Incremental LNG supplies are not something that’s going to happen all at once. New terminals will make their way through the permitting and construction process one by one, and the additional supplies will help offset declining production in other areas, according to an ExxonMobil executive.

“We look at it on the same basis as a large new field. It just blends into the portfolio of supply,” said Scott A. Nauman, ExxonMobil Gas Marketing’s Americas gas marketing manager.

It may cause some regional market displacement, and “you may see some minor price impacts on a very local basis,” but “it will be replacing declining production from other sources. The market will absorb it.”

On the other hand, “the absence of LNG would certainly affect prices,” reflecting ever tighter supplies, Nauman told NGI.

“There was a time when we produced everything North America needed. That’s not the case today, and it won’t ever be the case again with natural gas.”

Nauman expects North American LNG imports to grow to “significant volumes” with new terminals by the latter half of this decade, and by 2020 he expects North American demand to reach 12 Bcf/d, compared to about 1 Bcf/d currently.

The infrastructure is available and it is likely the Gulf Coast will see much of the new LNG activity, “but don’t discount possible terminals on both the East and West Coast.” The industry has proved, for instance with the Sable Island Offshore Energy project, in which ExxonMobil is a partner, that Atlantic development can be done responsibly.

Nauman will be elaborating on these views, and others on natural gas issues as a keynote speaker at GasMart 2004 in Denver March 17-19. For more information on GasMart go to gasmart.com.

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