U.S. LNG Exports Well-Positioned Globally, Report Says
Demand for Liquefied Natural Gas will increase over the next decade and U.S. LNG exporters could upset the traditional LNG pricing structure, said a new report from assurance, tax, transaction and advisory company Ernst & Young. The report, released March…
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19, said that a massive amount of new LNG capacity is proposed -- enough to double current capacity by 2025 -- and anticipates a growing role for more “price-sensitive buyers” less willing to pay supply security premiums. Proposed North American LNG export projects are “particularly well-positioned” for low pricing, the report said, because source gas in U.S. and Western Canada is priced on a spot basis, unlike gas elsewhere in the world. This could upset traditional pricing structure, as substantial volumes of low-cost LNG moves into Asian markets, the report said. Industry associations have pushed the Department of Energy to expand LNG exports to non free-trade agreement countries (see 13022602). So far, only one U.S. company has received a license to export LNG, and about 20 others are waiting for approval from the Department of Energy (see 13032013).