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MARINE | LNG In association with Envista
Insurers to benefit from US LNG boom
The US has been a consistent net exporter of natural gas since September 2017. This supply growth is having significant impacts for offshore energy, shoreside terminals, shipbuilding, and vessel operation. Michael Venturella, (left) Practice Leader-Marine Group, and Guillermo Ramirez, (below left) Principal Engineer-Major Loss, of Envista Forensics provide analysis of the potential risks and benefits for the insurer to consider with this growth According to the US Energy Information Administration (EIA), the US first saw a few months as a net exporter of natural gas in April 2017 and has made the transition to consistent net exporter since September 2017. While production of natural gas offshore has significantly declined over the last 20 years, forecasts from the EIA indicate production offshore has leveled and will not decline in future years. United States domestic consumption of natural gas has increased by about 30%, but, the additional shale gas production had the US exporting 5,280 billion cubic feet in 2020, which is more than double the imported volume from the same year.
PRODUCTION STORAGE AND DELIVERY While production offshore has declined by over 60% since The Marine Insurer Americas Edition | June 2021
2000, this growth has been due to shale gas obtained by fracking, which has seen a 400% growth during the same timeframe. The basic process to produce natural gas offshore is typically partnered with oil production. Exploration and production have evolved from stationary rigs in shorelines to rigid platforms in shallow water and now new ventures in deep (more than 20,000 ft.) and arctic waters that have resulted in new technologies and challenges not seen before by the industry. The basic process of offshore gas extraction starts at the well where oil and gas are extracted and transported by pipeline to a platform of vessel (ie FSO or FPSO). The gas is separated from the oil (gas and liquid phases) and further separated, or cleaned, for commercial use. The natural gas is then locally stored for offloading to a transportation vessel or directly delivered onshore via pipeline.
