NAm Natgas '04: Most LNG terminal projects likely to fail

19 April 2004 19:56  [Source: ICIS news]

HOUSTON (CNI)--Only about a quarter of the 34 liquefied natural gas (LNG) terminals proposed for North America will be built because most won’t clear high financial and regulatory hurdles, an Oklahoma energy official said here Monday.

David Fleischaker, Oklahoma's secretary of energy, told industry executives today that despite that anticipated high project failure rate, LNG will play a significant role in US short term energy needs - and most of that supply will be imported from foreign sources.

Speaking at the Ziff Energy Group's 9^th annual North American Gas Strategies Conference here, he added: "But then you have to recognize that we’re putting our eggs in a basket and that basket is in foreign hands."

Fleischaker said LNG companies in the US must address three major concerns when developing an LNG facility: location, location and location.

"The LNG industry would do well to heed the lessons of the nuclear industry and not place facilities near population areas," he said. "Putting LNG facilities in high population zones raises their visibility and adds more public issues, which lead to additional costs."

Fleischaker noted that increased costs helped derail the US nuclear industry three decades ago.

At the same time, said Fleischaker, safety of LNG should be the "number one" concern.

He added: "A catastrophic accident wouldn’t be pretty and would rock the industry. If it occurs when the industry is in its infancy, it will deliver a terrible setback to LNG."

The Ziff conference is focused on transportation, supply, price and regulation of natural gas in North America. The conference concludes tomorrow.

By: Mike Sheridan
+1 713 525 2653

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