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Energy / Natural Gas

  • Qatar’s LNG Dominance Threatened by Shell’s Reported Withdrawal

    Royal Dutch Shell’s widely reported decision to end its role in a gas project in Qatar threatens the Gulf state’s dominance in the production of liquid natural gas (LNG).In 2010, the British energy giant had signed a contract with the state-owned Chinese company PetroChina and with Qatar Petroleum (QP) to drill two wells as part of a five-year project to explore for gas in the North Field, part of the Pre-Khuff formation off the coast of Qatar.Shell owns a 75 percent share of the initiative and PetroChina holds the remaining 25 percent.In 2013, however, one Shell well in Block D…

  • Falling LNG Prices May Hinder U.S. Export Plans

    The rush to export liquefied natural gas (LNG) from the U.S. might face a major obstacle: falling prices abroad. The debate in the U.S. over whether or not to export LNG has largely subsided as the Obama administration has approved a series of proposed LNG export facilities. Though the pace at which the Department of Energy has signed off on them may not be satisfactory to LNG companies and natural gas producers, the result has been to slowly liberalize the export regime for natural gas.While the permit approvals effectively green light LNG exports, they do not necessarily mean that there…

  • Natural Gas: The Big Sell Off

    This week, August Natural Gas futures posted its biggest one day drop since mid-February. The sell-off basically erased all of 2014 gains. Bearish speculators sold heavily on the notion that the uneven U.S. heat pattern this summer will weigh on demand for the power-plant fuel.Although the weather has a short-term fundamental influence on the market, the recent price action clearly suggests that natural gas is in the hands of some strong short-sellers. This is because the market is taking a hit from both the demand and supply side of the equation.The short-term demand outlook looks bearish for the rest of…

  • Can the Arctic Reshape Global LNG Shipping?

    Rising global temperatures are melting Arctic sea ice, so much so that some companies are now viewing the Arctic Ocean as a major shipping route for energy supplies. The Wall Street Journal published an article on July 9 that detailed a joint venture between two major Asian companies seeking to ship liquefied natural gas (LNG) through the Arctic Ocean. Mitsui OSK of Japan and China Shipping Development Company announced a combined investment of $932 million on three LNG carriers that could handle the rough icy waters of the far north. China and Japan promise to be huge buyers of LNG…

  • Cheap Natural Gas Triggers Major Industrial Expansion Plans In the U.S.

    Natural gas consumption in the United States could rise by 19 to 31 percent over the next five years due to a wave of industrial projects slated for construction. A new study from the University of Texas’ Center for Energy Economics found 144 natural gas-intensive industrial projects on the drawing board that could be built by the end of the decade. They include processing facilities for the production of ethylene, methanol, ammonia, urea, nitrogen fertilizer, and gas-to-liquids, among others. Taken together, the projects could total $121 billion in investment and add 26 billion cubic feet per day of natural gas…

  • Nigeria Offers To Step In If Russian Gas To EU Is Interrupted

    Nigeria says it is prepared to help Europe meet its long-term needs for gas at a time when there is concern about the western flow of Russian gas through Ukraine.The office of Diezani Alison-Madueke, Nigeria’s oil minister, issued a statement on June 25 saying she discussed Nigeria’s offer with EU Energy Commissioner Guenther Oettinger in Brussels during the EU-OPEC Energy Dialogue Ministerial Meeting.The statement quoted Alison-Madueke as saying such a deal between her country and the EU would be mutually beneficial. Nigeria is interested not only in helping Europe meet its long-term supply needs, she said, but also “to expand…

  • How Japan’s Plan To Restart Reactors Is Hurting U.S. LNG

    The window of opportunity for new liquefied natural gas (LNG) suppliers in the U.S. is beginning to close, and it is not because of slow permitting from the government. The enormous difference in pricing between natural gas in North America and Asia is starting to shrink as new supplies come online and Japan considers restarting some of its nuclear reactors.To be sure, there is still a yawning gap between what natural gas sells for in the U.S. and what Japan or South Korea pay for delivery. Henry Hub prices – a key benchmark price for natural gas in the U.S.…

  • The Most Volatile Game in Town

    From my experience, June is a great month to take a look at the natural gas market. One reason is the speculative opportunities that can develop because of the weather. It’s hurricane season so there is always the possibility of a natural gas plant shutdown in the Gulf of Mexico. Hot weather can also lead to greater demand for natural gas because of all those air conditioners running on the East Coast and in the Midwest. Sometimes the weather causes a price spike, other times a trend develops because of heat domes that periodically form. If you’re a speculator then…

  • Political Setbacks Injects Uncertainty In Argentine Shale

    Argentina has been hailed as a promising frontier for the development of shale gas outside of the United States, and billions of dollars in investment from international oil companies have begun to pour in. But clouds of uncertainty have begun to form over the country’s vast, centrally located shale gas basin, the Vaca Muerta.Last week, an Argentine appellate court ordered a criminal investigation into a deal between Chevron and YPF, the country’s government-owned oil company. At issue is whether President Cristina Fernandez de Kirchner abused her power by issuing tax incentives by decree on the eve of a major deal…

  • Australia’s Shale Gas Sector Set to Take Off

    Australia is in the midst of a massive construction wave for new liquefied natural gas (LNG) capacity, seeking to profit off of sky-high demand in Asia for the fuel. Already one of the world’s largest exporters of LNG, Australia plans on moving to the top spot over the next 3-4 years, potentially overtaking Qatar. It currently has the capacity to export 23 million tonnes per annum (mtpa), but it plans to almost quadruple that total by 2017. The 62 mtpa under construction in the land down under accounts for almost two-thirds of the total LNG capacity under construction around the…