LNG market faces oversupply if planned US terminals are not built

Singapore (Platts)--17Jun2004

US gas markets are defining a new paradigm in the LNG industry and hold the
key to future supply-demand balance that could transform LNG from a buyer's
market to a seller's market if projected demand materializes, or cause
overcapacity and length if it doesn't, delegates at the Asia Oil and Gas
Conference in Kuala Lumpur said this week. Shell's global LNG and power
director Ann Pickard said global LNG supply could go long if the US
regasification terminals don't come on line. Of the 31 import terminals
planned in the US, only three or four are likely to become a reality, Fereidun
Fesharaki, president of the Hawaii-based consultancy FACTS said. US LNG
imports could potentially soar from a base of 5-mil mt/year in 2002 to 30- to
40-mil mt by 2010 and 50- to 80-mil mt by 2015-20. However, Fesharaki said the
market may well transform from a buyers to a seller's market and much higher
prices if US imports increased.