Tag Archives: Chevron

‘No LNG exports, no growth’ in Western Canada

Experts warn that without a LNG export market on the British Columbia’s west coast, there will be no growth in the industry.

Forecasts have Western Canada’s natural gas production growing by 5 billion cubic feet (Bcf) per day by 2022. However, the forecast includes that amount as being attributed to LNG exports. Without the exports there will simply be now growth in market where competition is growing on a global basis. With no LNG export terminal, Canada’s only customer would be the USA who is now the largest producer of natural gas on the planet.

In a recent report, Simon Mauger, Director of Natural Gas & Economics at Ziff Energy:

“Growth in Western Canada will depend on market growth, first and foremost. So no LNG exports, no growth. With the LNG exports, we expect to see quite some growth — from about 14 bcf a day today up to 19 bcf a day in 2022.”

Recently Apache Energy dropped out of the Kitimat LNG project in BC. Kitimat LNG is considered by many as being the most advanced of the 15 LNG projects under consideration. Likely only two, perhaps three we be built. Chevron Canada the remaining partner in the project is looking for another suitable partner to replace Apache.

Read More:“No LNG exports, no growth’ in Western Canada’s natural gas industry: expert”

Read More: “Apache Energy, under investor pressure, exiting Kitimat LNG project”

 

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Prime Minister Azarov: Ukraine will cut gas imports from Russia by 66% within 5 years

Following up on our early and ongoing coverage of the far reaching geopolitcal and economic impact of shale gas (See HRN Sept. 2010 Natural gas to bring about far reaching geopolitical changes), Ukraine Prime Minister Mykola Azarov has stated in no uncertain terms that his country will cut imports of Russian natural gas by 66% within 5 years.

Azarov’s comments emphasize the Ukraine’s worsening relations with Russia and the failure to re-negotiate a controversial 10-year gas agreement signed in January 2009. At the same time it also emphasizes the growing importance of shale gas reserves within the Ukraine to reduce dependence on Russia for natural gas.

The Ukraine estimates it will import 40 billion cubic meters of natural gas from Russia in 2011. Extensive exploration has already been completed on Ukraine’s shale gas potential, and plans to start shale gas production within years. The hopes shale gas production will reduce natural gas imports 5 Bcm per year.

Estimates are that the Ukraine has between 1.5 trillion and 2.5 trillion cubic meters of shale gas according to statements in June based on preliminary results of a survey that had been financed by the US government. The US government have also been very supportive of Poland’s desire to develop shale gas assets. Support that was confirmed with President Obama’s visit to Poland earlier this year.

Source: Ukraine to cut gas imports from Russia by 66% within 5 years: PM

See Also: June 8, 2011: Poland Targeting Shale Gas With Exxon, Chevron to End Russian Dominance

Bloomberg: Poland Targeting Shale Gas With Exxon, Chevron to End Russian Dominance

For over  a year, HRN has been writing about the far-reaching geopolitical impact shale gas will have on various parts of the world. Back in April 2010, we referenced a Times article that was picking up on the impact Poland’s shale gas reserves will have on eastern Europe and that country’s relationship with Russia.

See HRN: Natural gas to bring about far reaching geopolitical changes –  Sept 2010

When U.S. President Barack Obama visited Poland for the first time last month, he offered to share US technology used to crack open the gas-rich rock formations. Obama has also offered this to China and others with potential shale gas reserves. Interestingly enough Poland has set out a time line to start producing significant natural gas from their shale deposits within the next decade. Bloomberg points out that this coincides with Germany’s announced timeline to close its 17 nuclear reactors. This is nothing more then coincidence as one would have to truly believe that Germany will close these reactors (HRN Opinion: This is simply a convenient deferral.  Germany’s Chancellor Angela Merkel is simply trying to gain popular support. The public opinion of nuclear power in Germant is likely to change over the next ten years. The person in power in ten years is likely to keep them on a pro-nuclear policy).

Point here is that Poland is committed to shale gas, and moving forward with its development. As well as building an LNG port on the north shore of Poland. This will have significant impact on Europe, and in particular Russian relations with east Europe.

Bloomberg: Poland Targeting Shale Gas With Exxon, Chevron to End Russian Dominance

 

Chevron to search for shale gas in Poland

The Polish Environment Ministry says it has authorized U.S. oil company Chevron to explore natural gas (shale gas) deposits in eastern Poland. The license was granted for five years and enables Chevron to carry out seismic study and exploratory drilling up to 3,500 meters underground. The license covers 800 square kilometers in southeastern Poland. No financial details were released.

In the last two years, the Poland has granted 30 such concessions in Poland, to companies such as  ExxonMobil, Lane Energy and Marathon Oil. Shale gas has fundamentally changed the natural gas market in North America, and a similar paradigm shift in Europe would be a welcome change for those countries that have depended on Russia for their natural gas supply.

Russia has downplayed the potential impact of shale gas discoveries in European countries, an expected response. But not only would alternative suppliers diminish Russia’s influence in the region, an increased supply of natural gas in Europe could have the same impact that shale gas has had in North America, whereby prices have traded in a lower range for a number of years which will impact Russia’s revenues.

Wall Street Journal: U.S. Firm Chevron Gets Gas Exploration License In Poland

Natural gas as important as oil and coal – perhaps more

HRN has repeatedly written about the emerging long term importance of natural gas in today’s “going green” economy. And it seems that the natural gas industry itself has started to realize their new found importance as well and started to collectively promote natural gas as a low carbon “bridge fuel”.  Natural gas has now reached a level of importance that makes it critical and indispensable as an energy commodity.

It is only a matter of time before carbon begins to carry an internationally accepted cost. This cost will then be levied on all products and services that produce carbon emissions in delivering their product or service. This will effectively make low and zero carbon energy more affordable and more price competitive against oil and coal.

There are three key areas that have changed

Low Carbon fuel – natural gas emits 50% less carbon then coal and 30% less then oil (gasoline, diesel). In the “green economy” natural gas is undeniably the cleanest fossil fuel and will only increase in importance to countries wanting to reduce carbon emissions and remain competitive in a market where carbon carries a heavy cost.

Unconventional Gas – the fundamentals of natural gas as a long term energy resource have dramatically changed. Shale gas in the Horn River basin is estimated at up to 600 Trillion cubic feet in place. Technology continues to improve and continues to reduce the overall cost of extracting the natural gas from the shale formations.

Liquified Natural Gas (“LNG”) – an international network of LNG terminals and freighters expands the market for natural gas producers and makes natural gas a global commodity like oil and coal. A global market will have a major impact on the natural gas industry and will potentially settle the price fluctuations.

At the 24th World Gas Conference (“WGC”) in Buenos Aires, Argentina, natural gas producers are relishing in their new found importance in the global energy marke but recognize the challenges it faces with a global recession supressing demand.

At the conference, George Kirkland, Chevron Corp.’s vice president for global upstream and gas told the stated;

“The fact is – natural gas has come of age. What was once a second prize to oil is now a premium commodity.”

Kirkland referrred to an International Energy Agency (“IEA”) report that has estimated that global demand for natural gas to increase by 50% by 2030 and that in order to meet such a demand increase would require investments of about $227 billion a year over the next 20 years, or a total of $5.5 trillion. Kirkland went on to state;

“Without continued investment, natural gas will simply not be available to meet demand and drive economic growth.”

Kirkland expressed optimism that natural gas would play a major part in the global energy matrix going forward, especially in light of the need to reduce emissions and sees natural gas will be a larger part of Chevron’s future growth.

“I am confident that the importance of natural gas to the world’s energy portfolio will continue to grow. And I am confident that natural gas will redefine the world’s energy equation in the 21st Century.”

Rune Bjørnson, Vice President for Natural Gas at StatoilHydro, added his voice to the growing momentum supporting natural gas as a key energy source to reducing carbon emissions.

“I see natural gas as an important vehicle into a low-emissions future. Gas contains less carbon than oil and much less than coal,” stated Mr. Bjørnson.

Canada is a major natural gas producer and should play close attention to the growing importance being placed on natural gas globally. Canada needs to leverage this valuable low-carbon resource through increased domestic use of natural gas and decreased use of oil and coal in electricity generation and transportation. Canada is a net exporter of natural gas. It can easily increase its domestic usage of natural gas in a coordinated effort to reduce carbon emissions and still have surplus available for export.  If Canada does not increase the use of this valuable domestic low carbon resource, it will be exported to the competitive benefit of other countries.

Los Angelas Times: Natural Gas to play bigger role at Chevron