|
Chase continues for LNG El Paso, Exxon announce progress, while Australia looks to U.S. market Larry Persily Petroleum News Government Affairs Editor
The list of proposed new liquefied natural gas receiving terminals for North America is at almost three dozen, with the latest news coming from El Paso Corp. and Exxon Mobil Corp.
Meanwhile, Australia’s Industry Minister said his country is looking to export a profitable slice of its 100-plus trillion cubic feet of natural gas reserves to U.S. markets by the end of the decade.
“We can supply long term into the U.S. with reliability,” Industry Minister Ian Macfarlane said Jan. 15, after meeting in Australia with U.S. Energy Secretary Spencer Abraham.
Development of Australia’s large gas reserves has become an international effort. Among the familiar oil and gas names with interests in Australia’s gas fields and proposed LNG export projects are ChevronTexaco, ExxonMobil, ConocoPhillips, Royal Dutch/Shell and BP; Australia-based BHP Billiton and Woodside Petroleum; and Japanese-based Mitsubishi Corp. and Mitsui & Co. Australia, Indonesia, Russia are competitors Macfarlane said Australia’s toughest competitors for the U.S. market are LNG supplies from Indonesia and Russia.
Just last month Indonesia announced a deal with San Diego-based Sempra Energy to supply about 500 million cubic feet per day of LNG to a receiving terminal proposed for Mexico’s Baja Peninsula, 35 miles south of the U.S. border.
The terminal, a joint project of Sempra and Royal Dutch/Shell, is scheduled to start operations in 2007 at 1 bcf per day. Shell has not announced which of its Pacific basin projects will supply the 500 million cubic feet of LNG for its half of the terminal’s capacity, though Russia’s Sakhalin Island is seen as a likely candidate.
A Sempra official reported Jan. 19 the company expects to sign its 20-year contract for Indonesia LNG by the end of June. The gas will come from Indonesia’s Tangguh project, the nation’s third LNG producing and export plant. The largest owner at Tangguh is BP. Qatar signs another LNG deal North America markets are not the only target for new LNG developments. Qatar Liquefied Gas Co. signed a deal Jan. 15 to supply 200 million cubic feet per day for 20 years to Spain’s Gas Natural SDG. The new supply will start flowing in 2005. Gas Natural is Europe’s largest buyer of Qatargas LNG.
Qatar’s natural gas reserves are estimated at between 500 trillion and 900 trillion cubic feet, giving it more than enough supply to be an active player in worldwide LNG markets.
But in North America, the issue isn’t so much LNG supply as which of the 30-plus proposed new receiving terminals will be built and which will never advance beyond the planning stage.
El Paso Corp. received good news Jan. 15 when the U.S. Maritime Administration gave its approval for the company’s plan to build an LNG receiving terminal 116 miles off the Louisiana coast. The terminal will consist of a mooring buoy with a flexible steel pipe connected to undersea pipelines to carry the gas to shore.
The company said it expects to start construction later this year, with the start-up of operations set for December at 400 million to 500 million cubic feet of gas per day.
ExxonMobil announced Jan. 15 it plans to develop a $600 million LNG receiving terminal on the Texas Gulf Coast to handle up to 1 bcf per day starting in 2008 or 2009. The company said it started the permit process late last year with the Federal Energy Regulatory Commission for the Vista del Sol project, near Corpus Christi, Texas.
The company also is working toward getting its FERC permit for an LNG terminal near Port Arthur, Texas, near the Louisiana border about 250 miles up the coast from Corpus Christi.
ExxonMobil in October signed a deal to import 2 bcf per day from Qatar, with the supply contract expected to run 25 years. Exxon having problems in Alabama Meanwhile, ExxonMobil is having a problem with its proposal to build an LNG terminal near Mobile, Ala. Some residents near the Hollinger Island project, two miles south of Mobile’s city limits, are fighting the project, challenging its safety. They are pushing in court to stop the project.
The Alabama Port Authority, which backs the project, asked a state court judge Jan. 14 to dismiss the residents’ lawsuit. The judge is considering the state’s motion.
Separate from the lawsuit, Alabama Gov. Bob Riley sent letters to the state port authority and FERC, stating his opposition to the project “until an independent safety study has been completed and evaluated.” The Republican governor said the study should look at a “worst-case scenario” of an accident or terrorist attack.
ExxonMobil issued a statement the day after the court hearing, disputing reports that it is considering dropping the project. The company confirmed it had not yet applied to FERC for a permit for the site, and added it is looking at the “economic climate” in Alabama. Jury award concerns Exxon Company spokesman Bob Davis of Houston cited the governor’s opposition and last year’s $11.9 billion Alabama state court jury verdict against the company in a royalty dispute as factors that worry the company.
“The court ruling, I think, is indicative of a general environment in Alabama that certainly concerns us,” Davis told the Mobile Register newspaper.
The Alabama Port Authority sees it differently. “The royalty dispute is a totally distinct, separate issue,” said Chairman Tim Parker. “It’s apples and oranges. … If they want to link it, that’s their business,” he told the Mobile Register.
| 