Guest column written by Navigant’s Richard Bass and Gordon Pickering for Forbes.com looks at the U.S. natural gas glut and why exporting it as LNG is a good idea.
The emergence of shale gas has caused natural gas prices in North America to drop to the lowest levels seen in decades. Shale gas resources elsewhere in the world, however, have not yet been developed to the same extent—creating a sustainable arbitrage opportunity. Given the potential profitability of liquefying surplus North American gas production and exporting it as Liquefied Natural Gas (LNG), a number of companies are now willing to develop capital-intensive natural gas export projects.
LNG exports will help to provide better balance between supply and demand in the market, dampening price volatility in North America, and providing circumstances in which industrial gas investments and feedstock natural gas purchases can be made with greater confidence in long-term natural gas pricing.
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