US Public May Limit LNG Imports.

Public resistance in the US to new LNG receiving and regasification terminals has become so intense and widespread that industry executives are increasingly uncertain about how to overcome it, several speakers told the American Gas Foundation's Executive Roundtable in Dallas. While expressing

"Frankly, it scares me", Robert Bryngelson, vice president of Excelerate Energy, said of the opposition to LNG terminals. He added: "Projects are simply not progressing quickly enough. Getting over the goal line and getting these projects done is almost impossible". He said that, while "[t]here are plenty of [LNG] suppliers out there that are hungry for the US market, they don't know what project to back". Randall Parr of LNG terminal developer Cheniere Energy shared Bryngelson's views on the growing problem of local opposition.

Venezuelan LNG Project Might Look For New Partners: The state-owned Petroleos de Venezuela (PDVSA) has given Shell and Mitsubishi Corp. of Japan a "final" ultimatum that they make a firm commitment to the Gran Mariscal de Ayacucho (Mariscal Sucre - ex-Cristobal Colon) LNG project before February 2005. Beyond that PDVSA might look for different partners for this project.

PDVSA and the two foreign companies have been talking on the project for more than 20 years and finally in 2002, Shell and Mitsubishi signed an MoU with the Caracas government to hold talks with the state firm to develop offshore natural gas reserves for the domestic market and for LNG exports. In November 2003 they signed a preliminary development agreement (PDA) and started negotiations.

However, Shell and Mitsubishi have said Caracas has recently moved to get other foreign firms to develop its Mariscal Sucre project. Differences arose as the Ministry of Energy and Mines in 2004 sought to change the basic terms of the PDA. The key elements of the change are the ministry's assessment of the Venezuelan market's gas requirements, the foreign companies[acute accent] stakes in the JV, the project[acute accent]s value and the liquefaction technology to be used.

PDVSA is considering splitting the Mariscal Sucre project into two separate ventures, one to produce gas and another to market. PDVSA has also indicated that it could go forward with the project alone, while looking for new partners if an agreement could not be reached in the coming months.

Shell[acute accent]s Venezuela president Joaquin Moreno has said his company was ready to agree to a deal "if [the negotiation] makes strategic and economic sense". He told reporters on Nov. 5: "It is just a matter of finding the best way to skin the cat". For Yasushi Iwamatsu, president for Mitsubishi Venezolana, the deal is there to be signed. He said his company was still negotiating the project and expected to agree on a "package deal" that will include selling gas domestically but also overseas at higher prices. Reuters quoted an unnamed analyst as saying: "The government needs to be aware other potential international investors are watching Mariscal Sucre very closely, and unfortunately what they are seeing are inconsistencies".

Under the PDA, PDVSA would own 60% of the venture, with Shell to hold 32% and Mitsubishi to have 8%. Earlier this month, the Qatari Energy Ministry confirmed that it was holding talks with Venezuela on Qatar's interest to become a partner in this venture, leaving unclear what share each of the partners will have in this.

Mariscal Sucre's project is to develop 10 TCF of proven gas reserve located in the Caribbean Sea close to northern shore of the Paria Peninsula in Eastern Venezuela, near Trinidad. The project's downstream element calls for a spending of around $2.7 billion on construction of an LNG plant for exports to growing markets in the US as from 2009. Venezuela's proven gas reserves have been estimated at 148 TCF.

Gazprom Sees 2005 Gas Output 547 BCM: Gazprom has forecast that its natural gas output in 2005 will rise 0.9% to 547 BCM. This is an increase of 5 BCM above the 542 BCM it expects to produce this year.

In a press release on Nov. 10, Gazprom said 2005 exports to Central and Western Europe would rise 3.6%, or 5 BCM, to 145 BCM. It said it will deliver 391 BCM to domestic consumers, and these volumes include gas from independent producers and oil companies from whom Gazprom purchases gas. Deliveries to Ukraine will stay flat in 2005 at 60.08 BCM. Gazprom plans to pay Ukraine 23 BCM in exchange for gas transit services, compared to 28 BCM this year. It was unclear whether this 23 BCM is included in the 60.08 BCM figure. Gazprom said it will deliver 18.6 BCM of its own gas to Belarus (see survey of Russia in the current volume, Nos. 7-11).