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Forbes
24-03-2025
- Business
- Forbes
Risks Facing New LNG Projects On The U.S. Gulf And East Coasts
The Marine Offloading Facility (MOF) at the Venture Global Plaquemines liquefied natural gas (LNG) ... More export facility in Port Sulphur, Louisiana, US, on Thursday, March 6, 2025. Venture Global plans to expand its Plaquemines LNG facility south of New Orleans, bringing its total investment in current and planned US projects to more than $75 billion, according to an emailed statement. Photographer: Kathleen Flynn/Bloomberg Major long-term capital investments require predictable profitability and stable capital costs. For the eight large-scale liquefied natural gas (LNG) projects proposed on the U.S. Gulf and East Coasts, both of these factors appear increasingly uncertain. One of the biggest risks for these projects is unpredictable capital costs. The Biden administration and President Donald Trump have imposed tariffs on steel and critical energy infrastructure components, but future tariff rates remain uncertain. LNG facilities require specialty materials, such as high-cost cryogenic steel, which could be subject to tariffs of 25%, 50%, or even higher. This could significantly increase construction costs. Another challenge is labor availability. Building large LNG facilities requires a substantial skilled workforce willing to relocate. With multiple ongoing projects and a limited labor pool, competition for workers will drive up wages and could lead to project delays. LNG projects typically take five years to complete after a Final Investment Decision (FID), meaning that investments today must forecast profitability starting around 2030. While permitting under the Trump administration may not be an issue, global LNG supply and demand from 2030 to 2045 remain uncertain. Unlike many global LNG projects that rely on stranded natural gas with little domestic competition, U.S. LNG exports depend on a vast but historically volatile internal market. The Gulf and East Coast LNG sites also face hurricane risks, which could lead to long-term force majeure events and rising insurance costs. The U.S. natural gas market relies heavily on associated gas production from oil wells. Currently, about 25% of U.S. natural gas production comes from fracked oil wells in the Permian (20%), Bakken (3%), and Eagle Ford (5.5%) basins. Unlike conventional gas fields, where production declines slowly, fracked wells see rapid declines after just a few years. If oil drilling slows due to falling global prices, U.S. natural gas production could drop sharply. If this coincides with increased domestic gas demand for power generation, LNG exports may face restrictions to protect U.S. energy security. A future administration could impose limits on LNG exports rather than allowing market forces to dictate supply and demand. Foreign buyers of LNG must also consider geopolitical risks. The United States has recently demonstrated a willingness to disrupt trade agreements. Given the scale of U.S. LNG exports, foreign buyers may choose to avoid over-reliance on a single, potentially unpredictable supplier. Canada is already shifting its ~8 billion cubic feet per day (bcf/d) of gas exports from the U.S. to LNG exports aimed at East Asia. This will further tighten the U.S. domestic market, potentially impacting prices for U.S. Gulf and East Coast LNG projects. Meanwhile, Mexico is increasing its natural gas pipeline imports from the U.S., both for domestic use and for LNG exports via its own Pacific Coast LNG projects. A 2 bcf/d pipeline from the Permian Basin is nearing FID, with another 2 bcf/d pipeline planned. This could create additional competition for U.S. Gulf Coast projects in the Asia-Pacific LNG market. LNG from the U.S. Gulf and East Coasts faces intense competition from other global projects: Canada's Pacific Coast: A 5 bcf/d pipeline serving a 1.85 bcf/d LNG plant in British Columbia is set to start operations this year, with a second 1.85 bcf/d phase planned. A smaller LNG facility near Vancouver is already under construction. Mexico's Pacific Coast: A major LNG plant sourcing gas from the Permian Basin is under development. More LNG facilities could be built after 2030. Alaska's LNG Projects: Former President Trump is pushing a $44 billion LNG project on Alaska's southern coast. If Japan and other Asian buyers commit, 3.1 bcf/d could come online well before 2045. Guyana, West Africa, and the Mediterranean: These regions are developing LNG projects that could compete with U.S. exports to the Atlantic Basin. Pipeline Alternatives to Europe: The EU's reliance on LNG could decline if Russian pipelines are reactivated or if new supplies from Iraq, Iran, or Turkmenistan become available. The European Union and the UK remain committed to reducing carbon emissions, which may put pressure on long-term natural gas demand. While LNG remains critical for energy security, renewables and hydrogen are projected to displace natural gas over time. In Asia, the market remains in flux. Russia is pushing the Power of Siberia 2 pipeline to China, although China is demanding steep discounts. Meanwhile, Turkmenistan is debating whether to sell more gas east to China or west to the EU. Australia continues to modestly expand its LNG export capacity, providing stable competition. Critically, LNG projects in Canada, Mexico, and Alaska can serve Asian markets more efficiently than Gulf and East Coast projects. They benefit from shorter shipping distances, lower costs, and no reliance on the increasingly expensive and congested Panama Canal. Additionally, Gulf and East Coast LNG projects face hurricane risks that could disrupt operations for months or even years. Given these uncertainties, the massive U.S. LNG expansion proposed may face a smaller and more competitive market than anticipated. Some financial risks can be mitigated through long-term contracts, but they cannot be eliminated entirely. Prospective investors will need to carefully weigh the potential for cost overruns, supply chain disruptions, and global competition. While LNG demand is expected to remain strong in the near term, the landscape beyond 2030 presents significant challenges for Gulf and East Coast projects.
Yahoo
18-03-2025
- Business
- Yahoo
Verdagy Selects Black & Veatch for a Front-End Engineering Design (FEED) Study for its 9,000 tons/year (60-megawatt) Clean Hydrogen Plant in Texas
MOSS LANDING, Calif., March 18, 2025 /PRNewswire/ -- Verdagy, a leading clean hydrogen electrolysis company, announced that it has selected Black & Veatch, a global engineering, procurement, consulting and construction company as the FEED contractor for its 60-megawatt (MW) clean hydrogen project near the Gulf Coast in Texas. The project has a production capacity of more than 9,000 tons/year of clean hydrogen, with a targeted FEED completion in May 2025 and Final Investment Decision (FID) in July 2025. "We're excited to tap Black & Veatch with its deep domain expertise for this FEED study," said Verdagy President Rahul Bammi. "This project will bring over $150 million of investment to Texas, increase U.S. energy exports and create American jobs and be the precursor to over a gigawatt of upcoming projects in the state." "Black & Veatch has broad experience in project execution, and infrastructure development in gas storage, processing and liquefaction. We've worked on front-end engineering design, and complete engineering, procurement, and construction of hydrogen electrolysis projects across North America and we're pleased to be selected for this study," said Anand Pattani, vice president and managing director of Energy Majors, Black & Veatch. "We will utilize this expertise as we support Verdagy on this project, which will help develop the U.S. energy industry and strengthen U.S. energy exports." The project will use Verdagy's eDynamic® electrolyzers, which offer the widest dynamic operating range in the industry and will match the ERCOT grid's energy variations in real time to improve grid resilience, to maximize hydrogen production that is both RFNBO compliant to meet European RED III requirements and 45V compliant to meet U.S. Treasury requirements. Verdagy's electrolyzers are designed, and manufactured in the U.S. and are creating jobs across the entire domestic supply chain. About Verdagy Verdagy manufactures Dynamic AWE electrolyzers that provide the lowest levelized cost of hydrogen (LCOH) and highest asset utilization by integrating seamlessly with intermittent energy sources, and market-leading efficiencies. Verdagy's electrolyzers are manufactured and fabricated in the U.S. Verdagy also operates a hydrogen production plant and R&D complex in Moss Landing, California where it continues to advance its cutting-edge technologies. Media Contact Eric Anseleric@ View original content to download multimedia: SOURCE Verdagy Sign in to access your portfolio
Zawya
03-03-2025
- Business
- Zawya
Oman's first green hydrogen project FID in 2026-27
Oman - The first Final Investment Decision (FID) is anticipated during the 2026-27 timeframe by one of the consortiums awarded mandates to develop green hydrogen (GH2) projects in the Sultanate of Oman. As many as eight consortiums have secured land blocks over the past two years to invest in large-scale green hydrogen schemes in the central and southern parts of Oman. They will collectively target the production of at least 1 million tonnes of green hydrogen by 2030 to support the country's transition to a low-carbon energy future. Speaking at the 'Together We Progress' forum, hosted by the General Secretariat of the Council of Ministers over the weekend, Eng Salim bin Nasser al Aufi, Minister of Energy and Minerals, noted that the maiden FID – a critical milestone effectively enabling a project to progress from planning to execution – provides assurance that Oman's incipient green hydrogen journey is still on track. The note of optimism comes against a flurry of global developments and policy reversals by countries, such as the United States, which is seeking to dial back its commitments to clean energy alternatives. On Wednesday, energy supermajor BP also announced a 'reset' in its much-heralded switch to renewables and clean energy. Sharing his thoughts on other developments across the energy and minerals landscape, Al Aufi emphasised that Oman will continue to produce and export oil as long as 'production costs do not exceed the selling price in the global market'. Furthermore, with private upstream players accounting for most of the investments in the oil and gas sector, the government is spared any significant burden in budgeting for hydrocarbon expenditures, he noted. In the renewables sphere, developments have been overall positive, particularly in the wake of new solar projects coming on stream. In 2024, renewable electricity accounted for an average 9 per cent of total consumption during the year, reaching as much as 32 per cent on some days of the year. The national goal is to achieve an average 30 per cent from renewables annually by 2030, he said. Wind power Importantly, renewable energy capacity is set to be further bolstered this year with the planned award of contracts for four new wind-powered Independent Power Projects (IPPs) at various locations around the country. Turning to the burgeoning minerals sector, the official noted that a new investment strategy now governs the exploitation of minerals in the country. While concession agreements cover the development of sites known for metallic mineral deposits, general sites are awarded for the mining of non-metallic minerals and building materials. 'We started with 12 concession areas awarded to Minerals Development Oman (MDO) in cooperation with Oman Investment Authority, as these concession areas require intensive exploration operations. Previously, the areas were limited to small areas not exceeding 5 km2 and only one mineral was allowed to be extracted. Now, they have been given a longer period of 5-6 years for exploration and then 25 years for investment. The policy we have adopted has led to the export of copper concentrate for the first time in 10-15 years, which means that it is successful and attractive for investment and there is great demand from local and international companies,' said Al Aufi. As for the presence of associated gold found with the copper deposits, the Minister noted that the quantities are so small that the cost of extracting and refining the precious metal would be unfeasible. Instead, the gold is left in place to help increase the value of copper concentrate exports. 2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. ( CONRAD PRABHU
Yahoo
24-02-2025
- Business
- Yahoo
Perseus Mining Ltd (PMNXF) Half Year 2025 Earnings Call Highlights: Strong Gold Production and ...
Release Date: February 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Perseus Mining Ltd (PMNXF) reported a strong financial performance with gold production reaching 253,709 ounces, which is in the upper half of the guided production range. The company achieved an all-in site cost of $1,162 per ounce, well below the guided cost range, indicating efficient cost management. Average gold sales price increased by 13% to $2,350 per ounce, contributing to a 27% rise in notional cash flow to $300 million. Perseus Mining Ltd (PMNXF) ended the year with a net cash and bullion balance of $704 million, an increase of $117 million over six months. The board declared an interim dividend of 2.5 Australian cents, a 100% increase from the previous year, reflecting strong shareholder returns. The restructuring costs at the Edikan site amounted to $18.2 million, impacting financials, although it was a one-time expense. There are ongoing uncertainties regarding the regulatory framework in Tanzania, which could delay the commencement of the Nan Zaga project. The share buyback program has been slower than anticipated, with only 12% of the target achieved due to market blackout periods. Potential cost inflationary pressures could impact future financial performance, despite current conservative cost estimations. The company's investment in Predictive Discovery is considered expensive, and there is uncertainty about whether it will yield satisfactory returns. Warning! GuruFocus has detected 7 Warning Signs with CHRYY. Q: Could you elaborate on the restructuring costs of $18.2 million at Edikan and whether there will be any carryover into the second half? A: (Leanne de Bruyn, CFO) The restructuring costs were part of a completed program with no carryover into the next financial year. The changes involved moving staff at Edikan onto fixed-term contracts, triggering redundancy and retrenchment payments. This is a common practice in Ghana, and the program is now concluded. Q: Can you explain why costs were running under guidance in the first month? A: (Jeff Quartermain, CEO) The lower costs were due to a slower rate of expenditure on sustaining capital and shorter haul distances in mining at Yaoure. While this may even out over time, we have been conservative in our cost estimation, anticipating potential cost inflationary forces. Q: What are the elements you are waiting for before commencing the Final Investment Decision (FID) for the Nanzaga project? A: (Jeff Quartermain, CEO) We are ensuring there is no ambiguity in the framework agreement with the Tanzanian government, particularly regarding VAT repayment during construction and corporate structure. These are important for a long-term partnership, and we aim to resolve these issues to give them full legal force. Q: How are you considering mine life extensions in a high-price environment, particularly for Nanzaga? A: (Jeff Quartermain, CEO) For Nanzaga, we confirmed the resource and reserve are solid. We plan a further drill-out program to convert inferred material into measured or indicated, increasing reserves. For other mines, we are evaluating whether higher gold prices justify extending mine lives, considering potential higher costs. Q: At what point does the Nanzaga project hit a critical path for the January 2027 commissioning? A: (Jeff Quartermain, CEO) If the startup date extends well into the June quarter, the January 2027 commissioning could be under pressure. However, we are hopeful of starting much sooner to meet the timeline. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Zawya
06-02-2025
- Business
- Zawya
African Energy Chamber (AEC) Joins Nigeria International Energy Summit (NIES) 2025 as Gold Sponsor, Supporting Nigeria's Energy Investment Drive
The African Energy Chamber (AEC) ( as the voice of Africa's energy sector, is proud to participate in the 2025 Nigeria International Energy Summit (NIES) as a Gold Sponsor, reinforcing its commitment to making energy poverty history by 2030. Taking place from February 24–27 in Abuja, NIES serves as a critical platform for fostering collaboration and attracting investment to strengthen Nigeria's energy sector. Under the theme, Bridging Continents: Connecting Investors Worldwide with Africa's Energy Potential, the summit will connect global investors with Nigeria's vast oil, gas and renewable energy opportunities – aligning with the AEC's mission to maximize energy resources and provide sustainable access for the 600 million Africans lacking electricity and 900 million without clean cooking solutions. With 37.5 billion barrels of crude oil and 200 trillion cubic feet of natural gas, as well as significant untapped renewable energy potential, Nigeria has the capacity to expand energy access for its 85 million citizens currently without electricity. In 2024, pro-investment reforms positioned the country as Africa's top destination for upstream oil and gas investments, spurring major commitments from global players. Shell pledged $122 million to the Iseni Gas Project and reached a Final Investment Decision (FID) for Bonga North Tranche 1. TotalEnergies announced a $550 million FID for the Ubeta Gas Project, while China's CNEC partnered with UAE-based Alpha Group on the $20 billion Ogidigben Gas Revolution Industrial Park. CNEC also joined forces with Nigeria's BFI Group on a $1.2 billion gas processing project in Akwa Ibom State, while Nigerian firm Dorman Long Engineering secured a $10 million trade facility loan from the African Export-Import Bank – reflecting rising investor confidence in the sector. Looking ahead, investment in Nigeria's oil and gas industry is set to surge. TotalEnergies is expected to reach FID on a $750 million offshore gas project in 2025, while the country aims to attract $30 billion in deep offshore investments by 2029, cementing its role as a key player in the global energy market. At the same time, Nigeria's renewable energy sector is rapidly expanding. In January 2025, the International Finance Corporation partnered with five renewable energy firms to extend electricity access to 400,000 Nigerians under the Nigeria Distributed Access Through Renewable Energy Scale-Up initiative and Mission 300 program – advancing the country's diversification agenda. Against this backdrop, NIES 2025 presents a unique opportunity for global investors to engage directly with Nigeria's regulatory authorities and industry leaders on high-level deals and strategic partnerships. 'Nigeria's vast energy resources offer one of the world's most lucrative yet untapped opportunities to drive local, regional and global energy market stability. With investor-friendly policies and reforms, the country presents a compelling case for global players. NIES aligns with the AEC's mission to attract investment into Africa's energy sector and eradicate energy poverty through strategic cooperation,' stated NJ Ayuk, Executive Chairman of the AEC. Distributed by APO Group on behalf of African Energy Chamber.
