ConocoPhillips warns on US supply attitudes

Tuesday, 05 December 2006

"It’s disturbing to me that so much of the energy discussion in the US focuses on reducing the use of so-called unreliable foreign energy, particularly from Middle East producers," said ConocoPhillips Chief Executive Jim Mulva at the Gastech natural gas conference in Abu Dhabi in the United Arab Emirates.

The Qatargas III project includes a 7.8 million tonnes per annum LNG train, a large LNG carrier building programme, and the offtake is primarily destined for the US, starting in 2009.

"The somewhat diminished expectations for gas stem from higher natural gas prices and to the rising capital costs of petroleum industry projects," said Mulva, who also touched on the pressure on capacity to complete hydrocarbon projects.

“The boom in LNG and in the oil and gas industry generally – coupled with the general economic expansions in Asia and the US – have placed huge strains on the world’s capacity to produce everything from cement to specialized steels,” Mulva added.

“On the matter of security of demand, we all know that Middle East producers are now in the process of investing billions of dollars to add production capacity for both oil and natural gas,” Mulva said.

“These projects are predicated on expectations of demand often five or more years into the future, with a particular view toward the US market,” he added, pointing to the Qatargas III project as an example.