In an interview on E&ETV yesterday, Cheniere CEO Charif Souki said that domestic natural gas prices could drop to $2 per million British thermal units as a result of improved drilling technologies, regardless of whether LNG exports are increased.
“ The rationale is this is no longer an exploration play. We know where the resource is. This is now a technology play. Technology plays become better, not worse.
We are learning how to image better, so we know where we have to drill. Our drill bits are getting better, so we know how to manage them and get them to the right place faster and better with less intrusion.
John Berge was talking last week about being able to reduce the amount of water used in the fracking process by 80 percent over the next few years. So, this is going to become a better and better process,” he said.
“We’re very early in the learning curve and we’re going to be able to find this resource more easily, faster and cheaper over a long period of time.
Whatever we can do to export is not going to be sufficient to make any impact at all. Most of the studies talk about 20 cents, I would propose that 20 cents statistically is insignificant, because gas prices can go up or down 20 cents every week. So, over a 20 year period, if our impact by modeling is 20 cents, that’s fine,” he added.
Cheniere of USA is developing a project to add liquefaction and export capabilities to the existing infrastructure at the Sabine Pass LNG terminal.
The Liquefaction Project is being designed and permitted for up to four modular LNG trains, each with a nominal capacity of approximately 4.5 mtpa.
In November 2011, Sabine Liquefaction, a unit of Cheniere, entered into a lump sum turnkey contract for the engineering, procurement and construction of the first two trains of the project with Bechtel Oil, Gas and Chemicals.
Sabine Liquefaction has also entered into four long-term customer sale and purchase agreements for 16 mtpa of LNG volumes, which represents approximately 89 percent of the nominal LNG volumes.
The customers include BG Gulf Coast LNG for 5.5 mtpa, Gas Natural Fenosa for 3.5 mtpa, KOGAS for 3.5 mtpa and GAIL (India) for 3.5 mtpa.
[mappress] LNG World News Staff, March 20, 2012; Image: Cheniere