Abbreviated Post Today; Minimal Posting Today -- Back In The Bakken, Tuesday, April 29, 2014

Note: this post was done in haste; there may be more typographical errors than usual.

Active rigs:

	4/29/2014	04/29/2013	04/29/2012	04/29/2011	04/29/2010
Active Rigs	184	186	209	173	111

RBN Energy: Jordan Cove LNG export project in Oregon

The success of an LNG export project is founded on many things. Good connections to natural gas supply. Easy access to LNG buyers. A competitive delivered cost. Timing matters too, and may turn out to be a critical factor for Veresen’s Jordan Cove LNG export project in Oregon. Not only is it the first greenfield project to win the approval of the US Department of Energy (earlier DOE approvals went to projects to convert existing import terminals to export facilities), Jordan Cove also would be the first new LNG export terminal on the US West Coast—days closer to key buyers in the Asia/Pacific region than its Gulf Coast competitors. And it appears likely to beat out the first LNG export projects in British Columbia. Today in the first of a two-part blog series, we take a look at the Jordan Cove plan—its gas supply sources, the pipelines feeding it, the project’s economics, and its likely fate.

A race is on among prospective LNG exporters in the US and Canada to secure regulatory approvals, lock in LNG buyers and gas suppliers, and build the needed infrastructure. Being among the first at the finish line is a do-or-die matter, because realistically there will be limits to the number of LNG export projects approved, the volume of LNG that will be allowed to be exported, and demand from major LNG buyers. LNG buyers in Asia, Europe, and Latin America have options--Qatar, Australia, and Malaysia among them—and, in their quest for sourcing diversity and low prices, they are constantly sizing up the North American LNG export projects under development to see how they might fit into their gas-supply mix.

Jordan Cove is a 6 MMTPA (or million metric tons per annum - about 800Mcf/d) LNG export terminal (expandable to 9 MMTPA, 1.2 Bcf/d) to be built within the Port of Coos Bay on the Oregon coast. (The project was first envisioned as an LNG import terminal a few years ago, but the US and Western Canadian shale boom put the kibosh on that.) In March, Veresen, ,the project’s owner, a Canadian midstream natural gas infrastructure company, received DOE’s approval to export up to 800 Mcf/d of LNG to non-Free Trade Agreement (FTA) countries for 20 years. (That approval is critical for exports to the Asian market where only Singapore and South Korea are FTA countries.) Veresen this fall expects to get Federal Energy Regulatory Commission’s approval to build Jordan Cove. If all goes according to plan, Veresen’s financial investment decision and construction start will come in the first quarter of 2015, and the first LNG will be shipped in late 2018 or early 2019. Figure #1, from a recent presentation by the owner, helps us tell the story.

The Wall Street Journal

Top story: US, Europe raise stakes with Putin. Talk radio throughout the night provided a perspective. I arrived in the Bakken about 8:00 a.m. this morning after driving straight through from Dallas -- blizzard north of Rapid City / south of Buffalo. Will write more about snow conditions in the Bakken later.

This was on talk radio during the night and in the WSJ this morning: Pfizer will see huge tax savings if it buys AstraZeneca; the company will move to Europe, save taxes.

Boom time in Texas: jobs, traffic, water worries.

Tribes' new negotiating power cots utilities.

Kerry must not know history. He sees Ukraine crisis as uniquely Putin's. Wrong. He also doesn't know Israeli history: rues "apartheid" remark; bristles at criticism.

Wisconsin race signals historic shift in power of unions.

Texas to pay $10,000 for each Toyota job. Less than what the trillions in Obama-stimulus cost American taxpayers. 

Natural-gas prices climb. Regular readers know why.

Natural-gas prices jumped to a two-month high as investors wagered that supplies wouldn't bounce back fast enough from their lowest levels in 11 years. Inventories are just starting to climb after an unusually cold winter drove demand for the heating fuel to records.

Supplies are at about half their normal level for late April, even as U.S. gas production hits a record. Investors in the $52.1 billion natural-gas futures market are turning increasingly bullish, questioning whether producers are up to the task of replenishing stockpiles.

Analysts said producers would need to add an extra 20 billion to 35 billion cubic feet a week above the average for six months to ensure power plants have enough gas on hand to meet another frigid winter. Some investors said prices could climb this summer should a hot summer drive up air-conditioning demand, reducing the amount of gas left over for winter.

***************************

For Investors Only

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you may have read here. 

Early trading: market up another 80 points after yesterday's 80-point rise. Oil up over 1%.

Trading at 52-week highs: SRE, PSX, COP, KOG, BRK-B,
Oasis is up nicely. UNP is up nicely.

Abbreviated post today.

***************************

First view of the Bakken for me today

Southwest North Dakota, April 29, 2014




  Southwest North Dakota, April 29, 2014