Cheap LNG imports to supplant some USG gas drilling

Cheap LNG imports to supplant some USG gas drilling: consultant

Houston (Platts)--4May2004


Called the "Dead Sea" in the mid-1980s and early 1990s because of the lack of
interest in drilling there for oil, the Gulf of Mexico could in this decade
earn that moniker again -- at least for natural gas drilling, Tom Kellock,
senior consultant for industry researchers ODS-Petrodata, suggested Tuesday.
Despite consolidation, majors have not stepped up Gulf E&P activity, and
probably will not do so, preferring instead to focus on lower-risk liquefied
natural gas import projects, Kellock said during a presentation at the
Offshore Technology Conference here. He said fewer jackups are drilling for
gas in the Gulf -- 21% in January 2003, against roughly 50% in January 1998,
while LNG imports leaped significantly last year, boosting gas storage levels
at the start of the withdrawal season to just above 3 Tcf last November,
rather than the 2.6 Tcf that would have occurred otherwise. Even ultra-deep
Gulf of Mexico drilling, which has stepped up in recent years, "will not be
significant enough on the gas side to obviate the need for LNG," Kellock said