{"id":12505,"date":"2015-09-22T06:34:49","date_gmt":"2015-09-22T11:34:49","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12505"},"modified":"2015-09-22T06:34:49","modified_gmt":"2015-09-22T11:34:49","slug":"australias-mega-lng-projects-are-in-serious-trouble","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12505","title":{"rendered":"Australia\u2019s Mega LNG Projects are in Serious Trouble"},"content":{"rendered":"
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Australia\u2019s Mega LNG Projects are in Serious Trouble<\/a><\/h3>\n

In the US, natural gas is dirt cheap. The price peaked in 2008 and has since\u00a0collapsed. It remains below the cost of production, even today. Two natural gas drillers have recently buckled and declared bankruptcy.<\/p>\n

In the international markets, natural gas is traded as Liquefied Natural Gas (LNG).\u00a0There was a time, after Japan shut down its nuclear power plants in the wake of Fukushima, when prices, particularly for delivery in\u00a0Japan and Korea, soared. And\u00a0during this environment, a number of countries invested heavily into building LNG export terminals that convert natural gas into LNG.<\/p>\n

In the US, this has been the story of Cheniere Energy, a company that has barely any sales. It\u2019s\u00a0mostly\u00a0famous for\u00a0always<\/em>\u00a0losing a lot of money and then raising even more money. It\u2019s stock has soared from less than $2 a share in 2009 to over $80 a share late last year and earlier this year, giving it\u00a0a ludicrous market capitalization of nearly $20 billion.\u00a0And it has a breath-taking $18 billion in debt. But the dream is deflating, and it closed at $52.40 today.<\/p>\n<\/div>\n

It\u2019s deflating because it\u2019s a dream, and dreams always deflate sooner or later. And because\u00a0prices in the rest of the world have collapsed as well.<\/p>\n

And because in the US, current low prices are sending producers into bankruptcy. This works for a while, until it doesn\u2019t. At some point \u2013 when the money runs out \u2013 they stop drilling. And they can\u2019t restart until prices rise significantly. Rising gas prices in the US and dropping LNG\u00a0prices in the international market crimps any possibilities for Cheniere\u2019s math to work out.<\/p>\n

Australia is in the same boat, but to an extent that dwarves US efforts. Here\u2019s\u00a0Mark Hansen in Australia to shed light on just how\u00a0ugly the LNG debacle\u00a0is getting down under.<\/span><\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Australia\u2019s Mega LNG Projects are in Serious Trouble In the US, natural gas is dirt cheap. The price peaked in 2008 and has since\u00a0collapsed. It remains below the cost of production, even today. Two natural gas drillers have recently buckled and declared bankruptcy. In the international markets, natural gas is traded as Liquefied Natural Gas […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[41,1361,9171,1851,1714,1190,4254,4255],"class_list":["post-12505","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-australia","tag-bankruptcy","tag-cheniere-energy","tag-commodity-price-collapse","tag-liquified-natural-gas","tag-lng","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12505"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12505\/revisions"}],"predecessor-version":[{"id":12506,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12505\/revisions\/12506"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}