A decade from now, North American (Canada, Alaska and Lower 48) exports of liquefied natural gas (LNG) will be about 10 Bcf/d, according to the base case of a new LNG export analysis.

If this is to happen, North American LNG projects will need to capture about 60% of the Asian market’s uncontracted LNG demand, according to a new analysis by LCI Energy Insight and Energy Ventures Analysis (EVA).

“Obtaining this market share will be a tall order in light of the intense competition among a host of proposed global liquefaction projects that are earmarked to serve the Pacific Basin,” the firms said in their report. “…[T]he potential uncontracted LNG supply earmarked for the Pacific Basin exceeds uncontracted Asian demand by about 12 Bcf/d, which implies that some of these projects will be either delayed or canceled. Furthermore, unlike the proposed Lower 48 liquefaction projects, all of the other competing liquefaction projects have dedicated gas reserves.”

The 10 Bcf/d in 10 years projection is substantially higher than what others have projected for LNG exports.

For instance, Ken Medlock, a Baker Institute energy fellow at Rice University in Houston, recently told NGI the United States would be “lucky to see more than 1 Bcf/d” of exports 10 years from now. “I don’t think it’s going to be a huge number” (see Daily GPI, Aug. 9). And last month Bentek Energy LLC said exports from the United States could reach as high as 5.4 Bcf/d by 2020, and another 1.4 Bcf/d could be exported from Canada.

LCI-EVA said the two key uncertainties in their outlook are the question of whether/when the U.S. Department of Energy (DOE) will issue more permits for export to non-free trade agreement (FTA) countries (see Daily GPI, Sept. 26); and how global competition for LNG market share in the Pacific Basin evolves.

The analysts reviewed 24 proposed North American LNG export projects, totaling more than 32 Bcf/d of capacity, by their tally. These include 17 projects proposed for the Lower 48 with combined capacity of 23.3 Bcf/d. The Lower 48 projects consist of eight brownfields, with combined capacity of 12.6 Bcf/d; four greenfields, with combined capacity of 6.7 Bcf/d; three offshore projects, with combined capacity of 3.9 Bcf/d; and two “special” small-scale projects, with capacity of 0.1 Bcf/d.

There also are 20 proposed liquefaction projects with combined capacity of 25.2 Bcf/d elsewhere in the world that are competing for the same market share, the analysts said.

In about 2016 it is expected that North America will start to export LNG with the startup of the first phase of Cheniere Energy Inc.’s Sabine Pass (1.3 Bcf/d) (see Daily GPI, Oct. 11) and the Kitimat LNG (1.3 Bcf/d) (see Daily GPI, Sept. 14) projects, according to the analysts.

Cheniere Energy’s Sabine Pass project is the first and only Lower 48 export development to have received DOE authorization to export to non-FTA countries. The project, for which construction is under way, has left its competitors behind while they wait for DOE to decide whether more exports to non-FTA countries would be in the public interest. This first-mover advantage is significant, the LCI-EVA analysts said.

“Probably the most significant competitive advantage is being a first mover,” they said, “and despite any extenuating circumstances, securing long-term offtake agreements.”

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