Sunday, November 23, 2014

British Columbia LNG Fantasy Turns Nightmare, Christy Clark and Rich Coleman Drowning in Their Own Koolaid, Or Is That Their Own Bathwater



Global LNG-Prices slide as Australia, Nigeria offer fresh supply


 "Asian spot liquefied natural gas (LNG) prices extended losses this week as demand in December and January flat-lined, which is likely to have reduced interest for two sell tenders by Australia and Nigeria.

Spot LNG prices LNG-AS for January delivery fell 70 cents week-on-week to around $10.10 per million British thermal units (mmBtu) on Friday, while prices for December delivery dropped to $9.85 per mmBtu.

Pockets of demand from Indian and Chinese buyers could not hold back the sell-off, which extended for a fifth straight week, traders said.

More supply is due from Australia’s North West Shelf export project, which on Monday will close a tender to sell at least four cargoes for December and January loading.
The tender is likely to draw limited demand from Asian buyers, which are facing lower winter import costs for the first time since the Fukushima nuclear disaster in 2011, thanks to high inventories left over from a mild summer and winter.

“Buyers are careful to indicate any demand. They’ve been saying for months in a very disciplined manner that they don’t need any cargoes whatsoever,” a trader from an oil major said.
“But they do buy here and there. If you call them, they will say they’re not buying anything until April,” he said.

A single-cargo tender by Nigeria’s Bonny liquefaction plant to sell LNG for loading in mid-December was due to close on Friday, sources said.

But with Asian demand falling and the spread between Atlantic and Pacific markets collapsing, the volumes were likely be consumed within the Atlantic Basin, not Asia.

Europe is set to become a dumping ground for the world’s unwanted gas supplies this winter as Asian demand for sea-borne shipments fizzles out, leaving dealers to seek out willing buyers at rock-bottom prices.

Traders see LNG at $8 per mmBtu as achievable as mild weather forecasts dampen Asian demand and weak oil prices add pressure to spot LNG as long-term, oil-linked LNG deliveries become more competitive.

Falling oil prices effectively lower the ceiling beneath which spot LNG prices can remain competitive, especially in a currently oversupplied market.

Traders who have not cleared long positions, including those who are storing LNG on the water, are showing increasing eagerness to sell off supply, another trader said."

 British Columbia`s LNG proposals, PETRONAS..EXXON MOBILE..STEELHEAD..WOODFIBRE none of these energy companies can deliver any LNG at that price without incurring massive losses, the break even price for British Columbia`s proposed LNG plants is around $12 to $13 dollars per BTU.....look around, the price is already lower with even more capacity coming online..

There`s a massive LNG glut on the market with tonnes more capacity coming online from both Qatar, and Australia..

Any British Columbia LNG proposal, if any come to fruition and are selling LNG at these prices they will be claiming losses, not profits, will Canadian taxpayers be forced to not only rebate back LNG plant build costs but write off these losses against any future taxes..?

If these giant energy companies aren`t making any money there will be no tax money to collect..


"That appears to be what's happening now. The world already has more LNG trading capacity than it needs: There were about 286 million tons a year of LNG export capacity globally in 2013, while global LNG trade amounted to just 237 million tons

That's in part a reflection of a big surge by Qatar, the world's leading exporter of liquefied natural gas. Between 2008 and 2011, Qatar built a spate of new projects and now has 77 million tons a year of LNG export capacity. 

Now, other gas-producing countries are scrambling to add even more. Australia has three big LNG projects operating and seven more that will come online in the next few years. If all goes as planned, that would push Australia's total export capacity to 83 million tons a year by 2017, which would allow the country to overtake Qatar as the world's top LNG exporter. Even more export projects are under discussion there. 

Meanwhile, the United States is moving to take advantage of its own natural gas production boom to turn from gas importer to gas exporter. The Department of Energy has conditionally approved eight U.S. LNG export projects, with a total capacity of more than 80 million tons a year; analysts expect that at least five of those projects could actually get built, with an export capacity of close to 70 million tons. Canada is also hoping to ship natural gas to Asia.

As if that weren't enough, newcomers to the global energy boom, including countries in East Africa and the eastern Mediterranean, are also eyeing LNG exports as a way to fuel their own economic development. 

The problem is figuring out just how much demand there really will be for all that gas. Asia, and especially China, is expected to be the main driver, accounting for the overwhelming bulk of natural gas demand in the years to come, according to the IEA.

But there are several huge question marks that could radically affect those projections. Japan's imports of LNG have surged since 2011, when it shut down all its nuclear power plants in the wake of the Fukushima accident. Buying so much expensive gas is not a long-term option for Japan -- fuel imports pushed the country to its first trade deficit in more than three decades. The question for Shinzo Abe's government is not whether, but when, the country will restart at least a portion of its nuclear reactors, which would severely dampen Japanese demand for LNG.

The other big question marks are in China. In theory, as China cleans up its economy and environment, it will need a lot more natural gas. But it's not clear just how much -- or whether it has already lined up much of what it will need. 

Beijing has already signed one huge, $400 billion natural gas deal with Russia to get significant amounts of Siberian gas through a pipeline. The two countries are reportedly in talks on another gas deal that would give China even more Russian gas, further reducing Beijing's demand for expensive imported LNG. China is also trying, to tap into its own abundant shale reserves to ramp up its domestic production of natural gas, which, if successful, would reduce the country's need for LNG even more."


 I always knew we would end up here, 4 wasted years by the BC Liberals, LNG LNG LNG...almost 2 years since Christy Clark and the Liberals lied their way to victory...Too bad these inept quasi Conservatives/BC Liberals have no plan B

The Straight Goods

Cheers Eyes Wide Open 


Bill said...

Plan B is the same as Plan A.... keep lying.

Anonymous said...

Let them eat brioche

Jon Ghun said...

Thanks for this post. A most important one, indeed.

The world's economy is slowing significantly and energy prices (including Asian spot LNG) are dropping sharply.

However, now we have to be particularly vigilant; because these bc liberal bandits are going to get crazy desperate. They're going to want to give away LNG at any cost, even a bad loss. For them, making any sort of deal will be better than having to admit failure and then come clean about what a mess they've made of this file. And that is to say nothing of all the money they've taken and promises they've made to get it done.

The deal(s) will be kept secret and will involve all of the following elements:
--No tax (up-stream or mid-stream); and massive deferrals downstream (which they'll game and pay nothing on)
--Free water.
--Low-cost, subsidized electricity.
--Unlimited access to public and native lands.
--Rich royalty and development credits.
--Severely reduced environmental regulations.
--Temp. worker clearance.
--Off-shoring of any construction.
--Massively inflated capital-cost deductions.
--Closed-door guarantee that the yellow-striped thugs will be sent to incarcerate anyone that dares to challenge the pillaging.

No matter how right you are about this file being a non-starter, gassy and crispy will burn down this province in order to make some sort of deal happen.

We're up against psychopaths, without consciences, who are used to getting their way, no matter what. When faced with the prospect of cold, hard failure, they're going to go ballistic; and it isn't going to pretty or easy to stop them.

But we will. Steel yourselves. Stay wise. And don't expect the corporate media corps(e) to do the people any favours.


Bill said...

Bang on Jon Gun excellent summary. The desperate Liberals will do exactly as you have outlined above. It is actually very obvious to any one that has been paying attention. Still there are too many citizens not paying enough attention - that means reading more than simply what pawn Palmer spins.

The Straight Goods has been the leading source for facts and analysis all along. Grant has done more digging, research and revealing of the facts on BC LNG than any other source in our province.

John's Aghast said...

Hey! Maybe we should start IMPORTING the stuff! At current prices it would seem more economical to use someone elses stuff, save ours for a rainy day (or cold night).

Grant G said...

Thanks Bill...It amazes me how our big BC media has reported next to nothing on LNG, fluff pieces and cheerleading.

Mr. Ghun, what you say scares the heck out out me, Fascism on a province destroying level.

Petronas is scheming as we speak.

The old "in and out" scam

"Malaysia to build second regas terminal at Johor as part of LNG import-export plans

Samsung Construction and Trading Corp. of South Korea said it was awarded a contract valued at almost $500 million to build a second LNG import terminal for Malaysia, which is following an import-export strategy for the fuel"

Here`s the deal, to avoid paying any tax on that gas(BC LNG Gas)..

PETRONAS will claim it`s for domestic use...Ahh..From Malaysia the BC originated LNG will be sold.

70% of the LNG from Petronas`s proposed B.C. LNG plant will leave B.C, tax free, call it equity partner`s domestically needed gas.

"There is none so blind as those who refuse to see"


Hugh said...

By continuing to push LNG export, the BC Liberals just look dumber and dumber.

For them it's apparently ok for a foreign state-owned energy company to buy up and export our BC natural gas.

So why can not a Canadian state-owned energy company sell (at reasonable cost) our own natural gas to us?

Grant G said...

Hugh..Forget LNG for export, that market is dead..

promote LNG powered cars and domestic use.

Perhaps future generations might need a little bit of gas.

Forget Site C dam..$10 to $12 billion, interest payments on that build would be $400 million per year.

1 gas powered electrical generating plant at a $1.5 to $2 billion dollar cost would produce more electricity.

And it could be turned off or turned down depending on the need, if indeed we need any electricity.

Just for the Record said...

Canada moving toward American-style inequality, U.S. economist suggests

A prominent U.S. political economist says Canada is moving toward American-style inequality, and believes austerity economics and tax cuts for corporations are making the problem worse.

Hugh said...

BC has "enough gas to fuel every house in Canada for the next 8,000 years."

Sure thing.

Line 1105

Anonymous said...

I believe and always have that the Herr Harper/Gordo the drunk/and Cluck the photo opper and their gangster team mates are all psychos and they know exactly what they are doing and that they planned to "miss the market". Herr is a very, very big player in the NWO and he wants to create massive more debt that will take Canada down very fast and easy and will continue giving all our resources away, including our water. There will then be a food shortage, bogus of course and then a massive black-out with people killing each other trying to survive. Herr has signed free trade 'deals' with nearly every country on the planet even the very poorest. He has allowed China to buy and destroy our country and sue us and TFW's to steal our jobs and work for next to nothing. We cannot and will not survive this.


Grant G said...

Well J...It is true that BC Liberals are deliberately destroying coastal economies...The reason, starve the people so they`ll accept any industry...including destructive ones..

LNG is a dead market..

Look what is happening here..Solar powered electricity is now cheaper than fossil fuels..

BC`s LNG industry will never deliver profits to the BC Government.

And the world`s people are getting very angry.

Stay -tuned

Anonymous said...

I'm sure the Kingpin Rothschilds will either destroy solar development or buy them all out and take control.

The $$$$$500 trillion they have hoarded away is more than all governments have collectively and could feed, clothe and shelter every man, woman and child on the planet.

With the billions the Rockefellers have (they are related to the Rothschilds through a female blood line) and the rest of the evil illuminati have they can destroy the world, along with the bankster gangsters who live in the City of London, and do whatever they please.

Money really is power with this psycho mob.

I always stay tuned in, that is to the prp! :)



John's Aghast said...

Hugh@6:59 PM
Thanks for the connexion to Hansard. "Enough gas to fuel every house in Canada for the next 8,000 years". Not if we give it all away! By the way, just how many houses will there be in Canada in 8,000 years. Never mind, I doubt they'll be fueled as we know it.

3,000 trillion cubic feet of gas (but not LNG). That's got so many zeros that they don't even have a name for it! I think it works out to over 20 million cubic miles - enough to fill (way) over ten thousand Olympic size swimming pools.

Pretty scary to read all the accolades they are flinging back and forth at each other Must be some pretty powerful cool-aid they're pushing there. I can understand now why they aren't aware of what's happening in the real LNG world. Wouldn't it be a blast if someone like Grant slipped in and read from HIS programme.

Unknown said...

I been watching this 'progression' for years. The writing was on the wall when OPEC formed in '72 and told the west to "get stuffed". Even George Sorosz tried to warn the House Banking Committee in 1996 that American styled capitalism was failing its constituents at an increasing rate and disaster would begin in about 10 years. John Michael Greer has written extensively on this subject and he is no fool. Those of us who grew up in the 60s knew the future would never be the 'brighter day' the Boomers thought it would. You can't have everyone in the same business....but we humans sure have tried. Too bad were so blind.