Editorial comment

Adrienne Blume, Editor

In the US, LNG export terminal operators are gearing up to send liquefied natural gas to world markets. As of the time of writing, Cheniere Energy was due to ship out its first tanker of liquefied Texas shale gas by early March. A flurry of other terminals is scheduled to follow suit.

The US exports will contribute to a predicted tripling of global LNG supply by 2020 amid a wave of new production from the US, Australia, and Asia-Pacific. The new suppliers are highly visible entities, with their multi-billion-dollar liquefaction projects that will source natural gas from shale formations, coal seams and conventional gas deposits. But where will the gas go once it is liquefied?

Many of the US export projects had focused on Asia as a destination market when gas prices were high and demand was raging. However, with the slowing of demand from Asia and the worldwide dive in commodities prices, exporters’ attention has now shifted to Europe.

Europe’s energy security comes largely from diversity of supply, particularly in light of its repeated disagreements with major gas supplier Russia. However, Europe has also been serving as a dumping ground for re-exports of Australian LNG cargoes from Asia, indicating that Europe will continue to be oversupplied with gas through 2016. Luckily for US exporters, Europe has both the import infrastructure and trading clout to absorb most of the additional supplies. GP