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05-21-2013, 10:48 PM
(This post was last modified: 05-21-2013, 10:50 PM by johnwgrant.)
http://www.gpo.gov/fdsys/pkg/CHRG-113hhrg80386/html/CHRG-113hhrg80386.htm
HEARING
before the
SUBCOMMITTEE ON ENERGY POLICY,
HEALTH CARE AND ENTITLEMENTS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
(this is an excerpt near the end of the meeting)
Mr. Fleming. Mr. Ebinger, how do the transportation costs
of LNG affect the price in the world market compared to
domestic prices?
Dr. Ebinger. Transportation costs are, of course, extremely
high. Right now, if we are looking at what could we deliver gas
for example if we were ready to export into the Japanese
market, the actual transportation costs would be somewhere in
the neighborhood of $5 to $6 per million BTU, that added on to
the Henry Hub price plus the cost of gasification and
regasification, I think most analysts would agree we would
probably be able to deliver gas to Japan today if we could
export somewhere between $9.50 to $10 per million BTU,
significantly lower, of course, than the Japanese price.
Mr. Fleming. How would that compare to other forms of
energy for Japan? Would that be a favorable price for them?
Dr. Ebinger. At that price, it would be very favorable for
Japan because otherwise Japan imports almost everything and
since the Fukushima accident, the closing of the nuclear
powerplants has added roughly 4 bcf a day to Japanese demand,
killing them because they are importing into a very high cost
market.
*******************************************************************************
Hmmm... seems to me that we have a "geographic" advantage that translates into much less transportation costs. Plus, this hearing was trying to decide if the US gov't should allow exporting of Nat Gas via LNG plants. It would seem that the PNG gov't has already heartily endorsed/approved the export of the majority of their Nat Gas. Lastly, I think this implies that our gas should have a bare minimum value of Henry Hub (currently just over $4) + the difference in transportation costs.
No new news here... but, it makes me feel better about our chances to do a selldown that will be greater than $1.50/mcf (maybe a lot greater !!!). Still impatiently waiting.... sigh....
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Yes, there are little worries about price competitiveness for InterOil, although if US shale gas is going to be exported in serious quantities it could depress prices a bit, but that goes only so far as it would be hard to sell US shale gas below $10/mcf (henry hub + liquefaction + deliquefaction + transportation + tolls).
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'admin' pid='22731' datel Wrote:
Yes, there are little worries about price competitiveness for InterOil, although if US shale gas is going to be exported in serious quantities it could depress prices a bit, but that goes only so far as it would be hard to sell US shale gas below $10/mcf (henry hub + liquefaction + deliquefaction + transportation + tolls).
If they just add transportation cost to the Henry Hub price I think this delivery cost to Japan is too low. They left out the cost to Liquefy the gas. I don't know what that number is but the LNG Plant costs billions of dollars and the operator must be able to recover his investment cost plus the cost of running the operation plus, hopefully, make a profit. How about adding about another $6/MMBTU? That would bring the delivered cost to about $15.50-$16.00/MMBTU.
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Well, I have a feeling that was included, see the highlighted part of the first post in the thread
the actual transportation costs would be somewhere in
the neighborhood of $5 to $6 per million BTU, that added on to
the Henry Hub price plus the cost of gasification and
regasification, I think most analysts would agree we would
probably be able to deliver gas to Japan today if we could
export somewhere between $9.50 to $10 per million BTU
If luquefaction cost are left out and it's really more like $15+, that seems very high to me, I have to say.
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'petrengr1' pid='22732' datel Wrote:
'admin' pid='22731' datel Wrote:
Yes, there are little worries about price competitiveness for InterOil, although if US shale gas is going to be exported in serious quantities it could depress prices a bit, but that goes only so far as it would be hard to sell US shale gas below $10/mcf (henry hub + liquefaction + deliquefaction + transportation + tolls).
If they just add transportation cost to the Henry Hub price I think this delivery cost to Japan is too low. They left out the cost to Liquefy the gas. I don't know what that number is but the LNG Plant costs billions of dollars and the operator must be able to recover his investment cost plus the cost of running the operation plus, hopefully, make a profit. How about adding about another $6/MMBTU? That would bring the delivered cost to about $15.50-$16.00/MMBTU.
The Wall Street analysts think the total costs LNG processing plus transportation cost is $6 but the Henry Hub price will rise with more demand. Most Shale plays need $6 NG for decent margins. Those articles have been posted on these pages.
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'johnwgrant' pid='22730' datel Wrote:
http://www.gpo.gov/fdsys/pkg/CHRG-113hhrg80386/html/CHRG-113hhrg80386.htm
HEARING
before the
SUBCOMMITTEE ON ENERGY POLICY,
HEALTH CARE AND ENTITLEMENTS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
(this is an excerpt near the end of the meeting)
Mr. Fleming. Mr. Ebinger, how do the transportation costs
of LNG affect the price in the world market compared to
domestic prices?
Dr. Ebinger. Transportation costs are, of course, extremely
high. Right now, if we are looking at what could we deliver gas
for example if we were ready to export into the Japanese
market, the actual transportation costs would be somewhere in
the neighborhood of $5 to $6 per million BTU, that added on to
the Henry Hub price plus the cost of gasification and
regasification, I think most analysts would agree we would
probably be able to deliver gas to Japan today if we could
export somewhere between $9.50 to $10 per million BTU,
significantly lower, of course, than the Japanese price.
Mr. Fleming. How would that compare to other forms of
energy for Japan? Would that be a favorable price for them?
Dr. Ebinger. At that price, it would be very favorable for
Japan because otherwise Japan imports almost everything and
since the Fukushima accident, the closing of the nuclear
powerplants has added roughly 4 bcf a day to Japanese demand,
killing them because they are importing into a very high cost
market.
*******************************************************************************
Hmmm... seems to me that we have a "geographic" advantage that translates into much less transportation costs. Plus, this hearing was trying to decide if the US gov't should allow exporting of Nat Gas via LNG plants. It would seem that the PNG gov't has already heartily endorsed/approved the export of the majority of their Nat Gas. Lastly, I think this implies that our gas should have a bare minimum value of Henry Hub (currently just over $4) + the difference in transportation costs.
No new news here... but, it makes me feel better about our chances to do a selldown that will be greater than $1.50/mcf (maybe a lot greater !!!). Still impatiently waiting.... sigh....
In other news...
Abe's Master Plan
...
The goverment wants to encourage competition in supply and investment in renewable energy as well as In A NATIONAL INFRASTRUCTURE FOR IMPORTS OF NATURAL GAS.
Economist
May 18th 2013
The Great Gas Rush continues
![<img src=]( "Cool") " border="0" class="smilie" src="images/smilies/cool.gif" />
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