Little Impact Seen From Gazprom Plan Not To Ship Gas To US
Jeudi 12 octobre 2006 / 17h45
easybourse.com
(This article was originally published Wednesday.)
By Jeanine Prezioso and Angel Gonzalez Of DOW JONES NEWSWIRES HOUSTON -(Dow Jones)- OAO Gazprom's (GSPBEX.RS) decision to send natural gas from Russia's Shtokman field to Europe via pipeline rather than liquefy it and ship it to the U.S., won't affect the medium-term prospects of the North American regasification business, analysts and industry officials say.
Most liquefied natural gas cargoes are currently directed to European ports where they enjoy higher prices than in the U.S. However, as Europe develops more gas storage capacity and more liquefaction projects come on line in Equatorial Guinea, Norway and other countries over the next three years, more LNG will be available for U.S. markets.
On Monday, Russian energy giant Gazprom said it plans to develop the $20 billion Shtokman project on its own, and send its natural gas production to Europe via pipeline instead of North America via LNG shipments, as the company had previously said.
LNG from the massive Shtokman project, which is not scheduled to come on line until early into the next decade, would only be vital to the U.S. if the Alaska Arctic natural gas pipeline projected for 2015 doesn't come through, or if demand skyrockets, said John Perry, an analyst with John S. Herold, a Norwalk, Conn.-based energy consulting firm.
At the same time, the U.S. is likely to consume more gas than it can produce or import from neighboring Canada. Owners of North American regasifying terminals see themselves as "the gap filler," said Perry.
Most of the LNG supply that could end up on North American shores is likely to come from projects currently under development in West Africa, Trinidad, the Middle East and Norway, scheduled to come on line before the end of the decade.
"I don't think there'll be a problem to get gas for our capacity there," said Total S.A. (TOT) spokesman Paul Floren. The French energy giant owns regasification capacity in Mexico's Altamira terminal and another facility in Sabine Pass, La.
Price Gap Russia's decision to supply Europe over North America underscores the fact that the U.S. must compete with the rest of the world to bring LNG to its shores. So far, its performance has been unimpressive.
The LNG business is divided into two distinct geographical regions, the Atlantic Basin and the Pacific Basin. For most purposes, gas-producing nations in the Atlantic such as Trinidad, Egypt, Nigeria and Algeria will ship their gas to North America and Europe, said Stacy Durbin Nieuwoudt, an energy analyst with Pickering Energy Partners in Houston.
This year, at least two cargoes headed for an LNG terminal in Lake Charles, La., were diverted midway from the U.S. to Europe where the gas fetched higher prices.
Europe's lack of storage capacity, as well as the euro's strength in relation to the dollar, has made the LNG market there more lucrative.
U.S. demand for LNG may grow to 3 billion cubic feet a day in the next three years, a 30% increase from 2006, said Herold's Perry. By 2010, U.S. demand is projected to rise to between 4 billion and 5 billion cubic feet a day of imported gas. The strengthened demand will level the playing field with Europe, he said.
Gas storage improvements in Europe may help reduce prices there, just as it does in the U.S., where storage facilities can hold 15% to 17% of the nation's annual consumption, said Perry.
In the long term, Russia's decision to send Shtokman's gas riches to Europe may be positive for the U.S., said Pickering Energy's Nieuwoudt.
"As Russian production floats via pipeline to Europe, that leaves more gas (in the Atlantic Basin) free to ship to the U.S.," she said.
While there seem to be enough LNG projects to keep U.S. terminals supplied in the near future, Shtokman LNG could be useful if the Alaska Artic Natural Gas Pipeline doesn't materialize, said Perry.
The pipeline, which could bring between 4 billion and 5 billion cubic feet a day of gas into the lower-48 states by 2015, would keep U.S. demand at a manageable 6 billion to 8 billion cubic feet per day.
"If we're going to start pushing 10 or more billion cubic feet a day, Shtokman would have been helpful," said Perry.
-By Angel Gonzalez, Dow Jones Newswires; 713-547-9207;angel.gonzalez@dowjones.com
-By Jeanine Prezioso, Dow Jones Newswires; 713-547-9209; jeanine.prezioso@dowjones.com |
