North American LNG at sweet spot for future export
The North American LNG markets are at a “political and economic sweet-spot in terms of the LNG export approval process”, said Mr David Pumphrey, Co-Director and Senior Fellow, Energy and National...
Mr David Pumphrey, speaking on the major role US LNG exports play in meeting Asia’s energy demands.
The North American LNG markets are at a “political and economic sweet-spot in terms of the LNG export approval process”, said Mr David Pumphrey, Co-Director and Senior Fellow, Energy and National Security Program for the Centre for Strategic and International Studies today, adding that the current perception was that anticipated LNG export applications would have no impact on US domestic gas prices.
Mr Pumphrey was speaking at the Gas Asia Summit, on the “Examining the Gas Infrastructure and Target Model to Ensure Security of Supply in Singapore: Featuring the Strategic and Commercial Aims for Security Energy Through Investments in the LNG Value Chain” panel.
He was bullish about shale gas development prospects in the US, highlighting that the increasing resource base is still “real and extractable” and that “production rates have been phenomenal”, adding that major gas players have increased their shale production volumes by 60-fold.
“Producers are [already] expanding resource bases [rapidly] at current [price] levels”, he said.
This was despite potential concerns fracking posed to the environment, which Mr Pumphrey described as “real, but manageable”. He added that the challenge is for LNG players to work closely with regulators and government organisations to put in place the right standards for the fracking industry.
However, there were still hurdles to overcome in realising US LNG exports, he said, from the growing number of applications in queue to a process that is weighed down by red and green tape. The Department of Energy assesses the political and economic implications of LNG exports and non-FTA countries undergo a more complex approval process. Similarly the Federal Energy Regulatory Commission reviews the environmental impacts of LNG exports, which is also a long and complex process.
External challenges, he said in response to questions from conference participants, would come from potential developments in Australia and Qatar, for example, and transportation costs of exporting LNG.
There would be “arbitrage opportunities, even when shipping costs are accounted for”, he said.
BY : John Chong, EMA