The US’s lack of approved export terminals has prevented energy companies from competing in the growing global LNG market, despite the fact that the country is now the world’s largest natural gas producer, said an analyst with research and consulting firm GlobalData.
Global LNG capacity will increase at an average of 10%/year from 2013 to 2017, projected Carmine Rositano, GlobalData managing analyst, downstream oil and gas. Much of that change will be facilitated in Australia and Qatar, which will respectively hold 20% and 16% of global LNG capacity.
Australia will see the Gladstone, Gorgon, Wheatstone, and Queensland terminals come online, increasing the country’s LNG capacity by 10 bcfd over 2013 levels.
GlobalData forecasts that US liquefaction, meanwhile, will have just a 5% share of the global LNG capacity in 2017.
“Asia will remain the key market for LNG,” Rositano said, adding, “But other areas, such as Europe, will increase their LNG imports as they seek to reduce their dependence on gas supplies from Russia.”
Delays in the US caused by necessary local, state, environmental, and federal approvals, as well as the limitation that exports from US facilities can only be sold to countries with free-trade agreements (FTA), will hinder the country’s ability to compete globally, GlobalData said.
“To date, over 30 applications have been filed with the [US Department of Energy] to sell LNG. However, only seven terminals have been approved to export LNG to non-FTA countries and only one facility, the Sabine Pass LNG terminal (OGJ Online, Sept. 23, 2013), has received all necessary approvals,” Rositano stated.
“Being able to sell LNG to non-FTA countries, such as China, Japan, Taiwan, and India, is critical to success since these are key markets in the growing LNG trade. Without this approval, commercial risks would be increased and projects would be deemed commercially unviable,” Rositano warned.