According to International Gas Union’s World LNG Report—2015 Edition, natural gas accounts for approximately 25 percent of global energy demand, of which ten percent is supplied in the form of liquefied natural gas (LNG). This compares to four percent in 1990. LNG supply has grown faster than any other source of gas—at an average rate of seven percent per year since 2000—and is poised to significantly expand its share of the gas market.
As of August 6, 2015, the Federal Energy Regulatory Commission has approved six LNG export terminals in the United States, totaling 10.62 billion cubic feet per day of capacity. Five of these facilities are located on the Gulf Coast, viz., Cheniere/Sabine Pass LNG (Sabine, La., at 2.76 Bcfd); Sempra/Cameron (Hackberry, La., at 1.7 Bcfd); Freeport LNG (Freeport, Tex., at 1.8 Bcfd); Cheniere/Corpus Christi LNG (Corpus Christi, Tex., at 2.14 Bcfd); and Sabine Pass Liquefaction (Sabine Pass, La., at 1.40 Bcfd). Exports are expected to begin in late 2015, and by 2020, the United States will have the third largest LNG export capacity after Australia and Qatar. Beyond the six LNG facilities already approved by FERC, an additional 34.47 Bcfd of LNG export capacity has been proposed in the United States, with the vast majority located on the Gulf Coast.
With its proximity to the Gulf Coast, its robust pipeline (or take-a-way) capacity, and its estimated 75 trillion cubic feet of recoverable gas, the Haynesville Shale is uniquely positioned to benefit from the global market that these LNG export facilities will provide. In addition, the Cotton Valley play, which is attracting increased attention, is further positioning North Louisiana to lead in natural gas production as new demand comes on line. According to ExxonMobil’s The Outlook for Energy: A View to 2040, global demand for natural gas is projected to rise by 65 percent from 2010 to 2040, the largest of any energy source. North American demand will grow by 40 percent driven by electric power generation (conversion from coal to clean-burning natural gas), petrochemical/manufacturing (using cheap natural gas as feedstock and fuel), agriculture (fertilizer), and transportation (fleet vehicles). These long-term trends will ultimately lead to greater price equilibrium in the natural gas markets.