LNG: Fuel of the Free

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Researched by Industrial Info Resources (Sugar Land, Texas)--With all the attention being paid to the G20 talks this past week, and of course with America's new president, a businessman, it's not surprising that Donald Trump is using this opportunity to make business deals for America and forgo the uneventful and lingering nuisance of proposals and speculation. With the U.S. poised for a resurgence in oil and gas production, as well as more liquefied natural gas (LNG) production and export terminals coming online, it makes sense that the leaders of the U.S. government would promote U.S. business on a world stage.

Europe has long been held to the whims of Russia in regard to purchasing supplies of natural gas, but with the U.S. producing an abundance of LNG and more than ready and able to ship the product, it would seem Europeans have a free market opportunity opened to them. Not one that will be dictated by regional conflicts or favors, not one that would seem to be available as long as the Russian government gets its way, but rather a true supplier of a much-needed commodity for the continent.

Poland's state gas company PGNiG (Warsaw) already has entered into a spot purchase agreement with U.S. company Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas), and the first delivery arrived in June. It seems more negotiations are ongoing, without any confirmation from PGNiG or Cheniere on future contracts or agreements at the time. President Trump and Poland President Andrezej Duda participated in a roundtable for the Three Seas Initiative and took advantage of their shared vision prior to the G20 Summit to positively, publicly refer to the benefits for both nations regarding LNG shipments from the U.S. to Poland. Trump even mentioned in his speech in Warsaw that Poland should not be "held hostage to a single supplier of energy," referring to Russia's natural gas supply dominance in Europe.

Currently, the U.S. produces close to 15 million metric tons per year of LNG, and that is expected to rise to approximately 75 million metric tons per year of LNG by 2020. In just three short years, the U.S. is expected to increase LNG production by five times the current production rate. The U.S. is stepping out on the world stage of energy production and is planning for a standing ovation.

The U.S. imports about 10 million barrels a day of petroleum products, with that number decreasing. The aim is to achieve energy independence and be a net exporter of petroleum and LNG. The benefits the U.S. will offer international energy customers include a stable government, commitment to a free market and abundance of supply. The multibillion-dollar investments of U.S. companies securing the natural gas supplies, transporting the feedstock, construction of the production and export terminals, as well as friendly and safe ports for shipping LNG, allow the U.S. to gain confidence from existing and potential customers. Most tolling agreements are established for 20-year terms, and this adds to the longevity of the commitment by the companies and the U.S. in providing energy to the world.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.