United States: LNG Activity Expanding

• U.S. LNG imports¹¹ in 2003 are expected to reach 540 Bcf (11 million tons), up from 229 Bcf (4.8 million tons) in 2002.
• The United States is both an importer and an exporter of LNG. LNG has been produced in and exported from Kenai, Alaska, to Japan for the last 30 years, exporting 63 Bcf (1.3 million tons) in 2002.
• While historically Algeria was the United States’ largest supplier of LNG, since 2000 it has been far surpassed by Trinidad and Tobago, which now serves as the source for a full 66 percent of the nation’s LNG imports. The United States imported 151 Bcf (3.2 million tons) from Trinidad and Tobago in 2002.
• In addition to Trinidad and Tobago and Algeria, the United States also received LNG cargos from Brunei Darussalam, Malaysia, Nigeria, Oman, and Qatar.

Current United States LNG Facilities

There are currently four LNG import terminals in the continental United States:

• Cove Point, MD: After about two decades of dormancy from international trade, Cove Point received final permission to re-open from the Federal Energy Regulatory Commission in July 2003. Its re-opening adds up to 365 Bcf (7.7 million tons) per year of deliverability. Dominion, the terminal owner, began commercial operations in August and had received 18 Bcf (0.4 million tons) as of the end of September 2003, all from Trinidad and Tobago.
• Elba Island, GA: This terminal, the smallest of the continental U.S. import terminals, was reactivated in 2001 and received ten cargos in 2002. Activity was slow at this terminal in the first quarter 2003 but has since picked up due to more LNG production from Atlantic LNG in Trinidad and Tobago. As of the end of September 2003, this terminal had received 41 Bcf (0.9 million tons) from 18 shipments, all originating in Trinidad and Tobago.
• Everett, MA: This terminal, owned by Distrigas, received 52 shipments carrying 117 Bcf (2.5 million tons) in 2003 through September, all from Trinidad and Tobago. Distrigas completed an expansion in early 2003 in order to serve a nearby power plant, bringing total deliverability to about 260 Bcf (5.4 million tons) per year.
• Lake Charles, LA: This facility, owned by Southern Union, received 186 Bcf (3.9 million tons) from 81 cargos in 2003 through September. This facility has recently been operating above baseload capacity. Shipments this year have come from Trinidad and Tobago, Algeria, Malaysia, Nigeria, Oman, and Qatar.

United States LNG Expansion

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• The four U.S.LNG import terminals currently have an estimated combined peak capacity of about 1.2 Tcf (26.0 million tons)per year and an estimated baseload capacity of 880 Bcf (18.5 million tons)per year.All four terminals either have recently completed an expansion or plan to expand their regasification capacity by 2006.
• There are at least two dozen proposals to build new LNG regasification terminals in North America over the next several years. By 2010, projects could be located in the Gulf of Mexico, Bahamas (with pipelines into Florida), offshore the U.S. West Coast, Mexico’s West Coast (with supply into the Southwest and/or California), and the U.S. and Canadian East Coasts.

United States Natural Gas and LNG Outlook to 2010

• EIA’s Annual Energy Outlook 2004 (AEO2004)¹² projects that four new LNG regasification terminals will be constructed on the Atlantic and Gulf Coasts from 2007 through 2010 to meet the 58-percent increase in LNG imports that is projected for that timeframe.
• The first new U.S. LNG terminal in more than 20 years is projected to open on the Gulf Coast in 2007. It is projected that additional terminals will be constructed to serve markets in Florida, the south Atlantic states, and the western Gulf Coast. EIA also forecasts that a terminal targeting the Florida market will be constructed in the Bahamas with the gas piped to Florida.
• Almost 60 percent of the increase in LNG imports would be served by expanded capacity at existing terminals.
• By 2010, the new terminals are projected to be collectively importing 812 billion cubic feet annually.

United States Natural Gas and LNG Outlook: Beyond 2010

• Based on EIA long-term forecasts, U.S.¹³ natural gas consumption is projected to increase from 22.5 Tcf in 2002 to 26.2 Tcf in 2010 and 31.4 Tcf by 2025. Domestic gas production is expected to increase more slowly than consumption over the forecast period, rising from 19.0 Tcf in 2002 to 20.5 Tcf in 2010 and 24.0 Tcf by 2025. The difference between consumption and production will be made up by imports, which are projected to rise from net imports of 3.5 Tcf in 2002 to 7.2 Tcf by 2025.
• Nearly all the increase in net U.S. natural gas imports from 2002 to 2010 is expected to come from LNG, with an almost 2.0-Tcf (42.0-million-ton) increase expected over 2002 levels. Net U.S. LNG imports are expected to rise from 5 percent of net U.S. natural gas imports in 2002 to 39 percent in 2010.
• Over the forecast period, net pipeline imports from Canada are expected to reach 3.7 Tcf in 2010, and then decline as Canadian fields mature and Canadian demand increases. It is projected that LNG will become the largest source of net U.S. imports by 2015, as Canadian imports decline.
• Mexico, currently a net importer of U.S. natural gas, is expected to remain so throughout the period, mainly to supply industry located on the United States– Mexican border. Exports to Mexico are forecast to decline after 2005 as terminals in Baja California, Mexico come online to supply both the U.S. and the Mexican markets.