Content tagged “Natural gas”

Feds OK groundbreaking on Sempra Energy LNG project in La.

The Energy Department today handed critical government licenses to the Cameron LNG project in southwestern Louisiana, giving it final authorization to liquefy natural gas and ship it around the globe. reports that with the government's move, Sempra Energy can launch construction on its $10 billion Cameron LNG project, planned as an addition to an existing import terminal in Hackberry. Today's action came in the form of the Department of Energy finalizing Cameron LNG's existing conditional license to export up to 1.7 billion cubic feet of natural gas per day to Taiwan, Japan and other countries that do not have free-trade agreements with the United States. Cameron LNG secured a separate required approval from the Federal Energy Regulatory Commission in June. Only one other would-be LNG exporter in the continental United States has been fully authorized to ship to non-FTA countries: Cheniere Energy's Sabine Pass project, which is nearing completion in Cameron Parish after...

Keeping the faith with LSU alums

In the natural gas pipeline business, things occasionally go wrong. A bad day is when a catastrophic failure of the asset you're relying on to make money results in an explosion and fire.

Making a billion-dollar wager

There is an argument in philosophy known as Pascal's Wager. In essence, the argument is that if you find yourself forced to make a choice between two opposite and unknowable propositions, choose the one with the most upside potential.

Final investment decision announced on Cameron LNG project

Japanese partners in the Cameron natural gas liquefaction and export project in Hackberry announced Wednesday they have formally decided to go ahead with the $10 billion project that will send 8 million tons of natural gas to Japan annually from southwest Louisiana starting in 2018. The project entity has signed financing agreements amounting to $7.4 billion with the Japan Bank for International Cooperation and commercial banks to develop and operate liquefaction facilities with an export capability of 12 million tons per year at the site of the terminal. CB&I will be a joint venture contractor working on construction of the plant. Cameron, Sabine Pass and more than two dozen other projects are in a race to sell relatively cheap, abundant U.S. shale gas to foreign countries where it can fetch higher prices. But just because Asian demand for natural gas is rising doesn't mean every project to serve the demand will go forward, The Wall Street Journal reports. Japan's demand for...

In Conversation: Chris John

The oil and gas industry mostly got what it wanted during the last legislative session. But it continues to be criticized for damaging the coast, accepting tax breaks, fracking and other issues. Against that backdrop, the Louisiana Mid-Continent Oil and Gas Association in July released its latest report about the economic value of the energy sector, which says the industry supported nearly 300,000 jobs and $73.8 billion in sales in 2011 and contributed $4.2 billion to state and local treasuries in fiscal year 2013. The Grow Louisiana Coalition, established to promote the industry statewide, now can take those numbers on the road. Business Report spoke with LMOGA President Chris John the day the study was released.

Gas utilities try to stay one step ahead of regulators on pipeline leaks

The American Gas Association, a national trade association representing local gas utilities that sell natural gas directly to consumers, is trying to stay one step ahead of regulators by exhorting its members to replace leaky pipes and take other steps to reduce releases of methane into the atmosphere, according to Gregg Kantor, the group's chairman and the CEO of Portland-based Northwest Natural Gas Co., says that aging pipelines and methane leaks are "a real issue that affects everyone, and we are hearing about it from our customers. This is a recognition that we have to deal with it." Methane—the primary component of natural gas—is 25 times more potent a greenhouse gas than carbon dioxide. Kantor says the AGA's concern is both over replacing older pipelines that leak small quantities of methane and the routine maintenance practice of "blowing down" sections of pipeline by emptying all of the pipeline segment's methane into the air. Louisiana has more than...

Executive Editor: Effect of new EPA rules in BR may be muted

If you read the reports on how the Environmental Protection Agency's new rule limiting carbon emissions by electric utilities will affect the national economy, Business Report Executive Editor David Dodson says, you may have gotten the impression that it won't amount to much and could even have health benefits. "Either that or the rule will usher in the end of life as we know it," Dodson writes in his latest column. "I'm going to go way out on a limb here and suggest that the truth will probably fall somewhere in the middle." Part of the reason the impact of the new rule may be muted in Baton Rouge is the foresight of management at Entergy back in the day, says Dodson. "Entergy is one of the nation's largest generators of nuclear power, and because nuclear power is essentially emission-free, the nuclear component of Entergy's power portfolio will not be impacted," Dodson writes. "Shareholders and ratepayers will benefit as a result, even the ones who complained about Entergy's...

Potential for Gulf shut-in production due to hurricanes higher than last year

The National Oceanic and Atmospheric Administration is predicting a relatively mild hurricane season, but even a quiet season like last year can lead to disruptions to offshore crude oil and natural gas production in the Gulf of Mexico. The U.S. Energy Information Administration recently analyzed the potential for Gulf shut-in production during the upcoming months, given NOAA's outlook for hurricane activity. EIA's mean estimate of offshore production outages during the current hurricane season totals 12 million barrels of crude oil and 30 billion cubic feet (bcf) of natural gas, more than three and four times higher than last year, respectively. "These estimates are highly uncertain as it is difficult to predict the location and intensity of individual storms," said a report on the analysis released by EIA this morning. "If the actual storm activity in the Atlantic Basin falls within NOAA's predicted range, EIA estimates (within a 70% confidence interval) that Gulf of Mexico outages...

Water bill to benefit La. ports

Ports that move large amounts of energy resources—including five in Louisiana—would share a new pot of federal money to maintain and improve shipping channels under legislation passed by the Senate last week. Twelve ports in five states—Alabama, Louisiana, Maryland, Texas and Virginia—would get special treatment under the Water Resources Development Act because they move a high volume of cargo and at least 25% of that activity is in energy commodities such as petroleum, natural gas, coal, wind and solar energy components, and biofuels. The Senate passed the $12.3 billion measure 91-7, and the House has approved the legislation 412-4. It now goes to President Barack Obama for signing. The bill is an authorization measure, not a spending bill. There is no guarantee the projects authorized will be funded, but projects that receive priority in such bills stand a better chance of receiving money. Sen. David Vitter, top Republican on the Senate Environment and...

Playing with fire

I guess i shouldn't be be so surprised that a state whose mantra is "Get Government Off Our Backs" doesn't really mean that for a minute.

Feds: No significant environmental damage will be caused by Cameron Parish LNG plant

A proposed liquefied natural gas export terminal in Cameron Parish would not significantly damage the environment, the Federal Energy Regulatory Commission staff says. The conclusion also applies to 21 miles of pipeline and associated facilities proposed for Cameron, Calcasieu and Beauregard parishes. The project has adequate plans to compensate for filling in 213 acres of wetlands, according to an environmental impact study released Wednesday. It says those include using dredged material to turn an area of open water into brackish marsh and buying credits from approved mitigation banks. The report by FERC environmental staffers concluded that construction and operation won't affect any of the eight threatened or endangered species in the area, though it says surveys for the red-cockaded woodpecker should be updated within a year before construction. Cameron LNG LLC and Cameron Interstate Pipeline LLC have included adequate safety features in their plans, it says. And it says the...

Getting water from the moon

When actress Linda Hunt accepted the Academy Award for her role in The Year of Living Dangerously in 1983, she said she was reminded of an Indonesian saying she learned while working on the film.

La.'s appetite for natural gas may double in six years, report says

Louisiana has long been a net importer of natural gas, but sea changes in where that gas is produced and how it arrives at Louisiana homes and plants will bring changes in natural gas production, transportation and marketing. That is among the conclusions in a recent white paper published by ICF International, a leading energy consultant. The study—"How Louisiana Satisfies Growing Gas Market Demand: Implications for Portfolio and Investment Strategies in the Delta State"—explains that Louisiana, for decades the crossroads of the natural gas industry in North America, is in a ticklish situation. State offshore production is dwindling, and while an expected resurgence in production from the Haynesville Shale is a positive development, most of that gas actually is produced in east Texas. The infrastructure needed to get that gas to Louisiana petrochemical and other industrial users in the southern parishes is aging and inadequate, ICF says. Costly new pipelines may be needed...

Getting ahead of the boom

A playlist of the challenges and opportunities the coming industrial construction boom poses was laid out at a recent symposium in which veterans of previous upturns in the industrial sector told war stories and cautionary tales to a crowd of several hundred industrial contractors, suppliers, educators, lawyers and financiers.

Surge in fuel exports boosting U.S. trade balance

Growing production of U.S. oil and gas is helping to improve the nation's trade balance, according to a federal report released on Monday. As reports, dramatic growth in the export of refined petroleum products, such as jet fuel and gasoline, has led the way. The value of net refined exports increased 55% in 2013 over the prior year, reaching $33 billion, according to the U.S. Energy Information Administration. U.S. refiners are finding cheaper domestic alternatives to overseas oil, causing a rally in the ratio of refined fuel exports to imports. Overall energy export values increased 8% in 2013 over the prior year. Total energy imports to the U.S. fell by 11% for the same time period. The shifts have helped push down the U.S. trade deficit to its lowest level in four years, because of the importance of energy imports and exports. Energy accounts for 15% of gross goods imports and 7% of gross goods exports, the EIA says. The increase in production also has dampened...

'Business Report': Big industry battles over whether LNG exports might hamper domestic economic growth

Chris John says when he was in Congress from 1997 to 2005, America's energy picture was very different. "We were building natural gas import facilities because we didn't have enough natural gas," the head of the Louisiana Mid-Continent Oil and Gas Association tells Business Report for a new feature in the current issue by staff writer David Jacobs. "The dynamics of the natural gas market has really taken a 180 [degree turn] over a short period of time." Today, thanks to the shale gas revolution, we have more natural gas than we know what to do with, which has deflated the price and fueled a resurgence for the Capital Region's gas-dependent chemical sector. But while cheap natural gas is great for the plants and for anyone who pays an electric bill, it's not so good for the oil and gas companies that try to sell the stuff. So the energy industry is keen to liquefy natural gas and export it to nations where it might fetch more than three times the domestic price, and the U.S.

Asian tigers stalk U.S. gas as La. shale profits taper

DeSoto Parish has a problem. And as Bloomberg reports, the solution may lie 10,000 miles away in Jakarta, Indonesia. DeSoto and other communities in the Haynesville shale formation have become victims of the energy industry's success in extracting natural gas from deeply buried rock, Bloomberg reports. Even as U.S. gas production surges to a record, outpacing domestic demand, Haynesville output has slumped 40% since 2011 amid falling prices, as companies shift rigs to reservoirs richer in lucrative oil and gas liquids. Tax revenue has tumbled by the same percentage over the past two years from a record $50 million in the parish. Meanwhile, Indonesia's energy use may more than double from 2010 through 2035, according to the Asian Development Bank. As early as next year, cargoes of liquefied natural gas shipped from Gulf Coast terminals to fast-growing Asian countries will propel the region into the ranks of global gas exporters such as Qatar and Australia for the first time. "LNG...

Profits from U.S. natural gas exports could disappoint, study says

New natural gas export terminals in the U.S. might not be as profitable as once imagined—at least for a few years—due to overbuilding, a new study from Rice University warns. From about 2016 to 2025, the cost of liquefying natural gas in the United States and shipping it to Asia likely will exceed the difference in the commodity's price in the two regions, according to the study, released today. Just last week, the sixth LNG export facility in the U.S.—and the second in Louisiana—received approval from the U.S. Department of Energy. Today, reports, natural gas costs more than $18 per thousand cubic feet in Asia, while the U.S. price generally has held below $4 per thousand cubic feet during the past couple of years. That has helped fuel a rush to build liquefied natural gas export facilities along the Gulf Coast and in Canada, as producers view...

To export, or not to export

Chris John says when he was in Congress from 1997 to 2005, America's energy picture was very different.

Feds approve second La. LNG export terminal, sixth overall

Sempra Energy subsidiary Cameron LNG announced today that its plans to build a liquefied natural gas export terminal near Hackberry in Cameron Parish have been approved by the U.S. Department of Energy. The approval marks the sixth LNG export facility in the U.S.—and the second in La.—authorized to ship domestic natural gas to non-free-trade-agreement countries such as India, China and Japan—all huge markets for LNG. "Exporting natural gas will lead to the creation of thousands of new jobs and economic growth here in the U.S. and enable our partners to deliver domestically produced natural gas to our allies abroad and to the world marketplace," says Debra L. Reed, chairman and CEO of Sempra Energy, in a press release. It is a sentiment echoed by Sen. Mary Landrieu—the likely successor to Oregon Sen. Ron Wyden as chair of the powerful Senate Energy and...

Words aren't facts

President Barack Obama gave a pip of a speech to the nation Jan. 28. If rhetoric and high oratory were the measure of such things, then the state of the Union would indeed be strong.

Lake Charles export facility to be most efficient in world, official says

The president of Magnolia LNG—whose parent company is Australian-based Liquefied Natural Gas Limited—updated Lake Charles Port Board members on the company's estimated $3.5 billion liquefied natural gas project on Wednesday. He also presented a check to extend the company's lease with the port for a year. As KPLC-TV reports, Magnolia President Maurice Brand told the board the export facility will be the most efficient in the world. "Most energy plants will use 9% to 10% of the gas that's utilized actually in the plant itself. We're typically going to be somewhere in the 6% to 8% range. So that has a big impact; it's about a 30% improvement in efficiency, therefore there's 30% less greenhouse gas emission," Brand told the board. Meanwhile, Magnolia—which announced the project last year and expects to break ground on it next year—also says it has reached an agreement with Kinder Morgan...

Leases for another 55,000 acres in Tuscaloosa shale under contract

Frisco, Texas-based Comstock Resources Inc. announced today it has signed contracts to purchase the leases of approximately 55,000 acres of land in the Tuscaloosa Marine Shale for $54.5 million, including tracts in East Feliciana and St. Helena parishes. However, a company spokesman tells Daily Report that none of the lease purchase agreements announced today are among the 95,000 acres of land in the Tuscaloosa shale that Amelia Resources announced on Wednesday it has sold. Other than that, Comstock Director of Planning and Investor Relations Gary Guyton says he couldn't provide many further details on the purchase today or the firm's plans for the land. The seller, or sellers, of the leases was also not made public in today's announcement. Along with the land in Louisiana,...