IN a statement that has clear implications for Western Australian exports of liquid natural gas, US Federal Reserve chairman Alan Greenspan has urged the US to import and process liquid natural gas to avoid sudden price hikes.
Dr Greenspan also said a major expansion of LNG terminal import capacity, and the development of new offshore re-gasification technologies, was required to cope with the imports.
The Federal Reserve chair made the comments in a recent speech to a Washington conference organised by the Centre for Strategic and International Studies.
He told conference delegates the recent rise in energy prices was substantial and persistent enough to influence business investment.
There are currently only four LNG processing facilities located on the US east coast.
However, Australian Petroleum Production and Exploration Association (APPEA) executive director Barry Jones said that, while Dr Greenspan’s comments added credibility to the argument, they constituted nothing new.
“The importance about Alan Greenspan’s comments is not what he said, but who he is,” Mr Jones said.
“As Federal Reserve chairman he has the status and credibility of an economic commentator.”
Further, Mr Jones, said increased LNG opportunities were being met in the current market with increased competition.
“We’ve demonstrated we can compete with the best in the world,” he said.
“We’ve got the gas, we’ve got the technology, we’ve got the demand, but the competition is high.”
That competition comes from an array of projects, including those in North Africa and the Middle East.
Mr Jones said educating the US market remained an ongoing concern.
This was particularly evident on the US West Coast where the difference between liquid petroleum gas (LPG) and LNG was not well known.
Some of that concern over LPG stems from a massive explosion and series of fires at a LPG terminal in Mexico City in 1984, resulting in 500 deaths.
Other concerns are due to a lack of information concerning the transportation of LNG.
Chamber of Minerals and Energy chief executive Tim Shanahan said improvements in transport technology made WA LNG sales to the US more viable.
He said the State’s good track record with Japan and recent contract with China provided a strong basis for diversifying the LNG marketing opportunities to countries such as South Korea and the US.
Shell, ChevronTexaco and BHP Billiton are the three companies marketing LNG from the State’s North-West Shelf to the US.
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