First the All-Alaskan pipeline group pushed the Sempra facility in Baja as proof that the Valdez experiment would work. And on this site I pointed over and over again, the facility was going to be booked full and Gazprom was controlling it.
Here is the latest:
A second Sempra LNG receipt terminal, Energía Costa Azul, located in Baja California, Mexico, began commercial operation in 2008. It is the only LNG receipt terminal operating on the west coast of North America. The project's capacity is fully subscribed.
That is the reality, the capacity is fully subscribed and Gazprom got the contracts along with Shell Oil.
Now Larry is pushing the LNG to Asia. Larry thinks it will be competitive.
Why would TC and Exxon consider an LNG line to Valdez? Better prices and considerable interest from the Asian market. Why build a $40B U.S. pipeline 1,800 miles when a 3bcf per day pipeline into a market glut in the U.S. and Canada when a pipeline can be built 800 miles to Valdez using the Trans Alaska Pipeline easement with gas flowing for export within 3 years?
An LNG line will not compete with Russia's Sakhalin Field, period.
First and foremost, a spur-line has to piggyback off the main pipeline that goes through Canada to drive down the costs of a LNG facility in Valdez. A stand alone pipeline and facility won't cut it.
Next, with regard to statements made by TransCanada's Tony Palmer.
TransCanada Corp. told Alaska legislators June 23 it is getting serious interest in an LNG alternative to its all-land Alaska gas pipeline project as the company prepares for a 2010 initial open season.
Alternative to the all-land gas pipeline. Alternative is the operative word. Palmer wouldn't say who...
Also what did Palmer mean when he said:
"It would be an either/or situation for us, not both," he told the House Resources Committee in the committee's meeting.
That is a definite one or the other, not both. So the question should be asked of Palmer, are you entertaining the thought of not building the pipeline through Canada?
As stated on this site, there are problems with the all-land pipeline and there are problems with the LNG facility.
When you consider the following from Gazprom, you have to question the logic in entertaining the building of a LNG facility in Valdez:
Shell welcomed the proposal, which analysts said illustrated Gazprom's need for technologies and money to develop the difficult offshore fields rather than a government change of heart toward foreign investors.
"We consider it possible to continue a partnership with Shell on other fields, namely Sakhalin-3 and Sakhalin-4," Putin told Shell chief executive Jeroen van der Veer during a meeting Saturday at his Novo-Ogaryovo residence in the Moscow region.
Exxon was on Sakhalin 1, Shell Oil and Japan on Sakhalin 2, now you have 3 and 4 that will serve Asia and Sempra's Mexico facility.
There is no shipper on this planet earth that will be insulated from the pressures of Gazprom.
Because when you have this.
The two Japanese companies hold 12.5% and 10%, respectively, in the Sakhalin II oil and gas project being developed by Gazprom in the Russian Far East. Royal Dutch Shell controls a 27.5% stake.
Gazprom will pull the agreements with Japan in a heart beat, if Japan does not serve the best interest of Gazprom. And last but not least, Putin's cronies have a lock on the steel coming from Oregon and IPSCO that would go to build a pipeline.
Unless of course we buy from China and that would be a whole can of worms to be opened if it came to be in the public discussion.