Rising US Gas Flow Highlight LNG Export Potential
Conceptual studies on the technical and commercial feasibility of liquefying excess gas output on the US Gulf Coast for sale into higher-value export markets are on hold as cash-strapped independents like Chesapeake Energy, Quicksilver Resources and Petrohawk Energy slash spending amid falling gas prices, plunging share values and tightening credit. But the concept still has merit in light of the outlook for non-conventional gas. This includes the highly-prospective Haynesville Shale in northern Louisiana and east Texas, which analysts think could be even bigger than the Barnett play in north Texas. “A number of firms including ourselves have been talking about liquefying shale gas, although people have paused for a bit given what is happening in the market. It is an interesting concept, one that could make commercial sense if the shale basins continue to grow like they have been,” comments one company official. No one thinks the logistics of gathering, transporting and liquefying this gas will be easy, nor are they discounting the permitting minefields that lie ahead. But the prospect of tapping already-built import capacity – empty storage tanks, unused jetties and, in one case, the potential for reversing a takeaway line that runs within 100 miles of the Haynesville area – to facilitate exports and lower capital outlays raises intriguing possibilities.
