As global gas output surges, U.S. seen to rival Russia in Europe
By Melissa Massey and Oleg Vukmanovic
LONDON Feb 21 (Reuters) - U.S. liquefied natural gas (LNG) by the end of the decade is likely to challenge Russian gas for market share in Europe as the region becomes increasingly dependent on imports, ConocoPhillips' head of LNG trading said.
A surge in production worldwide, driven by new projects in the United States, Australia, East Africa, Russia and Canada, could double LNG output to 600 million tonnes annually from 2018 and provide ample new supply to global markets, industry estimates suggest.
Kicking off the export growth, after years of stagnating supply, will be Exxon Mobil's Papau New Guinea LNG plant in the third-quarter of this year, followed by BG Group's Queensland Curtis project in Australia by year-end.
Most new Australian and east Africa supplies are expected to reach Asia to fill demand, while significant output from the United States and elsewhere is expected to arrive at European terminals.
"We believe that the European gas market will be a balancing market for global gas," said Birger Balteskard, global LNG marketing manager at ConocoPhillips, told the International Petroleum Week industry conference.
Balteskard said Europe's dependence on gas imports will grow as its domestic fields age and that America's proposed LNG export terminals will help meet that need.
"There is a potential large gap between demand and supply into Europe. We think by 2025 that will be as much as 25 (billion cubic feet) a day, which is significant," Balteskard said.
The United States, meanwhile, is producing record amounts of gas from shale, and more than a dozen export projects have been proposed, some of which could target Europe from 2015 onwards. Continued...