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Feb 01, 2010
North American LNG exports?
I've been talking for six month or so on how the Kitimat LNG plant in British Columbia is going to disrupt world LNG markets even further. British and world prices have been impacted by US shale since shale has meant the US is seeing far less LNG imports than the LNG industry planned for. That means that Qatari and other LNG has to go either to Europe or Asia. Qatari gas is bumping up against existing Asian suppliers such as Australia, Malaysia, Indonesia for those markets. Further massive Oz LNG, along with new sources such as Timor, Papua New Guinea, Peru, Sakhalin and Kitimat will mean further pressure on Pacific Basin prices.
Kitimat has Korea and Spain's Gas Natural as lead customers. I figured that the Gas Natural cargoes are for trading, not physical supply. But suddenly, the possibility of of Pacific North America supplying Europe won't be far-fetched in the not too distant future:
Shipments of liquefied natural gas through the Panama Canal may climb once expansion work on the waterway is completed in 2014, TradeWinds reported, citing Silvia de Marucci, an official in the canal’s market research and analysis department.Once work is completed, 80 percent of liquefied natural gas carriers will be able to fit through the canal’s locks, up from 6 percent now, TradeWinds said. In practice, no such vessels presently use the link, de Marucci told the newspaper.Repsol YPF is interested in using the canal to ship LNG from Peru and Kitimat LNG Inc. is also considering using the waterway to sell Canadian cargoes to customers in the Atlantic, TradeWinds reported.
And why stop at Kitimat and Peru? Latin America is another area where shale gas is even deeper under the radar than in Europe, although much more active than people let on.The continental USA itself is not going to be an LNG net exporter for political reasons. But Alaska is in the USA, if only just and their massive North Slope gas reserves are Sarah Palin's Drill, Baby, Drill cure for energy. But the Alaska gas pipeline is something that worked in a shortage but will be an expensive failure today.
But who's to say that Alaska can't monetize that gas via LNG exports?
Potential shippers have the option of committing to an overland route to the Alberta border or a second option that would divert the gas to Valdez for loading on LNG tankers, but not both, said Tony Palmer, Trans-Canada's vice-president of Alaska development.
That could keep Alaska in the Union. But this is where we came in: The impact of shale reaches everywhere. Except to Ofgem of course!
Palmer said there isn't enough gas supply to support both options. Although he expects Lower 48 demand will be sufficient to support an overland route to the United States, he refused to speculate on whether the growing proliferation of shale gas and lower domestic pricing played a factor in advancing the Valdez option."Shale gas is a reality in the natural gas business," he said. "We're not making a judgment (on the LNG option) at this point."
Posted at 12:19 PM in Current Affairs, Energy Prices, Energy Tech, LNG, Next Big Things, Prices, Shale Gas Permalink Comments (2) TrackBack (0)
China and shale again
China is the biggest card in the gas bear deck as I've pointed out many times before. But a China that is both an emerging leader in renewable energy technology and a producer of more of it's own gas removes a large part of that scenario of fear. First, clean tech:
These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.This still gives the Sinophobes some ammunition, but that is that all it is: the same old energy security fear. China led in toys, socks, tee shirts and everything in Wal Mart, the idea that they would overlook high value items isn't realistic. Wait for 5 to 10 years and see their impact on electric vehicles for only one example. Throw in LED manufacture which will lead to printable OLED, which will then flow into printable solar panels which will flow into printable batteries is another.
But going back to gas. Who, apart from Ofgem, ignores the possibility that shale technology won't be used in China to produce gas, leaving more and cheaper gas for the rest of us? Not China themselves
The National Development and Reform Commission, the country's top economic planner, is reviewing a plan to encourage the development and utilization the unconventional gas source in an effort to meet rising energy demand without excessively increasing greenhouse gas emissions, the ministry said in its in-house newsletter, which was published Friday.Shale gas comprised a negligible portion of the 83 billion cubic meters of natural gas China produced in 2009. Beijing wants natural gas to account for 10% of the nation's energy mix by 2020, up from 3% in 2005, as part of pollution-cutting efforts. Natural gas currently accounts for around 4% of its total energy use.The nation aims to achieve recoverable shale gas reserves of 1 trillion cubic meters by 2020 after identifying 20-30 main exploration and development blocks, the report said. It has very limited experience in developing the fuel.China's three top oil companies have all listed shale gas as their priority among unconventional oil and gas sources, and are cooperating with international oil majors that can provide the technology necessary to stimulate the flow of gas, which is trapped in relatively impermeable rock.