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6 Differences between LNG and oil Projects

5/10/2017

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Gas and oil are fundamentally different. Most individuals do not completely comprehend just how different they are and how gas projects (particularly with respect to LNG) are a completely different economic ball game. 

1. Buyer Be There

When it comes to crude oil, you find it, produce it and sell it. Possibly the market price is lower than anticipated but finding crude buyers is not an issue, also crude oil is fairly cost effectively bunkered.

For LNG: sell first, produce it later. 


A industry joke is there three LNG permits you must have:  DOE, FERC and Adam Smith Permit. The first two are easy to get because they authorize your LNG project to lose money in a environmentally sanctioned manner.

Note that a FERC permit alone cost $100 million dollars and the US Government is happy to accept that check in the spirit of American laissez faire without inquiring to the interest of would-be buyers. You have to actually be able to sell the LNG to make money. Financiers, banks, venture capitalist and private investors will not lend money or put capitol into a LNG project without buyers. 

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The Gasline to Nowhere

6/26/2016

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Alaska's political spirit animal has been a natural gas pipeline for many many years. As in since the Carter Presidency.
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99% of Alaskan’s (and unfortunate Canadians in the Yukon territory) have heard about it for so long that sentences containing: “Governor”, “Natural Gas Pipeline”, “Alaska’s Gas”, “Gas Line Initiative” actuated a mental auto mute or at least a change of channel. Mis-information abounds and facts seem to have the flexibility of Russian gymnast and the latter's drug testing regiment. 
When something has been discussed for 20+ years....... we. stop. caring. 

But because interesting things are happening, it's worth paying attention to, if for no other reasons - it's an E&P thing. 

Governor Walker is the newest face of the gas line and has not disappointed on the drama front. The Republican sector of the Alaska legislature has traded reams of irate letters and press releases with the Governor. 

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Hall-YarBoROUGH Z-factor: TI-89

10/17/2015

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This post contains the TI-89 code for a program that calculates a gas' z-factor using the Hall-Yarborough correlation.

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    Author

    I grew up with fire, ice and North Slope Crude in my veins. I completed a B.S. in Petroleum Engineering and currently work as a wireline field engineer in the Permian.

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