LNG15: Statoil exec voices confidence on LNG supply

Warren R. True
Chief Technology Editor-LNG\Gas Processing

BARCELONA, Apr. 25 -- The nature of LNG and the strengths of its industry will help it weather a current lull in production start-ups, according to Rune Byornson, executive vice-president for natural gas at Statoil. He spoke Apr. 25 in a keynote presentation at the 15th International Conference & Exhibition on LNG in Barcelona.

He also said Atlantic Basin LNG trade will be sufficient to meet European demand as an alternative to problematic Russian pipeline gas supplies.

LNG has in essence been a "victim of its own success," said Byornson. Growth of LNG facilities—in production, shipping, and regasification—has contributed to the explosion in materials prices in recent years that is now plaguing projects.

Consequent delays in production projects have come at a time of heightened demand for natural gas delivered by LNG, forcing some observers to question whether the industry can meet demand in the near term.

But events in the industry's history since 1994 should reassure markets about LNG's future. In that time, industry lowered unit production costs through innovative technologies, nearly doubled production capacity, and demonstrated its ability and willingness to finance projects and bring gas to market.

As for the ability of Atlantic Basin LNG producers to shoulder more responsibility for supplying Europe, Byornson said Europe's proximity to various major suppliers—Egypt, Algeria, West Africa, Trinidad, as well as Statoil's Snohvit project starting later this year—should counter any supply reductions from Russia. That country is facing greater domestic gas demand and considering diversifying its supply efforts by building pipelines to Asia.

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