline Reversal

    A number of Canadian LNG export facilities being planned for eastern Canada are dependent on obtaining cheap, abundant Marcellus and Utica Shale gas from the U.S. Today we highlight news of a new (to us) entrant into the LNG race, AC LNG (see our companion story). How will Marcellus and Utica Shale gas get to the northern reaches of Canada? Via the Maritimes & Northeast Pipeline LLP (M&NE), a pipeline that stretches from the Boston area all the way to the northern reaches of Nova Scotia. Historically the M&NE pipeline has brought natural gas south, from Canada to the U.S. One of the sources of the gas traveling south on the M&NE is the Canaport LNG facility in New Brunswick–which imports LNG and regassifies it and sends it out over the M&NE. Repsol, a huge Spanish oil company, is the owner of the Canaport facility. So it’s no surprise that Repsol is sounding the alarm and asking the question: What happens to the gas we send south if M&NE reverses its flow and begins sending gas north?…
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    DOE Study: More LNG Exports Don’t Mean Higher Prices at Home

    What would happen if the U.S. increased LNG (liquefied natural gas) exports from 12 billion cubic feet per day (Bcf/d) to 20 Bcf/d? A new report just published by the Dept. of Energy and researched by Rice University and Oxford Economics, titled “The Macroeconomic Impact of Increasing U.S. LNG Exports” (full copy below) finds that although prices for U.S. consumers may go up a little, what would happen is that the production pie would grow and most of the delta (the difference between 12 and 20 Bcf/d) would come from new production. In other words, it’s a win/win. More jobs, more money flowing into the U.S., while at the same time very little rise in gas prices here at home–even if we ratchet up exports significantly…
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    Platts Says LNG Heading to Japan & Korea Fetching $7.40/Mcf

    Platts Japan/Korea Marker (JKM) LNG service issued an update yesterday that caught our eye. The JKM service says that LNG (liquefied natural gas) for delivery to northeast Asia (Japan and Korea) will average $7.397 per million British thermal units (MMBtu) for January delivery. Converted, that’s $7.40/Mcf (thousand cubic feet). That number is down 26.5% year-over-year. But hey, if our drillers were getting $7.40/Mcf for their gas? We’d be singing, “We’re in the money…” The problem is, of course, we don’t (yet) export our natural gas via LNG to any other countries. That’s about to change in January when Cheniere Energy’s Sabine Pass LNG facility begins shipping (see Genscape: Sabine Pass LNG Export Began Accepting Natgas on Dec 10). It’s not likely any gas will head to Asia from our shores until the Cove Point LNG export facility in Maryland is completed in the next few years. Until then, we can only watch and hope that some day our gas will be sold for $7+ per Mcf…
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    Genscape: Sabine Pass LNG Export Began Accepting Natgas on Dec 10

    Cheniere Energy’s Sabine Pass LNG (liquefied natural gas) export facility in Louisiana is in the process of ramping up for it’s very first shipment of U.S.-produced LNG that will head to a foreign destination. In fact, this will be the very first exported shipment of LNG from the Lower 48 states–ever. Cheniere itself is tight-lipped about the exact date it fires up the plant and begins liquefaction, the process of supercooling natural gas into liquefied natural gas. So how do we know the plant has been activated? Through the ingenious work and service from a company called Genscape. MDN editor Jim Willis sat in on a Genscape presentation at Bloomberg’s offices in New York City in early November. They have a really cool service. Using special cameras mounted on nearby properties, Genscape can tell if natural gas is flowing through a pipeline, or if a plant’s compressors are fired up and working, or even monitor truck and rail shipments into and out of facilities like Sabine Pass. Using their proprietary technology, Genscape says “the first substantial deliveries (46 million cubic feet) of natural gas flowed into the Sabine Pass facility on Dec. 10. Why does MDN care? Because some of that gas either already does, or soon will, come from the Marcellus/Utica…
    Read More “Genscape: Sabine Pass LNG Export Began Accepting Natgas on Dec 10”

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    Evil Corporate Raider Carl Icahn Claims Another CEO Scalp

    In what has become an all-too-familiar pattern, evil corporate raider Carl Icahn has struck again, claiming another CEO scalp. Like he did with Chesapeake Energy, Icahn increased his stake in another oil and gas company, Cheniere Energy, about to export the very first shipment of exported LNG from the Lower 48 states. After Icahn grabbed a big share of Cheniere (13.8%), he forced out the company’s co-founder and CEO, Charif Souki. It’s disgusting, it’s immoral, it’s unethical–but unfortunately, it’s legal and even vaunted by investors who worship at the alter of the Almighty Buck. Like the case of Aubrey McClendon being forced out of the company he founded, Chesapeake Energy, Souki was a maverick, and he erred by taking too much OPM–other people’s money. The firing of Charif Souki certainly takes the luster and excitement off the company’s pending first export shipment of LNG. If Cheniere goes bankrupt (not beyond the realm of possibility as Souki is credited with keeping the company afloat), it will be because of Icahn’s action. Investors can thank old Carl. What’s happening, of course, is that Icahn wants to put some new financial paint on the company so he can flip it in a year or two, adding more billions to his existing billions. Jerk. The company has appointed an interim CEO (board member Neal Shear) while they look for a new hatchet man like Ichan did at Chesapeake with Doug Lawler. Let the firings begin!…
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    A “Virtual Pipeline” for NatGas Goes Live in Upstate New York

    virtual pipelineWe’ve written about the concept of a “virtual pipeline” a couple of times before, in October (see NY Paper Plant Opts for “Virtual” NatGas Pipeline Over Real One and Florida Co. Building Big CNG “Mother Station” in Marcellus Region). The simplified version is this: Instead of laying a pipeline in the ground, which is more or less permanent, use trucks and even trains to transport compressed natural gas (CNG) to a central facility and from that facility distribute the gas–either by local pipelines or by trucks. Sort of a hub and spoke system applied to moving natural gas. We find it intriguing. For the second time in the past few months such a system is being created in New York State. But this time it’s being created by a large/major utility–New York State Electric & Gas (NYSEG). NYSEG is allowing new customers to sign up for natural gas in the Mechanicville (Saratoga County), NY area with the addition of a new “virtual pipeline” of CNG trucks that deliver CNG to a centralized facility in town. Here’s how that gas will help Mechanicville economically expand and provide new jobs…
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    North America’s Largest Private CNG Facility Opens in Detroit

    TruStar Energy, one of the biggest Compressed Natural Gas (CNG) fueling station operators, over the weekend announced it has completed construction of the largest private CNG fueling station in North America. The facility was built in Detroit for FCA US and will fuel 179 FCA tractor trucks that haul parts and materials to plants located in Michigan, Ohio and Ontario, Canada. The press release does not say where the natural gas comes from that gets compressed and used, but we have to believe at least some of that gas is coming from the Utica/Marcellus, which makes this a story of interest for MDN…
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    How a Louisiana LNG Export Facility is Connected to the Marcellus/Utica

    An article about Cheniere Energy’s Sabine Pass Liquefaction Project (LNG export plant) in remote Louisiana caught our attention for a couple of reasons. First, the plant will make its first shipment of LNG in January. Some of the natural gas the hungry Sabine Pass facility will use will (eventually) come from the Marcellus/Utica, via pipeline. That makes the Sabine Pass plant story an important story for our region. Second, the plant is a picture of/preview for what is coming to other regions where such facilities are built–like Cove Point, Maryland where Dominion is currently building (about half done) the Cove Point LNG export facility. Sabine Pass is a massive economic and job creation engine for Louisiana’s south coast. So too will Cove Point be for Maryland in the Chesapeake Bay area…
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    Antis Try Last Desperate Ploy to Stop Cove Point LNG in Court

    Dominion is working fast and furiously on constructing the Cove Point LNG export facility in Maryland. In fact, it’s now half done (see Dominion 3Q15: Progress on Atlantic Coast Pipeline, Cove Point LNG). Even though the Federal Energy Regulatory Commission (FERC) gave its blessing on the project, and even though Dominion suffered through something like 70+ federal, state and local permits to begin building, irrational anti-fossil fuel haters are still opposing the project. We told you how some of the most extreme among them endangered fans at an NFL game recently (see Cove Point Protesters Disrupt Monday Night Football Game on TV). Now comes word that several groups of nutters, including Waterkeepers Chesapeake, Potomac Riverkeeper, Lower Susquehanna Riverkeeper and others have filed a “friend of the court” brief in a lawsuit that is trying to get the project stopped cold in its tracks…
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    The Incredibly (Stupid) Hulk Praises Cuomo for Port Ambrose Veto

    Last Friday MDN told you that New York Gov. Andrew Cuomo had once again bowed to political pressure from his lunatic left and vetoed a proposed off-shore LNG import facility called Port Ambrose (see NY Gov. Cuomo Vetoes Port Ambrose LNG Import Terminal). Not having much to do between Avengers movies, Mark Ruffalo (who plays Bruce Banner/Incredible Hulk) occupies his time by making the rounds at small anti-fracking protest rallies where adoring fans as vapid as he is engage in sickening hero worship–believing a professional liar (i.e. actor) actually knows something about fracking and should be believed. Hearing of Cuomo’s veto of the Port Ambrose project–a project that would have imported non-fracked gas from Trinidad, potentially displacing fracked Marcellus gas–Ruffalo issued the following statement from his Americans Against Fracking organization praising Cuomo…
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    NY Gov. Cuomo Vetoes Port Ambrose LNG Import Terminal

    vetoA rather abrupt end for an issue that was just getting started. Liberty Natural Gas filed a plan back in 2010, prior to the Marcellus Shale revolution, to construct an off-shore LNG import (not export) facility off the coast of New York and New Jersey–in the ocean. A floating LNG facility called the Port Ambrose project. A pipeline would run from the off-shore terminal to Jones Beach, NY and from there would connect to a Transco pipeline lateral. The U.S. Coast Guard recently gave their blessing to the project (see Coast Guard Approves Port Ambrose LNG Import Terminal Near NYC/NJ). Liberty has tried to sell the project to New York and New Jersey anti-drilling nutters by saying the gas would come from Trinidad and wouldn’t be that nasty, fracked gas loaded with radon (see Liberty Says “Non-Fracked” Trinidad Gas Better than Marcellus Gas). Needless to say that was a whopping error on Liberty’s part–to smear the entire drilling industry in a vain attempt to garner favor with Kool Aid drinking global warmers, just to make a buck. Liberty’s “it’s not fracked gas” rationale didn’t stop the antis–they were just beginning to organize with protests and rallies–their version of a tailgate party at an NFL game. And now New York Gov. Cuomo has gone and ruined it for them. Cuomo, with the stroke of a pen, has vetoed the project. It’s dead. Done. Finished. Won’t happen…
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