Rise of US Oil and Gas Output

In its annual World Energy Outlook report, the IEA said its main projection scenario through to 2040 foresees the US accounting for nearly 75% and 40% of global oil and gas growth, respectively, over the next six years. The agency said that demand growth through 2025 should be driven by China and from the late 2020’s to 2040 by India and the Middle East. The report also highlighted that governments will have a very critical role to play in determining the future of energy systems and policies.

The application of hydraulic fracturing and horizontal drilling has propelled US’s position as a major player in the oil and gas industry. The boom of shale oil and LNG exports has helped US transition from a net importer to a net exporter of energy. Earlier this month the US Energy Department said that US oil production had climbed to a record 11.3 million barrels per day. Roughly half of this can be accounted towards oil produced from shale plays.

Fig 1. US Field Production of Crude Oil

Sources

World Energy Outlook Report, IEA EIA Website

S&P Global Platts: Contractors Express Caution On Bidding For New US LNG Export Projects

Facing unprecedented “pressure to sign engineering, procurement and construction deals for the lowest possible amount,” engineering, procurement, and construction firms (EPCs) are reported to vocalize their concerns.

“From my perspective, the way we hear about dollars per ton this and dollars per ton that. The answer is not the lowest dollar per ton. The answer is we have collaborated and innovated to make sure we have the best possible cost, the best possible schedule and the best possible certainty of outcome.
-Bechtel President Aladair Cathcart”

Forbes: Next Wave Of U.S. LNG Projects Lurks But Market Fistfight Is Inevitable

Weighing the United State’s LNG boon against an increasingly competitive global market, Forbes delivers a quiet warning - burgeoning production capacity does not guarantee the market’s success. The numerous pending American LNG plant projects awaiting environmental permits final investment decisions are far from secure:

“The entry of the U.S. as a marginal producer has changed the game. But it’s easy to get caught up in the market euphoria and forget that U.S. exporters are not the only game in town. American exports are (and will be) toughing it out with Australian and Qatari exports. It’s extremely challenging to get long-term high volume offtake agreements to support the construction of these facilities.”

— David Lang, law firm Baker McKenzie's Global Head of LNG

FERC Issues Environmental Schedules for 12 LNG Terminal Applications

The Federal Energy Regulatory Commission (FERC) on August 31, 2018 issued a news release highlighting the approval of environmental schedules for the following 12 outstanding LNG terminal applications: Freeport Train 4, Port Arthur, Driftwood LNG, Corpus Christi, Texas LNG, Gulf LNG, Rio Grande LNG, Jacksonville Eagle, Annova LNG, Plaquemines, Jordan Cove, and Alaska LNG. 

“Thanks to the tremendous work of our Office of Energy Projects and Office of the General Counsel, the Commission has made significant strides in streamlining our regulatory processes to adapt to the increasing number, and greater complexity, of the LNG applications we have received. These process improvements have shortened projected environmental schedules in some cases by 9 to 12 months. There is widespread acknowledgement that the United States is poised to play an important role in serving worldwide LNG demand, and its ability to serve that demand quickly will serve the nation’s national security and economic interests. Because sufficient LNG export capacity is a necessary gateway to the global gas markets, the FERC’s efficient processing of LNG facility applications will put the US in a more competitive position.

-FERC Chairman Kevin McIntyre.”

Tellurian's Driftwood LNG: On Track for 1-H 2019

Via: lngworldnews.com |Original Source: Tellurian

“All the pieces of the integrated project are coming together as planned, and we remain on schedule to announce our partners in the third or fourth quarter, begin construction of Driftwood LNG in first half 2019, and deliver LNG to the global market in 2023.”

— Meg Gentle, CEO Tellurian

Cheniere & Tellurian Release Corporate Reports

Cheniere Energy, Inc. - owner and operator of the Sabine Pass and Corpus Christi LNG projects - and Tellurian Inc. - of the upcoming Driftwood LNG project - released corporate reports this week:

Forecasting growing global demand for American gas, the juggernauts are investing heavily to build LNG infrastructure. Tellurian reports it is on track to reach its final investment decision (FID) on Driftwood 1-H 2019.