Russian geopolitics heating up with Putin re-elected, Russia and Ukraine in a massive dispute over pipeline tariffs with Russia cutting off gas to Ukraine, the US imposing sanctions over Russian cyberattacks trying to disrupt US energy policy and the Eastern european nations increasingly wanting energy security from Russia.
This can only be good macro news. Lets get this done GV. We need that first bankable deal to act as a circuit breaker because all of the macro factors are pointing to an acute confluence of Chinese demand, Russian instability and increasing focus globally on the eradication of coal as a means to clean air.
https://www.platts.com/latest-news/...d-shoulder-to-russian-gas-could-lift-21594084
Europe's cold shoulder to Russian gas could lift US LNG export goals
Houston (Platts)--19 Mar 2018 447 pm EDT/2047 GMT
Europe's efforts to cut its reliance on Russian supplies of natural gas are being seen as a timely business opportunity for US LNG exporters feverishly trying to secure long-term contracts to finance terminal projects.
Comments Monday to that effect by officials from Poland and Lithuania at trade group LNG Allies' Transatlantic Energy Security Forum in Houston come as Russian President Vladimir Putin won his fourth term, guaranteeing that he will be in power through the period in the early 2020s when the second wave of US liquefaction facilities are hoping to come online.
Putin's firm grip on Russia's energy policy ties the interests of Europe and US industry together at a critical juncture for both regions. Breaking Russia's stranglehold on the pipeline flow of natural gas to its neighbors would give Europe access to a competitive marketplace for gas, while US LNG projects stand to gain willing buyers with a strong appetite for imports at a time when they face challenges locking down enough customers to finance construction.
"After yesterday's election, I should say two things are stable in Russia -- this is the president and energy policy goals," said Zygimantas Vaiciunas, Lithuania's energy minister. "The key goal, the key target is the same -- to have the biggest market, the biggest power, the biggest market share as possible."
LNG COULD TAKE POLITICS OUT OF GAS FLOW
Demand for gas in European Union countries has increased as the bloc aggressively pursues clean air policies, which means less use of coal for power production. While Russia has been a major source of gas supply to the region for decades, in recent years some countries have expressed a desire to have cheaper, more predictable supplies - to effectively take the politics out of the flow.
LNG provides that opportunity, with new regasification infrastructure being developed in Europe, to turn the chilled gas back into the dry form that is delivered through pipelines.
S&P Global Platts Analytics expects that European LNG imports will increase to 9.4 Bcf/d by 2023, a 3.3 Bcf/d (53%) increase over 2017 and substantially stronger than the global average, which is only expected to increase by 33% over the same period.
Strong LNG imports will be supported by a protracted period of low prices, driven primarily by the expansion of US LNG export capacity over the next few years. Total nameplate US LNG exports are expected to reach roughly 8.9 Bcf/d by the mid-2020's, a near 7 Bcf/d (350%) increase over 2017, and will support annual feedgas demand upwards of 9.8 Bcf/d by 2022, Platts Analytics data shows.
At the forum, Tellurian CEO Meg Gentle said the US LNG export developer sees those dynamics as the "perfect alignment of demand pull and supply push at the exact same time."
MARKET REALITIES SUGGEST RISKS REMAIN
Gazprom's Nord Stream II gas pipeline, which would run across the Baltic Sea to connect Russia and Germany, poses a threat to growth of European imports of US LNG. A bipartisan group of US senators recently sent a letter to US Treasury Secretary Steven Mnuchin calling on the Trump administration to consider sanctions on companies supporting the pipeline project.
As for the US side of the equation, Tellurian has yet to secure any financial commitments to move its Driftwood LNG project in Louisiana forward.
Most of the developers that are part of the so-called second wave of projects are in a similar position. Australia's Liquefied Natural Gas Limited has secured commitments covering only about a quarter of the capacity of its proposed Magnolia LNG export facility in Lake Charles, Louisiana, which it hopes to reach a final investment decision on late this year or early next year, said Greg Vesey, a managing director and Texas-based CEO for the company.
Sempra Energy is a partner in the Cameron LNG export project in Louisiana, which is expected to start up next year with three trains. But it has been considering a second export project on the West Coast, at the site of the Energia Costa Azul receipt terminal south of San Diego in Baja California, Mexico. It is also involved in a proposed export project in Port Arthur, Texas.
While it has received expressions of interest from Asian buyers regarding capacity from the West Coast project and it has a memorandum of understanding with South Korea's Kogas regarding capacity at Port Arthur, it has not reached any firm long-term contracts, said Carlos de la Vega, director of commercial development for Sempra's LNG unit. It hopes to make a final investment decision by 2019 on Port Arthur so that terminal can start up in 2023, de la Vega said.
"We certainly don't have enough definitive documents to move forward," de la Vega said of the Port Arthur project.
