For decades the Asia-Pacific region has accounted for almost 70% of the world’s liquefied natural gas (LNG) imports, but the emergence of a plethora of projects in North America and Europe may lead to more price parity, according to an ExxonMobil Corp. executive.

Ron Billings, ExxonMobil’s Global LNG vice president, said this week at the Australian Petroleum Production and Exploration Association’s conference that dominance by Asian markets over LNG, and their ability to command lower prices is about to change. The growing recognition that LNG is becoming more of a global business will ultimately lead to the United States and the UK becoming price setters, he noted.

“The U.S., the UK and parts of northwest Europe are the only true liquid markets today,” Billings said. “LNG will be increasingly headed toward these liquid markets. So in order to compete with LNG supplies, buyers in other regions will need to pay prices that are competitive with those in liquid markets. In Asia, this represents somewhat of a paradigm shift.”

By 2020, Billings said ExxonMobil projects that LNG will more than double from today’s 6% of the world’s natural gas supply to reach about 14%. By 2010, the oil major also may become the world’s second largest LNG producer, after Royal Dutch/Shell Group, if its Qatar LNG project is completed (see Daily GPI, Oct. 17, 2003).

ExxonMobil also has agreed to jointly develop some offshore Australian gas fields for LNG, with partners ChevronTexaco Corp. and Shell (see Daily GPI, April 6).

ExxonMobil currently participates on a gross basis in about one-sixth of the global LNG trade, and by 2020, it plans to participate in 25-33% of the global market.

Even with the growth in the Western Hemisphere for LNG, Billings said ExxonMobil still views world gas demand nearly doubling to 500 Bcf/d from its current 280 Bcf/d because of developing Asian markets. It is the fastest growing region, and power generation is the main driver, he noted.

LNG projects remain expensive to build and operate, but Billings noted that technology already has lowered costs by about 30% in the past five years.

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