Officials cite high costs

Officials cite high costs, complexities of importing LNG to US

Denver (Platts)--18May2004


The costs and complexities of importing liquefied natural gas to the US are so
enormous that only a handful of large companies or consortia will succeed--and
only if a combination of key ingredients falls into place, several industry
officials said Tuesday. "Most terminals won't get built. The capital
investment is huge," Laird Dyer, director of structured transactions for Shell
Trading, told attendees at Natural Gas Intelligence's GasMart conference in
Denver. Of more than 30 new LNG import facilities proposed for North America,
only five or fewer will be built, he predicted. "There are substantial
barriers to entry" into the domestic LNG import business, Dyer added, citing
up-front costs that can run into the billions of dollars, as well as
regulatory roadblocks, community resistance, safety concerns and the high Btu
content of LNG. In addition, any new terminal not sited near an existing
network would require its sponsors to build transportation capacity to move
the regasified LNG to market, further driving up the costs, Dyer said.

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