Why LNG Now?

2002 US Natural Gas consumption = 22.6 Tcf
• 12 Tcf increase over next 10 years
! More electricity from natural gas
• Supply and Demand Issues
! Domestic production shortfall expected
! Canadian pipeline imports not adequate
enough to meet needs
! Supply/demand imbalance = higher prices

Supply and Demand Realities
• Higher natural gas prices drive greater LNG expansion, which serves to lower LNG production
costs
• Lower LNG production entices gas producers to monetize gas reserves, especially when import demand is rising and can’t keep up (applies mostly to North America)