01 April 2012 01:43 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--Exports of liquefied natural gas (LNG) should be established by the market, executives for the American Fuel & Petrochemical Manufacturers (AFPM) said on Saturday.
The advent of shale gas has led to an increase in US supplies of natural gas, causing prices to plummet. May US natural gas closed at $2.126/MMBtu on Friday, near a 10-year low.
Some in the petrochemical industry have worried that the low prices could discourage natural gas production. This would limit production of natural gas liquids (NGLs) such as ethane, a feedstock used in US crackers.
Exports could benefit US producers, since natural gas prices in much of the world are much higher.
However, exports could also threaten the nation's natural-gas cost advantage.
Earlier at the IHS CERAWeek conference in Houston, Dow Chemical CEO Andrew Liveris had said that the US could export 5% of its natural gas before the shipments start affecting prices.
The proper level of LNG exports should be left to the market, said Charles Drevna, president of AFPM. He made his comments on the sidelines of the International Petrochemical Conference (IPC) in San Antonio.
"The bottom line: it's a free market," he said. "If the market place decides it should be exported, it'll be exported."
James Cooper, AFPM vice president for petrochemicals added, "Let the markets figure it out."
The IPC lasts through Tuesday.
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