By JAMES HERRON
PARIS -- The US government is likely to impose
limits on exports of liquefied natural gas in order to keep its
domestic natural gas prices low, executives from two major oil
companies with operations in the country said on Thursday.
This means that European natural gas prices are
likely to remain much higher than those in the US for years to
come, with negative implications for the competitiveness of European industry, they said.
Natural gas prices in the US have fallen to
10-year lows because of a boom in production of gas trapped in
shale rock. The US government "wants to keep this surplus to
keep the price down," in the long term, said Christophe de
Margerie, chief executive of France's Total, at the
Petrostrategies conference in Paris.
Several companies are planning to build plants
that would convert some of this domestic surplus of gas into
LNG that could be shipped internationally.
It isn't official policy, but the US Department of
Energy "will limit exports to keep pressure downwards [on
natural gas prices] in the US," said de Margerie. European gas prices are therefore
likely to remain at a significant premium to those in the US,
This could benefit US industry because "low
prices for natural gas offer manufacturers a powerful
competitive advantage," said Mark Williams, the downstream
director for energy giant Royal Dutch Shell.
If natural gas prices remain cheap in North
America, and oil prices remain high, this does mean there is a
great opportunity for natural gas to gain market share in the
transport sector, Williams said.
"Liquefied natural gas offers great potential
as a transport fuel," he said.
Shell plans to build a network of LNG refuelling stations for
trucks across Canada, he said. It is also looking at sites in
Texas and Louisiana where it could build facilities that would chemically
convert natural gas into diesel, Williams said.
Both projects would be major multi-year
investments and require new infrastructure, he said. For this
reason, it is hard to predict how big a role natural gas will
play in North American road transport, he said.
Dow Jones Newswires