FERC chief says US must compete more for LNG

Thursday, 08 November 2007

Kelliher was speaking at a conference called by the FERC to look at the state of the US natural gas industry.


“The reality is that LNG is the fastest growing source of US natural gas supply, and will remain the case for the foreseeable future. So, our gas market is steadily becoming less North American and more international,” Kelliher said.


He warned that the US was in competition with other importing regions of the world for LNG supplies and “we are not predestined to prevail.”


Kelliher pointed out that the US enjoyed certain advantages and disadvantages in the global competition for LNG supplies.


He said the nation’s underground storage capacity was far greater than any of the other LNG importing countries. The US also had a robust pipeline network, access to both the Atlantic and Pacific LNG markets and had a natural gas market that was transparent.


“Our principal disadvantage is the aversion by US gas purchasers to enter into long-term supply contracts for LNG,” he said.


He said he didn’t see competition as an issue among the North American countries for LNG imports.


“I think it is more of a question of North America competing with Europe and the Asia-Pacific nations for imports. Our success in that competition is vital to our energy security,” Kelliher said.

The FERC chairman also stated that US companies would have to keep building adequate   natural gas infrastructure to meet future circumstances.“This has been a very significant year for gas pipeline construction.

The Commission has approved more pipeline expansion this year than at any point during the last years, with the exception of 2001. As domestic production shifts and LNG imports rise, we face the continued need for new infrastructure,” he added.