RBN Energy: competition, low prices unsettling the LNG market. Great update.
Only eight years ago U.S. natural gas prices were spiking, domestic gas production was declining, and much of the market was anticipating a boom in LNG imports to the U.S. from Qatar and other major suppliers.
Now, pipelines are being reversed to bring gas from the Marcellus and Utica basins to Gulf Coast to be super-cooled into LNG, and LNG from the first liquefaction/LNG export facility in the Lower 48 (Train 1 at Cheniere Energy’s Sabine Pass in southwestern Louisiana) is being shipped to overseas buyers. (Train 2 at Sabine Pass is in the process of being started up.) But the market expectations on which the development of new liquefaction capacity at Sabine Pass, Cameron LNG, Corpus Christi LNG (another Cheniere project), Freeport LNG, and Dominion’s Cove Point were founded have been shaken to their core.
Recent spot prices for LNG (around $5/MMBtu—75% lower than where prices stood two and a half years ago) suggest that the world is awash in LNG. Worse yet, it is possible (but by no means certain) that during the 2016-20 period worldwide liquefaction capacity (for super-cooling/condensing natural gas into very transportable LNG) will rise to 448 million tons per annum (MTPA) from the 308 MTPA online at year-end 2015, a 45% increase in less than five years.EOG in the Permian. SeekingAlpha. Nice update.
XOM, Guyana. An "elephant find"? ExxonMobil says the company plans to release the results of the Liza-2 well "by mid-year." According to an analyst, if the headlines prove accurate, Liza-1 and Liza-2 could confirm meaning reserves and production uplift for ExxonMobil and its partners well above the initial industry reserve estimates of 700 million bbls of oil. Data points:
- Liza-1, Stabroek Block, 120 miles offshore Guyana
- the seam is 295 feet thick
- oil-bearing sandstone
- 17,825 feet in almost 6,000 feet of water
- spud March 5, 2015
- Esso and Production Guyana (45%); Hess Guyana (30%), CNOOC Nexen Guyana (25%)
- yet to be built; on-line by late 2017
- 160-MW capacity; will be largest wind farm in Norway
- to provide power for Google's data centers
- on-shore Tellenes wind power farm south of Stavanger
ATT (a big whoop); Chevron, Duke Energy, Hershey, JNJ, Kellogg, Murphy USA, SRE (another huge whoop).
Note: this is not an investment site. Do not make any investment, financial, travel, relationship, or job decisions based on what you read or think you may have read at this site. It just helps me put things into perspective.