BG Says U.S. May Allow LNG Exports From Gulf of Mexico

BG Says U.S. May Allow LNG Exports From Gulf of Mexico

By Eduard Gismatullin - Mar 22, 2011

The U.S. may allow liquefied natural gas exports from Gulf of Mexico terminals after advances in shale gas boosted output, BG Group Plc (BG/) said.

BG, the U.K.’s third-largest natural-gas producer, has been examining plans to use its Lake Charles import terminal in Louisiana for fuel exports, said Elizabeth Spomer, a vice president for business development. Cheniere Energy Inc., a Houston-based LNG terminal owner, in June said it may become the first in the continental U.S. to export LNG.

“The public policy debate hasn’t occurred yet,” Spomer said in an interview in Amsterdam late yesterday. “It’s generally not U.S. government policy to refuse exports on the basis that there is an impact on domestic prices. We wouldn’t be exporting corn and soya beans if that would be the case.”

The U.S. surpassed Russia as the world’s largest natural- gas producer last year after companies raised extraction of unconventional gas. BG, which is working with Exco Resources Inc. to tap U.S. shale gas resources, in February raised its outlook for U.S. shale output to 190,000 barrels of oil equivalent a day by 2015 from a previous forecast of 100,000 barrels a day.

‘Competitive’

“The U.S. could export relatively material volumes of LNG without any impact on the domestic gas price,” De La Rey Venter, Shell’s global head of LNG, told reporters today in Amsterdam. “Exports from the U.S. would be competitive especially in the Atlantic basin.”

The Gulf of Mexico has existing import terminals that can be converted for LNG exports, BG’s Spomer said. “We were thinking about monetizing our position at Lake Charles, but it’s way too early to talk.”

The global industry will need $2 trillion in investment to find and develop gas supplies equivalent to 20 times production in Norway through 2020, BG Chief Executive Officer Frank Chapman has forecast.

Norway, the world’s second-largest gas exporter, produces about 100 billion cubic meters a year of gas.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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