• 4 minutes Why Trump Is Right to Re-Open the Economy
  • 7 minutes Did Trump start the oil price war?
  • 11 minutes Covid-19 logarithmic growth
  • 15 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 18 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 46 mins TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 7 hours Dr. Fauci is over rated.
  • 6 mins America’s Corona Tsar, Andrew Fauci, Concedes Covid-19 May Be Just a Bad Flu With a Fatality Rate of 0.1%
  • 49 mins Where's the storage?
  • 10 hours China extracts record amount of natural gas from Gas Hydrates in South China Sea
  • 4 mins Saudi Arabia Can't Endure $30 Oil For Long
  • 19 mins Western Canadian Select selling for $6.48 bbl. Enbridge charges between $7 to $9 bbl to ship to the GOM refineries.
  • 2 hours Oxford Epidemiologist: Here’s Why That Covid-19 Doomsday Model Is Likely Way Off
  • 2 hours Hillary Clinton tweeted a sick Covid joke just to attack Trump
  • 1 day Wastewater Infrastructure Needs
  • 1 day Dept of Energy ditches plans to buy Crude Oil for SPR
Alt Text

Shell Sees LNG Market Returning To Balance By 2021

The supply growth of liquefied…

Alt Text

Aramco To Invest $110 Billion In Huge Gas Field

Aramco plans to invest $110…

Alt Text

China’s Gas Demand Growth Slows Significantly

China has seen its natural…

Robert M Cutler

Robert M Cutler

More Info

Premium Content

Canadian Company Strikes Deal for LNG Exports to Europe

Planned exports of liquefied natural gas (LNG) from North America are already beginning to affect world energy markets, as the German company E.ON confirmed this week that it had agreed with Canada's Pieridae Energy to purchase 5 million tons annually for 20 years beginning in 2020. This is a done deal, a binding contract and not just a memorandum of understanding. The quantity is equivalent to about 6.6 billion cubic meters after per year re-gasification.

The deal represents an important diversification of supply for the Germany company, which at present relies mainly upon imports from Russia and Norway. An LNG plant is to be built on the Atlantic coast of Canada for new inexpensive shale gas. Construction of a plant with a storage capacity of nearly 700,000 cubic meters will start in less than two years, costing $5 billion.

Related Articles: Free Market LNG: the Next “Endless Bid?”

Location is an important consideration. Goldboro, Nova Scotia, the proposed site for the plant, is a full day's travel closer to Rotterdam than is New York City. The Goldboro plant will be built with an export capacity of 10 million tons of LNG per year, and the search for other buyers is under way. Suppliers for the E.ON contract may include companies in the eastern U.S. as well as in Canada, including eastern Canada

Backers of various proposed plants on the Pacific coast of Canada have so far not succeeded in identifying end-users. Further, existing pipelines should be able to satisfy transmission requirements to the Goldboro liquefaction plant.  E.ON has import facilities in the United Kingdom, Netherlands, and Spain, and will be constructing another offshore from Italy.

Related Articles: Will Washington Allow US Companies to Export Natural Gas?

E.ON has a long history with Gazprom with long-term contracts and fixed prices, and in the past year has tried to negotiate revised contracts with Gazprom. One of its contracts with Gazprom is due to expire in 2020. The other two run until the mid-2030s. However, the German company has denied rumors that it plans to cancel its Gazprom contracts as preposterous.

E.ON becomes the third major European company, after Centrica and GDF Suez, to contract for North American LNG. The Germany company has been obliged to sell imported Russian gas at a steep loss in order to stay competitive. E.ON has been forced take major losses to its balance sheet as as result, and it will reportedly cut 11,000 jobs, because Gazprom refuses to negotiate spot market pricing.  The contracts with Gazprom are indexed according to the price of oil, whereas the new contract with Pieridae will be based on West European natural gas market prices.

By. Robert M. Cutler


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News