Don’t believe the reports that more liquefied natural gas (LNG) shipments are headed to the United States this year, said an executive with GDF-Suez Gas North America (GSGNA).

It’s just not happening, and it won’t be for quite a while, said Guy Braden, senior vice president of Commercial Operations for GSGNA, a subsidiary of Paris-based gas giant GDF-Suez. Braden spoke this week at GasMart 2010 in Chicago.

The delayed start-up of new liquefaction trains and the “relative attractiveness” of European markets kept North American LNG imports in 2009 well below early expectations. Now increased shale gas supplies may keep imports away from domestic shores even longer, he told the audience.

GSGNA would rather the imports were flowing to U.S. shores: it imports LNG into the United States through its Everett, MA, marine terminal and the Neptune Deepwater Port offshore Gloucester, MA.

“Not unlike other industries, the LNG industry went through a significant transition in 2009, with rapidly declining gas demand, an increase in supply and an increase in shipping capacity,” Braden said.

LNG shipping capacity grew 114% between 2006 and 2009.

“The shipping fleet arrived to the party a little too soon,” said Braden. Construction of new LNG shipping vessels began several years ago “in anticipation of lots of supply. It came on pretty much in full force and absolutely crushed shipping rates last year…The charter range is usually three or four times higher” than it was in 2009.

It wasn’t all bad for LNG exports in 2009, Braden noted. “Europe started to ramp up [LNG imports], and as Asian demand dropped, European buyers took advantage and brought in considerably more LNG,” with shipments up 22% from 2008.

But the Middle East continued to ramp up gas supplies, which led to a “significant increase in ‘liquidity’ across the globe.

“With all that LNG sloshing around…spot LNG offered a more competitive advantage to pipeline gas, and flexible LNG became an attractive alternative,” Braden said.

Conventional LNG ties the production source to the delivery pipeline — like a floating pipeline — but the growth in regasification capacity, destination-flexible supplies and shipping capacity “accelerated the evolution of the LNG spot market.”

So much LNG available “made spot LNG far more competitive to long-term pipelines,” Braden said. In addition, “Asian spot prices softened substantially. Even though oil indices and demand fell, low Atlantic spot LNG prices also influenced Asian prices.”

With new supplies satisfying Asia’s demand, “relative appetites in Europe and the Americas…will determine the disposition of most remaining flexible LNG,” he said. “European regas capacity is more limited than U.S. capacity,” and the United States now is “positioned as the market of last resort for LNG.”

U.S. LNG deliveries actually jumped 60% in the first three months of 2010 from the year-ago period, “and you might expect, ‘here comes the LNG play’…But that’s not going to be the case.

“We’ve seen supplies increase in Canaport and the Northeast Gateway, which are taking advantage of New England basis, much to our chagrin,” said Braden.

“The current price levels do not favor this activity going forward,” he said. “The trend line is up, and there’s definitely more flexible LNG out there. The byproduct is the entrance of new players who are trying to take advantage of arbitrage, oil indices, Henry Hub, NBP [UK’s National Balancing Point].”

In “just two years,” said Braden, LNG exports have grown to 70 million tons a year, a “significant increase, representing about 3% of total world gas demand.”

According to Braden, 52 Bcf equals 140 MMcf/d, which equals one million tons of LNG.

“That’s a sizeable portion, and really, the center section is coming from Qatar, about 50%…and a large portion of it is flexible LNG.”

Geographically, “Qatar sits in the center of the world. It’s taking advantage of Atlantic pricing, and the cost of gas is very low, so it’s very competitive…,” Braden added.

“So, where’s all of that supply going to go?” he asked the audience. “Over the coming years, Asia is looking to scoop up uncommitted volumes…Asian demand and oil pricing influence “still favor the Middle East and Pacific,” and the NBP/Henry Hub gas price spread “is sufficiently positive to favor Europe.”

In Asia, there’s “no question that demand will continue to grow and the market for LNG will tighten up. There’s been a significant increase there and it’s absorbed relatively quickly in a rapidly growing environment.”

Australian LNG projects also will be coming on within a few years, which could increase exports “possibly three times,” said Braden.

For North America, however, “shale gas will determine LNG’s role over the next decade. Essentially there is a constrained market for LNG here, with a massive amount of regas capacity, but it will always remain the market of last resort as long as flow remains what it is…”

If there is an “inflection in demand or depending on legislation that alters the demand picture, you are probably not going to see LNG at a terminal near you, not in an appreciable quantity.”

U.S. LNG demand, said Braden, may “tighten by the middle of the next decade, but it will be much more developed for the spot market.”

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