By Selina Williams
LONDON--Inflation and U.S. domestic politics are likely to limit
the amount of liquefied natural gas exported from proposed projects
in North America to around 60 million to 70 million tons a year
over the next decade, Royal Dutch Shell PLC's (RDSB.LN) Chief
Financial Officer Simon Henry said Tuesday.
Currently companies including ExxonMobil Corp. (XOM),
ConocoPhilips Co. (COP), BP PLC (BP.LN), Sempra Energy (SRE),
Cheniere Energy Inc. (LNG), Shell and Apache Corp. (APA) are
seeking to export LNG from the U.S. and Canada in efforts to find
more profitable markets amid a continent-wide gas glut, due to the
shale gas boom, that has depressed prices.
Companies are hoping to capture value for cheap North American
natural gas in energy-hungry markets in Asia where gas sells for
several times more than the U.S. price.
Shell estimates that projects to export around 130 million tons
of LNG a year from the U.S. and Canada combined are currently on
the drawing board. Constructing the export infrastructure alone
would cost around $300 billion, with additional costs to develop
the gas production to support the projects, Mr. Henry said.
"If you get inflation, which you certainly would if everyone's
building at once, that's going to be a constraint and the other
constraint is going to be in Washington [DC] where at some point
the [U.S.] government will decide that exporting cheap American
energy and cheap American jobs to our competitors is no longer
acceptable," Mr Henry told reporters on the sidelines of an
industry event in London.
To date, only Cheniere Energy has approval to ship 2.2 billion
cubic feet a day of LNG from the Sabine Pass export facility in
Louisiana to countries not covered by U.S. free-trade
agreements.
Write to Selina Williams at selina.williams@wsj.com.
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