BG looking to become largest seller of natural gas by purchasing Canadian gas fields

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BG Group Plc, a UK energy company seeking to become the world’s largest seller of liquid natural gas by 2017, is planning to purchase natural gas fields in Canada to supply a proposed liquefied natural gas plant on the nation’s Pacific Coast.

The plan to build a liquefied natural gas plant on British Columbia’s Ridley Island was made so the company can ship liquefied natural gas to growing markets in Asia. The company has already partnered with Spectra Energy Corp, one of the area’s largest natural gas producers in North America, to build a 525-mile (850 km) pipeline that will pump gas into the facility. It is currently looking for additional resources to fuel its growth.

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The proposed Prince Rupert plant foresees two production units with a combined capacity of 14 million metric tons annually. BG even plans to add another production unit should the need arise. Several terminals are planned for Canada’s Pacific Coast to liquefy natural gas for shipping to Asia via tanker, and the proposed terminal is just one of those.

BG is exploring options with promoters of other LNG companies to see if cooperation on the pipeline’s development can be found and expects to make a final decision on the proposed Prince Rupert plant venture in 2016.

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Restoring South Sudan's maximum crude output will take three months

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South Sudan can restore maximum crude production output from its oilfields in three months. The reduced production output is due to the country’s recent dispute with neighboring Sudan that shut down oilfields.

Petroleum Minister Stephen Dhieu Dau said that an agreement had been forged between the two countries last week to enable the resumption of cross-border oil flows, which will restore South Sudan’s crude oil production back to its fullest capacity of 350,000 barrels a day.

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Data from the World Bank show that South Sudan is a sub-Saharan country with the third largest oil reserves, next to Nigeria and Angola. As the country is landlocked on all sides, the country exports its gas reserves through Sudan, and disputes over exports between the two countries last year halted all oil production, which effectively halved the size of South Sudan’s economy to just a little more than nine billion dollars.

Mr. Dau believes that in three months, South Sudan’s current crude production output of 170,000 barrels a day will increase to 300,000 barrels a day.

In 2011, South Sudan declared independence from Sudan and took with it three quarters of the previously united country’s crude oil output. Pumped mainly by India’s ONGC, Malaysia’s Petroliam Nasional Bhd, and China National Petroleum Corporation, South Sudan’s crude oil has low sulfur content and are relatively clean-burning, so it is prized by Japanese power-generating companies.

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The importance of the US natural gas pipeline to Mexico

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One of the problems that developing countries have to deal with is the increasing demand for energy. As people’s financial capacity to buy consumer electronics and appliances increases, so does their appetite for energy to power those devices. High energy consumption equals a high demand for fuel used for power generation. This is probably why these countries have been importing natural gas and other fuels from other countries at a higher rate.

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Mexico is one such country looking to import more natural gas as possible, especially since most of its electricity comes from thermal plants, which use natural gas as a fuel source. The country used to import natural gas from other countries, but it is now increasingly reliant on US natural gas exports. In fact, the Los Ramones pipeline, which stretches from southern Texas to Guanajuato, was developed due to Mexico’s increasing demand for natural gas exports.

As of 2012, natural gas delivered via US pipelines accounted for 80 percent of Mexico’s natural gas imports, which makes the US a valuable supplier. Furthermore, Mexico benefits financially from the US as natural gas imported from the latter is fairly cheap.

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Making people understand fracking

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Hydrofracturing, or fracking as it is commonly known, is a controversial topic. Although many are skeptical about the practice, there are still those who believe that fracking is good for the country, especially since its end products are natural gas and shale gas—cheaply produced hydrocarbons that are also cleaner than traditional hydrocarbons, such as petroleum and coal. Moreover, fracking also contributes to the economy by creating hundreds of jobs. Conversely, skeptics believe that fracking is a dangerous process, wherein the fluids may trickle into underground fresh water reservoirs, which are sources of drinking water for most people.

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However, both beliefs are eclipsed by the fact that, according to a recent survey by the George Mason University Center for Climate Change, most people do not even know what fracking is.

Educating people about the pros and cons of fracking and making information about the practice readily available are important, as public opinion is crucial, especially now that there are different groups disagreeing on whether to subject a particular land to fracking or not. Furthermore, companies should be transparent with regard to the chemicals used, including the amounts, during the fracking process to help raise awareness on the advantages and disadvantages of this practice.

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Infrastructure development: Key to increased natural gas adoption

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Many people think that natural gas is better than traditional sources of energy, such as coal and nuclear energy, due to its cleaner burning properties and its sheer abundance in many countries, such as the US and Russia. However, even though natural gas is being used in residential and commercial heating and in many industrial processes, and even as fuel for transportation, it is still not reaching its full potential due to its low market share.

Why is an energy resource that is easily available at vast amounts not being taken advantage of? The answer is simple: because of the abundant supply and low demand, natural gas has become too cheap, which dampened energy companies’ enthusiasm to spend huge amounts of money to build infrastructure that would enable increased production, which in turn, could lead to an increase in consumer adoption. In fact, natural gas is so cheap that drilling it is no longer profitable.

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But some believe that the persistently low prices of natural gas is a result of mild winter (in the US) that resulted in an oversupply of stored gas, slow economy, and continuing expansion of supply, and that a change in development strategy and an increase in heating demand should result in supply balancing, which is the proper amount of supply to offset demand.

When natural gas supply returns to normal, its price can rise and production can be made profitable again. This can lead to an increased rate infrastructure development and an increased consumption of natural gas in the US, which can grow from 23.8 Tcf in 2010 to 31.5 Tcf in 2035.

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