Entries categorized as ‘Uncategorized’
Mr. Zhang Guobao, CPPCC member and head of the National Energy Administration (NEA), stated on March 4 that China’s natural gas price will be linked to the oil price.
The price link was part of China’s natural gas negotiations with Russia but no further details on the price formula were provided. According to Mr. Gubao, pricing was the “most difficult part” of the negotiations and that “other commercial terms” were still ongoing.
China is looking to increase natural gas imports from Russia as well as increase storage capacity for natural gas (See HNR: China CNPC to build 10 natural gas storage facilities), as China seems to be putting increased emphasis on natural gas as a fuel source. However, in a broader context, China is building out all fuel sources that provide a lower carbon profile.
People’s Daily Online: China to link natural gas price with oil
Categories: Uncategorized
Tagged: CPPCC, National Energy Administration, natural gas, shale gas
Natural gas in storage declined by 116 billion cubic to sit at 1,737 Bcf for the week ended Feb. 26, the Energy Information Administration (“EIA”) said Thursday. Stocks were 71 Bcf less than last year at this time and 21 Bcf above the 5-year average of 1,716 Bcf. At 1,737 Bcf, total working gas is within the 5-year historical range.
Natural gas prices were down Thursday after the government said supplies dropped less than expected last week. A Platts survey of analysts expected a larger withdrawal of 128 to 132 billion cubic feet. The contract for April delivery lost 18.2 cents, nearly 4 percent, to settle at $4.575 per 1,000 cubic feet on the New York Mercantile Exchange. Prices dropped as low as $4.556 earlier in the day, the lowest ever for the April contract.
Back in early December, Horn River News started to report that though the colder winter weather and resulting draw down on natural gas was a welcome situation, and would allow the U.S. to avoid reaching its physical storage capacity, the next key point with U.S. natural gas storage would be where it finished the winter heating season. It appears that the average amount of natural gas in storage is going to increase until the U.S. takes advantage of this abundant cleaner fossil fuel and increases its usage in electricity power generation and transportation.
Categories: Uncategorized
Tagged: EIA, Energy Information Administration, natural gas, Platts survey, shale gas
If it was not apparent how important China thinks natural gas is to that countries energy needs, consider that China CNPC, China’s top oil and gas producer, plans to build 10 gas storage facilities over the next five years.
China’s infrastructure for natural gas storage and distribution is simply not adequate to meet demand fluctuations due to weather, or future demand requirements. (See HRN: China faces intensified gas shortages). China’s natural gas supply fell severely short of demand this winter, causing many problems for the transportation and residential sectors. The National Energy Administration committed to make the necessary investments to avoid future problems, and these 10 facilities are part of that commitment. The 10 storage facilities are intended to avoid future natural gas shortages, holding up to 22.4 billion cubic metres of natural gas which is about 20% of China’s total natural gas demand last year.
And while these storage facilities are a key components to China’s plans to avoid natural gas shortages, it also is an indication of the growing importance China is placing on natural gas in their overall energy mix. China understands how to manage and prepare for future energy demands better then any other country in the world and takes a long term planning approach to everything they do.
Do not be surprised if China joins Korea and starts to make key investments into massive gas reserves locked in shale gas in B.C. A strong connection with the China would make this a natural fit.
Reuters: CNCP to build 10 gas storage facilities
Categories: Uncategorized
Tagged: China, CNPC, horn river basin, natural gas, natural gas storage, shale gas
Korea Gas Corp. (“Kogas”) and EnCana Corp. will jointly explore and develop three natural gas with Kogas looking to invest $1.1 billion over the next five years to extract over 1 trillion cubic feet of natural gas from land leases held by EnCana in northeastern BC’s lucrative Horn River Basin and Montney Basin.
The initial agreement is a three-year farm-in deal with EnCana where Korgas will invest $565-million to acquire a 50% interest about 10,000 hectares in the Horn River Basin, and roughly 52,000 hectares in the Montney.
The investment is another step towards B.C. becoming a major export hub of natural gas and Kogas’ second major investment into B.C. gas.
South Korea consumed ~1.2 trillion cubic feet (“Tcf”) of natural gas last year – far below the 443 million cubic feet it produces – making it heavily dependent on imported liquefied natural gas (“LNG”). As a result, Korgas is the world’s single largest buyer LNG in the world and currently operates three LNG import terminals and has plans to build two more. To say the least, natural gas is key to meeting Korea’s – and Asia’s – energy requirements. Korgas’ investment brings further international attention to the huge potential that the Horn River Basin represents. In October, another South Korean energy company, Korea National Oil Corp., acquired Calgary-based Harvest Energy Trust for $4.1 billion.
Kogas’ interest in BC’s Horn River Basin may really started back last June, when Kogas committed $20 billion to Kitimat LNG – a planned LNG export facility located in Kitmat, BC. (See HRN Kitimat LNG signs deal with Korea Gas Corp. worth $20 billion). According to the terms of the agreement, Kogas will acquire ~40% of Kitimat LNG’s production, or two million tonnes per year for 20 years with an option to acquire an equity stake in the terminal. The first natural gas to be shipped from Kitimat LNG is expected in 2014 and with the EnCana deal, Kogas will become both an exporter and importer of natural gas.
Apache Corp. acquired a 51% stake in Kitimat LNG in DATE. Apache holds major gas assets in the Horn River Basin and elsewhere. By investing in Kitimat LNG, Apache ensures an alternative customer to the U.S. for their Horn River natural gas.
Bill Gwozd, vice-president of Calgary consulting company Ziff Group is quoted:
“You’ll probably see more companies looking to invest in Canadian natural gas. The value chain proposition is increased by owning the resources.”
With low natural gas prices, industry players are taking advantage of lower valuations to invest in expanding their holdings and invest both upstream and downstream in the distribution. The reasons are simple. They foresee a bright future for natural gas as a low carbon energy source that is fast becoming a global commodity that can be shipped internationally and will no longer be limited to pipeline distribution.
Globe & Mail: South Korean firm joins EnCana in B.C. gas
Categories: Uncategorized
Tagged: Bill Gwozd, EnCana Corp., Harvest Energy Trust, horn river basin, Korea Gas Corp., Korea National Oil Corp., natural gas, shale gas, Ziff Group
One of the most influential newspapers in the U.S. published an editorial this Sunday titled “A natural choice” that looks at natural gas from the environmental point of view. They make a case for shutting down older, less efficient, coal-fired electric plants and replacing them with cleaner burning natural gas-fired plants.
The editorial begins…
“In America’s climate debate, one of the most promising developments of recent months has been the growing recognition in Washington that natural gas may play a key role in curbing carbon emissions.”
The editorial goes on…
“With climate-change legislation still stalled in Congress, nudging gas forward is something that the government can do quickly and relatively cheaply to meet its medium-term emissions goals if current trends persist.”
With the abundance of natural gas in North America due to shale gas reserves, using natural gas for “base load” electricity generation — instead of reserving it for “peaking” when demand for power is highest — now makes economic and environmental sense.
“[E]xisting gas-fired plants are running at only about 25 percent capacity, in part because many are switched on only when demand spikes…doubling the use of existing plants could replace about a third of coal-fired power.”
As the world’s third largest producer, Canada needs to also reconsider natural gas taking a larger percentage of the overall energy mix in an effort to use available domestic resources to reduce carbon emissions from electrical generation and transportation. By doing so, Canada would reduce emissions while meeting energy needs, and still have surplus natural gas for export to the U.S. and Asia.
We encourage you to read the Washington Post editorial. Support Canada’s Bluebridge Plan, and support the Pickens’ Plan in the U.S.
Washington Post: A natural choice
Categories: Uncategorized
Tagged: Bluebridge Plan, natural gas, Picken's Plan, shale gas, Washington Post
T. Boone Pickens is confident that the The Natural Gas Act will be passed in the U.S. If so, it would dramatically expand the use of natural gas as a transportation fuel among heavy- duty fleets. House and Senate versions of the bill provide tax breaks for natural gas-powered vehicles and fueling stations.
Full story at Houston Chronicle: Pickens expects approval of key natural gas plan
This is a step in the right direction for the U.S. to use domestic energy resources and reduce carbon emissions from the heavy-duty transportation fleets. Canada should take note and implement similar tax incentives to better use vast natural gas resources in Canada. Even with expanded domestic use of natural gas, Canada would continue to post a surplus for export to the U.S. and Asia.
We encourage you to support the Bluebridge Plan.
Categories: Uncategorized
Tagged: Bluebridge Plan, carbon emissions, natural gas, Natural Gas Act, shale gas, T. Boone Pickens
February 26, 2010 · 1 Comment
When one thinks of the Canadian oil and gas industry the first province that comes to mind is Alberta. However, the early results from Questerre Energy and others in Quebec’s Utica shale formation has some speculating that this province may emerge as a petroleum power house changing the geopolitical landscape of Canada.
In fact, Questerre believes Quebec’s Utica shale could contain more than 20 trillion cubic feet of recoverable natural gas and has Questerre’s CEO, Michael Binnion again stating his opinion that its a top ten shale deposit in North America. (See HRN – “Questerre Energy claims “giant discovery of shale gas” in Canada”). Though not as large as the estimated 500+ trillion cubic feet of the Horn River Basin, Utica does have the advantage of proximity to the northeast U.S. – the largest natural gas consumers in the U.S.
And as HRN has stated in previous articles how shale gas will change the geopolitical landscape of the world, it also has the potential to potentially change the geopolitical landscape of Canada. Quebec needs to consider the requirements and prepare for managing this important resource if the resource proves to be commercial and they want to ensure its success. A competitive royalty structure, and the means for auctioning land lease licenses is a first step. Investments in infrastructure are critical. When the Horn River Basin emerged as one of the largest shale gas plays in North America, the B.C. government implemented a competitive royalty structure to attract developers, and invested nearly $200 million to expand infrastructure. So where Utica has the advantage of location, Alberta – and B.C. – have the advantage of infrastructure.
The attraction of shale gas in Quebec as opposed to Alberta, or BC is its proximity to the huge eastern U.S. market which would give it a competitive advantage over natural gas from the Canada’s western sedimentary basin. Shipping gas via lengthy pipelines is expensive with everyone along the way getting their pound of flesh.
At this point it is too early to say whether the Utica basin will play out as a major natural gas find. It is showing early promise, but the Questterre project has already seen initial production rates drop by nearly 50%. Its still a signifcant flow rate at 10 mmcf per day. Once the economic feasibility has been confirmed, the infrastructure will need to be in place to get this gas to market. And if it is not a massive basin play this may never come to fruition.
If the Utica play comes to fruition it would just add to the growing need for western Canada to have the necessary pipeline and LNG facilities in place to sell excess natural gas to Asia. Having two robust natural gas industries in Western Canada, and Eastern Canada would be good for all of Canada. Western Canada, will be just fine either way.
Another significant shale gas discovery in North America and the idea of adding to overall reserves and increased natural gas supplies may be the last thing the industry wants at this point. Some say we have “more natural gas then we know what to do with”… fact is we know what to do with it, we just need to do it. Increasing the usage of natural gas in transportation and electric power generation would provide a lower carbon energy source that would allow Canada and the U.S. to significantly lower carbon emissions with a practical and proven domestic energy source.
Globe & Mail: Quebec shale gas find could redraw Canada’s energy map
Categories: Uncategorized
Tagged: Horn River News, Michael Binnion, natural gas, Quebec, Questerre Energy, shale gas, Utica shale
February 25, 2010 · 1 Comment
A sour natural gas well about 19 kilometres northwest of Hythe, AB, Canada, has blown overnight while a crew was working at the rig. Energy Resources Conservation Board (“ERCB”) spokesman Bob Curran says no injuries have been reported.
Coincidentally, Wiebo Ludwig and several supporters were camped near a well site overnight to protest the danger gas wells present. At this point, the RCMP say the blowout is not considered to be suspicious.
Full Story:
CTV News – Gas well bloes near Hythe overnight
Vancouver Sun – Gas well blows near Ludwig protest site
Categories: Uncategorized
Tagged: Bob Curran, Energy Resources Conservation Board, ERCB, natural gas, natural gas well, shale gas, Wiebo Ludwig
Natural gas in storage fell 172 billion cubic feet (“Bcf”) in the week ended February 19, 2010 according to Energy Information Administration (“EIA”). Analysts polled by Dow Jones Newswires were expecting a withdrawal of 168 billion cubic feet. Colder-than-normal temperatures possibly contributed to the above-normal rate of withdrawals during this report week. Working gas in storage was 1,853 Bcf which is 56 Bcf less than last year at this time and 13 Bcf above the 5-year average of 1,840 Bcf. At 1,853 Bcf, total working gas is within the 5-year historical range.
Categories: Uncategorized
Tagged: EIA, Energy Information Administration, Horn River News, natural gas, shale gas
