While the viability of liquefied natural gas (LNG) projects seems to rise and fall with current gas prices, LNG is expected to play an increasingly important role in the U.S. energy mix in the long term, experts said at a recent LNG conference in Houston sponsored by CWC Associates Ltd. LNG imports will grow from 1.3% of U.S. gas consumption currently to more than 3% by 2008, predicts Don Juckett, director of the Office of Fossil Energy for the U.S. Department of Energy. "LNG imports more than doubled between 1998 and 2000," Juckett noted, from 85 billion cubic feet (Bcf) to 223 Bcf. In 2001, LNG imports hit 235 Bcf. The record is 252 Bcf set in 1979. There are currently four LNG receiving terminals in the U.S., and all may be expanded in the future, Juckett said. The Everett terminal in Massachusetts has a send-out capacity of 450 million cubic feet (MMcf) per day and a storage capacity of 3.5 Bcf. Its daily send-out capacity could be boosted by another 165 MMcf. A facility at Lake Charles, Louisiana, has a send-out capacity of 700 MMcf per day, which could be increased by 300 MMcf per day-and a storage capacity of 6.3 Bcf. At Elba Island, Georgia, send-out capacity is 440 MMcf per day and storage capacity is 4.1 Bcf. It could be expanded by 360 MMcf per day. At Cove Point, Maryland, send-out capacity is 1,000 MMcf per day, and storage capacity (presently 5 Bcf) could be expanded by 2.8 Bcf. "Expansion of facilities is often more economic than new-builds," Juckett said. "Many [companies] have proposed new projects, but none are certain to go forward so far." Challenges to new LNG facilities include jurisdiction issues offshore, siting problems onshore and safety concerns on- and offshore. "There's a lot of information about LNG out there, but there's also a lot of myth and legend," Juckett said. Phil Bainbridge, vice president of global LNG for BP Plc, said LNG makes up 5% to 6% of the world gas trade, and this will double during the next 10 years. The cost of producing and shipping LNG has fallen an average of 2.5% a year during the past 10 years. "Cost reductions will help LNG compete with pipeline gas," he said. Robert Wilson, senior vice president of commercial operations for Tractebel LNG North America, said he expects spot trades in the U.S. LNG market to increase this year. In the past, the European market has been a more welcome destination for spot LNG cargoes, but softening natural gas prices in Europe and strengthening prices in the U.S. may change that trend. Wilson also predicts major LNG traders will pool their shipping assets to cut costs. When that happens, there may be overcapacity in the shipping business for a few years, which could free ships to deliver LNG to some more long-distance destinations, he said. -Jodi Wetuski