WoodMac: North America will import more LNG

Oil & Gas Journal ^ | Jan 15, 2009 | Eric Watkins

[thackney]

Imports of LNG into North America are set to increase from 1.7 bcfd in 2009 to 4.2 bcfd in 2014, according to a report by consultants Wood Mackenzie Ltd.

The report forecasts North American LNG imports will rise despite increased domestic production of shale gas and the current recession that has reduced demand growth.

"In light of recent history, and the longer term outlook for growth in domestic US shale gas, many industry analysts and commentators have been suggesting that the outlook for LNG imports into North America is bleak," said WoodMac North American LNG analyst Murray Douglas.

Although regasification capacity has been overbuilt, Douglas said, "The medium-term outlook for LNG in North America is not as dire as other commentators are suggesting, despite the success in developing shale gas."

Favorable factors

In 2008, despite lower gas prices in North America than in Europe or Asia, baseload volumes of 1 bcfd flowed to the Everett, Elba Island, and Altamira LNG regas facilities. WoodMac forecast baseload imports into these terminals will continue into 2009 and beyond.

With a significant proportion of the 82 million tonnes/year of new liquefaction capacity coming onstream already dedicated to Asian markets, there is not a huge requirement for additional uncontracted volume in the Pacific Basin, especially given the economic downturn on demand levels.

"The result is a surplus of LNG that will flow to the more liquid Atlantic Basin markets, which have available regas capacity and the means to accept uncontracted volume," WoodMac forecasts.

A 'global sink' for LNG

The report describes the US as the "global sink" for LNG as the largest and most liquid markets. "Some of this relatively low-cost new liquefaction capacity will compete with domestic shale gas," Douglas said. "This will suppress price and in turn delay some higher cost domestic developments."

WoodMac said the North American gas market will prove more attractive to LNG suppliers as the oil-linked gas prices in European markets soften and Asian buyers switch from gas to oil, resulting in more LNG on the market. With the softening of global gas demand, the LNG market could be oversupplied in the near term.

[Vaquero]

The US owns most of the worlds Natural Gas, why do we need to import it???

[NRG1973]

What??? T. Boone Pickens says we have so much Natural Gas that we can use it for transportation. You don’t think he was pullin’ our leg, now do ya’.

[thackney]

Source:
http://www.eia.doe.gov/emeu/steo/pub/contents.html#Natural_Gas_Markets

Natural gas consumption is projected to decline by 1.0 percent in 2009

Total marketed production is expected to increase by 0.7 percent in 2009

Shipments of LNG to the United States are currently expected to rise to about 420 Bcf in 2009. However, limits to natural gas storage capacity outside the United States could unexpectedly boost U.S. imports of LNG during the summer months if global demand for natural gas does not increase as expected.

Previous long-term predictions from the EIA look like:

[thackney]

The US has less than 5% of the world's proved natural gas reserves. Iran, Russia, Qatar and Saudi Arabia all have more reserves than we do. Nigeria and UAE has comparable amounts to the US.

Natural Gas Proved Reserves, All Countries
http://www.eia.doe.gov/emeu/international/reserves.html

[cripplecreek]

No kidding. Unfortunately democrats and RINOs have fought tooth and nail to prevent side drilling under the great lakes for it.

[Tarpon]

I suppose drilling in the Destin Dome would be too easy.

[Tarpon]

I suppose drilling in the Destin Dome would be too easy.

[thackney]

Part of our Government is trying to include that area in our production.

MMS is trying to open up new areas for exploration and production including central and more eastern Gulf of Mexico.

MMS Announces Milestones in Energy Development
http://www.freerepublic.com/focus/f-news/2165880/posts

[GingisK]

...LNG...

One man's mnemonics are the other man's hieroglyphics.

[thackney]

Liquefied Natural Gas (LNG)

http://www.ferc.gov/industries/lng.asp

What is liquefied natural gas (LNG) and how is it becoming an energy source for the United States?
http://tonto.eia.doe.gov/energy_in_brief/liquefied_natural_gas_lng.cfm

[Tarpon]

Unfortunately, it’s the part that makes the rules that wants natural gas, a renewable resource according to Lord Nanny, off limits.