This is the first in a seris of two briefs, entitled Atlantic Basin LNG Market Dynamics, that focuses on the LNG markets in the US and Europe.LNG is an increasingly important alternative energy source in both the US and European energy landscape. By analysing the largest LNG market in the Atlantic Basin, it is possible to understand the long term development of the Atlantic Basin market.



Report Highlights
LNG prices are not as volatile as natural gas prices, especially in the years prior to 2005. LNG, although used principally for power generation, is mainly a peak shaving commodity. That is, it is stored to offset seasonality and high peak periods. This explains the lower price volatility of LNG compared to natural gas. Canada has been the major supplier of natural gas to the US market. However, Canadian gas exports to the US has fallen by seven percent over the past five years. LNG is therefore a viable solution to compensate for the decreasing production of gas and gas imports from Canada. Algeria is the largest exporter of Atlantic Basin LNG (24.68 bcm) followed by Nigeria (17.58 bcm) and Trinidad and Tobago (16.25 bcm).


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Table 1: US LNG Projects 9


Figure 1: Global LNG regional markets 2
Figure 2: Historic and projected LNG growth in three regions 3
Figure 3: 2006 Exports of Atlantic Basin Producers 5
Figure 4: 1996 - 2020 Actual and expected growth in natural gas and LNG consumption in the Atlantic Basin 6
Figure 5: Expected US Atlantic Basin LNG consumption 1996 - 2020 7
Figure 6: 2006 US LNG imports by source 10
Figure 7: LNG import terminals are all located along the industrialised eastern US seaboard and oil producing Gulf Coast 12
Figure 8: Increasing LNG imports will not keep up with expanding terminal investment 13
Figure 9: Forward prices Henry Hub versus NBP (2008-13) 19
Figure 10: US Price of Imported Gas and LNG 1999-2006 20

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