ChevronTexaco Calls for More Collaboration in LNG Industry

Future shortfalls of natural gas in North America can be mitigated if government and the energy industry act decisively to establish facilities for importing liquefied natural gas (LNG), a top ChevronTexaco official said. Large natural gas resources around the world await development, and many countries want the benefits of this clean-burning fuel, Peter Robertson, ChevronTexaco vice chairman, told the first LNG Ministerial Summit in Washington, D.C. Energy companies stand ready to link the two, he said, but LNG projects require extensive government review, huge capital investments and long lead times.

Failure to establish North American LNG import capacity in a timely manner "could lead to gas-supply shortfalls and volatile prices later in this decade, with dire consequences for the economy," said Robertson.

Sponsored by the U.S. Department of Energy and the U.S. Energy Association, the summit brought together officials from energy companies and the world's largest natural gas-producing countries. Robertson called on all participants in the LNG industry to work more closely together on new infrastructure, especially for North America's West Coast.

Let's "recognize both the opportunity and the urgency," he said during a panel moderated by energy expert Daniel Yergin of Cambridge Energy Research Associates (CERA). "The National Petroleum Council estimates that the United States will need a seven-fold increase in LNG supplies. I hope the dialogue about West Coast LNG can soon be moved to the top of the regional agenda. Uncertainty about energy is the enemy of economic development." Robertson also acknowledged the importance of embracing the general public, "We know that LNG is an industry with an outstanding safety record -- but we must appreciate that not everyone knows this. In North America and especially the West Coast, we cannot go forward unless people are fully informed and supportive." He continued, "After all, our neighbors and fellow citizens are the ultimate end customers of the LNG industry."

ChevronTexaco is working on LNG-export projects in Africa, Australia and Latin America to serve markets in Asia, Europe and North America, where it plans to build the Port Pelican LNG import terminal off the Louisiana coast. Several companies including ChevronTexaco are proposing terminals for California and Baja California, Mexico, which, like the United States, faces potential future shortfalls of gas.

Chilled to minus-260 degrees Fahrenheit, natural gas shrinks to 1/600th of its volume and becomes a liquid transportable in special tankers. Delivered to terminals, the liquid is "regasified" for use in industrial facilities and power plants, or fed into pipelines for use by businesses and consumers. LNG from Australia, Indonesia and other producers has been used in Japan and other countries for many years, and the U.S. has recently increased imports as well. But new North America infrastructure is required to handle the much larger LNG imports needed in the future, experts say.