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Asian Lng prices.... - freddiekingman - 01-26-2013
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8090428
Asian LNG prices to stay oil-linked: Facts Global Energy consultancySingapore (Platts)--25Jan2013/704 am EST/1204 GMT
Asian LNG prices will remain predominantly oil-linked for the foreseeable future, Shahriar Fesharaki, COO at consultancy Facts Global Energy, said at a conference in Singapore Friday.
"Asian LNG price will remain predominantly linked to oil for the next 20 or so years," Fesharaki said, citing existing oil-linked long-term contracts of 160 million mt/year to Asian buyers, and future incremental oil-linked volumes coming from Australian projects over the next couple of years.
"The incremental volumes over the next few years are coming from Australia and they are linked to oil, and in 2016-2017 we could see some US projects coming online, so Henry Hub linkage will increase a bit, but the incremental volumes will still be linked to oil," Fesharaki said.
Future Canadian LNG projects would also be linked to oil due to their unique cost structure. While the price of feed-gas in Canada would be quite similar to Henry Hub, the additional pipeline transportation fees to bring the gas over large distances from fields to specific projects on the West coast, combined with high Canadian greenfield LNG terminal costs, would mean the Canadian projects would have to price their LNG with some kind of oil linkage, Fesharaki said.
RE: Asian Lng prices.... - admin - 01-26-2013
Interesting info this, thanks Freddie. I wasn't aware of these cost issues in Canada, for instance and actually considered them more of a threat than US exports
RE: Asian Lng prices.... - jft310 - 01-27-2013
Canada can't compete with IOC. Why?? All cost with zero profits yields you at $10 cost to land in Japan. Since we are talking business decisions not 501C decisons the idea must have an acceptable ROI. Even if one buys NG for $3, add transportation cost $3 add LNG costs $3 PLUS. There is NO profit , no margin.This in direct from a Washington Post article posted here. Might go back and check out what an unbiased source states.IMHO
RE: Asian Lng prices.... - ArtM72 - 01-27-2013
Somehow it has always struck me that the biggest threat to IOC is more from Australian gas exports than any other source. PNG is highly dependent upon AU and there have to be major political and economic interests in AU trying to keep large volumes of PNG NG in the ground so as not to undercut the market AU projects will be selling into.
As to the linkage between NG and oil it seems that fundamentally the relationship should have a strong inverse component. NG is replacing oil in applications with NG native demand increasing at the expense of Oil burning applications. I see very few true "dual fuel" technologies out there where simple switches can be made. I suppose you can argue certain apps like microturbines can go either way there are component and programming switches that have to be made when changing from gas to oil and back. You can't easily do it on the fly. I suspect the same goes for IC engines adapted for NG.
Yes, while all BTUs are not created equal they tend to bear a strong resemblance. There's a long turbulent path ahead in the NG/Oil price relationship. It will be interesting to watch in the years to come, God willing.
Here's an out of the box thought. The high bidder for IOC will submit their bid on behalf of AU NG interests with the express purpose of limiting production and development of the high volume/high capacity reefal structures found in Gulf Province by IOC. Crazy thinking, to be sure. 3tops is certainly large, but just how big are those fish? Idle speculation on a cold day in Chicago.
RE: Asian Lng prices.... - bertl05 - 01-27-2013
Interesting thoughts Art. Thank you. Its impossible to know for certain, but its clear that there has been a syndicate of entities trying to discredit IOC for years. We all know Hempton has been a foerce antagonist over the years. My contention has always been that a large amount of this is offshore. Simply my opinion, nothing to back it up. But I eouldnt be surprised at an Aussie element. Certainly the Dumas of the world and other bureaucrats and pols in PNG have deep "ties" to Australia. All those ocean front homes don't hurt I suppose. Love to see the bank accounts these guys hold in Australia.