ENTSOG TYNDP 2015

US: the shale gas boom and the LNG exports 1)

Until 2007 the USA was foreseen as one of the main future LNG importers. Never- theless since the shale gas boom the gas production has followed a continuous increase, leading gas prices in the US to levels around 4$/MMBTU, reaching minimums down to 2 $/MMBTU. The US recoverable shale gas resources are estimated to be 18,800bcm (recoverable resources) 2) . The current level of produc- tion is expected to be increased and maintained, allowing the US to become a net exporter by 2017. The low and stable gas price in the US compared to the Asian and European market prices, could create a strong business case for the export of LNG to these markets. The shale gas boom has encouraged the rapid emergence of liquefaction projects in the US, both on the western and eastern coasts. The enlarge- ment of the Panama Canal will enable greater connection between the Atlantic and Pacific for LNG transportation.

$ MMBTU

€ MWh

16

40

12

30

8

20

4

10

0

0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

USA

Europe

Japan

Figure 5.70: Evolution of gas prices in US, Europe and Japan (Source IEA WEO 2013)

Despite of the high potential for LNG exports, the American administration (DOE) has been cautious when considering approval for export projects to coun- tries with no free trade agreement with the US. A significant increase in the exported volumes could result in a price increase for the American domestic consumers. As of September 2014, nine projects have received the approval for the Non-FTA application, with a total exporting capacity of around 105bcma.

Approved permits to export LNG to non-free trade agreement nations Pending application

Figure 5.71: LNG exporting projects in the US (own depiction)

1) gas prices are expressed in $/MMBTU. The prices expressed in € will depend in the €/$ exchange rate. For the understanding of the figures below, the following approximation can be considered (corresponding to 1 € = 1.3 $): 1 $/MMBTU = 2,62 €/MWh) 2) EIA 2013

Ten Year Network Development Plan 2015 |

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