BP North America Gas & Power President Tony Fountain said this week that the role of liquefied natural gas was “fundamental to our North American markets,” and indicated that the company is reviewing “several opportunities for LNG terminals” along the West Coast and East Coast. BP joins El Paso, Chevron and othercompanies that have announced similar LNG plans in response to high domestic gas prices.

“We see an opportunity to help California if we put an LNG terminal on the West Coast,” said Fountain at the Ziff Energy Group North American Gas Strategies Conference this week. Without submitting a time frame, Fountain said BP thinks the United States is a prime location for more LNG activity.

“The LNG prospect is in the future down the road, but it would probably help a terminal’s chances to be located along the West Coast if Alaska selects the highway route for its (natural gas pipeline) project. It’s not the next thing off the block for us, but the political stability in the United States helps the LNG market here,” he said.

Speaking of LNG’s ability to compete with existing and future natural gas supplies, Fountain said that North America’s growth was strong enough to handle it. “North America’s natural gas demand is more than India, Brazil and China put together. It is truly an incredible, dynamic market.” Pipeline imports and LNG will have to be part of the supply mix that North America will need to meet its expected 30 Tcf demand by 2009, Fountain said.

BP already produces LNG in Trinidad, and is now reviewing options on a LNG project in Egypt. BP is also subscribed for about one third of the total capacity at the Cove Point, MD terminal, which is being reactivated. The terminal, mothballed in 1980, is expected to accept its first tankers in 2002.

Andy Flower, a special adviser to BP on global LNG prospects, told a London audience this week that BP has identified three possible LNG sites in the United States, but said he did not expect anything to be completed before 2005 at the earliest. The proposed terminals at a minimum would be able to handle 3 million metric tons/year in capacity, Flower said.

Earlier this week, CMS Trunkline in Lake Charles, LA, the largest LNG import terminal in the United States received authorization from the Federal Energy Regulatory Commission to expand the peak send-out capacity of its terminal this summer to 1 Bcf/d from 700 MMcf/d (see Daily GPI, April 4). CMS is evaluating further expansion to increase daily send-out capacity to 1.3 Bcf/d. In 2000, there were 55 LNG tanker ships unloaded at the terminal, and it is anticipated that the number of shipments will be higher in 2001.

If BP muscles its way onto the North American LNG scene, it will find some heavyweight companies. In recent months there has been a frenzy of activity, including plans to recommission two mothballed terminals: the Cove Point terminal and Southern LNG’s terminal at Elba Island, GA.

There have also been several ownership changes at existing plants and multiple announcements of new facilities, including Enron’s plan for an LNG facility in the Bahamas and pipeline to Florida, and El Paso Corp.’s recent announcement that it plans to build six new LNG import terminals at various locations across the United States. Chevron also recently said it is examining the possibility of building a new LNG terminal in California (see Daily GPI, March 20, Feb. 6, Feb. 2).

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