Locator: 48503B.
Deadline: midnight, Saturday, March 15, 2025 -- deadline to pass spending bill to keep government "open."
National emergency: if the government shuts down, I assume the president can call it a "national emergency," which greatly expands his powers.
Tea leaves: no one cares. In fact, some may welcome it.
- for the GOP, it's a win-win;
- for the opposition, at best, break-even
- unlike
other administrations that attempted to minimize the impact of a
government shutdown, the current administration my seek areas that need
to be shut down ...
Tariffs: link here. California vintners: "we're lovin' it." Ditto: Kentucky distillers.
Investors: remember -- the most important date -- May 31, 2026.
Summit: dead. Link here.
Is this bad? Link here.
Natural gas: link here.
***********************************
Back to the Bakken
WTI: $67.37.
New wells:
- Friday, March 14, 2025: 36 for the month, 152 for the quarter, 152 for the year,
- 40875, conf, Oasis, Barnes Federal 5202 43-11 3B,
- Thursday, March 13, 2025: 35 for the month, 151 for the quarter, 151 for the year,
- 40876, conf, Oasis, Barnes Federal 5202 41-11 3B,
- 40858, conf, BR, West Kelloggg 4C-UTFH-B,
RBN Energy: long-dormant Alaska LNG project sees renewed interest after support by Trump.
President Trump’s flurry of executive orders upon returning to office
included one titled “Unleashing Alaska’s Extraordinary Resource
Potential,” which aims to see the realization of the long-dormant Alaska
LNG project, a multibillion-dollar plan to bring natural gas several
hundred miles from Alaska’s North Slope to Anchorage and Cook Inlet for
eventual liquefaction and export. The president’s endorsement renewed
interest in a project that has been on the drawing board for more than
30 years. In today’s RBN blog, we look at why there is renewed interest
in the project, some of the hefty challenges it would need to overcome,
and why many still see it as a long shot.
The
Trump administration’s backing has restarted the conversation about
Alaska LNG, with some potential importers showing renewed interest amid
U.S. tariff threats. Since its conception, Alaska LNG has focused
attention on Japan as a likely buyer. JERA, Japan’s largest LNG buyer
and a joint company formed by Chubu Electric and TEPCO, has expressed
interest in purchasing increased volumes of LNG as one means of reducing
Japan’s trade surplus with the U.S., and trading house Mitsui has said
it could consider supporting the Alaska Gasline portion of the project.
(More on that below.) Both JERA and Mitsui have experience in U.S. LNG
projects, with equity stakes in Freeport and Cameron, respectively.
Potential LNG buyers in Taiwan, South Korea and the Philippines have
also expressed interest in becoming customers if the Alaska LNG project
eventually gets off the ground.
Alaska LNG would enable exports of up to 20 million tons per annum
(MMtpa; 2.6 Bcf/d) and help meet local demand for gas around Cook Inlet.
The concept of exporting LNG derived from Prudhoe Bay gas reserves has
been a longstanding objective of the Alaska state legislature, which
highly supports the project. But it has long been viewed with
significant skepticism, given the inherent challenges of building a
massive pipeline several hundred miles across the state’s rugged
terrain. Estimates put a final price tag at about $44 billion, with
construction taking at least several years. [RBN’s LNG Voyager
report tracks LNG terminal projects and ranks them in six categories
(online, under construction/FID, probable, and possible tiers 1-3), in
order of imminence. Alaska LNG is categorized as Possible — Tier 3, the
bottom of the six categories.]
Aside from a shorter sea route to potential customers in Asia, the
project’s biggest plus may be its proximity to a large amount of natural
gas. Large-scale LNG projects require major gas reserves, preferably
gas with little market value in the environment where it is discovered
(typically referred to as stranded gas). In the case of Alaska, the
Prudhoe Bay oil field — one of the 10 largest in the U.S. — is topped by
a gas cap estimated to contain 46 trillion cubic feet (Tcf), with a
recoverable gas reserve of 26 Tcf. Then there is the gas dissolved in
the oil, which is separated at the wellhead and reinjected at rates up
to 7 Bcf/d, helping to maintain reservoir pressure. [Before Prudhoe Bay
gas could be piped south it would need to undergo processing to remove
NGLs and carbon dioxide (CO2), which accounts for 5%-18% of the gas present in the cap. This would require reinjection of the CO2 into a suitable sub-surface reservoir and/or potential use in enhanced oil recovery (EOR).]
Gas for the Alaska LNG project would flow from a gas treatment
facility (purple diamond in Figure 1 below) on the proposed Alaska
Gasline (dashed aqua line), an 800-mile, 42-inch-diameter overland
pipeline from Prudhoe Bay to Cook Inlet, where a subsea section would
deliver up to 3.3 Bcf/d of gas to the project site at Nikiski (striped
purple-and-white diamond), located to the north of the original Kenai
LNG export project (gray diamond) that ceased operation in 2016 due to
the depletion of reserves in Cook Inlet. The liquefaction facility would
comprise three trains, two LNG storage tanks (240,000 cubic meters
each) and two jetties. The pipeline would also supply gas to electricity
and gas utilities along its path and to Cook Inlet, where demand is
expected to reach 200 MMcf/d by 2030. (Cook Inlet stretches 180 miles
from the Gulf of Alaska to Anchorage.) There is also scope for
additional gas demand by local industries, such as Nutrien, which has
shuttered its fertilizer plant due to declining gas supplies.
Figure 1. The Alaska LNG Project. Source: RBN
