Wednesday, October 3, 2018

Natural Gas May Well Be The Story Of The Year -- More Proof -- See RBN Energy Today -- October 3, 2018

Starbucks: arrived at Starbucks about 6:00 a.m. this morning. Happened to be within earshot of three young businessmen working major real estate issues between California and Texas. Their conversation validates everything we seem to intuitively feel regarding the two states when it comes to the economy. Seems the huge movement of Californians (businesses) to this part of Texas (Plano, Frisco, McKinney) continues; perhaps accelerating. Liberal politics in California seems to be scaring businessmen. Marijuana: the individual from California says not eager to getting into marijuana (legal, but it's not legal; lots of regulations); Texas businessmen think marijuana will be huge opportunity in California -- medically legal now. Texas businessmen think using old industrial buildings are perfect for growing marijuana. Argument: local growing (high cost) vs importing from equator. Austin (TX) much bigger challenge for new California business vs DFW. DFW and Austin very different markets; different philosophies. DFW still huge area to grow. Oracle moving into Austin; after 3-hour car tour of Austin bought huge riverside area. Will be 3 - 5 year buildout. Will be huge. Huge Japanese influence. More opportunity in Ft Worth than Austin but Austin has the "bigger" draw. That may change once people start looking at the metrics. Conversation coming down to California vs Texas. In Texas, coming down to Austin vs Ft Worth. Not mentioned: San Antonio; Houston; Odessa-Midland. I had completely forgotten the "bullet train" from Dallas to Houston -- should be operational within next few years. Schwab putting in huge campus just west of DFW; 3,000 Schwabians; already having huge positive effect on local Schwab retail businesses.

Mixmaster: intersection of highways 360, 114, and 121, at the apex of the Dallas, Ft Worth, Grapevine triangle. Starbcks; In 'N Out; new shopping center with millennial focus (we talked about Hopdoddy earlier this week); Texas light rail from Ft Worth to DFW via Grapevine;

Reminder for later: Brent, Equinor, Mariner, Brassey
Back to the Bakken

Wells coming off the confidential list today -- Wednesday, October 3, 2018 --
34664, conf, EOG, Wayzetta 164-23M, Parshall, no production data, 
34261, conf, MRO, Young Woman USA 44-12H, Reunion Bay, no production data,

Active rigs:

Active Rigs65573368188

RBN Energy: part 5 -- the experienced, deep-pocketed team behind the Golden Pass LNG project.


February 1, 2019: COP pulls out of the Golden Pass project; will probably sell its interest to ExxonMobil.

Original Post
It’s crunch time in the race to advance the next-round of liquefaction/LNG export projects along the U.S. Gulf Coast to a Final Investment Decision (FID). And if we’re to assume that only a small number of these multibillion-dollar projects will get their financial go-aheads, it would seem eminently reasonable to put a win-place-or-show bet on a joint venture that includes the world’s leading LNG producer (by far) and one of the largest U.S. natural gas producers — oh, and the partners have very fat wallets too. Size and money aren’t everything, of course, but as we discuss in today’s blog, the team behind the Golden Pass LNG project plans to build its liquefaction trains at the site of an existing LNG import terminal with strong interconnections with coastal pipelines already in place.

2019 will be a pivotal year for the second wave of U.S. LNG export projects. Global demand for LNG continues to rise, and LNG marketers and customers — acutely aware of how much it takes to build new liquefaction capacity — are eager to line up the incremental LNG supply they will need in the early to mid-2020s. Want proof? Royal Dutch Shell, the lead partner in the LNG Canada project, on Tuesday (October 2, 2018) announced a FID on the 14-million-metric-tonnes-per-annum (MMtpa) liquefaction/export terminal in Kitimat, BC. (The project’s other partners are Petronas, PetroChina, Mitsubishi and Korea Gas.)
As it turns out, the U.S. is in many ways one of the best places in the world to locate a new liquefaction/LNG export project. There’s ample natural gas supply in the Marcellus/Utica, Permian and other U.S. plays, an extraordinary network of gas pipelines in place, and a skilled workforce capable of executing these very complicated facilities. By the end of next year, there’s a good chance that at least one new liquefaction/LNG export project will get the financial go-ahead and start construction. More may follow in 2020.
The Golden Pass LNG:
Today, we look at Golden Pass LNG, a joint effort by three global energy powerhouses — Qatar Petroleum, ExxonMobil and ConocoPhillips — to expand their existing LNG import terminal on the Sabine-Neches Waterway near Sabine Pass, TX, into a liquefaction/LNG export facility.
Much like Austin’s East Sixth Street is a mecca for live music and New Orleans’ Bourbon Street is a hub of late-night debauchery, the greater Sabine Pass area (on the border of Louisiana and Texas) already has drawn more than its share of liquefaction/LNG export facilities (Sabine Pass LNG, Cameron LNG and a number of second wave contenders, including Venture Global’s Calcasieu Pass), and for good reason. There’s easy, deep-water access to the Gulf of Mexico and large tracts of waterfront land, but just as important, there are few places on the planet with as many long-haul gas pipelines nearby to deliver large volumes of U.S.-sourced natural gas.
Like most of the initial round of U.S. liquefaction/LNG export projects now in operation or under construction, the Golden Pass LNG site already is home to an LNG import terminal that was developed in the 2000s, when almost everyone was expecting a flood of LNG from Qatar and other foreign sources. Having docks, storage tanks and connecting pipelines in place gives these brownfield projects at least a modest financial leg up over their greenfield-site competitors — their import-related investments were made and paid for years ago.
Qatar Petroleum (which owns 70% of Golden Pass LNG), ExxonMobil (with 17.6%) and ConocoPhillips (with 12.4%) are planning to build three 5.2-MMtpa liquefaction trains for a total of 15.6 MMtpa of capacity. That would require a total of about 2 Bcf/d of natural gas (using a rule-of-thumb ratio of 1 Bcf/d for each 7.6 MMtpa of liquefaction capacity). They also are planning onsite, gas-fired power plants with a capacity of 200 to 250 MW that would provide power for the liquefaction trains and other terminal operations.

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