The Impact of US LNG on Worldwide Gas Demand and Supply

This panel featured a buyer, a supplier, and two export companies. Moderator Alix Steel asked Mike Sabel and Matt Schatzman how they feel about two-dollar gas, since they’re the ones who must build export terminals. They said it is very helpful to exporters because it continues to make US LNG very competitive in the global market. Unfortunately, the short-term benefits in the energy market are not indicative of the long-term requirements.

The current lower cost of natural gas is leading to a great deal of innovation in the United States as producers try to compete for market share. Hendrik Gordenker sees a lot of uncertainty in the industry, difficulty in predicting future demand; and is certain that the US market will need greater contract flexibility and greater diversity of supply.

Jill Evanko spoke about Chart Industries’ strategies to work within the current state of the LNG industry, the uncertainty they face, and the need to diversify. They spend a lot of time on process technology and investigating different types of export facilities—from baseload to mid-scale, to micro and smaller scale terminals.

Mr. Gordenker, the buyer on the panel, spoke at length about dealing with the uncertainty of future LNG demand. Since buyers now have more energy choices, he said it becomes an issue of having the LNG storage potential, terminals, and transportation in place when and if demand requires. He said LNG should be combined with new types of renewable energy, and it can be used for purposes other than power, for example as a heating fuel to eliminate less-friendly alternatives like coal.

Finally, the conversation turned to what is most important to the customer, which was seen as low-cost, speed to market, and efficiency. With the climate discussion getting louder, the panel agreed it’s important for customers to understand the statistics regarding the environmental impact of LNG.