Liquefied natural gas supplies from the U.S. may find limited buyers in Asia because of competition from other regions, Wood Mackenzie Ltd. said.
U.S. LNG exports may be less than 28 million metric tons a year before 2018, lower than forecasts of 31 million to 94 million tons a year estimated by the U.S. Energy Intelligence Agency, Wood Mackenzie said today in an e-mail. Proposed Australian and African LNG developments are competing with U.S. terminals.
“Incremental U.S. LNG exports into Asia are likely to be restricted by competition and by buyer appetite rather than export approvals,” Noel Tomnay, head of global gas research at Wood Mackenzie, said in the note.
Buyers may be put off by political risk and specification that U.S. gas exports be “lean,” or devoid of condensates and gas liquids, Tomnay said. U.S. firms have applied for licenses to export about 97.5 million tons of proposed LNG capacity to non-Free-Trade Areas, Wood Mackenzie said.
U.S. projects poised to deliver before 2018 into the Pacific area may gain “significant first-mover advantages,” according to the note.
Some existing LNG import facilities in the U.S. are being converted into production areas at a cost of about $2.50 per million British thermal units, Amber McCullagh, a specialist on North American gas, in the note.
LNG is natural gas chilled to minus 260 degrees Fahrenheit (minus 162 degrees Celsius), converting it into a liquid state for shipping by tanker.
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