Energy Transfer Partners LP (ETP), Cheniere Energy, Inc. (LNG): How Much Natural Gas Can America Export?

Volume projections for LNG exports based on market share (volumes in billion cubic feet per day)

Author’s calculations

Based on these numbers, the current approved facilities would take about 7% to 8% of natural gas production when they’re up and running, and Goldman Sachs Group, Inc. (NYSE:GS)’s “sustainable levels” estimate would put exports at 10.2% of production. If we were to hold Liveris to his word, then he should be relatively pleased with the current pace of LNG exports.

What a Fool believes
Here’s the difficult thing to understand about opponents of LNG’s argument: They’re afraid that it will raise prices, but the success of both industries is reliant upon cheap gas prices. More specifically, LNG exporters need Henry Hub spot prices to remain below $5.10 per million BTU to make it a profitable venture.

Ultimately, the biggest challenge for U.S. LNG exports isn’t its battle with domestic consumers, but rather the stiff competition it will face from other regions that will look to export their own new-found gas reserves. Global demand for LNG is expected to grow by 8 billion to 9 billion cubic feet per day between now and 2020, and the trio of Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), and Royal Dutch Shell plc (ADR) (NYSE:RDS.A) have a combined 10 billion cubic feet per day capacity outside the U.S. on the drawing board. So it seems as though chemical manufacturers need not worry about the price of domestic gas, because LNG exporters will need the pricing advantage on U.S. gas just as much as they do.

The article How Much Natural Gas Can America Export? originally appeared on Fool.com.

Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter, @TylerCroweFool. The Motley Fool recommends Dominion Resources (NYSE:D). 

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