Headlamp – Modular LNG plant still in the works for Parks Highway.

 

Modular LNG plant still in the works for Parks Highway. Siemens is still working on its plan to build a modular liquefied natural gas plant in the Houston area, on the Parks Highway, company officials said in an interview on Thursday. The company is in discussions with the Interior Gas Utility (IGU) in Fairbanks, which needs to expand LNG purchases as it builds out a new natural gas distribution system, said Michael Walhof, Global Sales Director for Siemens’ Dresser-Rand business Distributed LNG Solution. Siemens AG (Berlin and Munich) is active around the globe, focusing on electrification, automation and digitalization, Walhof said. “We are one of the world’s largest producers of energy-efficient, resource-saving technologies. The company supplies power generation and power transmission solutions and is a pioneer in infrastructure solutions as well as automation, drive and software solutions for industry,” Walhof said.

China shakes up the oil futures market. It’s taken a quarter of a century, but China finally has its own oil futures. At 9 a.m. local time on Monday, crude contracts began trading on the Shanghai International Energy Exchange. Futures for September settlement opened at 440 yuan a barrel, up from a reference price of 416 yuan. The world’s biggest oil buyer is offering yuan-denominated futures that foreigners can buy and sell – a first in Chinese commodities. Among the most intriguing questions is whether the traditional benchmarks of Brent crude in London and West Texas Intermediate in New York will face a serious challenger. Here are some of the other key questions. 1. Why is this important for China? Futures trading would wrest some control over pricing from the main international benchmarks, which are based on dollars. Denominating oil contracts in yuan would promote the use of China’s currency in global trade, one of the country’s key long-term goals. And China would benefit from having a benchmark that reflects the grades of oil that are mostly consumed by local refineries and differ from those underpinning Western contracts. 2. Why now? The push for oil futures gained impetus in 2017 when China surpassed the U.S. as the world’s biggest crude importer. The Asian nation’s purchases reached a record high in January.

Let’s encourage investment to come “North to the Future.” On March 12, 1968, Alaska forever changed. That was the day a team of geologists, engineers and drillers confirmed the Prudhoe Bay oil field. The confirmation of a Middle-East sized oil field here, in the United States, made headlines across the globe. Fifty years later, it’s still one of the largest oil fields in North America and one of the 20 largest oil fields ever discovered in the world. Once the oil field was developed and the trans-Alaska pipeline constructed, the state for the first time had the ability to support itself. State oil taxation (including royalties) — $141 billion collected to date — funded transportation infrastructure, schools, public safety and the Alaska Permanent Fund. Those oil dollars, averaging 80 percent of state budgets, are what modernized Alaska. Prudhoe Bay also gave us something maybe even more valuable than oil. It revised what both Alaska and the nation thought it could become by transforming us from a relatively undeveloped state to a land of significant resource-based economic opportunity.

Fairbanks Daily News-Miner editorial: Thumbs down: Alaska labor officials reported a loss of 2,300 jobs in the state from February 2017 to February 2018. The retail sector was hit hardest, with a loss of 800 jobs during that period. The oil and gas industry suffered the second-worse loss with 700 jobs being lost. It shouldn’t surprise anyone that people are migrating out of the state. Hard times indeed.

Smooth sailing for the Alaska LNG Project.” It is full steam ahead for an Alaska pipeline project. The Alaska Liquefied Natural Gas project has cleared a major hurdle. The Federal Energy Regulatory Commission (FERC) has laid down a timeline to get the project started. The Alaska Gasline Development Corporation says it should be smooth sailing to get the project underway. The president of AGDC says he’s looking for support on Capitol Hill for the $43 billion project. Keith Meyer says he expects broad support from officials for his $43 billion dollar project. “All around for Alaska this is a very transformational project. It’s a very large job creator. It’s a very large economic engine,” said Keith Meyer. Meyer says the project will create thousands of jobs in the state. It would span more than 800 miles, from Prudhoe Bay in the north, to Nikiski, producing around 3.5 billion cubic feet of gas per day, much of it for export to China. He says his company should have an environmental impact statement from FERC by the end of 2019, clearing the way for construction and eventually service by 2024 or 2025. “The gas supply in the North Slope is one of the world’s largest concentrations of stranded natural gas. So this has potential for over a hundred years,” said Meyer.

From coal to LNG – China demand will be demanding. China’s shift away from coal will see demand for LNG surpass 300 million tons for the first time ever, raising concerns of short supply. Data from Bloomberg New Energy Finance has forecast a growth of 7.2 per cent in LNG demand, lifting from 285 million tons in 2017 to reach 305 million tons in 2018 as China shifts away from coal-fired power generation to gas and domestic production slows in Europe, putting pressure on producers to meet demand. The BNEF Global LNG Outlook 2018 report predicts demand will stabilize in the short term, at around 314 and 330 million tons between 2019 and 2022 before increasing again. “From 2023, imports will rise at a compound annual growth rate of 5 per cent till 2030,” BNEF said. This rate is slightly more aggressive than that forecast by Shell, which predicts a growth rate of 4 per cent per annum. BNEF forecast demand will hit a peak in 2029 before slowing once more, outstripping supply between 2024 and 2026 unless new projects are brought online.

First Reads:

China Is About to Shake Up the Oil Futures Market
Bloomberg Markets, Grant Clark and Sungwoo Park, March 25, 2018

Alaska’s current oil tax and royalty rates are fair. The Legislature shouldn’t change them.
Anchorage Daily News, Bill Corbus, March 25, 2018

Siemens still planning to build LNG plant in Houston
Mat-Su Valley Frontiersman, Tim Bradner, March 24, 2018

Employment declines statewide
Fairbanks Daily News-Miner, March 26, 2018

Alaska gas official in Washington as LNG Project waits for approval
KTUU, Peter Zampa, March 23, 2018

LNG global demand to hit new record high
The Sydney Morning Herald, Cole Latimer, March 26, 2018