Information on the U.S. Importation of Liquefied Natural Gas

Questions were raised concerning the use of imported liquefied natural gas by the United States. Specific questions covered the following: (1) liquefied natural gas sources and consumption; (2) price of imported liquefied natural gas (LNG) as compared to Mexican and Alaskan sources; (3) ownership interests of liquefied natural gas tankers; and (4) liquefied natural gas use by utility companies.

Consumption of LNG imports by the United States has not increased significantly in recent years and is not expected to do so in the foreseeable future. Almost all of our LNG supplies come from foreign sources; Algeria, Indonesia, Canada, and Mexico. Due to unknown variables such as the transportation cost of delivering Alaskan gas to the lower 48 States and the final negotiated price of Mexican gas, a meaningful cost and price comparison of these sources to Algerian LNG is difficult to construct. U.S. companies will build eight U.S. flag tankers for the transportation of imported LNG and U.S. utilities will receive the regasified LNG which they will use to meet their contractual obligations to supply natural gas to their primary customers.