Trends in the LNG industry were considered during a June 8 panel discussion featuring representatives from several global oil and gas companies. Anne Quinn, vice president of Gas and Natural Gas Liquids for BP, highlighted three main trends she sees in the global gas market: the growth of Atlantic Basin LNG; changes in gas pricing; and new approaches to contracting, including supplier auctions and equity gas sales. She nonetheless warned that cycles will always exist in the energy sector, and these positive trends could reverse course at some point in the future. Martin Houston, president of BG North America, cautioned against tightness of supply and questioned whether the LNG market will be liquid enough to become a true global market.
Gordon Shearer, president and CEO of Hess LNG, highlighted the potential for overdevelopment of LNG terminals in the United States, especially in the Gulf of Mexico, and suggested that by 2010 some companies — including his company, the developer of the Weaver’s Cove LNG terminal project in Massachusetts — may be “waking up from the LNG party with a hangover” as a result of the overbuild. He further suggested that opposition to LNG terminals may change when gas prices soar to even higher levels and the lights go out in New England, “at which point the politicians will say it is the energy companies’ fault that they haven’t built any infrastructure.”
Finally, Tadaaki Maeda, executive vice president for Tokyo Gas, said the U.S. LNG market’s rapid growth does and will continue to contribute to volatility in the global LNG market. He predicted that a lack of known buyers or “masked buyers” as he called them, for the LNG planned for the proposed U.S. receiving terminals could lead to a “big gap” in the global spot market and a major drop in natural gas prices between 2008 and 2010.
Our previous coverage of the World Gas Conference is available in our In Depth section. For more information, please contact David Wochner.