Ahead of the North American Gas Forum Energy Dialogues LLC spoke to Octávio Simões of Sempra LNG
…to discuss his views on the natural gas sector, where the market is heading and what the opportunities are ahead.
Energy Dialogues: 2013 has been a year of important milestones with the joint venture agreement announced between Sempra Energy, Mitsui & Co, GDF Suez SA and Mitsubishi for your Cameron LNG project. Can you tell us a little about the significance of this project for the North American and global LNG markets and what you foresee as the next steps in the project development?
Octávio Simões, Sempra LNG: Signing the agreements with GDF Suez, Mitsubishi and Mitsui for 100% of the capacity and 50% of the project equity created a “real” and viable project to supply LNG from the United States’ abundant sources of gas to the world market. This entry into the market will allow LNG customers to have a choice of pricing mechanisms and eventually will contribute to a world gas market fostering development and lower carbon emissions worldwide.
Next on our agenda of development is the receipt of the non-FTA license to export from the DOE and the FERC authorization to start construction. We expect construction to start in 2014 and first LNG to be delivered in 2017.
Energy Dialogues: The industry is eagerly awaiting the DOE’s project decisions on LNG export to non-FTA countries. What are your expectations and concerns about the timeline for approval?
Octávio Simões, Sempra LNG: The DOE has been doing a good job. Our expectations are that Cameron LNG will receive its license in the fall of 2013. Our concerns are that the DOE is not acting quickly enough and is not taking into consideration which projects are “real” and those that are not. Delays could lead to the US losing this window of opportunity to become a major player worldwide with all its advantages: geopolitical, trade, economic growth here and abroad.
Energy Dialogues: What do you see as the key economic impacts and advantages of the natural gas boom and ultimately a gain of market share through demand generation domestically and LNG export internationally?
Octávio Simões, Sempra LNG: The natural gas boom creates benefits in many related areas: construction, manufacturing, retails, balance of trade and local tax revenue to support areas like education and infrastructure. In addition, the US will be less dependent on politically unstable and/or unfriendly regimes and help our allies achieve the same.
Energy Dialogues: Where do you see the biggest challenges for natural gas in North America and how can those challenges be met?
Octávio Simões, Sempra LNG: The biggest challenges for natural gas in North America come from those that believe all fossil fuels are bad, not realizing that natural gas enables renewables.
Energy Dialogues: There seems to be an ongoing debate around natural gas as the future fuel or a bridge fuel? How do you see the importance of natural gas evolve?
Octávio Simões, Sempra LNG: Natural gas is in my opinion a fuel of the future to enable renewables like wind and solar to penetrate the market broadly and efficiently. With emission of CO2 being more than half of those of coal and oil, the advantage and role are clear. Furthermore, gas can play an important role in reducing the US dependence on foreign oil in the transportation sector.
Energy Dialogues: Sempra LNG is participating in the North American Gas Forum – where do you see the key benefits of the forum to Sempra LNG and on a broader scale how can the North American Gas Forum contribute to advancing the natural gas sector and emphasizing important industry dialogue?
Octávio Simões, Sempra LNG: Fora like the North American Gas Forum where a variety of stakeholders come together in a setting designed to promote candid debate and exchange of views play a key role in advancing our industry. The exchange of different perspectives makes one think about one’s own view. We will not all agree, but we will better understand what is needed and focus on what is important to move forward.
