Will the new shale plays still be producing natural gas ten to twenty or more years into the future? This topic was discussed at IHS CERA conference last week in Houston.
In addition to the large amount of natural gas being produced from shale there are at least three huge LNG (liquefied natural gas) projects expected to ship their first gas in 2014 and 2016.
Imports of LNG to the continental United States rose 29 percent or 100 Bcf in 2009 to a total of 452 Bcf, according to the U.S. Department of Energy’s Office of Fossil Energy. Five countries supplied U.S. LNG imports during the year: Egypt, Trinidad and Tobago, Nigeria, Norway, and Qatar.
In an article on the Journal of American Enterprise Institute website, Max Schultz, a senior fellow at the Manhattan Institute argues that new methods for producing natural gas (horizontal fracking) and new methods to distribute the gas (LNG) are going to transform the use of energy worldwide.
Although California has an improved natural gas supply situation, the state senate is still considering bills that relate to new LNG facilities that might come to the state.
A proposed pipeline to carry natural gas from the North Slope, through Canada and on to markets in Alaska and the 48 states could cost up to $41 billion. A competing project would carry the gas to a proposed LNG facility at Valdez.
The Federal Energy Regulatory Commission approved the Pacific Connector Gas Pipeline and the Jordan Cove LNG (liquefied natural gas) terminal. The terminal will receive about 1 billion cubic feet of natural gas per day and the pipeline will transport the gas from the Coos Bay terminal to Malin, Oregon. The project will supply natural gas to underserved markets in the Pacific Northwest, northern California and northern Nevada.
GE Oil and Gas (a subsidiary of General Electric) is now operating an LNG (liquefied natural gas) terminal on an artificial island in the Adriatic Sea offshore of Italy.
Hess LNG is considering construction of an LNG (liquefied natural gas) facility on the Delaware River in Logan Township, New Jersey. BP gave up on siting an LNG facility at this location in 2008 when the state of Delaware would not allow them to extend a dock across the state boundary.
A few years ago a number of LNG (liquefied natural gas) terminals were being planned to bring foreign natural gas into US markets. Then natural gas drillers began tapping shale reservoirs such as the Haynesville of Louisiana, the Barnett of Texas and the Marcellus of the Appalachian basin. The US natural gas and energy situations have been changed.
Shell plans to build a FLNG (Floating Liquefied Natural Gas) plant off the West Australia coast which will enable the company to develop its Prelude and Concerto gas discoveries.
Tom Walters, a division president at ExxonMobil, believes that global natural gas demand is starting to grow and, if sustained, will produce opportunities for LNG facilities and pipelines.
“The development of natural gas off Western Australia is entering a new era after Chevron Australia Pty Ltd, the Australian subsidiary of Chevron Corp., announced that it will proceed with the development of the world-class Chevron-operated Gorgon Project. It will be one of the world’s largest natural gas projects with much of the gas exported to Japan and South Korea.” Quoted from the ChevronAustralia website.
“Colorado School of Mines has announced the establishment of the Unconventional Natural Gas Institute (UNGI) for the upstream research and development of natural gas, which is clean-burning, helps minimize greenhouse gas emissions, and is in great supply in the United States.” Quoted from the Colorado School of Mines announcement.
Reuters reports that ExxonMobil is close to a deal to sell over four million tons of liquefied natural gas per year to Asian buyers from its LNG project in Papua New Guinea. ExxonMobil is one of several companies in Indonesia capable of producing significant amounts of new LNG.
Even with natural gas prices at low levels, Chevron is moving forward with its Gorgon liquefied natural gas project. The LNG will be made from gas produced about 200 kilometers off Western Australia.
Low demand for electric power, increased gas production from shales and competition from foreign LNG are putting downward pressure on the wellhead price of natural gas. Gas companies are wondering when the price will rebound but consumers enjoy a break from high prices.
A new bill in Congress proposes to establish the “Clean Energy Deployment Administration” within the Department of Energy. The agency would work to increase the diversity of US energy supplies and reduce carbon dioxide emissions.
“The U.S. Department of Energy (DOE) announces the release of Modern Shale Gas Development in the United States: A Primer. The Primer provides regulators, policy makers, and the public with an objective source of information on the technology advances and challenges that accompany deep shale gas development.” Quoted from fossil.energy.gov.
An article on the MSNBC website reports that a proposed floating LNG (liquefied natural gas) terminal in Long Island Sound – the first such facility in the world – will likely go unbuilt. Adverse coastal area impact is cited as the reason.
In Exxon Mobil’s Financial and Operating Review they report that LNG (liquefied natural gas) is expected to play an increasing role in meeting the world’s energy demand. They map several future/potential sites where Exxon might build liquefaction plants (Nigeria, Papua New Guinea, Australia, Qatar) regasification terminals (US east coast, US Gulf, Europe) – in addition to several existing facilities. (see page 37 in the .pdf document)
According to the Houston Chronicle, Chevron has launched the largest exploration project in company history. They hope to find enormous quantities of natural gas for their Gorgon and Wheatstone LNG projects off the north coast of Australia.
Construction costs for liquefied natural gas (LNG) terminals are falling and some experts believe that this will result in several new facilities being built even with the current tight credit markets.
“This report examines the geologic hazards that could affect the OceanWay Secure Energy Project, a proposal by Woodside Natural Gas to build liquefied natural gas (LNG) facilities offshore of the Palos Verdes Peninsula in southern California. These facilities would include a Deepwater Port (DWP), including submersible buoys, manifolds, and risers, which would be situated in 3,000 feet of water about 23 miles offshore.” Quoted from the USGS release.
Seven new, large LNG plants being completed overseas could bring a glut of natural gas to United States markets. Some believe that these deliveries will not only depress the price of natural gas but they will also hamper the development of domestic natural gas plays such as the Haynesville, Fayetteville and Marcellus.
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