French gas group GDF Suez yesterday revealed a giant deal, the first of its kind, to ship liquefied natural gas (LNG) from the US to supply Taiwan.
The contract will include natural gas from shale production and is a sign of huge changes in global energy markets driven largely by the shale energy revolution in North America. Its value was not disclosed.
GDF Suez said it had signed an agreement to sell 800,000 tonnes of LNG a year for 20 years, starting in 2018, to state-run CPC Corp, Taiwan (CPC, 中油).
The gas would come from the Cameron LNG liquefaction plant in Louisiana in the southern US, fed by natural gas from normal and also from shale reserves.
“This sales agreement, the first of its kind, will contribute to export natural gas — including shale gas — produced in the US to the global LNG market and will contribute to diversification and security of energy supply,” GDF Suez vice president Jean-Marie Dauger said in a statement.
“It will also be a part of GDF Suez ambition to deepen its role in the Asia-Pacific region and to expand long-term supply into a region where LNG demand for the future is high,” said Dauger, who is responsible for global gas operations.
“We are pleased to be among the first movers in the export of shale gas from the US and to enter into a long-term relationship with CPC, and to contribute to the security of energy supply also in Asia,” he said.
The LNG market in Taiwan is one of the biggest in the world. Imports are expected to exceed 12.5 million tonnes this year, about the same as last year.
Asia is seen as offering great potential to gas exporters with prices more than 50 percent higher than in Europe and twice or even three times the level in the US.
Asian demand has been boosted by the halting of production from nuclear energy plants in Japan and by economic growth.
LNG is gas which has been cooled to very low temperatures so that it becomes liquefied for transportation in tanker ships.
On arrival at its destination, most of the liquid is then turned back into gas for injection into local gas distribution networks.
GDF Suez, the third-largest importer of LNG, operates a fleet of 14 tankers and transports 16 million tonnes of LNG per year.