In the U.S., projects in the Pacific Northwest and the U.S. East Coast continue to stir controversy over environmental and security risk concerns, as does the Federal Energy Regulatory Commission’s (FERC’s) handling of the LNG facility review and licensing process.

A number of LNG terminals were originally proposed as a means to bring natural gas, which was anticipated to be in short supply, to the U.S. However, technological breakthroughs have allowed for the exploration and production of gas from unconventional plays in the U.S. and Canada, increasing supply, leaving doubt as to whether all the proposed LNG terminals will be needed.

Historically, shipments of LNG have been directed away from the U.S. to Asia, where greater demand could command higher prices. However, with Asian and European demand falling due to the global economic recession, LNG imports to the U.S. are expected to increase this year.

Varied projects proceed around the globe

New projects such as AGA Gas AB’s LNG terminal at Brunnsviksholme outside Nynäshamn, Sweden, have been announced. It will be the first of its kind in Sweden.

The LNG tank will be 33 meters (108 ft) high and 38 meters (124 ft) in diameter and will be constructed in slip form in August 2009 and completed during the first half of 2010 by NCC Construction Sweden AB.

NCC will also construct a harbor able to receive tankers with a maximum length of 160 meters (524 ft) and a depth of nine meters (29 ft). An approximately 100-meter-long (328-ft-long) bridge will connect Brunnsviksholme with the mainland. NCC also will construct of a service building, an access road to Norviksvägen, a vehicle bay for receipt of LNG and some ground work.

LNG projects such as Qatargas 2 and Sakhalin 2 have come online. In Qatar, Qatargas has inaugurated Qatargas 2, which it says is the world’s first fully integrated value chain LNG venture.

Combined, Qatargas 2 consists of three offshore unmanned platforms, two world class LNG trains, five storage tanks, two loading berths and a fleet of 14 state of the art LNG ships. The main destination for the LNG will be the South Hook terminal in the deepwater port of Milford Haven, Wales.

Qatargas 2 is capable of providing up to 20 percent of Britain’s natural gas needs.

The South Hook LNG Terminal is the largest LNG receiving terminal in Europe with a capacity of 15.6 million tonnes (17.2 million tons) per annum. The terminal features the largest diameter storage tanks in the world.

A tanker carrying about 67,000 tons of liquefied natural gas docked last month at an LNG receiving terminal in Sodegaura, Chiba Prefecture, Japan, marking the arrival of the first shipment of LNG from Russia’s Sakhalin-2 project.

Tokyo Gas Co. and Tokyo Electric Power Co., which jointly operate the LNG storage facility southeast of Tokyo, will share in shipments equally, with the gas company supplying the LNG as town gas and the electricity firm using it as fuel for its thermal power plants.

With Russia’s LNG project, Tokyo is hoping to reduce its energy dependence on the Middle East while Moscow is aiming to boost natural gas sales in the Asia-Pacific region in addition to Europe.

However, Tokyo Gas anticipates it will purchase less LNG in fiscal year 2009 versus 2008. In fiscal year 2009, Tokyo Gas expects its volume of gas production and purchasing, including LNG, will be 12.3 Bcm (434.3 Bcf), down from 13.1 Bcm (462.6 Bcf) in fiscal year 2008.

LNG market outlook

The U.S. Energy Information Administration (EIA) reports that U.S. LNG imports are expected to increase to about 480 Bcf in 2009, up from 352 Bcf in 2008, because of lower global economic activity and the start up of new liquefaction capacity in the Middle East and other parts of the world.

In its monthly Short-Term Energy Outlook for April, EIA reports that depressed LNG demand in Asia and Europe should tend to increase the amount of LNG available to the United States.  However, the projection is subject to considerable uncertainty. 

Initial production from new liquefaction capacity has been slowed or delayed for extended periods, and U.S. natural gas demand is also projected to be lower in 2009.  As a result, expanded LNG flows into the U.S. likely would depend on there being less domestic natural gas production or imports from Canada than forecast.  U.S. pipeline imports are expected to decline by about 11 percent in 2009. 

Recently, Europe has been seeing an increase in LNG imports, especially into France and the UK, partly because prices for LNG have come down and now are competitive with European prices. Right now, Europe has extra capacity to take in LNG after stores were depleted during last winter’s Russian/Ukrainian dispute, in which gas shipments were curtailed, forcing European countries to draw more gas from storage. Norway and Russia have lately been pushing more gas into the market, unwilling to give up their market share for LNG, said Zach Allen, president of PanEurasian Enterprises.

However, the global recession has hurt electricity demand, and Spain, Japan and South Korea, which last year accounted for over 60 percent of the total world LNG market, have curtailed their LNG buying. “These countries have a tremendous impact on LNG. If they need it and they’re buying aggressively, there’s not much left over. If they’re not buying, that means there’s a lot more LNG available in the market,” Allen said.

While LNG has been heading for Europe in recent months, cargoes will begin bringing LNG to the U.S. as temperatures rise and demand slips in Europe. Typically, the U.S. has been the destination for LNG in the summer as European demand wanes.

Steve Johnson, president of Houston-based Waterborne Energy, reports seeing a 28 percent increase in LNG imports during the first quarter of 2009 versus first quarter 2008, and expects LNG imports in the second quarter of this year to increase.

The global economic crisis, which has hampered energy demand, has resulted in LNG supply being backed out of Asia, and then Europe. The U.S., which has traditionally been a market of last resort, will see a significant influx of LNG imports this year, Johnson noted. “We’re seeing the beginning of a short-term global oversupply. Global supply by mid-2010 is likely to increase by 30 percent, which is enormous by any industry standards.

“Production has been bleeding slowly into the markets, and with seven new plants starting operations this year alone, the U.S. will see its first large incremental increase in imports, maybe 80 Bcf by May or June,” Johnson said.

A significant amount of LNG is likely to be headed to the U.S. from Nigeria and Algeria, where outages at LNG terminals have kept about 50 Bcf of supply off the market. That supply will likely be pushed to the U.S. when these plants come back online. 

“We have a perfect storm brewing, even though we’ll be stirring US$2.50/Mcf gas by this summer. We’re running into a situation where it’s more about storage capacity as opposed to price. There are a lot of the capacity holders in U.S. who are the primary spot players in market. It’s likely these capacity holders will start bringing in this product,” Johnson said.

The economic recovery will likely cause “an enormous whiplash” in the LNG business. A demand increase of five percent in Japan is a huge amount, and when the market turns around, demand for LNG will cause prices to take a severe hit. “It won’t be in five years or six months, but perhaps a year, a year and a half,” said Allen.

Import fears hit U.S. producers

Some industry associations, such as Denver-based Independent Petroleum Association of Mountain States (IPAMS), warned that the influx of foreign gas, in particular the agreement between Shell and the state-run Russian natural gas company Gazprom to import 20 million tons of Russian LNG to the Costa Azul LNG terminal in Baja California, could have devastating effects on independent natural gas producers in the Western United States.

The Gazprom-Shell agreement marks the entry of Gazprom into the North American market. As part of the transaction, Gazprom affiliates, under long-term assignment from Shell, will take capacity in Sempra’s Energia Costa Azul LNG import terminal in Baja California, Mexico, and pipeline capacity to enable gas to be transported to Southern California.

“America is currently awash with American-produced natural gas,” said John Harpole, president of Mercator Energy and member of the IPAMS board of directors. “In fact, due to recent technological advances, our proved reserves have increased dramatically in the past few years, placing the U.S. in an elite group of the world’s most natural-gas rich nations. We have no need for Russian natural gas, and the result will be a loss of American energy jobs.”

The short and medium-term impact of potential LNG imports to the U.S. on U.S. gas prices remains to be seen, according to the FERC’s State of the Market report. During 2008, the U.S. received less than 1 Bcf/d of LNG as prices in the rest of the LNG-importing world were higher than U.S. prices, Asian and European demand was high, and there were occasionally supply shortfalls.

However, world LNG prices have fallen substantially since the end of 2008, to the point that prices for natural gas were on par with the rest of the world by the end of March 2009.

In addition, additional LNG supplies are coming online and Asian and European demand continue to fall. Some analysts forecast U.S. imports greater than 3 Bcf/d by the third quarter of this year. A large inflow of LNG could put substantial downward pressure on natural gas prices, especially if U.S. demand does not rebound or production growth does not slow.

Many U.S. East Coast projects face opposition

While FERC has approved a number of projects, construction on several has been postponed because they lack necessary permits from state agencies.

In the past, critics have said that FERC was too easily green lighting projects, a trend seen by some as likely to change with the appointment of a new FERC chairman, Jon Wellinghoff.

However, Allen said he can’t see FERC behaving differently now that a new chairman is in office. “They may tighten up and be more rigorous in environmental examinations, but they’ve been very rigorous already, I think. The law is pretty specific as to what FERC can or can’t say. FERC is in a box, and they have to determine whether or not a facility is environmentally acceptable.”

Controversy continues to surround a number of proposed projects. Last month, the U.S. Department of Commerce upheld the state of New York’s objection to the proposed construction and operation of a floating LNG terminal and subsea pipeline that would be located in Long Island Sound.

Broadwater Energy LLC and Broadwater Pipeline LLC proposed constructing the terminal, which would have delivered up to 1.25 Bcf/d of gas to fuel electric generating plants and heat homes. The floating storage and regasification unit would have measured about 1,215 feet (370 m) long and 200 feet (61 m) wide, rising 80 feet (24 m) above the water line.

New York asserted that the proposal was inconsistent with the Long Island Sound Coastal Management Program.

BP, which has proposed the Crown Landing LNG facility for construction in Gloucester County, N.J., has had its request to FERC granted to extend the time to construct the terminal and associated pipelines.

BP subsidiary Crown Landing said that current market conditions are severely hampering the construction and development of LNG terminals in the U.S. and that a reconfiguration of the project must be developed, filed with, and approved by FERC before construction can begin.

The project has faced opposition from the state of Delaware over safety concerns. The U.S. Supreme Court in 2008 ruled that Delaware can block New Jersey industrial projects that jut into the state under the Delaware River, including BP’s Crown Landing LNG project.

BP’s proposed project would deliver up to 1.2 Bcf/d of gas to the Mid-Atlantic region.

President Barack Obama on March 30 signed into law H.R. 146, the Omnibus Public Lands Management Act of 2009, which designates about 2 million acres of new wilderness areas. The passage of the bill has been viewed by some as an attempt to block development of the proposed Weaver’s Cove LNG terminal in Fall River, Mass.

Under the bill, the Taunton River in Massachusetts will become part of the Wild & Scenic River system. The “Wild and Scenic” designation would cover the main stem of the Taunton River from its headwaters at the confluence of the Town and Matfield Rivers in the town of Bridgewater downstream 40 miles (64 km) to the confluence with the Quequechan River at the Route 195 Bridge in the city of Fall River.

Critics of the bill say that the lower segment of the Taunton River has been a highly developed, industrialized river for a long time and does not  possess the “remarkable scenic, recreational, geologic, fish and wildlife, historic, cultural or similar values” that qualify a river for wild and scenic designation.

Many LNG projects proposed for the U.S. East Coast face opposition from local officials, but not all. In Maine, Gov. John Baldacci and local industry has urged the Canadian province of New Brunswick to approve the development of LNG facilities in Maine in exchange for the state’s support of an energy corridor that would pass through New Brunswick and Maine.

The current economic environment is affecting the progress of some LNG projects. Earlier this month, FERC approved Cameron LNG LLC’s request for an extension of time until Dec. 31, 2009, to place the Cameron LNG terminal near Hackberry, La., in service.

Cameron LNG said in a March 16, 2008, filing that it has experienced construction delays and will be unable to complete construction of all its facilities within the time originally required. Cameron LNG expects to complete all construction activities and make the facilities available for service by Dec. 31 of this year.

Construction costs for LNG projects rose substantially in the past few years, in some cases doubling and tripling. Given the fall in LNG demand and gas prices, companies will likely begin aggressive cost cutting in the next six months, according to Steven Miles, head of the project development and finance section, as well as the LNG practice, at the international law firm of Baker Botts.

U.S. Gulf of Mexico - too many terminals?

The U.S. Coast Guard issued letters of recommendation on April 10 for eight LNG facilities located throughout the Gulf Coast, including four in Texas, two in Louisiana and two in Mississippi.

The letters indicate that the waterways associated with Calhoun LNG, Point Comfort, Texas; Freeport LNG Phase II, Freeport, Texas; Golden Pass LNG, Sabine Pass, Texas; Port Arthur LNG, Port Arthur, Texas; Creole Trail LNG, Cameron, La.; Sabine Pass LNG Phase II, Cameron Parish, La.; Casotte Landing LNG, Pascagoula, Miss.; and Gulf LNG Clean Energy, Pascagoula, Miss., are suitable for the expected vessel traffic at the facilities.

FERC earlier this year concluded that Sabine Pass LNG’s proposal to export LNG from the Sabine Pass LNG import terminal in Louisiana, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment.

Sabine Pass said its proposal would provide customers of the Sabine Pass terminal the opportunity to purchase cargoes of LNG at current LNG world market prices that may be higher than prices in U.S. markets, with the intent that such LNG subsequently could be exported for redelivery to a foreign market at a later date.

To export LNG from its facility, Sabine Pass will modify four 24-inch diameter check valves located on Transfer Arms A and D on the East and West Jetty Platforms.

The first phase of Sabine Pass LNG commenced service in April 2008, with 10.1 Bcf of LNG storage in three tanks, each with an LNG capacity of 160,000 cubic meters (5.6 MMcf), and a maximum continuous regasification rate of 2.6 Bcf/d. The first stage of Phase 2 will include the addition of a fourth and fifth storage tank, additional vaporizers that will bring the maximum continuous regasification rate up to 4.0 Bcf/d with a peak send out capacity of 4.3 Bcf/d. In the future stages of Phase 2, Cheniere may add a sixth storage tank and related facilities to bring the total LNG storage volume to 20.2 Bcf.

ExxonMobil’s Golden Pass LNG terminal is expected to begin operations in mid-2009. The LNG terminal will be located approximately 10 miles south (16 km) of Port Arthur and two miles (3.2 km) northwest of Sabine Pass, Texas, in an area zoned for industrial use on the Sabine-Neches Waterway.

In August 2007, FERC concluded that construction of Calhoun Point Comfort’s proposed Calhoun LNG project with appropriate mitigating measures, as recommended, would have limited adverse environmental impact.

The proposed Calhoun LNG facility will be capable of receiving, storing and regasifying up to 1 Bcf/d of LNG.  The project would ultimately consist of two 5.6 MMcf storage tanks with appropriately sized separation and vaporization facilities.  The project will be located near Port Lavaca, Texas. The facility could be operational in late 2009 or early 2010.

Sempra Energy’s Port Arthur LNG project has been permitted, but construction has not begun as the company is waiting on capacity supply contracts to be put into place first.

West Coast projects remain controversial

Three LNG projects proposed for construction in Oregon, Oregon LNG, Bradwood Landing LNG and Jordan Cove LNG, have sparked concerns among state and local officials, environmental groups and local residents over the projects’ impact on the local environment and wildlife, safety risks and impact on local industries such as forestry.

Some critics also view the projects as a means of using Oregon as a backdoor to supply more energy to California, and have criticized FERC’s handling of the LNG facility review and license process.

Both Allen and Johnson think it’s unlikely that LNG projects proposed for construction on the U.S. West Coast will be commercially viable. “It’s counterproductive and expensive to try and push through projects there,” Johnson said.

In a bid to regulate how and whether LNG projects are approved for construction and operation in Oregon, a bill was submitted to the Oregon Legislative Assembly that would establish certain requirements before applicants seeking to construct LNG terminals or related pipelines may be issued specified permits and authorizations. However, the bill died in committee.

Despite local opposition, FERC has concluded that the proposed Jordan Cove LNG project and associated Pacific Connector pipeline project would have limited adverse environmental impacts if constructed.

The U.S. Coast Guard also has issued a letter of recommendation for the Oregon LNG receiving terminal proposed for construction on the Skipanon Peninsula in Warrenton, Ore.

The Coast Guard has determined that, while portions of the Columbia River and its approaches are not currently suitable for the proposed traffic, they could be made suitable for the type and frequency of LNG marine traffic associated with the project. “Additional measures are necessary to responsibly manage the maritime safety and security risks,” the Coast Guard said.

Specific risk mitigation measures recommended to manage the safety and security risks of the project include a moving safety-security zone to be established around the LNG vessel extending 500 yards around the vessel but ending at the shoreline.

Construction of the import facility and an associated pipeline is anticipated to begin in 2010. The project is expected to begin serving customers in 2013.

The Oregon LNG receiving terminal will be designed with a natural gas send out capacity of 1.0 Bcf/d and a peak of up to 1.5 Bcf/d. The project will be designed to receive LNG from oceangoing LNG carriers up to 266,000 cubic meters (9.4 MMcf) in size and will feature three 160,000 cubic meters (5.6 MMcf) aboveground, full containment LNG storage tanks.

The Coast Guard also issued letters of recommendation for the other two proposed Oregon LNG terminals, Bradwood Landing and Jordan Cove.

FERC has granted a rehearing of the Bradwood Landing LNG project proposed for siting and operation near Astoria, Ore. to allow for additional time for consideration of matters related to the facilities.

Oregon Governor Ted Kulongoski had said in January the state would appeal FERC’s decision to license the proposed Bradwood Landing LNG terminal before environmental mitigation plans were fully evaluated and approved and the state permitting process was complete.

“I have been clear that FERC should not issue a license until all environmental issues are appropriately addressed and not before state permit decisions have been rendered,” Kulongoski said. “I am deeply disappointed that FERC has chosen to ignore Oregon’s concerns in this matter and have asked the Attorney General to seek prompt judicial review.”

Long Beach happy to use LNG

While opposition to LNG terminals along the U.S. West Coast has been strong, LNG is finding a foothold as an alternative fuel for trucks. The city of Long Beach last month unveiled a new LNG fueling station for the city’s growing feet of alternative fuel vehicles. The 32,000-gallon fueling station handles a two-week supply of LNG for the city’s 79 LNG vehicles, including the only LNG-powered street-sweeping fleet in the United States.

Mayor Bob Foster said, “Creating a world-class green fleet is one of the many sustainable programs that the city has implemented.  This LNG fueling station will save costs, and burns much cleaner than diesel fuel.”

The LNG fueling station will soon be publicly accessible for use by other LNG vehicles, and was partially funded by the South Coast Air Quality Management District.

By using LNG vehicles and retrofitting diesel vehicles with particulate traps, the city of Long Beach has removed more than 2.8 metric tons (3.1 tons) of particulate matter from the atmosphere.

Additionally, the conversion of a large portion of the city’s solid waste fleet to LNG powered vehicles has reduced carbon dioxide emissions by 19.54 metric tons (21.5 tons) per year, significantly reducing greenhouse gases that contribute to global warming.

The LNG is produced and supplied to Long Beach by Topock, Ariz.-based Applied LNG Technologies.

Australia develops as LNG hub

Australia is rapidly becoming a hub for LNG activity, albeit with environmental concerns by at least one government agency.

The Environmental Protection Authority (EPA) of Western Australia on April 30 conditionally approved Chevron Corp.’s proposal to revise and expand the Gorgon LNG development on the Barrow Island nature reserve.

Despite its conditional approval, EPA Chairman Paul Vogel said the agency still opposes the location of industry on Barrow Island, a Class A nature reserve. Vogel stated, “Given the very high environmental and unique conservation values of Barrow Island, which are reflected in its status as a class A Nature Reserve, it is the view of the EPA that, as a matter of principle, industry should not be located on a nature reserve and specifically not on Barrow Island.”

However, the EPA “recognizes that Government approved construction of a smaller gas processing plant on Barrow Island in 2007, and has therefore assessed the revised and expanded proposal for new and, or additional risks and impacts to significant environmental assets,” Vogel said.

The EPA has concluded that the proposal could meet the EPA’s objectives provided stringent conditions are imposed.

EPA has recommended that the Minister for Environment seek advice from the Marine Turtle Expert Panel on mitigating potential impacts on one of the most significant flatback turtle rookeries in Western Australia.

The EPA also regards the increased potential impacts of dredging and marine infrastructure construction on the high value coral dominated habitat of the Lowendal Shelf as an important issue.

Corrective action, including stopping dredging when required, would need to be set out in conditions, following advice to the Minister for Environment by the Construction Dredging Environmental Expert Panel.

Gas from the Gorgon field is high in carbon dioxide. A fundamental justification by the proponent for using Barrow Island was the need for access to a suitable aquifer beneath the island for long term carbon dioxide storage. If injection and long term storage of the carbon dioxide produced with the gas that is processed at the Gorgon plant is not achieved, then the decision to permit gas processing on Barrow Island nature reserve should be reconsidered, in the EPA’s view.

Chevron officials welcomed the EPA’s decision to conditionally approve the revised and expanded proposal, which would add a third 5 million metric ton (5.5 million ton) per year LNG train to the original two-train proposal already approved for Barrow Island.

“The EPA’s decision is an important step in the regulatory process. Chevron can now continue to assess the conditions as it works toward a final investment decision in the second half of this year,” Chevron said.

Chevron is operator of the Gorgon project with 50 percent interest. Partners in the joint venture include ExxonMobil with 25 percent and Shell with 25 percent.

Elsewhere in Australia, LNG projects are in various stages of planning. Woodside Petroleum Ltd. signed and executed a Heads of Agreement with the state of Western Australia and the Kimberley Land Council on behalf of Traditional Owners related to the establishment of a Kimberley LNG precinct.

Woodside’s decision follows the broad agreement reached by the Western Australian government with the Kimberley Land Council and Woodside about the establishment of a site for an LNG precinct at James Price Point on the Kimberley coast. Traditional owners voted to endorse the project on April 15.

State Premier Colin Barnett said the broad agreement provided a groundbreaking framework for comprehensive native title and cultural heritage agreements, land tenure arrangements and benefits to the community.

The precinct at James Price Point would occupy about 1,000 hectares (2,471 acres). With accommodation, ancillary services and an appropriate land and sea buffer, the total area may be up to 3,500 hectares (8,648 acres).

“The next step is the development of an Indigenous Land Use Agreement in negotiation with the Traditional Owners, registered by early 2010 and the environmental approvals process completed by late 2010,” Barnett said. 

The Australian state of Queensland also is becoming a hive of proposed LNG development, with four projects in the works.

The Australia Pacific LNG (APLNG) project, co-owned by Origin Energy and ConocoPhillips, reached a key milestone in April when the Queensland Co-ordinator General declared the project significant.

APLNG is proposing a large coal seam gas (CSG) to LNG project in Australia, which will result in investment in the order of A$35 billion (US$24.9 billion) in Queensland through to 2020.

The Co-ordinator General’s declaration will lead to a streamlined government approval process by allowing the draft Terms of Reference to be set for an Environmental Impact Statement for the project.

APLNG Project Director Todd Creeger said the declaration was an important milestone for the project. “Our CSG to LNG project is underpinned by a strong relationship between Origin and ConocoPhillips, which are both leaders in the production of CSG and, in the case of ConocoPhillips, a leader in the delivery of LNG projects.”

The project consists of the further development of APLNG’s CSG fields; a gas transmission pipeline to the Queensland coast; a gas processing plant and associated facilities where the gas will be cooled and liquefied for shipping overseas.

The project will consist of up to four trains. When all four trains are operational, the plant is expected to produce up to 14 million tonnes to 16 million tonnes (15.4 million tons to 17.6 million tons) of LNG a year.

Origin will be responsible for the development and management of the CSG facilities including the gas fields and pipeline on behalf of APLNG.

ConocoPhillips will be responsible for the construction and management of the LNG plant on behalf of APLNG. Discussions are continuing with relevant parties regarding the suitability of certain sites.

Production could begin in 2014 at 3.5 million tonnes (3.8 million tons) per annum, the Queensland government said in a statement.

Earlier this year, Santos Ltd. submitted a draft of the Environmental Impact Statement (EIS) for the CSG Gladstone liquefied natural gas (GLNG) project, also proposed for construction and operation in Queensland.

Santos said GLNG is set to become the world’s first major project to produce LNG sourced from CSG. Gas will be piped from fields near Roma via a 435-kilometer (270-mile) pipeline to Curtis Island, where will be cooled to minus 161 degrees Celsius in a liquefaction plant and shipped to global markets.

The EIS assesses major components of the project, including the CSG fields near Roma; transmission gas pipeline connecting Roma to Curtis Island; LNG liquefaction and export facility on Curtis Island; bridge, roads and service corridors to Curtis Island; and dredging in Gladstone Harbour.

The state government will examine the EIS against the Terms of Reference agreed for the project’s assessment before the document is made public. The Queensland community will then have an opportunity to review the EIS and make submissions.

Royal Dutch Shell Plc in February signed an agreement with Gladstone Port Corporation for an exclusive Right to Investigate a site on Curtis Island for construction of a possible LNG plant.

Shell intends to supply the plant with natural gas from Arrow Energy’s CSG acreage jointly owned by Shell and Arrow. A full integrated project plan is being formed.

Shell has closed on its acquisition of a 30 percent interest in Arrow’s CSG acreage in Queensland and a 10 percent stake in Arrow Energy subsidiary Arrow International, which holds Arrow’s international interests in CSG opportunities.

Champion will replace Maher Abu-Ghazaleh, who resigned after 12 years. Abu-Ghazaleh’s brothers Mohammed and Amir still work as directors.

Champion, an international management and trade consultant, worked as a managing director and senior vice president at JPMorgan Chase & Co. from 2004 to 2008.

Del Monte, a seller of prepared and fresh fruits and vegetables, said Tuesday its first-quarter net profit fell 45 percent to $34.9 million, or 55 cents per share, from $63.6 million, or $1 per share, a year earlier.

Del Monte shares dropped 36 cents, or 2.4 percent, to close at $14.52 on Thursday.

For the week ended April 24 crude inventories rose by 4.1 million barrels, or 1.1 percent, to 374.7 million barrels, which is 18 percent above year-ago levels, the Energy Department’s Energy Information Administration said in its weekly report.

Analysts had expected a boost of 1.8 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill  Cos.

Gasoline inventories slipped by 4.7 million barrels, or 2.2 percent, to 212.6 million barrels, which is even with year-ago levels. Analysts expected stockpiles of the motor fuel to rise by 900,000 barrels.

Demand for gasoline over the four weeks ended April 24 was 0.5 percent lower than a year earlier, averaging 9.1 million barrels a day.

At the same time, U.S. refineries ran at 82.7 percent of total capacity on average, a drop of 0.7 percentage point from the prior week. Analysts expected capacity to rise to 83.7 percent.

Inventories of distillate fuel, which include diesel and heating oil, rose by 1.8 million barrels to 144.1 million barrels for the week ended April 24. Analysts expected distillate stocks to jump 1.3 million barrels.

Benchmark crude rose 98 cents to $50.90 per barrel on the New York Mercantile Exchange. -AP

With oil prices down 60.0% over the year, Big Oil is seeing a corresponding drop in profitability. Royal Dutch Shell announced on Wednesday a 61.6% slide in first-quarter profits, to $3.5 billion, only a day after BPsaid its own quarterly profits had fallen by 64.0% over the year. But like its rivals, Shell is building up its defensiveness and cutting costs–it just remains to be seen by how much.

Shell stuck to its previous guidance on capital expenditure for this year on Wednesday, or $31-$32 billion, which would only represent a slight decrease from last year’s figure of $32 billion. But incoming chief executive Peter Voser admitted that this “could change” over the course of 2009, and after BP cut spending forecasts for this year it seems likely that Shell will also tighten its belt to adapt to oil at $50 per barrel.

Shell’s upstream earnings fell 67.0% over the year. The company blamed militant attacks in Nigeria and quota restrictions from the OPEC oil-exporting cartel for its reported 7.0% drop in crude oil production. Project developments in the first quarter included the first exports of liquefied natural gas from the Sakhalin-II site in Russia, and an extension to its gas joint venture with the Abu Dhabi National Oil Company.

In the downstream, Shell said oil trading and business-to-business sales helped earnings fall only 9.0% over the year, on a constant cost of supplies basis.

You receive an e-mail from a prospective customer - requesting information on your products, price etc. or placing order. Normally, you would like to find out more information about this customer before parting with requested information, especially if the information is of sensitive nature like price list, discount rate etc. There may be other occasions when you want to find out more information about e-mail sender - for example, to locate the identity of a spammer or someone whose identity is suspicious. How do you go about it?

I belong to a closed network of CEOs who share information with each other regarding international finance and trade deals worldwide and every month we share notes in our own blacklists as well as high level messages carrying “red flags”. Since I achingly encounter fraudsters (and lately some cyberbullies) on a weekly basis, I decided to write about one simple technique we do that I tell our employees worldwide in how we do business within MJS companies.

E-mail is perhaps the easiest thing to acquire in the Internet. Though Internet is anonymous - there are few tools with which you may dig out some information about your customer before entering into a negotiation. For example - if you receive an e-mail from a ‘customer’ with US postal address but discover that the e-mail has been sent from an African country - you´ll  know what to do with the help of these steps.

Analysis of Given Details

Every e-mail has at least three distinct elements:

From: (e.g. abcd@whyme1234.com)

To: (e.g. seller@products.com)

Subject (e.g. Want to buy Your products)

The simplest test is to put the tail of sender’s e-mail address (e.g. www.whyme1234.com for abcd@whyme1234.com) in your browser’s window and check if there is a web-site at this URL. 

If you find a valid and business like web-site at this URL - your job becomes easier. One can dig out significant details from web-site as also other sources. Please see Faida article - ‘How to evaluate a business web-site’ for details. 

However, if you can not find e-mail sender’s web-site at URL - do not jump to conclusion that the sender is phony. Lot’s of people use business e-mail address without web-site. In such cases, you need to determine if this guy is one of them or is using an anonymous web-based free e-mail, disguised as business e-mail. Your next task is to find out ownership details of the domain name.

Tracing Owner of Domain Name

Internet Corporation For Assigned Names and Numbers (ICANN) is the nodal agency that supervises registration of domain names. Information on ownership of domain names can be located from ICANN approved registrars, who maintain public access database (called whois) on ownership of domain names. 

Please visit such a whois (e.g. http://www.internic.net/whois.html) and check ownership of domain name. 

If the sender is using a business e-mail - the domain name should be registered in sender’s or his/her company’s name. 

When e-mail Sender Uses free web-based E-mail service

What happens when the e-mail sender uses a web-based free e-mail service (e.g. hotmail.com, yahoo.com, rediffmail.com etc.) ? 

Well, you can still find information about the sender by analyzing the e-mail header.

Unraveling Hidden information from e-mail header

Every e-mail has a visible set of information on sender (From:), recipient (To:), subject (Subject:), Organization of the sender (Orgn:) etc. However, there’s a great deal more hidden within, that can reveal significant information about the sender. 

A little scrutiny of this hidden information may help you locate sender’s country, genuineness of the e-mail used in ‘From:’ column, whether the sender tried to conceal his/her identity etc. 

A fake sender attempting to confuse identity usually means a fraudster trying to steal your money or a virus attack, a potential hazard in either case, that can cost you a lot in terms of financial loss, computer crash etc. A little time spent on analyzing suspicious looking e-mails is an insurance against such disasters. 

Those using Yahoo, AOL, Hotmail or any such web-based e-mail service may think that their true identity and location are hidden. In reality - one may still find information about them by analyzing their e-mail headers.

What is E-mail Header

The part of an e-mail where such hidden information is stored is called ‘header’. Header of an e-mail stores various information on the path it has traversed while reaching your mailbox - right from sender’s computer. Normally, one doesn’t need this kind of information and mail clients (Eudora, Outlook, Netscape etc. ) do not display it. 

To see e-mail header in Netscape, open any e-mail and click 

View > Page Source 

For Outlook, right-click on the mail message that is still in your Inbox, select ‘Options…’ from the resulting popup menu Examine the ‘Internet Headers’ in the ‘Message Options’ dialog 

At first look - the header may look confusing and puzzling. This is more so for spam e-mails as spammers try their best to make the header misleading. Do not lose heart - I am going to explain how to pick up right information from it.

Examining a Typical Header

Let us examine following e-mail header:

1. Delivery-date: Wed, 03 Nov 2004 23:59:47 -0600
2. Received: from bani by arjuna.banijya.com with local-bsmtp (Mann 4.43)
3.  id 1CPaev-00057o-Q4
 4.  for abcdxyz@banijya.com; Wed, 03 Nov 2004 23:59:47 -0600
5. Received: from [203.199.83.28] (helo=rediffmail.com)
6. by arjuna.banijya.com with smtp (Mann 4.43)
7. id 1CPaev-00057f-8T
 8.  for info@infobanc.com; Wed, 03 Nov 2004 23:59:45 -0600
9.  Received: (qmail 28471 invoked by uid 510); 4 Nov 2004 05:59:09 -0000
10. Date: 4 Nov 2004 05:59:09 -0000
11. Message-ID: <20041104055909.28468.qmail@webmail18.rediffmail.com>
12. Received: from unknown (61.3.251.11) by rediffmail.com 
13.  via HTTP; 04 nov 2004 05:59:08 -0000
14. MIME-Version: 1.0
15. From: “Raj International ” 
16. Reply-To: “Raj International “ 
17. To: “InfoBanc” 
18. Subject: Thanks for activation

Explanation of Header Elements

If you look carefully at e-mail header above, a pattern is clearly visible. The header is composed of several lines of text - each starting with header name (e.g. Delivery-date) , a colon (:), a space and finally header value. If a line starts with a tab or spaces (line nos. 2-4 and 5-8) - that line is a continuation of the previous header value line. So, the header name ‘Received:’ in line 2 has a header value that spans lines 2 to 4. 

Some of the header names are simple and self-explanatory, such as the ‘Delivery-date:’, ‘From:’, ‘Reply-To:, ‘Subject:’ etc. For example, sender’s e-mail address appears after header name ‘From:’ and the recipients e-mail address appears after the ‘To:’ header name. 

Please note - mail servers have no way to check if the sender is using his or her own e-mail address. This lack of verification is a weakness - that spammers and fraudsters use ruthlessly to confuse recipients. So, do not accept sender’s e-mail address at face value. A fraudster or spammer, in all likelihood, will never use his/her actual e-mail address. Instead, he/she may use a legitimate e-mail address (it could even be your own e-mail) as sender. 

We shall not discuss each and every header name - as many of these can be forged or a fake one inserted by spammer. What is most important for our purpose (and most difficult to forge) is the ‘Received:’ headers. Analysis of ‘Received:’ header names can reveal a great deal of information about the sender.

Locating Actual Sender from Header Analysis 

Every e-mail has a header that stores significant information about sender of the e-mail and the path it traversed before reaching your mailbox. In earlier issues - we have discussed how to read e-mail headers and various header elements. In this issue, we shall discuss how to locate actual sender of an e-mail and his/her geographical location. 

Considering anonymous nature of Internet - this a vital piece of information for every e-business. If you receive an e-mail from a ‘customer’ with US postal address but discover that the e-mail has been sent from an African country - you know what to do ! 

Users of web-based free e-mail services like Yahoo, Rediffmail, Hotmail etc. may think that their true identity and location are hidden. In reality - one may still find information about them by analyzing their e-mail headers.

‘Received:’ Headers

Of all header elements we have discussed, ‘Received:’ headers are most important for identifying sender’s country. One reason is that - ‘Received:’ headers are most difficult to tamper with. 

Any header element can be forged and faked ones inserted up to a point, as the headers are just textual data, and only the headers added by servers that you trust can be considered reliable. 

Every time an e-mail moves through a new mail server, a new Received header line (and possibly other header lines) is added to the beginning of the headers list. This means that as you read the Received headers from top to bottom, you are gradually moving closer to the computer/person that sent you the e-mail. 

But please note that as you read through the Received header fields and get closer to the computer/person that sent you the e-mail, you need to consider the possibility that the sender added one or more false Received header lines to the list (at the time, the senders beginning of the list) in an attempt to redirect you to another location and prevent you from finding the true sender. But, now that you know false header lines are possible, just stay alert.

Reading ‘Received:’ Header

Consider following e-mail header and its interpretation:

1. Received: from [216.136.225.35] (helo=web20024.mail.yahoo.com)
2. by arjuna.banijya.com with smtp (Mann 4.43)
3. id 1CPhNE-0002Qt-0T
4.  for info@infobanc.com; Thu, 04 Nov 2004 07:09:56 -0600
5. Received: from [69.132.4.255] by web20024.mail.yahoo.com via 
6.   HTTP; Thu, 04 Nov 2004 05:09:53 PST

Interpretation

Line 1 - 4 : Mail sever arjuna.banijya.com  receives a mail  for one of its clients (info@infobanc.com) 
 from mail server web20024.mail.yahoo.com
 which has an IP address 216.136.225.35



Line 5 - 6 : Mail server web20024.mail.yahoo.com receives
  a mail from IP 69.132.4.255

By the way - IP stands for Internet Protocol. The Internet uses a technology to interlink millions of computers in its fold - TCP/IP. The core of this technology is called IP addressing or Internet Protocol addressing. Every computer connected to Internet is given a unique number for identification - called IP number. IP number is used to verify location and activities of any computer. Your ISP provider assigns you an IP address each time you connect to the Internet. 

It is evident from header interpretation that actual sender is the one at the bottom of series of ‘Received:’ headers and the recipient is at the top. In other words, mail server web20024.mail.yahoo.com received an e-mail from IP address 69.132.4.255. 

So IP address 69.132.4.255 is the sender of this e-mail. 

Interestingly, this sender used a free web-based e-mail service (yahoo.com) to send this e-mail - still his/her identity can be traced using IP address 69.132.4.255 found in mail header.

Locating Sender’s Country from IP Address

Spammers and fraudsters may forge many header elements like ‘From:’, ‘Received-date:’ etc. - but it is very difficult to change IP addresses inserted by mail servers. At best, they may insert fake ‘Received’: headers to confuse recipient. 


Once you locate IP address of actual sender’s mail server or computer, it is possible to locate geographical location or country.

E-mails are anonymous by nature - but contains significant information in its header about the path it traversed before reaching your mailbox. The header is normally not visible. We have discussed how to view and analyze header of any e-mail and locate actual sender with his/her IP address. In this issue - we shall discuss how to locate sender’s country from IP address.

Internet Resources for IP Analysis

There are various free and paid-for Internet resources to help you find information about IP addresses, domain names etc.

1. VisualWare

Perhaps the leader in IP tracking software, Visualware has number of products to track e-mail, IP, domain name owner etc. 

VisualRoute and eMailTrackerPro are two software from Visualroute that can help you significant information on e-mails. 

VisualRoute has a free service to demonstrate how the software works. If your IP tracking requirement is modest - you may use this free service to track any IP address. However, if you wish to use this facility regularly - please consider buying the software. 

To use the free service - please visit Visualware web-site http://www.visualware.com/index.html

Click on ‘Online demos’ button on above page - you will reach http://www.visualware.com/demo/index.html 



Click on ‘VisualRoute’ link on above page and you will reach IP Tracking area - http://visualroute.visualware.com/ 



There is a simple one-step registration process that requires your e-mail address only. Enter your e-mail address in registration box - an identification number (called PIN) will be sent to your e-mail. Use this PIN for first time - you will not require it again. 

After registration - copy and paste any IP number and it will immediately show the country of origin of the IP number on world map.

2. DNS Stuff

My favorite - this is a very powerful yet completely free service that does dozens of extremely useful functions. Internet is truly a marvelous place - where else would you find such high quality service completely free of cost ? 

This does not even require registration - please visit http://www.dnsstuff.com/ and perform dozens of IP and DNS related functions. 

To trace geographic location of an IP address - please use Tracert (Traces the route packets)

3. American Registry for Internet Numbers (ARIN)

An excellent free source for finding information on IP number. To use this service, please visit http://www.arin.net/whois/index.html . Enter the IP into the search text box and hit “Submit”. If the IP address belongs to an organization in North America or sub-Saharan Africa it will display the details of owner of the IP address. 

For organizations located outside ARIN’s geographical area of responsibility - here are other resources 


RIPE (European Registry): http://www.ripe.net/ripencc/pub-services/db/whois/whois.html

APNIC (Asia Pacific Registry): http://www.apnic.net/apnic-bin/whois2.pl

LACNIC (Latin America and the Caribbean Registry): http://lacnic.net/cgi-bin/lacnic/whois?lg=EN

To determine in which geographical area a particular country is located, see the List of Countries in Regional Registry Geographical Areas: http://www.arin.net/library/internet_info/countries.html

 4. NetGeo - The Internet Geographic Database

NetGeo is a free service for locating geographical position of an IP address. Though this free service is almost as good as Visualware - much of its functionality is now lost as its database is not updated regularly. 



You may find more information about NetGeo at http://www.caida.org/tools/utilities/netgeo/ 



To use this facility - please visit http://www.dnsstuff.com/ and use NetGeo IP Lookup

Here are just some pointers to help your business and personal life. Our companies, MJS Commodities and MJS Capital  are very active within international trade, we are very diligent in making sure that we deal with real players in the business. Trust, Integrity and relationships are our greatest commodities in our business. I hope this will help you become productive and have a safe experience in this new technologically savvy  generation of fraud, scams and cyberbullying. I look forward to your comments, feedback and suggestion. -reprint from  MJ Santos,Global Chairman/CEO MJS Global Group

According to the Cement Manufacturers’ Association (CMA), the industry, which is expected to grow at about 1.2 times of the country’s GDP growth this fiscal, is estimated to have sales growth of 8-9 per cent in 2008-09, but profit margins are likely to dropped by 20 per cent for the same year.

“In 2009-10, about 50 MT of capacity will be added to the country’s total cement production,” CMA president H M Bangur told reporters here.

In the last fiscal, the 30 MT of capacity were added and the additional production of 50 MT this year would fulfill India’s overall requirement, he said.

As on March 31, the country had an installed capacity of 210 million tonnes, while production stood at 181 MT in FY’09, he added.

Bangur, however, said the industry’s overall profit margin was expected to be lower by 20 per cent in 2008-09 due to rising input costs.

“Profit is falling due to cost structure… earlier most of the manufacturers used to get coal by linkage, but now over 50 per cent of this fuel is purchased from the open market or imported,” he added.

Oil Minister Rafael Ramirez said Petroleos de Venezuela SA will cut “excess” costs by $11 billion, about a tenth of last year’s estimated spending, freezing wages for its 75,000 employees and reducing salaries for all top officials, including himself, by 20 percent.

He gave no other details on what areas of spending would be affected.

A company statement said the spending cuts will allow PDVSA to pursue $14 billion in investments in maintenance, upgrades, natural gas and other projects this year, even as world oil prices remain low.

“We’re not going to hold back on our investment plan,” Ramirez said. “If we want to keep our company functioning and expanding, we have to work hard at administering our resources.”

After years of financing many of President Hugo Chavez’s broad social programs, PDVSA may finally be putting oil and gas developments above other financial obligations as falling oil prices slash income, said Caracas-based economist Pavel Gomez.

Venezuela relies on oil for 93 percent of exports, but world crude prices have tumbled 65 percent since their July peak.

The spending cuts are “probably a signal to generate credibility” among international investors at a time that the company may be pushed to issue new bonds, Gomez added.

After nationalizing four of Venezuela’s biggest heavy crude projects, PDVSA last year invited foreign private companies to bid for minority stakes in seven exploration areas in the same Orinoco region.

Though nineteen companies, including Chevron  Corp., Total SA, and Royal Dutch Shell Plc spent $2 million each for technical information about those deposits, none have publicly announced bids yet.

PDVSA spent $81.4 billion on maintenance, exploration, administration and other costs in the first nine months of last year, the latest period for which figures are available. Soaring oil prices, which peaked in July, gave PDVSA net income of $12.1 billion for that period.

Hu Xiaolian, the head of China’s State Administration of Foreign Exchange told Xinhua news agency that the country has added 454 metric tons to its gold reserves since 2003 when it said reserves totaled 600 metric tons. Purchases were made off the exchange as private transactions, Hu said which explains the global surprise by the Friday announcement.

The recent buying brings China’s total gold reserves to 1,054 metric tons and the ratio of gold to total reserves to 1.6% from 1.7% in 2003, according to Tom Pawlicki, a precious metals and energy analyst at MF Global. It also places them fifth among countries with the largest gold holdings.

Pawlicki expects China to continue building gold reserves because its has recently expressed interest in buying strategic commodities while prices are low. Gold is an obvious choice given China’s huge foreign exchange reserves.

“The purchase of gold removes some country risk inherent in foreign currency holdings and protects against potential dollar weakness,” Pawlicki said.

The news helped push up prices of gold futures trading on the Comex division of the New York Mercantile Exchange with the price of June gold up by $7.50 to settle at $914.10 an ounce on Friday.

Axel Merk, president and chief investment officer of Merk Mutual Funds, suspects that China’s decision to address its gold reserves is in keeping with the country’s recent efforts to increase transparency as it endeavors to become a more active participant in global financial markets. Lately, the country has been seeking a more active role in the debate over global currencies and Merk suspects that the country is looking to diversify its reserves as a way to become a more active global player.

China may also see an opportunity in possible gold sales of 400 metric tons by the International Monetary Fund. Merk said buying gold from the IMF would be a way for the Chinese to build its reserves quickly without causing large disruptions to the market.

Since coal is used in power generation and steel production, it has suffered dwindling demand alongside those industries. Even though some U.S. coal companies are cushioned from weak coal prices since they negotiated contract prices before the recession’s onset, sales have suffered from customers’ high inventory levels and delayed shipments. Struggling steelmakers may even try to renegotiate prices, says Raymond James analyst James Rollyson and they might have some leverage since nobody wants to put their customers out of business.

“We expect contracts with utilities to be honored, but deliveries could be postponed in some cases,” Rollyson said. “The same cannot be said for metallurgical coal contracts, as we continue to hear stories of certain met coal contracts being cancelled or held off for delivery and/or requests for price adjustments. More lawsuits against the steelmakers for breach of contract could start to pop up.”

Although Peabody Energy ’s results missed analysts’ estimates on April 15, better-than-expected first-quarter earnings from Consol Energy  on Thursday lifted shares across the sector. When Arch Coal reports first-quarter earnings on Friday morning, analysts will be eagerly anticipating any comments regarding guidance for 2009 since companies are declining to give exact estimates given industry uncertainty.

Analysts will also be watching to see whether Arch will announce more production cuts. In January, the company projected sales volumes from company-controlled operations to be between 120.0 million and 127.0 million tons in 2009, compared with production of 134.0 million in 2008.

“Included in this range are 6.0 million tons of metallurgical quality coal–some of which will likely shift into steam coal markets or, conversely, will be left in the ground depending on market conditions,” the company said.

Arch Coal has been further hurt by a recent roof fall and has said previously that it isn’t benefiting from lower diesel costs since it already had hedges in place against higher prices.

Last quarter, Arch said it expects the first quarter of 2009 to be the weakest operating period of the year–and well below 2008’s fourth-quarter. Analysts polled by Thomson Reuters have been projecting a first-quarter profit of 24 cents a share on sales of $680.5 million. Arch shares closed Thursday’s trading session up by 15 cents, or 1.0%, at $14.91.

The Associated Press contributed to this article.

Fitch cited “steep declines” in the company’s fourth-quarter sales volumes as well as the devaluation of the Mexican peso, British pound and Euro versus the U.S. dollar. 

Further, ratings have been placed on “Rating Watch Negative” because of the challenges Cemex, the world’s third-largest cement producer, faces in trying arrange financing that will let it meet debt coming due over the next few months, Fitch said.

Cemex’s debt maturities during the second, third and fourth quarter of this year are $473 million, $428 million and $2.2 billion, respectively. In 2010 and 2011, Cemex faces debt amortizations of $3.8 billion and $7.8 billion, respectively.

“If successful (in servicing its debt), Cemex’s risk will remain high until it reaches a broader agreement with the banks that will allow it to lengthen the maturity schedule of a significant portion of its debt that comes due in 2009, 2010 and 2011,” the agency said.

At the end of last year, Cemex had total adjusted debt of $23 billion and cash and marketable securities of $993 million.

In afternoon trading, the company’s American Depositary Shares rose 58 cents, or 14.4 percent, to $4.60, as the broader markets surged.