Voser hopes for US LNG-export restraint

Exports: Voser urges restraint from US exporters

Shell chief executive Peter Voser said he hopes the US will keep LNG exports at around 50 million tonnes per annum, at least initially, so industrialisation in the country can continue apace.

“Exports will happen,” Voser told Bloomberg TV. “But I hope that the US will actually keep most of the gas back home because it will help them to industrialise parts of the US more.”

Some forecasts put the US’ LNG-export capacity at around 120 million, Voser said.

The more modest figure of 50 mtpa would account for about 10% of the worldwide gas demand, he said, adding that US gas demand by the end of the decade will be roughly the same.

That kind of export capacity would allow for “quite sizable construction and infrastructure” to be built in US, Voser said.

Shell is one of the world’s biggest suppliers of LNG and currently accounts for 7% of global production.

The company has 22 mtpa of capacity now with another 7 mtpa under construction and options on another 20 mtpa.

Voser said Shell may look to build a liquefaction facility in the US.

“We are looking at various options at the moment and there is a high possibility that we build our own (terminal),” Voser said. “The next 12 months on this are quite crucial.”

The company is thought to be a front-runner to take over the remaining 8.8 Bcfd of liquefaction capacity at the proposed Freeport LNG project in Texas, with some suggesting the supermajor could be planning to take on a major role in running the facility.

Only one LNG project – Cheniere’s Sabine Pass proposal – has been approved to export the fuel from the US to non-free trade agreement countries.

That project would potentially export some 20 mtpa from five trains at full capacity, with first LNG expected in 2015. The first two trains are under construction and the third and forth are expected to break ground this year.

Another dozen or so projects are under governmental review.

A recent report from the US Department of Energy said LNG exports would, “in all cases”, be a net benefit to the US economy.

Separately, on Thursday a bipartisan group of more than 100 US lawmakers sent a letter to Energy Secretary Steven Chu urging the White House to approve more LNG exports.

The issue has proved politically divisive, prompting many in the manufacturing sector to oppose the push for LNG exports. Giants such as Dow Chemical and Alcoa say sending the US’ vast gas supplies abroad will hurt manufacturing at home and cost jobs.

Shell would be among those manufacturers potentially hit by the higher natural gas prices in the US that would likely result from greater exports. The company is planning to build a massive ethane cracker in Pennsylvania that would rely on natural gas for supplies.

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