Posted on 08/29/2014 7:04:41 AM PDT by thackney
Morgan Stanley has quietly filed plans to build and run one of the first U.S. compressed natural gas export facilities, the first sign the bank is plunging back into physical commodity markets even as it sells its physical oil business.
In a 23-page application to the U.S. Department of Energy's Office of Fossil Energy submitted in May, the Wall Street bank outlined a proposal to build, own and operate a compression and container loading facility near Freeport, Texas, which will have capacity to ship 60 billion cubic feet a year of compressed natural gas (CNG).
While the size of the project is small compared with bigger liquefied natural gas (LNG) projects, the plan highlights the bank's ability to exploit its status as one of two Wall Street banks which are allowed to own and operate infrastructure for the manufacture, storage and operation of raw materials. The other one is Goldman Sachs.
Their physical commodities activities were both "grandfathered" in when they became bank holding companies during the financial crisis more than five years ago.
It also showcases a nimble and novel approach to exporting cheap domestic gas that could replace oil for power plants in Caribbean nations, as the United States pumps out record amounts of gas from its fracking revolution.
The strategy skirts the multibillion-dollar upfront investments, long lead times and stringent application processes associated with building liquefied natural gas (LNG) terminals in favor of using readily-available containers and inexpensive container ships, in one of the first projects of its kind...
"You can collect U.S. gas at $4, it costs you $1 to ship it and gasify it, you bring it in at $5 and the equivalent that they are paying for fuel is $20 plus," said a person familiar with the project. "There is a lot of money...
(Excerpt) Read more at reuters.com ...
Related:
http://www.coselle.com/sea-ng/overview
Sea NG Corporation is a Canadian company engaged in the development and commercialization of technology for marine transportation of compressed natural gas (CNG). Sea NG offers its customers a safe, economic and reliable method of transporting natural gas by ship.
Sea NG was formed in 2005 to acquire the rights to an innovative marine CNG technology — the Coselle™. The Coselle™ is a large-volume, high-pressure gas storage module. Coselle™ is a contraction of the words “coiled pipe in a carousel”. Sea NG built on over a decade of design, engineering and testing to develop a project-ready marine CNG transportation system.
In 2006 the C16 Sea NG ship with the Coselle™ CNG containment system became the only CNG ship to receive approval for construction from the American Bureau of Shipping (ABS). ABS approval was granted after construction and extensive testing of Coselle™ prototypes, review of hundreds of drawings of all aspects of the ship and Coselles™ and comprehensive safety studies.Sea NG is recognized as a world leader in marine CNG technology. The Coselle™ System is backed by an expert team that includes the inventors of the Coselle™ and an International alliance of energy companies.
Is Morgan Stanley planning on using coselle ships?
Sea NG has a spread sheet that quotes $4.60 per mcf to deliver 100mmcf/d over 750 miles. Sounds a lot like MS’s plans...at a 12% cost of capital which would be peanuts to MS.
I don’t know on the ship. I posted it as related info.
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