NAm Natgas '04: US Gulf Coast to become LNG focal point

20 April 2004 18:07  [Source: ICIS news]

HOUSTON (CNI)--The US Gulf Coast will likely become the focus for new US liquefied natural gas (LNG) terminals because of opposition to terminals elsewhere, an industry official said Tuesday.

Rob Bryngelson, vice president of The Woodlands, Texas-based Excelerate Energy, told energy and chemical industry executives here today that while the US East and West Coasts are the primary market for LNG imports, few if any new LNG terminals are likely to be built on either coast.

Speaking at Ziff Energy Group's ninth annual North American Gas Strategies Conference, Bryngelson said: "While the fastest growing regions for gas consumption are on the East and West Coasts, a greater number of terminals are planned for the Gulf Coast because it is easier to build a terminal here."

The result, he noted, is that supply will continue to be located far from areas of heavy demand.

Last month residents in Maine voted down a proposed ConocoPhillips LNG terminal that was to be built on the site of a former US Navy fuels terminal. Defeat of that project was attributed to the so-called NIMBY syndrome - Not In My Back Yard.

Bryngelson said that sentiment likely will defeat or indefinitely stall any LNG projects on the East or West Coasts. He said: "I call it the BANANA effect: Build Absolutely Nothing Anywhere Near Anything. It’s just so tough to develop projects in those areas. Projects either don’t happen or just drag on so long they won’t be feasible."

If LNG terminals are concentrated on the US Gulf Coast, he said, the problem then becomes one of transportation: moving the gas from the Gulf to the East or West Coast. "The pipelines are not in place to bring it up," he said.

Excelerate is constructing one of the first offshore LNG terminals in the Gulf of Mexico, he noted, with initial gas deliveries expected in January. The baseload capacity of the Excelerate terminal is 500m cubic feet/day (cfd).

He added: "The focus now has turned to alternative means, including offshore terminal developments. The Deep Water Port Act amendment allows offshore LNG terminal development."

Focused on natural gas transportation, supply, price and regulatory issues, the two-day Ziff Energy conference concludes today.

By: Mike Sheridan
+1 713 525 2653

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