2009 May 22
ST. ANDREWS – The U.S. has a glut of natural gas and a representative of the Energy Intelligence Group is questioning why anyone would invest in an LNG project at this time.
In a telephone interview from Houston this week, Barbara Shook, Houston bureau chief for the group, said currently there are a number of LNG terminals which are sitting idle.
“We have one here on the Gulf Coast that has never been used and there is no sign of it being used in the near future. It looks like they are not going to be doing any business for possibly some years to come,” Shook said.
“We have another one that has not handled any cargo in almost two years and another that had only commissioned cargo since it was commissioned a year ago and no more are scheduled.
“We have an existing one that went about a year and a half without handling any cargo and another one due to start up this summer and no business is scheduled.”
When these facilities were built, said Shook, it seemed like a good idea at the time but it takes several years before they become operational and the natural gas world looked a lot different four or five years ago than it does today.
“We were looking at possible shortages then. Today we not only have a world awash with natural gas but North America has far more natural gas than we have demand for.
“We are in a recession and demand is plummeting. I would have to question why an intelligent investor would be putting money into a business that has so much surplus capacity.”
According to analysis her group has done and what she is hearing from other consulting firms, Shook said it will probably be at least four years from now before there will be a need for more natural gas.
“In four years we might have additional supply coming from some of these other projects. Most LNG projects produce more than their capacity.
“We not only have a lot of shale gas in the U.S. but we have a lot more prospects that have to be fully delineated and developed in the U.S. lower 48.”
Shook said Canada also has shale prospects including in Atlantic Canada. She said Nova Scotia has a significant shale prospect along the Bay of Fundy and the recoverable reserve of the resource is considerably higher than that.
© 2009 Advocate Media
Article republished on Save Passamaquoddy Bay website with permission.
The Saint Croix Courier, St. Stephen, NB