Posted - May 21, 2013 - Hellenic Shipping News Worldwide
1). US paves way for shale gas export to India
Opening up the prospects of export of shale gas to energy starved India,
the US today granted conditional authorization to export domestically
produced liquefied natural gas (LNG) to nations that do not have Free
Trade Agreement (FTA) with it.
In a decision, which has major implications for India, the Department of
Energy announced that that it has conditionally authorized Freeport LNG
Expansion, LP and FLNG Liquefaction, LLC (Freeport) to export
domestically produced LNG to non-FTA countries from Freeport Terminal on
Quintana Island in Texas.
Given that the companies from countries like China, Japan and Britain
have already have an overwhelming stake in this Texas company, India is
unlikely to benefit immediately from this grant of license.
But the decision paves the way for India, which does not has a FTA with
the US, to get its companies seek similar licenses for import of much
needed gas from the United States in large quantities from other
terminals.
The existing federal law generally requires approval of natural gas
exports to countries that have an FTA with the United States.
For countries that do not have an FTA with the United States, the
Natural Gas Act directs the Department of Energy to grant export
authorizations unless the Department finds that the proposed exports
"will not be consistent with the public interest."
In its 132 page order, the Department of Energy said that the proposed
exports are likely to yield net economic benefits to the United States.
"We further find that granting the requested authorization is unlikely
to affect adversely the availability of natural gas supplies to domestic
consumers or result in natural gas price increases or increased price
volatility such as would negate the net economic benefits to the United
States," it said.
Freeport facility in Texas, the Department of Energy said, is
conditionally authorized to export at a rate of up to 1.4 billion cubic
feet of natural gas a day (Bcf/d) for a period of 20 years.
Source: PTI
2). BPC study says US gas prices will drive level of US LNG exports
Proposed US liquefied natural gas exports have spurred fears that
exports will boost domestic gas prices, but a new study by the
Bipartisan Policy Center says it is the other way around.
"Exports don't drive prices, prices drive exports," Tracy Terry,
director of the BPC's Energy Project, said on a conference call. "LNG
exports only reach 2 Bcf/d [of gas] in the high demand scenario," she
added.
The study released Monday was intended to explore the relative impact of
different supply and demand drivers over the next several decades. "We
were particularly interested in getting a better understanding of the
dynamics of natural gas prices," Terry said.
The study looked at possible demand from LNG exports, industry, power generation and natural gas-fueled vehicles.
BPC used the National Energy Modeling System used by the Energy
Information Administration, and then modified the model to make LNG
exports respond to domestic gas prices.
The study found that LNG exports under a high demand, low supply
scenario would reach 2 Bcf/d of gas in 2020. With high supply and the
low demand, exports would hit 6.4 Bcf/d of gas in 2020, the study found.
On the price side, the study found that gas prices would be $0.97/MMBtu
higher than the reference case in 2020 under a low supply, high demand
scenario. Meanwhile, prices would be $0.86/MMBtu below the reference
case in 2020 in a high supply, low demand scenario.
Source: Platts
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