Announcements

The latest announcements for developing liquefied natural gas (LNG) receiving facilities and related infrastructure in the northern end of Mexico’s Baja California peninsula already has energy planners in the Southwest scratching their heads over where and how the 2.2 Bcf/d already planned, and more in the works, will be transported and consumed. Conventional wisdom says 1 Bcf/d of added capacity — about 1 and 1/2 projects — centered south of the U.S. border would likely be the maximum volume the market and pipeline infrastructure can handle, according to the California Energy Commission’s leading natural gas planning guru.

Coming as no surprise due to the recent announcements that exploration and production companies are slashing their drilling budgets because of unfavorable natural gas commodity prices, Houston-based offshore drilling contractor Global Marine reported that its worldwide Summary of Current Offshore Rig Economics (SCORE) for September 2001 decreased by 4.3% from August 2001.

Coming as no surprise due to the recent announcements that exploration and production companies are slashing their drilling prospects because of unfavorable natural gas commodity prices, Houston-based offshore drilling contractor Global Marine reported that its worldwide Summary of Current Offshore Rig Economics (SCORE) for September 2001 decreased by 4.3% from the previous month.

Although there still have been no formal announcements from any companies to proceed, support for a Mackenzie River Valley pipeline in the Northwest Territories is slowly growing, with aboriginal interests — considered key to any plan — steadily moving toward approval. One of the last communities uncommitted, the Acho Dene Koe, has joined a memorandum of understanding (MOU) to back the C$3 billion pipe.

The prospect of the first significant voluntary production shut-ins in years is looming for the gas industry in about another month or so, according to an informal sampling of opinions among the trading community (“voluntary” means unrelated to a hurricane, pipeline maintenance or force majeure event). While a majority of sources fully expect to see such shut-ins beginning within a few weeks, it’s not a foregone conclusion, said a few dissenters.

Nearly all of the U.S. independents posted remarkable earnings in second quarter earnings announcements last week, boosted by high commodity prices and increased production — especially in the natural gas sector. Anadarko Petroleum Corp. and Apache Corp., both headquartered in Houston, got a boost in production and earnings from strategic acquisitions, while Barrett Resources Corp., XTO Corp. and Mitchell Energy & Development Corp. relied on their own U.S.-based production reserves.

Following a stream of industry announcements, Cambridge Energy Research Associates has now put its stamp on liquefied natural gas growth, predicting that the “fundamental” changes worldwide in natural gas availability and potential shifts in pricing, downstream markets and available capital will position LNG to become a “major global energy player over the coming 20 years,” with demand as much as tripling by 2020.

Three major Gulf of Mexico deepwater announcements were unveiled Wednesday, partially discounting reports by analysts recently that offshore production is tapering off based on rig counts. Confirming ramp ups following discoveries in deepwater were Dominion Exploration & Production Inc., and two involving Texaco, one with BP and another with Agip SpA.

Following a stream of industry announcements, Cambridge Energy Research Associates has now put its stamp on liquefied natural gas growth, predicting that the “fundamental” changes worldwide in natural gas availability and potential shifts in pricing, downstream markets and available capital will position LNG to become a “major global energy player over the coming 20 years,” with demand as much as tripling by 2020.