Liquefied Natural Gas Development: Overview and the Growth of Future Gas Supply for the North American Market
Keywords:Energy Law, Petroleum Law
AbstractThe business of liquefied natural gas (LNG) has very quickly become a topical and important energy concern. While the liquefication process has been developed and refined for a number of decades and importation of LNG is an accepted practice in the Middle East, Japan, Korea and parts of Europe, it is a relatively new source of supply in North America. However, increased North American demand for natural gas, coupled with diminishing production from accessible basins in Western Canada and the reduced costs and efficiencies of ships, liquefaction plants and storage terminals, have rendered LNG a viable and price competitive supply alternative. The LNG industry provides unique challenges to producers, regulators, consumers and stakeholders. Producers must not only negotiate development, joint venture and sale and purchase agreements, but also arrange for shipping and transportation and terminal services agreements. In North America, while regulators have divided jurisdiction over LNG terminal facilities on the basis of the location of the facility, the stage of production and the degree of integration with related infrastructure, they also appear to be encouraging further development by facilitating regulatory approval. As the Fairwinds and Qatar Petroleum projects demonstrate, the evolution of the LNG industry is dependent upon a delicate collaboration of governments, regulators, producers, financiers, consumers and stakeholders.
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