By OGJ editors
HOUSTON, Dec. 10 -- Despite strengthening US natural gas prices and additional LNG supplies from Trinidad and Tobago, increasing US LNG imports this year likely will be offset by US natural gas exports-imports elsewhere, an analyst said.
US natural gas production is on the decline while LNG imports have grown at an average rate of 60%/year since 1995, according to a research note from Raymond James & Associates Inc. Although the LNG growth trend was reversed earlier this year by lower natural gas prices and the Sept. 11, 2001, terrorist attacks on Washington, DC, and New York, the rate of US LNG imports are accelerating again, Raymond James said.
LNG imports last winter averaged 310 MMcfd compared with 750 MMcfd during the first 9 months of this year. Raymond James estimates US imports of LNG will top 1 bcfd in January 2003, which would be 750 MMcfd over last winter's level.
Raymond James analyst Marshall Adkins of Houston said, "While this is more than a twofold increase in LNG imports, don't get excited just yet. Based on our year-to-year supply-demand forecast, the US market is going to need every molecule of that gas, and then some.
"Specifically, aside from falling US gas production, falling Canadian imports as well as increasing Mexican exports should act to offset the aforementioned increase in LNG imports," Adkins said.
US natural gas supply
The analyst forecast a 500 MMcfd decline in Canadian imports this winter compared with last winter. Meanwhile, the US is exporting more than 700 MMcfd to Mexico compared with last winter's average exports to Mexico of 440 MMcfd.
The Canadian natural gas imports and Mexican natural gas export figures neutralize the US LNG import figure, Raymond James calculated. The analyst foresees "that natural gas imports-exports will have no net impact to the US natural gas supply picture this winter."
Ultimately, LNG is expected to become a more significant factor in US natural gas supply "though material increases still appear to be a ways off," Adkins said.
ChevronTexaco Corp. has applied to the US Coast Guard for a license to construct and operate a deepwater port off Louisiana at which it would site an LNG receiving terminal (OGJ, Dec. 9, 2002, p. 8).
"While we believe the 2006 startup is an aggressive goal, we also conceded that LNG imports will have to be a significant contributor to US supply to reach future demand projections," Adkins said of ChevronTexaco's proposed terminal.
Meanwhile, Trinidad and Tobago is a key supplier of natural gas to the US, particularly New England. Its Atlantic LNG plant provides as much as 40% of the gas used for heating in the New England states during the peak winter periods.
By the second quarter 2003, Trinidad and Tobago is expected to be fifth largest exporter of LNG in the world, much of it going to the US.
