Natural gas so cold it becomes liquid under pressure, proposed for export in Delaware River & Delaware Bay

From the Kallanish Energy News, April 29, 2020

An environmental group has filed a lawsuit in federal court against a proposed pier in the Delaware River in New Jersey for liquefied natural gas (LNG) tankers. The suit was filed last week in U.S. District Court in New Jersey by the Delaware Riverkeeper Network.

The suit charges the U.S. Army Corps of Engineers should not have approved the $96 million project that includes a 1,600-foot pier and a storage facility in New Jersey’s Gloucester County. The permit had been issued last February 28.

The project at Gibbstown, New Jersey, is being advanced by Delaware River Partners, a subsidiary of New Fortress Energy LLC. Those tankers would load LNG that had been moved about 200 miles by truck and rail from the Marcellus Shale in northeast Pennsylvania under the plan by New Fortress Energy.

The company has gotten a special federal rail permit to be allowed to move LNG by rail in specially designed rail cars.

Construction started last fall at a New Fortress liquefaction plant in Wyalusing, Pennsylvania. It is expected to be operational in late 2020 or early 2021.

New Fortress has plans for a second facility in Pennsylvania. It would be operational in first quarter 2021. Each plant would produce 3.6 million gallons of LNG per day or 2.15 million tons of LNG per year.

In related news, the Delaware River Basin Commission has set a May 11 hearing for an adjudicatory hearing on the project. Hearing officer John Kelly will hear evidence and then decide whether to recommend that the commission uphold or reject its approval of the project last June.

The commission, a governmental body, can accept or reject his recommendation. Critics have argued that the commission did not allow enough time for public comment in approving the project that would allow two tankers to dock at Gibbstown on the Delaware River.

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See also: Critics of LNG Plan Say Army Corps Failed to Assess Impacts Before Issuing Permit | NJ Spotlight, John Hurtle, April 27, 2020

The environmental group Delaware Riverkeeper Network (DRN) filed a complaint in federal court in New Jersey last week, claiming that the Corps, one of several regulators that must sign off on the project, had violated the National Environmental Policy Act (NEPA) by not doing an environmental impact study (EIS) on the project on the Delaware River at Gibbstown in Gloucester County, New Jersey.

Fracking, Exports & Imports: Details Important

International Markets Prove Hard To Conquer For U.S. LNG

From an Article by Irina Slav, OilPrice.com, May 19, 2016

The latest drilling productivity report from the Energy Information Administration (EIA) has shown that the Marcellus shale continues to be the largest source of natural gas in the U.S. by a wide margin, with daily amounts that put it on par with leading international producers such as Iran and Qatar. This is despite a serious dip in production that began last year as the market became saturated and prices plunged.

The domestic gas market is still saturated, according to the EIA, which has projected that gas output in the Marcellus and elsewhere will continue to decline. International markets are the natural alternative for shale gas producers, but there are a few issues with this alternative, and these issues mean that the huge output in the Marcellus is not such good news.

First, there is the competition. The European market is an attractive destination for U.S. gas as it is looking to diversify away from Russia’s Gazprom. Asia, with its high levels of demand, is also an attractive prospect. However, there are suppliers with an established presence in both these markets, which are likely to cut prices in a bid to preserve their market share. U.S. exporters, on the other hand, have less space for maneuvering.

The only way U.S. companies can transport their gas is after liquefying it and shipping it to Europe or Asia. Cheniere Energy is already doing this. There are several liquefaction terminals in construction across the country, driven by hopes for gas demand growth across the world. However, these hopes have not yet proved realistic. To complicate things further, pipeline projects at home are being delayed, adding to the pressure on gas producers.

There is a glut on the international gas market comparable to that in oil, although various sources claim the oil glut is on the wane with the recent production outages in Canada and Nigeria.

Last month, Barclays’ Commodity Research unit issued a note, in which its analyst team said: “Given limited amounts of incremental demand in the premium markets of Asia, the Middle East and South America, increasing volumes of LNG will likely be imported into Europe, especially northwest Europe, given the region’s liquidity relative to other global gas markets (the UK, Belgium, the Netherlands).” The analysts went on to add: “However, the LNG glut will converge on Europe, meaning Europe’s prices will likely decline.”

If European gas prices drop any further, U.S. gas will be unable to compete with current suppliers, which use an extensive pipeline system to feed gas into Europe at lower than LNG shipping rates. Maybe the best solution to the glut is the most obvious one: cut production, let the market rebalance, and try to survive in the meantime.

See also: www.FrackCheckWV.net

Cove Point on Chesapeake Bay

Natural Gas Awakening From U.S. Shale Slumber as LNG Shipments come On-Line

From an Article by Naureen Malik and Christine Buurma, Bloomberg News Service, July 30, 2015

After years of languishing in a shale-induced coma, the U.S. natural gas market is waking up.

Seasonal price swings will intensify as the country begins shipping liquefied natural gas cargoes to Asia and Europe later this year, said Bank of America Corp., RBC Capital Markets LLC and Wood Mackenzie Ltd. While that’s good news for traders yearning for volatility, it could be bad news for consumers.

Exports will help prices rebound from the slump caused by the U.S. pumping record amounts from shale formations. Growing domestic winter demand is already causing spikes and trading volumes in futures markets have rebounded to the highest level in three years. Average retail gas prices also will rise with LNG exports, according to Bloomberg New Energy Finance.

“Connecting U.S. natural gas prices into the global market could result in wider spreads at home,” said Francisco Blanch, the head of commodities research at Bank of America Corp. in New York. “Global LNG spot prices are notoriously seasonal.”

Cheniere Energy Inc. will start operating a liquefied natural gas terminal this year in Louisiana, the first new export site in 46 years. The U.S. will be the third-largest supplier by 2020, the International Energy Agency says.

In a sign of what may be coming, futures for January 2017 are already trading at a 35.7-cent premium to October 2016 contracts, the biggest premium for this time of the year since 2012. That seasonal spread may widen to as much as a dollar as LNG exports expand, Blanch said.

Price Volatility

Natural gas for September delivery fell 0.5 percent to $2.849 per million British thermal units in electronic trading on the New York Mercantile Exchange at 9:29 a.m. London time.

Demand growth, including LNG exports, will lead to greater seasonal price volatility, said Breanne Dougherty, a natural gas analyst at Societe General SA in New York.

Prices have fallen 79 percent in the past seven years as new wells opened in the Marcellus shale deposit across Pennsylvania, Ohio and West Virginia.

Cheniere won approval to export as much as 3.5 billion cubic feet of gas a day from its Sabine terminal, with the first of six liquefaction plants starting by the end of this year and the rest staggered through 2018.

Sempra Energy, Freeport LNG Development LP, Energy Transfer and Dominion Resources Inc. will bring 5.67 billion cubic feet of capacity online from late 2017 through 2019.

LNG shipments might remove enough supply from the market that volatility will rise during particularly cold winters, according to Michael Mitton, the director of the commodity investor team at BNP Paribas SA in New York.

Capture Profits

A rebound in volatility, which makes it easier for traders to capture profits from price swings, has already boosted trading. Futures volume in June rose to 7.71 million contracts, the most for the month since 2012.

New York residents experienced how volatility and price spikes in the cold months can directly affect their costs. More than half of U.S. homes rely on gas for heating.

Consolidated Edison Inc., which owns New York City’s utility, said home gas bills jumped 17 percent in February 2014 from a year earlier because of higher wholesale gas prices during a storm that dumped snow across the East Coast. Spot prices rose to a record on Jan. 21, 2014, as pipeline bottlenecks limited deliveries and demand reached a record.

LNG export terminals in the U.S. will be taking as much as 8.5 billion cubic feet a day out of the domestic gas market by the end of 2019, said Charles Blanchard, a Bloomberg New Energy Finance analyst in New York. Producers will have to drill wells in costlier areas, raising prices by about 35 cents and increasing retail prices by 5 to 10 percent, he said.

“Always and ever, more demand leads to higher prices,” Blanchard said. “The question of whether LNG exports will lead to higher U.S. gas prices is a fairly easy one to answer.”

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See also the VIDEO by Doug Hornig on the Atlantic Coast Pipeline project.