Flood

Those who were expecting a flood of LNG imports into the United States last year were sorely disappointed, but the Energy Information Administration (EIA) is optimistic that there will be a “substantial” LNG rebound this year and sustained growth thereafter. Not everyone shares EIA’s views, however. Some experts say the market will have to wait until late in 2008 before a notable influx of LNG occurs.

Those who were expecting a flood of LNG imports into the United States last year were sorely disappointed, but the Energy Information Administration (EIA) is optimistic there will be a “substantial” LNG rebound this year and sustained growth thereafter. Not everyone shares EIA’s views, however. Some experts say the market will have to wait until late in 2008 before a noticeable influx of LNG occurs.

Despite declining well numbers in many offshore regions around the world, drilling services will continue to attract a “flood” of cash, with deepwater expenditures — especially in West Africa and the Gulf of Mexico — nearly doubling in the next five years, according to Douglas-Westwood Ltd.’s latest worldwide offshore drilling forecast.

Power grids in California, Nevada and Arizona last week fended off soaring temperatures and a resulting flood of demand for electricity. Power providers in Nevada and Arizona were reporting new records for system peaks, while the California Independent System Operator (CAISO) declared restricted maintenance days for power facilities and asked Californians to reduce energy usage.

Don’t count on a multitude of new liquefied natural gas (LNG) import terminals and a flood of LNG collapsing domestic gas prices, said James Trifon, Wood Mackenzie’s managing consultant for North America LNG. Most of the import terminals planned won’t make it, and the underlying tight domestic supply situation will continue to support the market, he said in a preview of a presentation to be given at GasMart on March 18 in New Orleans (see http://www.gasmart.com/).

Don’t count on a multitude of new liquefied natural gas (LNG) import terminals and a flood of LNG collapsing domestic gas prices, said James Trifon, Wood Mackenzie’s managing consultant for North America LNG. Most of the import terminals planned won’t make it, and the underlying tight domestic supply situation will continue to support the market, he said in a preview of a presentation to be given at GasMart on March 18 in New Orleans (see http://www.gasmart.com/).

The first battle over covering the expense of excess capacity generated by the onset of competition in the Canadian natural gas delivery grid has been won by TransCanada PipeLines Ltd., but the war is far from over. The National Energy Board (NEB) rejected a salvo of proposals to make TransCanada absorb half the costs of empty space in its system, setting the stage for toll increases on the remaining customers, with the amounts to be determined by another case now developing. However, the board also declared that its decision to uphold the status quo is temporary.

A mild European winter with accompanying low heating oil priceswas the saving grace for U.S. industrials that took advantage ofthe flood of heating oil imports to switch off high-priced naturalgas. Revised estimates by Raymond James Associates show industrialsswitching at 5 Bcf/d during the coldest part of the winter, ratherthan the 3 Bcf/d originally estimated.