Friday, August 23, 2013

IGU LNG Report

Good report on LNG developments.  Long list of North American projects on page 36.

Here's a shocker - Alaska Gas Pipeline and LNG project are barely mentioned. (LINK). 

Saturday, August 3, 2013

Other Pipelines and Projects

The Alaska Gas Pipeline and associated LNG plant is, according to all the evidence I can gather, dead for at least another decade.  The slides presented with the ExxonMobil second quarter earning conference call still list Alaska as one of the "Upstream LNG future opportunities".  See page 17 of the presentation slide set.

The Alaska LNG project does not even rate a bullet for explanation and none of the analyst in attendance had any interest in Alaska LNG.  Here's the only mention of the Alaska LNG rpoject:
We also continue to assess other LNG opportunities in Alaska, Australia, Russia and Tanzania. A range of factors will be considered before any final investment decision is made, in particular, the fiscal and regulatory regime, market conditions, and capital costs.(Transcript Link)
They did mention that pesky concept of fiscal and regulatory regime for  the umpteenth time but I don't expect Alaska to sit up and listen, Tanzania might get in the game, but Alaska can't stop hating long enough to cut a good durable deal.  In the mean time other projects emerge or fade in response to market forces.

The Russian Shtokman project has been canceled. This project was an offshore version of the Alaska project with a combination of gas exports via pipeline and 15 MTPA of LNG.  The gas production rate was about half of the Alaska gas project size and the stated cost was about a quarter of the cost of the Alaska gas project.  The cost estimate seems light and I suspect the refined cost estimate pushed the project over the cliff of feasibility. Chalk up another victory to North American shale gas  I expect other marginal project to be cancelled as shale gas LNG moves forward.

New project of the week - $12 Billion TransCanada Energy East Project. The project involves conversion of a gas pipeline to oil and a total of 2700 miles of line across the Canada. Shipping for 900,000 BPD of the 1.1 million BPD capacity has already been contracted.
Nice job Canada - The project recycles an old pipeline and displaces imported oil. Jobs, Jobs Jobs - it's all about Jobs.