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ExxonMobil Exec: LNG to Bridge the Supply, Demand Gap in Years Ahead

Given an anticipated growth rate of 1.4% annually, the U.S.-Canadian natural gas market could experience a natural gas supply shortfall of about 6 Bcf/d in 2010 and up to 19 Bcf/d by 2020 absent significant contributions by imported liquefied natural gas (LNG), an official with ExxonMobil Gas & Power Marketing said Friday at NGI's 19th annual GasMart conference in New Orleans.

The Houston-based company, however, expects new North American LNG imports of 10 Bcf/d by 2015, rising to 14 Bcf/d by 2020, along with natural gas from Alaska's Arctic region, to close the supply-demand gap over the period, said Elissa Sterry, ExxonMobil Gas's manager of business, planning and support.

She estimated that LNG could account for 20% of North American gas demand by 2030. New supplies of natural gas from the Arctic region are expected to come online by 2015 at the earliest, and the Mackenzie pipeline project could go into service around 2009, she noted.

Of all the LNG terminal projects proposed or planned, James Trifon of Wood Mackenzie predicted that only five (three in the Gulf of Mexico, one in the Northeast and one in the Bahamas) would be built. He said U.S.LNG imports, which currently average about 2 Bcf/d, would rise to approximately 8.2 Bcf/d by 2010.

On a worldwide basis, Sterry projected that gas demand will grow to nearly 500 Bcf/d from 280 Bcf/d by 2030, with North America to remain the largest gas market even after 2030.

Significantly, however, she noted that about three-quarters of the anticipated growth in natural gas demand over the next 25 years will come from developing countries.

Globally, gas will remain the preferred fuel for power generation, according to Sterry. She estimated that total energy investment between now and 2030 will be $16 trillion, of which $10 trillion will be dedicated to power generation alone.

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