The ability to import liquefied natural gas (LNG) into the United States is the “huge prize” oil and gas companies are attempting to grab, but there will only be a few winners at the end of the race, executives said last week.

Douglas Rotenberg, president of BP Global LNG, spoke at the Offshore Technology Conference in Houston about the competition by producers large and small attempting to capture some LNG business. The United States and the southern North Sea have mature gas basins and declining supplies, and rising gas use has sent imports rising from nearby Trinidad, as well as Qatar, Indonesia, Algeria and Malaysia, Rotenberg said. Right behind those exporters are Russia and Iran, which both hold potential.

PFC Energy’s Rodney Schmidt told OTC attendees that LNG opportunities are offering “very exciting times” for the energy industry. “There is a great deal of competition to place this gas in the marketplace.”

However, while gas imports are available to supplant a dwindling North American supply, Rotenberg cautioned that it is unlikely any more than six to eight of the proposed 38 LNG terminals will be built in the United States in the near future. Five to date have received approval by the Federal Energy Regulatory Commission, with only one in the continental United States — Sempra Energy’s Hackberry, LA, facility. The Hackberry terminal would be the first new onshore LNG plant in almost 25 years.

The main problem in obtaining terminal approval, said Rotenberg, is the lengthy process to obtain permits before construction actually begins. Besides that, developers often face stiff stakeholder opposition and other problems. Proposed plans to build terminals in California and Maine fell apart after strong local opposition, he noted. And Marathon Oil Co. dropped its adventurous plan to build an LNG regional energy center in Baja California Norte, Mexico after the Mexican government blocked construction.

Paul Britton, managing director of EnerSea Transport LLC, said another way to bring stranded gas to areas that cannot support LNG development may be through the marine transport of CNG.

“People are now beginning to realize that LNG doesn’t solve all of the gas supply problems around the world,” Britton said, adding that CNG is a “new industry” that would fill that need. Developers, he said, have been working on CNG systems over the past decade, and the industry now is “starting to take shape.”

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