McKinsey: Natural Gas Update -- Through 2035 -- September 11, 2019

US natural gas: making America great. Link to report on McKinsey Energy Insights. Globally, new natural gas production forecast to be 635 billion cubic meters by 2035; half of that to be produced by US.

Data points:

• among fossil fuels, only natural gas will likely continuously grow in demand through 2035
• 2018: the turning point in terms of gas and LNG market dynamics
• China became the world's biggest LNG importer
• highest volume of liquefaction projects taking final investment decision (FID)
• that set the tone through 2035 -- long term projects
• Asian economies in the ascendancy, led by China; growing energy demand
• US continues to rank highly for both supply and demand
• supply side -- Europe and Asia's second-tier economies falling away
• 2018: China took overtook Japan as the world's biggest importer of gas
• China surpassed South Korea to become the second-biggest LNG importer
• through 2035, Asia (all of Asia) will account for 95% of glboal LNG demand growth until at least 2035
• demand
• global demand: will grow at about 1% annually
• Asian demand: will grow twice as fast, more than 2% annually
• production
• global production: new production to grow by at least 635 billion cubic meters
• US to supply more than half of that; 380 bcm
• Russia: 110 bcm of new production
• Africa: 110 bcm of new production
• Pipeline, note US-Mexico:

... new pipeline construction will add more than 200 bcm of cross-border gas capacity by 2025, with the U.S. and Russia retaining their major piped gas exporter positions. The firm also noted that three U.S.-Mexico projects totaling 60 bcm in capacity – the largest set of pipelines set to be completed anywhere in the world by 2025 – should conclude by the end of this year. Nord Stream 2, which will ship Russian gas to Germany (and the European Union) via the Baltic Sea, represents the second-largest set of pipeline projects and will reach a total of 55 bcm by next year

Finally, LNG and FID:

... “a record volume” of LNG projects – more than 60 million tonnes per annum (mtpa), or 20 percent of today’s market – took FID in the last 12 months and will push the LNG supply-demand balance into the late-2020s.

“Looking ahead, only one in 10 proposed LNG projects will take FID, with over 100 LNG projects totaling 1,100 mtpa of capacity competing to fill the 125 mtpa supply gap by 2023,”

Why I Love To Blog -- Reason #56 -- January 19, 2019

Just after posting this at top stories for the week:  

The story that simply disappeared: the Mexican fuel shortage

This was an AP headline story:

Mexican President Andres Manuel Lopez Obrador says the attorney general’s office will investigate an illegal pipeline tap in central Mexico that killed 66 and wounded dozens of others.

At an early morning press conference he said that the office will open an investigation to determine whether the explosion was intentional — caused by an individual or group — or whether the fireball occurred due to the inherent risk of clandestine fuel extraction from ducts.

Lopez Obrador called on townspeople to give testimony not only about Friday’s events in Hidalgo, but about the entire black market chain, including who punctures the pipelines, who informs locals about collecting fuel in containers, and how fuel is then put to personal use or sold.

Something tells me this is not going to end well. 

Making America Great Again -- It Never Gets Old -- New Energy Record -- Crude Oil Production Highest In 44 Years -- T+275, October 23, 2017

The Red Queen has not fallen off her treadmill.

US petroleum product demand hits 10-year September peak -- API -- Oil & Gas Journal, data points:

• US petroleum product demand averaged more than 20.2 million b/d in September, 2017
• 2.4% more than a year earlier
• gasoline deliveries fell 0.8% from a year earlier to an average 9.4 million b/d -- still, second-highest for the month on record
• distillate fuel deliveries: averaged 4 million b/d; up 3.4% from a year earlier
• crude oil production: robust; highest September in 47 years, since 1970; highest production level for any month in 29 months, since April, 2015
• crude oil production: first nine months of 2017 -- averaged 9.1 million b/d; 2.9% more year-to-year and the second highest for the period in 44 years, since 1973

I do believe "Peak Oil" theory is pretty much in shambles.

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West Coast Mexican Terminals Might Ship US LNG

From Bloomberg, another big story:

Since the first shale gas export terminal opened in Louisiana last year, America’s drillers have seen at least 75 cargoes of their fuel sail through the Panama Canal bound for markets in Asia.

Now they’re looking for a cheaper and quicker route. And they’ve turned to Mexico for help.

Aldo Flores, Mexico’s deputy energy secretary, said Thursday that the government’s in talks with shale drillers in West Texas about a potential pipeline that would send their gas straight to Mexico’s west coast, where it could then be liquefied and shipped overseas.

Such a pipeline could eliminate the need for gas tankers to navigate the Panama Canal and hand the U.S. another outlet for the bounty of gas that President Donald Trump has vowed to “unleash” upon the world.

It comes as at least one would-be U.S. gas exporter, Sempra LNG & Midstream, voices concerns about delays at the canal that threaten to cost gas traders thousands of dollars a day.

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Conrad Hilton Quiz

Time to answer the quiz posted earlier:

1a. Who "discovered" Conrad Hilton's most famous granddaughter?  Most famous granddaughter, Paris Hilton, discovered by Donald Trump 1b. Before she was discovered, what did she want to be when she "grew up"? veterinarian (page 427)
2. Whom was Barron named after? Yes, that Barron. Conrad's second son, William Barron, (p. 414) Barron was his first wife's maiden name.
3. Who was Conrad Hilton's second wife? Zsa Zsa Gabor; his first wife, Mary Adelaide Barron, her fling with an athletic coach led to their divorce
4. The Melba was one of Conrad Hilton's very first hotels; in what city was it located? Ft Worth, TX
5. What hotel was the first hotel that Conrad Hilton built from the ground up? Dallas Hilton
6. Where did Conrad Hilton serve in WWI? Paris 6b. In what capacity? Quartermaster 6c. In what service and at what rank? US Army, 2nd Lt
7a. In what country was Conrad Hilton's dad born? Norway 7b. What was his Dad's middle name?  Halvorsen 7c. In what month was Conrad Hilton's father born? August 7d. In what state was Conrad Hilton born? (this is a trick question) Conrad was not born in any US state; he was born in San Antonio, Territory of New Mexico
8. Hilton Conrad's first child was a son, Conrad Nicholson, Jr. Whom did "Nicky" marry? his first wife was Elizabeth Taylor (yes, that Elizabeth Taylor; the marriage lasted from 1950 - 1951; second marriage to Patricia (Trish) McClintock
9. What major airline bought Hilton International in 1967? TWA
10. What was the first company registered with the New York Stock Exchange to operate gambling facilities (in Nevada). Hilton, 1970, purchased the Flamingo Hoel and the Las Vegas International, later named the Las Vegas Hilton

Update On Sempra's Mexican Projects -- October 13, 2016

Updates

October 28, 2022: 20-year wind farm energy for Silicon Valley; wind farm in Mexico.

November 3, 2018: the pipeline mentioned below is now in service. The name of this well is the Valley Crossing Texas-To-Mexico gas pipeline.

Original Post

For me, personally, one of the best things I ever did was start the blog on the Bakken. Without question, without the blog I would not have kept up with things, and I certainly would not have had incredible good input from any number of readers.

There are so many energy stories out there, I cannot keep up. There are a number of non-Bakken energy stories that interest me more than others, because they help me put the Bakken in perspective; they help me better understand the oil and gas industry; and/or they help me understand the equity market.

One of the stories that has fascinated me is the Mexican energy story. RBN Energy has had a good series on Mexico, including a great article earlier today.

Now, SeekingAlpha is providing another update on Sempra Energy and Mexico. Like real estate, it's all about location, location, location, and in Sempra's case, being "next" to Mexico has been nothing but great news. One would have thought the same thing for MDU being in the heart of the Bakken, but that did not out so well. Whatever. I digress.

Back to Sempra. Over at SeekingAlpha:

• Sempra Energy's IEnova Mexican unit says it raised $1.43B, pricing 344.9 million shares at 80 Mexican pesos/share ($4.22) in a global offering; the parent company participated in the capital increase, agreeing to buy shares for $350.7 million
• IEnova will use the money to repay bridge financing for its recent $1.14B acquisition of state oil company Pemex's 50% stake in pipeline joint venture Gasoductos de Chihuahua, which is now wholly owned by IEnova, and to help finance the recent purchase of two wind farms in Mexico for $852M, including debt.
• IEnova also is developing new projects; it owns 40% of a joint venture with TransCanada that won a contract from Mexico’s state electric utility to build a 500-mile, $2.1B offshore pipeline to carry natural gas from south Texas into Mexico.

I've blogged about Sempra, IEnova, and these issues at several posts earlier; this is one example, but a google search of the blog will provide additional posts. I assume the wind farms are being bought to a) comply with government mandates, current and future; and, b) to provide tax credits to offset their fossil fuel projects. I did not post that story, but it is being reported that Warren Buffett is making more off tax credits than he is producing electricity from wind/solar. I did not post it because it's a "dog-bites-man" story. 

TransCanada: Mexico Is A Bigger Deal Than The Keystone -- November 17, 2017

BloombergBusiness, today, writes that TransCanada will build the Tuxpan to Tula natural gas pipeline in Mexico:

TransCanada won the rights last week for its sixth pipeline in Mexico, one of the company’s key targets for growth. The Nov. 10 decision came four days after the U.S. denied TransCanada’s bid to build its Keystone XL oil sands project across the border into Nebraska where it would connect to existing pipes leading to Gulf Coast refineries.

That's what it says, TransCanada's "sixth pipeline in Mexico."

But just a few days ago, Oil & Gas Journal wrote:

By 2018, with Tuxpan-Tula, TransCanada will have five major pipeline systems, with $3 billion invested in Mexico.

Yes, I checked that several times, and "cut and copied" it directly to the blog.

So BloombergBusiness says this will be TransCanada's sixth, and Oil & Gas Journal says it will TransCanada's fifth pipeline in Mexico.

Other data point points from the BloombergBusiness article:

• TransCanada beat out Carlos Slim's Grupo Carso and Sempra Energy for this pipeline
• TransCanada now holds the rights to develop and operate 2,000 kilometers of pipelines in Mexico
• TransCanada currently only operates gas pipelines in Mexico but wants to expand to oil and power generation
• with Mexico much less difficult to deal with, TransCanada argues that Mexico is a bigger deal than the Keystone XL
• the company said it plans to extend its dividend growth plan of 8 to 10 percent annually through 2020 as more and more Mexican projects come on line
• there is little pushback in Mexico once the government approves a project
• Mexico plans to expand its pipeline infrastructure 75% by 2018 and is seeking as much as $10 billion in investment for 24 new projects in the short term

And then this:

• Mexico is planning to hold as may as five pipeline auctions before the end of January, 2016, and TransCanada will look at all of them.

After all, with the Keystone XL killed, TransCanada has other eggs to fry, or whatever the idiom is.

Pipeline, The Ventures