Exporting

CNG/LNG | Exporting | Industrywide Issues | Maryland | Statewide MD

Cove Point LNG’s Exports End Up in Far-Flung Countries
August 16, 2018August 16, 2018

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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CNG/LNG | Dominion Energy | Electrical Generation | Energy Services | Exporting | Industrywide Issues | Pipelines

Dominion Energy 2Q18: Cove Point, SCANA, ACP & More
August 2, 2018August 2, 2018

There is a LOT going on at Dominion Energy that impacts the Marcellus/Utica region. Yesterday Dominion posted its second quarter 2018 update and held a conference call with investors to discuss what happened during 2Q18, and what to expect in coming quarters. Discussed on the call: (1) The Cove Point LNG export plant went online in 2Q18 and so far has shipped 19 cargoes of LNG–60 billion cubic feet of gas! (2) The $1.3 billion Greensville County, VA gas-fired electric plant is 95% built and will go online later this year. (3) The Atlantic Coast Pipeline and Supply Header Project is under construction and on track to be online by fourth quarter of 2019. (4) The SCANA Corporation merger is moving along, and a big decision from a judge is coming by Aug. 7 about whether or not SC can unilaterally force SCANA to lower electric rates by 15%. If the judge tosses that law and the 15% price reduction is out, the merger is in. If the price reduction stays, the merger is (our conclusion) questionable. Yeah, there’s a lot going on. Below are excerpts from the quarterly conference call, the full 2Q18 update, and the latest slide deck…
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CNG/LNG | Exporting | Industrywide Issues | Jobs

Nova Scotia LNG Export Project Signs Agreement with Labor Unions
July 25, 2018July 25, 2018

MDN has tracked the progress of an LNG export plant planned for the eastern shore of Nova Scotia, called Bear Head LNG, for the past several years (see our Bear Head LNG stories here). Of all the Canadian LNG export projects, Bear Head appears to have the most momentum. The project has received most of the necessary permits it needs to proceed. An official from the project says it is “shovel-ready” and can begin at any time. However, they aren’t ready to begin just yet. The reason we track the project is because the most probable source of natural gas to feed the plant would come from the Marcellus Shale via the Maritimes & Northeast pipeline, converted to be bidirectional (see FERC Approves Atlantic Bridge Project for New England/Canada). For the first time in nearly a year, we have some new news to report on Bear Head. LNG Limited, the company behind Bear Head, announced this morning it has signed a Memorandum of Agreement (MOA) with two labor union groups to supply skilled workers to build the plant–when it gets built. While a timeline is not given, the announcement says Bear Head will need “several hundred workers” over “the next several years” to build the facility. Which we take as a positive sign that this project is close to starting…
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CNG/LNG | Exporting | Industrywide Issues | Pipelines

Trump Rips into Germany re Russian NatGas Pipe at NATO Meeting
July 12, 2018July 12, 2018

Trump at NATO breakfast – credit: CNN

At first blush this story, which is an international story in the news yesterday and today, may not seem to have a tie-in with the Marcellus/Utica. But it does, very much so. President Trump, in addressing a NATO meeting yesterday in Brussels, Belgium, delivered a blistering verbal attack against Germany. He told those assembled that (1) the U.S. is done being the Europe’s piggy bank, we pay the lion’s share of the NATO budget to defend Europe against Russian aggression, and yet (2) Germany, whose defense bills we’ve been paying for, for more than a generation, insists on building a natural gas pipeline (the Nord Stream 2) that will further enrich Russia and make all of Europe virtual slaves to Russia via natural gas supplies. What’s wrong with this picture?! We’re paying to protect Europe from Russia, and they turn around and spit in our faces by deeply embedding Russia into their own economic futures. Enough. What’s worse is that a former German Chancellor, Gerhard Schröder, is a senior official in Russia’s state controlled energy companies Gazprom and Rosneft that will build the pipeline. He is enriching HIMSELF. It is totally disgusting. Trump told current German Chancellor Angela Merkle, ENOUGH! We will not stand for it. The not-so-subtle threat made by Trump at the NATO meeting is that if Germany persists in building the Nord Stream 2 pipeline, NATO can forget about our money to protect them. They will have to pay their own bills from now on. It’s about time somebody told Europe if they would rather get into bed with Russia rather than us, fine. You go right ahead. You’ll loose our $upport. How does all this relate to the Marcellus/Utica? Via our LNG exports to Europe…
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Ethane | Exporting | Industrywide Issues | NGLs | Processing Plants

Europe Building New Cracker, to be Fed by Marcellus/Utica NGLs
July 6, 2018July 6, 2018

Here’s some exciting news: The first ethane cracker plant to get built in Europe in the past 20 years has just been announced by INEOS. Based in Switzerland, INEOS is a young but rapidly growing chemical company with roughly $40 billion in sales per year. INEOS’ competitors would be companies like BASF, Bayer and Dow Chemical. INEOS has its fingers in a lot of pies. For example, the company currently has two ships that shuttle Marcellus and Utica Shale ethane from Philadelphia to Scotland and Norway (see Ineos Gets Ready to Begin Ethane Exports from Marcus Hook, PA). INEOS has also been tapped to provide the technology for an ethane cracker plant to be built in Belmont County, OH (see PTT Taps Swiss Company INEOS for OH Cracker Plant Technology). INEOS already owns their own cracker plant in Scotland (see Cracker Plant in Scotland “Brought Back to Life” Thx to Marcellus Ethane). Now the company plans to build a €2.7 billion (US$3.2 billion) cracker plant and propane dehydrogenation unit in northern Europe. A specific country/location has not yet been selected. An INEOS official said, regarding the new cracker facility: “All our assets will benefit from our ability to import competitive raw materials from the US and the rest of the world.” Our translation: We love cheap Marcellus/Utica NGLs, and this plant will use lots of it…
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CNG/LNG | Exporting | Industrywide Issues

Canadian Goldboro LNG Inches Toward Final Investment Decision
July 3, 2018July 3, 2018

The Goldboro LNG export facility in Nova Scotia continues its march (shuffle?) toward construction. As we reported in February, Pieridae Energy (the builder) has enlisted the help of Morgan Stanley and Société Générale to help raise $10 billion to build it (see Pieridae Energy Hires Morgan Stanley, SG to Help Fund Goldboro LNG). Last May, MDN told you that Pieridae Energy had signed a labor agreement to build the Goldboro LNG export facility along the shore of Nova Scotia, Canada (see Update on Goldboro LNG – Labor Agreement Signed to Build). The U.S. Dept. of Energy approved the plant for exporting to non-free trade agreement counties in February 2016, an indication that Marcellus/Utica gas may flow to the plant (see Goldboro LNG Project Gets Final DOE Approval – Good for Marcellus). And in May, we told you the facility is lining up customers for its LNG in Europe (see Goldboro LNG in Nova Scotia Negotiating Deal to Sell LNG to Europe). It’s now time for Pieridae to decide. If they don’t begin construction on the project in the next nine months, they risk losing Nova Scotia environmental approval…
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CNG/LNG | Exporting | Industrywide Issues | Research

DOE Publishes New LNG Export Study – Seeks Comments
June 14, 2018June 14, 2018

How much American-extracted natural gas should get exported? That question is the focus of a newly published study, titled “Macroeconomic Outcomes of Market Determined Levels of U.S. LNG Exports” (full copy below). The study is the fifth in a series commissioned by the U.S. Dept. of Energy (DOE). The study/research, performed by NERA Economic Consulting (NERA), looks at the impacts on the U.S. for various export scenarios. Export a lot? A little? Somewhere in between? There are 21 proposed LNG export facilities in the pipeline right now, requesting permission to export to “non-FTA” (non-Free Trade Agreement) countries. DOE wants to make the right decisions about how many of them to approve. This study and its numbers will help guide their decision-making. The study is now available for public review and comment, until July 27…
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CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Maryland | Statewide MD

Cove Point LNG Shutting Down for Maintenance This Fall
June 7, 2018June 7, 2018

Cove Point LNG, built by Dominion Energy, began exporting Marcellus Shale gas in April (see First-Ever Shipment of Marcellus LNG Leaves Cove Point, Maryland). Even though it’s only been up and running for about two months, there’s already talk of shutting Cove Point down. You may recall that two countries have contracted for all of the exported LNG coming from Cove Point: India and Japan (see Dominion’s Cove Point LNG Facility Achieves Important Milestones). Dominion Energy CEO Tom Farrell is currently visiting Japan to commemorate the first two shipments of Marcellus LNG arriving there. Yesterday Farrell shared that although Cove Point is doing just fine, the plant will undergo “brief maintenance” of “a few weeks” in the autumn. Scheduled downtime. Does that mean LNG will quit flowing out of the facility each day? According to Farrell, it “depends” on how full the storage tanks are ahead of the planned downtime…
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Energy Services | Energy Transfer Partners | Exporting | Industrywide Issues | Pipelines

The Battle for Dawn Hub Begins: M-U vs. Western Canada
June 6, 2018June 6, 2018

Canadian natural gas customers in Ontario and Quebec can expect to begin paying less for their gas, courtesy of their American cousins. Starting last week, Marcellus/Utica gas is now flowing all the way to the Dawn Hub in Ontario, via the Rover Pipeline connected to the Vector Pipeline (see M-U Gas Now Travels to Dawn Hub in Canada via Rover Pipeline). Western Canadian producers beat Rover to the punch last year when TransCanada radically reduced prices to cart gas thousands of miles away to the Dawn Hub (see Canadian Lowball Shipping Works, Grabs Market Share from U.S.). Now that M-U gas is also hitting the Dawn Hub, there’s an abundance (over abundance?), which has driven prices to their lowest in 10 years. The battle for Dawn Hub, between M-U and Canadian gas, has begun, and Canadian gas customers are already winners…
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CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Maryland | Statewide MD

First Marcellus Molecules from Cove Point Arrive in Japan
May 23, 2018May 23, 2018

On April 22, the LNG tanker Sakura left Dominion Energy’s Cove Point LNG export facility loaded with Marcellus molecules, heading for Japan (see Cove Point LNG Ships First Marcellus Cargo to Japan). It was the second-ever load of Marcellus molecules to depart the Cove Point facility. About a week later the ship transited the Panama Canal (see 1st Cove Point Marcellus Shipment to Japan Goes Thru Panama Canal). On Monday, the Sakura finally docked at the Negishi LNG terminal in Japan, closing the loop on the first of many such shipments of Marcellus gas that will go to the Land of the Rising Sun…
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CNG/LNG | Economic Impact | Exporting | Industrywide Issues | Research

LNG Exports to Add $1-$2 Trillion to U.S. Economy by 2050
May 17, 2018May 16, 2018

Here are some numbers that are, frankly, hard for us to wrap our heads around. LNG Allies, a nonprofit trade group, recently issued a study they conducted showing that LNG exporters will add between $716 billion and $1.267 trillion in cumulative “direct, indirect, or induced value added” to the U.S. economy by 2050. Yes, trillion, with a “t”. During the same period of time, the study says value added to the economy from supplying the natural gas to those LNG plants (that is, all of the drilling and fracking), will be worth $948 billion to nearly (gasp) $2 trillion! No wonder President Trump is pushing hard to get more LNG export plants online. Here’s a quick overview, followed by a copy of the study/slide deck…
Read More “LNG Exports to Add $1-$2 Trillion to U.S. Economy by 2050”
CNG/LNG | Exporting | Industrywide Issues

Goldboro LNG in Nova Scotia Negotiating Deal to Sell LNG to Europe
May 10, 2018May 10, 2018

The Goldboro LNG export facility in Nova Scotia continues its march toward construction. As we reported in February, Pieridae Energy (the builder) has enlisted the help of Morgan Stanley and Société Générale to help raise $10 billion to build it (see Pieridae Energy Hires Morgan Stanley, SG to Help Fund Goldboro LNG). Last May, MDN told you that Pieridae Energy had signed a labor agreement to build the Goldboro LNG export facility along the shore of Nova Scotia, Canada (see Update on Goldboro LNG – Labor Agreement Signed to Build). The U.S. Dept. of Energy approved the plant for exporting to non-free trade agreement counties in February 2016, an indication that Marcellus/Utica gas may flow to the plant (see Goldboro LNG Project Gets Final DOE Approval – Good for Marcellus). If the gas to feed the new export facility does come from the Marcellus/Utica, it will come via the Maritimes & Northeast Pipeline. However, Goldboro can also source gas from TransCanada’s pipeline system, from Western Canada. We remain hopeful that M-U gas will be the preferred feedstock. There is new news to report on this project. Pieridae announced earlier this week they are in the midst of negotiating a 10-year contract with a “European utility” to purchase up to 1 million tonnes per year of LNG…
Read More “Goldboro LNG in Nova Scotia Negotiating Deal to Sell LNG to Europe”
Energy Services | Energy Transfer Partners | Exporting | Industrywide Issues | NEXUS Pipeline | Pipelines

Canadian Lowball Shipping Works, Grabs Market Share from U.S.
May 7, 2018May 7, 2018

TransCanada, one of Canada’s leading midstream/pipeline companies, cooked up a deal in 2016 to pipe natural gas from Canada’s West Coast to the East Coast in order to fend off cheap supplies of Marcellus/Utica gas that will flow into Canada from the NEXUS and Rover pipelines (see TransCanada Pipe Drops Price 42% to Compete with Marcellus/Utica). TransCanada dropped their pipeline price by 46% to lure drillers by (theoretically) making it less expensive to get gas from Western Canada, some 2,400 miles away, than from the Marcellus, just 400 miles away. Following a couple of open seasons and stiff regulatory hurdles, the plan was adopted and went into service last November (see TransCanada Pipe Begins Lowball Shipping to Compete with Marc/Utica). In February of this year, TransCanada announced a $1.9 billion plan to expand its Western Canadian pipeline system in a bid to gather up and send even more Western Canadian gas to the East Coast (see TransCanada Spending $1.9B to Bring More Canadian Gas to Northeast). Looks like TransCanada’s gamble paid off. According to records from the U.S. Dept. of Energy, Canada is using more of their own homegrown gas and less gas from the U.S….
Read More “Canadian Lowball Shipping Works, Grabs Market Share from U.S.”
CNG/LNG | Dominion Energy | Electrical Generation | Energy Services | Exporting | Industrywide Issues | M&A | Pipelines

Dominion Energy 1Q18: Important Updates on Key Projects
May 2, 2018May 2, 2018

Late last week Dominion Energy issued its first quarter 2018 financial and operational update. Dominion is not only a large utility company (electric and gas), but also a huge pipeline company. Dominion has it’s fingers in a lot of Marcellus/Utica pies, so we like to keep track of the company and what it says about various critical projects for our region. Dominion CEO Tom Farrell had a lot of interesting updates, including updates for: Atlantic Coast Pipeline, a $6.5 billion Dominion pipeline from West Virginia through Virginia and into North Carolina; Cove Point, the $4 billion LNG export facility that began commercial operations in April; Greensville County (VA) Power Station, a $1.3 billion natural gas-fired combined cycle power plant; and the proposed merger with SCANA Corporation, the main electric and gas company for much of South Carolina. Buckle up, there’s lots of news here…
Read More “Dominion Energy 1Q18: Important Updates on Key Projects”
CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues

1st Cove Point Marcellus Shipment to Japan Goes Thru Panama Canal
May 1, 2018May 1, 2018

LNG Sakura – now on its way to Japan

A sharp MDN reader recently emailed us to ask about that first shipment of Marcellus Shale LNG exported from Cove Point that is heading to Japan, wondering if the ship would transit through the Panama Canal to get to Asia. We had to say we didn’t know! But now we do know. And the answer is “yes”–that ship is going through the Panama Canal. Last week MDN reported that the second shipment of Marcellus molecules from Cove Point had been loaded onto the LNG carrier Sakura, and that the Sakura is heading to Japan (see Cove Point LNG Ships First Marcellus Cargo to Japan). Before June 2016, large LNG carriers could not pass through the Panama Canal. In 2016 new locks were installed to make it possible for larger ships, like the Sakura, to transit through. By using the Panama Canal, ships save an extra 7,800 miles, bypassing a trip around the tip of South America. Since 2016 more than 300 LNG carriers have used the Canal. Here’s the news that the Sakura is already through the Canal and now in the Pacific Ocean, steaming toward Japan…
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CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Maryland | Statewide MD

Cove Point LNG Ships First Marcellus Cargo to Japan
April 23, 2018April 23, 2018

LNG Sakura

Last week MDN reported that a ship called Adam had departed the Cove Point LNG facility in Maryland with the very first shipment of Marcellus molecules (see First-Ever Shipment of Marcellus LNG Leaves Cove Point, Maryland). Although the first shipment of Marcellus LNG was/is owned by Japan, the destination for the cargo was/is still unknown. The second shipment, ever, of Marcellus LNG from Cove Point left port yesterday–also owned by Japan. However, the ship’s manifest indicates this second shipment IS heading to Japan…
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