LNG exporting heavyweights meet with U.S. industry

Daily News Egypt
3 Min Read

Reuters

WASHINGTON: Four major international exporters of liquefied natural gas met with U.S. utility and industry executives on Wednesday to discuss future supply. Government officials from Nigeria, Algeria, Qatar and Egypt met with executives from about 30 U.S. companies in the closed-door session organized by former U.S. Energy Secretary Spencer Abraham s consulting shop. Both producers and consumers stressed that long-term contracts were key to securing future U.S. supplies of super-cooled LNG, Abraham told Reuters in an interview. Just as U.S. industry wants secure supplies, big LNG exporters like Nigeria and Qatar want assurances that markets for their product won t fizzle out after they invest the billions of dollars needed to carry LNG across oceans on special tankers, Abraham said. U.S. utilities need to convince sometimes reluctant state regulators to approve the recovery of expenses incurred in signing multimillion-dollar, multi-year contracts, he said. State regulators might not fully appreciate that … you may not have a choice but to sign these contracts, he said. The event drew high-level officials, including former Federal Reserve chairman Alan Greenspan and Nigerian Oil Minister Edmund Daukoru, who is also the president of the OPEC oil producing cartel. Qatari Oil Minister Abdullah Al-Attiya, Algeria Energy Minister Chakib Khelil and Hany Soliman from Egypt s Petroleum Ministry also attended. Qatar and Algeria are also OPEC members. U.S. companies attending included manufacturing giants like Dow Chemical Co., natural gas utility KeySpan Corp. and Cheniere Energy Inc., which operates some U.S. LNG import terminals. U.S. industry lobbying groups like the Edison Electric Institute, American Gas Association and the American Chemistry Council were also involved. Nigeria, Qatar and Algeria are members of the OPEC oil cartel, and each country holds substantial natural gas reserves that do not fall under OPEC s quota-setting process. LNG currently accounts for about 2 percent of U.S. natural gas supplies but imports are growing and could meet about 10 percent of total U.S. gas needs by 2010, according to government estimates.The expected jump in LNG imports reflects the growing gap between U.S. gas production and future growth in demand, especially from new power plants that are mostly fueled by natural gas.

With constrained capacity for U.S. gas production and domestic prices still historically high, our industry is certainly interested in the prospects for greater importation of LNG, said Tom Kuhn, president of the Edison Electric Institute. LNG producers must build 15 more giant trains to process the gas into liquid form and an equivalent number of U.S. import terminals must be built, Abraham said in the event program. Each of those projects will cost upwards of $1 billion, he said.

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