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Industry Insider Tells Platts Energy Podium New LNG Terminals Unlikely in the United States Over Next 10 Years

2007-04-18 09:35 832



WASHINGTON, April 18 /Xinhua-PRNewswire/ -- Hess LNG CEO Gordon Shearer told the Platts Energy Podium here Tuesday that construction of new liquefied natural gas (LNG) import and processing terminals in the United States is highly unlikely over the next ten years due to community pushback and overly-restrictive laws at the state and local level. Hess is familiar with construction constraints, given the fact that one of its own LNG import projects in the northeast United States is embattled.

Shearer discussed the prospects for new projects by the LNG industry at large, region by region. Referring to the Energia Costa Azul project in Baja California, Mexico, Shearer said: "I think that's it for the West Coast within the next ten years." In the Gulf of Mexico, he said no new terminals are likely beyond those already in construction.

As for the East Coast, Shearer said, "Boy that one's tough; we've got one in Canada [The Canaport LNG project in St. John's, New Brunswick] that's clearly in construction, I struggle to see many more. The problem on the East Coast is the opposition is going to be tremendous. Who's got the patience, the time, the energy, and in the end, the money to get through it?"

As slim as the onshore prospects are, Shearer said the outlook for offshore construction of new LNG facilities is even slimmer. And this could be a particular problem, he explained, given the fact that US and global demand for gas is outstripping supply and LNG will become increasingly important.

Shearer has been the public face pressing for support for building the controversial Weaver's Cove LNG project in Fall River, Massachusetts. The proposed import terminal has already secured a permit from the US Federal Energy Regulatory Commission (FERC). But it continues to battle opposition from local groups and members of Congress who say LNG is too dangerous to be shipped into a port so close to population centers.

Still, Shearer said he expects the terminal will be built and in operation by 2011. He expressed optimism that a federal court will uphold FERC's permit, and said the Coast Guard will support the developer's effort to use smaller ships to pass beneath a bridge that would block passage of larger tankers. All of that, he said, should clear the way for the project, which would enable 800,000 thousand cubic feet per day (Mcf/D) peak sendout.

Shearer also said the LNG industry is largely in flux right now as supplies from Europe, the Middle East, Africa, the Caribbean and South America continue to be uncertain, the cost of building liquefaction capacity increases, and political turmoil puts some projects at risk.

From an import versus export perspective, price, demand from Europe, and the size of the US market will keep United States on the world LNG import stage. "What you'll see in the US market is a surge-and-slump type of scenario," the Hess executive told Podium attendees. "But supply is definitely going to make it here," Shearer insisted.

Sponsored by Platts, a division of The McGraw-Hill Companies, Platts Energy Podium provides an ongoing forum for prominent newsmakers and the press to address important energy and environmental issues. Credentialed members of the media may receive complementary registration for Energy Podium events by contacting Nancy Covey at 202-942-8719, Nancy_Covey@platts.com. A recording of the Gordon Shearer session is available via podcast at http://www.energypodium.platts.com .

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Source: Platts
Keywords: Oil/Energy
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