Headlamp – AGDC says no to Port MacKenzie and you’re still the one to Nikiski.

Tweet of the day: Wood Mackenzie (@WoodMackenzie) “China said in early 2017 it was targeting annual production of 30 billion cubic metres (bcm) of shale gas by 2020, but we forecast that production will reach 17 bcm by that time”

Nikiski is still the one. The President of the Alaska Gasline Development Corporation has confirmed that Nikiski is still the preferred site for the AK LNG liquefaction facility. On Thursday, April 12, AGDC President Keith Meyer stated in a press conference that Nikiski is still the preferred site for the natural gas liquefaction plant and terminus. The Mat-Su Borough filed a complaint on January 9, with the Federal Regulatory Energy Commision (FERC) stating that the project and regulators “improperly and intentionally excluded” the borough’s Port MacKenzie as a “reasonable alternative” for the proposed liquefied natural gas plant. According to the AGDC they plan to build a natural gas offtake facility at milepost 731 (measured from Prudhoe Bay) for gas withdrawals in the Mat-Su valley. Nikiski was identified as the preferred site location over four years ago, after more than two dozen possible locations were analyzed. Back in March, a schedule was released by the FERC to the AGDC. According to the plan, a draft Environmental Impact Statement will be completed by March 2019, with the final Environmental Impact Statement set for December of that year. Construction will begin after FERC finalizes its regulatory decision in March 2020.

Geopolitical uncertainty stimulates oil prices. Oil prices were little changed on Tuesday as investors took profit following last week’s rally above three-year highs, with prices supported by growing concern over the potential for supply disruptions. Brent crude oil futures LCOc1 were down 9 cents at $71.33 a barrel by 11:50 a.m. EDT (1550 GMT), having come off an earlier high of $71.89, while U.S. crude futures CLc1 slipped 8 cents to $66.14. “We’re starting to see a little of the premium come off from geopolitics, and the focus is shifting to inventories,” said Bill Baruch, president of Blue Line Futures in Chicago. Brent has risen 1.4 percent so far this month. It hit a peak last week of $73.09, the highest since late 2014, amid mounting tensions in the Middle East, the possibility of renewed U.S. sanctions against Iran and falling output in Venezuela, where economic crisis has dragged down oil output to multi-year lows. “The rally upwards was purely on geopolitical risk and if now we haven’t had any further stimulus, we’re seeing prices slip off a bit,” Natixis commodities strategist Joel Hancock said. Analysts expected uncertainty over U.S. policy towards Iran to continue to support prices through May 12, the deadline that U.S. President Donald Trump gave to Congress and European allies to “fix” the Iran nuclear deal.

Winter is coming…and we’re excited. ConocoPhillips say its 2018 winter exploration and appraisal program on Alaska’s western North Slope produced promising results. The Houston-based company Monday announced it had concluded 2018 winter program and that three appraisal wells supported a previously announced estimate of at least 300 million barrels of oil at its Willow Discovery leasing area within the National Petroleum Reserve-Alaska. Company executive vice president Matt Fox calls the results “promising.” The company says it originally planned to drill five wells, including two appraisal wells at Willow. Drilling efficiencies allowed the drilling of a third appraisal well plus three exploration wells. The company says all six wells reached oil and verified potential. The exploration wells represent new discoveries and the company will assess results in anticipation of additional appraisal next winter.

From today’s Washington Examiner, Daily on Energy:

TRUMP, ABE, MACRON ON CLIMATE COLLISION COURSE? President Trump will meet with Japan’s Prime Minister Shinzo Abe at Mar-a-Lago Tuesday and a week later with French President Emmanuel Macron at the White House. Both leaders are facing interesting energy climates.

Japan’s fossil fuel imports: Abe’s country is one of the largest importers of coal and natural gas, two areas of intense interest in meeting Trump’s energy dominance agenda, which includes more exports of both fossil fuels.

At the same time, Abe is a signatory to the Paris climate change deal, which Trump is leaving, although it will take until the next presidential election to do so. It will take a heavy lift for Japan to reduce its reliance on fossil fuels to meet its climate goals, especially in the wake of 2011 Fukushima nuclear disaster that caused its expensive shift in power production away from carbon-free nuclear energy.

France talks a good game: Macron, of course, has chided Trump for his climate stance, but for the most part wants to appear as though not having the U.S. on board the Paris Agreement will not deter the rest of the world from cutting greenhouse gas emissions.

However … : France imported more electricity last year than in the past five years, while lagging other European countries in its adoption of renewables, according to Reuters.

Bottom line: Both Japan and France find themselves in a place where aggressive climate actions may lag real-world challenges to keep the lights on.

 

First Reads:

Oil prices little changed as profit locked in; supply worry supports
Reuters, Ayenat Mersie, April 16, 2018

AGDC Confirms Nikiski Over Port MacKenzie For LNG Site
KSRM Radio Group, Jennifer Williams, April 16, 2018

Winter drilling in Alaska ‘promising’ for ConocoPhillips
AP News, April 16, 2018