LNG exports from Canada and the US get closer

The SMH reports that LNG exports from North America are starting to look likely - the gas age is in full swing - US and Canada step on the gas.

JUST hours after the Canadian government approved its third export gas project, another US export gas project, this time in Texas, has moved closer to getting a green light. The approvals come as concern is mounting that a large rise in North American gas reserves on the back of the shale gas boom will undercut much of the optimism of Australia's gas exporters over projects being developed off Western Australia and in Queensland.

Australia is set to be one of the world's largest gas exporters in the next five years, although growth prospects beyond that are being hurt by the increase in export projects vying for approval in North America.

On Tuesday Shell won approval for a project it is promoting in British Columbia, on Canada's west coast, which includes PetroChina, Korean Gas and Mitsubishi Corp as shareholders. Both PetroChina and Mitsubishi are participants in export gas projects in Australia.

As well, the US Department of Energy granted Pangea LNG approval to begin exports from its south Texas project. Pangea has been authorised to export up to 8 million tonnes annually of liquefied natural gas for 25 years.

Shell, also, has joined another consortium planning to export gas from Georgia, in the US south.

The inability of large vessels to use the Panama Canal always meant that gas exports from the US could only be exported to Asia from the west coast and Alaska, but that will change from late 2015 when the canal's capacity rises after a $US5.5 billion ($A5.28 billion) expansion.

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US Gas-to-Liquid Plant Planned By SASOL May Cost $10 Billion

The WSJ reports that South African coal to liquids company SASOL is looking to build a GTL (gas to liquids) plant in Louisiana, using the (at least currently) cheap supply of shale gas as feedstock - Gas-to-Liquid Site May Hit $10 Billion.

Sasol Ltd., a chemical company long known for squeezing motor fuel out of coal, is now turning its sights on the glut of natural gas in the U.S.

South Africa-based Sasol on Tuesday announced plans to build a plant in Louisiana, at a cost of up to $10 billion, that would convert natural gas into diesel fuel for trucks and other vehicles.

The company's board last week approved an 18-month feasibility study for the project, which would be constructed on land adjacent to Sasol's existing chemical facility in Calcasieu Parish, La.

If given the final go-ahead, the plant would be the first in the U.S. to use "gas-to-liquids" technology. Once seen as futuristic, the technology has gained traction in recent years as discovery of gas supplies have outpaced that of oil.

"The initial numbers look positive," said Ernst Oberholster, Sasol's managing director of new-business development, who stood alongside Louisiana Gov. Bobby Jindal at the company's Louisiana complex when the decision was announced.

What makes the U.S. an attractive location for such a project is the low level of natural-gas prices in the country. Benchmark futures have hovered between $3 and $6 per million British thermal units for two years, well below prices paid by consumers in Europe and Asia.

Sasol would buy the natural gas from suppliers using long-term contracts, convert the gas to liquid fuel and then sell that fuel to blenders, who wouldthen sell it for the open market.

The project is the latest to address what to do with a surplus of natural gas caused by the boom in drilling in shale-rock formations in places like Texas and Pennsylvania. Energy investor T. Boone Pickens and natural-gas producers such as Apache Corp. have promoted the use of natural gas as a road-transportation fuel, one that would be cleaner burning than oil-based alternatives. In addition, some companies have put forward plans to export gas out of the U.S. in cool-liquefied form.

Sasol's idea is one of the most ambitious, because it would essentially put natural gas on par with higher-priced crude oil as a key raw material for transportation fuels. And diesel prices trickle down into the cost of consumer goodseverywhere because the fuel is mainly used in trucking. So far this year, retail diesel prices in the U.S. are up 16%, even as the economy grows more fragile.

Sasol officials estimate that a plant producing 96,000 barrels a day of diesel, and some jet fuel, would cost $10 billion to construct. They say they could opt for a smaller facility, however.

By converting natural gas into a liquid, the fuel could be used without retrofitting vehicles or creating new fueling infrastructure, an issue that would affect motorists using compressed natural gas as Apache and Mr. Pickens have advocated. The proposed site in Louisiana is close to Gulf Coast natural-gas fields and is crisscrossed by pipelines that could be easily linked to a new facility, Mr. Oberholster said.

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