WIDER SEARCH FOR LNG SUPPLIES PREDICTED

Fast growing markets for LNG in Japan, Taiwan, and Korea will have to look farther afield for new volumes because supplies in Brunei, Malaysia, and Indonesia are being committed under long term contracts.

LNG users in the region also will have to pay substantially more for future supplies, says Gotaas-Larsen Shipping Corp. in its annual LNG World Overview.

The report calculates that LNG imports into Japan, Taiwan, and Korea will nearly double from 36.3 million tons/year in 1990 to 68 million tons/year in 2000.

U.S., EUROPE

Meantime, consumption of natural gas in the U.S. will increase from the present 18 tcf/year to about 23 tcf/year by the turn of the century.

But it is not clear, says the report, when U.S. prices will rise enough to make additional LNG imports or other higher cost sources of natural gas commercially viable. The report projects that U.S. LNG imports will increase to about 7 million tons/year by 2000 from the current 1.7 million tons/year.

In the southern countries of western Europe, LNG demand is likely to increase substantially as part of a general migration toward natural gas because of concerns about safety of nuclear power and the desire for a cleaner burning fossil fuel.

The problem for potential customers will be to rationalize the higher price required for LNG than for natural gas by pipelines from Algeria and the Soviet Union. By the end ,of the century, western European LNG imports will rise to 23 million tons/year from 12.8 million tons/year in 1990.

PROPOSED PROJECTS

Gotaas-Larsen says a big effort is under way to set up new LNG chains, but results are not yet too clear with the exception of Qatar, where a firm customer, Chubu Electric of Japan, has been identified.

Nigeria's LNG project continues intensive marketing efforts in southern Europe and the eastern U.S. Gotaas-Larsen expects sales contracts to be in place by the end of 1991, allowing project startup in late 1996.

The proposed trans-Alaska gas pipeline/LNG chain could benefit from lack of new supplies from traditional LNG sources for Japan, Korea, and Taiwan. The Alaskan project requires 14 million tons/year throughput to make it viable.

Gotaas-Larsen said there could be a match between increasing customers' requirements for LNG and minimum production buildup in the late 1990s or early in the next century.

The report points out that Nigeria's proposed 1.4 million tons of LNG exports to the U.S. will materialize at about the same time as 4.6 million tons/year of proposed Venezuelan imports. Algerian contracts for an additional 1.5 million tons/year are in place for about this time.

It isn't clear whether U.S. markets for that volume of LNG will be available in the time frame.

Portugal (OGJ, July 22, p. 25) and Finland plan to import LNG-probably from Algeria-with first deliveries in 1996-97.

The Finnish project could require ice strengthened LNG tankers because Helsinki is sometimes ice bound.

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