By Rick Wilkinson
OGJ Correspondent
SYDNEY, Sept. 7 -- LNG provides the oil and natural gas industry with positive options, Didier Sire, Gaz de France vice-president of strategy, told the World Energy Congress Monday.
He and other WEC speakers agreed that new rules need to be established for a new market order.
LNG is able to service small and previously perceived unprofitable markets, Sire said. Projects are of modular design, meaning that additions are relatively straightforward and overall construction of these projects is much faster than it was 1-2 decades ago, he added.
The early take-or-pay LNG contracts stipulated large volumes. Although this type of arrangement was necessary to underpin the large capital investments involved, it also restricted the flexibility of procurement contracts, he said.
LNG transactions are becoming more flexible with short-term markets and anticipated spot markets. The number of transactions will increase and lead to a more global trade, Sire said. An increased number of players—both buyers and sellers—will more open competition, including competition with pipeline gas.
David Sweet, International LNG Alliance executive director, told delegates that there is an anticipated need for more US gas imports in the medium-term. This will create opportunities for producers worldwide, particularly in Asia.
The challenge for the LNG industry will be to gain public acceptance, Sweet said. Recent polling has indicated opinion also goes against the establishment of LNG receiving terminals on US coasts. Sweet attributed this to fear and a lack of education about LNG.
