Thursday, March 17, 2016

Another Proposed Canadian LNG Terminal Scrapped, No Gas Buyers, No Market, World LNG Glut

Grant G

Unfortunately there is a world glut of LNG, these energy companies and investors only have themselves to blame, these greedy entities swooped in like vultures on Asia(Japan) and figured they could make $billions providing natural gas..

They created a massive glut...With new gas discoveries in nearly every country, with renewable energy leapfrogging fossil fuel investment, with a warming planet along with an economic stall in China...These companies and shareholders are not prepared to lose $billions...

Supply and demand, a massive supply glut AND LITTLE DEMAND...It really is that simple.  


Spanish energy giant Repsol has halted plans to add liquefied natural gas export facilities at its existing Canaport LNG import terminal in Saint John, Canada.

“The Saint John LNG liquefaction project has been placed on hold,” Brent Anderson, a spokesman for Repsol Canada told LNG World News in an emailed statement.

Repsol joins a growing number of companies that are delaying or cancelling their LNG developments due to market volatility and low oil and gas prices.

“Current market conditions and project challenges make it unattractive for third-parties and off-takers to join the project,” Anderson said.

Saint John LNG Development, a unit of Repsol, received in September last year a licence from Canada’s NEB to export up to 8.86 bcm of gas per year for a period of 25 years from the proposed 5 mtpa LNG facility.


Oh indeed, need more...It's not just Canada, proposed LNG projects are being deferred and cancelled everywhere...including this one in Indonesia..


Japan’s Inpex will delay the development of its multi-billion Abadi LNG project in Indonesia by at least two years, the Indonesian energy regulator SKK Migas said on Wednesday.

According to Amien Sunaryadi, Chairman of  SKK Migas, Inpex notified the regulator that it plans to downsize its workforce in Indonesia of around 400 by at least 40 percent as an agreement on the revised Masela plan of development (POD) had not yet been reached.
Shell engineers working on the giant LNG project had also been told to look for other work within the company, he said.
Inpex pushed the final investment decision on the project until 2020, meaning that the LNG project will not be operational until at least 2026, around two years before the companies’ contract is due to expire.
The Japanese company submitted to SKK Migas of Indonesia in November last year a revised plan of development of the Abadi LNG project, as a result of a greater volume of natural gas reserves being confirmed.
The revised plan envisions the adoption of a floating LNG plant with an annual processing capacity of 7.5 million tons, bigger then Shell’s Prelude FLNG.
However, the Indonesian government has still not approved the plan as it is considering whether the LNG project should go ahead as an offshore facility or be moved onshore.
It was recently reported that $6 billion could be saved by Inpex and Shell if Indonesia opts to build the Masela Abadi LNG facility on land instead of offshore.
Maritime affairs coordinating ministry official Haposan Napitupulu said that a land-based LNG facility would cost $16 billion while an offshore facility would be in the region of $22 billion.
Contrary to the Maritime affairs ministry, SKK Migas believes a floating LNG facility would cost around $14.8 billion, $4.5 billion less than an onshore facility.
Inpex currently has a 65 percent operating interest in the Masela block, while Shell holds the remaining 35 percent.


Here is another newsflash....The world LNG glut will not ease if a bunch of these projects all figure to come online in 2025...

The LNG game is over...The energy source is just as dirty as coal, maybe even dirtier once one counts all the upstream, downstream emissions, the transportation emissions, and the end buyers burning the actual gas, then factor in all the methane leaks at the wellheads.....

Christy Clark and the BC Liberals, along with a stale cheerleading media claim that LNG will displace coal use thus the massive GHG footprint of LNG production should be ignored...Hogwash!

The media must start reporting actual facts and data, the practice of merely repeating political and industry hyperbole and spin has gotten way out of hand, Postmedia is no longer a news source, comic books provide more honesty than Postmedia(are you listening Vancouve Sun and Province)

The facts must be reported...

One more thing, a commenter on my Petronas is out article(linked directly above)...This anonymous commenter claimed that Shell Canada will make a final investment decision in late 2016...Why is that some people believe a final investment decision is always positive?...More often than not, the decision is no..!

Isn't that the reason why the word "decision" is placed in FID..?

The Straight Goods

Cheers Eyes Wide Open


John's aghast said...

I'm quite convinced there is no market for LNG, but I'm a little confused about all the numbers being bandied about. I have a problem comprehending any number with more zeroes than my paycheque. So riddle me this: If Saint John LNG received a license to export 8.86 bcm per annum (or 312.9 billion cubic ftpa = 7.82 trillion cubic feet over 25 years)from the 5 mtpa facility, how many Olympic Size swimming pools is that?
Do we in fact have 7.82 trillion cubic feet to export?
And if we do, why is Canada at this time IMPORTING natural gas? Shouldn't we supplying the domestic market before thinking of supplying the international non-market?
I guess what I'm asking is: how many tons of LNG are there in a cubic meter? And why don't we use a common measurement, preferably one with a lot fewer zeroes?

Grant G said...

John Aghast...The more important question is....If nobody buys LNG from exporter X at a profitable price, how does exporter X pay taxes, or royalties..How does company X make money???

It leaves but one thing, build an $11.4 billion dollar LNG liquefaction plant and bill the Canadian taxpayer $50 billion for the infrastructure...That's what went down in Australia..


Anonymous said...

more outsourcing

John's aghast said...

Grant, I think the important thing to determine before you build an $11.4 billion plant that you don't need is to find out what plants cost, so you don't end up like Australia!
Of course, if you do your homework you'll find as you have, that you don't really need a plant at all and you'll have saved anywhere from $11 billion to $50 billion.
And another $15 billion for Site C and pretty soon you're talking real money!

But I still don't know how many tons of LNG there are in a cubic meter. Is that a cubic meter of LNG or NG?

Anonymous said...

Grant, what do you think about Squamish's Woodfibre LNG being given the environment green light today by Minister McKenna?

Grant G said...

We will have to wait and see...Sukanto Tanoto is not one to spend money to lose money...Small operations like Woodfibre LNG will find it very difficult to make a profit....

Also, Sukanto Tanoto wants a bank, a finance company and or investors to foot the bill...The bankers said no to Jordon Cove LNG and they said no to Altagas..

Wait and see