The Northeast Natural Gas Market in 2030 LNG EXPRESS CONFERENCE Boston, Massachusetts September 21, 2006 William Trapmann Natural Gas Analysis Team Leader Energy Information Administration (EIA)

Outline EIA’s Long-term Energy Market Outlook Natural Gas Supply Outlook World Natural Gas Resources Northeast Outlook And Infrastructure The Outlook for LNG Imports

EIA’s Long-Term Outlook

U.S. Primary Energy Consumption by Fuel, (quadrillion Btu) Natural Gas Petroleum Nuclear Renewables Source: EIA, Annual Energy Outlook 2006 ProjectionsHistory Coal U.S. Primary Energy Consumption by Fuel,

U.S. Natural Gas Production, Consumption, and Net Imports, (trillion cubic feet) 15% 21% Net Imports Consumption Production Natural Gas Net Imports, 2004, and 2030 (trillion cubic feet) Source: EIA, Annual Energy Outlook 2006 HistoryProjections Average Wellhead Price (dollars per thousand cubic feet) Dollars $5.49 $5.92 Nominal Dollars $5.49 $11.20 U.S. Natural Gas Production, Consumption, and Net Imports,

U.S. Natural Gas Consumption by Sector, (trillion cubic feet) History Industrial* Electric Generators Residential Commercial Transportation** Projections * Includes lease and plant fuel ** Includes pipeline fuel Sources: EIA, Annual Energy Outlook 2006; EIA, Natural Gas Annual 2004

Natural Gas Supply Outlook

LNG Is Expected to Represent A Growing Share of U.S. Supply Over the Long-Term History Projections Source: EIA, Short Term Energy Outlook, August 2006, and 2006 Annual Energy Outlook. Long-Term Near-Term

U.S. Dry Natural Gas Production, 1990 – 2030 (trillion cubic feet) History Projections Associated/Dissolved Nonassociated Offshore Nonassociated Onshore Conventional Onshore Unconventional Alaska Source: EIA, Annual Energy Outlook

Net U.S. Imports of Natural Gas, (trillion cubic feet) Canada LNG Mexico ProjectionsHistory Source: EIA, Annual Energy Outlook 2006 Net U.S. Imports of Natural Gas, (trillion cubic feet)

U.S. LNG Imports, (trillion cubic feet) History Projections Existing Onshore Terminals New Terminals Source: EIA, Annual Energy Outlook 2006

Annual Energy Outlook 2006 reference case indicates that through Imports are expected to play an important role in U.S. natural gas markets, accounting for 21 percent of total U.S. natural gas consumption in 2030, compared with 15 percent in 2004 LNG imports are projected to grow sevenfold, from 650 billion cubic feet in 2004 to 4.4 trillion cubic feet in 2030 The most rapid growth in LNG import capacity will occur over the next decade, with peak annual capacity increasing from 1.4 trillion cubic feet in 2004 to 4.9 trillion cubic feet in 2015 Construction of new terminals is expected to slow after 2015 as rising natural gas prices limit consumption, especially in the electric generators sector Peak annual LNG import capacity in 2030 is projected to be 5.8 trillion cubic feet

World Natural Gas Resources

Source: Oil & Gas Journal, Worldwide Look at Reserves and Production, December 19, 2005 pp World Natural Gas Reserves, 2005 (trillion cubic feet) 187 2, , World Natural Gas Reserves, 2005 (trillion cubic feet)

World LNG Movements, 2004 (billion cubic feet) Source: EIA, Office of Energy Markets and End Use ( –USA –Canada –Mexico –S. & Cent. America –Europe & Eurasia –Middle East –Africa –Asia Pacific 109 –(Line thickness indicates volume) –LNG imports into Asia/Pacific –LNG imports into Europe & Eurasia –LNG imports into North & South America

U.S. LNG Imports by Country, (billion cubic feet) Nigeria Qatar Other Australia Trinidad and Tobago Algeria Source: Energy Information Administration Oman Malaysia Egypt * Estimate *

Northeast Outlook and Infrastructure

Northeast Interstate Pipeline Capacity, November 2005 (million cubic feet per day) Note: Corridor capacity levels are approximate. 216 MMcf/d 52 MMcf/d 1,195 MMcf/d 445 MMcf/d 1,820 MMcf/d 7,173 MMcf/d 628 MMcf/d 1,953 MMcf/d 1,100 MMcf/d Source: Energy Information Administration GasTran System Northeast Interstate Pipeline Capacity, November 2005 (million cubic feet per day)

Lake Charles, Louisiana 6.3 Bcf Storage Capacity Regasification Capacity: 2.1 Bcf /day Current U.S. LNG Import Terminals Current U.S. LNG Import Terminals Elba Island, Georgia 7.3 Bcf Storage Capacity Regasification Capacity: 1.2 Bcf/day Cove Point, Maryland 7.8 Bcf Storage Capacity Regasification Capacity: 1 Bcf/day Everett, Massachusetts 3.5 Bcf Storage Capacity Regasification Capacity: 0.72 Bcf/day Source: Energy Information Administration Gulf of Mexico, Offshore Gulf Gateway Energy Bridge Regasification Capacity: 0.5 Bcf/day

Northeast Natural Gas Consumption, (trillion cubic feet) Source: EIA, Annual Energy Outlook 2006 Electric Power Industrial Commercial Residential

Northeast Seasonal Natural Gas Load Patterns By Sector Source: Energy Information Administration. Residential Industrial Commercial Electric Power Billion Cubic Feet per Day

43 LNG Facilities 72 Underground Storage Facilities Liquefied and Underground Natural Gas Storage in the Northeast Source: Energy Information Administration, GasTran Gas Transportation System. = Underground Natural Gas Storage Facilities = LNG Facilities Liquefied and Underground Natural Gas Storage in the Northeast

The Outlook for LNG Imports

Net Imports of Liquefied Natural Gas in Three LNG Supply Cases, (Trillion Cubic Feet) Source: Energy Information Administration, Annual Energy Outlook 2006 HistoryProjections High LNG Base Case Low LNG

Lower 48 Natural Gas Wellhead Prices in Three LNG Supply Cases, (2004 Dollars per Thousand Cubic Feet) Source: Energy Information Administration, Annual Energy Outlook 2006 HistoryProjections High LNG Base Case Low LNG

Siting LNG Terminals in the Northeast Demand is expected to grow Indigenous supplies are limited Supplies must come from outside the region The U.S. and Canadian oil and gas producing areas are “mature,” so North American production potential is limited LNG terminals in the Northeast offer regional supply diversity, proximity to markets, distribution of LNG as a product Import facilities elsewhere may take advantage of existing infrastructure Northeast gas consumers will face direct competition for LNG imports outside the Northeast

William Trapmann Periodic Reports Short-Term Energy Outlook, monthly Annual Energy Outlook 2007, December 2006 and full report, February 2007 International Energy Outlook 2006, July Periodic Reports