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Manufacturers reiterate LNG warning after Cheniere deal

Keywords: Tags  Cheniere, Centrica, LNG, exports, America’s Energy Advantage, Nucor, Alcoa, Thorsten Schier


NEW YORK — A nonprofit group that includes major U.S. steel and metal producers has reiterated its warning that further exports of natural gas should be monitored carefully in light of a deal between Houston-based Cheniere Energy Partners LP and British firm Centrica Plc.

"We continue to urge the federal government to move cautiously on permitting additional natural gas exports in order to measure impact on price, security and jobs," America’s Energy Advantage said in an e-mail.

Under the 20-year contract, Cheniere will supply Windsor, England-based Centrica with 1.75 million tonnes of liquefied natural gas (LNG) annually, with the possibility of a 10-year contract extension (amm.com, March 26).

America’s Energy Advantage, which includes Charlotte, N.C.-based steelmaker Nucor Corp. and Pittsburgh-based Alcoa Inc., sees the domestic natural gas boom as key to a resurgence in the U.S. manufacturing sector.

"America’s Energy Advantage believes in supporting the natural gas advantage that has made the U.S. manufacturing sector more competitive, which has created jobs, spurred capital investment and increased exports of value-added products," the organization said.

On its website, the group cites a recent study by Boston-based consulting firm Charles River Associates stating that domestic natural gas prices could increase threefold by 2030 under a "high-export scenario," which the group says could have dire consequences for the domestic manufacturing sector. "In all, $90 billion of gas-intensive investment in manufacturing could be on the line."

However, producers of energy tubulars and such organizations as the American Petroleum Institute have widely touted LNG exports as a boon for the country as they are expected to increase prices and spur exploration (amm.com, Feb. 4).

Cheniere expects European demand for LNG imports to reach 87 million tonnes in 2015 and climb to 123 million tonnes annually by 2020 and 152 million tonnes by 2030, according to a company presentation. Asian demand is expected to grow even faster, reaching 192 million tonnes in 2015, 242 million tonnes annually by 2020 and 310 million tonnes by 2030.

In addition to deals with three British energy companies, Cheniere has signed LNG supply deals with Indian, South Korean and Spanish gas suppliers, according to the presentation.

The first two LNG trains at Cheniere’s Sabine Pass terminal in Louisiana are expected to start up in early 2016.


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