EOG | Northwest Coast Energy News

Australia, Canada rivals in “new frontier” of liquified natural gas

Canada and Australia are rivals in the “new frontier” of liquified natural gas export sales to Asia, a panel of energy marketing executives told the National Energy Board Tuesday at hearings into the KM LNG in Kitimat.

The “marketing panel” testifying before the board included Kenny Patterson, Vice President LNG Marketing and Shipping for Apache Energy, Sean Bolks, Apache Director of Corporate Risk Management, Jamie Bowman, Vice President of Marketing for EOG and David Thorn,Vice President, Canadian marketing for Encana and two consultants.

Patterson told the NEB at more than one point during his testimony that Canada was the “new frontier” for liquified natural gas, and so was attracting a good deal of interest from countries across East Asia who need more natural gas supplies.

Patterson and the other executives on the panel refused to be specific on who the customers actually are, despite cross-examination from NEB counsel Parvez Khan and additional questions from the NEB presiding member Lynn Mercier.

Patterson said Apache couldn’t go into individual buyers, so Khan asked: “How many different buyers n a general sense?” to which Patterson replied that in Asia, the KM LNG partners, which include Apache, EOG and Encana, were general discussions with seven to eight major Asian LNG companies as well as other smaller players.

That answer came despite the fact that earlier in the day in Kuala Lumpur at the Asia Oil and Gas Conference, Mate’ Parentich, general manager of LNG marketing at Apache, said the company would soon conclude talks on the sale of 85 percent of liquefied natural gas from the Kitimat terminal.

Asked for specifics by Bloomberg News, a Houston based Apache spokesman Bill Mintz then said that no binding contracts had yet been signed for the Kitimat project.

Bloomberg later moved a corrected and updated version of the story, including the statement that no contracts have yet been signed.

Khan asked about one Memorandum of Understanding signed with KM LNG. Again the panel refused to be specific. Bowman said the MOU had been signed with the previous partnership in KM LNG and while the MOU had not yet expired, it was subject to further negotiations.

Khan and Mercier were both aware that any agreements with potential buyers were “subject to regulatory approval,” which, of course, is the National Energy Board’s role, but again they were unable to drag any specifics out of the executives on the marketing panel.

The panel members told the NEB members that Korea and Taiwan are already well established LNG markets and China was beginning to be more aggressive as an LNG buyer. Japan, which was devastated by the earthquake in March and lost of a lot nuclear powered electrical generation capacity is now scrambling to catch up with its Asian neighbors. The executives told the NEB panel that both Indonesia and Malaysia will also become more important buyers for LNG in the Canadian market as their domestic demand grows.

Noting that Patterson is based in Perth, Australia, Mercier asked the executives about the recent announcement by Shell that it would build a floating LNG platform off Australia.

Panel members replied that the Asian markets want long term, secure sources of supply, with multi-billion dollar contracts for between 10 and 20 years. As stable, market-driven countries with ample supplies of natural gas, both Canada and Australia could fulfill those needs, panel members said. Companies operating in both countries would require those multi-billion, multi-year contracts to justify the investment in natural gas extraction and transportation.

Jamie Bowman, Vice President of Marketing for EOG listens as fellow panel members testify before the NEB. (Robin Rowland/Northwest Coast Energy News)

Kitimat fishers, hunters ask NEB for special conditions on KM LNG export licence

The Kitimat Rod and Gun Club Tuesday asked the National Energy Board to place special conditions on the Kitimat LNG project so as, in the words of Rod and Gun representative Mike Langegger, to preserve “the fish and wildlife values of the northwest,” from the “cumulative effects” of industry encroaching on the wilderness.

The board panel,which is considering the project’s application for a natural gas export licence, allowed Langegger to testify early in the proceedings, now expected to run at least until Thursday, because he has other commitments.

In response to a specific question from Lynn Mercier, presiding member of the board panel, Langegger asked that the NEB require the KM LNG partners, energy giants Apache, Encana and EOG, establish a joint committee with Kitimat residents, both First Nations and non-First Nations, to preserve the values of the wilderness around the liguified natural gas terminal.

He also asked that the energy companies create special funding “dedicated to fish, wildlife, and the environment…to maintain the fishing, hunting [and] recreational activities used by residents not just for now but for generations to come.”

The liquified natural gas terminal is proposed for Bish Cove, down Douglas Channel from Kitimat, an area that is currently still largely wilderness.

Langegger noted that crucial salmon breeding rivers flow into Bish Cove from the surrounding mountains. Bish Cove is also known as a habitat for deer and bears, both black bears and grizzlies.

He also asked that Kitimat residents continue to have access, as they do now, to the bush surrounding the proposed terminal “with no gates, no lockoffs.” Langegger complained to the board that Rio Tinto Alcan has, in recent years, restricted access to the Kitimat River estuary, near the aluminum plant, while once Kitimat residents had easy entry to the estuary.

Langegger said that Rod and Gun members and other Kitimat residents fear the cumulative effects of the destruction of the wilderness, and specifically that some of the past practices of the forest industry, which he said had a “huge detrimental effect,” could be compounded by the Kitimat LNG plant and other projects.

While not referring directly to the proposal, Langegger was bringing in the Enbridge Northern Gateway project, which is being considered in a separate National Energy Board proceeding.

Lanegger told the NEB panel that he hoped that “the new generation of industries coming [would] accept those values” of fishing, hunting and recreation.

Mike Langegger of the Kitimat Rod and Gun

club checks his notes while testifying before the NEB. (Robin Rowland/Northwest Coast Energy News)

Enbridge, Veresen, Williams to acquire condensate plant, pipeline from EOG: CP

Canadian Press

Enbridge, Veresen, Williams to acquire condensate plant, pipeline from EOG

Three North American pipeline companies including Calgary-based Enbridge Inc. (TSX:ENB) are buying a natural gas processing plant and pipeline in the U.S. Midwest from EOG Resources, Inc. (NYSE:EOG) for US$185 million.

The Stanley Condensate Recovery plant and Prairie Rose pipeline connect to the Alliance gas pipeline, which is owned 50-50 by Enbridge and Veresen Inc. (TSX: VSN), and will supply a Chicago-area processing plant operated by the partners.

PNG hands out more cash to shareholders, execs: Northern Sentinel

Northern Sentinel

PNG hands out more cash to shareholders, execs

Pacific Northern Gas (PNG) shareholders are to receive another cash benefit resulting from the sale earlier this year of its 50 per cent interest in a planned natural gas pipeline to feed the Kitimat LNG export terminal project.

Shareholders of record as of June 6 are to receive $3 a share, amounting to $11 million, part of the net remaining proceeds of an initial $30 million payment made to PNG by Apache Canada and EOG Resources.