New gas market fundamentals: the prospects for liquefied natural gas

• Published in: Texas Business Review 2003, p.1
• Main Author: Holloway, Milton L
• Format: Newsletterarticle
• Language: English
• Subjects: Costs; Deregulation; Energy economics; Finance; Forecasts and trends; International aspects; Liquefied natural gas; Market prices; Natural gas; Natural gas reserves; Natural gas supply; Natural gas utilities; Offshore; Statistical data; Volatility; Wage & price controls
• ISSN: 0040-4209

An increasingly volatile market price for U.S. natural gas, the inadequacy of domestic natural gas reserves, and the continuing development of new natural gasbased electric generation capacity have created a heightened interest in imported liquefied natural gas (LNG), and plans are underway to add more LNG to the U.S. fuel mix. Current costs for moving LNG from several foreign sources into the U.S. pipeline transmission system make its price competitive with wholesale natural gas in the U.S. gas market. Current projections of the U.S. Department of Energy show the LNG share of the U.S. gas market increasing from a current level of 0.75 percent to 6.1 percent by 2025, or a volume of 2.14 trillion cubic feet (tcf). Industry projections expect a considerably larger share, anticipating that LNG can capture a significant portion of the expected 12 tcf of growth in the U.S. gas market. LNG imports into the continental United States amounted to 229 bcf of natural gas equivalent in 2002. In total, the United States received LNG from seven countries: Trinidad, Algeria, Qatar, Nigeria, Oman, Brunei, and Malaysia. LNG volumes from Trinidad (currently, the largest source of LNG to the United States) grew more than 50 percent (to 151 bcf) from 2001 volumes.