Page 7 - NorthAmOil Week 21

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Major LNG projects advance
Some major LNG projects are still moving for- ward, despite the oversupply that has led some developers to delay plans for adding new lique- faction capacity. In some cases, though, the pro- gress is coming at the regulatory level. As a result, there are no guarantees that a given project will ultimately reach the final investment decision (FID) stage.
This is the case with Alaska LNG, which received authorisation from the US Federal Energy Regulatory Commission (FERC) on May 21. The approval marks the conclusion of an environmental review process that has taken over three years. While the approval has been welcomed, the project remains mired in uncer- tainty, owing to the high cost of development. Its price tag was previously estimated at $43bn but was recently reviewed; an updated figure has not yet been disclosed, though.
It has previously been reported that state- owned Alaska Gasline Development Corp. (AGDC), the project’s backer, may sell off the venture’s assets if it does not find another party to develop Alaska LNG. Obtaining authorisa- tion from FERC could help de-risk the project significantly in the eyes of potential investors and developers. (See: Alaska LNG obtains federal authorisation, page 15)
Elsewhere in the world, Qatar has reiterated its commitment to increasing its LNG produc- tion significantly in the coming years despite the current oversupply in the market.
Indeed, Qatari Minister of Energy Saad al-Kaabi, who is also the CEO of Qatar Petro- leum (QP), said that if there is capacity for the country to grow its LNG output beyond the planned 126mn tonnes per year (tpy), it may commit to this in the coming years.
Meanwhile, few developments illustrate the short-term impact of recent developments on demand more clearly than the growing number of cancellations for cargoes that were scheduled for loading at US terminals. Bloomberg has esti- mated that the number of US cargoes scheduled
for July loading that have been cancelled could be as high as 35-45, which would mark an increase compared to June.
If you’d like to read more about the key events shaping the global LNG sector then please click here for NewsBase’s GLNG Monitor.
Latin America’s hopes rising
Several Latin American countries appear to be optimistic about the future of oil and gas, despite the shocks the industry has suffered over the last two months.
Omar Gutierrez, the governor of the oil-pro- ducing Neuquen province in Argentina, has praised the government’s decision to introduce an artificially high domestic price floor, calling it “a great stimulus for investment, production and especially for the protection of jobs. Some indus- try observers believe that the new policy will do little to bring production back up to pre-pan- demic levels, though.
In Brazil, Royal Dutch Shell has begun drill- ing at Saturn, a new block in the offshore Santos Basin. The super-major remains upbeat about the potential of the pre-salt zone but believes Brazilian projects will have to fight hard to attract investment in the future.
Guyana, meanwhile, has named all 35 of the companies that have bid for the right to market the government’s share of oil from Liza, a field within the offshore Stabroek block. It has also said it will seek help from experts in evaluating bidders.
Jaguar E&P, an independent Mexican opera- tor, has drawn attention to “under-drilled” areas along the Gulf coast and in the northern parts of the country.
According to Warren Levy, the company’s CEO, the northern Burgos Basin is particularly attractive because of its proximity to the US Per- mian basin.
In other news, Colombian officials are work- ing to address private companies’ concerns about high oil pipeline tariffs.
Week 21 28•May•2020 w w w . N E W S B A S E . c o m P7