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Geology News
LNG Current Events

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.

Chevron is to review a $7 billion plan to develop the natural gas resources off the coast of Borneo, Indonesia. If approved, it would become the country’s first deep-sea drilling project.

A Chinese and Kazakh joint venture will build an LNG plant in the Xinjiang region of China, far from a typical coastal location. They plan to transport the liquefied natural gas to local users by truck.

Chevron picked a site near the town of Onslow, on the northwest coast of Australia, to build its Wheatstone liquefied natural gas processing facility. This location is about 200 kilometers south of the offshore Wheatstone natural gas field, which currently has no sales contracts.

LNG, liquefied natural gas, is natural gas that has been condensed to the liquid state for ease of storage and transport. It is used to transport natural gas to locations where a pipeline is impractical – such as from one continent to another. An article at the Oil and Gas Journal explores how LNG might fare in the future given our current reduced price and reduced demand environment.

Major oil companies such as Exxon Mobil, Royal Dutch Shell and Chevron are hoping to build a new category of production vessel for liquefied natural gas. These ships would float above offshore gas wells, produce the gas, cool it to a liquid state and offload to LNG transport vessels that deliver gas to distant markets.

Royal Dutch Shell now has a signed agreement to sell 40 million tons of LNG (liquified natural gas) per year to PetroChina.

With fossil fuel prices falling and world economies in trouble, Exxon Mobil says that their $11 billion liquefied natural gas project in Papua New Guinea is still on track. An article on Exxon Mobil’s Papua New Guinea LNG project published in April, 2008 says that global demand for LNG is expected to triple to 400 million tons per year by 2020.

Safe Harbor Energy is the name of a proposed liquid natural gas processing terminal that would be located 19 miles east of the New Jersey shoreline and 13 miles south of the Long Beach boardwalk.

A Canadian company announced plans to develop an LNG (liquefied natural gas) facility at Kitimat, British Columbia. The intent is to liquefy Canadian gas and ship it to Asia where prices are much higher. The increased production of natural gas from shale in North America provides an opportunity for this type of export.

Rising oil prices, rising demand for natural gas and an interest in cleaner-burning fuels is stimulating interest in liquefied natural gas (LNG). Security, environmental concerns and the remote location of the resource have held back the development of LNG in the past.