EPCA ’13: LNG exports from US not game-changer: exec

08 October 2013 15:26  [Source: ICIS news]

BERLIN (ICIS)--Exports of liquefied natural gas (LNG) will not be a “game-changer” in terms of natural gas prices, but the next wave of downstream investments could drive prices higher in the long term, an executive with US producer Ascend Performance Materials said on Tuesday.

“To me it’s not about shale gas. It’s going to be the next wave of investments,” said Thomas Verghese, vice president of Ascend’s Chemicals division. “It’s cheaper to export a finished good than it is to export a base chemical, and particularly gas.”

He made his comments on the sidelines of the 47th annual European Petrochemical Association (EPCA) meeting, in Berlin.

Verghese said that, due to the expense of compressing, storing and shipping LNG, it takes a landed price of at least $12/MMBtu to make exports attractive enough for a serious shift toward them. He does not see that upward price movement occurring in areas that are currently well under that level.

The move by some companies to get permits to export LNG from the US to non-free trade agreement (FTA) countries has led to a debate between companies that want to maximise the US shale gas advantage through exports of gas and those that would rather just export the products made from it.

Verghese said that it will not be LNG exports that lead to any substantial market move for natural gas, but possibly the investments that will be made to make use of all the chemicals being produced from shale gas.

“I don’t see [LNG exports] as a game-changer,” Verghese said.

The EPCA conference runs from 5-9 October.

($1 = €0.74)

By: Jeremy Pafford
+1 713 525 2653

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