While the US has joined the ranks of the very largest exporters of liquefied natural gas, there’s room for it to ship more of the fuel overseas – much, much more, according to one developer.
The country needs to add 100mn metric tonnes a year of capacity if it’s to capture the full potential of its gas reserves, Meg Gentle, the chief executive officer of Tellurian Inc. The US currently has 32.3mn tonnes of export capacity in operation, while global capacity is 392mn tonnes, according to Bloomberg NEF.
“We have not even begun to understand how much stranded gas we have in the US,” she said on Tuesday during a panel discussion at the BNEF Summit in New York.
Gentle also pointed to the 400mn cubic feet of gas being flared in the Permian Basin of West Texas and New Mexico. Nationally, the volume is closer to 1bn, she added.
Spot gas prices in the Permian tumbled to a record low for Tuesday, according to the Intercontinental Exchange.
The flaring volumes are “telling you that there’s not enough infrastructure” to take away the supply, Gentle said.
Gentle also said Tellurian is getting closer to signing partnerships that will allow it to proceed with its $28bn liquefied natural gas export project in Louisiana. It’s been working with about 30 companies and will move ahead with about a half-dozen, she said.
“We will have a nice portfolio of major traders, Asian counterparts, and even some from the Middle East,” she said in a Bloomberg Television interview. “We are a couple of months from being able to conclude and start construction.”
While Gentle didn’t identity any of the potential partners on Tuesday, she said they may include at least one oil major, and that she expects Driftwood to get its final approval from the Federal Energy Regulatory Commission when it meets next month. Tellurian shares have risen 54% this year, compared with a 20% gain for the Russell 2000 Energy Index.