The US needs to invest $150 billion in gas infrastructure to be able to service its growing natural gas production, even as it is capable of supplying the clean fuel at most competitive prices, an American gas company executive said on Thursday.
Speaking on the last day of the 16th International Energy Forum here, Tellurian Senior Vice President Amos Hochstein said that since rising oil prices were spurring higher production, US producers were facing a quandary due to lack of adequate pipeline infrastructure to evacuate the associated gas produced.
"We need well over $150 billion worth of investment in infrastructure in the US to support the gas production coming online," Hochstein said.
"Shale oil producers are reaching a point where they have to make a decision on whether to restrain their production in oil because they don't have the ability to evacuate the gas produced," he said.
According to the Tellurian executive, historically America's infrastructure was not built to handle the shale oil and gas revolution where producers are able to quickly step up production when prices rise.
Another problem, he said, was that there had been too little investment in constructing liquefied natural gas (LNG) terminals which could be used to export the surplus gas.
Hochstein earlier told reporters that his company was looking to market gas to India from their project under construction in the US at the price of $3 per unit, "which is the cheapest LNG in the world".
"To this you would need to add $1.50 for the transportation to India, and the only cost above this is that of the capital for investing to become a partner in our shale gas project," he said.
"Tellurian is not selling gas -- we are selling a partnership, offering to customers to come and invest and become a partner in our shale gas asset. The first LNG will be in the water by 2023."
Explaining that shale gas was expensive to produce, the American said the dynamics in the sector had changed.
"It is no longer a producer-consumer relationship. It is cheaper to buy LNG than produce it. Even some producers in the Middle East have set up LNG terminals to receive gas," he said, adding that US LNG prices were very competitive for India.
--IANS
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