Active rigs:
| 2/23/2016 | 02/23/2015 | 02/23/2014 | 02/23/2013 | 02/23/2012 |
|---|
| Active Rigs | 39 | 126 | 187 | 181 | 204 |
RNB Energy:
Natural Gas Flowing to Sabine Pass LNG Export Plant.
The first U.S. liquefied natural gas (LNG) export cargo from the
Lower 48 is now likely within just a week or two of shipping from the
Cheniere Sabine Pass, LA terminal. In the meantime, physical flow data
is already giving us a first glance at how the terminal will be supplied
from U.S. natural gas production. In today’s blog, we begin a look at
flows to the terminal, how the gas is getting there and where it’s
coming from.
In recent months, there has been a flurry of completion and
commissioning activity around Sabine Pass. Filings with the Federal
Energy Regulatory Commission (FERC) indicate the terminal has been
furiously readying its first two liquefaction trains over the past few
months in preparation for loading its first export cargo. As we detailed
previously in our blog series Begin the Sabine,
Cheniere Energy’s Sabine Pass LNG (SPL) export terminal in Cameron
Parish, LA along the Texas-Louisiana border, is one of four such
brownfield projects targeting gas exports from the US, and the first to
begin operations.
The terminal will ultimately include six liquefaction “trains,” each
with the capacity to supercool up to 650 MMcf/d of natural gas into LNG
(at -260 oF) for a total capacity to produce 3.8 Bcf/d for
loading and shipment overseas. The facility also has 17 Bcf of LNG
storage capacity on site. Construction of the first train was completed
and commissioning activity began last fall. And just last Friday
(February 19, 2016), SPL filed a request for authorization to introduce
fuel gas to train 2 “at the earliest date possible, but no later than
March 4, 2016” in order to begin commissioning activities for the second
train. Additionally, pipeline flow data from our friends at Genscape
indicates that more than 3 Bcf of gas has physically flowed to the
terminal in just the past two weeks, suggesting the liquefaction process
is underway. Reuters is reporting that two LNG tankers in the Gulf of
Mexico are at the ready to take the cargo, one having docked at the
terminal just this past Sunday (February 21).
The terminal’s activity and the imminent first cargo of physical gas
exports from the lower 48 U.S. are historic events in their own right,
with long-term implications for both the global and U.S. natural gas
supply/demand balances. But on a more granular level within the U.S.,
the exports also will have more localized impacts on regional flows and
pricing based on where the supply is sourced and how that gas will get
there. Cheniere has lined up commitments for the vast majority of each
train’s liquefaction capacity through Sales and Purchase Agreements, or
SPAs, with various counterparties. To fulfill these commitments,
Cheniere secured upstream supply and transportation capacity to serve
the trains. In a January 2016 company presentation, Cheniere restated
that it has entered into 1-7 year term gas supply contracts with
producers for an aggregate of approximately 2 Tcf for an average price
of Henry Hub minus $0.10/MMBtu. The supply contracts cover ~50% of the
required daily load for Trains 1-4. To ensure transportation capacity to
bring supply to the terminal, Cheniere also has commitments on existing
and planned expansion pipeline capacity.
Thus, flows around the terminal will continue to
evolve based on expected pipeline expansions and related supply
contracts kicking in over the next year. Additionally, some of these
flows could be seasonal. By looking at initial flows to the terminal, as
seen in the daily pipeline flow data, we can provide an early glimpse
of this picture. We’ll start today with a quick review of the available
pipeline capacity serving the terminal and deliveries to date. Next time
we’ll take a detailed look at where the supply is coming from.
The other day there was an article about the Chinese looking to build three methanol refineries along the Columbia River in Washington state and Oregon. LOL. When will these folks ever learn. When it comes to fossil fuel, one cannot do business in Washington, Oregon, Minnesota, Nebraska, Iowa, Maine, New Hampshire, or Vermont, or as I call them, "The Gang Of Eight." New York State has applied for membership.
FuelFix is reporting:
The Pacific Northwest could become a major hub for methanol
production if three proposed refineries are built along the Columbia
River and Puget Sound.
A China-backed consortium, Northwest Innovation Works, has proposed
two plants in Washington and a third in Oregon to convert natural gas to
methanol, which would be shipped to China to make plastics and other
consumer goods.
But those plans are running into opposition. On Friday, the company
temporarily put its project in Tacoma on hold, saying it has been
“surprised by the tone and substance of vocal opposition.”
I wasn't going to link that article; some things are beyond the pale, as they say. But when I saw the LNG export story from RBN Energy, it reminded me of the
FuelFix article. The Chinese simply have to build these plants in Texas, Louisiana, or Mississippi. The Panama Canal has been widened. What are we talking? Three extra days shipping time from the Gulf Coast to China? Or the Chinese can fight Washington and Oregon for a decade and still probably have nothing to show for it.
How naive can these folks be?
The company
temporarily put its project in Tacoma on hold, saying it has been
“surprised by the tone and substance of vocal opposition.” Surprised? Naive, I would say.
Update, just a couple of hours later, 5:23 p.m. Central Time:
bizjournals is reporting that one of the proposed Columbia River refinery projects is "already dead in the water" --
The Port of Longview has rejected a proposal for an oil refinery and propane export terminal.
Waterside Energy, the proponent, wanted to build the first-ever oil refinery on the Columbia River, and would have been the first constructed on the West Coast in 25 years.
The port's commissioners voted unanimously to deny the $1.25 billion proposal.
Project
opponents point to Houston-based Waterside Energy's record as proof the
refinery project was wrongheaded. In 2014, the investors behind
Waterside Energy abandoned a biodiesel facility in Odessa, Wash., firing
its employees and leaving $1.6 million in bills unpaid, according to
information from Columbia Riverkeeper.
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GITMO
I've lost the bubble why we still need GITMO. It is a political issue in which closing GITMO will simply be another pin in the George W. Bush voodoo doll. Folks want GITMO to be closed only to point out that Bush was wrong. Whatever.
Once I start reading about the money being spent keeping GITMO open tells me no one is serious about this issue. It's simply political theater, and a theme that can be used in political speeches to raise money. No matter how much GITMO costs or doesn't cost, it's but a footnote in a national budget that has a $20 trillion debt.
I would suggest that the Bush family get out in front of this -- now that Jeb is out of the race -- and fight to have GITMO closed. The grand compromise would be this: close GITMO, move the prisoners to federal prisons, and put pork back on the menu.
I don't think this is all that difficult. Based on early reports, it does not sound like the president is averse to putting them into non-military federal prisons. I would prefer not to have them in military prisons, but that's a minor debating point.
The best thing that would come out of this would be the detainees would be separated from each other.
By the way, President Obama was to lay out his "Get Out of GITMO" speech this morning. At least we know what he was doing this past weekend during the Scalia funeral: working on a speech. I still haven't seen the golfing photographs from this past weekend.
