The very first ship that will load and transport Marcellus LNG from Cove Point is now docked and waiting.
Read More “Ships Line Up for Cove Point LNG – 1st Ship Docked”
The U.S. Department of Energy’s Office of Fossil Energy has just released an interesting report that shows the number and volume of LNG (liquefied natural gas) exports from Feb. 2016 (when U.S. LNG exports began) to Dec. 2017. It’s really quite fascinating. For example, which country do you think we have (so far) shipped more LNG to than any other country? Someplace in Europe? Maybe Japan or China? Nope. The #1 one trading partner that received our LNG for 2016-2017 was…Mexico! That’s right, Mexico. Even though we have all sorts of natural gas pipelines crossing the border into Mexico. Apparently those pipelines don’t connect with large parts of the country, so LNG tankers meet the need instead. Number two on the list of countries receiving our LNG exports: South Korea. Followed by China (#3), Japan (#4) and Chile (#5). The report also breaks down deliveries by other criteria. For example, even though Mexico was #1 on the list for our exports, if you break our exports down regionally, Asia/Pacific received most of our exports, while Latin America (including Mexico) was the #2 region. Or how about this: Free Trade Agreement (FTA) countries vs. non-FTA countries. Would it surprise you to learn that non-FTA countries got more of our exported LNG (52.7%) than FTA countries (43.3%)? The reason MDN readers should be interested in LNG exports is because exports are a huge future market for Marcellus/Utica gas. Be sure to spend some time with this important report…
Read More “US LNG Exports Report 2016 to 2017 – Where is Our Gas Going?”
On Monday, Dominion Energy CEO Tom Farrell reported that the company’s Lusby, Maryland Cove Point LNG export facility will become operational and begin to export LNG in “early March” (see Dominion CEO Says Cove Point LNG Operational in “Early March”). Then yesterday, Dominion issued a press release to say Cove Point has now (as of this week) begun producing LNG! What gives? This “we’re now producing LNG” is part of the commissioning process which began back in December (see Dominion Cove Point LNG Export – Dress Rehearsal Begins). Feed gas is imported and used for testing purposes, and is the final step before the plant goes online into full production. The feed gas came from Shell (sourced from Nigeria), and Shell will take delivery of the LNG that results. When the initial commissioning is done, Marcellus/Utica gas will then begin flowing to the plant and the LNG produced will begin shipping (by “early March”) to Japan and India…
Read More “Dominion Cove Point Begins Producing LNG – for Shell”
Earlier this month MDN brought you news that Dominion’s Cove Point LNG export facility along the shore of Maryland has delayed its official start-up until perhaps as late as April (see Uh-Oh: Cove Point LNG Exports Possibly Delayed Until April). An expert analyst theorized the reason for the delay is to install two flaring systems at the plant (a safety precaution). We still don’t know the exact reason for the delay, but we now have confirmation direct from the top at Dominion, from CEO Tom Farrell, that Cove Point will become operational and begin to export in “early March.” On an analyst phone call yesterday to discuss Dominion’s fourth quarter and full year 2017 results, Farrell had this to say about Cove Point…
Read More “Dominion CEO Says Cove Point LNG Operational in “Early March””
The Maritimes and Northeast Pipeline (M&NP) runs from Goldboro, Nova Scotia through Nova Scotia and New Brunswick to the Canadian – U.S. border near Baileyville, Maine. The pipeline continues through Maine and New Hampshire into Massachusetts where it connects with the existing North American pipeline grid at Dracut, Massachusetts. It used to be that offshore natural gas from Nova Scotia fed the pipeline, which ran from north to south. But those offshore fields are running low, and the Marcellus/Utica appeared. These days the M&NP runs from south to north–at least part of the system does. One of M&NP’s big customers is Irving Oil, with a refinery and cogeneration (natgas-fired) power plant in Saint John, New Brunswick. Irving is an M&NP customer. However, another pipeline company offered to build a new pipeline to feed Irving Oil’s operations with natural gas, at discount. M&NP said that’s crazy. They want to keep Irving as a customer, so they cut a deal with Irving to import natural gas from the U.S. (in all likelihood, Marcellus/Utica gas), flowing the gas from the Maine border to St. John and Irving’s operation there. The only thing standing in the way is the Canadian National Energy Board (NEB)–which is kind of like our own Federal Energy Regulatory Commission (FERC). The deal offered by M&NP requires NEB approval because it lowers the toll (fee charged) and changes directions to import/flow U.S. gas to Irving. Last week the NEB rejected M&NP’s plan, saying the plan is “premature” because the Maritimes region is facing a period of uncertainty. It is not clear (to the NEB) where natural gas will ultimately come from, and what the market actually needs. Offshore? Canadian fields? Import from U.S.? It’s not yet clear how it will all shake out. So the NEB turned down M&NP’s request. What happens now?…
Read More “Canada Rejects Discounted Rates for U.S. Shale Gas to New Brunswick”
In December 2015, evil corporate raider Carl Icahn (invests in companies so he can fire a bunch of people, boost the stock and pocket the profit) fired Cheniere Energy CEO Charif Souki (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). Souki didn’t let it slow him down. He started a new LNG export company, Tellurian, to compete with his old company (see Revenge: Fired Cheniere CEO Starts Competing LNG Company). We kind of had (past tense) a soft spot for Souki, getting tossed from the company he started. But then we read comments he made about Donald Trump in the run-up to the 2016 election. Souki thought (like many) that Trump had no chance of winning, but if he did, Souki said he would “reconsider my nationality.” Souki was born in Egypt but is an American citizen now. After Trump’s victory, Souki forgot about his threat to leave the country and change his citizenship. We didn’t. We’re still waiting. Souki turned up on CNBC again yesterday, this time with faint praise for Trump (but also words of praise for the abysmal failure Obama). Souki had a chat with Jimmy Cramer, telling Cramer the U.S. urgently needs $150 billion worth of infrastructure investment (i.e. pipelines) in order to get our prodigious amounts of natural gas from inland places where’s extracted to the shoreline–so it can be exported…
Read More “Tellurian Founder Says U.S. Needs $150B in Gas Infrastructure”
We consider this REALLY BIG news–and yet we’ve only seen it mentioned in a single mainstream news story. For the first time since 1957, in 2017 the United States exported more natural gas to other countries (Canada, Mexico, and internationally) than it imported (from Canada, Mexico and other countries). That is, in 2017 the U.S. became a “net exporter” of natural gas–the first time in 60 years! The reason is, of course, because of shale. And because the Marcellus/Utica produces over 40% of all the shale gas produced in the U.S., you can justifiably say we just became a net exporter, thanks to the Marcellus/Utica. So pop a cork on the champagne bottle. It’s Friday. Let’s celebrate!…
Read More “U.S. Becomes Net NatGas Exporter – First Time in 60 Years”
We’ve been waiting, with bated breath, for an announcement from Dominion Energy that their $4 billion LNG export terminal is finally (finally!) up and running and shipping out condensed Marcellus/Utica Shale gas as LNG, heading to Japan and India. In April of last year, Dominion said the plant would be up and running, shipping LNG to India beginning this month (see Dominion Cove Point to Begin LNG Exports to India in Jan 2018). Dominion began priming the pump with an initial load of feed gas in early December (see Dominion Cove Point LNG Export – Dress Rehearsal Begins). But by the end of the month, Dominion signaled a full startup at the facility may be delayed, until an unspecified “early next year” (see Dominion Signals Delay in Cove Point Start-up; Contract Related?). In a blockbuster story, NGI’s Daily Gas Price Index is reporting (based on a super secret source who talked to Bloomberg) that commercial startup of the Cove Point facility will now not happen until (gasp), April of this year. Why the delay? NGI spoke to their own experts who have a plausible theory…
Read More “Uh-Oh: Cove Point LNG Exports Possibly Delayed Until April”
For months Dominion’s top brass has signaled that the country’s newest LNG export facility, Cove Point (situated along the coast of Maryland), would begin full commercial operations “by the end of this year” (see Dominion 3Q17: Cove Point LNG Coming Online, ACP Permits in Dec). That has now changed to “early next year”–which is a disappointment. Earlier this month Dominion began the commissioning process, where they use already-chilled LNG (from a tanker) to cool down the equipment, prior to running regular natural gas through it for the first time (see Dominion Cove Point LNG Export – Dress Rehearsal Begins). It appears the commissioning process to check out all of the equipment and to make triple sure everything is OK is taking longer than Dominion expected. The delay, along with a Reuters story, has given rise to rumors that Dominion’s signed-on-the-dotted-line customer from India is getting cold feet and attempting to renegotiate their long-term, 20-year contract. Dominion says, in so many words, that’s hogwash. Dominion says the slight delay in beginning full commercial operations has nothing to do with “contract renegotiations” and everything to do with a “comprehensive round of thorough testing and quality assurance activities.” However, the Reuters article quotes an Indian official as saying they have held a “number of discussions…for re-negotiation of the contracts.” Is contract renegotiation really the reason for Cove Point’s delayed start?…
Read More “Dominion Signals Delay in Cove Point Start-up; Contract Related?”
We have to confess, the LNG (liquefied natural gas) world is sometimes confusing for us. The overall theory is pretty simple. Huge plants super-cool natural gas into a liquid state (called liquefaction) and load it onto tankers. The tankers (typically ships, sometimes rail) convey the LNG to a distant port somewhere and it’s unloaded. At the receiving end, the gas is then reheated back into a gaseous state (called regasification). However, the technology that both cools and reheats the gas is complex. Dominion began working on the Cove Point LNG export plant in October 2014 (see Dominion Breaks Ground on Cove Point, MD LNG Export Facility). Cove Point will liquefy 1.8 billion cubic feet per day (Bcf/d) of Marcellus/Utica shale gas and load it onto ships bound for India and Japan. It took something like $4 billion and just over three years, but earlier this month the facility began to accept an initial quantity of gas as part of the “commissioning” process–which we take to mean the shakedown process, make sure everything is working OK (see Dominion Cove Point LNG Export – Dress Rehearsal Begins). Now comes word that a tanker has docked at the Cove Point facility. The tanker is already filled with LNG–from Nigeria. Apparently the Nigerian LNG will get offloaded at Cove Point, which is a bit mysterious for us. Experts say this is a “cool down” cargo, used as part of the commissioning process. We assume, like it’s name, this cargo will “cool down” the equipment that needs to be cooled down in order to begin operations. Like we said, the LNG world is sometimes confusing for us…
Read More “LNG Tanker Docks at Cove Point Terminal – To Offload Nigerian LNG?”
Dominion announced yesterday it has introduced “feed gas” into it’s new $4 billion LNG export plant in Cove Point, Maryland. Feed gas is used for testing purposes and is the final step before the plant goes online into full production later this month. Dominion said the feed gas will come from Shell, and Shell will take delivery of the LNG that results. Following the test, Marcellus/Utica gas will begin flowing to the plant and the LNG produced will begin shipping to Japan and India. We are on the cusp of something we’ve waited for, cheered for, and agonized over for more than three years. Think of the Shell’s feed gas as the dress rehearsal the night before a play opens…
Read More “Dominion Cove Point LNG Export – Dress Rehearsal Begins”
Black & Veatch, a leading engineering, consulting and construction company, released their “2017 Strategic Directions: Natural Gas Industry Report” earlier this week (full copy below). In the report, B&V examines how organizations are planning for long-term, sustainable operations that can handle rising supplies and deliver those supplies to markets eager to use natural gas as a cheaper and cleaner power generation source. The report finds that LNG (liquefied natural gas) is key in shifting oversupply from countries like the U.S. to growing demand centers in Asia, Latin America, India and Sub-Saharan Africa. The report emphasizes calls from the industry to fund infrastructure investments to enable increased LNG imports and exports, including floating LNG (FLNG) and natural gas-based power generating plants. There is no doubt, according to the report, that the U.S. is now in the driver’s seat with respect to LNG. Below is a summary of the key points, followed by the full report…
Read More “Black & Veatch Report: US LNG is Changing the World”
Yesterday a three-judge panel from the US District of Columbia Circuit Court of Appeals tossed out the Sierra Club’s petitions challenging Federal Energy Regulatory Commission (FERC) authorization of three LNG export projects: Dominion Energy’s Cove Point LNG in Maryland, Cheniere’s Sabine Pass LNG in Louisiana, and Cheniere’s Corpus Christi LNG in Texas. As we said in a post on Oct. 3rd: “The Sierra Club lawsuit against all three projects challenges FERC’s approval of them, arguing the plants negatively affect the environment and will make Mom Earth sick. While no one expects these lawsuits to go anywhere, you never know, which is why it’s important to keep an eye on it” (see Sierra Club in Court Oct 18 Against Cove Point, 2 More LNG Plants). We did keep an eye on it, and the good news is that not even the liberal judges on the DC Circuit Court of Appeals could stomach the nonsense coming from the odious Sierra Club…
Read More “Sierra Club Lawsuit Against Cove Point, 2 Other LNG Plants Tossed”
Yesterday midstream and utility giant Dominion Energy issued their third quarter 2017 update. During an analyst phone call, Dominion CEO Thomas Farrell shared some great news regarding both the Cove Point LNG export facility and Atlantic Coast Pipeline (ACP). Farrell said Cove Point will “begin generating LNG” in November, “conclude commissioning” in December and be fully operational by the end of this year. Fantastic! In response to a question by an analyst about Atlantic Coast Pipeline, Farrell said he expects water permits from West Virginia, North Carolina and Virginia will all be issued by the middle of December. Again, fantastic! These two projects are HUGE with respect to the future of the Marcellus/Utica region. Christmas has come early this year. 🙂 Below is yesterday’s 3Q17 update for Dominion, along with the latest slide deck and select comments pulled from the analyst phone call…
Read More “Dominion 3Q17: Cove Point LNG Coming Online, ACP Permits in Dec”
Yesterday MDN brought you the exciting news that Marcellus shale gas molecules have been/are finding their way all the way to Nova Scotia, Canada (see Marcellus Gas Now Flows All the Way to Nova Scotia). A paper mill in Nova Scotia has been buying Marcellus gas since this summer to power the plant, via a now-reversed portion of the Maritimes & Northeast Pipeline (M&NE). Today we spotted a different article that sheds more light on how our gas is getting to our Canadian cousins. In yesterday’s post, the paper mill operator was quoted as saying: “For the majority of the summer I’ve been importing Marcellus Shale gas from Pennsylvania and some from an exchange in Ontario.” Which we thought odd. We searched every map resource we could find and found no pipelines from Ontario to Nova Scotia–they don’t exist. The only pipeline into (out of) Nova Scotia is M&NE. Enter the article we spotted today. The article below chronicles the fight in Weymouth, Mass. to block the expansion of a compressor station there. Enbridge (i.e. Spectra Energy) plans to expand the compressor as part of the Atlantic Bridge project. Atlantic Bridge will flow more Marcellus gas north into Maine, and potentially beyond Maine into Canada, via the M&NE. The compressor is needed to flow more gas along the existing pipeline. While the article is largely about the fight over the compressor station and implications of further delays in building it, it is the other details that supplied the missing pieces of the puzzle that explain how our gas currently gets all the way to Nova Scotia…
Read More “The Circuitous Route Marcellus Gas Takes to Get to Nova Scotia”
For years now MDN has kept an eye on several LNG (liquefied natural gas) export plants planned in Nova Scotia, Canada. Why? Because of the potential for Marcellus/Utica gas to feed those hungry beasts, once they are built. How would/could that happen? Primarily through a plan floated by Spectra Energy (now owned by Enbridge) called the Access Northeast Project, a roughly $3 billion project in New England to connect four existing pipeline systems (with enhancements): Texas Eastern, Algonquin Gas Transmission, Iroquois and Maritimes & Northeast. That last one, the Maritimes & Northeast (M&NE) pipeline, stretches from Massachusetts to Nova Scotia, to bring offshore Canadian gas south into New England. Part of Spectra’s plan is to make M&NE bidirectional, able to flow gas to Nova Scotia. Unfortunately the full Access Northeast Project got weighted down by opposition and in July Enbridge pulled the application (see Enbridge Withdraws $3B Access Northeast Pipeline Application). However, all is not lost. Part of the larger Access Northeast Project survived in another project called Atlantic Bridge, which the Federal Energy Regulatory Commission (FERC) approved in January of this year (see FERC Approves Atlantic Bridge Project for New England/Canada). Atlantic Bridge beefs up capacity along the Algonquin Gas Transmission pipeline and turns Spectra’s M&NE bidirectional, to carry more Marcellus/Utica gas into New England and eventually all the way to Nova Scotia. Work on the M&NE must have progressed quickly, and under our radar, because we read an article (below) that surprised us. Apparently M&NE is now bidirectional and has been since this summer. A paper mill operator in Nova Scotia says he has been buying Marcellus gas since this summer to power his plant. Who knew?! Some of our molecules are now able to make it all the way to Nova Scotia! The problem for the paper mill, and for all of Nova Scotia, is that when winter sets in and gas supplies get tight (and expensive) around Boston, Marcellus supplies to Nova Scotia will dry up or become uneconomical…
Read More “Marcellus Gas Now Flows All the Way to Nova Scotia”