WASHINGTON, April 17 /CNW/ -- Hess LNG CEO Gordon Shearer told the Platts
Energy Podium here Tuesday that construction of new liquefied natural gas
(LNG) import and processing terminals in the United States is highly unlikely
over the next ten years due to community pushback and overly- restrictive laws
at the state and local level. Hess is familiar with construction constraints,
given the fact that one of its own LNG import projects in the northeast United
States is embattled.
Shearer discussed the prospects for new projects by the LNG industry at
large, region by region. Referring to the Energia Costa Azul project in Baja
California, Mexico, Shearer said: "I think that's it for the West Coast within
the next ten years." In the Gulf of Mexico, he said no new terminals are
likely beyond those already in construction.
As for the East Coast, Shearer said, "Boy that one's tough; we've got one
in Canada [The Canaport LNG project in St. John's, New Brunswick] that's
clearly in construction, I struggle to see many more. The problem on the East
Coast is the opposition is going to be tremendous. Who's got the patience, the
time, the energy, and in the end, the money to get through it?"
As slim as the onshore prospects are, Shearer said the outlook for
offshore construction of new LNG facilities is even slimmer. And this could
be a particular problem, he explained, given the fact that US and global
demand for gas is outstripping supply and LNG will become increasingly
Shearer has been the public face pressing for support for building the
controversial Weaver's Cove LNG project in Fall River, Massachusetts. The
proposed import terminal has already secured a permit from the US Federal
Energy Regulatory Commission (FERC). But it continues to battle opposition
from local groups and members of Congress who say LNG is too dangerous to be
shipped into a port so close to population centers.
Still, Shearer said he expects the terminal will be built and in
operation by 2011. He expressed optimism that a federal court will uphold
FERC's permit, and said the Coast Guard will support the developer's effort to
use smaller ships to pass beneath a bridge that would block passage of larger
tankers. All of that, he said, should clear the way for the project, which
would enable 800,000 thousand cubic feet per day (Mcf/D) peak sendout.
Shearer also said the LNG industry is largely in flux right now as
supplies from Europe, the Middle East, Africa, the Caribbean and South America
continue to be uncertain, the cost of building liquefaction capacity
increases, and political turmoil puts some projects at risk.
From an import versus export perspective, price, demand from Europe, and
the size of the US market will keep United States on the world LNG import
stage. "What you'll see in the US market is a surge-and-slump type of
scenario," the Hess executive told Podium attendees. "But supply is definitely
going to make it here," Shearer insisted.
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