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54 comments on Some tanker arithmetic relating to LNG supply

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unplanner on January 26, 2006 - 6:17am

I chatted with an energy company exec last April about just this subject.

His capacity concerns in the near term was not on the shipping capacity, but rather in the liquification facilities. In a few years though, shipping capacity will be tight.

As for ship capacities, the average is 3.3BCF with capacities as large as 4.5 out there. His expectation was that as time goes one, ship capacity would also increase, somewhat reducing the overall number.

When it comes to servicing NA, its clear that most deliveries would not originate from the ME. Sempra (the only one with a terminal underconstruction) signed a contract with an indonesian supplier (for only half of the terminals rated capacity though). Logic would dictate that most sources would be closer, namely 20-25 day sail, not 40. Alaska LNG would be the fastest, as would bolivia for any new West Coast location. East coast locations would probably continue to source from existing locations, plus any incremental additions from W. Africa.

Read the rest of my conversation here:
http://unplanning.blogspot.com/2005/04/natural-gasp-conversation-with.html

My real question on the future of LNG really has to deal with how much GTL production could impinge on LNG production. Given the inevitable shortage in Liquid fuels and the attendant rise in prices, how much gas will get Haber-Bosched into diesel and sold to China in a simple tanker ship rather than chilled and liquified and sent via LNG ship to the US.

I am not sure if anyone has looked at the play between these two end uses for methane.

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Freddy Hutter on January 26, 2006 - 2:24pm

LNG supplies to the usa are a concern for 2008 & 2009 condidering rising demand and limited domestic supply. LNG imports were 0.65-bcf in 2004 and likely the same in 2005 due to disruptions. In 2006, we expect 0.95-bcf and 1.2-bcf in 2007.

2006 & 2007 is of little concern as i see it. As of Friday, working nat'l gas in the usa was 8.3% higher than last yr and 21.7% above the 5 yr avg. The world is unfolding as it should and prices should drop further as this becomes common knowledge.

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Dave Cohen on January 26, 2006 - 5:45pm

Ah, Freddy.

Are you just one of those guys who is always cheerful?

By the way, could you provide a source when you cite these numbers? I always like to see the source. Thanks in advance.

And, have a great day!

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Johnny on January 26, 2006 - 11:30pm

Jan. 26 (Bloomberg) -- Natural gas dropped to the lowest in almost half a year as mild winter weather leaves supplies fuller than normal.

U.S. stockpiles fell by 81 billion cubic feet last week, a much smaller drop than is typical in the middle of winter, the Energy Department said today. The decline left stocks at 2.494 trillion cubic feet, or 22 percent above the five-year average.

``There's plenty of gas in storage,'' said Ed Kennedy, an energy trader at Commercial Brokerage Corp. in Miami. ``Every day in January has been above normal,'' he said, referring to the warm weather that's spread over much of the northern tier of the country.

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Freddy Hutter on January 27, 2006 - 1:55pm

These are my own tracking figures based on analysis of the weekly oil and gas reports issued by EIA. In crisis times, we post them weekly to our website; otherwise we issue a monthly report of usa stocks. http://trendlines.ca/economic.htm