During a conference in Tokyo in June 2003 Sir Philip Watts, chairman of the committee of managing directors of Royal Dutch/Shell said, "Gas has the potential to become the most important fuel for a generation."

His speech indicated some of Shell's strategic thinking about the world market for gas. Now we are in a headlong rush towards satisfying growing gas demand, particularly in the United States and Europe where liquefied natural gas (LNG) is the energy solution many operators are seeking.

Global LNG trade growth from 1964-2001 included:

• 1964 first LNG shipments - barely 5 Bcm a year
• 1980 Nearly 40 Bcm
• 1990 More than 80 Bcm
• 2001 More than 140 Bcm a year

In January, 2004, Mitsubishi's Californian subsidiary Sound Energy Solutions was due to file an application for a new US $400 million LNG reception plant at Long Beach, Calif. It is scheduled to start operating in 2008 supplying between 700 MMcf/d and 12 Bcf/d of gas - 10% of Californian demand. It's the latest of some 35 proposed US terminals lodged with authorities in the last 3 years, Reuters reported.
Two LNG terminals were approved in 2003, and another six are likely to be built within 15 years, according to analysts, Reuters suggested, "To bring imports to a market plagued by high gas prices."
ExxonMobil has filed for another project, the Golden Pass LNG Terminal. It will be a $600 million facility near Sabine Pass, Texas, due to begin operating also in 2008/9 providing 1 Bcf/d and double that with a capacity expansion. Exxon began making submissions to the US Federal Energy Regulatory Commission (FERC) for the project, and has options for other LNG import sites at Corpus Christi, Texas, and Mobile, Ala., Petroleum Finance Week reported last November.

Last October ChevronTexaco announced a plan to build a new $650 million LNG terminal 8 miles (13 km) off Baja, California, to produce 1,400 MMcf/d of gas and applied for permits from Mexico's energy and environmental regulators for using a gravity based structure (GBS). Ove Arup in the United Kingdom has recently designed a GBS for offshore US LNG plants. The new terminal is intended to import gas from the 12.9 - 40 Tcf Gorgon gas field off Western Australia under development by ChevronTexaco with Shell and ExxonMobil.

Concrete is also favored for construction of another North Adriatic LNG terminal being developed by ExxonMobil with ENI. Early in 2004 Aker Kværner won a front-end engineering study worth $21 million for the project. Design parameters for the plant include installation in a water depth of 95 ft (29 m) and located 10 miles (17 km) offshore. It will take LNG shipped from the ExxonMobil-operated Qatar LNG project - exploiting Qatar's North Field, with estimated reserves of 900 Tcf of gas - re-gassify LNG, and export into the Italian network. Storage will be provided for 66 million US gallons (250,000 cu m) of LNG and re-gassification capacity for up to 6 million tonnes of LNG per annum will be built.

Announcing the contract, Aker Kværner's Executive Vice President Simen Lieungh said, "When approved, this will be the first offshore concrete LNG terminal in the world. A number of similar prospects are being considered."

Expertise acquired constructing concrete platforms for the Norwegian sector of the North Sea will be used in the terminal design by Aker Kværner Contracting AS. The Norwegian group has already won engineering for other terminals in the United States - in Baja and for Cove Point.
Exxon and Qatar Petroleum each have 45% of the Adriatic LNG terminal project and Italy's Edison Gas holds 10%. Last year Edison Gas of Italy agreed to increase LNG supplies from the Ras Laffan LNG II project in Qatar - owned by Exxon and Qatar Petroleum and dubbed Ras Gas II - from 3.5 million tons per annum (mtpa) to 4.7 mtpa of LNG, commencing in 2007.

Shell International Gas and Sempra Energy plan to build another new $600 million LNG reception terminal at Baja California, Mexico, with a 50/50 joint venture which will be able to supply 1 Bcf of gas per day. Located at Costa Azul, 14 miles (22 km) north of Enseda, the facility will combine two LNG terminals previously planned by Shell and Sempra. About half the output is expected to meet demand from west Mexico and any surplus will be piped to the southwestern United States. Construction is due to begin mid 2004 with the terminal becoming operational early 2007.

Donald Felsinger, group president Sempra Energy Global Enterprises said, "The decision to combine and develop a single successful project in Baja California blends the permitting, technical and logistical expertise required to get this project underway."

Sempra is already developing another LNG terminal, Cameron LNG, at Lake Charles, La., the largest US LNG import terminal. It has approval from the US FERC to expand Lake Charles capacity from 4.7 to 8.9 mtpa, which is due for completion 2006. Since January BG Group has a deal to take 100% of capacity there.

The company also plans to upgrade another LNG terminal at Providence, R.I. in the Unites States and has a deal with Petroplus International to develop a UK terminal at Milford Haven, Wales. Due to commence operating 2007, it will be operated by Dragon LNG Ltd established by Petroplus. BG Group has committed to 2.2 mtpa of LNG production.

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