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Poten: Six to 10 North American LNG Projects Likely

Of the nearly 60 liquefied natural gas (LNG) import terminals on the drawing board for North America, only six to 10 are likely to be built by 2012, according to an energy consultant with Poten & Partners.

Speaking at Platts Fourth Annual LNG Conference in Houston on Thursday, Poten's Gabriel Avgerinos forecast that one to two new LNG terminals will be built along the West Coast, one to two along the East Coast and four to six along the Gulf Coast. Avgerinos currently is general manager, LNG & Gas Consulting at Poten in New York City.

Because the proposed North American 2010 import capacity exceeds current global LNG supply, "there are many contenders, but most will not be built," said Avgerinos. "The Gulf Coast gets the most new LNG capacity because siting is easier. LNG mega-trains, ships and regas terminals will target the Gulf Coast, which will provide economies of scale." However, he warned that the Gulf Coast risks having "terminal clusters," with potential takeaway bottlenecks and discounts to Henry Hub prices.

Asked how long the push for new LNG supplies will continue, Avgerinos predicted that 'the market will be mature by 2015. I believe by then we will see a real slowdown." Potentially, the LNG shipping fleet worldwide could triple by 2015."

As to where the LNG sites are likely to make it, he said it depends on pipelines and the "NIMBY" (not in my backyard) factors. "Pipeline access is critical," said the Poten consultant. Among the myriad of proposals, LNG terminal sites are most likely to be built where there are existing pipeline flows, and "first-built" terminals probably will be expanded over new construction.

Even though there is a strong push for new LNG construction, "sustained high U.S. gas prices may result in demand destruction via fuel switching and export of U.S. industries," which could impede some projects. "The success for new LNG terminals will require an LNG-ready supply between 2008 and 2010."

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