Annual
Energy Outlook 2003 with Projections to 2025
Table 4. Components of LNG trigger prices for
new facilities (2001 dollars per thousand cubic feet)
| Component |
Low |
High |
| Production |
0.25 |
0.60 |
| Liquefaction |
1.32 |
1.72 |
| Shipping |
0.89 |
3.72 |
| Regasification |
0.45 |
0.87 |
| Stranded natural gas production costs represent expert judgments based on sources that include Zeus Development Corporation, 2001 World LNG/GTL Review (Houston, TX, 2001), and “Asian Gas Prospects-1,” Oil & Gas Journal (March 5, 2001). Liquefaction costs for different supply sources are based on an average liquefaction capital cost of $1 billion for one train (3 million metric tons of LNG or 143 billion cubic feet per year) amortized over a 20-year period with a 12-percent discount rate and a 3-year construction period, adjusted to account for individual plant factors such as age and location. LNG per-mile transportation costs are based on the distance-weighted average of per-mile shipment costs from Australia to Japan and from Indonesia to Japan. The shipment costs are drawn from “Asian Gas Prospects-1,” Oil & Gas Journal (March 5, 2001). The per-unit average cost is applied to the distances from supply sources to different LNG receiving terminals in the United States to arrive at initial transportation costs. Final transportation costs are computed taking into account the return on capital (12-percent rate of return) based on a $165 million capital cost per ship, depreciation over a 20-year period, and an assumed tanker capacity of 3 billion cubic feet per trip. Regasification costs were arrived at using expert judgment based on capital and operating expenses developed by PTL Associates for a generic LNG import terminal with two storage tanks and a total capacity of 183 billion cubic feet per year, at a seismically inactive site with no requirement for dredging or piling. The costs were adjusted to account for land purchase, rate of return, site-specific permitting, special land and waterway preparation and/or acquisitions, and regulatory costs. | ||