Friday, June 21, 2019

Natural Gas -- A Reader Comments -- June 21, 2019

I'll never be able to find it, but two or three years ago I mentioned in passing that my focus on oil had caused me to miss a much bigger story: natural gas. At the time, I said in passing that it was my hunch that this would be the decade (starting in the mid-20-teens) of natural gas.

Earlier today I made another passing reference to that thought about natural gas being the "big" energy story this next decade.

Today, a reader who writes me often about natural gas sent me this note:
Quick background ... 4 years or so ago, I started focusing on the Appalachian Basin region as the production numbers being thrown about seemed outlandishly high.

This interest segued into an exploration first of the gas world in toto and then, more specifically, into the rapidly evolving realm of LNG.

The hardware such as Floating Storage and Regassification Units (FSRUs), small and mid scale LNG plants, containers to both transport and store LNG via truck, rail, barge and ship are ALL prompting the swift transition to natgas as a fuel/energy source.
(Today's HH price of $2.16/mmbtu means the heat energy in natgas is about ONE FIFTH the equivalent energy in oil form).
Data points ...

Pakistan is installing its 3rd FSRU terminal shortly after bringing its first 2 online.

Bangladesh is quickly setting up its 2nd FSRU.

Brazil is soon to bring online the huge (1,500 Mw) Sergipe power plant - biggest gas plant in South America - using fuel from its just- installed FSRU. Two more FSRUs are planned for Belem and Santa Catarina.
Poland setting up an FSRU as is China.

India is planning on possibly an FSRU in all of its ports.

Even Kaliningrad - Kaliningrad!!! - is setting up an FSRU!

Port Kembla, Australia, building $170 million LNG terminal ... expected to take 16 months ... deploying an FSRU ... and - get this - very possible that the LNG could come from USA. Truly a coals to Newcastle situation.

Abundant, economical supply ensures an ongoing transition to natgas for decades to come.
By the way, my hunch is that the reader would suggest that BP's 2019 statistical estimate of US natural gas reserves is again way too low.

By the way -- did you note that comment about transporting LNG by truck. We talked about that earlier this week -- that it might even happen in the Bakken. 


  1. 1. I would go off the PGC gas estimates of ~3000 TCF (resource plus SEC reserves). That's where the 100 year timeline comes from. So far, resource is increasing fast enough so that neither depletion nor higher demand are moving the 100 year figure.

    2. David Hughes, peak gas 2006:

    'declining 1.5 BCF/d per year'

    'LNG import [yes IMPORT] can not be built fast enough.'

    'shale and unconventionals are worth looking at but won't affect production significantly.'

    1. Thank you, much appreciated.

      Pretty funny:

      "LNG import cannot be built fast enough. Shale and unconventional plays are worth looking at but won't affect production significantly."

      Must have gone to the Art Berman school of energy.