Thursday, January 3, 2008
LNG Imports Into US Climb to New Record
3 January 2008
International Oil Daily
Barbara Shook
LNG imports into the US set a record in 2007 as volumes climbed almost 40% from 2006 levels.
Imports averaged 2.2 billion cubic feet per day, up from 2006's 1.6 Bcf/d, according to figures compiled by investment bank Tudor Pickering Hold.
The averages are a bit deceiving, however, as all of the growth came in the first eight months of the year, especially July and August when imports hit 4 Bcf/d. All five existing US receiving terminals were taking in LNG at near capacity for much of the time.
Starting in September, volumes plummeted as the arbitrage advantage the US enjoyed over Europe in the summer reversed, and Japan started buying cargoes to offset the loss of its largest nuclear power plant following an earthquake. Sellers elicited oil-indexed prices into Japan that sometimes topped $16 per million Btu, more than double the US' $7-$8/MMBtu. South Korea also has reportedly paid $16/MMBtu for a recent cargo.
In December 2007, US imports averaged 1 Bcf/d, about one-quarter of existing terminal capacity, compared to 1.7 Bcf/d in the year-ago month. Utilization rates likely will fall further in 2008 with the completion of at least one Canadian and four US terminals, some of which have no dedicated supply.
First up will be Excelerate Energy's second offshore buoy, Northeast Gateway near Boston. These will be followed by Freeport LNG in Texas and Cheniere Energy's Sabine Pass and Sempra Energy's Cameron LNG, both in Louisiana.
Canaport, a joint venture of Canada's Irving Oil and Spain's Repsol YPF near St. John, New Brunswick, will be the first Canadian LNG import facility.
Collectively, the five terminals have regasification capacity exceeding 6.5 Bcf/d, but committed supplies are minuscule.
French Total has a small volume of Qatari LNG that it will bring into Sabine Pass, and Italy's Eni has 600 million cubic feet per day of capacity at Cameron LNG, though the source has not been identified. Repsol hasn't indicated how it will supply Canaport, aside from its global portfolio. Freeport's capacity is completely committed, 1 Bcf/d by ConocoPhillips and 500 MMcf/d by Dow Chemical, but neither has arranged for supply.
