Japan likely buyer for US LNG exports

The US could become a major LNG supplier to Asia in the future, Toshi Yoshida, global energy partner of Mayer Brown LLP, told a Mayer Brown energy conference in Houston on May 23.

Other Mayer Brown conference speakers noted the growth in oil and gas production from shale plays in recent years. Given the surplus in US gas supply, various companies are considering using US LNG terminals to export LNG to Europe and Asia.

US LNG terminals were built to import LNG before the shale production boom. Meanwhile, Japan’s reliance on fossil fuel is climbing because all of its nuclear reactors are offline following the March 2011 incident in which an 8.9 magnitude earthquake hit off Tohoku, eastern Japan.

A subsequent 23-ft tsunami swamped parts of Japan and knocking out the country’s nuclear-generation capacity at Fukushima.

Separately from the conference, Barclays Capital issued a May 23 research note saying it expects total Japanese fossils fuel imports to increase with oil and products stabilizing at around 4.6 million b/d in 5 years and LNG imports growing to above 135 billion cu m by 2016.

Most US companies have yet to receive permission from the US Department of Energy to sell LNG to Japan, which lacks a free-trade agreement with the US. Sempra of San Diego has submitted a request to DOE and hopes for approval by yearend.

Other US companies also have submitted or plan to submit similar requests. Excelerate Energy wants to develop a floating LNG export plant in the Gulf of Mexico, which would be a first for the US. The Lavaca Bay LNG project off Texas tentatively is scheduled to start exporting by 2017.

Cheniere Energy, which soon plans to start construction on its LNG plant in Sabine Pass, La., already signed supply deals with buyers in Spain, Britain, India, and South Korea. Cheniere Energy has conditional approvals from the US government.

US companies hope to sell US gas to higher-price markets elsewhere. Recent US prices are less than $3/MMbtu while Asian LNG prices are at 4-year highs of about $18/MMbtu, analysts said.

Yoshida noted that LNG export projects and contracts take time. Industry executives generally agree that most LNG projects take at least 4 years to build.

“It’s not like oil trading,” Yoshida said. “The core nature of LNG is tailor-made projects with specific buyers involved from the beginning.”

Ramsey Fahel, Anadarko Corp. vice-president and general manager, agreed, adding that LNG projects are not done on a speculative basis. “Deepwater costs are too high,” for operators to consider spec projects, Fahel said.

In addition to the prospects for US shale gas development to push LNG into global markets, Anadarko notes another potentially large source of supply from eastern African fields off Mozambique.

In November 2010, Anadarko reported a third large gas discovery in the Rovuma basin off Mozambique. The company said the three discoveries together were more than sufficient to support an LNG export project (OGJ Online, Nov. 29, 2010).

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

Shell cancels Arrow LNG project

01/30/2015

Royal Dutch Shell PLC has abandoned its plans for what would have been a fourth coal seam gas-LNG project at Gladstone in Queensland.

US Senate passes bill approving Keystone XL pipeline project

01/30/2015 The US Senate has passed a bill approving construction of the proposed Keystone XL crude oil pipeline by a 62-36 vote after 3 weeks of debate. Nine...

Douglas Channel LNG moves toward 2018 startup

01/29/2015 Exmar NV, EDF Trading, and AIJVLP, a joint venture of AltaGas Ltd. and Idemitsu Kosan Co. Ltd., have taken full ownership of the 550,000 tonne/year...

Mitsui charters two more LNG ships for Cameron export project

01/29/2015 Mitsui & Co., Ltd., Tokyo, reports contracts for chartering two new ships to transport LNG to Japan from the Cameron LNG export project in Loui...

US House approves bill aimed at increasing LNG exports

01/28/2015 The US House of Representatives passed a bill aimed at increasing US LNG exports by requiring the Department of Energy to determine whether a proje...

New Russia-Turkey gas pipeline route approved

01/28/2015

OAO Gazprom reported selection of a route for a gas pipeline across the Black Sea from Russia to Turkey.

PHMSA outlines community steps to reduce pipeline incident risks

01/27/2015 The US Pipeline and Hazardous Materials Safety Administration released a guide to best practices for communities to reduce risks from pipeline inci...

Knight Warrior Eaglebine-Woodbine crude pipeline advances

01/27/2015 Knight Warrior LLC has reached agreements to build its 160-mile, 100,000-b/d pipeline linking the East Texas Eaglebine-Woodbine crude oil play to H...

ETP, Regency to merge in $18-billion deal

01/26/2015 Energy Transfer Partners LP (ETP) and Regency Energy Partners have agreed to merge in a unit-for-unit transaction, plus a one-time cash payment to ...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected