Processing/LNG

Appalachian Midstream Operators Face Myriad of Challenges

This has been a busy year of new challenges and issues facing the Appalachian oil and gas industry as rig count in the Appalachian Basin and elsewhere is down substantially compared to the previous two years. A significant challenge ahead for shale developers in a lower price environment is to continue to be active in finding land, drilling wells and getting the natural resource to market. This article concerns our most recent report, published in May, on the issues and challenges facing midstream operators in the Appalachian Basin.

Latin America Forced to Face Growing Supply-Demand Gap

Latin America’s prominence on the world gas stage has increased over the last several years. Although it is well-endowed with natural gas resources, the region has struggled to find its footing as both a natural gas producer and consumer. Consequently, Latin America’s potential as a natural gas import province is the topic of increasingly animated debate.

Natural Gas Market Dynamics in the Northeast

Natural gas markets have gone topsy-turvy. Until recently, prices around the country were generally pretty similar, with gas costing a bit more in the Northeast, far from where it was produced on the Gulf of Mexico coast. But that reality has changed dramatically in the last few years.

With a Chill in the Air, Thoughts in New England Turn to Heating Bills

As winter approaches, the hot topic of conversation in the Northeast once again becomes the looming frigid temperatures and accompanying burdensome cost of heating homes and offices along with powering manufacturing plants. With this in mind, the Access Northeast project developers plan to upgrade existing pipeline facilities and market area storage assets in New England to deliver – on peak days – up to 1 Bcf/d of natural gas for electric-generation markets.

Iraqis Tour North Dakota to Study Gas-Capturing Technologies

BISMARCK, N.D. (AP) — The Iraqi government has turned to North Dakota for help in finding solutions to the wasteful burning of natural gas that's a byproduct of oil production. Iraq, OPEC's second-biggest oil producer behind Saudi Arabia, is having much the same problem dealing with excess natural gas that North Dakota has had as oil production there has increased, though the state has made strides recently to capture and use it, said Julio Friedmann, the U.S. Energy Department's deputy assistant secretary for fossil energy.

Fed Review Boosts Ocean Gas Plan; Foes Seek NY Governor's Veto

ATLANTIC CITY, N.J. (AP) — A company that wants to build an ocean terminal off the coast of New York and New Jersey to import LNG said Wednesday that a federal review supports its claim the $600 million project is safe and economically necessary. Roger Whelan, CEO of Liberty Natural Gas, told The Associated Press that the final environmental impact statement from the U.S. Coast Guard bolsters its contention that the project to import natural gas to the New York metropolitan region during peak demand times should go forward.

Can the Panama Canal Fulfill Its Global LNG Promise?

After delays, strikes, and cost overruns, the Panama Canal expansion is finally set to open in April 2016. But the global energy landscape has changed in the eight years since construction began, with opportunities first expanding and now, potentially, contracting. The question today is whether the new canal can still fulfill a promise to transform global LNG trade.

Tough Decisions Ahead for LNG Project Developers

<em>Editor's note: Larry Persily, assistant to the Kenai Peninsula Borough mayor in Alaska, was invited to participate in a global LNG conference and prepared this report as part of the borough’s ongoing efforts to share information about LNG market developments. </em> The frustrations of an oversupplied LNG market and low prices were evident as about 100 liquefied natural gas buyers, sellers, lenders, advisers and goods and services suppliers gathered in London last month.

In the News: Phillips 66, Spectra Energy Bail Out Troubled DCP Midstream

Phillips 66 and Spectra Energy, 50/50 joint venture owners in DCP Midstream, LLC, have entered into a nonbinding letter of intent for contributing assets to strengthen DCP Midstream. This transaction is expected to provide DCP Midstream with a stronger balance sheet and increased financial flexibility, and positions DCP to grow through commodity price cycles.

Alaskans Eager to Learn Amount of Upcoming Oil Payout

ANCHORAGE, Alaska (AP) — Oil prices are so low, they're hovering at benchmarks not seen in years, plunging oil-dependent Alaska into a crippling budget deficit. But the industry's woes won't affect the payout from the state's oil investment account to Alaskans even though state government has been scrambling to pay the bills. In fact, most predictions put the yearly oil check at near record levels, about $2,000 for nearly every man, woman and child who lives in the 49th state. Last year's check was $1,884.

EIA Finds U.S. Propane Inventories Reach All-Time High

U.S. inventories of propane and propylene reached 97.7 million barrels as of September 11, the highest level in the 22 years that EIA has collected weekly propane inventory statistics. In the first six months of 2015, U.S. propane and propylene inventories were 24.3 million barrels higher on average compared to the same period in 2014. In the past year, nearly all of the increase in inventories occurred in the Gulf Coast region (PADD3).

Pragmatic Approach to Understand Indian Natural Gas Market

A Pragmatic Approach to Understand Indian Natural Gas Market Historically, India has relied on coal to generate power, liquid fuels as feedstock and oil for its transport sector. But for environmental reasons India needs to focus on cleaner fuels. Natural gas has emerged as the fuel of choice for many industries in India owing to its environmental benefits and higher economic efficiency. However, India’s natural gas market is seeing a supply deficit due to its low domestic production.

Natural Gas Infrastructure Intelligence Report

In today’s commodity environment, being aware of ongoing decisions by producers and midstream players regarding planned projects is a critical component to understanding the future natural gas infrastructure landscape. Experienced analysts collect and interpret the information to deliver a streamlined approach for understanding and quantifying the influence of planned projects on the market. Up-to-date, reliable insight into these decisions reduces blind spots for traders so they can make more informed, longer-term decisions.

Southcross Begins Open Season on Propane Pipeline System

Southcross Energy Partners launched a binding open season to solicit commitments for its recently completed 20,000 bpd propane pipeline system connecting the company's Bonnie View Fractionator to the Corpus Christi. TX area for delivery to end-use customers.

In the News: Crude Oil Prices Poised to Drop Further

Since the oil price collapse, global oil production has risen, not fallen. Since the fateful Nov. 27, 2014 OPEC meeting, aggregate production from the U.S., Saudi Arabia, and Iraq is up 2 MMbop/d – far more than demand. November is also when the U.S. inadvertently became the swing oil producer. Prices have not yet fallen far enough or for long enough for an appreciable U.S. supply adjustment to occur. It may not be far off, especially if oil prices fall further with new Iranian supplies, says a study from IHS Energy that notes:

Steelhead LNG Plans Gas Connector Project on Vancouver Island

Steelhead LNG struck a pre-construction agreement with pipeline developer Williams to design and gain regulatory approvals for the Island Gas Connector Project, a proposed natural gas pipeline to Vancouver Island. The pipeline would transport natural gas 33 miles from Williams’ Northwest Pipeline’s interconnect with Spectra Energy’s BC Pipeline system at Sumas, WA to Cherry Point, WA. From there, it would travel 47 miles subsea, landing directly to the proposed Malahat LNG Project on the island.

Bechtel Building First U.S.-Based Floating LNG Vessel

Bechtel was selected by Delfin LNG, a wholly owned subsidiary of Fairwood Peninsula Energy Corp., to perform front-end engineering and design for the first U.S.-based floating liquefied natural gas vessel (FLNGV) to go into service at Port Delfin. Port Delfin is a proposed deepwater port and floating LNG facility that will be located about 50 miles off the coast of Cameron Parish, LA. Upon the final investment decision, Bechtel is expected to design, build and commission the FLNGV. Plans call for Port Delfin to receive natural gas from the Delfin Offshore Pipeline.

World News: China and Russia Begin Work On Power of Serbia Pipeline

Russia’s Gazprom and China National Petroleum Corporation (CNPC) have confirmed that construction is underway on the 4,000-km Power of Serbia Pipeline that will deliver up to 38 Bcma of gas to China. The first joint of pipe for the Chinese sector of the project was recently welded near the city of Heibe in the northern Heilongjiang Province bordering Russia, according to CNPC. Russia started building its section of the 2,500-mile eastern route last year. The pipeline is due to become fully operational in late 2017.

Key Issues Taken on at Pipeline Conference

Pipeline & Gas Journal’s 11th annual Pipeline Opportunities Conference brought in 400 attendees from throughout North America, all focused on getting the most up-to-date information regarding the oil and natural gas industry. In addition to a full day’s worth of conference presentations and roundtables, guests had ample time to network during the even held March 24 at the Royal Sonesta Hotel in Houston’s Galleria district.

Icahn takes 8.2% Stake in Cheniere Energy

NEW YORK (AP) — Billionaire investor Carl Icahn is taking an 8.2% stake in liquid natural gas company Cheniere Energy Inc., sending its shares higher Thursday in aftermarket trading. Icahn disclosed ownership of 19.4 million shares of Cheniere, which owns a liquid natural gas terminal and pipeline in Louisiana. Icahn's funds say they want to start talks with the company about its business, financing of capital spending and executive compensation, and Icahn may seek representation on the board of directors. Cheniere Energy did not immediately respond to a request for comment.

P&GJs Midyear International Pipeline Report

<em>P&GJ’s</em> 2015 international pipeline survey indicates 70,308 miles of pipeline are in various stages of construction or planned. Of these, 32,013 miles account for projects in the planning and engineering phase, while 38,295 miles are in various stages of construction.

Fire Sale on Stuff that Burns: Oil, Natural Gas, Coal Down

NEW YORK — These days it seems whatever can be burned to power a car, heat a home, make electricity or ship people and goods around the globe is being sold at bargain basement prices. Prices for coal, natural gas, oil and the fuels made from crude such as gasoline and diesel are all far less expensive than they have been in recent years.

New Ethane Blending Facility Provides Flexibility for Natural Gas vs. Ethane Spreads

Enterprise Product Partners’ recently opened Ethane Blending Facility in Natchitoches, LA provides an unprecedented option for U.S. Northeast ethane rejection by blending ethane moved on the company’s 125,000 bpd ATEX pipeline into the U.S. Gulf Coast natural gas stream.

What's in Store for Halliburton-Baker Hughes Tie-Up?

Perhaps the biggest single change for the oil business since the start of the slump is Halliburton’s deal to buy Baker Hughes. The mega-merger would radically alter the oil field servicing industry leaving two giants competing and a couple of smaller firms vying to take BHI’s spot as the new number three.

Wood Group Awarded FEED Contract for Australia FLNG Development

Wood Group secured a contract to carry out front-end engineering and design (FEED) for the Woodside-operated Browse Floating Liquefied Natural Gas (FLNG) Development, offshore Western Australia. Wood Group Kenny (WGK) will perform all design engineering for the insulated production flowline system required for the asset’s offshore gas-condensate fields - Brecknock, Calliance and Torosa – located 300 km from the Kimberly coast. The 12-month contract, which is valued at US$6 million and effective immediately, will be delivered from WGK’s Perth office.

World News: Report Outlines Climate Framework, Spending

Development of a clear climate framework and a global emissions target is essential if $48-53 trillion for a new sustainable energy infrastructure is to be delivered, according to a new report from the World Energy Council. The findings are discussed in the fifth edition of the energy leaders’ dialogue series, the World Energy Trilemma Report, ‘Priority actions on climate change and how to balance the energy trilemma,’ released by the World Energy Council and project partner Oliver Wyman, along with the Global Risk Centre of its parent Marsh & McLennan Companies.

Offshore News: McDermott Awarded 12 Jacket Order for Saudi Fields

McDermott International, Inc. was awarded a large brownfield contract by Saudi Aramco for the engineering, procurement, construction and installation (EPCI) of twelve jackets for offshore oil and gas fields in Saudi Arabian waters. Engineering and procurement is expected to be performed by McDermott’s teams in Dubai, and Al Khobar, Saudi Arabia. The jackets are scheduled for fabrication by McDermott’s Dubai, U.A.E.-based fabrication facility.

EIA: Annual Energy Outlook Through 2040

The latest <em>Annual Energy Outlook 2015 (AEO2015)</em> prepared by the federal Energy Information Administration (EIA) presents long-term annual projections of energy supply, demand and prices through 2040. This analysis focuses on six scenarios: a reference case, low and high economic growth cases, low and high oil price cases, and the high oil and gas resource case.

Not Deterred By Huge Risks, Shell Opts For Megaprojects

U.S. shale has offered the oil industry a business model that is different from conventional drilling of the past. High initial decline rates, especially compared to conventional wells, requires companies to continuously drill to keep up production. But with lower upfront costs and shorter ramp up times, shale drilling is arguably less risky than a multibillion-dollar megaproject that the oil majors had become accustomed to over the past decade.

Carbon Emission Regulations Could Jeopardize LNG Projects

Natural gas is increasingly being viewed as one of the most important sources of fuel in the coming decades. That is why Royal Dutch Shell, an oil major, made a huge bet onLNG when it decided to purchase BG Group, which has major holdings in LNG projects in Australia and East Africa.