What to Watch

The $24 Billion Job: An Energy CEO’s Quest to Reshape Gas Exports

 Meg Gentle the chief executive officer for Tellurian is pushing to sell more gas abroad in novel ways, reports The Wall Street Journal’s Stephanie Yang.

To ship liquefied natural gas, companies are constructing terminals where they can superchill gas and load it onto tankers.

Houston-based Tellurian Inc., is taking a step further by building out the ability to produce natural gas as well.

 To fund Tellurian’s plans, which are expected to cost $24 billion, Ms. Gentle must persuade buyers to purchase equity interests in exchange for low-cost gas in the future.

It is an experimental model for an evolving global market, as liquefied natural gas changes hands more easily around the world.

Stock investors aren’t giving her the benefit of the doubt: The stock has fallen about 10% this year, putting the market value at about $2 billion.

But some major energy companies have expressed confidence by investing in the two-year-old upstart. Tellurian counts French oil company Total SA and General Electric Co. among its backers.

It also has held talks with Saudi Arabian Oil Co., known as Aramco, about a potential investment as the state oil company seeks deals in U.S. shale.

Energy News

Oil Retreats From Three-Year High as Syria Tensions Simmer

 Oil prices retreated Monday morning from a three-year high reached at the end of last week, as geopolitical risks to supply receded.

Brent crude, the global benchmark, was down 1.38%, at $71.58 a barrel, on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1.34%, at $66.49 a barrel.

WTI on Friday had closed at $67.39 a barrel—its highest level since December 2014—ahead of U.S.-led military strikes in Syria.

Meanwhile, the US oil rig-count hit a three-year high last week as the industry put seven additional oil-directed rigs to work, for a total of 815.

Canada’s Trudeau Pushes for Embattled Oil Pipeline

Canadian Prime Minister Justin Trudeau said on Sunday that the central government is ready to offer financial aid to complete Kinder Morgan Canada Ltd’s embattled oil pipeline project.

 

“We can understand why the oil price has tended to fall rather than gain today in response to the West’s military strike against Syria – after all, the tough response announced by Russia has failed to materialize.”

– Analysts for Commerzbank

 ChemChina Aims to Expand Cooperation with Trader Mercuria

 China National Chemicals Corp, said on Monday that it wants to increase its share in energy  trader Mercuria Group and offer the firm a stake in the Chinese state-firm’s refinery unit.

Big Number

6.8%

China’s growth surged ahead despite trade disputes and other background noise. The Asian country’s economy is forecast to have grown 6.8% in the first quarter of 2018, according to a survey by Bloomberg. Official Chinese data will be announced on Tuesday.

FutureCurve

April 18–19: IQPC hosts the Oil & Fuel Theft Summit in Geneva. Speakers include Mahmoud Al-Bayati, the director general for counter-terrorism for Iraq, William J. Waggoner, the chief executive of the Mexico Petroleum Company and Daniel Gianfalla, a member of the national maritime security advisory committee at the U.S. Department of Homeland Security.

Reporter’s Notebook

The WSJ’s Dan Molinski on U.S. energy overtures in Asia. Energy Secretary Rick Perry travels to India today, the Energy Department says, adding he’ll meet with government officials and private sector stakeholders about growing the energy relationship between the two countries. Last month, India received its first LNG shipment from the US as part of a long-term deal with Cheniere Energy. India and Asia in general, are seen as driving oil and gas demand growth in the coming decades. The EIA said in a report late last year that “delivered energy consumption for residential and commercial buildings in India is expected to increase by an average of 2.7% per year between 2015 and 2040, more than twice the global average increase.”

 

WSJ Reporter Saurabh Chaturvedi on the decline in the oil services sector. Creditors haven’t been helping the long-oversupplied offshore-support-vessel sector, which was battered after oil crashed mid-decade and has yet to meaningfully recover. A number of vessels have been turned over to banks or other creditors, but many are still operating to generate some cash flow, notes PhillipCapital. They’re “assets that should have been scrapped” but have instead “prolonged the supply imbalance.” Meanwhile, there are fewer and fewer long-term contracts available as vessel owners don’t want to be locked into low charter rates for long as demand is predicted to rebound with oil at 3-plus-year highs and exploration spending poised to finally start picking up.