| To: Ed Ajootian who started this subject | 6/22/2003 11:26:07 PM | | From: Ed Ajootian | | | | Freeport LNG Secures Chemical Giant Dow
(Copyright © 2003 Energy Intelligence Group, Inc.)
Oil Daily Monday, June 23, 2003
Dow Chemical, a $28 billion per year petrochemical business and significant consumer of natural gas, announced Friday that it intended to secure capacity in the proposed Freeport liquefied natural gas (LNG) terminal in Freeport, Texas (OD May1,p5). This will make the chemical giant the first end-user of natural gas in the US to look to LNG imports to ensure a reliable and presumably more cost efficient avenue to meeting its needs for natural gas feedstocks.
Dow signed up for 500 million cubic feet per day of capacity at the 1.5 billion cubic feet per day facility for 20 years starting in 2007. A $1.2 million initial payment will be paid to Freeport, pending a final agreement, though the total price was not disclosed. Cheniere Energy, a 30% shareholder in the project, has indicated previously that it was looking to earn a target price of between 30¢ to 35¢ per million Btu or about $68 million per year in service fees for a third of the capacity at Freeport. Other shareholders in Freeport LNG are investor Michael Smith with 60% and Contango Oil & Gas with 10%.
Keith Meyer, president of Cheniere LNG told Oil Daily, "Dow's decision to take capacity in the Freeport LNG receiving terminal is not only significant from the project perspective, but will serve as a guiding light for all major gas consumers to be proactive in an effort to pull imported gas supplies to the United States. This also helps to validate the idea of locating large LNG receiving terminals in close proximity to the large gas consumers and interstate pipelines along the Gulf Coast."
Dow Chemical consumes about 700 MMcf/d for its operations in the Texas Gulf Coast, all of which have been adversely affected by high natural gas prices over the past year. Companies such as Exxon Mobil who sell natural gas to end-users such as Dow on the other hand have made out very well.
Dow is looking to minimize these costs and is currently planning to purchase LNG directly from suppliers in the Atlantic basin, including Nigeria and Trinidad, Freeport LNG spokesman Nathan Will told Oil Daily.
"In spite of Dow's tremendous strides to reduce energy intensity and a historic focus on co-generation, energy efficiency and conservation, it continues to be challenged with unprecedented increases in costs for US hydrocarbons and energy -- particularly natural gas," Jody Sumrall, Dow's business manager for LNG and Texas Gas, said in a press release.
Dow has a large petrochemical complex located next door to the proposed site. Natural gas price volatility was one of the contributing factors in the shut down of the company's Union Carbide Texas City olefins plant that was recently completed, according to Dow spokeswoman Leslie Hatfield.
Madeline Jowdy |
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| To: Ed Ajootian who wrote (75) | 7/1/2003 10:35:51 AM | | From: DELT1970 | | | | Unit Corp is paying a 34% premium for PetroCorp, its Tulsa neighbor. Unit drills for clients (#5 land based driller in the US) and its own portfolio. Petro had already hi-graded its portfolio by selling Alabama and Canadian assets.
Unit Corp. (NYSE:UNT - News) , in a move to boost its presence in the oil and gas exploration sector, Tuesday said it agreed to acquire rival energy concern PetroCorp Inc. (AMEX:PEX - News) for $190 million in cash and stock.
PetroCorp, based in Tulsa, Okla., explores and develops oil and natural gas properties primarily in Texas and Oklahoma. Unit Corp., which is also based in Tulsa, is involved in oil and gas exploration, production and contract drilling.
The proposed deal consists of two million shares of Unit Corp., with the remainder in cash. Unit Corp. expects the deal to immediately add to earnings and cash flow per share.
The acquisition is subject to conditions, including approval of PetroCorp shareholders.
Monday, shares of PetroCorp closed at $11.15 on the American Stock Exchange, and Unit Corp.'s shares closed at $20.91 on the New York Stock Exchange (News - Websites).
Unit Corp. said about $101 million of the purchase price will be allocated for working capital, $78 million to proved reserves and the remaining $11 million to undeveloped leasehold and partnership interest. |
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| To: DELT1970 who wrote (76) | 7/1/2003 11:33:13 PM | | From: Ed Ajootian | | | | I had mixed feelings when I saw this. Was glad because I owned some PEX, but sad that I hadn't gotten around to rebuilding my position yet.
Unit is getting a great deal here, about $1.20/mcfe. Do you know anything about Unit Corp? They look interesting, one of the few firms that's really trying to do both drilling and E&P work at the same time. I always thought the two businesses would match up well together since the E&P division could act as a tax shelter for the drilling division. |
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| To: Ed Ajootian who wrote (75) | 7/8/2003 11:12:06 PM | | From: Ed Ajootian | | | | HORIZON: Early Leaders Emerge In Race To Build New US LNG Ports
(Copyright © 2003 Energy Intelligence Group, Inc.)
World Gas Intelligence Wednesday, July 2, 2003
The question these days seems to be not whether the US is a viable market for LNG but rather when, how, and from where more LNG can be delivered. Currently, around 20 proposals to enhance LNG receiving capacity through onshore, offshore, or Mexico-based terminals are in one stage or another of commercial or regulatory approval.
The US currently has about 1.8 billion cubic feet per day of receiving capacity, including a recent expansion of the Everett, Massachusetts, terminal. Upon the slated reopening of the Cove Point, Maryland, facility later this month, that should leap to 2.8 Bcf/d (WGI Jun.18,p1). Approved expansions of Lake Charles and Elba Island should bring the total for existing terminals up to a combined 4 Bcf/d. Since forecasts suggest that the US could be using 9 Bcf/d -- or nearly 70 million tons per year of LNG -- by 2010, a number of new facilities will likely be needed (WGI Oct.23,p5). But that number isn't as large as 20. Those that look to be good contenders to make the cut are mainly clustered along the Gulf Coast.
ChevronTexaco's Port Pelican application has been making its way through the US Coast Guard permitting process since late last year, with a decision expected by end-2003. Located offshore Louisiana about 50 miles south of Lake Charles, Port Pelican could start up as early as 2006, a point when new Atlantic Basin liquefaction facilities should be completed (WGI Apr.9,p4).
The Freeport LNG project on Quintana Island, southwest of Freeport, Texas, also looks promising for several reasons, starting with a blue-chip customer and a location in a heavily industrial and economically depressed area where any job-creating venture is likely to get solid local backing. Freeport shouldn't face regulatory impediments at the state level, and Federal Energy Regulatory Commission (FERC) approval is pending. Completion is set for 2007. Dow Chemical has provisionally agreed to bring 3.6 million tons/yr of LNG, or 500 million cubic feet per day of gas, into the facility from an unspecified source. Cheniere Energy came up with the Freeport project but has since sold a majority to small, privately held investment groups.
Cheniere has targeted two other sites: Sabine Pass, Louisiana, and Corpus Christi, Texas, each projected to have 2 Bcf/d of capacity, with completion targeted for 2007-08. At both sites, Cheniere has awarded a front-end engineering and design contract to Black and Veatch in anticipation of filing an application with the FERC in early 2004.
Exxon Mobil is looking at Sabine Pass, too, but on the Texas side of the border, about 80 miles east of Houston, for a possible 1 Bcf/d (7.7 million ton/yr) terminal (WGI Jun.25,p1). Exxon, which currently has no firm US import capacity, is evaluating other Gulf Coast locations, as well, including one in Louisiana. One reason for Exxon's relatively late indication of interest in US LNG was the regulatory environment. FERC's Hackberry decision changed that (WGI Jan.22,p1). Now Exxon can build its own terminal and not have to share it or worry about regulated tariffs if it does sell access to others.
Sempra's Cameron LNG project -- initiated by Dynegy -- to convert an unused LPG terminal at Hackberry, Louisiana, has preliminary FERC approval, and an environmental impact study is underway. A 2007 completion date is targeted. The company hasn't said whether the facility will be open-access. The location on Calcasieu Lake has a major drawback: potential shipping bottlenecks in the Lake Charles Channel. The existing Lake Charles terminal is further upstream.
Of three proposed LNG receiving terminals in the Bahamas, only two are active. The largest and apparently most promising is Tractebel's Calypso venture near Freeport, acquired from Enron last year. Output from the 830 MMcf/d complex would be shipped through a 96 mile pipeline to Florida. The other is AES' scheme to build a 550 MMcf/d facility on Ocean Cay that would be connected by a 65 mile pipeline to Florida. AES also would build a power plant in the Bahamas. Both have applications into the Bahamian government and into FERC for the pipeline access, and both are scheduling a 2006-07 startup (WGI Jun.4,p3). Given that a supply contract with end-user Florida Power & Light is a near necessity, both are unlikely to go through.
El Paso's Energy Bridge project may be up for sale, but its application is still wending its way through the US Coast Guard permitting process, giving it potential value to another company. Special tankers would have regasification equipment on board, eliminating the need for a conventional receiving terminal. Regasified LNG would be unloaded directly into a pipeline through a submerged docking buoy.
Another technological innovation would be use of salt caverns for storage. The US Energy Department recently endorsed a process developed by Houston-based Conversion Gas Imports that involves an innovative heat exchanger to allow direct injection of pressurized LNG or dense-phase vapor into salt caverns or pipelines. At a fraction of the cost, that would eliminate the need for both storage tanks and conventional regasification facilities (WGI May7,p8). Conversion Gas itself is participating in two projects, and its technology could be used in a third sponsored by Freeport McMoRan (Natural Gas Week Jun.23,p6).
Also enticing is Canadian refiner Irving Oil's recently resurrected plan for an LNG regasification in New Brunswick, Canada, to target New England through an expansion of the existing Maritimes and Northeast Pipeline.
By Barbara Shook in Houston and Madeline Jowdy in New York |
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| To: Ed Ajootian who wrote (78) | 8/8/2003 11:35:58 AM | | From: Ed Ajootian | | | | Cheniere Energy Makes Progress on Gulf Coast LNG Projects
HOUSTON--August 8, 2003--Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Cheniere Energy Incorporated (AMEX:LNG) (Houston Texas) recently awarded the Front End Engineering and Design (FEED) contracts for two of its four planned LNG receiving and regasification terminals planned for the Gulf Coast.
Cheniere awarded Black & Veatch Pritchard Incorporated (Overland Park, Kansas) the FEED contracts for its Sabine Pass, Louisiana (PEC 020051337) and Corpus Christi, Texas (PEC 01008551) LNG terminal sites. The FEED for both sites will be completed by September of 2003 and Cheniere Energy plans to file permits with the FERC in January 2004 for these two facilities.
The other members of the of the project team assembled by Cheniere are Project Technical Liaison Associates Incorporated (Spring, Texas) for the safety & permitting issues, Ecology and Environment Incorporated (AMEX:EEI) (Lancaster, New York) for environmental assessment and Shiner Moseley and Associates Incorporated (Corpus Christi, Texas) for marine engineering.
These two sites, combined with Cheniere Energy's partnership investment in Freeport LNG Development LP for their planned Freeport LNG terminal (PEC 01008554), will give the company a very strong presence in the Gulf Coast U.S. region. Deepwater access, available pipeline capacity and local demand for natural gas make these locations very appealing. Cheniere Energy hopes to be importing 5-6 Bcf/d of natural gas through its planned LNG receiving terminals by 2007.
North American is witnessing an increase in LNG project development as energy developers seek solutions to our growing energy needs. See related archived news article*: North American LNG Project Planning Exceeds $11 Billion as ExxonMobil Gas & Power Joins the Foray for additional information on the growing LNG industry.
*Access to Industrialinfo.com's archive of over 2,100 news articles is available to Premium News Subscribers. Click Premium News for more details.
Industrialinfo.com (IIR) is the leading provider of global industrial market research. We specialize in helping companies develop information solutions to maximize their sales and marketing efforts. For more information on trends and upcoming construction activities in the terminals industry as well as other industrial sectors send inquiries to petroleumterminalsgroup@industrialinfo.com or visit us at www.industrialinfo.com.
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Too bad this thread died, I'll just use it to store articles I guess. |
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| To: DELT1970 who wrote (80) | 8/11/2003 6:33:07 AM | | From: Ed Ajootian | | | | Delt, Great to see you're still hangin'.
Infinity brings back memories, I had bought them several times previously, the last time with good results. Haven't kept them on the radar screen for some reason. Do you still like them?
UNT seems intriguing, being one of the few that is trying to combine both drilling and E&P in one company. It makes a lotta sense tax-wise.
I own a small amount of XEC, it has been an enigma. Hopefully this stepped up drilling pace will get folks more excited about the stock. |
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| To: Ed Ajootian who wrote (79) | 8/11/2003 1:44:29 PM | | From: David Weis | | | | Hi Ed.
I'm new to this thread.......and I appreciate your article on LNG. The reason why I'm here is several months ago I learned of a possible Natural Gas shortage this winter.
For disclosure purposes, I own PVX
Thanks,
David |
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