Category Archives: Cameron (P)

USA: Sierra Club Opposes Cameron LNG Export Plans

Apr 26

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The Sierra Club filed a formal protest to the U.S. Department of Energy (DOE) on Tuesday, challenging a proposal to export billions of cubic feet of domestic natural gas from a facility on Lake Charles in Cameron Parish, LA.

The Sierra Club’s protest challenges natural gas companies’ efforts to secure liquefied natural gas (LNG) export licenses without acknowledging its damaging effects. DOE is currently studying the effects of exporting as much as a fifth of the domestic gas supply, and the Sierra Club calls for similar studies of the public health and environmental damage caused by increased fracking.

The Sierra Club’s challenge contends that the Cameron export proposal would lead to increased air and water pollution in Louisiana and Texas and raise domestic natural gas prices. The filing calls for a full Environmental Impact Statement to study the extent of this proposed facility’s environmental damages before DOE makes any final decisions. Weighing these threats is particularly important because the oil and gas industry currently exploits numerous loopholes and exceptions in federal safeguards, putting the health and safety of Americans at risk.

This filing is the fifth protest the Sierra Club has brought before DOE and other regulatory bodies, opposing LNG export facilities. The other challenges were filed against Cove Point, MD, Sabine Pass, LA, Coos Bay, OR, and Freeport, TX.

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Blackstone to Invest $2 Billion in Cheniere Energy in Bet on LNG Expansion

Feb 27

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By Jim Polson – Feb 27, 2012 7:49 AM CT

Cheniere Energy Partners LP (CQP) said Blackstone Group LP (BX) agreed to invest $2 billion toward construction of a $5 billion natural-gas export terminal.

The financing is a “significant milestone” toward Cheniere’s plan to build the plant, Chairman and Chief Executive Officer Charif Souki said in a statement today. If built, the plant would be the first constructed in more than four decades to export U.S. natural gas by ship.

Cheniere Energy is seeking final approval from the Federal Energy Regulatory Commission for the plant, which would liquefy gas for export from its existing import terminal in Cameron Parish, Louisiana. The Houston-based company obtained Energy Department approval to export after U.S. production of the fuel surged from hydraulic fracturing.

“Obtaining this financing will be a significant milestone for the advancement of construction for the first two liquefaction units,” Charif Souki, chairman and chief executive officer of Cheniere Energy Partners and its parent, Cheniere Energy Inc. (LNG), said in today’s statement.

The Blackstone entities have agreed to buy 111 million new senior subordinated paid-in-kind units for $18 billion each, according to the statement. Final terms are contingent on Cheniere securing debt financing.

Starting Construction

Cheniere expects to obtain the remaining financing by March 31 and to begin construction by June 30, according to the statement.

The units that Blackstone is buying will pay 4.2 percent interest quarterly and convert to partnership common units once the first two sections of the plant begin commercial operation. Cheniere Energy Partners will use cash from the sale to buy the pipeline that connects the terminal to the U.S. gas pipeline network from Cheniere Energy Inc., according to today’s statement.

The announcement was made before regular trading began on U.S. markets. Cheniere Energy Partners rose 6.7 percent to $22.30 at 8:46 a.m. in New York. Cheniere Energy Inc. rose 17 percent to $16.42.

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A Little Bit Louder Now, Chevron Starts To Shout About Davy Jones And The Ultra Deep

Feb 21

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Joan Lappin, Contributor

I can’t stop hearing that famous Isley Brothers song Shout in my head as I write this post: “A little bit louder now, a little bit LOUDER now, A LITTLE BIT LOUDER NOW.”    About a year ago, speaking at a popular oil and gas conference Chevron tipped its hat to McMoRan’s Jim Bob Moffett and his work in the Gulf of Mexico Shallow Water Ultra Deep (SWUD) play that has been ongoing for more than five years.  That event was truly noteworthy because major oil companies rarely, if ever, acknowledge a little player like MMR as being out front and leading the wave on any important new geological play.  Chevron has recently promoted the Shallow Water Gulf of  Mexico to one of its top three areas of geologic focus around the world.  And it is becoming more vocal about its involvement.

Chevron is no longer whispering. In fact, there is a crescendo building in what CVX is saying about the Gulf of Mexico and what it is doing itself and with partners, both onshore and offshore.  Many MMR watchers know that at 2011 year’s end, Chevron spud a well onshore in Cameron Parish, LA called Lineham Creek. It has a proposed total depth of 29,000 feet targeting the Eocene and Paleocene objectives below the salt weld. This is Chevron’s well in the Rockefeller Preserve, land that was donated to the State of Louisiana years ago. However, the royalty rights on the land were retained and passed to Chevron.

In recent months, Chevron invited MMR to participate in the Lineham well and Moffett agreed as long as his Ultra Deep partners were also included in the project. What’s significant is that giant Chevron wanted MMR to join it in this project as an equal partner. After Moffett made sure his partners were along for the ride:  MMR is participating for 36%, EXXI for 9%, and W.A. “Tex” Moncrief for 5%.  Why? Because MMR now knows more about the SWUD than any other company.  For sure, the view is that perhaps geologically this play extends onshore and not just in the shallow water. This well will explore that concept and is located halfway between (on an east/west axis) Davy Jones and Chevron’s Bear Hump well which has been completed and is now being evaluated. What MMR has mastered over these last few years at Blackbeard West, Blackbeard East, Lafitte, and its Davy Jones’ discoveries is now critical for anyone who is also pursuing bounty in the general area and at the depths below 20,000 feet that have become the new  exploration frontier.

During February, Bobby Ryan, Chevron’s VP of Global Exploration, spoke at another oil and gas conference about their enthusiasm for the SWUD and the work they are doing with MMR.  On page 15 of its presentation, it describes the UltraDeep Gas Play as new play in a mature basin.  Chevron can easily be a player because it already controls major acreage from wells drilled long, long ago and that are still producing to retain the leases. On that same slide, Davy Jones is listed as an exploration discovery. Who knew CVX was a player in DJ?

The transcript contains the following information:

“All eyes are focused on Davy Jones, that McMoRan-operated well, which we’re into a royalty position, is preparing for a test soon, 25,000 pound test equipment. This is a significant environment in the sense of geologically from what we’re typically used to. So we’ll be watching the results of that well. Meanwhile, we’re drilling and just spudded on December 31st, the Lineham Creek well you see onshore Louisiana there. In fact, Bear’s Hump was actually onshore as well.”

If you have ever wondered why the DJ participation percentages never quite added up to 100%, now we know.  Chevron does not have a working interest but it does have a royalty interest in DJ.  In probing, we also learn that somehow in the negotiations that have gone on this year between CVX and MMR, Chevron has also obtained access to the DJ logs and geological evaluations and interpretations which would not normally be available to a royalty interest holder.

Moffett has told us in no uncertain terms that he intends to bring in a partner with very deep pockets to help develop the Ultra Deep play.  He has also told us he plans to follow the model he used for the development of the Grasberg Mine at Freeport Copper and Gold (FCX) years ago.  In that case, Rio Tinto came along for the ride after paying FCX $1.5 billion for which it received ZERO participation in anything that had already been discovered up to that point.  It then paid up for a half participation of what came after.  Perhaps we are in the very early stages in the mating dance between MMR and Chevron.  Don’t expect a rush on that. For sure, Jim Bob won’t do anything until he has proved up exactly what he has so the reserve engineers are happy and he is fully paid for all the hard pioneering work of the last several years.

We know that for a long time, the SWUD detractors have said there is nothing to be found in the Ultra Deep. So much has now been found that viewpoint has become ridiculous. Of course, flowing these wells is still to come.  Another key in the shallow water is that offshore LA there are existing pipelines to carry these new discoveries to market right away. Billions will not have to be spent over future years to accomplish that part of the equation from the deepwater discoveries.   As our country shifts, ever so slowly,  away from coal and nuclear power and toward Natural Gas, nearby infrastructure is a very good thing.

The detractors have also said repeatedly, if this is such a great play, then why aren’t any majors involved?  Well, clearly now there are!  They aren’t just talking about it in whispers any longer.  Chevron is starting to SHOUT about it. It’s about time.   Or as Jim Bob said on a conference call last year: “Hallelujah, Hallelujah!”

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USA: Sabine Pass LNG Gets Cargo

Feb 21

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The U.S. Sabine Pass liquefied natural gas terminal received an LNG cargo yesterday, according to shipping data.

The Arctic Spirit, owned by Teekay LNG, has a capacity of 87.305 cbm.

Cheniere’s Sabine Pass LNG terminal  is located on 853 acres of land along the Sabine Pass River on the border between Texas and Louisiana, in Cameron Parish.

It  has regasification and send-out capacity of 4.0 billion cubic feet per day (Bcf/d) and storage capacity of 16.9 billion cubic feet equivalent (Bcfe).

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USA: Sabine Pass Re-Exports LNG Cargo

Jan 13

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The U.S. Sabine Pass liquefied natural gas terminal re-exported a LNG cargo Sunday, according to shipping data.

The cargo is being hauled by Seri Balquis, a 157,610 cubic-meter tanker, and is heading to Asia.

According to shipping data, the cargo is due to arrive at Port Said in Egypt on Jan. 23.

The Sabine Pass LNG terminal, operated by Cheniere Energy, is located on 853 acres of land along the Sabine Pass River on the border between Texas and Louisiana, in Cameron Parish, Louisiana.

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GAIL to buy 3.5 million tonnes of LNG from U.S. firm

Dec 11

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by Sujay Mehdudia

“It will ensure long-term gas supply to meet demand in India”

In a major step aimed at meeting India’s energy security requirements, state-run Gas Authority of India Limited (GAIL) on Sunday announced that it signed an agreement to buy 3.5 million tonnes a year of liquefied natural gas (LNG) for 20 years from a U.S. firm.

“GAIL has signed a sales and purchase agreement [SPA], for supply of LNG over 20 years, with Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, LP, the United States, for supply of 3.5 million tonnes per annum of LNG,” the company announced it in a statement here. The supplies may start as early as 2016.

“Under the SPA, GAIL will pay Sabine Liquefaction as per contractual provisions on a Henry Hub (U.S. gas benchmark) basis after transfer of custody on FOB. LNG will be loaded onto GAIL’s vessels,” the statement said.

The 20-year term would commence upon the date of first commercial delivery, and there was an extension option of up to 10 years. The LNG from Sabine Pass shall form a part of the basket for feeding LNG to Dabhol terminal in Maharashtra and Kochi in Kerala.

GAIL chairman and managing director B.C. Tripathi said: “The SPA with Cheniere will help GAIL to ensure long-term gas supply for the growing demand in the Indian market. This will be in addition to other initiatives being undertaken by GAIL, which includes building captive LNG facilities in India and augmenting its transmission capacity from 175 million standard cubic metres a day to over 300 msmcd over the next two years.”

“Charif Souki, chairman and CEO, said GAIL would join BG and Gas Natural Fenosa as the next foundation customer for our Sabine Pass liquefaction project,” he said.

GAIL is India’s leading natural gas company and its largest shareholder is the government of India.

“We are building a strong portfolio of customers, consisting of energy companies engaged in natural gas, LNG and power markets with operations spanning the globe. We continue to hold advanced discussions with additional global LNG buyers and expect to complete commercial discussions for the remaining capacity of the second phase of the project in the coming weeks,” he added.

The LNG would be supplied from four of the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish, Louisiana. The Sabine Pass LNG terminal project is being developed by Sabine Liquefaction and would include up to four liquefaction trains capable of producing up to 18 mtpa of LNG. The project is being developed in phases with each LNG train commencing operations approximately six to nine months after the previous train. Sabine Liquefaction recently announced that it had reached its targeted annual contract quantity of 7 mtpa for the first phase and was advancing towards making a final investment decision for the development and construction of the first two liquefaction trains.

“The SPA is subject to certain conditions precedent, including, but not limited to, Sabine Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the second phase of the liquefaction project,” the statement said.

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