International trade in natural gas grew at a brisk pace in 2004, when Canadian pipeline exports rebounded and tanker landings of offshore supplies surged at a rate described as "explosive" to serve strong demand for imports in the United States, according to the U.S. Energy Department's (DOE) annual review of gas trade trends.
While Canadian supplies still accounted for 85% of U.S. imports last year, LNG tanker deliveries were the hot growth item. LNG, which was statistically insignificant while Canadian deliveries mushroomed through the 1980s and '90s, accounted for 15% of U.S. imports and 3% of American gas consumption in 2004.
The DOE's Office of Fossil Energy called the rate of LNG import growth outright "explosive" during the past two years. Total 2004 landings of 652 Bcf, an annual record, were up by 29% from 506 Bcf the year before. The 2003 LNG imports were in turn about double the 2002 total of 229 Bcf.
A decade ago, in 1995, U.S. LNG imports were 18 Bcf. Volumes rose to 40 Bcf in 1996, to 78 Bcf in '97, to 86 Bcf in '98, to 163 Bcf in '99, to 227 Bcf in 2000 and to 238 Bcf in '01.
A widely forecast drop in Canadian supplies has been at least postponed. This finding is corroborated by an earlier report by Canada's National Energy Board on activity during the 12 months that ended last Oct. 31.
Far from falling off, Canadian pipeline deliveries into the U.S. rose to 3.689 Tcf in 2004 -- up 5.2% from 3.5 Tcf in 2003 and most of the way back to their 2002 peak of 3.78 Tcf.
Canadian gas exports also set a price record by fetching an annual average US$5.70/MMBtu at the international border in 2004, up 11% from $5.13 in 2003.
Total gross U.S. imports, including LNG, reached 4.34 Tcf in 2004, up 8.5% from 4 Tcf the year before. But the acceleration of the international gas trade also included growing exports from the U.S., back into Canada as well as to Mexico and Japan. American exports reached a record 854 Bcf in 2004, up 23% from 692 Bcf in 2003. The 2004 U.S. gas exports included 395 Bcf to Canada, a record 397.5 Bcf to Mexico and 62 Bcf of LNG shipped to Japan from Alaska.
Net U.S. gas imports in 2004 were 3.487 Tcf or 15.6% of consumption. Net American imports were up by 5% last year from 3.3 Tcf in 2003.
The LNG contribution to U.S. gas supplies is spread over eight exporting countries. Trinidad & Tobago has emerged as the top shipper of LNG to the U.S. since 1999. In 2004, the Caribbean supplier shipped 462 Bcf to the U.S. or 71% of LNG imports. Trinidad's top performance was followed distantly by 120 Bcf from Algeria, 20 Bcf from Malaysia, 15 Bcf from Australia, 12 Bcf from Qatar, 12 Bcf from Nigeria, 9.4 Bcf from Oman and 1.5 Bcf from Mediterranean region storage facilities in Spain.
The Cove Point terminal in Maryland emerged as the most active LNG port, accounting for one-third of tanker deliveries. Annual average landed prices paid at entrances to terminals for U.S. LNG imports varied widely. The range spread from US$4.49/MMBtu for shipments from Malaysia to $5.51 for Australian deliveries.
The annual trade survey made no attempts to forecast future U.S. pipeline or LNG imports. While growth in American gas imports from Canada has tapered off amid debates over gas resource endowments, the traffic continues to be regarded north of the border as one of the major successes of energy deregulation and free trade over the past 20 years. Current annual Canadian pipeline exports in the 3.6 Tcf range are five times the low of 711 Bcf that the trade hit in 1983, when federal and provincial regulation tightly controlled both volumes and prices of shipments to the U.S.
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