International LNG Blog

Reliance Industries planning US$1.2 Bn LNG terminal

2011-01-07T13:19:00.000-08:00

Reliance Industries Ltd (RIL) is considering putting up a US$ 1.2 Bn LNG import terminal on the east or west coast to meet demand at its refineries and petrochemical plants.

According to report, Reliance's requirement of the fuel is around 14 MMSCMD at its twin refineries at Jamnagar in Gujarat. It also needs gas at its petrochemical plants.

The company had first contemplated the facility back in 1997, but plans for a 5-MT per annum port terminal were later held back, the report said. The company had at that time envisaged receipt of LNG transported from overseas via cryogenic ships and a re-gasification of the liquid cargo.

The company is now thinking of reviving the plan as it is not able to use the natural gas from the eastern offshore KG6-D6 field given that its twin refineries at Jamnagar have been allocated only 2.34 MMSCMD of the 60 MMSCMD of gas that the government has earmarked for various users.

Reliance is reported to be buying LNG from Royal Dutch Shell at prices that are in double digits as against a delivered price of US$7 per million Btu of KG-D6 gas.

The report said that Jamnagar was the natural choice, but Gujarat already has LNG terminals at Dahej, operated by Petronet LNG and another at Hazira owned by Shell India and Total of France.

According to the report, a third terminal was under planning stage at Mundra by the Adani Group and Gujarat government entity GSPC), and therefore a fourth one in the state looked unlikely.

One option is to set up the facility at Kakinada in Andhra Pradesh and transport the gas via the under-utilised East-West pipeline connecting the landfall point for gas from the eastern offshore KG-D6 field to Baruch in Gujarat.

The pipeline has the capacity to move 100 MMSCMD of gas. However only half the capacity is being used given the production constraints at KG-D6 field, which has an output of 54 MMSCMD at present.

Another option under consideration is using a floating LNG facility that would receive cryogenic ships at high sea and regasify the liquid cargo into natural gas before piping it to shore through a submarine pipeline.

According to the report Reliance's LNG terminal is expected to take 1 1/2 years as against 36-40 months for a normal LNG terminal.

It added that Reliance had also explored the possibility of picking up a stake in Adani's proposed LNG terminal at Mundra, but the two sides failed to reach an agreement.

In 2000 the company had also tied up LNG imports from Iran but then dropped the plan following the huge gas reserves it struck off the Andhra coast.

Meanwhile, the company has commissioned its business transformation plans for 2012 and has engaged AT Kearny, Booz & Co for the business transformation.

According to reports, Reliance would finalize its US$5 Bn investment plans at Jamnagar in 2011. The plans include new cracker and downstream expansion.

Also the assessment on building and LNG Terminal would only be taken in 2011.

RIL is also said to have revived its talks with British Petroleum to sell a stake in its E&P assets.

Approval for Masela LNG

2010-12-13T12:17:00.000-08:00

Indonesia has approved a development plan for a LNG floating terminal project run by Japan's Inpex Corp.

The floating LNG project will have capacity of 2.5 MMTPA, lower than a previously proposed capacity of 4.5 MMT, said Evita Legowo, director general of oil and gas at the energy and mineral resources ministry.

The project will cost an estimated US$ 4.9 Bn.

Inpex has a majority stake in the Masela block in Maluku province while PT Energy Mega Persada , a unit of the Bakrie Group, has a 10% stake in the oil and gas block.

Former OPEC member Indonesia, which has far more gas than oil, has pushed companies to move faster in developing gas projects as the country badly needs the fuel for domestic industrial demand as well as for exports.

CH-IV International To Support U.S. LNG Export Project On Behalf Of Freeport LNG Expansion, L.P.

2010-11-22T21:42:00.000-08:00

Freeport LNG Expansion, L.P. and Macquarie Energy to Jointly Develop LNG Export Project.
HANOVER, MD November 22 – Jeffrey P. Beale, President of CH-IV International (CH-IV) is pleased to announce that CH-IV International will continue its Owner’s Engineering support for Freeport LNG Expansion, L.P. (Freeport LNG) for their recently announced project with Macquarie. CH-IV International had previously been contracted by Freeport LNG to execute a Pre-FEED for the LNG Export Project, which included the evaluation and selection of the Liquefaction Technology. As part of the overall FEED for the expansion project, CH-IV will continue its support to Freeport LNG by managing and contributing to the preparation of the required Resource Report 13 (RR13) for the NEPA Pre-filing Process with the Federal Energy Regulatory Commission (FERC).

The Freeport LNG import terminal located on Quintana Island, Texas commenced commercial operations in June 2008. Since commercial operations began, the terminal has seen a limited number of import cargos due to higher global LNG prices relative to natural gas prices in the United States, and the significant increase in domestic gas supplies due to recent advancements in shale gas technology.

Mr. Beale stated, “CH-IV is excited to continue working with the Freeport LNG Team on such an important project. We look forward to adapting the current infrastructure to meet new commercial goals while maintaining the existing high levels of safety and operational proficiency.”

“We look forward to continuing the relationship we have developed with CH-IV in evaluating various potential opportunities for our terminal.” stated Charles Reimer, Freeport LNG President. “Supplementing our existing import terminal with the capability to produce and export LNG provides Freeport LNG with new opportunities to maximize the value of our assets on Quintana Island.”

Mr. Michael Diemert, of CH-IV’s Houston Office, will manage this project.

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CH-IV [read C - H - 4] International (www.ch-iv.com) is a joint venture corporation between MPR Associates, Inc. (www.mpr.com) and CH-IV Cryogenics, LP. CH-IV International provides engineering and consulting services in four overlapping areas involving LNG facilities: 1) Feasibility / Pre-FEED; 2) Front end engineering design (FEED); 3) Engineering oversight and consulting on all things LNG; and 4) Operational services relating to the training, commissioning, start-up and operations of LNG facilities.

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by clicking on http://twitter.com/LNGSpecialists

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CH·IV International to provide Consulting Services to Bangladesh LNG Project

2010-11-15T21:45:00.000-08:00

Bangladesh is seeking solution to energy crisis due to the gas supply shortfall.

HANOVER, MD November 15 – Jeffrey P. Beale, President of CH·IV International (CH·IV), is pleased to announce that CH·IV International, in association with the Galway Group LP, will provide support to Bangladesh’s state-owned Petrobangla in acquiring firm LNG supply and design and construction of the country’s first LNG import terminal. Chief of the Bangladesh LNG Cell Md Muqtadir Ali said, “The company (CH·IV) was selected on the basis of its experience in negotiating LNG supply agreements, pricing, LNG shipping and development of LNG import terminals.” Mr. Muqtadir, who previously served as the acting chairman of Petrobangla, added “We have already issued a letter of intent to award the contract to the U.S firm.”

Mr. Beale pointed out that CH·IV emerged as the clear winner out of the 28 global companies that had participated in the Technical Advisor tendering process. Further Mr. Beale stated, “The Team of CH·IV and Galway provide the proper mix of strong talent to address the many dimensions of this world class LNG project.”

The Team’s support of Petrobangla is further strengthened by Galway’s recently announced expansion into Singapore and the addition of Mr. Veldanda V. Rao as the Managing Director of Galway's Asia energy consulting practice. Mr. H.J. Miller, one of the founding partners of Galway, said, "We are very pleased to have this opportunity to utilize our Asia based consulting strengths on behalf of this exciting new LNG project for Bangladesh."

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FERC imposes new vapor rules on Weaver's Cove LNG

2010-10-12T14:00:00.000-07:00

FERC has informed Weaver’s Cove Energy that the company must comply with new vapor-gas exclusion zone requirements before moving forward with construction of the planned LNG terminal.

In a letter issued from FERC to Weaver’s Cove attorney Bruce F. Kiely, the director of FERC’s office of energy projects informed the company that it must receive written authorization from FERC before constructing any facilities associated with the project. That authorization, the letter states, “will only be granted following a determination that the facilities are in compliance with the interpretations issued by” the Pipeline and Hazardous Materials Safety Administration of the U.S. Department of Transportation.

The PHMSA issued two interpretations in July concerning the flammable vapor-gas exclusion zone requirements, saying that the interpretations apply to any LNG facility that is not yet in existence or under construction.

Two city residents raised objections with the U.S. Department of Transportation and FERC earlier this year in regards to Weaver’s Cove’s use of an outdated dispersion called SOURCE5 to show that vapor gas would not leave the company’s Fall River site.

Residents John Keppel and Michael Miozza argued the SOURCE5 model used by Weaver’s Cove resulted in a vapor dispersion model that showed vapors would remain within the company’s property. Keppel said at the time the SOURCE5 model creates “artificially small vapor zones.”

They argued that under different models the vapor dispersion would travel beyond the company’s boundaries, over private residences and possibly to Route 79.

In response to those concerns, the U.S. DOT informed the pair in July that the SOURCE5 model can not be used to comply with the agency’s vapor gas dispersion exclusion zone requirements. A similar determination was made in regards to the proposed Downeast LNG proposal for Robbinston, Maine.

KOGAS's Strategic LNG deals in Australia, Indonesia

2010-10-12T06:47:00.000-07:00

Korea Gas Corp (KOGAS) is planning to acquire stakes in Australian and Indonesian LNG projects to secure stable supplies, the state-run utility said in a report.

The world's largest LNG buyer said it was in talks to acquire a 15% stake in a coal seam gas project led by Australia's Santos Ltd and a 9.8% stake in Indonesia's Senoro Toili project run by Japan's Mitsubishi Corp.

The company did not provide a financial value for either of the potential deals, but sources with knowledge of the Australian deal said in August that KOGAS would invest more than US$1 Bn in the Santos's Gladstone LNG (GLNG) project.

"The US $1 Bn fundraising report lends credence to the first report that KOGAS will take a larger 15% of GLNG, rather than the 10 percent commonly reported previously," said Benjamin Wilson, an analyst with JP Morgan in a note.

"We think this news implies Kogas is confident it will achieve Korean government approval to contract/purchase soon," Wilson said.

Total paid US$597.4 MN for 15% of the coal seam gas-fed LNG project in Australia's north east state of Queensland in September.

Santos currently owns 45% of Gladstone, Petronas has 35% and Total holds 20%.

In addition to buying a stake in the GLNG project, KOGAS has also been expected to sign an offtake agreement for 2 million tonnes per annum of LNG from the project.

The state-run utility sold 24.6 MMT of LNG in 2009 and said in February that it was planning to spend about US$895.4 MN this year on overseas resource development to secure energy supplies for Asia's fourth-largest economy.

LNG Report - International LNG market likely to balance in 2011 as demands grows

2010-09-18T00:54:00.000-07:00

The International LNG market will likely come back into balance in 2011 as demand grows considerably this year and the next, absorbing the projected supply growth, BofA Merrill Lynch Global Research said in a report.

The bank said it was projecting total International LNG import growth of 18% for 2010, followed by 9% in 2011, with the bulk of the increase coming from Asia and Europe. "We believe the risk of an influx of LNG imports to the US is low," it added, since it expects US gas prices to remain "very weak."

The UK could become the world's fourth-largest LNG importer in 2010, after Spain, with imports up 120% year on year "potentially exceeding 11.6 MMT," it said. "In general, UK LNG utilization rates at regasifcation capacity still remains low, suggesting room for further liquid gas imports into the UK."

In Asia, China and India have expanded their import capacity, the bank said, while South Korean and Japanese imports had "surprised to the upside, though largely driven by a hot summer." And "new joiners" such as Argentina, Brazil and Chile would also soak up some of the expected growth in supply, it added.

Global LNG supply would likely grow 14% in 2010 and 9.6% in 2011, the bank said. It added, however, that a number of issues "are clouding the supply outlook of existing facilities." Those include rising use of domestic gas among some exporters, technical issues "as seen with RasGas Train 7 and Tangguh in Indonesia," and maintenance of LNG trains, particularly in Qatar.

"Combine the strong rebound in LNG demand with the startup delays at Qatargas Trains 6 and 7 into next year, and we get a global LNG market in 2010 that is less loose than commonly expected," the bank said.

As a result, it added, the market would "likely be able to rebalance over the course of 2011."In level terms," the bank added, the market would remain oversupplied in both 2010 and 2011 due to utilization rates at liquefaction terminals remaining below 90%, however.

LNG production reached a total of 181.7 MMT in 2009, according to independent consultant Andy Flower.

Roberto R. Vara returns to CH·IV International

2010-07-14T06:23:00.000-07:00

HANOVER, MD July 14 – Jeffrey P. Beale, President of CH·IV International (CH·IV) is pleased to announce that Roberto Ruiperez Vara has returned full-time to our Hanover Maryland Corporate Office. Mr. Vara will provide technical consulting engineering services to clients involved in the pretreatment and liquefaction of natural gas and the transportation, importation, storage and re-gasification of Liquefied Natural Gas (LNG). Mr. Beale stated, “Roberto has played a very significant role in CH·IV’s success before leaving for Chile. I know, with his return, our clients will benefit from his wealth of experience and expertise.”

Mr. Vara took over the role of Operations Manager at the GNL Quintero LNG import terminal in Quintero Bay, Chile in May of last year. There he oversaw cooldown and start-up of the world’s first of its kind “Early Gas” LNG Import Terminal, where LNG transfers are batched into a small land-based tank (10,000 cubic meters) with a LNG carrier permanently connected to the jetty, until the complete terminal (2 x 160,000 cubic meter LNG tanks) construction could be completed. As Simultaneous Operations (SIMOPS) Coordinator, he established and managed a Permit to Work System that allowed approximately 200 construction workers to complete the LNG terminal constructions while day-to-day LNG sendout was taking place.

Construction of the entire terminal was completed in late Spring, at which time Roberto directed Operations through start-up. Mr. Vara completed his obligation in Chile upon establishment of normal operations of the GNL Quintero LNG import terminal.

The GNL Quintero LNG import facility is comprised of three LNG tanks (one x 10,000 cubic meter and two x 160,000 cubic meter); two x 175 mmscfd open rack vaporizer systems; one x 175 mmscfd submerged combustion vaporizer system; six first stage, in-tank LNG pumping systems; one recondenser and BOG recovery system, three x 1,600 gpm high pressure LNG pumping systems; a 6,000 foot long LNG Transfer System and a marine LNG carrier berth.

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CH·IV [read C - H - 4] International is a joint venture corporation between MPR Associates, Inc. and CH·IV Cryogenics, LP. MPR, founded in 1964, specializes in technical services for the development, design, construction and operation of power facilities and equipment for energy, industrial, pharmaceutical and government clients. CH·IV Cryogenics, founded in 1994, had been providing LNG engineering and consulting services to a wide base of clients ranging from international LNG trading to LNG vehicle fleets until the formation of CH·IV International in 2001.

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YPF, Enarsa To Build LNG Plant Near Buenos Aires

2010-06-04T23:17:00.000-07:00

Argentine oil company YPF SA, the local unit of Spain's Repsol YPF SA, will build a LNG plant about an hour north of Buenos Aires.

The LNG plant, which will cost around $150 million to build, will be financed equally by YPF and the state energy company Enarsa.

The government typically rations gas to industrial firms during Argentina's cold winter months, which run roughly from May through September.

Argentina already gets LNG from a regasification vessel located at the southern port of Bahia Blanca in the province of Buenos Aires.

Argentina also imports natural gas from Bolivia, but the amount of gas produced domestically, coupled with imports, still fails to meet demand during the winter, leading to rationing.

Argentine President Cristina Fernandez said that her government is working with Uruguay on the construction of an LNG plant, though she didn't provide more details. Presidents of the two countries are thought to be nearing finalization of plans to build a regasification plant near the Uruguayan capital of Montevideo.

Since an economic meltdown in 2002, the government has kept most energy prices and utility rates frozen partly because of its belief that rates should be kept low to help spur growth in other areas of the economy.

But the price controls have crimped profits for oil and gas companies and given them a disincentive to invest in exploration and production.

As a result, Argentina's oil and gas reserves have fallen while demand has risen, creating an energy crunch that has sometimes led to blackouts and rationing.

Argentina gets more than 90% of its energy from oil and gas. Energy experts say the country depends more on natural gas than any other nation in the region.

A K Balyan to head Petronet LNG

2010-06-03T23:09:00.000-07:00

Petronet LNG, India's largest LNG importer, has appointed Ashok Kumar Balyan as new Chief Executive Officer and Managing Director.

Balyan, who currently is Director for Human Resources and Business Development in Oil and Natural Gas Corporation, has accepted the offer made at the meeting of board of Petronet (PLL).

Balyan will now resign from ONGC and is likely to join PLL by month end. He is due to retire from ONGC on July 31, 2011, on attaining superannuation age of 60 years.

South Hook LNG terminal in UK completed

2010-04-06T07:23:00.000-07:00

The second part of Europe's largest LNG terminal at South Hook in Wales has been fully commissioned, doubling the amount of gas it can deliver into the UK gas grid to 21 BCM a year, the operator said.

The first phase of the terminal owned by U.S. oil major ExxonMobil, Qatari gas giant Qatargas and France's Total officially opened in May 2009.

The first two storage tanks at the facility in the port of Milford Haven, each the size of London's Albert Hall concert venue, were brought into service a year ago. The three extra tanks and other equipment commissioned since then increase the terminal's total processing capacity to 15.6 million tonnes per year of LNG.

Most of South Hook's LNG will come from Qatar. Britain hopes increased LNG import capacity will help compensate for decling North Sea gas production.

(Reuters)

Natural Gas Outlook This Week

2010-03-20T08:31:00.000-07:00

Prices

Natural gas spot prices continued declining this week, reflecting moderating demand as temperatures warmed in key high-demand areas of the country. Spot prices at market locations across lower 48 States fell since last Wednesday, March 10, with decreases ranging between 4 and 26 cents. Prices at trading locations serving demand centers in the Northeast also fell significantly on the week, as spring-like temperatures arrived. The spot price at the Algonquin Citygate, which delivers natural gas to markets in New England, fell 19 cents or about 4 percent on the week. Transcontinental Pipeline’s delivery into New York City was priced at $4.58 per MMBtu yesterday, 18 cents, or 3.8 percent, lower than the previous Wednesday.

Prices at trading locations serving markets in California registered some of the biggest declines since last Wednesday, particularly the southern portion of the State where temperatures continued to moderate. Natural gas spot price at the Southern California Gas Company’s market location fell 22 cents or about 5 percent since last Wednesday, ending trading yesterday at $4.49 per MMBtu. Prices at the Pacific Gas and Electric trading location, which serves markets in northern California also decreased significantly on the week, falling by 21 cents. However, despite the significant price decline, this location was the highest-priced in the lower 48 States as of yesterday, ending trading at $4.81 per MMBtu. The high price at this location and its spread compared with the Henry Hub and trading locations in the Northeast is the result of several factors. These factors include BENTEK Energy estimates, which show that since the middle of 2009, electric generators in the Western United States have been using more natural gas compared with the 5-year (2005-2009) average. The increased power burn is likely the result of a reduction in hydroelectric power generation in the Pacific Northwest and California because of lower precipitation and drought conditions. Furthermore, natural gas is replacing the 1,100 megawatts of electric power that Unit 2 of the San Onofre Nuclear Generating Station (SONGS) previously generated. SONGS Unit 2 has been out of service since September 2009 for steam generator replacement.

While temperatures in the Rocky Mountain States increased slightly during the report week, they continued to hover in the 30s and 40s. Still, the price of natural gas fell substantially in a few market locations in the Rockies. The highest net weekly price drop occurred at Northwest Pipeline’s Sumas location, which fell by 26 cents or 5.7 percent per MMBtu since last Wednesday. The Sumas premium over Henry Hub decreased from 14 cents to 5 cents per MMBtu as of yesterday. Additionally, prices at Kingsgate in Idaho and Stanfield (for delivery into Oregon) fell by 23 and 22 cents per MMBtu, respectively. Overall, trading locations in the Rockies registered net weekly decreases between 4 and 26 cents per MMBtu.

The across-the-board price decreases likely resulted from the significant reduction in total U.S. demand. Total demand for the week ended March 17 fell by 8.6 percent compared with last week, according to BENTEK Energy. Consumption in the residential and commercial sectors fell by 12 percent, contributing to the week-to-week decline. The majority of the decrease in this sector occurred between Monday and Wednesday of this week, as temperatures rose in areas east of the Rockies. The electric power and industrial sectors also recorded demand decreases of 8.6 and 2.3 percent, respectively.

Natural gas supply exceeded total demand for 3 days this report week, the first time the estimated supply/demand balance was positive since November 26, 2009. However, total natural gas supply fell this week, a result of the decrease in Canadian and liquefied natural gas (LNG) sendout, according to BENTEK. Canadian imports decreased by almost 2 percent compared with last week, while LNG sendout fell by nearly 9 percent over the same period. U.S. natural gas production was flat compared with last week, with volumes totaling only 0.1 percent lower. Total supply of natural gas this week was 0.4 percent lower than last week and 2.2 percent lower than last year for the same week.

At the NYMEX, the price of the near-month contract for April delivery decreased by 26 cents during the report week to $4.303 per MMBtu. The price of the April futures contract has decreased fairly consistently since becoming the near-month contract on February 25, falling 46 cents during the period. Remaining contracts for delivery through the end (October 31, 2010) of the upcoming injection season posted similar decreases, ranging between 4.7 and 5.5 percent. Prices on the futures market likely reflect the arrival of spring-like temperatures and continued strength in natural gas production. With only about 2 weeks left in the traditional heating season, which will officially end on March 31, supplies of natural gas are relatively ample. Robust domestic production coupled with the possibility that natural gas inventories in underground storage may close the heating season at about last year’s level could provide considerable downward pressure on prices. Inventories of natural gas in underground storage ended the 2008-2009 heating season at 1,656 Bcf, the highest level since the 2005-2006 heating season ended with 1,692 Bcf of natural gas in storage. The 12-month strip traded yesterday at $4.919 per MMBtu, 22 cents or 4.3 percent lower than last Wednesday.

Storage

Working gas in storage decreased to 1,615 Bcf as of Friday, March 12, according to EIA’s Weekly Natural Gas Storage Report (see Storage Figure). The implied net withdrawal was 11 Bcf, significantly below both the 5-year (2005-2009) average withdrawal of 65 Bcf, and last year’s net withdrawal of 42 Bcf for the report week. The East and West regions both noted net withdrawals for the week; however, storage operators in the Producing region reported the first regional net injection of the season of 14 Bcf. This net injection in the Producing region reduced the storage deficit compared with last year to 135 Bcf, down from 145 Bcf last week. With less than 3 weeks left in the current heating season (November 1-March 31), natural gas stocks in underground storage are on pace to finish the heating season above the 5-year average. If the remaining withdrawals equal the 5-year average withdrawals and injections for the remainder of the month, natural gas stocks would end the heating season at 1,557 Bcf, about 73 Bcf above the 5-year average.

Temperatures in the country were generally warmer than normal for the week ended March 11, with total heating degree-days falling short of normal levels by about 10 percent. Based on the National Weather Service’s degree-day data, temperatures in the United States were 2 degrees warmer than normal, but 3 degrees colder than last year. Four Census Divisions in the Northeast and the Midwest recorded average temperatures that were more than 5 degrees warmer than normal (see Temperature Maps and Data). The West South Central Census Division, which roughly coincides with EIA’s Producing Region, also experienced above-normal temperatures. Despite relatively warmer temperatures in the Northeast and the Midwest, these areas remained cold and registered the lowest temperatures in the country for the week ended March 11. Elsewhere in the United States, average temperatures ranged between 39 and 67 degrees.

Other Market Trends

EIA Highlights Differences between Projections and Actual Values in AEO. On March 16, EIA released its Annual Energy Outlook (AEO) Retrospective Review, which presents a comparison between projected data for all fuel types in the AEO reference case and the actual outcomes from 1982 to 2009. The report measured the average absolute percent difference, which is the simple mean of the absolute values of the percentage difference between the reference case projection and the actual value. The report concluded that consumption forecasts for most fuel types were often far more accurate than price forecasts, as consumption is relatively more stable compared with energy prices. However, the fuel with the largest difference between projections and actual consumption was natural gas, the result of difficulty in forecasting the effects of regulatory changes in the 1980s. Regarding other natural gas data, EIA’s forecasts were generally 57.6 percent off for wellhead prices; 7.1 percent for consumption; 6.2 percent for production; and 15.6 percent for net imports when the time frame between 1982 and 2009 is analyzed. EIA noted that expectations of technological improvement within the natural gas industry embedded in early editions of the AEO were somewhat conservative, further affecting the accuracy of forecasts. Additionally, despite the large difference between projected and actual wellhead prices from 1982-2009, the error has decreased over time. For example, the AEO had an absolute relative error for natural gas wellhead prices of 7.5 percent in 2006, no error in 2007, and 0.2 percent in 2008. In general, longer-term price forecasts were more inaccurate.

Shale Will Play a Greater Role in Natural Gas Production. Speaking on March 12 to Clean Skies News at the Cambridge Energy Research Associates energy conference (CERAWeek) in Houston, Texas, EIA Administrator Richard Newell discussed increasing prospects for natural gas production from shale formations, as well as the role of natural gas in power generation. Newell noted that shale gas production comprises an increasing percentage share of dry natural gas production, totaling 11 percent in 2009. Over the next 25 years, shale is expected to account for more than 25 percent of dry natural gas production. Newell noted that the electric power sector will contribute substantially to growth in natural gas consumption. Newell also discussed the role renewable energy sources will play in reducing greenhouse gas emissions. A video of Newell speaking is available here: http://www.eia.doe.gov/neic/press/video/video.html

Natural Gas Transportation Update

- Southeast Supply Header, LLC (SESH) has begun planned maintenance on several compressor units, reducing available capacity through associated stations on its system. On March 15, work began at the Lucedale Compressor Station in Mississippi. SESH’s capacity through the Lucedale station during maintenance will likely be approximately 870,000 decatherms (Dth) per day, compared with normal capacity of about 1,060,000 Dth per day. From March 18–20, maintenance will occur at the Gwinville Compressor Station, also in Mississippi, where capacity will be limited to 920,000 Dth per day. Lastly, maintenance at the Delhi Compressor Station in Louisiana between March 22 and 27 will limit capacity through the Delhi and Gwinville compressor stations to 800,000 Dth per day. Normal operating capacity through the Delhi and Gwinville stations is 1,020,000 and 1,060,000 Dth per day, respectively.

- Gulf South Pipeline Company LP began maintenance on Unit #3 at Marksville Compressor Station in Louisiana on Tuesday, March 16. According to the pipeline company, work is expected to last 30 days, likely reducing capacity through the station by 150,000 Dth per day. The pipeline company moved up the maintenance from an original start day of March 29.

- Rockies Express Pipeline LLC (REX) on Monday, March 15, informed shippers that it had completed repairs at its compressor station in Cheyenne, Wyoming, returning capacity to 1,900,000 Dth per day. The capacity of REX’s segment 200 in Wyoming had been reduced to 1,550,000 Dth per day on March 7 because of repairs on a transformer at the compressor station.

- Columbia Gas Transmission, LLC on March 16 began planned maintenance on its pipeline in Green County, Pennsylvania. The maintenance will reduce capacity at an interconnect between Columbia and Texas Eastern Transmission near Waynesburg, Pennsylvania. According to BENTEK Energy, flows for March 18 are 80 million cubic feet (MMcf), down 60 MMcf from the 30-day average of 140 MMcf. Maintenance is scheduled to run through April 14, but minimal impact is expected because of below-normal demand in the Northeast, BENTEK said.

Source: U.S. Energy Information Administration

India's Third LNG Terminal Commissioning Delay

2010-03-19T08:27:00.000-07:00

India's third terminal to import LNG will miss by a year the target to commission its first phase in March because of delays in starting dredging to desilt the ship channel, a senior executive at its owner said.

Due to delays in getting government clearances and a shortage of equipment, the dredging contractor, Gammon India Ltd., had to postpone its work, the executive at Ratnagiri Gas & Power Pvt. Ltd. told Dow Jones Newswires, asking not to be identified.

The terminal to handle 5.0 million metric tons of LNG a year was initially planned by Enron Corp. to import LNG for a power plant it was setting up in the western state of Maharashtra. It was also planning to lease out excess capacity. After the U.S. company's collapse, Ratnagiri Gas & Power took over the projects in 2005.

The delay in opening the terminal isn't expected to have any major impact on gas supplies as the local market is well fed with Reliance Industries Ltd. increasing output at its gas field in the Krishna-Godavari basin off the east coast. Ratnagiri Gas & Power also gets gas from Reliance to run its 2,150-megawatt power plant.

Also, Petronet LNG Ltd., India's largest LNG importer, has raised capacity at its Dahej terminal in the west coast to 11.5 MMTPA from 6.5 MMTPA.

QGC, BOC sign deal to produce LNG from coal seam gas

2010-03-18T00:41:00.000-07:00

This is a joint venture between the Queensland Gas Company and gas company BOC. This plant will provide LNG to create fuel for trucks.

Premier Anna Bligh said it could be the start of a new industry, leading to heavy transport switching from diesel to LNG.

"LNG produces up to 25 per cent fewer emissions than diesel and is a proven safe alternative to other fossil fuels,'' she said.

"Through this agreement, Queensland will join the rest of Australia, as BOC develops a network of fuelling stations across the country for vehicles converted to run on LNG.''
Ms Bligh said QCG has agreed to supply gas to BOC from July 2011 and if the companies meet that deadline, Queensland will become the first in Australia to produce LNG from coal seam gas.

The plant will be built next to the Condamine Power Station, west of Chinchilla, with construction expected to start early next year.

CNOOC to build new LNG terminal

2010-03-11T18:46:00.000-08:00

CNOOC Ltd is in talks with the relevant government authorities regarding the construction of a new liquefied natural gas terminal, Song Enlai, a senior executive at CNOOC said. CNOOC operates three LNG terminals, one in Guangdong Province, one in Fujian Province and one in Shanghai. Its fourth terminal, located in Zhejiang Province, is still under construction.

(Source: China Knowledge Online)

Adriatic LNG terminal will be operational in 2014

2010-03-11T06:27:00.000-08:00

Croatia's energy firms power board HEP, gas pipeline operator Plinacro and INA will change their participation structure in an Adriatic liquefied natural gas (LNG) terminal project to help make it operational in 2014.

Location: Northern Adriatic island of Krk

Capacity: 15 BCM

Target Market: Central and southeastern Europe and Italy

Investment Expected: 800 million euros

The government is expected to adopt a decision on establishing the Croatian LNG consortium soon.

At the moment, four foreign energy firms keen to take part in the project are part of the Adria LNG consortium. They include Germany's E.ON-Ruhrgas, Austria's OMV, France's Total and Geoplin from Slovenia.

Croatian firms should join later this year and have a 25-percent stake in the joint venture. INA can have 14 percent while Plinacro and HEP will jointly have 11 percent.

The LNG project has moved slowly in recent years, largely due to a slow decision-making process within Croatia, but the foreign investors are keen to speed it up because of a strong competition looming on the Italian side of the Adriatic.

Approval for Mid-Atlantic LNG Import Deal

2010-02-19T00:08:00.001-08:00

A U.S. subsidiary of Moscow-based OAO Gazprom, the world’s largest gas producer, won federal approval today to import liquefied natural gas into the U.S. Mid-Atlantic region.

The Federal Energy Regulatory Commission voted in favor of a deal between Gazprom Marketing & Trading USA Inc. and a U.S. affiliate of Oslo-based Statoil ASA to import the gas through Dominion Resources Inc.’s LNG terminal in Cove Point, Maryland. As much as 200 million cubic feet of gas a day would be imported under the Dec. 1 deal.

Surat LNG pipeline

2010-02-19T00:02:00.000-08:00

The State Government has approved the first licence for a gas pipeline from the Surat Basin to Gladstone in central Queensland.

Arrow Energy is planning to build an LNG facility on Curtis Island near Gladstone and hopes to start exporting in 2012.

The Government has approved a 470 km pipeline from Dalby which will cost about $550 million.

Arrow Energy spokesman Gareth Quinn says the company is also planning to build a pipeline from Moranbah to Gladstone.

Arrow Energy to acquire Gladstone LNG

2010-02-17T02:50:00.000-08:00

Liquefied Natural Gas Limited (LNG) has executed a conditional heads of agreement with Arrow Energy Limited to sell the entire Fisherman's Landing liquefied natural gas project (Gladstone LNG Project) through the sale of LNG's 100% owned subsidiary Gladstone LNG Pty., Ltd. for a combination of cash, milestone payments, royalties and Arrow options. The total transaction is valued at approximately AUD45 million ($39.4 million). All the companies are based in Australia.

Arrow Energy is an integrated energy company focused on the development of coal seam gas. LNG is engaged in the production and sale of liquefied natural gas in Australia.

The consideration will consist of $10 million licensing fee for Arrow's use of LNG's OSMR(R) technology for the first LNG train, with $5 million to be paid by Arrow to LNG Ltd by February 28, 2010 and a further $5 million payable at notice of readiness to proceed to construction of the first LNG train. An additional $10 million license fee is payable for each additional LNG train developed at the project site using the OSMR(R) technology.

Deal Value (US$ Million) 39.4

Deal Type                Acquisition

Sub-Category             100% Acquisition

Deal Status              Announced: 2010-02-11

Deal Participants

Target (Company)   Gladstone LNG Pty., Ltd.

Acquirer (Company) Arrow Energy Limited

Vendor (Company)   Liquefied Natural Gas Limited

First LNG Distribution Terminal in the Dominican Republic

2010-02-04T10:13:00.000-08:00

AES Dominicana has inaugurated a LNG distribution terminal east of Santo Domingo, the first facility of its type in the Dominican Republic and Latin America. The LNG terminal will yield annual savings of more than $1 Bn, AES Dominicana officials said.

The terminal will allow the Dominican Republic to “significantly” reduce its high dependence on petroleum, AES Dominicana chief Marco De la Rosa said.

The LNG terminal, among other benefits, will allow the Dominican Republic to replace 35 percent of its fuel mix, create around 300 new direct and indirect jobs, and reduce emissions of CO2, the gas believed to contribute to global warming, by more than 300 tons annually.

The use of LNG “will help achieve total savings on the order of $1.1 billion annually, representing a sum relative to 2.5 percent of the gross domestic product,” the AES Dominicana chief said.

US Coast Guard clears Yemen LNG shipments

2010-02-03T10:12:00.001-08:00

LNG shipments from Yemen have been cleared by the US Coast Guard for entry into the Distrigas terminal in Everett outside Boston, in the face of local opposition.

BW Gas and Höegh LNG ships chartered by Distrigas owner GDF Suez would begin calling from Yemen from the end of February. Distrigas has signed a 20-year contract with a Yemeni supplier and expects to bring in up to 30 shipments a year to its Everett facility. The imminent delivery would be only the second from Yemen to the United States. A tanker carrying Yemeni LNG arrived earlier this week in less-populous Sabine, Texas, according to John Healey, Coast Guard captain of the port of Boston, who said the Coast Guard spent a year reviewing security plans for the Yemeni shipments.

LNG Project in in central Queensland, Australia

2010-02-02T00:53:00.000-08:00

Australia Pacific LNG is one step closer to making the liquefied natural gas industry in central Queensland a reality, with the lodgement of its draft environmental impact statement (EIS) with the State Government.

The EIS covers the project's gas fields, a 450 km gas transmission pipeline and an LNG plant on Curtis Island in Gladstone.

Joint venture partner Origin Energy says it is a significant milestone for the project.

Origin's executive general manager, Paul Zealand, says the final investment decision for the project is expected by December this year, with the first gas to be exported in late 2014.

LNG offloading terminals in Orlovka bay, Gazprom

2010-02-02T00:49:00.000-08:00

Shtokman LNG offloading terminals will be located in Orlovka Bay as it was decided at Gazprom meeting. Alexey Miller, Chairman of the Gazprom Management Committee held a meeting on the Shtokman gas and condensate field development.

The meeting was attended by heads and experts from the Gazprom Administration subdivisions, subsidiaries, corporate research and design institutes and Shtokman Development AG, reads the press release of Gazprom.

The meeting discussed Shtokman project progress focusing on technology optimization within first phase of the Shtokman development. The idea is to raise the economic efficiency and to assure navigation safety of heavy-duty LNG carriers.

Based on the meeting results the decision was taken to position LNG offloading terminals in the northern part of the Orlovka Bay (Murmansk region, eastwards from Teriberka). The project operator will rely on this decision when planning its further activities.

Total may invest in new LNG project

2010-02-01T00:43:00.000-08:00

Total could invest in a liquefied natural gas (LNG) plant project led by EDF in Dunkirk to offset possible job losses if the refiner decides next week to close a refinery in the same town, an industry source said.

Oil giant Total is considering permanently shutting its 137,000 barrels-per-day Dunkirk refinery in northern France, or a 13 percent share of the group's French output capacity, which could result in some 600 job losses, a source close to the situation said earlier this month.

Total is expected to make the announcement on the possible closure after an extraordinary meeting with unions on Feb. 1.

The French government has pressured Total to find an alternative industrial project to compensate for the possible job losses, three months before key regional elections.

EDF, which is planning to make a final investment decision on the Dunkirk LNG plant in the next six months, said at the end of 2009 that it was looking for financial partners for half of the 700-million euro investment.

The plant is expected to start running in 2014 and produce some 13 BCM of gas.

BPMigas rejects LNG project plan for Sengkang LNG project

2010-01-29T22:37:00.000-08:00

Upstream oil and gas regulator BPMigas has rejected a plan of development (POD) for a liquefied natural gas (LNG) project proposed by Energy Equity Epic Sengkang, a subsidiary of Australia-based Energy World Corporation (EWC), on the grounds that the proposal is incomplete.

“The POD is not backed up with valid data. How can we approve the POD if we don’t even know

the reserve data?” BPMigas’s chairman, R. Priyono, told. Priyono said BPMigas rejected Energy Sengkang’s work program and budget (WPNB) for development of new gas reserves in the block.

“We cannot approve their WPNB for drilling activities, because they don’t follow the SOP [standard operating procedures]. It’s strange they want to drill without an initial seismic survey,” Priyono said.

EWC’s executive director Brian Allen said during a hearing with the House of Representatives Commission VII overseeing energy and mineral resources on Monday that the new reserves would be able to provide between 300 billion cubic feet (BCF) and 500 BCF of gas for the LNG plant

He said the proposed LNG development would cost EWC about US$500 million in investment.

To facilitate the financing and funding for the LNG project, part of the LNG would be exported.

Energy Sengkang is one of 232 oil and gas contractors operating in Indonesia. Based on their proposed work programs and budgets for 2010, the contractors plan to spend nearly US$16 billion in upstream activities in this coming year.

Origin seeks environmental nod for $31.3 Bn LNG project

2010-01-28T22:27:00.000-08:00

Origin Energy said it had sought formal environmental clearance for its gas export project with U.S. ConocoPhillips.

Origin, the country's largest producer of coal seam gas, said the lodging of the draft environmental statement with the Queensland state government advances the $31.3 billion project towards a final investment decision by December this year and first LNG shipments by late 2014.

While the lodging of the environmental statement is a key project milestone, investors are still looking for firm gas sales before validating the project, analysts say. There are four other projects racing to start exporting Australian coal seam gas and the Origin/Conoco development is seen by some analysts as a falling behind the rivals as it was yet to lock in any gas sales.

Origin's project, also known as Australia Pacific LNG, will produce between 3.5-4 million tonnes per year (mtpy) of LNG in the first phase in 2014, before progressively expanding up to 14-16 mtpy.

PGN signs initial LNG contract with EEES

2009-09-08T02:03:00.000-07:00

PT Perusahaan Gas Negara (PGN) signed an initial agreement to purchase up to 5 million metric tons of liquefied natural gas (LNG) per annum from Energy Equity Epic Sengkang Pty Ltd (EEES).

"PGN will receive between 1.5 and 5 million metric tons of LNG per annum *MTPA* from EEES. The LNG is expected to be delivered from 2012 as part of a five-year contract," PGN president director Hendi Prio Santoso said.

Hendi refused to divulge the contract's value, saying the pricing was one of the issues the two companies would finalize later.

Stewart Elliot, CEO of EEES's parent company Energy World Corporation Ltd, said EEES had produced a surplus of gas at its block in Sengkang, Central Sulawesi.The company was also planning to build an LNG plant, he added.

"We will build the LNG plant with a production capacity of 2 MTPA to begin with.
"We will then ramp up the capacity to 5 MTPA," he said.

Elliot added EEES would spend between US$400 million and $500 million to build the 2 MTPA plant.

EEES has been preparing for the plant's permit and putting together its component manufacturing.

"We expect the plant will start operating in 12 to 18 months from now," he added.

Hendi said the LNG would be supplied to PGN's LNG-receiving terminals it was planning to build in West Java and North Sumatra.

As has been reported earlier, PGN and state oil and gas company PT Pertamina have formed a consortium to build the two LNG-receiving terminals in those particular regions.

InterOil’s PNG LNG project seeks approval

2009-09-08T01:57:00.000-07:00

Papua New Guinea’s second liquefied natural gas project is edging forward after Canadian independent InterOil and its joint venture partners submitted a project agreement to the government to build the proposed plant in Port Moresby.

InterOil said that both the Prime Minister of PNG, Michael Somare, as well as the Minister for Petroleum and Energy, William Duma, have stated their support for the proposed project and associated agreement.

The proposed project targets a $6 billion two train LNG facility, with each train capable of producing about 4 million tonnes of LNG per year. Current plans call for first production of LNG towards the end of 2014 or beginning of 2015.

At least 5000 jobs are expected to be created at peak construction of the InterOil facility. Economic returns from the project are expected to help fund public infrastructure and community services in Papua New Guinea, such as education and health, and provide income to land owners.

InterOil's partners in the project are Petromin PNG Holdings and Pacific LNG Operations.

Indonesia Tangguh begins trial at train 2

2009-09-07T02:08:00.000-07:00

Indonesia's Energy Minister said trial runs at the second LNG train at the Tangguh project began last week and the first train would resume operations by the second week of October at the latest.

The Tangguh LNG plant in Papua, led by BP's Indonesian unit, started up this year but was temporarily shut in August to resolve technical problems.

"Second train commissioning started. Trial runs are on," the minister, Purnomo Yusgiantoro, told Reuters in an interview.

Indonesia's oil watchdog BPMIGAS said last week the LNG plant, which has a capacity to produce 7.6 million tonnes per year (tpy) via two trains, will ship only 16 cargoes of liquefied natural gas in 2009, well short of its previous estimate of 56 cargoes.

BPMIGAS monitors oil and gas firms operating in Indonesia.

Indonesia, the world's third-largest LNG exporter after Qatar and Malaysia, plans to use more natural gas at home to avoid costly oil prices as its own oil reserves dwindle.

Yusgiantoro said fertiliser customers had placed a request for 0.5 million tonnes of LNG from Donggi-Senoro project and the remaining 1.5 million tonnes was yet to be sold.

He said the promoters were still negotiating price and financing of the project.

The Donggi-Senoro project, which will require $1.7 billion for upstream activities and $2 billion for downstream, has been under threat since Vice President Jusuf Kalla said in June gas from the project should be sold to the domestic market.

Yusgiantoro said Indonesia, the world's largest thermal coal exporter, would export 150 million tonnes of coal annually from 2015. It exported 140.35 million tonnes of coal in 2008.

"We will increase it by 20 million tonnes to 30 million tonnes per year up to the level that it can be massively exported," Yusgiantoro said. Currently, Indonesia uses 40 percent of its output locally and exports the rest.

CNOOC Shanghai terminal to receive 1st LNG cargo

2009-09-07T02:01:00.000-07:00

The Shanghai LNG project, a joint venture between CNOOC and Shenergy Group, is expected to receive its first cargo of liquefied natural gas (LNG) from Malaysia around Sept. 20, an industry source said.

The shipment would be about 80,000-90,000 cubic metres, the source said, adding that the fuel would be used later to test new facilities.

Previous imports from Malaysia were diverted to Wuhaogou, an existing small LNG terminal in the financial hub, which has two 50,000 cubic metre LNG tanks and one 20,000 cubic metre tank and serves as backup supplies for the city.

Wuhaogou is run by Shanghai Gas (Group) Co Ltd, a unit of Shenergy Group. The group controls Shenergy Company .

Under a long term contract, Malaysia's Petronas will supply 3.03 million tonnes of LNG a year to the new Shanghai terminal for 25 years starting from 2009.

China National Offshore Oil Corporation (CNOOC), parent of CNOOC Ltd, has one terminal in Guangdong and another in Fujian in operation.

Yemen LNG says to start producing in "coming weeks"

2009-09-06T01:59:00.000-07:00

Yemen LNG expects to start production from its new gas liquefaction plant in the "coming weeks", the company's chief executive said.

The first cargo was originally scheduled to be exported in August, but start-up problems, including leaking valves and minor glitches, delayed first production.

"Well we are in the start-up phase at the moment, we are working very hard and should see (production) in the coming weeks," Joel Fort said.

"We are not yet producing LNG but we are flowing gas through the first LNG train at the moment."

The Total-led Yemen liquefied natural gas (LNG) project in Balhaf, is expected to help boost economic growth in the country to nearly 8 percent, almost double last year's gross domestic product.

Other investors in the project include U.S.-based Hunt Oil and Yemen Gas Co, which own 17.2 percent and 16.7 percent, respectively.

The project has the capacity to produce 6.7 million tonnes of LNG for export from the Gulf of Aden port of Balhaf.

At the end of 2008, Yemen held 17.3 trillion cubic feet (tcf) of proven natural gas reserves, according to the BP Statistical Review.

Qatar to up LNG sale to India

2009-08-27T01:53:00.000-07:00

Qatar's RasGas will raise liquefied natural gas (LNG) supplies to India by 50 percent from November, a top official at gas importer Petronet LNG said on Thursday, but that will still leave scope for spot purchases.

The booming economies of China and India have propped up the long-term outlook of LNG market, as demand from traditional buyers such as South Korea and Japan has eased due to the rise in alternative energy sources such as nuclear power and coal.

At present Petronet imports 5 million tonnes of LNG every year from RasGas under a long-term deal, and supplies were to be raised to 7.5 million tonnes from the last quarter of 2009.

"It is 100 percent. Certainly we will receive it from November," Chief Executive Officer P. Dasgupta told reporters.

"India is always going to be driven by supply and not by demand".

Despite the start in April of output from Reliance Industries' huge gas find in its D6 block, which will eventually double local output, India will still have a gas deficit.

"Contrary to our nervousness about D6 gas, in April-June, D6 gas coming in to the tune of almost 25-30 mmscmd (million cubic metres a day), we sold a record 98 trillion British thermal units (tBtu) compared to 78 tBtu year ago," Dasgupta said.

He said Petronet's 10 million tonne a year Dahej terminal in western India could regassify 160 cargoes per year, and the enhanced RasGas supplies would translate to 120 cargoes. Its short-term supply deal with BP will end next month.

In the June quarter, Petronet imported 4 spot cargoes and in September quarter it planned to import 6 parcels, with two scheduled for arrival in September. Dasgupta said the firm would import 5 spot LNG cargoes in October and November.

He said Petronet was also in talks with Indian explorer Oil and Natural Gas Corp to jointly acquire a stake in InterOil's LNG project in Papua New Guinea. The Canadian firm has said it was looking to sell a stake of up to 35 percent.

Earlier this month Petronet signed a deal with Exxon Mobil Corp to buy 1.5 million tonnes of LNG a year for 20 years from Australia's Gorgon project to be regassified at its upcoming Kochi terminal in south India from late-2014.

No change in wholesale gas price pressure, NGSA

2008-10-03T00:55:00.000-07:00

"This winter season, we believe that all the combined market forces (slightly warmer than normal weather, stagnant economic growth, moderate growth in overall demand, near record storage levels and a healthy supply) will cause flat price pressure on the gas market compared to last winter," said NGSA Chairman Patrick J. Kuntz, who also is vice-president of gas and oil sales at Marathon Oil Co.

He said US gas production is expected to be nearly 8% higher this winter than a year earlier, based on an independent analysis by ICF International of Fairfax, Va., which NGSA commissioned. "Explorers and developers responded to the market signals, and companies are producing more domestic gas. Current production rates are at their highest level since the early to mid-1970s," Kuntz told reporters at a briefing.

Technology also is playing a significant role, he continued. "Much of our increase in domestic gas production is coming from unconventional plays where technological advances have unlocked the resource. Horizontal drilling is another big advance that allows more gas to be produced from a single well," he said.

NGSA forecasts that 31,530 wells will be completed during the 2008-09 heating season, 753 or 2.4% more than the 30,777 completions during the same period a year earlier. Average production is expected to climb 7.9% year-to-year to 57.5 bcfd from 53.3 bcfd, while the annual average rig count is expected to rise 4.4% to 1,535 from 1,470.

Stronger LNG prices

2008-09-17T06:43:00.000-07:00

Qatargas chairman and CEO Faisal al-Suwaidi has forecasted stronger price levels as well as demand in the Atlantic Basin.

“Qatar sees much of the new growth potential in the Atlantic Basin and has executed strategies to develop secure markets there,” al-Suwaidi said. “Achieving these objectives required investing billions in terminals and ships to access the deep liquid markets of the northwest Europe and the US. This investment ensures sufficient market capacity for the new large trains.

“By 2010 over 120mn tonnes of LNG could be targeting the Atlantic Basin and there should be over 200mn tonnes of terminal capacity waiting for it. So what we see is solid growth in LNG demand in all markets and sufficient production, ships and terminals to deliver it where it is needed the most.”

While declining to discuss specific price ranges, al-Suwaidi added that “We see that gas is deeply discounted in the Atlantic Basin relative to oil on an equivalent energy basis, and hope to see prices strengthen relative to oil in the coming years.”

Sitting on 900tn cu ft of gas reserves, the third largest reserves in the world, Qatar has invested billions in its infrastructure to ensure that it can meet its ambitious goals for exporting LNG to Asia, Europe and North America.

Al-Suwaidi is positive about LNG growth for the future. “Eight new LNG trains around the world will come into production increasing capacity by some 20%,” he said. “This new capacity is meeting customers in Asia and the Atlantic Basin ready for the gas. This expansion will continue, albeit at a slightly slower pace, and likely to average over 10% per annum growth through the end of the decade.”

LNG News Headlines - July 7 -12, 2008

2008-07-12T01:10:00.000-07:00

Samsung signs up Kanfa for first floating LNG vessel

Sevan Marine subsidiary Kanfa Aragon AS today signed a Letter of Intent with Samsung Heavy Industries Co. Ltd. in Korea for the development of a liquefied natural gas production topside to the world's first Floating Liquefied Natural Gas (FLNG) production vessel.

The FLNG topside will be based on Kanfa's liquefaction technology. Kanfa's scope of work includes the design and engineering of the liquefaction plant as well as procurement of major equipment items. The contract value is estimated at approximately US$200 million.

The vessel will be owned and operated by FLEXLNG and will be ready for operation late 2011. The vessel will have a gas processing and liquefaction topside with an LNG capacity of approximately 1.7 million metric tons (15. million tonnes) per annum LNG.

Sevan Marine wins $200 mln LNG vessel project

Norway's Sevan Marine said on it had won a $200 million deal from South Korea's Samsung Heavy Industries Co (010140.KS: Quote, Profile, Research) to supply its technology for a liquefied natural gas (LNG) production vessel.

The topside production equipment for the vessel will be based on liquefaction technology developed by Sevan's Kanfa Aragon AS subsidiary, Sevan Marine ASA said in a statement.

"Kanfa Aragon's scope of work includes the design and engineering of the liquefaction plant as well as procurement of major equipment items," Sevan Marine said.

"The contract value is estimated at approximately $200 million," Sevan said.

The vessel will be ready for operation in late 2011, it said.

Argentina Imports Third LNG Cargo as Bolivia Cuts Supply

July 11 (Bloomberg) -- Argentina may receive its third cargo of liquefied natural gas for delivery this month at Excelerate Energy LLC's Bahia Blanca GasPort terminal amid reduced gas supplies from neighboring Bolivia.

The Madrid Spirit, a 138,000 cubic-meter tanker, set sail from Idku terminal in Egypt carrying a cargo from the North African country and will reach Argentina on July 28, AISlive data on Bloomberg show. BG Group Plc and Gaz De France market Idku's output, according to World LNG Review 2008 published by U.S. Energy Intelligence Research.

Bolivia currently is sending about 2 million cubic meters of gas of day to Argentina, 26 percent of the 7.7 million cubic meters it agreed to sell in 2006, ABI reported, citing Energy Minister Carlos Villegas.

The first two LNG cargoes into Argentina came from Trinidad and Tobago in May and June, the ship tracking data showed, where BP Plc and partners produce LNG, natural gas that's been chilled into a liquid to be shipped on specialist tankers,

Argentina faces energy shortages after price caps curtailed investments and economic growth increased demand. The government rationed power to the country's biggest industrial companies last year after the coldest winter in about eight decades.

StatoilHydro says Snoehvit LNG restarted

Norway's StatoilHydro restarted production of liquefied natural gas (LNG) from its Snoehvit field in the Arctic on Thursday and the plant is now operating at 60 percent of capacity, the company said on Friday. The LNG plant at Hammerfest on the shores of the Barents Sea has been beset by teething problems since its start up in late 2007.

Samsung Heavy completes construction of worlds no. 1 LNG tanker

Samsung Heavy Industries Co. of South Korea, the world's second-largest shipyard, said Friday it has completed building the world's largest liquefied natural gas (LNG) tanker.

Mozah, the name of the 266,000-cubic-meter tanker, will be transferred to Qatar in August, and supply gas to the United States and Europe, said Samsung.

Samsung Heavy Industries won the 290 million U.S. dollar contract to build the LNG tanker in March 2006, the then largest-ever contract, the company said.

Samsung said by 2010 it plans to deliver 10 additional LNG tankers of the same size to Qatar.

Spice Energy to import LNG from Indonesia

NEW DELHI: Spice Energy will import LNG from Indonesia at its proposed $400 million import terminal in Haldia while its unit Cals Refineries has signed a deal with oil major BP plc to source up to five million tonnes a year of crude oil for its $1.1 billion refinery in the same city.

“We have signed a framework agreement with Indonesian State-run firm Pertamina for sourcing liquefied natural gas for the Haldia import and re-gassification facility we plan to set up by 2011,” Spice Energy CEO Ravi Chilukuri told PTI.

Spice Energy is setting up a 2.5 million tonnes facility that would sell gas to fertilizer plants in West Bengal.

In the same port city, Cals Refineries, the Bombay Stock Exchange listed firm, where Spice Energy promoters hold just under 15 per cent stake, is relocating a five million tonne refinery from Germany by the first quarter of 2010. It has also got BP to commit 2.5 million tonnes a year of heavy crude and a similar quantity of light crude for the refinery. He said Spice had also signed a deal with Indonesian miner PT Tambang Batubara Bukit Asam Tbk to buy six million tonnes of coal a year for 20 years from 2011. — PTI

Chevron to triple size of Australia LNG project

U.S. energy firm Chevron Corp plans to triple the production capacity of its proposed Wheatstone liquefied natural gas (LNG) project off western Australia to 15 million tonnes a year, the firm said.

Chevron said expansion plans for the project came after it found a significant gas extension at its Iago gas field, which lies adjacent to its Wheatstone gas field in western Australia.

Chevron, which is also the operator of the proposed Gorgon LNG project in the same region, said it was now looking at combining the resources in the Wheatstone and Iago fields into a single project with three processing units.

"We've now got enough gas to support a multi-train development and we're also looking at the option of bringing in third-party gas," Chevron's spokeswoman Nicole Hodgson said.

The Wheatstone LNG project, which will also supply Australian markets as well as exports, is expected to enter the front-end engineering and design (FEED) stage in 2009, she said.

Italy sets new tariffs for LNG terminal use

Italy's energy regulator has updated the tariffs for the use of LNG terminals in the country from October 2008 to September 2012.

The Authority for Electricity and Gas has set the tariffs to allow for a rate of return (WACC) on Regulatory Asset Base equal to 7.6 percent in real terms before tax, according to Snam Rete Gas, Italy's gas network operator.

"Furthermore, it is established an additional remuneration, up to 3 percent above WACC, for new capex for a maximum of 16 years period," it said in a statement on Thursday.

The operational costs will be adjusted every year taking into account inflation and efficiency gains set by the regulator equal to 0.5 percent in real terms, it said.

"The regulation for the next period guarantees a substantial stability leveraging on principles of continuity and coherence with the objective of providing incentives for development capex," Snam Rete Gas Chief Executive Carlo Malacarne said in the statement.

The planned expansion will bring the total capacity of Chevron-operated LNG projects in Australia, Wheatstone and Gorgon, to 30 million tonnes a year.

LNG News Updates

2008-07-02T04:37:00.000-07:00

Iberdrola Signs $100 Million LNG Supply Contract With Gasnor

1 July 2008: Spanish energy major Iberdrola and Norway-based Gasnor have signed a liquefied natural gas supply contract worth about $100 million, pursuant to which Iberdrola will supply LNG from its regasification plant at Huelva, Spain.

The liquefied natural gas (LNG) will be shipped in a new 7,500 cubic meter (cbm) capacity cargo vessel, which Gasnor will put into operation in the first half of 2009.

The contract is expected to allow Gasnor to meet increasing demand in Scandinavia, which is exceeding production capacity at its three liquefaction plants on the west coast of Norway.

The LNG supplies from Iberdrola reportedly represent an effective back up for production, and will help Gasnor meet supply contracts with its customers.

ExxonMobil Joint Ventures to Outpace Industry in New LNG Capacity

Joint ventures in Qatar in which Exxon Mobil Corporation participates will start up projects over the next two years that will bring more liquefied natural gas to market than any other international oil company, Rex Tillerson, chairman and chief executive officer, said .

Speaking at the 19th World Petroleum Congress in Madrid, Mr. Tillerson outlined the challenge of supplying growing energy needs while minimizing the impact on the environment.

“New energy technologies for energy supply, such as those enabling an increase in world LNG supplies, together with technologies to improve energy efficiency, will be critical in meeting the world’s energy challenge,” Mr. Tillerson said.

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080701005909&newsLang=en

Qld Gas increases LNG project reserves

Queensland Gas Company Ltd (QGC) has defined more than a third of the required gas reserves it needs for a proposed $8 billion liquefied natural gas (LNG) development with BG Group Plc.

The coal seam gas producer has increased its proven and probable (2P) reserves in the Surat Basin in Queensland to 2,415 petajoules (PJ) after final confirmation by independent certifiers Netherland, Sewell & Associates.

QGC is targeting more than 7,000 PJ of 2P gas reserves to support a planned LNG plant at Gladstone on the Queensland coast.

Kawasaki Heavy Ship Unit Delivers LNG Carrier to Mitsui O.S.K.

June 30 - Kawasaki Heavy Industries Ltd., Japan's second-largest maker of heavy machinery, delivered a liquefied natural gas carrier to joint owners Mitsui O.S.K. Lines Ltd. and Tokyo-LNG Tanker Co.

Unit Kawasaki Shipbuilding Corp. built the Mmoss-type LNG vessel that can carry 147,558 cubic meters of gas, Kobe, Japan- based Kawasaki Heavy said today in a faxed statement, without disclosing the value of the contract. Tokyo-based Mitsui O.S.K. will operate the vessel.

Fed official rules against Fall River LNG terminal

The U.S. Secretary of Commerce has decided a Massachusetts agency acted correctly when it objected to plans to build a liquefied natural gas terminal in Fall River.

In a decision Thursday, U.S. Commerce Secretary Carlos Gutierrez ruled that the project’s potential benefit to the nation would not outweigh the possible effects on the coastline.

Gutierrez also said that while the project would increase New England’s access to LNG, Coast Guard officials are not convinced LNG tankers could safely navigate a nearby bridge.

Massachusetts Attorney General Martha Coakley, who’s against the project, called the developers’ appeal an attempt to circumvent the state.

A spokesman for Weaver’s Cove says the developers expect to file a new application with the state.

Iran, Poland to sign 2-billion-dollar LNG contract

Iranian Offshore Oil Company (IOOC)and Polish Oil and Gas Company (PGNiG) are about to sign a 2-billion-U.S.-dollar liquefied natural gas (LNG) contract, local daily Tehran Times reported Sunday.

"Recently Poland requested to invest in Lavan gas field whose volume of gas-in-place is around 10 trillion cubic feet (TCF)," IOOC managing director Mahmoud Zirakchian Zadeh was quoted as saying on Saturday.

"The Polish side has declared its readiness to invest in Persian Gulf's Lavan gas field development plan to export the produced LNG gas to Poland," he added.

Zadeh said that the contract will most probably be finalized.

Poland, which depends on Russia for 48 percent of its gas imports, has made diversification of supply a priority.

In recent months, PGNiG signed several deals that could allow it to import gas from countries such as Libya and Denmark.

Essar plans terminal for LNG and container cargo at West Coast

Live Mint reported that Essar Group is planning to expand its logistics business by building a port terminal for liquefied natural gas and a container cargo facility as well as freight stations and depots under its arm Essar Shipping Ports & Logistics Limited.

The report cited an Essar official as saying that "We are planning to build a port terminal for LNG handling and storage. The group is looking at setting up this facility in the west coast."

He added that expanding into LNG would be a logical extension of the group’s existing port business.

Essar has a port and terminal facility at Vadinar in Gujarat providing handling, storage and terminalling services for crude oil and petroleum products to refineries and traders. It is also setting up a 30 million tonnes per annum all weather port and jetty at Hazira in Gujarat for import of iron ore, pellets, coal, limestone and export of finished steel products. It also proposes to build an integrated terminal at Salaya for handling coal and pet coke used in power plants.

Petrobras and PDVSA make headway on LNG agreement

Brazilian national oil company Petrobras and Venezuelan national company PDVSA have signed agreements committing to negotiate commercial terms for the purchase and sale of liquefied natural gas (LNG) supplied by PDVSA.

The agreements set the basis for negotiation between the two companies for future LNG supply agreements. The product will be supplied by two liquefaction units, Tren 1 and Tren 2, that will be built in the Complejo Industrial Gran Mariscal de Ayacuchho in Venezuela.

Petrobras and PDVSA also made progress in the definition of the shareholder agreement and the articles of incorporation for a company that will be incorporated to build and operate the Abreu e Lima refinery in the State of Pernambuco, Brazil.

LNG News Updates - June 27, 2008

2008-06-27T03:54:00.000-07:00

Commerce Dept. overrides objection to LNG plant

The Commerce Department has overridden Maryland's objection to a proposed liquefied natural gas terminal at Sparrows Point near Baltimore.

The department determined that the national interest served by the facility outweighs what it described as "limited adverse coastal effects."

Governor Martin O'Malley sharply criticized the decision, saying the project presents a homeland security and environmental threat.

Senator Barbara Mikulski pledged to search for legislative options to stop the project.

AES Corporation wants to build the LNG terminal at the former Bethlehem Steel shipyard, along with an 88-mile pipeline that would pump the gas to Pennsylvania. The Federal Energy Regulatory Commission has recommended conditional approval of the project and could make a final decision by the end of November.

Peru natgas project signs financing deal with IFC

June 26 (Reuters) - The World Bank's International Finance Corp on Thursday signed a $300 million financing agreement with Peru LNG to develop Latin America's first liquefied natural gas export project.

The loan by IFC, the World Bank's private-sector lender, is part of $2.25 billion in financing by international banks that were part of the signing.

Other lenders for the $3.8 billion project include the Inter-American Development Bank, the Export-Import Bank of the United States, Export-Import Bank of Korea, and SACE of Italy.

The project, which is expected to start up operations in 2010, is being developed by a consortium headed by US-based Hunt Oil and includes Spain's Repsol-YPF, South Korea's SK Energy, and Japan's Marubeni Corp.

Brazil, Venezuela To Sign LNG Supply Deal

The presidents of Brazil and Venezuela will sign a protocol of intention for Brazil to buy liquid natural gas from its Latin American neighbor, the local Estado news agency reported late Thursday.

According to the report, Brazilian President Luiz Inacio Lula da Silva and Venezuelan President Hugo Chavez will sign the deal.

The pact will cover future purchases of liquid natural gas by Brazilian state- run energy giant Petroleo Brasileiro (PBR) from Venezuela's state-owned Petroleos de Venezuela SA, or PdVSA. Natural gas will be shipped from Venezuela to two regasification plants in Brazil.

Gasification plants at Pecem in Ceara state and Baia da Guanabara in Rio de Janeiro state will process 20 million cubic meters of gas a day. The plants are expected to enter operation in the third quarter.

Shell Asks for Bids to Help Build a Floating LNG Unit

Royal Dutch Shell Plc, Europe's largest oil company, invited three companies to bid for the engineering and design of a floating liquefied natural gas facility.

Bids for the facility with an annual capacity of 3.5 million tons will be submitted around the end of the year and the first award is possible next year, The Hague-based Shell said in an e-mailed statement today. Shell is looking at the Asia-Pacific region for potential development, it said.

Shell, the largest non-government producer of LNG, said April 7 its Prelude discovery in the Browse Basin, about 400 kilometers (249 miles) off the Australian coast, may be one of the first fields to be developed using floating LNG technology.

Floating LNG is ``possibly the leading candidate'' for developing Prelude, Linda Cook, executive director gas and power at Shell, said at the Australian Petroleum Production & Exploration Association conference in Perth in April.

While the Basin holds several gas finds, none has been developed and construction of plants on the Kimberley coast region faces opposition from environmental groups.

News Updates

2008-06-26T05:10:00.000-07:00

GE Energy inks LNG deal with RasGas

June 25, 2008

GE Energy has made a deal to help the nation of Qatar in its quest to become the world's top supplier of liquefied natural gas (LNG).

Atlanta-based GE Energy said it has signed a multi-million, multi-year service agreement with RasGas Co. Ltd., covering two LNG trains and Al-Khaleej Gas Plant-2 at RasGas' LNG and gas production complex in Ras Laffan Industrial City, Qatar. An LNG train is a chain of equipment, including a gas turbine, which is used to convert natural gas to liquid form. The process reduces the volume of the gas, making it easier to ship large quantities of LNG to help meet growing energy demands in locations around the world.

The new agreement brings GE's total services commitment at the site to more than $1 billion.

Bangladesh to boost gas output by 20 pct by 2011

Bangladesh will raise its natural gas production by nearly 20 percent by 2011 with new investment of nearly $100 million, a senior official said on Wednesday.

"We will be able to produce 2.15 billion cubic feet of gas per day from the existing 1.8 billion cubic feet over the next more than three years," Jalal Ahmed, chairman of the Bangladesh oil, gas and mineral corporation or Petrobangla told Reuters.

"At least 15 new wells in different gas fields across the country will be explored and developed by the state-run gas firms to produce additional hydrocarbon," Jalal said.

Bangladesh faced a gas shortage of up to 150 million cubic feet daily (mmcfd) which was an obstacle to industrial and economic activities, Jalal said.

Eight gas-fired power plants are out of action and nearly 300 new manufacturing firms at Chittagong port city cannot start production due to lack of gas supply, officials said.

Three state-run gas firms - Bangladesh Gas Fields Company Limited, Sylhet Gas Fields Limited and Bangladesh Petroleum Exploration and Production Company Limited - produce about 900 mmcfd of gas, half of Bangladesh's total production, they said.

The remainder is produced by four international oil companies (IOCs) - the U.S. based Chevron Corp, British firm Cairn Energy, Irish company Tullow and Canadian company Niko Resources Ltd.

The authorities say they fear further gas shortages by 2011 when daily demand will rise to 2.4 billion cubic feet per day, nearly 34 percent more than now.

Gas Natural gets permit for Trieste LNG plant

Spain's Gas Natural said it had won approval from Italy's Environment Ministry to build a regassifaction plant for liquefied natural gas (LNG) imports at the northern Italian port Trieste.

Gas natural and its partners had spent four years seeking environmental approval for the plant, which has an estimated cost of 500 million euros and is due to come on stream in 2012.

The onshore plant will have two tanks each with the capapcity to hold 140,000 cubic metres of LNG and to process 8 billion cubic metres of gas per year.

Gas Natural said it had agreed with Snam Rete Gas to connect the new plant with the Italian gas pipeline network.

Last month, the Barcelona-based company said it was interested in buying local gas distributors in central and southern Italy.

Spain is a major importer of LNG and Gas Natural ran the country's six regasification plans, when it had part or entire control of distribution company Enagas between 1994 and 2002.

Gas natural manages a 115,000 cubic metre regasification plant in Puerto Rico.

Enel in talks with Hoegh LNG to develop LNG ship

Enel SpA is in talks with Norway's Hoegh LNG to jointly develop a floating liquefied natural gas (LNG) ship, a Hoegh spokesman said.

'I can confirm Enel is one of the parties we are talking to as regards the development of our FPSO (floating production storage and offloading) vessel,' the spokesman said.

He said a joint investment of around 1 billion euros could be a reasonable amount for the project.

Hoegh, which is developing its FPSO programme with a series of investors, expects first delivery of the vessel in 2012.

A source said Enel will use the LNG capacity from the ship, when ready, to supply the LNG terminal it is building at Porto Empedocle in Sicily.

The Porto Empedocle facility, which recently received crucial environmental clearance, will have a capacity of 8 billion cubic metres of gas per year.

The terminal is expected to receive around 4 billion cubic metres of LNG from Nigeria and 2 billion cubic metres from Egypt.

LNG could hit US$40

As the world thirsts for LNG Trinidad and Tobago stands to benefit as prices go up, according to Dr Ranato Bertani, the former president of Perobas America, a subsidiary of the Brazilian energy giant. Speaking at an energy luncheon hosted by First Citizens at the Hyatt Regency, Port-of-Spain, Bertani, now president of Thompson and Knight, Global Energy Services, a legal firm that has an appetite for energy deals, predicted that at the present rate of demand LNG prices could hit US$40.

He said this was possible given the fact that energy demand across the globe was rising.

“That is good business for Trinidad and Tobago,” he said of the LNG prices increase.

He pointed out that there could eventually be a convergence of oil and gas prices, if the global energy dynamics don’t change.

The theme of his address was, “The Risks and Opportunities in the Energy Sector.”

According to Bertani, the world will have to spend US$20 trillion by 2030 if it is going to meet the demand for energy.

LNG prices on Monday stood at US$13.23, according to Bloomberg, while oil was at US$137 a barrel. “Oil prices are not going to come down to gas prices but gas will get closer to oil,” he said.

Using a diagram to show the changes in LNG flow, he pointed out that in 2030 the US and Asia will see a significant increase in LNG usage.

He said although there are security concerns across the US regarding the use of LNG, he said they will soon have to re-examine this stance given that the price of oil is rising. He said for a gas economy like TT, this was good news because a market was going to be assured.

He said there could be converge of oil and gas prices and where gas would become a major player in the global energy scenario.

Noting that there could be more demand for LNG from developing countries in the next ten-20 years, Bertani said the supply of LNG will reach the consumer in different ways. His view is that in addition to oil, LNG will play a more significant role in the US energy portfolio, saying that the spot market for LNG will increase.

Such a market occurs when an LNG buyer takes the LNG at an agreed price from a supplier and sells it on the open market to the highest bidder.

He said with LNG prices increasing, this was a possibility and said that this could carry prices further up.

On oil and the world’s demand for it, Bertani said this was not going to change soon. He took the view that the world’s ceiling for oil can be sustained in the US$140- US$150 bracket, adding that after that it becomes unsustainable.

He said at such a price, companies are looking at going after oil that was once considered unattainable.

“There is now pressure to explore and extract,” he said, noting that for oil companies it was now possible to take the risk.

Giving a global overview on energy, he said developing countries like China and India and their increased energy demand is what is pushing up the price of oil. On ethanol, he said this was extremely lucrative and profitable and stressed that with massive tracts of land, the Caribbean could reap the benefits.

To back his case, he said the world consumes about 20 billion tonnes of gasolene a year with half of that being consumed in the US. Stressing that this was a huge opportunity for the Caribbean, Bertani said ethanol coming from the Caribbean into the US would face no tariff.

He said in the case of Brazil, the US has imposed a tariff on ethanol coming into the country.

Weekly Update

2008-06-24T04:02:00.000-07:00

Prime Petroservices to build mini LNG plant worth $327m

Integrated oil and gas service provider PT Prime Petroservices (PPS) plans to build a small liquefied natural gas (LNG) plant in Bali this year with a total investment of US$327 million. PPS, through its subsidiary PT Indogas Kriya Dwiguna, will build the plant, with a capacity of 300,000 tons per year, on Pagerungan Island, north of Bali, the company's president director, Faiz Shahab, told. In comparison, an existing LNG plant in Bontang, East Kalimantan, has a capacity of 18.5 million tons per year, while another in Arun, Nangroe Aceh Darussalam, outputs 12.5 million tons annually.

UK's BG makes hostile $13.1 bln Origin bid

British gas producer BG Group launched a hostile $13.1 billion bid for Australia's Origin Energy, as it seeks to boost its position in Asia-Pacific's fast-growing gas market. BG is taking its A$13.8 billion all-cash bid, valuing Origin at A$15.50 a share, direct to Origin shareholders after Origin's board rejected it last month. Origin claimed then that its coal seam gas reserves alone were worth over $15 billion after it doubled its resource estimate to 10,000 petajoules. BG, U.K.'s third-largest oil and natural gas producer, wants Origin's vast gas resources in Australia to feed a proposed liquefied natural gas (LNG) project on the east coast, which would help BG fill a hole in its LNG business in the region.

Five planned LNG terminals in Italy move forward

Italy's privately-held Anonima Petroli Italiana SPA, Rome, applied for approval from the country's Environment Ministry for an offshore regasification terminal with an capacity of about 4 billion cu m/year. The facility will be located in the Adriatic Sea in front of Anonima Petroli's Falconara refinery. After converting the LNG, the company will inject the gas into Snam Rete Gas SPA's grid. Construction will take just over 5 months. The news coincided with reports that Gas Natural could win environmental clearance for an 8 billion cu m regasification terminal it wants to develop at Trieste in northern Italy. An official at the environment ministry confirmed that Gas Natural's LNG facility had received positive opinions from a series of subcommittees at the ministry, and it said the project could be approved or a series of observations on the plans could be made. Earlier this month, Iride SPA and CIR SPA's unit Sorgenia SPA said their planned 12 billion cu m regasification terminal at Gioia Tauro, which won environmental approval in April, has been granted access to European Union funding. The Gioia Tauro terminal is due to go online in 2013. In early May, Royal Dutch Shell and Italy's ERG received local authorization to build their planned joint Ionio LNG import terminal in Sicily. The partners hope to begin construction of the import terminal in 2010 and to have it operational by 2013, according to ERG's power and gas division head Raffaele Tognacca. Later in May, following a feasibility study completed early this year on its Triton LNG project 30 km off Italy's Marches region in the Adriatic Sea, Gaz de France signed a joint development agreement with Oslo-based Hoegh LNG for the design, construction, and operation of a floating storage and regasification unit vessel.

Hearing set on offshore LNG terminal After suffering a series of setbacks since receiving conditional federal approval three years ago to build a liquefied natural gas terminal in Fall River, Weaver’s Cove Energy came back this year with an alternative proposal. It would float an off-loading facility in the middle of Mount Hope Bay. Under the new plan, Weaver’s Cove would situate the 1,200-foot berth in Somerset waters, about a mile from the nearest shore. Tankers would dock at the facility and unload LNG, which would be piped to a re-gasification plant at the site in Fall River’s west end originally targeted for the company’s $250-million marine terminal. The 4-mile pipeline connecting to the re-gasification facility would be buried in a trench at the bottom of Mount Hope Bay and the Taunton River. Weaver’s Cove came up with the new plan after failing to win approval for key aspects of its initial proposal. In August 2007, the Rhode Island Department of Environmental Management denied an application to dredge a portion of Mount Hope Bay to clear the way for tanker ships that would travel north from Narragansett Bay.

CNOOC's parent inks 25-year LNG supply pact with Qatargas China National Offshore Oil Corp (CNOOC Group), parent of Hong Kong-listed CNOOC Ltd, said it has signed a 25-year liquefied natural gas (LNG) supply agreement with Qatargas Operating Co. According to the agreement, the operator of the country's first liquefied natural gas terminal will buy two million metric tons of LNG a year from Qatargas, which will be transported to CNOOC's projected reception station in Ningbo, Zhejiang Province, according to sources familiar with the deal. The agreement is a continuation of the unbinding one signed by the two sides in April. In addition, the state-owned oil producer has formed an LNG supply agreement with Total SA, under which the French LNG producer will supply as much as one million metric tons of LNG per year to CNOOC Group from 2010.

BG to supply LNG volumes to Castle Peak's planned Hong Kong terminal

UK-based BG Group's wholly owned subsidiary BG LNG Trading has signed a liquefied natural gas heads of agreement with the Castle Peak Power Company, to supply one million tonnes per annum to the latter's planned import terminal in Hong Kong for a period of up to 20 years.

BG Group And CAPCO Sign Pact For LNG Supply

BG Group has announced that its wholly owned subsidiary BG LNG Trading has signed a Liquefied Natural Gas Heads of Agreement with Castle Peak Power Company, Hong Kong.

Under the proposed arrangement, BGLT have agreed to supply one million tonnes per annum to CAPCO's planned LNG import terminal in Hong Kong for a period of up to 20 years, it said.

Initial deliveries are expected to begin in 2013 to coincide with the completion of the LNG terminal on South Soko Island. The LNG will be sourced from BG Group's growing and flexible global portfolio.

LNG may turn more expensive than crude oil, says Bernstein

Liquefied natural gas may become more expensive than crude oil as demand from Asia and Europe rises faster than supply, Sanford C Bernstein & Co said.

“It’s clear that LNG prices overall are set to rise towards parity with the oil price,” Bernstein analysts led by Neil McMahon said in a report. Sellers of the fuel are renegotiating contracts to increase prices, it said.

Prices may decline in 2009 and early 2010. After this, limited new supplies of LNG between 2010 and 2015 will make market conditions “very tight,” raising the potential of “an LNG premium above the oil price,” the report added.

LNG cargoes have sold for as much as US$20 amn cubic feet this year, Sanford said. Crude oil futures at today’s price of US$136 a barrel are the equivalent of about US$22 amn cubic feet, based on the energy content of the fuels.

The growth of import terminals will outpace the rise in LNG supplies to a point where global regasificaton plant capacity is more than double LNG production by the end of 2010, Bernstein said. Some planned LNG production projects in Nigeria, Australia and Iran will get pushed back into the second half of the next decade, Bernstein added.

Limited growth in alternative energy sources and long lead times for new nuclear power stations will mean demand for LNG grows at more than 10% a year, the report said.

Qatar, already the world’s biggest LNG producer, will boost LNG supplies by 45 million tons a year with six new production trains due to start before the end of 2010.

BG Group, the UK’s third-largest oil and gas company, will benefit the most from rising LNG prices. Bernstein estimates BG is diverting as much as 60% of its cargoes to Asia and 25% to Europe, raising its forecast for BG to 'outperform'.

Orascom gets new construction contracts for Skikda LNG Project in Algeria

2008-06-24T03:31:00.000-07:00

Orascom Construction Industries ("OCI") confirmed that it has been awarded two construction contracts by Kellogg, Brown & Root International Inc. (“KBR”) for the civil works and piling installation of the new LNG train in Skikda, Algeria being developed by Sonatrach. These contracts represent some of the first packages of the US$ 3 billion Skikda LNG program in Algeria.

Sonatrach is the national oil & gas company of Algeria, wholly owned by the government. It is one of the world’s largest exporters of natural gas in its various forms and is Africa’s largest oil & gas company.

The civil works construction contract for the LNG train is expected to be complete in approximately 14 months.

The OCI/Trevi SpA joint venture is responsible for the execution of the piling and installation works expected to be complete in approximately 10 months.
As part of the Q1 2008 results, OCI reported a record consolidated backlog of US$ 6.8 billion as at 31 March.

OCI Construction Group Managing Director, Osama Bishai commented “we are pleased to participate in the LNG expansion program in Algeria for KBR. The contracts are in continuation of the successful work performed by OCI for KBR on the EBIC Ammonia plant and the Damietta LNG facility in Egypt.

The receipt of these contracts further bolsters our successful repeat business with KBR and ensures future cooperation on the projects in the region. These awards are a result of OCI’s significant presence as a construction contractor in Algeria over the past several years and OCI shall continue to pursue opportunities in the oil & gas sector where it has developed significant core competencies.”

News Updates

2007-10-31T17:12:00.000-07:00

BG submits Italian gas terminal project to new environmental review
BG Group PLC said it has agreed to submit the delayed Brindisi gas terminal project in Italy to a fresh environmental review, while insisting the regulatory consent it obtained in 2003 remains 'full and valid.'
Read more>>

Sempra Seeks Further LNG Opportunities
The outlook for strong liquefied natural-gas demand in the U.S. has one major stumbling block, according to the head of Sempra Energy's LNG division: insufficient liquefaction capacity.
Read more>>

U.S. Coast Guard puts clamps on LNG project
The U.S. Coast Guard last week issued its final decision, awaited since May and widely hailed by officials in recent days, on a ruling against the Weaver's Cove/Hess plans to ship liquefied natural gas (LNG) in giant tankers to Fall River, Mass., using Narragansett Bay.
Read more>>

Russia and liquefied natural gas

2007-07-23T03:08:00.000-07:00

The recent history of natural gas has been dominated by pipeline economics and pipeline politics and this history is not yet at an end. But parallel to this history another historical development in the natural gas arena is also taking shape, albeit slowly and unassumingly.

This development is the growing importance of liquefied natural gas (LNG) in the global energy market, which both major energy consuming and producing countries have been trying to take part.

This is because during the 2000s, global LNG prospects were radically transformed. The combination of technological advancement, cost reduction in the supply chain and the insecurity in pipeline deliveries changed perceptions with regards to the LNG market.

As a result of these far-reaching developments it seems clear that the future of natural gas will be more diverse than now, with increased opportunities to export LNG all over the world. In this context, an April report by Pricewaterhouse Coopers suggests that LNG will account for one-third of all gas trade in 2010 and 62 percent by 2020.

This new and emerging fact is so accepted by energy experts, companies and particularly by major gas consuming and producing countries that these countries have all started investing heavily in the LNG field.

Sales of LNG installations and equipment such as regasification terminals and seaborne carrier vessels are increasing by the day as uncertainties in the global oil and gas market continue to haunt consumer countries.
For this reason many consumer countries are thinking and planning to support their present gas supplies with LNG deliveries. In this regard, the US is a good example because 45 LNG vessels are currently under construction in various countries to carry LNG from Qatar to the US.

Seeing an opportunity to strengthen its gas dominance further by LNG deliveries, Russia has been trying to assemble an LNG fleet of its own for some time. The Sovcomflot shipping company, whose CEO Igor Shulov is one of Russian President Vladimir Putin’s most trusted advisers, is leading this effort. In January 2007, Sovcomflot took the delivery of two LNG carrier vessels built by South Korea’s Hyundai Corporation to be followed by others. In fact, in partnership with Japan’s NYK Line, Sovcomflot has four LNG carrier vessels on order, two with South Korea’s Daewoo and two with Japan’s Mitsubishi.

When Russia’s LNG fleet is assembled and put into operation, five LNG carrier vessels are slated to handle LNG deliveries from the Sakhalin-2 oil and gas field in the Russian Far East. Of course this is a modest step in comparison with the global LNG deliveries but it clearly shows that Russia is determined to have an important role in global LNG trade and for this reason Russia’s gas giant Gazprom has changed its gas policy of not letting foreign companies to exploit gas fields recently and made a deal with France’s Total to operate Shtokman gas field jointly.
Gazprom announced on July 12 that it had chosen Total to be a partner in Shtokman, mainly because of the company’s vast experience and expertise in LNG and added that it hoped to have the field operational by 2013, producing 71-94 billion cubic meters per year.

Russia’s reversal of policy not to permit foreign companies in its gas sector is very significant. On the one hand it shows its technical deficiency in the LNG field and on the other the expedient efforts in its national foreign policy.
At the same time, it is reasonable to say that Russia’s LNG ambitions and plans might also have political motives because assuming a considerable capability to ship large quantities of LNG to Asian countries, the US and Canada, and probably others, may eventually increase its political clout in these countries.

Russia’s LNG move is the latest in a series of actions aimed at its becoming a dominant global energy power.

VIEW BY FIKRET ERTAN

Fears of LNG 'cartel' pricing

2007-04-10T03:23:00.000-07:00

The prospect of an active spot market in liquefied natural gas is raising fears that major gas exporting countries could in the long term form an OPEC-like cartel to control prices.

Australia, as a major LNG exporter, could benefit from any cartel supporting higher prices, even if it is almost certain never to become a member.

Members of the Gas Exporting Countries Forum (GECF) are meeting in Doha, Qatar, this week and while a gas cartel isn't on the official agenda, Iran and Venezuela have both talked up the prospects.

Australia isn't a member of the forum, which is made up mainly of Middle Eastern states and Russia.

Forum member Algeria has warned that a gas cartel is barely feasible in a market dominated by long-term contracts linked to oil prices. But Algerian Energy Minister Chakib Khelil said the forum could still appoint experts to look into it.

"The only time you are going to have some kind of gas OPEC is when you have a very liquid market. Lots of liquefied (natural) gas and so on," he said.

But analysts are sceptical of any gas cartel emerging. "I see very little scope for it (GECF) to become much more than a talking shop. I don't see how they can work together. We don't have a global gas market," LNG consultant Andrew Flower said.

LNG is a growing export earner for Australia as the North West Shelf project ramps up shipments to Japan and China, and Conoco-Philips of the US last year started up its smaller Darwin LNG project.

The Australian Bureau of Agricultural & Resource Economics forecasts Australian LNG production to jump more than 20 per cent in 2006-07 to 15.2 million tonnes, worth $5.4 billion in export income. That is more than either grain or beef, and more than double Australia's export earnings from wool.

With other projects on the agenda, such as Chevron's Gorgon development offshore from northwestern Australia, ABARE is tipping Australian LNG exports to rise to 25.1 million tonnes by 2012, overtaking oil exports for the first time to generate $9.6 billion in income.

Giving impetus to talk of a cartel are moves by Qatar to launch an LNG trading contract. A traded contract in LNG would pose a new challenge to gas-exporting countries, with the arrival of liquidity and price transparency in an opaque market.

Qatar is pushing the contract as a way of gaining increased market access for its own rising LNG production. Its North Dome field is the largest gas reservoir in the world. Qatar expects to export 30 million tonnes of LNG next year, about a third of the world market. Projects are under way to more than double that capacity.

The global trade in LNG is on the rise as countries increasingly turn to gas as a secure and more greenhouse-friendly energy source.

Gas to remain major source of energy as demand jumps

2007-01-10T02:47:00.000-08:00

Natural gas, the cleanest of the currently available fossil fuels, is likely to keep its place as a major energy source with consumption growing at around 2.5% a year over the coming decades, analysts say.

The world has enough proven natural gas reserves to last 64 years at 2005 consumption levels, compared with only four decades worth of oil, according to the BP Statistical review.

Much of the world’s estimated 180tn cu m of gas reserves are deep under the sea, in vast deserts or politically unpredictable countries. Russia, Iran and Qatar account for 27%, 17% and 14% respectively and 58% of the total lies in former Soviet Union countries.

Getting that gas to consumers will become increasingly easier with new pipelines and liquefaction plants, which cool it to liquid form so it can be shipped anywhere in the world. Much of the demand growth is spurred by the power industry, where the latest combined cycle gas turbines make gas-fired electricity generation ever more efficient.

Gas was producing 20% of the world’s electricity in 2004, up from 12% in 1973, figures from the International Energy Agency (IEA) show. Its share of total final energy consumption rose to 16% from 14.6% over the same period. The IEA sees gas supplying 21.5% of the world’s total primary energy in 2010 and 24.2% in 2030.

In Europe, gas should be the fastest growing fuel source in the next two decades because of demand from new power stations, but as Europe becomes more addicted to gas, concerns about security of supply mount.

The steady decline in British and Dutch gas production means northern Europe increasingly relies on Russia’s Gazprom, as many of the former Soviet states already do. Gazprom’s price hikes, its move to turn off the gas taps to Ukraine last winter and threat to do the same to Belarus this winter show how dangerous that reliance can be.

“Europe has woken up to the seriousness of the situation,” economist Dieter Helm of Oxford University said in a paper on European energy policy published in December.

The European Union has proposed measures to reinforce connections between countries so states can help each other in an energy crisis. A new Baltic pipeline will bring Russian gas direct to Germany from 2010, bypassing former Soviet countries.

Spain and Italy are in a better position because they have pipeline access to Algeria, which has 2.5% of world gas reserves. Each country already has a pipeline in place, via Morocco and Tunisia respectively, and is building a second direct link.

“Despite rising capital expenditure costs, the LNG picture is one of growth upon growth ... We estimate global demand for LNG will rise 10% a year until 2015,” he says. Predicting trends is risky when energy technology is evolving so quickly, Lyle says.

Clean alternatives such as hydrogen or new sources of natural gas from naturally abundant methane hydrates could quickly take off as soon as they become commercially viable.

The world’s reserves of methane hydrates – methane frozen into a type of ice under the sea bed or in permafrost - exceed those of conventional natural gas by hundreds if not thousands of times.

Gazprom to develop Shtokman field independently

2006-10-09T23:36:00.001-07:00

Gazprom OJSC will develop the Shtokman gas condensate field on its own, without foreign partners, Gazprom announced, October 9.

In addition, Gazprom's Management Committee has taken a decision on the priority of gas deliveries from Shtokman to the European market. The field will become a resource base for Russian gas exports to Europe via gas pipeline Nord Stream that is under construction. The Concern had said earlier it was planning to deliver LNG from Shtokman to the USA market.

"Gazprom will own 100% of the Shtokman field. It has been considering to give 49% in the Shtokman project to foreign companies for a long time. But foreign companies were not able to give assets corresponding to the volume and quality of the Shtokman field reserves. Up-to-date technologies will be used to develop this field. For these purposes, competent international companies will be attracted as contractors," said Gazprom's CEO Alexey Miller.

Gazprom and BP sign natural gas deal to supply Atlantic basin

2006-09-14T01:23:00.000-07:00

Russia's state-controlled natural gas giant Gazprom and Britain's BP have signed a deal to supply LNG to Atlantic basin countries, according to sources.

Under the deal, BP will supply LNG to Gazprom's Britain-based branch, Gazprom Marketing & Trading Ltd., which will market it across the Atlantic basin, Gazprom said in a statement.

Total acquires interest in Nigeria's Brass LNG project

2006-08-22T00:04:00.000-07:00

Total has acquired Chevron's interest in the Brass LNG project in the Niger Delta, 90 km west of Bonny Island, Nigeria. Its current partners are NNPC, Eni and ConocoPhillips.

Project sanction for the first two trains of Brass LNG is expected by year-end, with production scheduled to start up in 2011. Initially, two trains will be built, with a capacity of 5 MMTPA each, with most of the LNG intended for export to Europe and the U.S. The feed gas will be supplied from the partners' productions, with Total accounting for a third, or 570 MMCFD, over a period of at least 20 years.

The interest is in addition to Total's 15% stake in NLNG, whose capacity was recently expanded to nearly 18 MMTPA with the commissioning of Trains 4 and 5 earlier this year. Train 6, with a capacity of 4 MMTPA, is under construction and scheduled to come on stream in 2007.

Gazprom establishes Houston subsidiary to supply LNG domestically

2006-08-20T23:23:00.000-07:00

Russian gas monopoly OAO Gazprom has set up a U.S. subsidiary based in Houston to supply LNG to U.S. markets.

Gazprom Marketing & Trading USA will be headed by John Hattenberger, who has been LNG director for London-based Gazprom Marketing & Trading Ltd. since mid-2005.

LNG marketing "is not the kind of business where we could operate on our own. We are establishing partnerships with a number of major players in this field," Hattenberger told a Russian trade publication.

In August 2005, Gazprom inked a supply agreement with Shell Western BV and BG Group, a UK-based natural gas company, to supply LNG to the U.S. market. Gazprom's first LNG carrier arrived at a Cove Point, Md,. LNG terminal last September.

Liquefied natural gas output to soar worldwide

2006-06-26T02:03:00.000-07:00

The number of countries exporting LNG will grow 30% by the end of the decade, the US Department of Energy said.
Guy Caruso, head of the Energy Information Administration, the statistical arm of the DOE, said: "We do see the emergence of a robust LNG trade, leading to perhaps a real global gas market."

By 2010, 17 countries will export LNG, with Norway, Russia, Equatorial Guinea and Peru joining the group. In the US, LNG will become more important than piped gas from Canada, the US's top foreign supplier, the EIA said.

The growth is being driven by demand and shrinking supply from fields whose gas lies close to Europe and the US and can therefore be transported by pipeline. But the rapid rise of LNG is also proving to be a lifeline for the world's biggest international energy companies, who are losing the battle to grow their oil production.

Liquefied natural gas will make up 19% of the energy majors' total production by 2020, up from only 6% today, according to a report from Sanford Bernstein, a financial services company.

The energy majors are investing billions of dollars in LNG projects in Africa, Australia, Qatar, Iran and Asia. As their oilfields age and oil-rich countries such as Saudi Arabia and Mexico keep their doors shut to foreign investment in their oilfields, international oil companies arebecoming international gas companies.

ExxonMobil, for example, last year managed to replace its used reserves only because it was able to book with the US Securities and Exchange Commission large gas reserves in Qatar, analysts said.

By 2020, the energy majors' share of gas versus oil will rise from 37% to 43%, Bernstein estimates.

However, LNG has been prone to massive cost overruns, delays and challenges over environmental concerns.

Shell's Sakhalin LNG project in eastern Siberia has suffered the greatest cost overrun, ballooning from a US$ 10 Bn project to one costing US$ 20 Bn. But the pressures are industry wide and several projects around the world have already seen delays.

For consuming countries LNG is critical, especially in Asia, which is relying on Australia's gas to supplement the waning volumes from Indonesia, historically the major provider. Japan is set to double its imports from Australia in the next decade. In Europe, Algerian, Nigerian and Qatari LNG is seen as critical to reducing the region's dependence on Russia, which is being seen as an increasingly untrustworthy supplier.

Bolivia Gas Nationalization

2006-05-16T03:56:00.000-07:00

Bolivia's Evo Morales got elected on promises to nationalize the country's resources and is carrying them out, to the applause of his voters.

Bolivia has the second-largest natural gas reserves in South America after Venezuela, and disputes over how the impoverished country should manage those riches have sparked several popular revolts since 2003.

Bolivia proceeds on gas nationalization

Leaders Back Bolivia Gas Nationalization

Bolivia: Gas nationalization just the start

Bolivia gas nationalization plan has risks

Indonesia not to stop LNG export, President says

2006-03-28T23:08:00.000-08:00

Indonesia will consider extending its contract to supply LNG from Central Kalimantan Province to Japan after its end in 2010 and allocate more gas production to satisfy domestic needs, President Susilo Bambang Yudhoyono said.

Indonesia will not completely stop gas sales to foreign countries, "We must see case by case about extension and sales volume of the contract," said Susilo. So far, Indonesia exports an average of 12 million tons of gas each year to Japan. Meanwhile, the president said that more gas production will be used to meet the demand of domestic fertilizer and electricity companies.

Indonesia, the world's top exporter of LNG, has about 182 trillion cubic feet of natural gas reserves, sufficient to last 60 years at the current production rate.

China: Pumping an Iranian LNG deal for oil

2006-03-22T22:12:00.000-08:00

Industry officials announced March 22 that a US$ 100 Bn LNG deal between China's Sinopec and Iran will be delayed until at least mid-2006 due to price disagreements.

Despite the effect of high prices, the real dilemma facing the two parties is that Iran has no facilities capable of exporting LNG. The agreement's strategic importance lies in Sinopec's development of the Yadavaran field and the oil reserves held there.

LNG Deals/Contracts

2006-03-20T21:22:00.000-08:00

Centurion Energy, Shell sign LNG accord for Nile Delta blocks

Centurion Energy International Inc. has signed an agreement with Royal Dutch Shell Plc's Egyptian units under which the companies will explore for natural gas and develop liquefied gas ``opportunities.''
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Petro-Canada and Gazprom sign agreement on LNG plant in Russia

Canadian energy major Petro-Canada has signed an agreement with Russian energy giant Gazprom on initial engineering design of a LNG plant in St. Petersburg.
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Keltic signs gas terminal deals

Maple LNG, the Canadian affiliate of Dutch company 4Gas and Russia's Suntera, said they had signed agreements with Keltic to develop a proposed LNG project on the Nova Scotia coast northeast of Halifax. The project's regasification terminal would be located beside the Maritimes and Northeast Pipeline, which carries gas from Sable Island offshore fields to American customers via Canadian and U.S. pipelines.

Qatar plans to invest in key global energy projects

2006-03-19T22:05:00.000-08:00

Qatar has plans to invest in key energy projects worldwide. The job of identifying viable ventures has been assigned to Qatar Petroleum International (QPI), a newly formed arm of state-controlled Qatar Petroleum (QP).

The QPI has been set up to exclusively manage Qatar's investments overseas. It is already in the process of identifying best investment opportunities available globally in the energy industry.

Among the prospective projects the QPI is looking at are refineries in India and China and LNG terminals in the UK, Italy and the US.

Nigeria, Libya, Others To Supply 30% Of World’s LNG

2006-03-04T04:13:00.000-08:00

Nigeria, Libya and other African countries will supply 30% of the world’s of LNG by 2010, as against the present level of 12%, which the continent’s gas producers have been supplying.

The President of HIS Energy, Mr. Ron Mobed, who disclosed this recently, stated that Africa had 50 MMTPA of LNG capacity at the end of 2005, with most of it in Algeria and Nigeria.

Mobed noted: “Egypt opened a new train that will accommodate 3.6 MMTPA of LNG, while Equatorial Guinea and Angola have announced their first LNG projects.”

Aside from that, African finds, he said, totalled nearly 25% of world liquids reserves discovered between 2000 and 2004 and 12% of world gas reserves discovered in the same period excluding the United States of American onshore and Canada. Companies in the region discovered 300 billion barrels oil equivalent. Two thirds of it liquids, in Africa, were discovered in 2004. Of that, 85% has been found in 10 basins, and 22% is in Libya's Sirte basin alone.

EIA releases annual energy outlook 2006

2006-03-02T00:37:00.000-08:00

In preparing projections for the AEO 2006, EIA evaluated a wide range of trends and issues that could have major implications for U.S. energy markets between now and 2030.

While focusing primarily on the reference case, lower and higher economic growth cases, and lower and higher energy price cases, the full AEO2006 report presents information on over thirty alternative cases. Examples include cases that examine the impact of greater and slower improvement in energy technologies (end-use, electric generation, renewable, exploration and production), cases with more rapid reductions in nuclear costs, cases with the more rapid or slower introduction of liquefied natural gas supplies, and cases that open the coastal plain of the Arctic National Wildlife Refuge to exploration and development. These cases provide the user of the AEO2006 with a better appreciation of the full range of uncertainty that surrounds long-term energy projections.

The full AEO2006 report is available at http://www.eia.doe.gov/oiaf/aeo/index.html

Energy Challenges

2006-03-01T00:31:00.000-08:00

2006 represents a very challenging year for the international energy industry. Demand for natural gas is far-outstripping supply. LNG still remains as a viable or “bridge” solution to meet both short-term and long-term fuel and feedstock requirements for both wholesale and retail consumers. Policy & Regulatory framework must support commercial market mechanisms in order to ensure timely production, transportation and delivery of LNG to both developed and developing countries.

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2006-02-25T02:46:00.000-08:00