Greece and Russia on Tuesday signed a deal on Greece's participation in a gas pipeline project that will help strengthen Russia's grip on energy exports to Europe.
The agreement for the 900-kilometer (550-mile), €10 billion (US$15 billion) South Stream pipeline was signed at a Kremlin ceremony attended by Greek Prime Minister Costas Karamanlis and Russia President Vladimir Putin.
At a news conference after the ceremony, Putin again focused on Russia's growing position as Europe's dominant supplier of gas and oil, and pooh-poohed efforts to find alternatives — both sources and conduits.
"Realizing the South Stream project doesn't mean that we are fighting some other alternative project," Putin told reporters. "Please, if someone can find some other similar project under economically acceptable terms that can guarantee products of a sufficient volume for these gas systems, we will only be glad."
The European Union, with the United States, has pushed another pipeline called Nabucco, but that project lags far behind South Stream, which will run under the Black Sea from Russia to Bulgaria, where it could branch off in several directions.
Wednesday, April 30, 2008
Tuesday, April 29, 2008
Broadwater Liquid Natural Gas New York Project - Appealed!
NEW YORK, April 28 (Reuters) - Energy companies Shell (RDSa.L: Quote, Profile, Research) and TransCanada (TRP.TO: Quote, Profile, Research) plan to ask the U.S. Commerce department to overturn New York state's rejection of their plan to build a liquefied natural gas platform in Long Island Sound.
John Hritcko, regional project director for the Broadwater LNG project, has asked the Federal Energy Regulatory Commission to forward the details of the case to the Secretary of Commerce in preparation for an appeal.
The company plans to appeal to the Commerce department before the May 12 deadline, he said. He said the department has up to a year to process the appeal.
Earlier in April, New York Governor David Paterson rejected the proposal to build the Broadwater project, saying it was "fundamentally wrong" to privatize open water.
Under the Coastal Zone Management Act, the state of New York's objection prevents federal agencies from issuing permits required by the project. However, the state's objection may be overridden by the Secretary of Commerce through an administrative appeal.
The Federal Energy Regulatory Commission approved Broadwater's construction in March despite concerns by local officials that the plant could be the target of an attack.
LNG is natural gas that is super cooled into liquid form for transport in ships. It is warmed and returned to its gaseous state at the import terminal.
The project would be the first floating terminal in the United States for storing and delivering LNG.
John Hritcko, regional project director for the Broadwater LNG project, has asked the Federal Energy Regulatory Commission to forward the details of the case to the Secretary of Commerce in preparation for an appeal.
The company plans to appeal to the Commerce department before the May 12 deadline, he said. He said the department has up to a year to process the appeal.
Earlier in April, New York Governor David Paterson rejected the proposal to build the Broadwater project, saying it was "fundamentally wrong" to privatize open water.
Under the Coastal Zone Management Act, the state of New York's objection prevents federal agencies from issuing permits required by the project. However, the state's objection may be overridden by the Secretary of Commerce through an administrative appeal.
The Federal Energy Regulatory Commission approved Broadwater's construction in March despite concerns by local officials that the plant could be the target of an attack.
LNG is natural gas that is super cooled into liquid form for transport in ships. It is warmed and returned to its gaseous state at the import terminal.
The project would be the first floating terminal in the United States for storing and delivering LNG.
Monday, April 28, 2008
Idaho Natural Gas from Cow Manure
One Idaho Falls company is leading the way when it comes to creating renewable green energy. As Ty Brennan show us, you may be surprised to find out how they're doing it.
Intrepid Technology, based in Idaho Falls, is doing their part to go green. Sitting on an ordinary dairy farm near Rupert, something extraordinary is going on. Animal waste is being transformed into pipeline-quality natural gas.
The senior vice-president of Intrepid, Brad Frazee, says they saw a need to not only help nature, but produce something from it.
"We started looking at some of the issues the state faced and the manure coming off the dairies was kind of first and foremost as far as the ability to go in and help manage the situation."
Three years after the initial idea, the first prototype was installed, and the company says they haven't looked back since, blazing a trail as the first company to produce natural gas.
"We're very intrepid in our approach to this renewable energy field and it's something nobody else in the United States has been able to accomplish in the private or the government actually."
The process of turning manure into natural gas is no easy feat. It's lengthy and complicated. Every six to eight hours, waste from the nearly 6,000 head of cattle is collected. From there, it starts its transition to natural gas in a 34,000-gallon tank.
"Each tank gets a certain charge and just keeps going 24/7."
After the gas is captured, it is then refined and sent out in trucks to customers. Some of the gas even runs some of the plant's own equipment.
"This boiler-water heater is running on the purified side of natural gas. It's running as if it were hooked up to a natural gas pipeline."
One hundred cubic feet a minute of natural gas is produced. To put that into perspective, in one room alone, there is enough natural gas being produced to serve nearly 2,000 homes.
Wayne Tolman, who helped design and now runs the operation, says this plant is not only creating a green fuel, but keeping harsh gases out of the environment.
"As you know, methane is a big deal getting into the atmosphere. Well, we're keeping the methane out of the atmosphere. We're turning it into usable fuel."
But besides that usable fuel, Intrepid has also found another way to go green - by using all the byproducts of the manure as compost.
"It's 100% renewable green energy, the manure, the compost goes back out on to the land, it's brought in, becomes a nutrient plan for raising the crops and it goes back out through the cow, so it's this perpetual machine going."
Intrepid employees they say this is just the tip of the iceberg - just one way they are looking forward to the future.
"We are producing a product that's basically a renewable replacement for natural gas."
"In the United States, everyone's talking about 'going green'. This is state-of-the-art. This is green energy as we speak."
The gas from Intrepid was rigorously tested during a 3-month process to make sure it was pipeline-quality gas. They are currently working on using cheese whey as yet another way to produce natural gas.
Intrepid Technology, based in Idaho Falls, is doing their part to go green. Sitting on an ordinary dairy farm near Rupert, something extraordinary is going on. Animal waste is being transformed into pipeline-quality natural gas.
The senior vice-president of Intrepid, Brad Frazee, says they saw a need to not only help nature, but produce something from it.
"We started looking at some of the issues the state faced and the manure coming off the dairies was kind of first and foremost as far as the ability to go in and help manage the situation."
Three years after the initial idea, the first prototype was installed, and the company says they haven't looked back since, blazing a trail as the first company to produce natural gas.
"We're very intrepid in our approach to this renewable energy field and it's something nobody else in the United States has been able to accomplish in the private or the government actually."
The process of turning manure into natural gas is no easy feat. It's lengthy and complicated. Every six to eight hours, waste from the nearly 6,000 head of cattle is collected. From there, it starts its transition to natural gas in a 34,000-gallon tank.
"Each tank gets a certain charge and just keeps going 24/7."
After the gas is captured, it is then refined and sent out in trucks to customers. Some of the gas even runs some of the plant's own equipment.
"This boiler-water heater is running on the purified side of natural gas. It's running as if it were hooked up to a natural gas pipeline."
One hundred cubic feet a minute of natural gas is produced. To put that into perspective, in one room alone, there is enough natural gas being produced to serve nearly 2,000 homes.
Wayne Tolman, who helped design and now runs the operation, says this plant is not only creating a green fuel, but keeping harsh gases out of the environment.
"As you know, methane is a big deal getting into the atmosphere. Well, we're keeping the methane out of the atmosphere. We're turning it into usable fuel."
But besides that usable fuel, Intrepid has also found another way to go green - by using all the byproducts of the manure as compost.
"It's 100% renewable green energy, the manure, the compost goes back out on to the land, it's brought in, becomes a nutrient plan for raising the crops and it goes back out through the cow, so it's this perpetual machine going."
Intrepid employees they say this is just the tip of the iceberg - just one way they are looking forward to the future.
"We are producing a product that's basically a renewable replacement for natural gas."
"In the United States, everyone's talking about 'going green'. This is state-of-the-art. This is green energy as we speak."
The gas from Intrepid was rigorously tested during a 3-month process to make sure it was pipeline-quality gas. They are currently working on using cheese whey as yet another way to produce natural gas.
Sunday, April 27, 2008
Bangladesh Doubles Natural Gas Prices
BANGLADESH: Bangladesh Thursday almost doubled the price of compressed natural gas (CNG) to 16.75 taka per cubic meter from 8.50 taka previously.
The Bangladeshi caretaker Government announced Thursday, “The new tariff rate will come into effect from Friday.”
The announcement said though the CNG tariff is raised, bus and truck operators will not be allowed to raise their transport fares. “The Ministry of Communications will contemplate increasing the rate of CNG-run auto-rickshaw and taxicabs’ passenger fares,” it said.
The Bangladeshi caretaker Government announced Thursday, “The new tariff rate will come into effect from Friday.”
The announcement said though the CNG tariff is raised, bus and truck operators will not be allowed to raise their transport fares. “The Ministry of Communications will contemplate increasing the rate of CNG-run auto-rickshaw and taxicabs’ passenger fares,” it said.
Saturday, April 26, 2008
Natural Gas $11/mmBtu on April 25
April 25 (Bloomberg) -- Natural gas rose to the highest in more than two years as oil advanced on supply disruptions, spurring prices of the heating and industrial fuel.
Crude rose as BP Plc prepared to shut down a North Sea pipeline and violence and strikes crimped output in Nigeria. The furnace fuel also gained amid speculation supplies may fall short of the quantities needed to rebuild storage for next winter's heating needs.
``People are trying to make an association that natural gas and crude have a symbiotic relationship and their prices need to be closer,'' said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. ``There's been a notion prevalent for the last month that this gap has to close.''
Natural gas for May delivery rose 17.3 cents, or 1.6 percent, to settle at $10.963 per million British thermal units at 2:53 p.m. on the New York Mercantile Exchange. The price rose to $11.05 per million Btu in after-hours electronic trading, the highest intraday price since Dec. 30, 2005. The May contract is up 4 percent this week. Prices are 47 percent higher so far this year. The contract expires on April 28.
The contract for June delivery rose 15.8 cents, or 1.4 percent, to $11.101 per million Btu and is pulling the May price higher, said Rose.
Based on prices in the cash market, gas is valued at $11.27 per million Btu compared with $14.66 per million Btu for fuel oil, according to data compiled by Bloomberg. Heating oil at $23.88 per million Btu equivalent is more than double the price of gas.
``There's some pre-weekend short covering for natural gas,'' said George Ellis, a director in the energy derivatives group at BMO Capital Markets in New York. ``Natural gas looks very strong. Momentum is taking over and allowing this market to trade higher.''
Moving Average
Traders who are short heading into the weekend may be buying now to guard against having to purchase gas at higher prices should it surge before regular trading resumes on April 28. Short trades are bets that the price of a commodity will decline. Prices typically rise as those speculators who had sold contracts anticipating lower prices buy them back to protect gains or limit losses.
Gas has held above the nine-day moving average of about $10.605 per million Btu and unless it breaks below that, the fuel should continue higher, Ellis said.
Moving average is an indicator used by technical analysts. It shows the average value of a security or commodity over time. Chartists track the averages for clues on price direction.
Fundamentals
Higher crude allows ``natural gas traders the luxury of paying attention to their own fundamentals,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut.
To rebuild supplies for next winter, higher prices are needed to either prompt additional exploration and production in the U.S. or to pull cargoes of liquefied natural gas from Asia and Europe, which pays more.
Inventories for the week ended April 18 gained 24 billion cubic feet to 1.285 trillion, the Energy Department said in a report yesterday. Stockpiles were 18 percent lower than a year ago and 1.9 percent below the five-year average, the department said.
The five-year average change for the same week of the year is an increase of 46 billion, according to the Energy Department.
Gas inventories fell to 1.234 trillion cubic feet on April 4, the lowest since May 2004, after reaching a record 3.545 trillion in November.
``I have a feeling we're going to make new highs,'' said Beutel. ``We're losing production from Independence Hub. Imports of LNG are lower and we're playing catch up to next winter, there are a lot of reasons to think this is still a bullish market.''
LNG Imports
Flow of liquefied natural gas into the U.S. is below that of a year ago as Europe pays more for the fuel to build up inventories, investment bank Tudor, Pickering, Holt & Co. said.
U.S. LNG imports dropped to 900 million cubic feet a day in April from a daily 3.2 billion cubic feet a year earlier, Tudor analyst Stacy Nieuwoudt said in an e-mail yesterday. The New York June futures contract was $1.63 per million British thermal units below prices offered in the U.K. today for the same month, according to data compiled by Bloomberg.
LNG is super-cooled natural gas reduced to a liquid for transport by ships to markets not connected by pipeline.
The Independence Hub, a production platform in the Gulf of Mexico that was supplying about 900 million cubic feet a day, shut April 9 after a leak was discovered in a pipeline. Repairs may take as long as four weeks, Enterprise Products Partners LP, which owns Independence, said.
Crude rose as BP Plc prepared to shut down a North Sea pipeline and violence and strikes crimped output in Nigeria. The furnace fuel also gained amid speculation supplies may fall short of the quantities needed to rebuild storage for next winter's heating needs.
``People are trying to make an association that natural gas and crude have a symbiotic relationship and their prices need to be closer,'' said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. ``There's been a notion prevalent for the last month that this gap has to close.''
Natural gas for May delivery rose 17.3 cents, or 1.6 percent, to settle at $10.963 per million British thermal units at 2:53 p.m. on the New York Mercantile Exchange. The price rose to $11.05 per million Btu in after-hours electronic trading, the highest intraday price since Dec. 30, 2005. The May contract is up 4 percent this week. Prices are 47 percent higher so far this year. The contract expires on April 28.
The contract for June delivery rose 15.8 cents, or 1.4 percent, to $11.101 per million Btu and is pulling the May price higher, said Rose.
Based on prices in the cash market, gas is valued at $11.27 per million Btu compared with $14.66 per million Btu for fuel oil, according to data compiled by Bloomberg. Heating oil at $23.88 per million Btu equivalent is more than double the price of gas.
``There's some pre-weekend short covering for natural gas,'' said George Ellis, a director in the energy derivatives group at BMO Capital Markets in New York. ``Natural gas looks very strong. Momentum is taking over and allowing this market to trade higher.''
Moving Average
Traders who are short heading into the weekend may be buying now to guard against having to purchase gas at higher prices should it surge before regular trading resumes on April 28. Short trades are bets that the price of a commodity will decline. Prices typically rise as those speculators who had sold contracts anticipating lower prices buy them back to protect gains or limit losses.
Gas has held above the nine-day moving average of about $10.605 per million Btu and unless it breaks below that, the fuel should continue higher, Ellis said.
Moving average is an indicator used by technical analysts. It shows the average value of a security or commodity over time. Chartists track the averages for clues on price direction.
Fundamentals
Higher crude allows ``natural gas traders the luxury of paying attention to their own fundamentals,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut.
To rebuild supplies for next winter, higher prices are needed to either prompt additional exploration and production in the U.S. or to pull cargoes of liquefied natural gas from Asia and Europe, which pays more.
Inventories for the week ended April 18 gained 24 billion cubic feet to 1.285 trillion, the Energy Department said in a report yesterday. Stockpiles were 18 percent lower than a year ago and 1.9 percent below the five-year average, the department said.
The five-year average change for the same week of the year is an increase of 46 billion, according to the Energy Department.
Gas inventories fell to 1.234 trillion cubic feet on April 4, the lowest since May 2004, after reaching a record 3.545 trillion in November.
``I have a feeling we're going to make new highs,'' said Beutel. ``We're losing production from Independence Hub. Imports of LNG are lower and we're playing catch up to next winter, there are a lot of reasons to think this is still a bullish market.''
LNG Imports
Flow of liquefied natural gas into the U.S. is below that of a year ago as Europe pays more for the fuel to build up inventories, investment bank Tudor, Pickering, Holt & Co. said.
U.S. LNG imports dropped to 900 million cubic feet a day in April from a daily 3.2 billion cubic feet a year earlier, Tudor analyst Stacy Nieuwoudt said in an e-mail yesterday. The New York June futures contract was $1.63 per million British thermal units below prices offered in the U.K. today for the same month, according to data compiled by Bloomberg.
LNG is super-cooled natural gas reduced to a liquid for transport by ships to markets not connected by pipeline.
The Independence Hub, a production platform in the Gulf of Mexico that was supplying about 900 million cubic feet a day, shut April 9 after a leak was discovered in a pipeline. Repairs may take as long as four weeks, Enterprise Products Partners LP, which owns Independence, said.
Friday, April 25, 2008
Turkmenistan Selling Natural Gas to India & Pakistan
India and Pakistan on Thursday committed themselves to buying natural gas from Turkmenistan despite cost of laying pipeline from the Central Asian nation doubling to $ .6 billion and the energy-hungry countries close to striking a deal for a rival line from Iran.
The South Asian neighbours and Afghanistan signed the Framework Agreement with Turkmenistan for laying the line by 2015.
Two-days of deliberation of the Steering Committee of the Turkmenistan-Afghanistan-Pakistan-India pipeline, that has the US backing, saw the formal induction of New Delhi and resolved issues regarding gas reserves in Turkmenistan and demand of the South-Asian neighbours.
After the meeting, Pakistan's Petroleum Minister Khwaja Asif said: "We are strongly committed to the project. We believe it is still economically viable for the four countries even after the escalation in cost."
According to a draft feasibility study prepared with the support of the Asian Development Bank, which is financially backing the pipeline, the estimated cost of the project has increased from $ 3.3 billion in 2004 to $ 7.6 billion.
The escalation was due to sharp rise in steel prices, jump in construction costs and cost of compressor stations to be set up for the 1,680-km line from Turkmenistan's Daulatabad gas field to Fazilka on the India-Pakistan border after passing through Herat and Kandahar in Afghanistan and Multan in Pakistan
The South Asian neighbours and Afghanistan signed the Framework Agreement with Turkmenistan for laying the line by 2015.
Two-days of deliberation of the Steering Committee of the Turkmenistan-Afghanistan-Pakistan-India pipeline, that has the US backing, saw the formal induction of New Delhi and resolved issues regarding gas reserves in Turkmenistan and demand of the South-Asian neighbours.
After the meeting, Pakistan's Petroleum Minister Khwaja Asif said: "We are strongly committed to the project. We believe it is still economically viable for the four countries even after the escalation in cost."
According to a draft feasibility study prepared with the support of the Asian Development Bank, which is financially backing the pipeline, the estimated cost of the project has increased from $ 3.3 billion in 2004 to $ 7.6 billion.
The escalation was due to sharp rise in steel prices, jump in construction costs and cost of compressor stations to be set up for the 1,680-km line from Turkmenistan's Daulatabad gas field to Fazilka on the India-Pakistan border after passing through Herat and Kandahar in Afghanistan and Multan in Pakistan
Thursday, April 24, 2008
Natural Gas Canada Drilling Again
EDMONTON - A drilling revival has begun as rising natural gas prices fuel increases in industry budgets, the Petroleum Services Association of Canada reported Wednesday.
The 270-company group sharply increased its 2008 activity forecast to 16,500 wells, up 14 per cent from a previous prediction of 14,500 wells made as gas languished in a market low last fall. Nearly 12,000 wells or three-fourths of western Canadian drilling will be in Alberta this year, though the industry is accelerating oil exploration in Saskatchewan and Manitoba, PSAC added.
"While all the talk of late is centred around the rising price of oil, it's actually the price of natural gas that really impacts the industry in Canada, especially in Alberta," association president Roger Soucy said in a statement on the new numbers.
The 270-company group sharply increased its 2008 activity forecast to 16,500 wells, up 14 per cent from a previous prediction of 14,500 wells made as gas languished in a market low last fall. Nearly 12,000 wells or three-fourths of western Canadian drilling will be in Alberta this year, though the industry is accelerating oil exploration in Saskatchewan and Manitoba, PSAC added.
"While all the talk of late is centred around the rising price of oil, it's actually the price of natural gas that really impacts the industry in Canada, especially in Alberta," association president Roger Soucy said in a statement on the new numbers.
Wednesday, April 23, 2008
Alaska Says No to ExxonMobil
Alaska rejected Exxon Mobil Corp.'s $1.3 billion plan for a North Slope natural-gas project, saying it couldn't trust the company to develop a field that holds enough gas to meet almost two years of U.S. residential demand.
The proposal to begin production of reserves that have lain dormant since their discovery in the 1970s isn't in the "best interests" of the state, Alaska Natural Resources Commissioner Tom Irwin said today in an e-mailed statement. The plan would have involved assessment and design work at the Point Thomson field without any actual commitment to pump gas, he said.
"I could not risk further delay in development of these valuable resources," Irwin said in the statement. "In light of the history of this unit, I did not trust the appellant's commitment to follow through."
Irving-based Exxon Mobil, the world's largest energy company, submitted the plan in February after Gov. Sarah Palin's administration moved to evict the company and its partners from the field 50 miles east of Prudhoe Bay because of decades of inaction.
The proposal to begin production of reserves that have lain dormant since their discovery in the 1970s isn't in the "best interests" of the state, Alaska Natural Resources Commissioner Tom Irwin said today in an e-mailed statement. The plan would have involved assessment and design work at the Point Thomson field without any actual commitment to pump gas, he said.
"I could not risk further delay in development of these valuable resources," Irwin said in the statement. "In light of the history of this unit, I did not trust the appellant's commitment to follow through."
Irving-based Exxon Mobil, the world's largest energy company, submitted the plan in February after Gov. Sarah Palin's administration moved to evict the company and its partners from the field 50 miles east of Prudhoe Bay because of decades of inaction.
Tuesday, April 22, 2008
Canadian Natural Gas Pushing Canadian Dollar
CALGARY -- The Canadian dollar is often talked about as a petro-currency, but it's natural gas that is doing much of the heavy lifting.
With the price of natural gas recovering to double-digit levels since the beginning of the year, count on the loonie's strength continuing, CIBC World Markets senior economist Avery Shenfeld predicted on Monday, heading for US$1.05 this year and staying in the US$1-to-US$1.05 range in 2009 as well, regardless of what happens to the economy in the United States.
"There are a lot of fears that Canada is about to develop a very large trade deficit, because of the weakness in our manufacturing sector, and that won't happen if natural gas and oil prices keep rising," Mr. Shenfeld said in an interview. "They will simply be replacing our trade surplus that we used to have in things like automotive products, with a larger trade surplus in energy."
In a weekly foreign exchange outlook, Mr. Shenfeld said natural gas, not oil, has been contributing the most to the trade surplus in every year since 1975, with last year's natural gas trade surplus reaching over $25-billion, next to crude oil's $18-billion.
"Double-digit gas prices and triple-digit oil should prevent Canada from developing a material current account deficit this year even as factories shut their doors," he said in the report.
The natural gas recovery will further "tilt" the country's economy toward Western Canada, which produces what the world wants most, and "these days, that is energy."
Mr. Shenfeld said oil has been getting a lot of attention as a top engine of the Canadian dollar because it's more noticed by consumers and investors.
In reality, natural gas results in a larger trade surplus because the trade is largely one-way, from Canadian producers to U.S. consumers.
In the case of oil, exports from Western Canada are offset by imports in Eastern Canada. Last year, Canada imported crude oil worth $23.7 billion (not including petroleum products), while it exported crude oil worth $41.3 billion.
"To the extent that trade surpluses matter for a currency, which they do, natural gas should be more important than oil, because the trade balance is larger," he said, noting that years in which Canada had the largest trade surpluses tended to be associated with spikes in natural gas prices, generating a lot of Canadian dollar buying.
The Canadian dollar depreciated marginally on Monday, to US99.40¢, down 0.11, in anticipation of a Bank of Canada cut today to its benchmark interest rate.
With the price of natural gas recovering to double-digit levels since the beginning of the year, count on the loonie's strength continuing, CIBC World Markets senior economist Avery Shenfeld predicted on Monday, heading for US$1.05 this year and staying in the US$1-to-US$1.05 range in 2009 as well, regardless of what happens to the economy in the United States.
"There are a lot of fears that Canada is about to develop a very large trade deficit, because of the weakness in our manufacturing sector, and that won't happen if natural gas and oil prices keep rising," Mr. Shenfeld said in an interview. "They will simply be replacing our trade surplus that we used to have in things like automotive products, with a larger trade surplus in energy."
In a weekly foreign exchange outlook, Mr. Shenfeld said natural gas, not oil, has been contributing the most to the trade surplus in every year since 1975, with last year's natural gas trade surplus reaching over $25-billion, next to crude oil's $18-billion.
"Double-digit gas prices and triple-digit oil should prevent Canada from developing a material current account deficit this year even as factories shut their doors," he said in the report.
The natural gas recovery will further "tilt" the country's economy toward Western Canada, which produces what the world wants most, and "these days, that is energy."
Mr. Shenfeld said oil has been getting a lot of attention as a top engine of the Canadian dollar because it's more noticed by consumers and investors.
In reality, natural gas results in a larger trade surplus because the trade is largely one-way, from Canadian producers to U.S. consumers.
In the case of oil, exports from Western Canada are offset by imports in Eastern Canada. Last year, Canada imported crude oil worth $23.7 billion (not including petroleum products), while it exported crude oil worth $41.3 billion.
"To the extent that trade surpluses matter for a currency, which they do, natural gas should be more important than oil, because the trade balance is larger," he said, noting that years in which Canada had the largest trade surpluses tended to be associated with spikes in natural gas prices, generating a lot of Canadian dollar buying.
The Canadian dollar depreciated marginally on Monday, to US99.40¢, down 0.11, in anticipation of a Bank of Canada cut today to its benchmark interest rate.
Monday, April 21, 2008
India Natural Gas Project Expanding
he Hong Kong-based China Light and Power company (CLP), has requested the Centre and Gujarat government for allocating more natural gas for its 1050 MW project at Paguthan in neighbouring Bharuch district, Chief Executive Officer of CLP Andrew Brandler said.
"We are very excited about this project but it is delayed due to non-avalibility of gas, Bandler told media on the sidelines of inauguration of Rs 600 cr wind power plant at Paguthan recently.
CLP Group's subsidiary, Gujarat Paguthan Energy Company (GPEC) has been operating 655 combined cycle gas-fired power plants at Paguthan at present. CLP had acquired a majority stake in GPEC in 2002 and fully acquired it in mid-2003.
Rajiv Mishra, Managing Director of CLP Power India Ltd, a subsidiary of CLP Group, said it needs five million cubic meters of gas per day for the 1050 MW gas-based expansion power project in Paguthan.
At present, it gets two million cubic meters of gas per day for the 655 MW gas-based power project. The company invest Rs 4,000 crores for this expension project, Mishra said.
After getting necessary approvals for this expansion project last year, they have been requesting the Union Power Ministry and Gujarat Chief Minister Narendra Modi for availability of required gas.
"We are very excited about this project but it is delayed due to non-avalibility of gas, Bandler told media on the sidelines of inauguration of Rs 600 cr wind power plant at Paguthan recently.
CLP Group's subsidiary, Gujarat Paguthan Energy Company (GPEC) has been operating 655 combined cycle gas-fired power plants at Paguthan at present. CLP had acquired a majority stake in GPEC in 2002 and fully acquired it in mid-2003.
Rajiv Mishra, Managing Director of CLP Power India Ltd, a subsidiary of CLP Group, said it needs five million cubic meters of gas per day for the 1050 MW gas-based expansion power project in Paguthan.
At present, it gets two million cubic meters of gas per day for the 655 MW gas-based power project. The company invest Rs 4,000 crores for this expension project, Mishra said.
After getting necessary approvals for this expansion project last year, they have been requesting the Union Power Ministry and Gujarat Chief Minister Narendra Modi for availability of required gas.
Sunday, April 20, 2008
Natural Gas Costs Driving Higher Natural Gas Prices
CHICAGO--(BUSINESS WIRE)--It’s the high costs of the difficult to reach and developing basins now being tapped to supply this nation’s growing demand for natural gas that have driven prices to a new level, and those costs won’t go away regardless of the worldwide price of oil, a ConocoPhillips vice president recently told Natural Gas Intelligence (NGI).
While some believe natural gas prices have been dragged higher by $100/bbl oil or pushed up by supply shortfalls, these factors don’t explain the step-change gas prices have experienced. Higher full-cycle gas production costs -- due particularly to greater reliance on unconventional supply basins -- have driven the prices all gas consumers pay to a new level, one where they’re bound to stay, according to Will Hussey, ConocoPhillips senior vice president for origination. Hussey will be one of the key speakers at the upcoming GasMart 2008, the 22nd annual event coming up May 20-22 in Chicago.
“I don’t know that people have a real appreciation for what full-cycle costs are for developing some of these nonconventional supplies,” he said. “I think people think that the prices of gas are high and inflated and don’t think it’s justified. I think they think it’s following crude oil. There’s an expectation that if crude were to come down or if we were ever over-supplied, supply-demand would be at a balance and the price would go back to three bucks, and it’s just not the way things work from a cost-based perspective.”
Asked for his long-term view on gas prices, Hussey quips that they will be higher than costs. More to the point, “I think that a reasonable floor would be seven bucks,” he said.
That outlook stokes no fears of demand destruction, at least not with Hussey. Even if one can switch from gas to oil, that’s an even less attractive proposition where prices are concerned. Coal is still taboo among many. “I’m not nearly as threatened about moving people away from gas as I am just trying to manage expectations for what I think the future will bring,” he said.
Factors influencing higher full-cycle costs include the technical challenges presented by unconventional reservoirs, but also higher labor and materials costs, particularly for steel. Not everyone appreciates this.
“People are looking at the E&P [exploration and production] companies and saying ‘these people are making a killing on this stuff,’” Hussey said. While it’s less costly to produce from legacy fields than it is from the unconventional frontier, consumers tend not to realize that the higher prices producers receive for gas today just drop down to the higher production costs in the new fields.
Generally, consumers understand the worldwide supply-demand outlook for oil, particularly where China is concerned, Hussey said. “And I think that the general prevailing thought is that gas has followed oil up, but when we can get the supply picture up for gas, then pricing can come back down,” Hussey said. “I just want people to understand what the underlying costs for natural gas are, and I think that communication is taking place. I think that people will accept that message.”
The pressure to is on natural gas to explore, expand and deliver as the only major “acceptable” transition fuel to a cleaner world. Hussey will be among a number of industry leaders speaking at this year’s GasMart, including keynoters Brian Frank, President of BP Energy Company, North America Gas & Power and Kathleen Eisbrenner, Executive Vice President, Global LNG, Shell Gas and Power International. Their companies will be among the sponsors meeting with customers in the GasMart Market Network Center.
Purchasers will be taking an active role in this year’s GasMart. The Process Gas Consumers (PGC), an organization of industrial natural gas users, is a sponsor and will be hosting a special luncheon for end users. Alex Strawn, Purchasing Group Manager, North American Energy for Procter & Gamble, will address the GasMart audience, as will buyers for Alcoa, AcelorMittal USA Inc., Potash Corp., Abbot and USG Corp.
Other speakers include executives from Nexen Marketing, TransCanada, Kinder Morgan’s Rockies Express Pipeline, EnergyUSA, Integrys, OGE Energy Resources, and Wachovia. Offering market insight will be Porter Bennett, President of Bentek Energy, the industry’s premier data collection and analysis firm, Aaron Studwell, Meteorologist for Weather Insight, and Jim Osten, Principal, North American Energy Services, Global Insight (USA), Inc.
The IntercontinentalExchange will have a workshop on electronic trading and host the main GasMart reception. The New York Mercantile Exchange is sponsoring attendance at a Chicago White Sox game and the North American Energy Credit and Clearing Corp. is hosting a golf tournament at the Harborside International Club.
The GasMart program and Market Network Center will be in the headquarters hotel, the Sheraton Chicago Hotel & Towers. More than half of the 450 already preregistered to attend are utility, LDC, IPP and industrial purchasers of natural gas. The event is hosted by Intelligence Press Inc., publisher of NGI, which has been reporting on natural gas market news and prices for 27 years and now carries the news real-time at intelligencepress.com.
While some believe natural gas prices have been dragged higher by $100/bbl oil or pushed up by supply shortfalls, these factors don’t explain the step-change gas prices have experienced. Higher full-cycle gas production costs -- due particularly to greater reliance on unconventional supply basins -- have driven the prices all gas consumers pay to a new level, one where they’re bound to stay, according to Will Hussey, ConocoPhillips senior vice president for origination. Hussey will be one of the key speakers at the upcoming GasMart 2008, the 22nd annual event coming up May 20-22 in Chicago.
“I don’t know that people have a real appreciation for what full-cycle costs are for developing some of these nonconventional supplies,” he said. “I think people think that the prices of gas are high and inflated and don’t think it’s justified. I think they think it’s following crude oil. There’s an expectation that if crude were to come down or if we were ever over-supplied, supply-demand would be at a balance and the price would go back to three bucks, and it’s just not the way things work from a cost-based perspective.”
Asked for his long-term view on gas prices, Hussey quips that they will be higher than costs. More to the point, “I think that a reasonable floor would be seven bucks,” he said.
That outlook stokes no fears of demand destruction, at least not with Hussey. Even if one can switch from gas to oil, that’s an even less attractive proposition where prices are concerned. Coal is still taboo among many. “I’m not nearly as threatened about moving people away from gas as I am just trying to manage expectations for what I think the future will bring,” he said.
Factors influencing higher full-cycle costs include the technical challenges presented by unconventional reservoirs, but also higher labor and materials costs, particularly for steel. Not everyone appreciates this.
“People are looking at the E&P [exploration and production] companies and saying ‘these people are making a killing on this stuff,’” Hussey said. While it’s less costly to produce from legacy fields than it is from the unconventional frontier, consumers tend not to realize that the higher prices producers receive for gas today just drop down to the higher production costs in the new fields.
Generally, consumers understand the worldwide supply-demand outlook for oil, particularly where China is concerned, Hussey said. “And I think that the general prevailing thought is that gas has followed oil up, but when we can get the supply picture up for gas, then pricing can come back down,” Hussey said. “I just want people to understand what the underlying costs for natural gas are, and I think that communication is taking place. I think that people will accept that message.”
The pressure to is on natural gas to explore, expand and deliver as the only major “acceptable” transition fuel to a cleaner world. Hussey will be among a number of industry leaders speaking at this year’s GasMart, including keynoters Brian Frank, President of BP Energy Company, North America Gas & Power and Kathleen Eisbrenner, Executive Vice President, Global LNG, Shell Gas and Power International. Their companies will be among the sponsors meeting with customers in the GasMart Market Network Center.
Purchasers will be taking an active role in this year’s GasMart. The Process Gas Consumers (PGC), an organization of industrial natural gas users, is a sponsor and will be hosting a special luncheon for end users. Alex Strawn, Purchasing Group Manager, North American Energy for Procter & Gamble, will address the GasMart audience, as will buyers for Alcoa, AcelorMittal USA Inc., Potash Corp., Abbot and USG Corp.
Other speakers include executives from Nexen Marketing, TransCanada, Kinder Morgan’s Rockies Express Pipeline, EnergyUSA, Integrys, OGE Energy Resources, and Wachovia. Offering market insight will be Porter Bennett, President of Bentek Energy, the industry’s premier data collection and analysis firm, Aaron Studwell, Meteorologist for Weather Insight, and Jim Osten, Principal, North American Energy Services, Global Insight (USA), Inc.
The IntercontinentalExchange will have a workshop on electronic trading and host the main GasMart reception. The New York Mercantile Exchange is sponsoring attendance at a Chicago White Sox game and the North American Energy Credit and Clearing Corp. is hosting a golf tournament at the Harborside International Club.
The GasMart program and Market Network Center will be in the headquarters hotel, the Sheraton Chicago Hotel & Towers. More than half of the 450 already preregistered to attend are utility, LDC, IPP and industrial purchasers of natural gas. The event is hosted by Intelligence Press Inc., publisher of NGI, which has been reporting on natural gas market news and prices for 27 years and now carries the news real-time at intelligencepress.com.
Saturday, April 19, 2008
Shell Natural Gas & Power Names New President
SAN FRANCISCO (Thomson Financial) - Royal Dutch Shell Plc on Friday named Mark Quartermain president of its natural gas and power marketing and trading subsidiary, Shell Energy North America, and certain of its other subsidiaries and affiliates, and head of U.K.-based Shell Energy Trading Ltd.'s leadership team.
Quartermain currently serves as senior vice president of the south region for Shell Energy North America, with responsibility for managing gas and power
trading, including emissions trading, and marketing in 14 states.
U.S.-listed shares of Shell rose a penny to $75.68.
Quartermain currently serves as senior vice president of the south region for Shell Energy North America, with responsibility for managing gas and power
trading, including emissions trading, and marketing in 14 states.
U.S.-listed shares of Shell rose a penny to $75.68.
Friday, April 18, 2008
Malaysian Liquid Natural Gas Exports to Japan
Last month, the government agreed to extend its exports of liquefied natural gas (LNG) to Japan beyond the original contract expiry date of 2010/2011. The new contracts are for 3 million tons of LNG per year (mtpy) over the first five years and 2 mtpy over the following five years.
Indonesia itself is facing a serious energy crisis. This is indicated by long queues for kerosene, LPG shortages, power supply interruptions and huge energy subsidies. Power generators and manufacturers are protesting about the shortage of gas. At the same time, the country is still recognized as one of the world's largest exporters of LNG and coal.
Do we really need to extend our exports of LNG to Japan, while the country is having such problems in providing its own energy security?
The upsurge in oil prices is worrying the government and parliament, who have had to make adjustments to the 2008 fiscal budget. They are also getting anxious about the 2009 budget, having projected energy subsidies for more than Rp 200 trillion. The government needs to respond to public concerns openly and honestly.
The root cause of the huge energy subsidies and energy crisis is our excessive dependence on oil. The government has introduced energy diversification projects, such as 10-gigawatt coal-fired plants, conversion from kerosene to LPG and biofuel promotion. However, these efforts have not been able to reduce the share of oil in our energy mix, because -- apart from projects begun recently -- our oil consumption has not been managed properly.
Natural gas is an ideal substitute for oil because it is cheaper and more efficient and produces fewer emissions than oil. Over the past two to three decades, natural gas has become widely used across the world, mainly in power generators. Indonesia -- with more natural gas reserves than oil -- implemented a crash program to build combined cycle gas turbines in Java during the 1990s, but those power generators (Tanjung Priok, Muara Karang, Muara Tawar, Tambak Lorok and Gresik, with a capacity of more than 5,000 megawatts) have to burn expensive oil, making them the largest beneficiaries of the energy subsidy.
Power generators and manufacturers were complaining about gas shortages long before the recent energy crisis hit consumers. The crises have been occurring for some time, but the government is still choosing to stick to its longtime policy of exporting natural gas while importing oil and selling it cheaper in the domestic market, instead of speeding up the supply of natural gas to mitigate our energy crises.
For businesses (state-owned companies), exporting LNG/natural gas to Japan, Korea, Taiwan, Singapore and Malaysia while at the same time importing oil (crude and products) for domestic consumption means profits.
Indonesia itself is facing a serious energy crisis. This is indicated by long queues for kerosene, LPG shortages, power supply interruptions and huge energy subsidies. Power generators and manufacturers are protesting about the shortage of gas. At the same time, the country is still recognized as one of the world's largest exporters of LNG and coal.
Do we really need to extend our exports of LNG to Japan, while the country is having such problems in providing its own energy security?
The upsurge in oil prices is worrying the government and parliament, who have had to make adjustments to the 2008 fiscal budget. They are also getting anxious about the 2009 budget, having projected energy subsidies for more than Rp 200 trillion. The government needs to respond to public concerns openly and honestly.
The root cause of the huge energy subsidies and energy crisis is our excessive dependence on oil. The government has introduced energy diversification projects, such as 10-gigawatt coal-fired plants, conversion from kerosene to LPG and biofuel promotion. However, these efforts have not been able to reduce the share of oil in our energy mix, because -- apart from projects begun recently -- our oil consumption has not been managed properly.
Natural gas is an ideal substitute for oil because it is cheaper and more efficient and produces fewer emissions than oil. Over the past two to three decades, natural gas has become widely used across the world, mainly in power generators. Indonesia -- with more natural gas reserves than oil -- implemented a crash program to build combined cycle gas turbines in Java during the 1990s, but those power generators (Tanjung Priok, Muara Karang, Muara Tawar, Tambak Lorok and Gresik, with a capacity of more than 5,000 megawatts) have to burn expensive oil, making them the largest beneficiaries of the energy subsidy.
Power generators and manufacturers were complaining about gas shortages long before the recent energy crisis hit consumers. The crises have been occurring for some time, but the government is still choosing to stick to its longtime policy of exporting natural gas while importing oil and selling it cheaper in the domestic market, instead of speeding up the supply of natural gas to mitigate our energy crises.
For businesses (state-owned companies), exporting LNG/natural gas to Japan, Korea, Taiwan, Singapore and Malaysia while at the same time importing oil (crude and products) for domestic consumption means profits.
Thursday, April 17, 2008
Liquid Natural Gas Marketing Team
Cheniere Energy Inc. (LNG.A: Quote, Profile, Research) said late Tuesday it hoped to outsource the marketing of liquefied natural gas delivered to its new Sabine Pass LNG terminal on the Gulf Coast as a way of reducing costs. Houston-based Cheniere said it is in advanced negotiations with a "major North American natural gas marketing company" that would allow Cheniere to reduce its own investment in its natural gas marketing unit and significantly cut overhead costs for procuring LNG. "It has become evident to us that the capital markets are currently very difficult," said Charif Souki, Cheniere's chairman and chief executive, in a press release. "This proposed strategic arrangement will allow us to receive large quantities of LNG without putting strain on our balance sheet." The imminent completion of the Sabine Pass terminal and Creole Trail Pipeline has also allowed Cheniere to start a staff- and cost-cutting program that will eliminate some 200 jobs, according to the press release. Shares of Cheniere closed at $14.20 on Tuesday on the American Stock Exchange, after reaching a 52-week low of $13.82 earlier in the day.
Wednesday, April 16, 2008
Freeport Receives 1st Liquid Natural Gas Tanker
HOUSTON (Reuters) - The first tanker load of liquefied natural gas arrived Tuesday at the new Freeport LNG import terminal on the Texas Gulf Coast, a spokeswoman said.
The tanker Excelsior, loaded in Nigeria, arrived at midday and will begin unloading LNG Thursday to prepare Freeport for commercial start-up by June 1, spokeswoman Janet Faz said.
The terminal is one of three new U.S. LNG import facilities receiving first cargoes this month.
Denver oilman Michael Smith owns 45 percent of the $1-billion terminal, which will be able to send up to 1.5 billion cubic feet of gas per day to market.
Cheniere Energy Inc owns 30 percent, Texas Holdings (owned by Dow Chemical Co) 15 percent and Japan's Osaka Gas Co Ltd 10 percent.
Conoco Phillips Inc has bought two-thirds of the plant's total capacity, with the remaining third committed to Dow.
Pipes, tanks and other equipment at new LNG terminals must be cooled gradually before full operation because of the frigid temperature of the energy-rich cargo handled.
LNG is gas cooled at overseas production facilities to -260 degrees Fahrenheit to liquefy it for shipment overseas beyond the reach of pipelines.
The other two new U.S. terminals nearing operation are Sabine Pass LNG, 100 miles northeast of Freeport in Louisiana, and Northeast Gateway offshore of Boston, Massachusetts.
The tanker Excelsior, loaded in Nigeria, arrived at midday and will begin unloading LNG Thursday to prepare Freeport for commercial start-up by June 1, spokeswoman Janet Faz said.
The terminal is one of three new U.S. LNG import facilities receiving first cargoes this month.
Denver oilman Michael Smith owns 45 percent of the $1-billion terminal, which will be able to send up to 1.5 billion cubic feet of gas per day to market.
Cheniere Energy Inc owns 30 percent, Texas Holdings (owned by Dow Chemical Co) 15 percent and Japan's Osaka Gas Co Ltd 10 percent.
Conoco Phillips Inc has bought two-thirds of the plant's total capacity, with the remaining third committed to Dow.
Pipes, tanks and other equipment at new LNG terminals must be cooled gradually before full operation because of the frigid temperature of the energy-rich cargo handled.
LNG is gas cooled at overseas production facilities to -260 degrees Fahrenheit to liquefy it for shipment overseas beyond the reach of pipelines.
The other two new U.S. terminals nearing operation are Sabine Pass LNG, 100 miles northeast of Freeport in Louisiana, and Northeast Gateway offshore of Boston, Massachusetts.
Tuesday, April 15, 2008
Algeria Eyes Short Term Profits in Natural Gas
ALGIERS, Algeria -- With global energy prices near record levels, Algeria -- a major supplier -- said it plans to switch away from long-term contracts to try to generate more revenue from its natural-gas reserves.
In an interview, Algeria's oil minister said he won't sign any further long-term gas contracts and will instead switch to shorter-term ones that allow the nation to renegotiate gas prices with customers every few years.
Chakib Khelil, who also is president of the Organization of Petroleum Exporting Countries, said the plan aims to drive up gas revenue for Algeria, the world's fourth-largest gas exporter. He also underscored the need for gas producers to cooperate to obtain a fairer price.
Algeria meets more than 11% of the European Union's natural-gas consumption and is a major producer of liquefied natural gas, or gas cooled into liquid form to be transportable by ship.
Algeria is developing the Medgaz pipeline to Spain, due to start up in the middle of next year, and the Galsi pipeline into Sardinia in Italy, due to begin exporting gas in 2012.
Gas is being sold far too cheaply under long-term contracts, Mr. Khelil said. Mr. Khelil said Algeria is talking with other producers about seeing what could be done to align gas prices more closely with oil prices, which are at historical highs.
In an interview, Algeria's oil minister said he won't sign any further long-term gas contracts and will instead switch to shorter-term ones that allow the nation to renegotiate gas prices with customers every few years.
Chakib Khelil, who also is president of the Organization of Petroleum Exporting Countries, said the plan aims to drive up gas revenue for Algeria, the world's fourth-largest gas exporter. He also underscored the need for gas producers to cooperate to obtain a fairer price.
Algeria meets more than 11% of the European Union's natural-gas consumption and is a major producer of liquefied natural gas, or gas cooled into liquid form to be transportable by ship.
Algeria is developing the Medgaz pipeline to Spain, due to start up in the middle of next year, and the Galsi pipeline into Sardinia in Italy, due to begin exporting gas in 2012.
Gas is being sold far too cheaply under long-term contracts, Mr. Khelil said. Mr. Khelil said Algeria is talking with other producers about seeing what could be done to align gas prices more closely with oil prices, which are at historical highs.
Monday, April 14, 2008
New York Says NO to Broadwater Liquid Natural Gas Terminal
Gov. M. Jodi Rell threw a little beach party Thursday to celebrate New York state's rejection of the controversial Broadwater liquefied natural gas platform in Long Island Sound.
But she and other top state officials, as well as environmental activists who have fought the proposal for nearly three years, anticipate appeals from the international consortium that wants to build the $700 million LNG platform about 10 miles off the coast of Guilford.
Broadwater was "disappointed" with the defeat and a spokesman said that Connecticut is turning down a chance to save on rising energy costs that are at least partially responsible for about 2,700 state businesses closing during the first quarter of 2008.
Rell, during a news onference at Silver Sands State Park, said New York Gov. David Paterson called her Wednesday night with the good news that the billion-cubic-feet-per-day facility was sunk.
"I can only sum this up in three words," Rell said. "We did it. We did it. We did it and against an awful lot of odds, I'll tell you."
At around the same time, Paterson, in a news conference on the other side of the Sound, said the LNG platform would have set "a dangerous precedent of industrializing a waterway" that generations of people have tried to preserve.
New York's Department of State said the 1,200-foot-long, 82-foot-high platform would create environmental, navigational and safety hazards in the Sound.
"It is a real, true, enormous potentially Advertisement explosive magnet for terrorism that would be sitting right out here in Long Island Sound," Rell said to a group of about 30 beach visitors and about 20 reporters and photographers.
"Today's decision truly is a relief," Rell said, stressing that the Federal Energy Regulatory Commission, which approved the Broadwater proposal, failed to see what Connecticut and New York officials found in the way of potential dangers.
But she and other top state officials, as well as environmental activists who have fought the proposal for nearly three years, anticipate appeals from the international consortium that wants to build the $700 million LNG platform about 10 miles off the coast of Guilford.
Broadwater was "disappointed" with the defeat and a spokesman said that Connecticut is turning down a chance to save on rising energy costs that are at least partially responsible for about 2,700 state businesses closing during the first quarter of 2008.
Rell, during a news onference at Silver Sands State Park, said New York Gov. David Paterson called her Wednesday night with the good news that the billion-cubic-feet-per-day facility was sunk.
"I can only sum this up in three words," Rell said. "We did it. We did it. We did it and against an awful lot of odds, I'll tell you."
At around the same time, Paterson, in a news conference on the other side of the Sound, said the LNG platform would have set "a dangerous precedent of industrializing a waterway" that generations of people have tried to preserve.
New York's Department of State said the 1,200-foot-long, 82-foot-high platform would create environmental, navigational and safety hazards in the Sound.
"It is a real, true, enormous potentially Advertisement explosive magnet for terrorism that would be sitting right out here in Long Island Sound," Rell said to a group of about 30 beach visitors and about 20 reporters and photographers.
"Today's decision truly is a relief," Rell said, stressing that the Federal Energy Regulatory Commission, which approved the Broadwater proposal, failed to see what Connecticut and New York officials found in the way of potential dangers.
Sunday, April 13, 2008
Dubai to Import Liquid Natural Gas
Dubai is planning to import liquefied natural gas (LNG) for use in power generation, with the Dubai Supply Authority (Dusup) developing proposals to build a terminal at Jebel Ali.
It is expected that the terminal will initially import LNG from existing sources such as Qatar and Egypt, and may also purchase gas from the Far East on the international market. In the longer term, it could also import gas from Iran if issues delaying Tehran's LNG projects can be resolved.
Contractors have been invited to prequalify for a construction contract for the terminal in Dubai. An award is expected by August and completion is targeted for the first quarter of 2010. The works include building a jetty, landing areas, a 1.5 kilometre-long sub-sea pipe, gantry cranes and other loading facilities. The UK's Halcrow is the consultant.
Gas availability is a growing concern for Dusup and Dubai Electricity & Water Authority (Dewa). According to a prospectus issued by Dewa ahead of a proposed bond issue last year, Dubai has enough gas supplies to fuel power generation in 2008, but from 2009 onwards the emirate will need to secure more gas supplies or start using alternative energy sources.
It is expected that the terminal will initially import LNG from existing sources such as Qatar and Egypt, and may also purchase gas from the Far East on the international market. In the longer term, it could also import gas from Iran if issues delaying Tehran's LNG projects can be resolved.
Contractors have been invited to prequalify for a construction contract for the terminal in Dubai. An award is expected by August and completion is targeted for the first quarter of 2010. The works include building a jetty, landing areas, a 1.5 kilometre-long sub-sea pipe, gantry cranes and other loading facilities. The UK's Halcrow is the consultant.
Gas availability is a growing concern for Dusup and Dubai Electricity & Water Authority (Dewa). According to a prospectus issued by Dewa ahead of a proposed bond issue last year, Dubai has enough gas supplies to fuel power generation in 2008, but from 2009 onwards the emirate will need to secure more gas supplies or start using alternative energy sources.
Saturday, April 12, 2008
Alberta Offers Natural Gas Incentives for Drilling
CALGARY -- Alberta is offering producers of deep oil and gas substantial royalty breaks, in an attempt to spur more drilling in the province and undo some of the harshest effects of last October's royalty regime overall.
Under the terms of a new program announced yesterday, companies that drill deep wells will receive royalty offsets or credits, a move that will cost Alberta more than $1-billion over the next five years.
The province yesterday introduced two new royalty programs, a move aimed at relieving pressure on companies drilling high-cost, high-productivity wells that were seen as the most heavily penalized by the previous royalty regime changes last October.
"Addressing the unintended consequences with these programs will help Alberta achieve the necessary levels of investment and production to generate the royalties anticipated by the New Royalty Framework," Energy Minister Mel Knight said.
Drillers of deep natural gas wells will get a break on royalties through credits, which will cost the province about $200-million a year for five years, while the credits to deep oil drillers will cost $37-million annually, also over five years.
Alberta believes the cost of the program will be recouped by additional drilling, and the province expects to get an extra $2-billion over 10 years.
The main change is for deep natural gas wells, those drilled to more than 2,500 metres in depth, multimillion-dollar efforts that occur in the Foothills of the Rocky Mountains.
While only accounting for 5 per cent of gas wells drilled, deep wells contributed a quarter of the province's total gas production and are crucial to the provincial treasury.
The changes come as new figures show Canada's energy firms are funnelling vast sums of money into Saskatchewan, at least in part at Alberta's expense.
In October, Alberta approved increased royalties on oil sands, natural gas and oil production, seeking to increase the amount earned by the province by 20 per cent or $1.4-billion after the new rates come into force Jan. 1, 2009.
The changes to the regime were complex - rates varied depending on both the depths and productivity of wells - but effectively hit conventional oil producers and firms that operate deep gas wells the most. Spending cuts of more than $1-billion were seen as companies such as EnCana Corp. and Canadian Natural Resources Ltd. redirected spending out of Alberta.
Junior firms, which have fewer assets and so less options for redirecting capital, were seen as being particularly affected. Highpine Oil and Gas Ltd., a deep-oil-producing junior, said in October that the initial changes would reduce its cash flow by as much as 29 per cent. Yesterday, Highpine CEO Jonathan Lexier said it was "too early to tell" if the new programs would improve cash flow, adding the government had provided "scant detail" about the changes.
However, he said, Alberta at least appeared to be recognizing the struggle for firms at recovering the costs of their investment challenge for companies from deep wells.
While the changes will affect many oil and gas producers in Alberta, juniors with a focus on deep production should see the most benefit. Other provinces also appear to be reaping the benefits. Both B.C. and Saskatchewan have made more in Crown land sales so far this year than Alberta. While hot new plays in both provinces are seen as a cause, so too are Alberta's royalties.
"This level of interest is unprecedented and speaks to the optimism about the economic prospects of both our province and our No. 1 industry," said Saskatchewan Energy and Resources Minister Bill Boyd.
"It is also a clear sign of confidence in Saskatchewan's new government and our stable royalty and regulatory regime."
Under the terms of a new program announced yesterday, companies that drill deep wells will receive royalty offsets or credits, a move that will cost Alberta more than $1-billion over the next five years.
The province yesterday introduced two new royalty programs, a move aimed at relieving pressure on companies drilling high-cost, high-productivity wells that were seen as the most heavily penalized by the previous royalty regime changes last October.
"Addressing the unintended consequences with these programs will help Alberta achieve the necessary levels of investment and production to generate the royalties anticipated by the New Royalty Framework," Energy Minister Mel Knight said.
Drillers of deep natural gas wells will get a break on royalties through credits, which will cost the province about $200-million a year for five years, while the credits to deep oil drillers will cost $37-million annually, also over five years.
Alberta believes the cost of the program will be recouped by additional drilling, and the province expects to get an extra $2-billion over 10 years.
The main change is for deep natural gas wells, those drilled to more than 2,500 metres in depth, multimillion-dollar efforts that occur in the Foothills of the Rocky Mountains.
While only accounting for 5 per cent of gas wells drilled, deep wells contributed a quarter of the province's total gas production and are crucial to the provincial treasury.
The changes come as new figures show Canada's energy firms are funnelling vast sums of money into Saskatchewan, at least in part at Alberta's expense.
In October, Alberta approved increased royalties on oil sands, natural gas and oil production, seeking to increase the amount earned by the province by 20 per cent or $1.4-billion after the new rates come into force Jan. 1, 2009.
The changes to the regime were complex - rates varied depending on both the depths and productivity of wells - but effectively hit conventional oil producers and firms that operate deep gas wells the most. Spending cuts of more than $1-billion were seen as companies such as EnCana Corp. and Canadian Natural Resources Ltd. redirected spending out of Alberta.
Junior firms, which have fewer assets and so less options for redirecting capital, were seen as being particularly affected. Highpine Oil and Gas Ltd., a deep-oil-producing junior, said in October that the initial changes would reduce its cash flow by as much as 29 per cent. Yesterday, Highpine CEO Jonathan Lexier said it was "too early to tell" if the new programs would improve cash flow, adding the government had provided "scant detail" about the changes.
However, he said, Alberta at least appeared to be recognizing the struggle for firms at recovering the costs of their investment challenge for companies from deep wells.
While the changes will affect many oil and gas producers in Alberta, juniors with a focus on deep production should see the most benefit. Other provinces also appear to be reaping the benefits. Both B.C. and Saskatchewan have made more in Crown land sales so far this year than Alberta. While hot new plays in both provinces are seen as a cause, so too are Alberta's royalties.
"This level of interest is unprecedented and speaks to the optimism about the economic prospects of both our province and our No. 1 industry," said Saskatchewan Energy and Resources Minister Bill Boyd.
"It is also a clear sign of confidence in Saskatchewan's new government and our stable royalty and regulatory regime."
Friday, April 11, 2008
Natural Gas Sanitation Trucks
Today, as she has done countless times over the last 35 years, actor Blythe Danner stood up for the environment. Not the newly-sexy environment, but the real, every day environment that affects you, me and everyone else, especially in a crowded urban place.
She attended a media event today in New York's Union Square where she helped Energy Vision - a national non-profit organization that studies and promotes the benefits of clean, renewable petroleum-free transportation fuels - unveil two new natural gas garbage trucks. She let her famous face be photographed next to the two beautifully detailed trucks - and one NYC Department of Sanitation natural gas sweeper - and she even sat in the cabs of both trucks, cameras clicking away.
Why? Because she knows that what really counts in environmental progress is everyday, down on the ground, incremental environmentalism and real commitment. It's a journey, a long, long path.
It turns out that garbage trucks are among the most polluting vehicles on the road. "The 6,000 diesel refuse and recycling trucks on NYC streets have been a major source of air pollution," said Joanna Underwood, Energy Vision's president. "But these trucks here today and the growing fleet of new natural gas trucks are blazing a 'path to the future.' Within a few years use of natural gas trucks could become the industry norm in New York City."
Because of just the 38 natural gas trucks put on the streets in the NY region as a result of the four initiatives that were highlighted at today's Union Square event, New Yorkers will be spared the health risks, involving asthma, other respiratory illnesses and cancers associated with more than 124 tons a year of airborne particulates (soot) and smog-forming nitrogen oxides. Were half of the diesel refuse collection and recycling trucks operating in New York City traded in for natural gas models "more than 16,000 tons of pollutants would be eliminated a year, while reliance on a clean domestic fuel would eliminate the need for 23 million gallons a year of petroleum-based diesel fuel, which is getting more expensive by the day and relies on imported oil." This is from Energy Vision's new report,
"Fueling a Greener Future: NYC Metropolitan Region Garbage Fleets Commit to Alternative Fuel," that was released at the press event.
One of the good results of the new focus on green is that there are companies that are sincerely looking for ways to capitalize on both the environmental green and monetary green. And they are finding it.
The two companies' trucks that were featured in today's event belong to private haulers -
Filco Carting Corporation and Metropolitan Paper Recycling. Their CEO's were both clearly proud to be part an important movement and are truly committed to making it work for their companies.
She attended a media event today in New York's Union Square where she helped Energy Vision - a national non-profit organization that studies and promotes the benefits of clean, renewable petroleum-free transportation fuels - unveil two new natural gas garbage trucks. She let her famous face be photographed next to the two beautifully detailed trucks - and one NYC Department of Sanitation natural gas sweeper - and she even sat in the cabs of both trucks, cameras clicking away.
Why? Because she knows that what really counts in environmental progress is everyday, down on the ground, incremental environmentalism and real commitment. It's a journey, a long, long path.
It turns out that garbage trucks are among the most polluting vehicles on the road. "The 6,000 diesel refuse and recycling trucks on NYC streets have been a major source of air pollution," said Joanna Underwood, Energy Vision's president. "But these trucks here today and the growing fleet of new natural gas trucks are blazing a 'path to the future.' Within a few years use of natural gas trucks could become the industry norm in New York City."
Because of just the 38 natural gas trucks put on the streets in the NY region as a result of the four initiatives that were highlighted at today's Union Square event, New Yorkers will be spared the health risks, involving asthma, other respiratory illnesses and cancers associated with more than 124 tons a year of airborne particulates (soot) and smog-forming nitrogen oxides. Were half of the diesel refuse collection and recycling trucks operating in New York City traded in for natural gas models "more than 16,000 tons of pollutants would be eliminated a year, while reliance on a clean domestic fuel would eliminate the need for 23 million gallons a year of petroleum-based diesel fuel, which is getting more expensive by the day and relies on imported oil." This is from Energy Vision's new report,
"Fueling a Greener Future: NYC Metropolitan Region Garbage Fleets Commit to Alternative Fuel," that was released at the press event.
One of the good results of the new focus on green is that there are companies that are sincerely looking for ways to capitalize on both the environmental green and monetary green. And they are finding it.
The two companies' trucks that were featured in today's event belong to private haulers -
Filco Carting Corporation and Metropolitan Paper Recycling. Their CEO's were both clearly proud to be part an important movement and are truly committed to making it work for their companies.
Thursday, April 10, 2008
Alaska to Chicago Natural Gas Pipeline?
Funneling Alaskan natural gas to Chicago in a 3,500-mile-long pipe would benefit area customers and manufacturers, observers say.
Two of the world's largest oil companies — Britain's BP PLC and ConocoPhillips in Houston — unveiled plans to jointly develop a multibillion-dollar natural gas pipeline. Anchored in Alaska's energy-rich North Slope, it would ship natural gas to U.S. markets to power homes and business.
Chicago could be the southern terminal of the 3,500-mile pipeline.
Tapping new stocks of natural gas in Alaska would help to lower prices in the Chicago area, one of the nation’s largest gas markets.
The more supply you have, the lower the cost,” said Phil Flynn, a senior trader at Chicago-based Alaron Trading Corp. “If that gas comes to Chicago, it’s going to keep prices lower.”
The Alaska gas pipeline has been the “holy grail” of the energy industry for 30 years, said Mr. Flynn. Several companies have taken a crack at building the line.
But the project’s enormous cost has kept them from moving forward with actual construction. Ironically, it’s record high oil and gas prices in recent years that has rekindled interest in piping gas from northern Alaska.
"Thanks to high prices, it’s starting to make sense now,” said Mr. Flynn.
BP and ConocoPhillips said they plan to spend $600 million in the first phase of the project over the next three years, beginning this summer. The project's cost estimates exceed $30 billion.
Construction of the line could be a boon to pipe and construction equipment manufacturers, such as Peoria-based Caterpillar Inc., already a major supplier of equipment and power generators to the energy sector. Pipe maker Ipsco Inc. would likely be one of the suppliers of the 52-inch-diameter pipe anticipated for the project. Russia’s Evraz Group S.A. is attempting to acquire Lisle-based Ipsco’s pipe making operations for $4 billion.
The project also has long-term implications to North America's energy needs by potentially helping homeowners and business owners with soaring heating and fuel costs in years to come.
"This is not an announcement to build a plan; this is an announcement to start the project," said Doug Suttles, president of BP Exploration Alaska Inc. "Before the year is out, we will have over 150 people working on it. What I would say is, 'Watch, just watch.'"
No timeline was announced for construction and completion, but the companies have said it would be at least 10 years before gas begins to flow.
The pipeline would eventually move about 4 billion cubic feet of natural gas per day to markets, about 6 percent to 8 percent of daily U.S. consumption, the companies said.
Interest comes at a time when natural gas has become an increasingly valuable source of energy, with U.S. natural gas demand growing about 1.5 percent a year for two decades since 1986.
Two of the world's largest oil companies — Britain's BP PLC and ConocoPhillips in Houston — unveiled plans to jointly develop a multibillion-dollar natural gas pipeline. Anchored in Alaska's energy-rich North Slope, it would ship natural gas to U.S. markets to power homes and business.
Chicago could be the southern terminal of the 3,500-mile pipeline.
Tapping new stocks of natural gas in Alaska would help to lower prices in the Chicago area, one of the nation’s largest gas markets.
The more supply you have, the lower the cost,” said Phil Flynn, a senior trader at Chicago-based Alaron Trading Corp. “If that gas comes to Chicago, it’s going to keep prices lower.”
The Alaska gas pipeline has been the “holy grail” of the energy industry for 30 years, said Mr. Flynn. Several companies have taken a crack at building the line.
But the project’s enormous cost has kept them from moving forward with actual construction. Ironically, it’s record high oil and gas prices in recent years that has rekindled interest in piping gas from northern Alaska.
"Thanks to high prices, it’s starting to make sense now,” said Mr. Flynn.
BP and ConocoPhillips said they plan to spend $600 million in the first phase of the project over the next three years, beginning this summer. The project's cost estimates exceed $30 billion.
Construction of the line could be a boon to pipe and construction equipment manufacturers, such as Peoria-based Caterpillar Inc., already a major supplier of equipment and power generators to the energy sector. Pipe maker Ipsco Inc. would likely be one of the suppliers of the 52-inch-diameter pipe anticipated for the project. Russia’s Evraz Group S.A. is attempting to acquire Lisle-based Ipsco’s pipe making operations for $4 billion.
The project also has long-term implications to North America's energy needs by potentially helping homeowners and business owners with soaring heating and fuel costs in years to come.
"This is not an announcement to build a plan; this is an announcement to start the project," said Doug Suttles, president of BP Exploration Alaska Inc. "Before the year is out, we will have over 150 people working on it. What I would say is, 'Watch, just watch.'"
No timeline was announced for construction and completion, but the companies have said it would be at least 10 years before gas begins to flow.
The pipeline would eventually move about 4 billion cubic feet of natural gas per day to markets, about 6 percent to 8 percent of daily U.S. consumption, the companies said.
Interest comes at a time when natural gas has become an increasingly valuable source of energy, with U.S. natural gas demand growing about 1.5 percent a year for two decades since 1986.
Wednesday, April 9, 2008
BP & Conoco To Do Alaska Natural Gas Pipeline
Two of the world’s biggest oil companies, BP and ConocoPhillips, joined forces Tuesday to try to break a longstanding deadlock over Alaska’s vast reserves of natural gas. They said they would spend billions to build a pipeline from the North Slope to feed energy-hungry markets in the United States and Canada.
The proposal won praise from Alaska’s governor, Sarah Palin. “It’s a good day,” she told reporters in Alaska.
The announcement comes at a time when consumption of natural gas in the United States is increasing and conventional production is declining. Natural gas is cleaner than other power sources, like coal, and analysts say it is becoming increasingly critical to the nation’s energy needs.
BP and Conoco will initially spend $600 million in the next three years to drum up support for the project, seek state and federal approval, and secure gas supplies for the pipeline. BP and Conoco said the project would be the largest-ever private sector construction project in North America.
The project, which would include a $5 billion gas-processing facility on the North Slope, would cost about $30 billion and take at least 10 years to complete.
At a time when both energy prices and construction costs are soaring, the endeavor would dwarf the 800 mile trans-Alaska oil pipeline, a momentous project completed in 1977 and that brought jobs and revenue to Alaska. As oil production from the Prudhoe Bay field declines, Alaskans are hoping that natural gas will take over from oil.
An Alaska gas pipeline has long been sought as a critical component of the nation’s energy security. The planned pipeline would have a daily capacity of 4 billion cubic feet of natural gas, or almost 7 percent of current United States consumption.
But the companies will have to overcome some huge hurdles, said Christopher Ruppel, an energy analyst at Execution, a brokerage and research firm.
“We’ve had a long record of Alaska pipeline projects coming out of Alaska and Canada, and they have consistently been delayed because of political opposition and rising costs,” he said. “The United States and Canada desperately need the gas. But the question is, is it doable?”
The companies will need to secure more than 1,000 permits from local, state and federal authorities in both the United States and Canada, a process that will most likely take years. They need to negotiate with native tribes along the pipeline’s route to secure the right of way. If the oil pipeline is any guide, the gas line will also require vast engineering feats.
But with higher prices, and a growing appetite for natural gas, the economics of such a large project are starting to make sense for oil companies. The companies said the initial plan is to build a 2,000-mile pipeline from Alaska’s North Slope to the Canadian province of Alberta; that would add to the total North American gas supply, freeing some Canadian gas for export to the United States. Eventually, the pipeline might be extended 1,500 miles, to Chicago.
“This will be a massive undertaking,” said Doug Suttles, president of BP Alaska. “It is going to take the big team to get this going.”
The plan to build a natural gas pipeline to export the state’s vast gas resources has been tangled in Alaskan politics for years. Today, Alaska’s estimated 35 trillion feet of gas reserves are either re-injected into oil fields or left dormant because of a lack of export facilities to bring them to consumers.
When Governor Palin took office in late 2006, she interrupted pipeline negotiations that her predecessor, Frank H. Murkowski, had been pursuing with the North Slope oil operators, BP, Conoco and Exxon Mobil.
She started from scratch after criticizing the previous talks as not being competitive enough, and sought to bring in new operators in order to secure better terms for Alaska. Her administration is evaluating a proposal made by a Canadian pipeline operator, TransCanada.
But the oil companies complained about the delays and said the governor’s procedure was unrealistic. Eschewing $500 million in potential subsidies from the state, BP and ConocoPhillips declared on Tuesday that the economics of natural gas have reached the point that they can finance the pipeline on their own.
James L. Bowles, the president of Conoco Alaska, said that while the companies would seek no state subsidies, they will try to meet requirements outlined by Alaskan authorities, like offering local delivery points on the pipeline to meet the state’s natural gas requirements.
“This project is moving forward on its own,” he said.
Ms. Palin welcomed BP’s and Conoco’s proposal, while stopping short of formally endorsing it. She told reporters that she would meet with executives from the companies to find out more about the joint project. Still, she added, “it sounds great for the state of Alaska.”
The plan came as a surprise to Exxon, which said it had been invited to participate only a few days ago. The company will now “evaluate all options,” according to Margaret Ross, an Exxon spokeswoman.
BP and Conoco said they would welcome Exxon’s participation.
Many analysts have voiced concerns that natural gas prices would keep rising as domestic demand grows and Canada’s exports fall because of increased consumption there.
Without a natural gas pipeline, the United States will increasingly depend on imports of natural gas in liquefied form, a source that is costly and potentially vulnerable to political instability in the Middle East, Africa and Latin America. Greater demand is already pushing prices higher, and adding to pressure to open deeper waters off the country’s coast for exploration.
Amy Myers Jaffe, an energy analyst at Rice University, said a gas pipeline was badly needed, in addition to the liquefied natural gas projects under consideration. “In the long term it’s not going to mean we are not going to need L.N.G., but we would need a lot more L.N.G. if Alaska does not happen,” she said.
Natural gas consumption rose by 6.2 percent in 2007, to 23 trillion cubic feet, from 21.7 trillion cubic feet in 2006, according to the Energy Information Administration.
Natural gas prices, which averaged $2 a thousand cubic feet in the 1990s, have soared in the last decade. It recently traded at $9.74 a thousand cubic feet on the New York Mercantile Exchange.
The proposal won praise from Alaska’s governor, Sarah Palin. “It’s a good day,” she told reporters in Alaska.
The announcement comes at a time when consumption of natural gas in the United States is increasing and conventional production is declining. Natural gas is cleaner than other power sources, like coal, and analysts say it is becoming increasingly critical to the nation’s energy needs.
BP and Conoco will initially spend $600 million in the next three years to drum up support for the project, seek state and federal approval, and secure gas supplies for the pipeline. BP and Conoco said the project would be the largest-ever private sector construction project in North America.
The project, which would include a $5 billion gas-processing facility on the North Slope, would cost about $30 billion and take at least 10 years to complete.
At a time when both energy prices and construction costs are soaring, the endeavor would dwarf the 800 mile trans-Alaska oil pipeline, a momentous project completed in 1977 and that brought jobs and revenue to Alaska. As oil production from the Prudhoe Bay field declines, Alaskans are hoping that natural gas will take over from oil.
An Alaska gas pipeline has long been sought as a critical component of the nation’s energy security. The planned pipeline would have a daily capacity of 4 billion cubic feet of natural gas, or almost 7 percent of current United States consumption.
But the companies will have to overcome some huge hurdles, said Christopher Ruppel, an energy analyst at Execution, a brokerage and research firm.
“We’ve had a long record of Alaska pipeline projects coming out of Alaska and Canada, and they have consistently been delayed because of political opposition and rising costs,” he said. “The United States and Canada desperately need the gas. But the question is, is it doable?”
The companies will need to secure more than 1,000 permits from local, state and federal authorities in both the United States and Canada, a process that will most likely take years. They need to negotiate with native tribes along the pipeline’s route to secure the right of way. If the oil pipeline is any guide, the gas line will also require vast engineering feats.
But with higher prices, and a growing appetite for natural gas, the economics of such a large project are starting to make sense for oil companies. The companies said the initial plan is to build a 2,000-mile pipeline from Alaska’s North Slope to the Canadian province of Alberta; that would add to the total North American gas supply, freeing some Canadian gas for export to the United States. Eventually, the pipeline might be extended 1,500 miles, to Chicago.
“This will be a massive undertaking,” said Doug Suttles, president of BP Alaska. “It is going to take the big team to get this going.”
The plan to build a natural gas pipeline to export the state’s vast gas resources has been tangled in Alaskan politics for years. Today, Alaska’s estimated 35 trillion feet of gas reserves are either re-injected into oil fields or left dormant because of a lack of export facilities to bring them to consumers.
When Governor Palin took office in late 2006, she interrupted pipeline negotiations that her predecessor, Frank H. Murkowski, had been pursuing with the North Slope oil operators, BP, Conoco and Exxon Mobil.
She started from scratch after criticizing the previous talks as not being competitive enough, and sought to bring in new operators in order to secure better terms for Alaska. Her administration is evaluating a proposal made by a Canadian pipeline operator, TransCanada.
But the oil companies complained about the delays and said the governor’s procedure was unrealistic. Eschewing $500 million in potential subsidies from the state, BP and ConocoPhillips declared on Tuesday that the economics of natural gas have reached the point that they can finance the pipeline on their own.
James L. Bowles, the president of Conoco Alaska, said that while the companies would seek no state subsidies, they will try to meet requirements outlined by Alaskan authorities, like offering local delivery points on the pipeline to meet the state’s natural gas requirements.
“This project is moving forward on its own,” he said.
Ms. Palin welcomed BP’s and Conoco’s proposal, while stopping short of formally endorsing it. She told reporters that she would meet with executives from the companies to find out more about the joint project. Still, she added, “it sounds great for the state of Alaska.”
The plan came as a surprise to Exxon, which said it had been invited to participate only a few days ago. The company will now “evaluate all options,” according to Margaret Ross, an Exxon spokeswoman.
BP and Conoco said they would welcome Exxon’s participation.
Many analysts have voiced concerns that natural gas prices would keep rising as domestic demand grows and Canada’s exports fall because of increased consumption there.
Without a natural gas pipeline, the United States will increasingly depend on imports of natural gas in liquefied form, a source that is costly and potentially vulnerable to political instability in the Middle East, Africa and Latin America. Greater demand is already pushing prices higher, and adding to pressure to open deeper waters off the country’s coast for exploration.
Amy Myers Jaffe, an energy analyst at Rice University, said a gas pipeline was badly needed, in addition to the liquefied natural gas projects under consideration. “In the long term it’s not going to mean we are not going to need L.N.G., but we would need a lot more L.N.G. if Alaska does not happen,” she said.
Natural gas consumption rose by 6.2 percent in 2007, to 23 trillion cubic feet, from 21.7 trillion cubic feet in 2006, according to the Energy Information Administration.
Natural gas prices, which averaged $2 a thousand cubic feet in the 1990s, have soared in the last decade. It recently traded at $9.74 a thousand cubic feet on the New York Mercantile Exchange.
Tuesday, April 8, 2008
Exxon - Natural Gas Demand Go to 2030
Natural gas demand is expected to lead growth in fossil fuel demand to 2030 as European and Americas demand surges, said Alan Hirshberg, Vice President of Exxon Mobil Corp.'s (XOM) established areas projects.
"No fossil fuel will grow faster than natural gas," Hirshberg said in a presentation to the Australian Petroleum Production and Exploration Association conference in Perth.
Combined demand from the Americas and Europe for liquefied natural gas will surpass Asian demand by 2030, he said.
"No fossil fuel will grow faster than natural gas," Hirshberg said in a presentation to the Australian Petroleum Production and Exploration Association conference in Perth.
Combined demand from the Americas and Europe for liquefied natural gas will surpass Asian demand by 2030, he said.
Monday, April 7, 2008
Australia Pushing Natural Gas over Coal Next 10yrs
THE oil and gas industry has outlined its future greenhouse strategy which aims to have 70 per cent of all new power stations gas fired within a decade.
The push to replace coal generation with clean natural gas emerged during the opening session in Perth yesterday of the annual Australian Petroleum Production and Exploration Association conference.
APPEA chairman Colin Beckett told 2200 representatives who are in Perth that the oil and gas industry was committing itself to finding solutions to the emissions issue.
Mr Beckett said world energy demand was expected to grow by 40 per cent to 2030.
"At the same time environmental awareness is increasing with a greater recognition of the role natural gas can play as a clean 'blue fuel' in reducing or offsetting greenhouse emissions," he said.
One of the association's key aims is to help create a competitive electricity market in which 70 per cent of Australia's new generating capacity will be gas fired.
The push to replace coal generation with clean natural gas emerged during the opening session in Perth yesterday of the annual Australian Petroleum Production and Exploration Association conference.
APPEA chairman Colin Beckett told 2200 representatives who are in Perth that the oil and gas industry was committing itself to finding solutions to the emissions issue.
Mr Beckett said world energy demand was expected to grow by 40 per cent to 2030.
"At the same time environmental awareness is increasing with a greater recognition of the role natural gas can play as a clean 'blue fuel' in reducing or offsetting greenhouse emissions," he said.
One of the association's key aims is to help create a competitive electricity market in which 70 per cent of Australia's new generating capacity will be gas fired.
Sunday, April 6, 2008
Natural Gas Priced at $9.40/mmBtu as Investors Buy Natural Gas
Natural gas advanced as the dollar fell against the euro, lifting the appeal of commodities as an alternative investment.
The dollar declined on a report showing the U.S. economy lost jobs for a third month, prompting investors to buy commodities as a hedge against the weaker currency and inflation. Crude oil surged above $105 a barrel.
``We're getting a pop on the dollar'' falling, said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. People are piling money into ``energy commodities.''
Natural gas for May delivery rose 5.1 cents, or 0.5 percent, to $9.468 per million British thermal units at 11:57 a.m. on the New York Mercantile Exchange. Gas fell 4.2 percent yesterday.
Crude oil for May delivery rose $1.41, or 1.4 percent, to $105.24 a barrel in New York. Futures prices climbed to $111.80 a barrel on March 17, the highest since trading began in 1983.
Natural gas also rose on speculation that inventories are insufficient to meet summer cooling demand and rebuild enough to satisfy next winter's heating needs.
``There's a real tug of war going on between the bulls and the bears,'' said Carl Neill, an energy analyst at Risk Management Inc. in Chicago. ``Natural gas storage is low, though there's nothing to really move the market right now'' as temperatures moderate with spring's arrival.
Futures prices are getting ``good support'' around $9.40 per million Btu and will probably move higher to about $12 this summer, Neill said.
Stockpiles were 1.248 trillion cubic feet in the week ended March 28, or 304 billion cubic feet below the 1.552 trillion level of a year ago, the U.S. Energy Department said a report yesterday. Supplies started the heating-demand season on Nov. 1 at a record 3.545 trillion cubic feet.
Lower Storage
``Storage represents one of the lowest levels at the start of rebuilding season in recent years,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``It may be difficult to build supplies back up to comfortable levels ahead of next winter if cooling demand this summer is higher than expected.''
Supplies are the lowest since 2005 for this time of year. Storage was at 1.569 trillion cubic feet at the end of March 2007 and 1.695 trillion cubic feet in 2006, according to the Energy Department.
Inventories have dropped this winter more than analysts anticipated as demand surged and crude oil prices rose.
LNG Imports
Lower imports of liquefied natural gas, or LNG, are also helping push U.S. prices higher, analysts have said.
LNG imports this year may fall below the average 2.1 billion cubic feet a day in 2007. Analysts credit LNG, gas that has been cooled to a liquid state so that it can be moved by tankers to markets not connected by pipelines, with helping inventories to climb to last November's record.
The price gap between the U.S. and U.K. widened this week to almost $2 per million Btu.
February imports of LNG declined 46 percent to 23.6 billion cubic feet from 44.1 billion the same month a year earlier, the Energy Department said on April 1.
The dollar declined on a report showing the U.S. economy lost jobs for a third month, prompting investors to buy commodities as a hedge against the weaker currency and inflation. Crude oil surged above $105 a barrel.
``We're getting a pop on the dollar'' falling, said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. People are piling money into ``energy commodities.''
Natural gas for May delivery rose 5.1 cents, or 0.5 percent, to $9.468 per million British thermal units at 11:57 a.m. on the New York Mercantile Exchange. Gas fell 4.2 percent yesterday.
Crude oil for May delivery rose $1.41, or 1.4 percent, to $105.24 a barrel in New York. Futures prices climbed to $111.80 a barrel on March 17, the highest since trading began in 1983.
Natural gas also rose on speculation that inventories are insufficient to meet summer cooling demand and rebuild enough to satisfy next winter's heating needs.
``There's a real tug of war going on between the bulls and the bears,'' said Carl Neill, an energy analyst at Risk Management Inc. in Chicago. ``Natural gas storage is low, though there's nothing to really move the market right now'' as temperatures moderate with spring's arrival.
Futures prices are getting ``good support'' around $9.40 per million Btu and will probably move higher to about $12 this summer, Neill said.
Stockpiles were 1.248 trillion cubic feet in the week ended March 28, or 304 billion cubic feet below the 1.552 trillion level of a year ago, the U.S. Energy Department said a report yesterday. Supplies started the heating-demand season on Nov. 1 at a record 3.545 trillion cubic feet.
Lower Storage
``Storage represents one of the lowest levels at the start of rebuilding season in recent years,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``It may be difficult to build supplies back up to comfortable levels ahead of next winter if cooling demand this summer is higher than expected.''
Supplies are the lowest since 2005 for this time of year. Storage was at 1.569 trillion cubic feet at the end of March 2007 and 1.695 trillion cubic feet in 2006, according to the Energy Department.
Inventories have dropped this winter more than analysts anticipated as demand surged and crude oil prices rose.
LNG Imports
Lower imports of liquefied natural gas, or LNG, are also helping push U.S. prices higher, analysts have said.
LNG imports this year may fall below the average 2.1 billion cubic feet a day in 2007. Analysts credit LNG, gas that has been cooled to a liquid state so that it can be moved by tankers to markets not connected by pipelines, with helping inventories to climb to last November's record.
The price gap between the U.S. and U.K. widened this week to almost $2 per million Btu.
February imports of LNG declined 46 percent to 23.6 billion cubic feet from 44.1 billion the same month a year earlier, the Energy Department said on April 1.
Saturday, April 5, 2008
Pennsylvania Natural Gas Rush!
Natural-gas producers are swarming into Pennsylvania to chase what many are betting could be the next big thing: a thick wedge of gas-bearing rock called the Marcellus Shale.
The recent surge in interest was triggered by disclosures in the fall from producer Range Resources Corp. of Fort Worth, Texas, that it had drilled a well there producing more than three million cubic feet of natural gas a day, proving that Marcellus Shale wells can be profitable. Since then, Range has reported wells that produce even more gas.
The result is a land rush unmatched anywhere else in North America as companies try to snap up drilling acreage on a giant swath of rock stretching from West Virginia across Pennsylvania to the northeast corner of the state, 90 miles
The recent surge in interest was triggered by disclosures in the fall from producer Range Resources Corp. of Fort Worth, Texas, that it had drilled a well there producing more than three million cubic feet of natural gas a day, proving that Marcellus Shale wells can be profitable. Since then, Range has reported wells that produce even more gas.
The result is a land rush unmatched anywhere else in North America as companies try to snap up drilling acreage on a giant swath of rock stretching from West Virginia across Pennsylvania to the northeast corner of the state, 90 miles
Friday, April 4, 2008
Natural Gas Discovery in Karnes County, Texas
Abraxas Petroleum Corp.'s Gisler #1 exploratory well in Karnes County, Texas, is currently producing a healthy supply of natural gas, the company said Wednesday.
The Gisler #1 well was drilled vertically to a total depth of 13,000 and placed online two weeks ago. The well is currently producing at a rate of 2.9 million cubic feet of gas and 55 barrels of condensate per day.
The company owns a 63 percent working interest in the well. The Gisler #1 was drilled targeting the Wilcox formation.
Abraxas President and CEO Bob Watson says the production rates for the Gisler #1 well are above their expectations.
The Gisler #1 well was drilled vertically to a total depth of 13,000 and placed online two weeks ago. The well is currently producing at a rate of 2.9 million cubic feet of gas and 55 barrels of condensate per day.
The company owns a 63 percent working interest in the well. The Gisler #1 was drilled targeting the Wilcox formation.
Abraxas President and CEO Bob Watson says the production rates for the Gisler #1 well are above their expectations.
Thursday, April 3, 2008
Compressed Natural Gas for China
NEW YORK, April 2, 2008, 2008 /PRNewswire-FirstCall via COMTEX/ -- China Natural Gas, Inc. (OTC Bulletin Board: CHNG), one of the leading providers of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi'an, China, announced today that it has built two new CNG filling stations in Xi'an City, in the Shaanxi Province of China. The filling stations have all of the government permits they need to operate and are now selling natural gas for CNG powered vehicles. Today's announcement brings the Company's total CNG filling stations in operation to 28.
"We are so pleased to continue our station build out in 2008 as we further enhance our presence in the Shaanxi Province. We believe there is significant opportunity to build out our filling network as more and more drivers and local governments seek the benefits of CNG, which is significantly more affordable and energy efficient than gasoline. In fact, in Xi'an City alone, we estimate there are roughly 700,000 motor vehicles, of which only eight percent are currently using CNG. We are working diligently to capitalize on this market opportunity," stated Mr. Qinan Ji, CEO and Chairman of the Board of China Natural Gas, Inc.
About China Natural Gas, Inc.
China Natural Gas, Inc., ("CHNG"), is the first China-based natural gas retailing company publicly traded in the U.S. It currently owns and operates a network of CNG retail filling stations as well as a 120 kilometer long compressed natural gas pipeline in Xi'an, China. Xi'an is a fast growing Chinese city supported by a population of approximately eight million and is the "gateway" to the broad Western regions of China. CHNG has three business segments: retail natural gas at company-owned filling stations, end user delivery of natural gas services to residential, commercial and industrial customers, and conversion of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles. Currently it is estimated that there are 5,000 buses and 20,000 taxis using CNG in Xi'an.
This press release may contain forward-looking statements. These statements are based on the current expectations or beliefs of China Natural Gas, Inc. management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including the fluctuation of natural gas prices, the availability of natural gas supplies, changes in governmental regulations and/or economic policies.
"We are so pleased to continue our station build out in 2008 as we further enhance our presence in the Shaanxi Province. We believe there is significant opportunity to build out our filling network as more and more drivers and local governments seek the benefits of CNG, which is significantly more affordable and energy efficient than gasoline. In fact, in Xi'an City alone, we estimate there are roughly 700,000 motor vehicles, of which only eight percent are currently using CNG. We are working diligently to capitalize on this market opportunity," stated Mr. Qinan Ji, CEO and Chairman of the Board of China Natural Gas, Inc.
About China Natural Gas, Inc.
China Natural Gas, Inc., ("CHNG"), is the first China-based natural gas retailing company publicly traded in the U.S. It currently owns and operates a network of CNG retail filling stations as well as a 120 kilometer long compressed natural gas pipeline in Xi'an, China. Xi'an is a fast growing Chinese city supported by a population of approximately eight million and is the "gateway" to the broad Western regions of China. CHNG has three business segments: retail natural gas at company-owned filling stations, end user delivery of natural gas services to residential, commercial and industrial customers, and conversion of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles. Currently it is estimated that there are 5,000 buses and 20,000 taxis using CNG in Xi'an.
This press release may contain forward-looking statements. These statements are based on the current expectations or beliefs of China Natural Gas, Inc. management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including the fluctuation of natural gas prices, the availability of natural gas supplies, changes in governmental regulations and/or economic policies.
Wednesday, April 2, 2008
Quebec Natural Gas is Discovered by Forest
NEW YORK (Associated Press) - Forest Oil Corp. said Tuesday it has drilled successful natural gas test wells on a sprawling site it controls in Quebec, and plans to pay $285 million for tens of thousands of acres in parts of the southern U.S. where it already operates.
In Quebec, Forest said it drilled two vertical wells last year atop a rock formation known as the Utica Shale that were able to produce the equivalent of up to 1 million cubic feet of gas per day. Three new horizontal wells are planned for this year.
The company cautioned that "the play is still in the early stages," but said early results were encouraging given the quality of the rock and gas, nearby pipelines and strong natural gas prices. Early indications suggest Forest could extract the equivalent of 4 trillion cubic feet from the site, with production scheduled to begin in 2009, the company said.
In addition, Forest said it will buy existing natural gas operations in Arkansas, Texas and Louisiana that contain the equivalent of an estimated 110 billion cubic feet for $285 million. In 2007, the reserves produced an average of 13 million cubic feet equivalent per day.
The seller was not named. Forest plans to pay for the purchase using its existing credit line and cash on hand. Top of page
In Quebec, Forest said it drilled two vertical wells last year atop a rock formation known as the Utica Shale that were able to produce the equivalent of up to 1 million cubic feet of gas per day. Three new horizontal wells are planned for this year.
The company cautioned that "the play is still in the early stages," but said early results were encouraging given the quality of the rock and gas, nearby pipelines and strong natural gas prices. Early indications suggest Forest could extract the equivalent of 4 trillion cubic feet from the site, with production scheduled to begin in 2009, the company said.
In addition, Forest said it will buy existing natural gas operations in Arkansas, Texas and Louisiana that contain the equivalent of an estimated 110 billion cubic feet for $285 million. In 2007, the reserves produced an average of 13 million cubic feet equivalent per day.
The seller was not named. Forest plans to pay for the purchase using its existing credit line and cash on hand. Top of page
Tuesday, April 1, 2008
Promigas Invests in Latin Natural Gas
BARRANQUILLA, Colombia, March 31 (Reuters) - Colombia's second largest natural gas transporter Promigas said on Monday it plans to invest $214.6 million in 2008 in its operations in Colombia, Mexico, Panama, Peru, Ecuador and Chile.
Speaking as part of the Reuters Latin American Investment Summit, Antonio Celia Martinez-Aparicio, president of the company controlled by Ashmore Energy International (ASHM.L: Quote, Profile, Research), said he expected net income to increase 15 percent this year compared with a year earlier.
Net income in 2007 was $100 million and new investments will focus on domestic and vehicle gas distribution and liquid fuels, he said.
"The investments are for expansion of infrastructure of services, consolidation in service offers, technology and acquisitions," Celia told Reuters in Barranquilla.
Promigas operates a 2,300-km gas transportation network which is concentrated around the production fields in the Caribbean off northern Colombia.
Celia said the planned investments would be financed with the company's own resources and with credits, which he said the company would access thanks to its strong performance with foreign rating agencies.
Promigas transports 45 percent of Colombia's gas with 1.6 million clients out of the nationwide market of 4.5-million users and holds 40 percent of the national vehicle gas market.
Speaking as part of the Reuters Latin American Investment Summit, Antonio Celia Martinez-Aparicio, president of the company controlled by Ashmore Energy International (ASHM.L: Quote, Profile, Research), said he expected net income to increase 15 percent this year compared with a year earlier.
Net income in 2007 was $100 million and new investments will focus on domestic and vehicle gas distribution and liquid fuels, he said.
"The investments are for expansion of infrastructure of services, consolidation in service offers, technology and acquisitions," Celia told Reuters in Barranquilla.
Promigas operates a 2,300-km gas transportation network which is concentrated around the production fields in the Caribbean off northern Colombia.
Celia said the planned investments would be financed with the company's own resources and with credits, which he said the company would access thanks to its strong performance with foreign rating agencies.
Promigas transports 45 percent of Colombia's gas with 1.6 million clients out of the nationwide market of 4.5-million users and holds 40 percent of the national vehicle gas market.
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