Natural gas is increasingly being viewed as one of the most important sources of fuel in the coming decades. That is why Royal Dutch Shell, an oil major, made a huge bet on liquefied natural gas (LNG) when it decided to purchase BG Group, which has major holdings in LNG projects in Australia and East Africa.

But what if the industry’s expectations for the growth in LNG demand are wildly optimistic? At issue is how deep governments around the world cut their carbon emissions in an effort to slow climate change. Natural gas does offer some climate benefits over coal as a source of electricity – it burns cleaner and releases less carbon dioxide.

However, it is still a fossil fuel and carbon restrictions could keep a lid on the demand scenarios for LNG. In a new study, the Carbon Tracker Initiative (CTI) finds that there could be $283 billion in planned LNG assets that may not be needed over the next decade, and if companies move forward on them, they could wind up with stranded assets. An overwhelming portion of these high-cost LNG projects are slated to be constructed in the U.S., Canada, and Australia.

http://oilprice.com/Energy/Natural-Gas/Carbon-Emission-Regulations-...

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IMO. carbon restrictions should make natural gas the best energy choice.  The challenge for US LNG exporters in the short term is the increasing supply and the declining demand. 

RBN excerpt:

Given all that’s going on in the energy world, it’s not surprising to see the international LNG market in a state of flux. Consider this: Demand for LNG has plateaued in Asia (by far the largest market for LNG, led by Japan and South Korea) due to a combination of milder-than-normal weather, slower economic growth, renewed competition from nuclear, and lower-cost power from oil and coal. Also, the biggest Asian growth markets (China and India) are looking to pipe in natural gas from their neighbors (Russian/Siberian gas into China, for instance) as a lower-cost alternative to LNG. Europe, meanwhile, is concerned about relying too heavily on piped-in gas from Putin’s Russia, and is considering its gas-supply options too—including, as of late, piped-in gas from Iran. All of this comes as a flood of new liquefaction/LNG export capacity is poised to enter commercial operation, most of it in Australia and the U.S and as major LNG consumers are trying to move away from long-term LNG supply deals indexed to oil prices and toward shorter-term and spot deals, prices tied to spot natural gas (as U.S. LNG exporters are offering), and—very important—“destination flexibility” to allow LNG to be shipped wherever the liquefaction off-taker wants.

What matters most to U.S. and Canadian natural gas producers (and developers planning new liquefaction/export facilities) is what these LNG market changes (a demand-growth lull; low spot and short-term prices; game-changing offers of gas-indexed LNG pricing; buyers’ insistence on destination flexibility) mean to them and their plans. In what’s becoming an increasingly liquid, competitive and lower-margin market, the most frequent among natural gas producers and LNG exporters will be those who offer the full package: ample gas supplies, low-cost gas production, supportive pipeline infrastructure, competitive liquefaction costs, easy access to multiple markets, and destination flexibility. As it turns out, the U.S. gas/LNG sector ticks every one of those boxes, and provides a bonus: LNG prices tied to the price of U.S. spot natural gas. The prospects for U.S. gas producers/LNG exporters stack up well against both the biggest existing player in LNG supply (Qatar) and the other big up-and-comer, Australia, which may take the top spot by 2020.

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