The United States are set to become the third largest liquefied natural gas supplier by 2020, according to Meg Gentle, president of Cheniere Marketing.
Gentle said the facilities currently under construction in the United States will bring around 60 mtpa of LNG volumes by 2020, taking up about 20 percent of the market by that time.
Speaking during the Flame Conference, currently being held in Amsterdam, Gentle added that LNG market is expected to grow and that the United States have an advantage due to the low cost of LNG production at below US$3 per mmBtu. Additionally, the LNG construction costs in the United States are at a $500 to $800 per ton, Gentle said.
This will enable natural gas produced in the US to compete with natural gas produced anywhere else in the world.
Production from the US brought more flexibility in the contracting terms, liquidity, greater access to volumes, according to Gentle.
Gentle believes that the industry will trade 50 percent of LNG on short-term basis by 2020, bringing increased liquidity to natural gas players, and enable LNG to respond to price signals.
“New emerging markets rely on the liquidity,” Gentle said, adding that currently there are over 30 new markets considering LNG imports, and the low energy prices, flexible demand and 50 percent of LNG growth supply expected, creating a “perfect environment” for industry growth.
However, besides China that is a large volume market, most new markets are smaller and have turned to the FSRU market which enables quicker deployment and the capacity as low as 500,000 tons of LNG per year.
In regards to the amount of US LNG that would end up in Europe, Gentle said that Europe is the “natural market for almost all US LNG exports”.
“In 2015, Europe imported about 50 bcm of LNG while a report by Wood Mackenzie reveals that Europe could be importing about 130 bcm of LNG by 2020,” Gentle said.
The 80 bcm increase could absorb almost the entire US LNG production capacity as it represents about 90 percent of US production expected in 2020.
Gentle added that natural gas should be considered as the major source of decarbonisation of the industry and that LNG should be viewed as a clean energy solution.
Talking about Cheniere’s exports from the company’s Sabine Pass LNG export facility, the first of its kind to ship US shale gas overseas, Gentle said that so far 8 cargoes have been dispatched from the facility and that the second train has entered the commissioning phase.
The eight cargo was shipped aboard the Teekay’s MEGI LNG carrier Creole Spirit that is the first vessel to load its second cargo at the facility.
Previously, Asia Vision delivered the first cargo to Brazil and was followed by Clean Ocean, GasLog Salem, Energy Atlantic, Stena Clear Sky, Creole Spirit’s first cargo that ended up in Portugal, and BW GDF Suez Brussels.
LNG World News Staff