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Spindletop was the first big oil find. When the well ‘came in’ and struck oil in 1901, it was the largest single find to date and was the catalyst for a new era of oil exploration and production.

Here’s the location of the Spindletop field:
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The problems with the Fukushima Daiichi nuclear plant has been the most prevalent story to come out of Japan this week, and for good reason– not only is there potential for environmental catastrophe, but taking that nuclear plant out of the Japanese energy portfolio leaves a sizable gap in their energy mixture. Annual generation from the six reactors at Fukushima Daiichi alone was in the tune of 30,000 GWh, enough to power roughly  2.7 million US homes per year.

There have also been other significant energy infrastructure shutdowns in Japan as a result of the earthquakes and tsunami, including gas, oil, and coal-fired plants. All in, there is about 115 GWh per day (effectively 42,000 GWh per year) of power missing. Clearly, a critical matter.

One way to fill the gap is for Japan to import LNG. Fortunately, Japan has many LNG regasification facilities and only one of those import facilities (Shin Minato, 8MM mt/yr, in Northeast Japan) is closed now.  It is estimated that roughly 0.6 Bcf/d of additional LNG imports will be needed in the short term and, assuming power demand returns to previous levels prior to the tsunami, the LNG demand will be much higher in the long term.

LNG cargoes are being redirected to Japan from Qatar, Russia, South Korea, and Indonesia. Pricing of LNG has been low for quite some time now due to the lack of demand but the recent epidemic should change the picture. Also keep in mind that it will take years to restore Japanese energy infrastructure to pre-tsunami conditions, which might keep upward pressure on spot LNG prices for a while.

Here’s an article from Platt’s Energy with some additional detail on the subject: http://www.plattsenergyweektv.com/story.aspx?storyid=141607&catid=293

#Wintershall #Gazprom sign MOU to expand production at Urengoy- http://bit.ly/enUO0Q #Russia #natgas