Liquefied Natural Gas: Current Trends and Future Directions

Transcription

1 Liquefied Natural Gas: Current Trends and Future Directions ASPO Boston World Oil Conference October 26, 2006 Ezra D. Hausman, Ph.D.

2 What s in store with LNG? LNG Basics Current and Future Sources of LNG Global competition for LNG US Natural Gas Production LNG and Security Issues US Untapped Reserves 2

3 LNG Basics Gas is liquefied by cooling to -259 F / -161 C Volume decreased by a factor of % pure methane (NG is ~80% methane) Extremely capital intensive infrastructure Cost effective relative to pipelines for long distances (800 mi offshore, 2000 onshore) 3

4 Global LNG Trade as of 2002 From EIA 2003 report, The Global Liquefied Natural Gas Market: Status & Outlook 4

5 Global Production Capacity 5

6 Global Production Capacity 6

7 Global Production Capacity 7

8 Where are the gas reserves? 8

9 Growth in LNG Demand Worldwide 9

10 US vs. Competing LNG Importers From EIA 2003 report, The Global Liquefied Natural Gas Market: Status & Outlook 10

11 AEO 2006 Projects growth in LNG Imports tcf per year LNG Net pipeline imports Domestic Year

12 Interest in the US 12

13 Everett, MA Cove Point Elba Island Lake Charles Gulf Gateway Recent US LNG Imports Jan Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul Month Jul-06 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Aug-06 Source: Compiled from EIA monthly LNG reports Trinidad Australia Malaysia Nigeria Oman Qatar Algeria Egypt Month bcf per month

14 Trends in Natural Gas Use Source: AEO 2005 Source: AEO

15 Change in 2020 Outlook? (AEO 2004) 2020 (AEO 2006) Domestic Dry Gas Production Supplemental gas Net Pipeline Imports Net LNG Imports Total Supply

16 AEO Natural Gas Prices and Price Forecasts NG Price (Y2005$/mmBtu) Actual AEO 2004 AEO 2005 AEO 2006 NYMEX Oct 2005 NYMEX Oct Source: Compiled by Synapse from EIA s AEO reports and NYMEX website. 16

17 9.0 Some Uncertainty in Gas Price Forecasts 8.0 NG Price (Y2005$/mmBtu) Actual Source: Compiled by Synapse from EIA s Annual Energy Outlook reports. 17

18 Domestic Gas Reserves Year Source: EIA 18 Proved Reserves (years)

19 Sources of US Discoveries 20,000 18,000 16,000 14,000 Extensions New Field Discoveries New Reservoirs in old Fields # of Discoveries 12,000 10,000 8,000 6,000 4,000 2, Year Source: EIA 19

20 Safety Concerns Reasons for optimism Industry has superb safety record Gas in liquid form is NOT flammable Leaks will disperse as gas Reasons for concern Industry structure changing rapidly, disaggregating Gas in vapor form IS flammable Leaks will disperse as gas 20

21 In brief Worldwide, Regassification capacity is growing faster than liquefaction capacity Competition for supplies and short-term contracting means no good deals on LNG New capacity in the US extends the high end of the supply curve Is there a cheaper, more reliable way to meet our natural gas needs? 21

22 What About Proven Reserves of Negatherms Combined Heat and Power Gas DSM New York RPS New York Energy Efficiency Additional Savings from Repowering Inefficient Gas Plants Billion Cubic Feet per Year Expected Growth in Gas Demand, Connecticut RPS Connecticut Energy Efficiency Gas Savings Potential: Electricty Demand Management Gas Savings Potential: Gas Demand Management 0 Source: 2006 Synapse Energy analysis of need for proposed Broadwater LNG terminal 22