US wants more LNG imports from Trinidad and Tobago

Dec 21, 2003 01:00 AM

Prime Minister Patrick Manning led a team of local officials at the talks with the Bush administration to discuss the growing US thirst for imports of LNG to fuel electric utilities and manufacturing. The Bush administration invited Manning and 24 energy ministers from around the world to the two-day conference to address the supply shortfall.
With US natural gas production unable to keep up with domestic demand, more imports of the super-cooled gas will be needed over the next two decades to fill the growing gap.

Saudi Arabian oil minister Ali al-Naimi and six other OPEC members attended, making it the largest gathering of cartel ministers in Washington in recent memory. Ministers from OPEC members Venezuela, Nigeria, Indonesia, United Arab Emirates and Algeria, as well as cartel President Abdullah al-Attiyah of Qatar, were also present. Non-OPEC nations invited to the meeting that are major US energy suppliers, or have the potential to be, included: Russia, Mexico, Canada, Norway, Trinidad, Brazil, Argentina and Australia.
The ministers discussed global gas resources, existing and proposed LNG supply projects, import and export terminals, transportation routes to North America, safety and security issues, and barriers to investment in the LNG market. The conference came at a time of high gas prices that have punished US manufacturers. Gas prices soared to a nine-month high above $ 7 per mm Btu.

Many companies in the chemical sector, which uses gas to produce everything from plastics to fertiliser, have cut output because of high plant fuel prices. Some have moved production to countries like Trinidad, where gas is cheap and abundant.
Some 30 proposals have been unveiled in recent months to build LNG terminals to serve the US market. Several energy analysts say LNG could meet about 10 % of total US gas needs by 2010 -- up from about 2 % today.

Currently, there are four LNG receiving terminals in Massachusetts, Maryland, Georgia and Louisiana. Not all analysts are convincedLNG will significantly boost its share of the overall US gas market.
"LNG is a very small portion of the gas consumed... and I think in the future it will still be marginal. Terminals will have a difficult time getting built for economic and political reasons," said Stephen Brown, an energy economist at the Federal Reserve Bank of Dallas. But in its long-term energy forecast, the Energy Information Administration said US LNG imports should grow from this year’s 540 bn cf to 4.8 tcf in 2025, more than double its forecast from last year.

LNG imports will meet 15 % of America’s gas demand in 2025, as gas use is expected to rise from 22.8 tcf last year to 31.4 tcf in 2025, the Energy Department’s analytical arm said. LNG is natural gas treated for transportation aboard special tankers. Gas cooled to minus 259 degrees Fahrenheit (minus 162 degrees Celsius) changes into liquid and shrinks to less than 1/600 of its original volume. Once it arrives at a US terminal, LNG is returned to a gaseous state and fed into existing natural gas pipelines.
Algeria was historically the largest LNG supplier to the US market, but in 2000 it was surpassed by Trinidad and Tobago, which provides 66 % of the US’s LNG imports. Environmental and consumer groups have expressed concerns about the dozens of LNG terminals proposed to be built in the United States, citing fears LNG tankers could explode and are at the risk of sabotage.

The LNG conference also gave US Energy Secretary Spencer Abraham an opportunity to meet with the OPEC ministers following their December 4 meeting in Vienna, where the cartel decided to leave their oil production levels unchanged.
OPEC will meet again in early February and likely reduce its output, according to oil market analysts.

Source: The Trinidad Guardian
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