Liquified natural gas (LNG) gives gas a global reach and it has many advantages compared to gas transported by pipelines, Andrew Walker, Vice President of Strategy at Cheniere Europe said Thursday.
'This is a transformational era for energy. We are seeing gas in a fundamental change, and it will become a competitive commodity in its own right,' he said.
'LNG has given gas a global reach. Gas used to be a regional fuel. The U.S. will change the game by making LNG more affordable, and available at a cost-competitive rate,' he added.
Cheniere Energy's Sabine Pass project in the U.S. state of Louisiana will be the first LNG facility in the U.S. to export domestically produced gas to countries that the U.S. does not have a free trade agreement (FTA) with.
While the first LNG export cargo will be shipped from the facility at the beginning of next year, Walker talked about the importance of this significant threshold for the U.S.' importance in global energy market and the gas industry worldwide.
Walker stressed that LNG has the capacity to respond more quickly to supply and demand shocks in the global gas market.
'LNG is going to impact the structure of trade in the industry. While most gas deals are based on long-term contracts, the U.S. will create increasingly more liqudity, and more resilience to shocks,' he explained, and added 'LNG is a more attractive commodity because of its resilience to price shocks [in the market].'
Cheniere's Sabine Pass project was first to acquire an LNG export permit in the U.S. It was authorized in 2012 to export LNG up to the equivalent of 2.2 billion cubic feet (66 million cubic meters) per day of natural gas for a period of 20 years.
The U.S. Energy Department announced on June 26 that it authorized Cheniere's Sabine Pass project to export additional volumes of LNG, up to the equivalent of 1.38 billion cubic feet (41.4 million cubic meters) per day of natural gas for a period of 20 years.
With the latest approval, the project now has authorization to export LNG up to the equivalent of 3.58 billion cubic feet (107.4 million cubic meters) of natural gas per day for a period of 20 years.
Apart from the Sabine Pass project, the U.S. Energy Department has also aprroved 7 other project to export U.S. LNG to non-FTA countries. This means domestically produced U.S. gas will increase in future, and gain a global reach.
By Ovunc Kutlu
Anadolu Agency
ovunc.kutlu@aa.com.tr