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Timera Snapshot: Winter gas alert. European market tight into winter. Russia key marginal supplier but flows routes near max capacity. https://t.co/OHN1nApMCw https://t.co/LtoKKemC2V
Check out @TimeraEnergy’s Tweet: https://twitter.com/TimeraEnergy/status/1050684786442989568?s=09
https://timera-energy.com/global-gas-market-risk-shifting-to-the-upside/
Upside risk in 2020s is rising
Beyond the 2019-21 horizon, the global gas balance has tightened given an expectation of a continuation of the strong Asian demand growth experienced across 2016-18. This means the risk of a gas market squeeze in 2022-25 has increased substantially.
Chart 2 illustrates the balance of the LNG market if Asia continues on its current high demand growth trajectory. The chart shows the supply and demand balance in the LNG market (top panel), and European gas market (middle panel). It also shows LNG market balance based on current committed supply (bottom panel).
https://timera-energy.com/wp-content/uploads/2018/10/Market-balance-1.jpg
The bottom ‘market balance’ panel highlights two important implications of the current rate of Asian demand growth:
There is little to no surplus LNG spilling into Europe over the 2019-21 horizon
The LNG market needs new supply from 2022.
FIDs for new liquefaction projects have been thin on the ground since 2016. The only projects of scale that have committed to proceed are the Qatari expansion & the Shell led Canada LNG project announced last week.
These projects are not enough to meet the supply gap given the current pace of demand growth. Projects take 4 to 5 years to come online post FID. This means the timing and scale of new FIDs over the next 12 months will likely be critical to determining how tight the LNG market will be across the 2022-25 horizon. The risk of a sharp squeeze is increasing.
Does JW mean LNG terminals?
Close to our project or different location.?
Same location for hydrogen...? caverns 5&6 say?../would whole new Feed have to be done or would existing planned infrastructure cope with hydrogen as well with minor mods?
In the recent conference call JW made reference to "other uses" for salt caverns
From my research, apart from gas storage, salt caverns can be used for the following
CAES (compressed air energy storage)
Hydrogen storage (decarbonisation of grid)
CCS (Carbon Capture Storage)
interesting to note our FEED partner Costain is involved with all the above!! ( hiding in plain site)
https://www.costain.com/what-we-do/oil-gas/decarbonisation/
The projected 12% IRR for the project is imo conservative and with the CEO's vision for Islandmagee to become a big hydrocarbon hub I believe an IRR could turn out to be 20% a year or more for the next 40+ yrs if the facility is used to it's full potential.
Taken from one of the RNS's earlier this year...........
"Independent verification work undertaken by an international consultancy firm demonstrates a robust return on investment from the Project with a baseline internal rate of return ("IRR") of 12%, with potential for further improvement in certain scenarios, including access to additional grant funding and an extension to the operational life of the Project"
Snowman100 --great post ..nearly there and spot on EXCEPT the penultimate paragraph --have another read ----it just needs one word changing "will" to "are "
JW and the BOD ARE on top of the case,be fully assured.Now that FEED is on schedule and substantially sorted they have no issues with sorting out equity finance ( not investor cash this time) funding. They ARE on the case as we post !!
Always remember that any Lender or participating partner (such as say Costain ) will have the comfort of E.U backing ( Brexit or no bl**dy Brexit) full support from our wonderful erstwhile Gov and of course the Northern Ireland Finance Initiative --The BOD ARE well up to the task --thanks for your post ,Mike
mcadder,
Do you have a sense yet of the IRR range for the owner/operator of the IslandMagee project?
Energy security is going to become even more of a hot topic over the next few years and the fact remains that our reliance on Imports is dangerously high leaving us wide open to disruption during outages, peak demand, Brexit, any planned maintenance or force majeure etc. Fracking imo will always be in a fairly limited capacity but either way wherever the gas is sourced we still need somewhere to store it. But in terms of the economics of storage long range storage was just no longer economically viable for several reasons. Add in the estimated refurbishment costs of over £1B to make the failing wells safe for operation and it's no surprise the decision was made to extract the remaining gas from Rough and close it.
However the loss of 3BCM of storage is equivalent to 6 Infa facilities. The future of storage will be the development of more fast cycle MRS sites like that of Infa where the economics do stack up.
Snowman - regarding the potential LNG project it is still just that until it is actually built however they both offer different benefits in terms of security of supply.
Both would compliment each other imo. But either way Islandmagee would be the only UGS facility on the whole island of Ireland LNG facility or no LNG facility. It is also the only proven suitable location in Ireland where salt cavern storage is suitable due to the geology of the area.
Kerry senator believes Minister’s resignation is major blow to Shannon LNG project https://t.co/GRTHmgzwxT via @radiokerry
https://twitter.com/TheNightRider9/status/1051078117564063745?s=09
This is from May.......I remember first it in August, when I first noticed the Shannon project....
'The £1 billion Shannon project acquired 4 days ago will take enormous amounts of LNG to Southern Ireland from USA and Middle east.
https://www.irishexaminer.com/breakingnews/business/1bn-shannon-gas-project-acquired-864419.html
This is generating so much interest in gas in Ireland.
I hope it doesn't detract interest in Infa too much.'
It points out in that article that Shannon will be taking LNG from USA and Middle east . I think the USA were putting in £500m........in hind sight was rest coming from Qatar? Would Qatar see INFA, by helping to preserve continuity of supply in times of tactical interrupted supply, as a low level threat to them exporting LNG to Ireland (and UK via Ireland)?........low level threat is a bit strong, perhaps not so much a threat as just being non compatible with Ireland being even more dependent on Qatar's LNG supply?
Just a thought.
Then again they may support/finance a further LNG terminal at Islandmagee!.....who knows?....all way above my pay grade!
One thing you can be sure of....JW and our BOD will be on top of the case and if there is half a chance of us getting anything out of the situation, I am sure they are up to the task.
All of these strategic intentions would have been on the cards long before all the world class teams were brought into the ridiculously small market cap Islandmagee project......I'm beginning to get an inkling why they were that interested now.
I can see the offtake contenders vying with each other for a piece of the first few caverns. The project starts to become a reality when this rns comes out
Never ever going to a home produced over supply with fracking imo. It's all about having a storage of gas for security of supply and allowing traders to trade
.......was this week's Court of Appeal Judgment re the Injunction at Cuadrilla's site at Preston New Road Blackpool .
for INFA ...Yes or No ? ---that is the question.
As long as Cuadrilla do not shake the earth too much and the Government can prod the otherwise moribund state of such exploration there may after all be much more gas in the pipeline with a secure source of supply.
OK this may scupper the long term need for any new LNG terminals but at least GAS fracking may truly now be in the ascendency ......assuming of course that the earth stays quiet and the nimbies are controlled.
The question posed is how will that affect us.If there is a home produced over supply does that affect storage viability ? May be best for fracking to remain out of favour so that security of supply issues remain ? Answers please !!
Let’s hope so .. first brought in at 10p .. will break even at just over 0.7 .. 11m shares in ISA, SIPP .. hoping that INFA sails me into the retirement sunset ! Very much appreciate the great posts on here
is due to rocket on the steady stream of positive news that is very imminent......I have just bought a new wheelbarrow in order to transport my proceeds to Santander! (not immediately of course...just now and then, as required......I am a committed LTH here and want me future dividends!)
McAdder...great post......very comprehensive.
Although, regarding the ultra-massive Shannon project for LNG importing from States......isn't that a a gas storage project of a type?....not the same sort of thing I realise....but surely the gas is to be stored for a short while at Shannon before distribution....isn't it?....not 100% sure.....just what I've sort of been picking up from odd bits of news.
Complimentary to us I think.....all publicity regarding Ireland's gas situation helps to bring our project the world stage.
GLA...I think next few weeks going to be absolutely MEGA for Infa shares!
Totally agree Dawski!! Gloomy infa can only be seen in the rear view mirror!
Thanks,Spud .....Did you hear about the ashen faced boss of Centrica who after hearing of the problems with his only Gas Storage Site was looking at himself in the mirror whilst preparing for a shave .............
..................and found himself to be rather Rough around the edges ??!! McCadder's turn next.
It's the weekend folks and we can afford to be light hearted outside of business hours ..and also quite jolly in view of prospects .no point in being gloomy any more
Dawski I'm so pleased your investment decisions are better than your jokes...........
Wow and double wow indeed. !! What a superbly well researched and presented post by McCadder and followed by you all today.Usually the weekend here is boring with no news or blogs.Very refreshing to wake up to such in depth well constructed opinions.I spoke briefly with JW on Thursday as he was awaiting his flight to Belfast and his optimism has no bounds .........a bit like the legless kangaroo ! Oh come on folks..it's Saturday after all.
By the way,reference to Judith Tweed who is our local PR representative over there is merited....she has done a fantastic job so far having and keeping the locals on board,unlike Woodburn Forest saga !!!
Well worth noting islandmagee will be the only UK storage site with access to a deep water jetty.
This alone creates a lot of possibilities, lng terminal being one
Thank you mcaddder. Always a bit of a stumble around in the dark with a new investment. Fascinating the salt stretches that far, I love stuff like that.
Yep O&W, JW has big plans for little old infa by the sounds of it.
I'm sure Andy our finance guy has plans on how to make John's plans materialise........