East Coast Dominates LPG Exports via Philly’s Marcus Hook

According to RBN Energy, “U.S. production of natural gas liquids is projected to increase by 17% this year, and by another 10% in 2020.” NGLs cover a variety of hydrocarbons. Two NGLs, propane and butane, are further classified as LPG–or liquefied petroleum gas. Of the four “smaller” LPG export facilities here in the U.S., two-thirds of all exported LPGs last year came from one–Energy Transfer’s Marcus Hook refinery near Philadelphia.
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Bradford County Conducts Housing Survey to Prepare for LNG Plant

We’ve been tracking a story since November about a new, smallish (but very important) LNG export plant coming to Bradford County, PA, to Wyalusing (see Big News! Marcellus LNG Export Plant Coming to Landlocked NEPA). In order to build the $800 million facility, a LOT of workers, and housing, will be needed.
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US & Canada Become LNG Export “Powerhouse” – List of Projects

LNG (liquefied natural gas) is increasingly a critical part of the natural gas picture here in the U.S.–and in the Marcellus/Utica–as in exports of LNG. This year Dominion Energy’s Cove Point LNG export terminal in Maryland came online, and early next year Kinder Morgan’s Elba Island LNG export facility along the coast of Georgia is due to go online. Not only that, we now see a trend of setting up smaller LNG facilities inland, not situated along the coast, in places like northeastern Pennsylvania (see Big News! Marcellus LNG Export Plant Coming to Landlocked NEPA). But LNG export facilities don’t have to be located along the East Coast. Some of our Marcellus/Utica molecules are getting exported from places like Cheniere’s Sabine Pass facility in Louisiana. We spotted an excellent article that summarizes which LNG export operations in both the U.S. and in Canada are likely to go online by 2020, and which are still years away from getting built.
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Elba Island LNG Won’t be Fully Online Until “End of 2019”

Elba Island LNG

Elba Island LNG, situated along the Georgia coastline near Savannah, was originally due to begin operations now, in the fourth quarter of 2018 (see Elba Island, Ga. LNG Export Startup Delayed to 4Q18). But in October Kinder Morgan, the builder and owner of the project, delayed the startup until first quarter of next year (see Elba Island, Ga. LNG Export Startup Delayed (Again) – Now 1Q19). Elba Island will be the second LNG export facility along the East Coast, after Cove Point in Maryland. As we previously noted, Elba is quite a bit smaller than Cove Point. Whereas Cove Point, which has been up and running since March, can take in and liquefy up to 3.5 billion cubic feet per day (Bcf/d) of natural gas, Elba Island will be able to liquefy up to 350 million cubic feet per day (MMcf/d)–just 10% of Cove Point’s capacity. In a post on the U.S. Energy Information Administration website yesterday, we learned that Elba will *begin* operation in early 2019, but it won’t be *fully* up to speed until the end of 2019.
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Philly OKs $60M Plan to Partner with Russian re LNG Export Plant

Russian native Boris Brevnov, a former Enron executive, and banker Charles Ryan, a Radnor native who was once chief country officer in Moscow for Deutsche Bank, have just landed themselves a sweetheart deal with Philadelphia Gas Works to build a small LNG plant that will export Marcellus gas. The Philadelphia Gas Commission voted to approve a deal yesterday with Liberty Energy Trust. We frankly have mixed emotions about the news. We’re glad to see another LNG export facility, this one in PA (albeit quite small), but unhappy that these particular people are the ones building and operating it. Yes, there’s a lot of history to cover in this story.
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Elba Island LNG Key for Kinder Morgan Profits in 2019

Yesterday Kinder Morgan, one of (perhaps THE) country’s largest midstream company, issued guidance (their best guess) for how much money the company will make in 2019. Aimed at investors, of course. Usually these types of things are dry as toast, but we happened to notice the third sentence in the update which says Elba Island, Kinder’s LNG export facility on the coast of Georgia, along with the Gulf Coast Express pipeline project, will both enter service in 2019 and will help lead the company to record revenue–about 10% more revenue next year than was generated this year. Which got us to thinking once again about Elba Island, and the Marcellus molecules that will get exported from it. It also reminded us of a recent email exchange we had with a subscriber who swears that LNG shipments are already departing from the facility.
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Phila. Gas Works Public Advocate Endorses LNG Export Plan

In September, MDN told you that Philadelphia Gas Works (PGW), the country’s largest municipal-owned utility company, floated a plan to partner with a private company to build a new LNG export facility at its Passyunk Plant located in south Philly (see Phila. Gas Works Floats New Plan for LNG Export Facility). One of the first steps in making such a plan a reality is to run it by the PGW “consumer advocate”–an group appointed to be the voice of consumers as a check on decisions made by PGW management. The consumer advocate has just spoken–and likes the LNG plan!
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Elba Island, Ga. LNG Export Startup Delayed (Again) – Now 1Q19

The East Coast’s second LNG export plant to come online, after Cove Point in Maryland, will be Elba Island in Georgia. In July, Kinder Morgan, the builder and primary sponsor of the project, pushed back startup for the plant from the third until fourth quarter of this year (see Elba Island, Ga. LNG Export Startup Delayed to 4Q18). In what appears to be a pattern, Kinder has just delayed startup again–now estimated to be first quarter of next year.
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Phila. Gas Works Floats New Plan for LNG Export Facility

Philadelphia Gas Works (PGW), the largest municipal-owned utility in the country, and perhaps the oldest at 181 years old, floated a new proposal yesterday to partner with a private company to build a new LNG export facility at its Passyunk Plant, located in south Philly. This is not the first proposal to build an LNG export plant proffered by PGW. In 2015, City Councilman David Oh organized a meeting to discuss the feasibility of locating an LNG export facility inside city limits. PGW already has a small LNG facility in the city, but currently that facility is set up to import LNG, not export it. Councilman Oh wanted to explore the possibility of converting the site to export LNG. The very corrupt Philly City Council nixed a potential deal to sell PGW to UIL Holdings in 2014 (see Philly City Council Kills the Phila. Gas Works $1.86B Deal). Since that time, City Council members like Oh have tried to save face and figure out how they might turn around the near-bankrupt PGW. One of the most promising ideas is to set up a small export operation. A meeting to discuss that idea was held on the campus of Drexel University in April 2015. A meaningful portion of those attending were anti-drilling nutters who wouldn’t shut up and had to be escorted out by Drexel security personnel (see “Peaceful” Protesters Removed from LNG Export Hearing in Philly). With that as background, apparently PGW thought enough time had passed that maybe they could float a new, scaled-back plan to export LNG. However, the private company they want to cut a deal with, Liberty Energy Trust, is the same company that selfishly helped scuttle the sale of PGW to UIL back in 2014…
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Cove Point LNG Plant Down for 3 Weeks of Maintenance

In early June MDN told you that Dominion Energy’s Cove Point LNG export plant is due to shut down–after being online for just a few months–for scheduled maintenance (see Cove Point LNG Shutting Down for Maintenance This Fall). The shutdown will be for “a few weeks” and occur “in autumn,” according to Dominion’s statement back in June. Although we can’t track down an official announcement from Dominion, LNG World News is reporting the shutdown is here now, and that it will last for three weeks, beginning with this week. Does that mean all Marcellus LNG exports will stop for the next three weeks? In June, Dominion CEO Tom Farrell told Reuters: “Asked whether there would be any interruption in LNG exports from the site on the coast of the state of Maryland, Farrell said that would depend on whether gas storage tanks with capacity to hold nearly 15 billion cubic feet of the commodity were exhausted”…
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Could Atlantic Coast Pipe Feed LNG Exports from South Carolina?

This is all kind of speculative, but we find it intriguing and exciting. If you’ve read MDN for any length of time, you’re read about Dominion Energy’s 600-mile Atlantic Coast Pipeline, which will run from West Virginia through Virginia and into North Carolina–near the border with South Carolina. Unfortunately construction is currently on hold following revocation of some permits by a federal court, and an order from the Federal Energy Regulatory Commission in August to stop work on the entire project, for now (see FERC Shuts Down ALL Work on Atlantic Coast Pipeline). That won’t last–progress is being made to rework the necessary permits to the court’s liking, and Dominion has asked that FERC lift the stop work order for the rest of the line in the meantime (see Atlantic Coast Pipeline Asks FERC to Lift Stop-Work Order). At any rate, here’s where it gets interesting. Late last year a top Dominion official speculated that his company will look to expand Atlantic Coast into more of North Carolina, and extend it across the border into South Carolina, after the initial project is complete (see Atlantic Coast Pipeline’s Future Plans: Expand in NC & SC). In addition to building Atlantic Coast, Dominion is also in the process of buying South Carolina-based SCANA Corporation, the main electric and gas utility for most of South Carolina (see Dominion Buys SCANA, Mulls Atlantic Coast Pipe Expansion into SC). Antis are now connecting the dots and say if Dominion buys SCANA and if Dominion extends Atlantic Coast into SC, they believe an LNG export facility will get built in either Georgetown or Charleston to export Marcellus/Utica gas coming south…
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Dominion Takes Out $3B Loan for Cove Point Facility

This another one of those high finance thangs we don’t fully understand. Dominion Energy spent $4 billion to build their Cove Point LNG export facility in Lusby, Maryland. Somehow and somewhere they got money to build it–investors perhaps, or maybe Dominion had some cash tucked away under the corporate mattress. Dominion wants to get some of that debt off its books, so it has just structured a three-year loan with 20 lenders for $3 billion, reducing the company’s “parent level debt”–as opposed to child or subsidiary level debt. What it all means, if we’re understanding it correctly, is that Dominion is moving debt from the parent company’s balance sheet to the Cove Point subsidiary company’s balance sheet. Prior to this, Cove Point “owed” the money to Dominion itself (all in the family), and now, instead, the Cove Point subsidiary will owe that money to lenders directly. That’s our take. Hopefully it won’t take long for Cove Point to pay off the debt…
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Nova Scotia Goldboro LNG Buys Driller, Getting Gas from Canada

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. Two weeks ago we told you that $3 billion of German money will be used to propel the $10 billion project to begin (see With $3B from Germany, Canadian Goldboro LNG Looks Like Done Deal). While it looks like the project will happen, alas, it will happen without liquefying Marcellus/Utica molecules. Last Friday Pieridae announced it is purchasing Canadian driller Ikkuma Resources Corp. Ikkuma has major acreage and producing wells (both conventional and shale) in Western Canada, mostly Alberta. With TransCanada Pipeline’s new lowball shipping charges (see TransCanada Pipe Begins Lowball Shipping to Compete with Marc/Utica), Pieridae will be able to ship its own gas to Nova Scotia, liquefy it, and sell it. We’re disappointed, but we certainly understand. You can’t build a multi-billion dollar LNG plant on the *hope* that US politicians in New York and New England will suddenly get their heads right and allow pipelines to flow cheap Marcellus gas north into Nova Scotia. We get it. It’s just a shame–because our gas is more than thousand miles closer to the Goldboro plant, cheaper to ship–IF the pipelines were in place to do so. Because of anti-fossil fuel freaks in New England, that’s not the case. Pieridae wants to get going and can’t wait forever. They’ve purchased their own reliable supplies, and with TransCanada’s low-ball shipping from west-to-east, Pieridae is pulling the trigger. The FID will happen soon, and Pieridae will be totally self-sufficient. Good for them. Bad for us…
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With $3B from Germany, Canadian Goldboro LNG Looks Like Done Deal

Location for proposed Goldboro LNG plant – click for larger version

Canadian company Pieridae Energy is on the cusp of making a positive final investment decision (FID) to build a $10 billion LNG export facility on the coast of Nova Scotia. In February, Pieridae enlisted the help of Morgan Stanley and Société Générale to help raise the $10 billion needed to build Goldboro LNG (see Pieridae Energy Hires Morgan Stanley, SG to Help Fund Goldboro LNG). In May, Pieridae began lining up customers in Europe (see Goldboro LNG in Nova Scotia Negotiating Deal to Sell LNG to Europe). In a press release issued yesterday, Pieridae says they have hired yet another adviser, KfW IPEX-Bank (in Germany), to help it get a $3 billion loan from the German government. Canada’s Financial Post is reporting if the German loan goes through, Pieridae is prepared to pull the trigger and commit (and begin to build) the project this year. Which is a good thing, because if Pieridae doesn’t begin construction on Goldboro LNG by the end of this year, they risk losing Nova Scotia environmental approval…
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Cove Point LNG’s Exports End Up in Far-Flung Countries

The world of LNG (liquefied natural gas) is a strange world for us. We’re still learning about it. LNG is important for the Marcellus/Utica region as our molecules increasingly get shipped to other countries. Our molecules get shipped directly from the Dominion Cove Point LNG export facility in Lusby, Maryland, and by Cheniere’s Sabine Pass LNG export facility in Louisiana. Yes, some of our gas makes it to Louisiana and is liquefied and shipped out. However, the Cove Point facility is the focus of this post. Since early 2013, all of the LNG export capacity from Cove Point has been spoken for, by India and Japan, signing 20-year contracts (see Dominion’s Cove Point LNG Facility Achieves Important Milestones). You would think if they contracted for the LNG, they’d ship it to their respective countries and use it. But you would be wrong (see Half of India’s Contracted US LNG Won’t End Up in India). Once a company or a country owns a shipload of LNG and the ship sets sail and is on the open seas, the owner can sell it, trade it, swap it–do anything they want with it. Both Japan and India are and have been doing just that. The U.S. Department of Energy (DOE) recently released data on U.S. LNG exports covering year to date through June 2018. In looking over the shipment data for Cove Point, the shipments not only went to India and Japan, they also went to Jordan, Kuwait, Argentina, Dominican Republic, Mexico, Pakistan, Panama, and the United Kingdom! Marcellus/Utica molecules are literally being used around the world. The best part? Our drillers get higher prices for the gas than they can get here at home. Prices for the gas coming from Cove Point fetched anywhere from $5.27 per thousand cubic feet (Mcf) to $8.16/Mcf…
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