CNG/LNG

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    Corporate Raider Carl Icahn Makes Cheniere, like Chesapeake, Worse

    It befuddles us why anyone thinks Carl Icahn is such a genius. He invests just enough money in a company to get his own people elected to the board of directors, and then the board fires the CEO and fires thousands of people working at the company in hopes of boosting the stock price by making the company appear to be profitable on paper so Icahn can turn around and sell his stake in the company at a profit. We call it disgusting and immoral. Wall Street investors call it just another day at the office (never looking the people in the eye they’re responsible for screwing out of a job). But with Icahn and his investments, they often don’t go as planned. Instead of the stock price going up after he fires the CEO and a bunch of people–the stock price goes down instead. Icahn makes companies worse than before he started his meddling. It happened with Chesapeake–now a whisker away from bankruptcy. Now it’s happening with Cheniere Energy, the LNG export company located along the Gulf Coast…
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    Revenge: Fired Cheniere CEO Starts Competing LNG Company

    Martin_Houston_left_Charif_Souki_right_2016
    Martin Houston (left) and Charif Souki

    Several days ago Charif Souki, co-founder and former CEO of Cheniere Energy (forced out by Carl Icahn) announced he had resigned from the board of Cheniere. We now know why. Souki has formed a new LNG export company with former COO and executive director of BG Group, Martin Houston. Just like Aubrey McClendon started a new company to compete with Chesapeake (American Energy) after being forced out of Chesapeake Energy by Icahn, so too Souki has now formed a new company to compete with his old company. The new company is called Tellurian Investments and its mission is to offer “mid-scale natural gas liquefaction and export projects along the United States Gulf Coast.” No doubt those Gulf Coast export facilities will use at least some Marcellus/Utica shale gas to feed them. Here’s the details on Souki’s new “in your eye Carl Icahn” venture…
    Read More “Revenge: Fired Cheniere CEO Starts Competing LNG Company”

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    Radical Enviro Groups Continue Lawsuit Against Cove Point LNG

    Big Green groups, including the nutty Sierra Club and left-leaning Chesapeake Climate Action Network and the odious Earthjustice continue to pump money and lawyers and time into an effort to stop progress on Dominion’s construction of an LNG (liquefied natural gas) export facility in Cove Point, Maryland. Last June Earthjustice and its co-conspirators filed a lawsuit against the Federal Energy Regulatory Commission claiming that FERC was wrong to issue a permit for the facility (see Earthjustice Asks Court to Stop Construction at Cove Point LNG). The lawsuit has progressed to the point that oral arguments will be made on April 19 before the Court of Appeals. An update on the shenanigans from fossil fuel haters ahead of this important court date…
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    Shell & BG One Company After Today, Shell Ponies Up $14.4B Cash

    The last major hurdle has been scaled in the Shell buyout of BG–the largest such oil and gas deal since Exxon bought Mobil in 1999. Yesterday the High Court of Justice in England and Wales approved the merger. Previously Shell stockholders approved the $69.7 billion deal (see Shell Shareholders Vote in Favor of BG Buyout/Merger). Not long after BG stockholders approved it too (see It’s a Deal – BG Shareholders Approve Shell Buyout). Shell canceled a loan it previously arranged, for $14.4 billion to help with the purchase. Instead, the company will use its own hefty piles of cash for the buyout. The unfortunate news is that Shell intends to layoff 10,000 people after the merger is complete–to save money…
    Read More “Shell & BG One Company After Today, Shell Ponies Up $14.4B Cash”

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    Love’s Travel Stops Buys Trillium CNG, Expands CNG Network

    Loves, the big truck stop chain, has just purchased Trillium CNG. The purchase will add 37 public-access CNG locations to the Love’s network, bringing the number of Love’s-operated public CNG facilities to 65. Why is that an MDN story? For a few reasons. It shows the growth and importance of CNG (compressed natural gas) as a use in passenger vehicles and long-haul trucking. As demand grows for CNG, prices paid for natural gas will grow too. It’s an important developing market for natural gas. Also, there’s a Love’s and a Trillium CNG about three miles from where MDN editor Jim Willis lives. So this is a “local” story of interest for him! Here’s the good news of Love’s being in love with Trillium (along with a cool map)…
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    Goldboro LNG Project Gets Final DOE Approval – Good for Marcellus

    The U.S. Dept. of Energy (DOE) has been pedal to the medal lately with approvals for LNG exports. Yesterday we told you that the Bear Head LNG project in Nova Scotia, Canada received DOE approval to export U.S. natural gas from their facility to non-U.S. free trade agreement counties (see Bear Head LNG Exports Get Final DOE Approval – Good for Marcellus). Today we bring you the news that another Nova Scotia LNG project, Goldboro LNG, has also received approval from the DOE to export natgas to non-free trade agreement counties. Like Bear Head LNG, Goldboro LNG is now fully permitted and permissioned by the U.S. and Canada. Also like Bear Head, the Goldboro project will depend on natural gas coming from the Marcellus/Utica, and that won’t happen until the Maritimes & Northeast pipeline reverses its flow, and until either Kinder Morgan or Spectra Energy (or both) build pipelines that connect to it. There’s a lot of ifs/ands/buts that still remain–but sign-off by the DOE is a necessary and positive sign…
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    Bear Head LNG Exports Get Final DOE Approval – Good for Marcellus

    A Canadian liquefied natural gas (LNG) export facility planned for Nova Scotia received final authorization from the U.S. Dept. of Energy (DOE) to export LNG to countries that do not have free trade agreements with the United States. Bear Head LNG, a $2.2 billion project proposed by Australian company Liquefied Natural Gas Limited (LNGL) received Canadian approval a year ago (see Canada’s 1st LNG Export Facility Gets Green Light; Marcellus Gas?). The project then received DOE approval to export to free trade agreement countries in July of 2015 (see 2nd Canadian LNG Plant Gets U.S. Approval to Export Marcellus Gas). Now the project is approved for non-free trade agreement countries. However, as we said in July, there are still important hurdles to jump before the project gets built: (1) the Maritimes & Northeast pipeline has to get FERC permission to reverse its flow, which will send Marcellus and Utica gas northward; (2) the gas has to get to the Maritimes & Northeast pipeline in the first place via new pipelines from either Kinder Morgan or Spectra Energy (currently a battle royale); and (3) the price of oil has to rise to make the whole thing economical, since LNG is so closely tied to the price of oil. We don’t see that happening until later this year, at the earliest. Here’s the exciting announcement that regulation-wise the project is cleared for take-off…
    Read More “Bear Head LNG Exports Get Final DOE Approval – Good for Marcellus”

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    CNG for 34 Cents/Gal Equivalent! Fill ‘Er Up for Price of a Coke

    This story will appear to be inaccurate, or a “too good to be true” story. We assure you it is not. In December Congress passed a new law granting a retroactive (for 2015) tax cut on alternative fuels, and proactive tax cut for 2016. It amounts to a 50 cent savings per gallon equivalent for things like compressed natural gas (CNG). Following the tax cut, 7-Eleven Stores in Oklahoma at their locations with CNG pumps, reduced the price of their CNG to 39 cents per equivalent gallon of gasoline. If you use the 7-Eleven debit card, you can get it for 34 cents per equivalent gallon. No lie: you can fill up your CNG car up at 7-Eleven for little more than the price of a 20-ounce bottle of Coca Cola! Now THAT’s incredible…
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    It’s a Deal – BG Shareholders Approve Shell Buyout

    In the end, it wasn’t even close. Some 99.5% of BG Group’s shareholders voted to approve the sale/merger of the company with Shell at a meeting yesterday. Earlier this week 83% of Shell’s shareholders voted to approve the merger (see Shell Shareholders Vote in Favor of BG Buyout/Merger). As we’ve said from the beginning, this is an LNG love story–Shell wanted BG for its natural gas market share. The Shell/BG merger will create the world’s dominant LNG company, by far. The buyout/merger is, for Shell, it’s largest-ever acquisition. Just how big is this deal? The Shell/BG merger is the largest oil and gas deal since Exxon bought Mobil in 1999. The merger will be consummated on February 15. As we’ve previously noted, Shell plans to lay off 10,000 people across both companies once the merger is complete. Happy Valentine’s Day…
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    Cheniere’s Sabine Pass LNG Export Plant Delayed

    Corporate raider Carl Ichan isn’t have a good week. His tinkering at Chesapeake Energy hasn’t turned out so well. The company’s stock is hitting new lows. Yesterday Chesapeake’s stock closed at $3.27 per share, down from the mid-$20s just a year ago. Ichan, you may recall, fired Chespeake’s co-founder, Aubrey McClendon–so he has no one to blame but himself. Icahn recently did the same thing at Cheniere Energy–a company building an LNG export facility in Louisiana. Ichan fired Cheniere CEO Charif Souki in December (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). Since then, things have gone downhill at Cheniere. The first shipment of LNG from the facility was supposed to happen this month, January 2016. The latest statement from Cheniere says it will be more like late February or even March before the first LNG shipment sets sail. Completing expanded capacity (extra “trains”) at the Louisiana facility is also behind schedule…
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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…
    Read More “Cheniere Energy Hires 13 Banks to Refinance Debt for LNG 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…
    Read More “LNG May Not be a Panacea for Marcellus/Utica NatGas Producers”

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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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