LNG import capacity oversupply reported -- The Quoddy Tides, Eastport, Maine

Several reports in the past two weeks by energy consultant firms indicate that there is a oversupply of liquefied natural gas import capacity for the United States.

The LNG Journal, the world's leading liquefied natural gas (LNG) publication, reports that North America faces an LNG regasification terminal overbuild. According to the publication, the East Coast of North America is facing a significant oversupply of LNG import capacity because of a shortage of supply.

PFC Energy, a Washington-based consulting firm, on March 19 released a report indicating that regasification capacity in the United States will significantly exceed projected LNG supplies by 2012. Terrell Benke, one of the report's authors, says that there is a "very large overbuild in LNG regasification capacity," noting that several LNG terminals have been constructed without firm supply contracts.

Consulting firm Bentek Energy released a report on March 25 predicting increased volatility in the U.S. natural gas market over the next two years as infrastructure projects, including LNG import facilities, come online. The report predicts that excess pipeline and storage capacity will divert gas from existing pipelines.

Adam Wilson, deputy project manager for Quoddy Bay LNG, says the overbuild for LNG terminals is true in the Gulf area of the U.S., but there are not a sufficient number of import terminals on the East Coast or West Coast. Quoddy Bay would provide LNG, from its proposed terminal at Pleasant Point, for the New England area, where there is only one import terminal, located near Boston. Wilson believes the New England area could accommodate two additional terminals.