Friday, December 5, 2014

Parallel Universe - Canadian LNG Blues

Canadian LNG projects are similar to The Alaska LNG effort with some upstream and climatic differences. (LINK TO LNG-N-BC)

A week ago I would have predicted success for the Petronas led Pacific Northwest LNG project but apparently the project economics are not meeting client expectations (Globe and Mail Link). 

At 19.2 MMTPA, the PNW LNG project has about the same capacity as the Alaska LNG project. Gas is supplied to the PNW project via the Prince Rupert Gas Transmission Project which is 560 miles long (240 miles shorter than the Alaska LNG project).  Unlike Alaska, significant upstream development is required to provide gas to the PNW pipeline.

A final investment decision was due this month.


LINK to Map of BC Gas Pipelines

LINK to BC LNG information (BC Environmental Assessment Office website)

LINK to PNW Data

PETRONAS statement regarding LNG development in British Columbia

Quote: PETRONAS and its partners have decided to defer the project’s $36 billion Final Investment Decision (FID) pending further clarity on substantive items of importance to ensure that critical project components align with economic viability of the Project and competition from other LNG producing countries. Costs associated with the pipeline and LNG facility remain challenging and must be reduced further before a positive FID can be undertaken.

ASAP Update

Supplemental environmental impact statement (SEIS) documents are available HERE.

Summary of design changes (page 15 of the presentation)


Sunday, November 30, 2014

SOA Alaska LNG Project Current Highlights - Presentation

State of Alaska LNG Project Current Highlights - Presentation

Slowww progress - expect some real news by August 2015 (see page 5 Public Release of Agreements)


Sunday, November 23, 2014

DOE Approval, a New Governor, and BBQ

So little tangible progress is being made that I've cut way back on keeping up with this blog, but this week was semi news worthy.

First - DOE approved the Alaska LNG Project LLC 14-96 application to export up to 20 MTPA.  That's a hurdle, not the last hurdle or the biggest hurdle, but good news all the same. (DOE LINK)

Second - Bill Walker won a close race for Governor and unseated Sean Parnell.  For all I know he may be the guy that pushes the project over the next batch of hurdles, however sometimes he scares me and I fear he'll be a deal killer out of the Sarah Palin mold.  But Walker is brighter than Sarah Palin and I think he is truly dedicated to getting the project built.  He may increase the State equity position and that's OK as long as the percentage stays below 50%.  Above that the sparks may fly.

At this point I'm going to stay optimistic and wish Walker all the best luck.

A note of thanks to outgoing Governor Sean Parnell.  He inherited a mess from Sarah Palin, but he cleaned up that mess and got the project back on track, took care of the Point Thomson issues and forged some monumental deals.  Although progress has been slow I don't think Parnell was the problem - he was actually the leader pushing with all he had to get it done.

FYI - every time I type "Bill Walker"  it comes out "Bill Miller" as in Austin Texas BBQ, guess I've been away from Texas too long. so excuse me in advance if I mistype the new Governors name every once in a while - it happens.


Sunday, November 2, 2014

Monthly Pre-Filing Status Report No. 01

The first project progress report to FERC is out (LINK).

Stakeholder engagement, studies, field work, pre-design all "tracking".

It looks and feels like 2005/2006 all over again.  So many hurdles yet to go.

Metrics of success I'm looking for:

1) Announcement of customer commitment to buy product
2) Announcement of customer equity participation in project
3) Ordering pipe.

Thursday, October 2, 2014

Wednesday, September 17, 2014

JAPAN

At long last we're starting to read about Japan's interest in new Alaska LNG.

From the Alaska Dispatch we learn than teams from Alaska are visiting Japan (LINK) and from Nikkei we learn that Japan's Ministry of Economy, Trade and Industry will sign a memorandum or understanding with the Alaska project (LINK).

Why is this important? - You only build bankable projects and the cost of world scale LNG plants require that you must sell your product before you can obtain financing.  For example look at the customer side of a current project like Cheniere (LINK).  The Alaska LNG project must execute sales agreements before the project moves into the detail engineering and construction phase.