Doe Natural Gas Storage

State optimistic on Cook Inlet gas

The State of Alaska believes so.

With the right amount of investment and storage, the Cook Inlet could meet Southcentral gas demand through at least 2018, according to a new Division of Oil and Gas report.

And if that investment yields good results, it might push the timeline out to 2021.

The 34-page report compared the Cook Inlet basin to a 1990 pick-up truck: "In both cases we have been served well and the prospect for more years is likely if we continue to invest. Failure to provide sufficient investment will accelerate the end date. Conversely, even if we were to continue to invest, at some point it will become more economical to buy a new truck or in the case of gas supply to import from another source."

As a basin-wide look, the study evaluated the potential of the whole region, but didn't claim to say whether any individual project is economical or not. The study tried to figure out how much gas could be produced at various rates of return.

The state experts estimated that the region needs around 90 billion cubic feet per year, a figure that does not include demand for a potential liquefied natural gas export operation.

By defining a "project" as one season of work at an existing field and two seasons at a new field, the report identified 39 potential projects in the Cook Inlet, 26 in existing fields, 12 in new fields and one basin-wide compression project. The study team then performed an economic analysis on each project, considering costs under the existing fiscal system and timelines for bringing new production online. It considered various probabilities for success, as well as three potential rates of return: 10, 15 and 20 percent.

The report measured the commercial viability of Cook Inlet by calculating the internal rate of return and expected monetary value of the basin, and compared those values against a projected supply curve for the basin.The results "strongly suggest" that the basin contains economic natural gas, while "some of EMV are low compared to other projects around the world available for investment," the report concludes.

For the analysis of the supply curve, the State relied on its 2009 study on the potential reserves remaining in the basin. The report estimates that Cook Inlet continues to hold at least 863 billion cubic feet of proved reserves, developed and produced reserves, and could potentially take much more depending on the amount of industry investment pumped into the region.

Natural gas futures tumble to 5-week low after U.S. EIA data 6/23 ...

ForexPros.com

Posted 6/23/2011 10:42 AM by ForexPros.com from ForexPros.com in Investing, Forex and Currencies

Forex Pros – Natural gas futures extended losses on Thursday, tumbling to a five-week low after the U.S. Energy Information Administration said natural gas inventories rose more-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for July delivery traded at USD4.187 per million British thermal units during U.S. morning trade, tumbling 3.05%.

It earlier fell as much as 3.7% to USD4.157 per million British thermal units, the lowest price since May 20.

The July contract traded at USD4.263 prior to the release of the EIA data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 17 rose by 98 billion cubic feet, after increasing by 69 billion cubic feet in the preceding week.

Analysts had expected U.S. natural gas storage to rise by 91 billion cubic feet.

Total U.S. natural gas storage stood at 2.354 trillion cubic feet. Stocks were 258 billion cubic feet less than last year at this time and 64 billion cubic feet below the five-year average of 2.418 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 126 billion cubic feet below the five-year average, following net injections of 64 billion cubic feet.

Stocks in the Producing Region were 109 billion cubic feet above the five-year average of 851 billion cubic feet, after a net injection of 16 billion cubic feet.

In the West Region, stocks were 47 billion cubic feet below the five-year average after a net addition of 18 billion cubic feet.

At 2.354 trillion cubic feet, total working gas was within the five-year historical range.

Elsewhere, light sweet crude oil futures for delivery in August plunged 4.05% to trade at a four-month low of USD90.70 a barrel, while heating oil for July delivery plummeted 4.8% to trade at USD2.793 per gallon during U.S. morning trade.

Earlier in the day, after the International Energy Agency announced that it would release 60 million barrels of oil in response to loss of supplies from Libya, with the U.S. Department of Energy contributing 30 million barrels to the cause.

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