Wednesday August 30, 2006

Betting billions on liquefied natural gas

peakoil.com -> money.cnn.com :

An estimated $30 billion a year is pouring into developing liquefied natural gas. Despite concerns over the safety and the cost of importing it, analysts say the fuel will make up a larger and larger share of America's energy mix and may help prevent seasonal natural gas price spikes. The reasons for the boom are primarily twofold. The first is that the United States is using more and more natural gas because it's both cleaner burning than oil and economical. Previously much of U.S. natural gas demand was met by Canada, easily shipped via pipeline. But Canada's natural gas production, like America's, is expected to be flat or slightly declining. Canada may export less natural gas as it is increasingly being used to extract crude oil from its massive tar sands reserve in Alberta.

This growing demand and limited domestic supply, coupled with the fact that under-ocean pipeline construction is not feasible, means there's money to be made by liquefying it (which reduces its volume by 600 times), putting it on a boat and shipping it around the world. Because pipelines are not global, natural gas is a regional market, subject to wide price swings whenever a localized event threatens supply. But as more and more gas is liquefied, a shortfall in the United States could easily be covered by sending over supplies from, say, Europe.

- Recall what I said, that there is nothing cheap about LNG. The infrastructure - terminals and tankers - will cost billions of dollars. LNG spot prices are about $12 while natural gas prices are around $6, making LNG easily twice the price of natural gas per unit (mbtu/mcf). That kind of makes sense, since around 30% of net energy is lost during the conversion of the gas to liquid and back, plus factoring in a few dollars per unit to cover the cost of transportation and markup along the supply chain.

See also :

1. Mexico welcomes its first LNG cargo
2. Singapore commits to LNG for meeting future energy needs
3. Indonesia's LNG supremacy wanes as Chevron's fields run short

(2006-08-30 13:28:28 SGT) [Energy] Permalink

Malaysia may go for nuke energy

peakoil.com -> thestar.com.my :

Malaysia may explore the use of nuclear technology for power if the oil price shoots up to US$100 a barrel. It would be a matter of national interest and economic survival, Science, Technology and Innovation Minister Datuk Seri Dr Jamaluddin Jarjis said.

He said Malaysia wanted to know how Japan, where two major cities – Hiroshima and Nagasaki – were destroyed by atomic bombs during World War II, could convince its people to go along with the use of nuclear technology to generate power. "We have more than 60 nuclear scientists and we want Japan to share with us their experience," he added.

He said some European countries were already moving towards using nuclear technology with the latest being Britain. Closer to home, Vietnam also has plans to switch to nuclear technology to generate power, he noted.

See also :

1. Malaysia requires two nuclear reactors to generate electricity
2. Malaysia "needs to develop nuclear energy"
3. Vietnam is going nuclear

(2006-08-30 12:55:05 SGT) [Energy] Permalink

Oil prices drop below $70

wrex.com :

Oil prices fell below $70 a barrel as Tropical Storm Ernesto veered away from the oil and gas region of the Gulf of Mexico, easing concern that output would be disrupted. Concerns about threats to supply were further eased when BP said it had restored output from its Prudhoe Bay field in Alaska to about 200,000 barrels a day, half the daily production capacity. Traders also remain watchful of Iran's stand-off with the West over its nuclear program.

bloomberg.com :

Crude oil dropped below $70 as Tropical Storm Ernesto veered away from the oil and gas fields in the Gulf of Mexico. Natural gas has plunged 15% in two days because of the change in the storm's course. Crude oil touched $69.30, the lowest since June 21. Natural gas fell to $6.09, down 44% from a year ago. Americans were less confident in August than at any time in the past nine months. The Conference Board's index of confidence dropped to 99.6 from 107.0 in July, the biggest decline since last September.

(2006-08-30 01:29:58 SGT) [Energy] Permalink

Most popular blog postings on lowem.log :

1. Singapore SIBOR interest rates fall to 1.5%, lowest since Dec 2004
2. Singapore SIBOR rate falls to 1.31%, lowest since Nov 2004
3. Live spot gold price quotes chart on COMEX
4. Fuel prices seen stoking Malaysia inflation in 2008
5. 2010 Honda Civic Hybrid preliminary specifications released
6. Singapore SIBOR rate fell to 1.25% in Apr 2008, lowest since Aug 2004
7. Malaysia inflation rate jumps to 7.7% in Jun 2008, a 26-year record high
8. Singapore : electricity tariffs to increase April 2008 on rising oil prices

Featured articles on lowem.log :

1. ABC Guide to Beating Inflation in Singapore and Elsewhere
2. Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008
3. Singapore : Bread price inflation continues
4. 2010 Honda Civic Hybrid preliminary specifications released
5. Peakoiler buys 2008 Honda Civic Hybrid FD3
6. How to insert currency exchange rates into Google Spreadsheets
7. Singapore SIBOR rate falls to 0.94% in Nov 2008, lowest since Jul 2004
8. Singapore : Inflation erodes away bank savings