LNG produced at the Yamal project in Siberia, according to Bloomberg, is now reported to be headed to U.S. northeast, which experienced a spike in prices for natural gas during a sustained period of unusually cold weather, raising heating demand and sending domestic gas prices soaring for a few days.
This load of LNG first went to the UK on a French-flagged tanker, briefly stored at Isle of Grain terminal, then was reloaded Jan 7 and is due to arrive in Boston on Jan 22. Note it is not clear who actually owns the re-exported cargo. i.e. who is the trader behind this latest deal? The operator of the storage facility would not comment It is believed that Petronas LNG UK brought the original load to the UK, but was it resold to another trader?
So, why is this newsworthy? For two reasons. First, Yamal LNG is a joint venture between Novatek PJSC (Russian), Total SA (French) and China National Petroleum Corp. The project went ahead, despite USA federal government financial sanctions in 2014 because of Russia’s involvement in the Ukrainian crisis. So some in the news media are describing this as a “sanctioned” cargo.
Second, the USA is now increasingly an exporter of LNG, for example from Louisiana, and soon Texas and Maryland. So why wasn’t a need for LNG supplied domestically? A quote from the Oxford Institute for Energy Studies helps to clarify: ““The market shouldn’t see any irony in this cargo going to the USA. It’s a normal trade, LNG is supposed to travel globally to where the demand is.”
This is not the first LNG reload into the USA – in June 2014 a cargo came from Huelve terminal in Spain.
In the business of hydrocarbon production, accurate accounting of produced fluids and gases is critical from a process control, management and fiscal perspective.
The US East Coast will send out its first LNG exports in early 2018 as Dominion Energy’s Cove Point LNG export facility in Lusby, Maryland becomes operational.
The New LNG Imperative
The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.
November 29, 2017 10am CST
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