FT: Global gas revolution starts to take shape

Construction is well under way on the first US liquefied natural gas export plant outside Alaska, being built by Cheniere Energy. The first two trains, as LNG production lines are known, are already visible, and the foundations are being laid for a third. There are 2,000 people working on the site, rising to 3,000 next year to bring the plant into service by the end of 2015.

For gas consumers around the world, these are exciting times. Abundant US shale gas, unlocked by advances in horizontal drilling and hydraulic fracturing (“fracking”), has prompted about 25 proposals for LNG export projects.

The US Henry Hub gas price benchmark is roughly one-third of the price in Europe and one-quarter of the price in Asia, raising buyers’ hopes that, even allowing for the substantial costs of liquefaction, shipping and regasification, future LNG sales will be cheaper than traditional gas contracts linked to the price of oil, especially in Asia.  MORE