The U.S. is too attached to its supply independence to become a huge natural-gas exporter, even though the country has been experiencing a substantial oversupply situation due to a shale-gas extraction boom over the past two years, Jean-Francois Cirelli, co-chief executive of French power operator GDF Suez SA (GSZ.FR), said Thursday.
The U.S. is too attached to its supply independence to become a huge
natural-gas exporter, even though the country has been experiencing a
substantial oversupply situation due to a shale-gas extraction boom over the
past two years, Jean-Francois Cirelli, co-chief executive of French power
operator GDF Suez SA (GSZ.FR), said Thursday.
Some
U.S.
shale
gas producers have been requesting export licenses from the
U.S.
authorities, as the surplus has dramatically lowered the spot price to around
$2 per million British thermal units, or MBtu, the industry's standard--this
price currently stands around $11 in
Europe
and
$18 in
Asia
.
U.S.
natural gas exports are seen by industry participants as a possible threat to
the hegemony of
Qatar
,
Norway
and
Algeria
as
the world's biggest natural gas exporters.
"It doesn't seem that obvious that the
U.S.
will
export huge amounts of natural gas, due to political reasons and not economical
ones," Mr. Cirelli told Dow Jones Newswires on an interview on the
sidelines of the World Gas Conference in
Kuala
Lumpur
. "The
U.S.
are
very fond of their energy supply independence."
More interesting is whether Canadian unconventional gas producers will find a
way to export to
Asia
, where current strong demand
will likely keep increasing as the region's economy remains buoyant and as
Japan
is
looking for alternatives to nuclear following the
Fukushima
nuclear disaster, he said.
Because of the strong demand for gas in
Asia
,
prices there are unlikely to substantially decrease, he said.
GDF Suez, one of the world's largest power distributors, has sealed deals with
China
's
CNOOC Ltd. (CEO) to supply gas there, Mr. Cirelli said. He doubts if the
country's shale gas reserves will be exploited any time soon, due to the
technical difficulties the location of the fields represent--the lands are dry
and the extraction of shale gas, through fracturing of the rock with the
injection of high-pressured water mixed with chemicals, requires huge amount of
water.
"GDF Suez hasn't yet taken a strong position on Chinese natural gas but
that's what we're aiming at," he said.
After Russian gas giant OAO Gazprom (GAZP.RS) mentioned recently that it was
seeking new partners for its Shtokman Arctic gas project, Mr. Cirelli said his
company had no interest in taking part in the development of what is one of the
world's largest natural gas fields.
Mr. Cirelli also rejected any interest from GDF Suez for BP PLC's (BP) stake in
its Russian joint-venture TNK-BP, which "isn't in our core business."
Elsewhere in
Europe
, Mr. Cirelli said a lack of
proper incentives to curb carbon emissions has resulted in the re-emergence of
coal as an alternative to out-of-favor nuclear, but natural gas should be the
preferred source. He insisted the European exchange trading system, which
places a price on carbon dioxide emissions, could be detrimental to
investments, such as in Belgium.
As the Belgian government is yet to announce plans for its energy mix strategy,
GDF Suez--which owns seven nuclear reactors there and wants to expand their
lifespan by ten years--could develop some renewable energy capacities as a
valid alternative. But not gas-fired plants as financial conditions aren't
supportive, he said.
In the company's domestic market of
France
, GDF
so far hasn't requested a regulated tariffs increase, Mr. Cirelli said. Regulated
tariffs are reviewed every quarter and can only be increased by a decision from
the government, acting upon the advice of the country's energy regulator and
after gas distributors have made a request.
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