Japan likely buyer for US LNG exports

The US could become a major LNG supplier to Asia in the future, Toshi Yoshida, global energy partner of Mayer Brown LLP, told a Mayer Brown energy conference in Houston on May 23.

Other Mayer Brown conference speakers noted the growth in oil and gas production from shale plays in recent years. Given the surplus in US gas supply, various companies are considering using US LNG terminals to export LNG to Europe and Asia.

US LNG terminals were built to import LNG before the shale production boom. Meanwhile, Japan’s reliance on fossil fuel is climbing because all of its nuclear reactors are offline following the March 2011 incident in which an 8.9 magnitude earthquake hit off Tohoku, eastern Japan.

A subsequent 23-ft tsunami swamped parts of Japan and knocking out the country’s nuclear-generation capacity at Fukushima.

Separately from the conference, Barclays Capital issued a May 23 research note saying it expects total Japanese fossils fuel imports to increase with oil and products stabilizing at around 4.6 million b/d in 5 years and LNG imports growing to above 135 billion cu m by 2016.

Most US companies have yet to receive permission from the US Department of Energy to sell LNG to Japan, which lacks a free-trade agreement with the US. Sempra of San Diego has submitted a request to DOE and hopes for approval by yearend.

Other US companies also have submitted or plan to submit similar requests. Excelerate Energy wants to develop a floating LNG export plant in the Gulf of Mexico, which would be a first for the US. The Lavaca Bay LNG project off Texas tentatively is scheduled to start exporting by 2017.

Cheniere Energy, which soon plans to start construction on its LNG plant in Sabine Pass, La., already signed supply deals with buyers in Spain, Britain, India, and South Korea. Cheniere Energy has conditional approvals from the US government.

US companies hope to sell US gas to higher-price markets elsewhere. Recent US prices are less than $3/MMbtu while Asian LNG prices are at 4-year highs of about $18/MMbtu, analysts said.

Yoshida noted that LNG export projects and contracts take time. Industry executives generally agree that most LNG projects take at least 4 years to build.

“It’s not like oil trading,” Yoshida said. “The core nature of LNG is tailor-made projects with specific buyers involved from the beginning.”

Ramsey Fahel, Anadarko Corp. vice-president and general manager, agreed, adding that LNG projects are not done on a speculative basis. “Deepwater costs are too high,” for operators to consider spec projects, Fahel said.

In addition to the prospects for US shale gas development to push LNG into global markets, Anadarko notes another potentially large source of supply from eastern African fields off Mozambique.

In November 2010, Anadarko reported a third large gas discovery in the Rovuma basin off Mozambique. The company said the three discoveries together were more than sufficient to support an LNG export project (OGJ Online, Nov. 29, 2010).

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

Navitas to build Eaglebine natural gas gathering pipeline

11/20/2014 Navitas Midstream Partners LLC, The Woodlands, Tex., will build the La Bahia natural gas gathering system, including a 20-in. OD pipeline extending...

Hiland launches open season for Double H system

11/20/2014 Hiland Crude LLC has launched an open season to solicit shipper commitments to expanded capacity of the company’s Double H crude oil transportation...

Freeport LNG nears construction phase

11/19/2014 Freeport LNG Expansion LP expects later this month to close on financing and begin construction on the first two trains of its natural gas liquefac...

Woodside releases draft EIS for Browse LNG project

11/19/2014 Woodside Petroleum Ltd. has released its draft environmental impact statement (EIS) for the proposed Browse LNG project offshore Western Australia.

Senate debates, then barely rejects, Keystone XL approval bill

11/19/2014 The US Senate finally debated a bill authorizing construction of the proposed Keystone XL crude oil pipeline on Nov. 18 before rejecting the measur...

ETP, Regency plan Permian-to-Mont Belvieu NGL pipeline

11/18/2014 Energy Transfer Partners LP and Regency Energy Partners LP, both of Dallas, reported that their joint venture, Lone Star NGL LLC, has received boar...

EPA finalizes methane emissions control rule, proposes another

11/18/2014 The US Environmental Protection Agency issued a final regulation aimed at improving the clarity and consistency of oil and gas data submitted to it...

ANGA president calls for sharper focus on gas transportation issues

11/17/2014 America’s Natural Gas Alliance Pres. Martin J. Durbin called for a stronger focus on transportation as he outlined issues that the US gas industry ...

EIA: OPEC's anticipated inaction brings uncertainty to oil price forecast

11/17/2014

Brent crude oil prices fell to $84/bbl at the end of October from $95/bbl at the beginning of the month.

White Papers

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Increase Equipment Uptime Through Robust Enterprise Asset Management

Whether you operate in the Upstream Drilling and Exploration sector, the Midstream distribution sector...
Sponsored by

Continuous Improvement for Maintenance with Robust Reporting and Analytics

You should have real-time, anywhere access to more relevant and comprehensive data to help manage and ...
Sponsored by

Enterprise Asset Management Solution for Movable Assets in the Oil & Gas Industry

Drilling and exploration companies face several challenges in effectively managing assets both offshor...
Sponsored by

Supporting HSE Needs for Oil & Gas Through Effective Asset Management Practices

The Oil & Gas industry is constantly being challenged to find, extract and deliver cheaper an...
Sponsored by

Sesam for subsea design analysis

With the exponential growth in the subsea sector, a new set of challenges now face the industry. Mostl...
Sponsored by

Is the gas delivery system you’re looking at able to meet your power generation needs: a hydraulic engineer’s perspective

The hydraulic characteristics, and system response to demands and supplies, of natural gas pipelines a...
Sponsored by

Available Webcasts



Optimizing your asset management practices to mitigate the effects of a down market

When Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST



On Demand

Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected