The Great LNG Reversal - Red Hard Hat

Posted - July 25, 2013 - By: Peter van der Schans - Red Hard Hat
The US is transitioning from being a net importer of liquefied natural gas (LNG) to a net exporter. After going through a revival earlier this century, LNG imports into the US have been on the decline since 2007. As of March 2013, only three out of the 12 US import terminals have seen shipments of LNG into the US since the beginning of 2013. The US imported less LNG in 2012 than it did in any of the last ten years, and if the trend continues, will almost surely import even less this year. The following chart shows the overall decline in LNG imports over the past 10 years in billions of cubic feet (bcf) per day.

US LNG Import Volume (bcf), 2003-2012

(Click to enlarge)

The declines shown in recent years can be explained in part by the relatively low price of domestic natural gas in the US coupled with the increase in domestic supply, which has made imported LNG economically unfavorable.
The following chart shows the level of imported LNG declining as the amount of domestic natural gas production has increased.

US LNG Import Volume (bcf) v. US Natural Gas Production (bcf), 2003-2012

(Click to enlarge)

This trend is expected to continue as domestic production continues to increase. According to the EIA, the United States is projected to be a net exporter of natural gas by 2020.
The trend toward exporting natural gas can be seen in the number of planned LNG export terminals. In 2008, there were zero planned export terminals in the US. However, according to FERC, there are 21 potential LNG export facilities, including one (1) currently approved and under construction, planned in the US.
Currently, the U.S. does not export any LNG. By 2025, an industry report by ICF International indicates that US exports could exceed 10 billion cubic feet per day. This assumes that the construction of several LNG export facilities is completed on time. These massive projects involve years of planning and construction, and costs that exceed, in many cases, over $10 billion per facility. At that magnitude, claims and disputes are inevitable. Owners and contractors will need to prepare for effectively mitigating, pursuing, and defending against very large and complex claims resulting from the construction of these facilities.

Click on the following (Link) Interface Consulting infographic to see a full-size summary of “The Great LNG Reversal” in the US.

http://www.interface-consulting.com/files/1093/

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http://redhardhat.com/07/2013/the-great-lng-reversal/