Louisiana Economic Development (LED), a development agency, is looking to Asia and Europe as the main destinations for the US state’s natural gas in the coming years.
“Most of our contracts have been with Asian countries so far,” Larry Collins, LED executive director for international commerce, said in a briefing for reporters from Asia and Europe.
He cited Cheniere Energy, Inc., a liquefied natural gas (LNG) company headquartered in Houston, Texas as signing last year a 20-year, $30-billion contract with a Taiwan trading company.
Cheniere has facilities both in Texas and Louisiana, allowing it to ship from either sources depending on the availability of LNG, he said.
Mr. Collins said Louisiana is well-positioned to deliver the requirements of other countries as it has 17 oil refineries, making it the second-largest refiner in the US after Texas. Its network of pipelines also allows it to move LNG with ease.
“Louisiana is very uniquely situated geographically because we are at the mouth of the Mississippi River,” he said about the waterway that runs through the middle of the US “heartland” and allows it to reach 38 states by water.
“Many of the goods that are sent around the world come through Lousiana,” he said.
Mr. Collins said he expects “resource-deprived” nations such as Japan, South Korea and Taiwan whose economies are performing strongly as the likely markets for Louisiana’s LNG.
“It’s very important for them to tie up these resources,” he said, adding that China also has a “strong reason” to import LNG because of its requirements for power and manufacturing.
For Europe, he said it makes sense to import from countries other than Russia to diversify its sources.
“They don’t want to be tied to the Russians, there have some national security interests as well. They don’t want to be beholden only to the Russians for their supply. So to have a diversified source, maybe even if it were the same price, they would have two sources of supply,” he said.
US LNG exports mark a turnaround from 15 years ago when it was an importer of the fuel.
Mr. Collins noted the “shale renaissance” in which the US learned how to exploit resources out of such rock formations to extract gas, resulting in a surge in its production numbers.
“We now have a situation where companies, chemical companies, know how to break this oil up, how to break this gas into the molecules and turned to high-value products such as plastics, construction materials, automobile parts,” he said.