• Wednesday, 16 May, 2012

'Small role in LNG for unconventional gas'

-

Aleya Begum , Aleya Begum

 20 April 2010 13:33 GMT

Unconventional gas will play a limited role in the future liquefied natural gas industry, contributing no more than 5% of total global supply by 2020, Frank Harris, the head of WoodMackenzie's LNG Consulting unit, said today.

“We fully expect unconventional gas feedstock to become a feature of the LNG supply industry, but its suitability as a feedstock appears limited and it will be geographically constrained - it is hard to see the next Queensland at the moment,” said Harris said in a video presentation broadcast at the LNG16 conference in Oran.

Harris referred to unconventional LNG projects as those with unconventional feedstock, such as shale or coal, as well as those where the location of the liquefaction plant is unconventional - including offshore plants, floating LNG plants or modified LNG tankers.

Unconventional gas is attractive to the LNG supply industry for three reasons, Harris said.

Firstly, it is largely accessible and not controlled by the national oil companies. Secondly, there are limited exploration risks, and finally, the raft of unconventional projects under way is attracting significant investment which enhances project economics, he said.

“With regards to the other element of unconventional LNG projects, floating LNG solutions will be a niche play and will not become a major part of the industry’s supply mix,” Harris added.

“Whilst unconventional LNG does have an, albeit limited, role to play, the significant impact of unconventional gas on the LNG industry is more likely to be the reduction in LNG demand that it causes.

"We have certainly seen this in North America where shale gas has significantly impacted LNG demand,” he said.

Frank Harris was due to speak at the LNG16 conference this week, but was unable to make it to Algeria because of ongoing travel disruption in Europe. His address was made via video link instead.

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