Qatar Gas where UK fracked gas should be


From a recent article in Downstream Today.

Qatargas, the world’s largest LNG producer, signed a five-year sales and purchase agreement with Petronas LNG UK on Wednesday . . . Under the agreement Qatargas will deliver 1.1 million tonnes of liquefied natural gas (LNG) per year to the UK-based venture until Dec. 31 2023, extending a current five-year contract that was due to expire on Dec. 31 2018.

Why are we importing a million tonnes of LNG from Qatar?  Because we’re not producing enough gas of our own and as coal and oil fired power stations are shut down thanks to EU directives we’re becoming more reliant on importing the energy that we need.

Of course if the government stopped faffing about and got on with promoting fracking in this country we’d have a massive reserve of natural gas that we could tap into for years to come.



Rough ride ahead for gas prices?

Further to my last post, one way companies have tried to smooth out gas demand is by storage such as the Rough facility in the North Sea.

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But as this article points out, it’s not as easy or cost-effective as you might think and as a result we’re all going to be paying more.

Centrica Plc’s Rough, the U.K.’s largest natural gas storage facility 9,000 feet below the North Sea bed, unexpectedly closed for the summer and will probably remain unavailable for most of the winter.

Why does this matter?

Rough accounts for more than 70 percent of Britain’s storage capacity. Without the facility, the U.K. will be more dependent on imports in winter, potentially making energy more expensive. Gas for winter delivery advanced 4.3 percent since June 21, the day before the full outage at Rough was announced. Storage levels at Rough are less than half the five-year average.

You can read more of the why’s and wherefore’s in the article but suffice to say it’s not good news, especially if we have a cold winter;

Gas exporters from Norway to Russia, already pumping record amounts of gas to Europe may be able to sell even more fuel to the U.K. this winter. Exporters of U.S. liquefied natural gas may also benefit.

We need to get cracking with fracking.

Get fracking on with it

gas ring

Fracking has the potential to unlock significant benefits for the UK;

  • Cheaper gas
  • Increased revenue for government
  • Additional cash for local investment, and now
  • Extra money directly to the pockets of those most impacted.

As this article reports;

Britons living near “fracking” developments will be able to decide how a 1 billion pound ($1.3 billion) shale gas wealth fund should be spent, either by accepting direct personal payments or supporting projects such as railways or flood defences, the government said on Monday.

There is still a lot of objections from certain areas to fracking, much of it based on myth and legend and a lack of understanding of the technology and also the differences between how the UK is supplied with tap water compared to the US.

Whether the green lobby like it or not, it will come to the UK and it will be good thing;

Britain is estimated to have plenty of shale gas resources in place, enough to cover the country’s annual gas needs for hundreds of years.

Imagine that – not having to rely on imports of fuel for years.

The quote from Greenpeace UK’s chief scientist that;

You can’t put a price on the quality of the air you breathe, the water you drink, and the beauty of our countryside

Is particularly specious;

  • Gas is far cleaner than coal and oil and by replacing these fuels with gas will improve air quality
  • Water quality will not be affected. Fracking takes place hundreds of metres below the water table and almost all UK water is supplied from treatment works where any unexpected impurities will be removed.
  • To claim to be concerned about countryside beauty while advocating covering our land in giant monstrous wind turbine bird shredders is totally hypocritical.

Hopefully the government will push forward without delay.

Coal Own Goal

coal burning s

As I have written here before, the European Union’s race to eliminate coal under the flawed logic of reducing CO2 to save the planet is once again demonstrated.

As a cheap energy source, at a time of austerity and concern about reliance on fuel from potential rogue countries such as Russia, coal should be retained and money spent on modernisation. Instead, plants like the SSI steelworks in Redcar are forced to close with the loss of 1700 direct jobs and many hundreds more indirectly.

While at the same time we can read stories like this one in Downstream Today, telling of India’s latest mining project which it hopes

will in five years be Asia’s biggest coal mine.

India’s coal minister sums up the futility of EU green initiatives and the worthless soundbites that will no doubt come out of the UN Climate summit in Paris in December.

Environment is non-negotiable but we can’t live without coal. You can’t wish away coal,

The article goes on;

China, India and Indonesia now burn 71 percent of the world’s newly mined coal according to the World Coal Association, with new European and North American consumption negligible as their countries turn to cleaner energy.

Other Asian nations are increasingly looking to coal to power their economies too, with Pakistan, the Philippines and Vietnam opening new plants, pushing the Asia/Pacific region to 80 percent of new coal plants.

The list of other countries expanding their coal infrastructure goes one; Japan plans to build another 41 new coal-fired units over the next decade, Australia’s exports rose driven by increased demand from South Korea and Taiwan.

It’s no wonder the EU share of global GDP is declining if politicians continue to make crass regulations without any cognisance of the consequences.

When politics and energy collide


News from Downstream Today (and reported elsewhere too), that Shell’s plans to expand its LNG business could be scuppered by the latest western sanctions planned against Russia.

Shell have, for some time, had a tie-up with Russian Gas Major Gazprom, which includes operating the large LNG facility Sakhalin-2 in the Pacific. But

On Friday the U.S. government said it was restricting exports, re-exports and transfers of technology and equipment to the Yuzhno-Kirinskoye field.  Shell, with considerable assets in the United States, would face consequences if it went against the sanction, as would other potential foreign investors.

The intention of these new sanctions is to target future projects rather than tackle current supplies that might cause prices to rise.

Last year, Washington slapped sanctions on an Arctic project that state-owned Russian oil major Rosneft planned to develop with U.S. oil major ExxonMobil, effectively forcing the two companies to suspend drilling despite the discovery of oil.

It’s a dangerous game to play, while restricting exploration clearly hurts Russian exports it is also damaging to western oil companies who have to keep replenishing their reserves of oil and gas to keep shareholders happy and provide ongoing work for their staff – and Engineering contractors too.

Green Blob Costs Jobs

petrol fillup

From a recent article on the Downstream Today web site;

Industrial group Siemens has resigned itself to never selling another gas turbine in its home country following Germany’s switch to renewable energy, its chief executive said.

1600 jobs are lost as Siemens sees no prospect for future sales in Germany. Meanwhile renewables continue to propser thanks to massive subsidies.

The Siemens-built Irsching gas-fired power plant in Bavaria, one of Europe’s newest, is to be shut down next year. It is one of many German conventional power stations being pushed out of business by competition from renewable energy.

Competition is good and if the green revolution were as cost-effective without subsidy then that would be fine, but it’s not. And so governments across Europe and further afield are taxing us so that they can pay the renewables sector to put conventional energy companies and their employees out of business.

It’s a strange world!

The SA – US Stand-off

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Two articles caught my eye, offering more insight into the current low oil price and reasons for it.

I’ve blogged about this a few times recently (probably too many, if you’re not interested in this sort of thing) the reasons for Saudi Arabia to keep pumping oil into the system despite reduced demand and thereby lowering the oil price. This seems at first sight odd for a country that makes a living from selling oil.  However, the reasons for SA to continue this policy (for it is they, rather than Opec driving this) are several – maintain market share, hurt Russia, hurt Iran, curtail the US shale gas revolution.

Three out of four are certainly being achieved but not the last.  As this article reports, US Shale Gas continues to boom and the lower oil price is driving innovation rather than closing facilities down.

In fact in a third story I read this week, the US are stepping up plans to export natural gas in liquid form to Europe. This will be welcomed by Europe as it will ease the reliance on Russian gas.