Time Ticking on US LNG Export Window of Opportunity

“U.S. LNG can fill in the medium-term gap for demand and provide optionality for LNG buyers’ portfolio,” said Mohanty.

In the long-term, however, supply competition will heat up as LNG export projects come online around the world. U.S. LNG export projects could come under stress from the growth of other gas-based industries in the United States. The United States’ distance to market – and perception by foreign buyers in a slow LNG export facility permitting process – could also work against U.S. LNG export projects. Long-term LNG demand also faces risks from the potential reconstruction of Japanese nuclear power capacity.

Buyer interest in LNG works in phases.

“If you look three or four years back, everyone wanted a piece of Australia LNG, the new thing on the block. However, interest has waned as buyers move onto the next new thing.”

In this case, it’s U.S. LNG; however, this phase also will come to an end.

 “Key buyers want a variety in their LNG supply portfolios,” Mohanty said. “The overall conclusion is, time is of the essence for U.S. LNG export projects.”

DOE: Job is to Make ‘Good Policy Decisions’ on LNG Export Terminals

When Chevron Corp. submitted an application for the gravity-based Port Pelican regasification project in the late 1990s/early 2000s, it was assumed that an onshore regasification facility would never receive a permit since no new refinery capacity had been built in years, said Christopher A. Smith, principal deputy assistant secretary with U.S. Department of Energy (DOE).


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Dr. Tom Williams  |  February 27, 2014
US LNG is probably now well behind the curve as PRC/Korea/Japan are investing NOW in pipelines and fracking and like PRC did with HongKong Black Point Power plant - built 500mi subsea pipeline from and gas collector system for a 1000++MW power plant in HK...before the contracts could be signed to get the coal... Now PRC is getting the gas production going in west and central China...laying pipelines to Beijing and Shanghai...once in Beijing piping into Incheon is piece of cake...only question is a gas line from Incheon to Pusan by land/sea...then jump the straits to Japan...subsea again. One question - highly compressed NG or LNG by pipe PRC/Korea/Japan, I believe, have already gotten agreements regarding technologies, pipelayers, pipe production/transport, and sizing/number of pipelines...along with 25 year delivery contracts. These are easy and lucrative contracts for all three.. Russians are trying to come into the north end of Japan but their gas will probably much more expensive and not include the Koreans in the mix - kiss of death...in this commodity market system. US gas may provide a little LNG in 2016-18 until the pipelines are operating to Japan. So who would want to invest in a pipeline to NWUS/Can-BC which will be moot within 5-years, as no one in Japan would sign a 25-year supply contract for LNG and receiving gasifiers when they know the PRC gas will be there within five years. That take care of the Pacific market while Argentina is progressing for the SoAmerican market...and NoAfrica and Europe can deal with the European demands within ten years...With tankers and pipeline investments it is difficult to deal with a spot market when it is LNG vs CNG.