Bilbro Baggins Posted November 18, 2014 Share Posted November 18, 2014 http://www.bloomberg.com/news/2014-11-11/russia-china-natural-gas-ties-seen-leading-to-lng-project-delays.html Russia’s move to broaden its energy ties to China is clouding the outlook for natural gas export projects on the drawing board in the U.S., Canada and Australia. Companies looking to approve liquefied natural gas plants in the next couple of years and start shipments at the end of the decade will probably experience delays, according to energy consultants Tri-Zen International Inc. Gas-supply agreements between Russia, the world’s largest energy exporter, and China, the biggest consumer, are adding to pressure on projects that are already facing increasing competition, rising costs and the prospect of lower prices. “It’s just bad news generally” for LNG around the world, said Peter Howard, president of the Canadian Energy Research Institute. “It’s going to get really crowded.” China and Russia signed an initial gas accord two days ago, after a $400 billion deal earlier this year. The tie-up means that only one-in-20 proposed LNG projects targeting the 2020 market will be needed, while one-in-five seeking 2025 sales will be required, according to a Macquarie Group Ltd. report. “It’s not good news for projects hoping to get to a final investment decision in the next year or two,” Tony Regan, a consultant at Singapore-based Tri-Zen, said today. “Those developers will need to think about the post 2020 market.” Vulnerable Canadians The export of new supplies to Asia increases the possibility of a glut in global energy markets by early next decade. Once deliveries begin, China would supplant Germany as Russia’s biggest gas market, even as relations have soured with the U.S. and Europe over the Ukraine crisis. Multibillion-dollar projects led by companies including Royal Dutch Shell Plc, Petroliam Nasional Bhd., Chevron Corp. and Exxon Mobil Corp. (XOM) are among more than 20 proposals for LNG export that Canadian regulators have approved or are considering from the nation’s Pacific and Atlantic Coasts. Most Canadian projects are scheduled to begin after 2020. “The Canadian ones are probably the most vulnerable,” Regan said by phone. Among proposed projects in Australia are Woodside Petroleum Ltd. (WPL)’s Browse and Sunrise LNG ventures, with partners including Shell, and Exxon’s Scarborough venture. Expansions of plants including Exxon’s $19 billion project in Papua New Guinea are also being considered. Those proposed plants would follow seven Australian projects currently under construction for about $185 billion. Window Closes In Australia, “new local projects will be undercut by international competitors while existing projects will see downward pricing pressure” as Russian pipeline volumes add to supplies, according to Macquarie. In the U.S., Cheniere Energy Inc. is set to be the first company to export gas produced from the shale boom. Dominion Resources Inc. (D)’s Cove Point terminal in September became the fourth U.S. export project to win permission from the Federal Energy Regulatory Commission to ship LNG around the world. Mozambique is among countries vying with the U.S., Australia and Canada to build mega-LNG projects. Demand for Canadian LNG in China will be strong regardless of the latest deal for a gas pipeline from Russia, said Nigel Kuzemko, chief executive officer of Steelhead LNG, a proposed export project. China’s appetite for gas is probably stronger than some forecasts suggest, Woodside said in May. Second Deal The second gas-supply pact is less attractive to China, and Russia’s OAO Gazprom may need to offer a “serious discount’’ to secure a final deal, according to Alexander Kornilov, an Alfa Bank energy analyst in Moscow. The price in the Chinese contract earlier this year is equal to about $10 per million British thermal units, two Russian officials said in July. China pays about $16 per million British thermal units for LNG, Macquarie said. “The more Russian gas going into China” means the less higher-cost LNG China will import from places like Canada, Reynold Tetzlaff, energy leader for Canada at PricewaterhouseCoopers LLP in Calgary, said by phone. “So we can’t ignore it, that’s for sure. We do need to move quickly or the window starts to close.” Link to comment Share on other sites More sharing options...
Chalky Posted November 18, 2014 Share Posted November 18, 2014 Perhaps Stevie Harper should talk tough to Xi Jinping and grudgingly shake his hand to scare them into backing down and buying our LNG. Link to comment Share on other sites More sharing options...
aliboy Posted November 18, 2014 Share Posted November 18, 2014 We are supposed to be in an energy crisis and will run out of oil, and suddenly there is a glut of oil and LNG? LOL Link to comment Share on other sites More sharing options...
Nuxfanabroad Posted November 18, 2014 Share Posted November 18, 2014 Not worried about all this nonsense. We'll find a 2nd planet soon. Link to comment Share on other sites More sharing options...
Warhippy Posted November 18, 2014 Share Posted November 18, 2014 Anyone with half a brain knew this was coming. The report doesn't even mention Australia's fields or the fact that they're in talks to actually build a direct pipeline to Malaysia who has numerous operating facilities and one of the largest LNG tanker fleets in the Pacific. Clark lied about LNG revenues, experts told her it was way off base, then she turned tail and immediately dropped her estimates and the tax/royalty rates to try to entice people to develop in canada. The second the West sanctioned Russia Russia signed this deal as they just have to build their pipeline through Mongolia and they're in China. Any idea who is going to provide the labour for that? if you guessed China you are correct. Now let us speak from a point of economics. If you can buy your gas without ANY transportation costs from source A (Russia), buy your gas with minimal transportation costs from source B (Australia) or buy your gas from source C (BC) knowing source C will cost literally upwards of 30% more for transport and tax/royalty rates Who are you going to purchase from? This is not a green movement issue with halting pipelines in BC. This is simple economics and Clark knows about as much about the economy as Harper does. BC was 10 years to late to the LNG field and now runs the risk of selling below cost at high volume to make up for it. The worst will be when massive amounts of tax dollars are funneled in to the development of the infrastructure... Link to comment Share on other sites More sharing options...
aGENT Posted November 18, 2014 Share Posted November 18, 2014 SIgh..... Link to comment Share on other sites More sharing options...
NightHawkSniper Posted November 18, 2014 Share Posted November 18, 2014 Hopefully China can buy Russia's crap for dirt cheap because of all these sanctions. Link to comment Share on other sites More sharing options...
SabreFan1 Posted November 18, 2014 Share Posted November 18, 2014 We'll be buying the energy supplies from Canada dirt cheap. Can't wait!! Link to comment Share on other sites More sharing options...
Chalky Posted November 18, 2014 Share Posted November 18, 2014 Anyone with half a brain knew this was coming. The report doesn't even mention Australia's fields or the fact that they're in talks to actually build a direct pipeline to Malaysia who has numerous operating facilities and one of the largest LNG tanker fleets in the Pacific. Clark lied about LNG revenues, experts told her it was way off base, then she turned tail and immediately dropped her estimates and the tax/royalty rates to try to entice people to develop in canada. The second the West sanctioned Russia Russia signed this deal as they just have to build their pipeline through Mongolia and they're in China. Any idea who is going to provide the labour for that? if you guessed China you are correct. Now let us speak from a point of economics. If you can buy your gas without ANY transportation costs from source A (Russia), buy your gas with minimal transportation costs from source B (Australia) or buy your gas from source C (BC) knowing source C will cost literally upwards of 30% more for transport and tax/royalty rates Who are you going to purchase from? This is not a green movement issue with halting pipelines in BC. This is simple economics and Clark knows about as much about the economy as Harper does. BC was 10 years to late to the LNG field and now runs the risk of selling below cost at high volume to make up for it. The worst will be when massive amounts of tax dollars are funneled in to the development of the infrastructure... Only to have the bottom fall out of the market right as we complete the projects. No one ever listens to me, but we should be very mindful of the supply and demand of LNG globally, and not allow Corporations or Countries to dictate how we move forward with our resource foreign policy. I'd argue that Stevie Harper knows a tad more about global economics than Clark, but that doesn't really give me any sense of relief given Stevie's penchant of letting his MASSIVE ego dictate his choices. At the end of the day, at least we have a domestic market and still have a neighbour to the South who will gladly under pay for our LNG....for what it's worth. Link to comment Share on other sites More sharing options...
Chalky Posted November 18, 2014 Share Posted November 18, 2014 Hopefully China can buy Russia's crap for dirt cheap because of all these sanctions. It's true. Russia will find out the hard way that they are just trading dollars...or rubles...whatever. The bottom line is Russia needs China more than China needs Russia...especially right now. I say that because China has a lot more options for energy than Russia does trading partners. Russia also needs to secure trading partners immediately with the Ukraine situation, and China is taking advantage to the opportunity. If the Russia well runs dry, or is no longer is the best option, China will move to the next one. This is happening exactly as predicted and Russia is being forced to action. Link to comment Share on other sites More sharing options...
aGENT Posted November 18, 2014 Share Posted November 18, 2014 Opportunity strikes for a national energy program? Link to comment Share on other sites More sharing options...
Lancaster Posted November 18, 2014 Share Posted November 18, 2014 The only way for Canada to make any headway to other APEC countries would be portraying itself as the more politically friendly alternative. Japan should be the prime target. They're having energy problems, they spend way too much money on it currently for their industries. They can't really be buddy-buddy with the Russians due to sanctions and some land claim issues.... should be prime for Canada to compete with the Aussies for their business. Link to comment Share on other sites More sharing options...
Warhippy Posted November 19, 2014 Share Posted November 19, 2014 Only to have the bottom fall out of the market right as we complete the projects. No one ever listens to me, but we should be very mindful of the supply and demand of LNG globally, and not allow Corporations or Countries to dictate how we move forward with our resource foreign policy. I'd argue that Stevie Harper knows a tad more about global economics than Clark, but that doesn't really give me any sense of relief given Stevie's penchant of letting his MASSIVE ego dictate his choices. At the end of the day, at least we have a domestic market and still have a neighbour to the South who will gladly under pay for our LNG....for what it's worth. I wouldn't. he ran initially as an economics whiz who never left the mail room. 40+ year amortization mortgages and trying to twin and pair the canadian banking system to and with the US model as well as absolutely swearing up and down there would be no recession only to stand dumbfounded when one happened, and then to say he wouldn't bail out the canadian banks or CMHC only to do just that and then loses billions everywhere while failing to successfully tell anyone how much any of his procurements would cost. he knows as much as Clark maybe....maybe less by his track record. Link to comment Share on other sites More sharing options...
drummer4now Posted November 19, 2014 Share Posted November 19, 2014 Not worried about all this nonsense. We'll find a 2nd planet soon. Yeah alrighty then... What we are doing basically messing things up for future generations as did people before us. I gurantee you we wont be colonizing another planet anytime soon.. Not in our lifetime Link to comment Share on other sites More sharing options...
Violator Posted November 19, 2014 Share Posted November 19, 2014 This doesn't mean much to Canada This deal is a drop in the bucket. Link to comment Share on other sites More sharing options...
Hobble Posted November 19, 2014 Share Posted November 19, 2014 Wish Canada could just be a leader in renewable energy funding and research, and slowly ditch fossil fuels. Link to comment Share on other sites More sharing options...
Nuxfanabroad Posted November 19, 2014 Share Posted November 19, 2014 Yeah alrighty then... What we are doing basically messing things up for future generations as did people before us. I gurantee you we wont be colonizing another planet anytime soon.. Not in our lifetime Apparently one can no longer employ lame sarcasm?.. Link to comment Share on other sites More sharing options...
Ghostsof1915 Posted November 19, 2014 Share Posted November 19, 2014 Wish Canada could just be a leader in renewable energy funding and research, and slowly ditch fossil fuels. Exactly. Link to comment Share on other sites More sharing options...
Mr. Ambien Posted November 19, 2014 Share Posted November 19, 2014 Wish Canada could just be a leader in renewable energy funding and research, and slowly ditch fossil fuels. Wish Canada was a bottomless pit of money to afford the investment. Would be nice all around to rid North America of foreign oil dependence. Link to comment Share on other sites More sharing options...
KoreanHockeyFan Posted November 19, 2014 Share Posted November 19, 2014 The government put too many eggs in one basket. Can't believe Harper and Clark haven't even put any effort into growing the Canadian economy through some sort of "dual-track." Invest in our natural resources, and invest in some RND for other possible resources. You know, sort of like diversifying your investment portfolio when you're trying to manage your own money? Diversify = less risk. Too bad the government doesn't understand basic financial principles when it comes to trying to grow the economy. Link to comment Share on other sites More sharing options...
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