Michael Giberson
More evidence that shale gas development is changing the international (not just the United States) natural gas market:
- A US LNG terminal is spending $2 billion to add export capability. Currently Freeport LNG has the capability to re-export stored LNG; the new investment will add the capability to liquefy US-produced natural gas.
- Last Friday, November 19, 2010, the second-ever delivery of LNG from the US to the UK arrived, this cargo re-exported from the Sabine Pass terminal in Louisiana. (The world’s first LNG cargo was delivered from Lake Charles, Louisiana to Canvey Island in the UK on the “Methane Pioneer” in 1959.)
- The above report also mentioned that LNG was re-exported from the United States to Spain (in February 2010) and to South Korea (in June 2010).
- In October an LNG tanker left from Sabine Pass with a cargo bound for China.
- Sempra Corp. has applied for a re-export license for its Cameron LNG terminal, also in Louisiana.
- Also see this earlier post about exporting LNG from the Kitimat LNG terminal in British Columbia.
Contrast the picture of the natural gas market presented by the above developments to the US Energy Information Administration outlook in 2004; selected quotes from EIA’s “The Global Liquefied Natural Gas Market: Status and Outlook,” (December 2003):
- EIA’s Annual Energy Outlook 2004 (AEO2004) projects that four new LNG regasification terminals will be constructed on the Atlantic and Gulf Coasts from 2007 through 2010 to meet the 58-percent increase in LNG imports that is projected for that timeframe.
- The first new U.S. LNG terminal in more than 20 years is projected to open on the Gulf Coast in 2007. It is projected that additional terminals will be constructed to serve markets in Florida, the south Atlantic states, and the western Gulf Coast. EIA also forecasts that a terminal targeting the Florida market will be constructed in the Bahamas with the gas piped to Florida.
- By 2010, the new terminals are projected to be collectively importing 812 billion cubic feet annually.
- Based on EIA long-term forecasts, U.S. natural gas consumption is projected to increase from 22.5 Tcf in 2002 to 26.2 Tcf in 2010 and 31.4 Tcf by 2025. Domestic gas production is expected to increase more slowly than consumption over the forecast period, rising from 19.0 Tcf in 2002 to 20.5 Tcf in 2010 and 24.0 Tcf by 2025. The difference between consumption and production will be made up by imports, which are projected to rise from net imports of 3.5 Tcf in 2002 to 7.2 Tcf by 2025.
- Nearly all the increase in net U.S. natural gas imports from 2002 to 2010 is expected to come from LNG, with an almost 2.0-Tcf (42.0-million-ton) increase expected over 2002 levels. Net U.S. LNG imports are expected to rise from 5 percent of net U.S. natural gas imports in 2002 to 39 percent in 2010.
For the time being, the U.S. remains a net importer of natural gas.