Seven giant overseas gas export terminals are expected to start up this year, expanding worldwide capacity by 20%. There's only one problem: the torrid world economy is dampening gas demand. With producers unlikely to scale back, with a slew of new LNG tankers and expensive gas export terminals coming stream, there's only one place that has the capacity and the appetite to absorb excess gas - the United States, where three trips to the energy buffet are never enough.
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“It’s completely counterintuitive,” said Murray Douglas, a global LNG analyst with Wood Mackenzie in Houston, who is predicting U.S. LNG imports will grow 30 percent to 456 billion cubic feet this year and to more than 1.1 trillion cubic feet by 2013.
“We don’t believe Asia and Europe will be in a position to absorb this new production, and the U.S. is the only market that can take it, that has a large amount of storage.”
Other analysts, including Houston-based Waterborne Energy and Raleigh, N.C.-based Pan Eurasia Enterprises, agree that an American gas import surge may be coming.
Even the Department of Energy updated its LNG import predictions for 2009 recently to include the possibility of such a surge.
LNG imports could be a challenge to shale gas producers:
The wave of imports might even be strong enough to challenge growing domestic natural gas production from various shale formations, including the Barnett Shale near Fort Worth and Fayetteville Shale in Arkansas.
“This can put pressure on U.S. gas prices and could delay the full development of some of the new shale projects,” Douglas said.