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Africa to overtake U.S. in meeting LNG trade growth: IEA
A view is seen of the Nigeria Liquified Natural Gas company (NLNG) during an aerial tour by the Royal Dutch Shell company, in Bonny, March 22, 2013. PHOTO BY REUTERS/Akintunde Akinleye
By Oleg Vukmanovic
15/04/2015
AMSTERDAM (Reuters) - African seaborne gas exports will play a bigger role in meeting global LNG trade growth than the United States, whose supply will be capped by mass domestic switching from coal to gas-fired power generation, the West's energy watchdog said on Wednesday.
Africa's LNG exporters in Nigeria, Algeria and Equatorial Guinea are set for a new supply wave coming from major new discoveries off the coasts of Mozambique and Tanzania, home to some of the biggest discoveries in a decade.
By contrast, the United States will fall behind as abundant gas supply muscles coal out of the domestic energy mix, creating huge demand for cheaper gas-fired power generation, Laszlo Varro, head of gas and power at the International Energy Agency said at the Flame gas conference in Amsterdam.
The scale of fuel switching facing the U.S. power generation sector outlined by Varro appears to be greater than previous estimates, which assumed coal might remain partly competitive as domestic gas prices edge higher.
"Africa will play a bigger role supplying the global trade growth than the U.S.," Varro said.
"Coal is in serious trouble in the United States, from (U.S. President Barack) Obama's administration climate policies to U.S. environmental regulations limiting emissions, we see a very large U.S. coal fleet being decommissioned in the next several years and almost no new coal plants being built," he added.
Varro said replacing all existing coal-fired capacity would exceed current U.S. gas production and predicted robust growth in gas consumption over coming decades.
Despite that, meaningful quantities of U.S. LNG will still be exported, Varro said. U.S. gas production driven by shale-gas drilling will see a "glorious decade" in the 2020s, but output will roughly come back to 2014 levels by 2040, he said.
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