FAIRFAX,
VA, March 17, 2003 - Based on its recently completed annual
natural gas market study, ICF Consulting has concluded that
the current tight market for natural gas will continue through
2005, with Henry Hub prices averaging over $4.00/MMBtu through
2004 and between $3.50 and $4.00 (in 2000$) over the long term.
The study confirms the underlying long-term strength of the
natural gas supply in North America at prices that also will
support a significant expansion of liquefied natural gas (LNG)
imports.
Leonard Crook, an ICF Consulting Vice President states, "Our
studies suggest that imported LNG will be a vital source of
gas in the future."
Mr. Crook added, "One surprising result of our 2003
study is that LNG imports appear to have reached the tipping
point. LNG projects have always been vulnerable to lower cost
domestic production. For the first time, our models are showing
robust LNG import growth, even when we also see growing production
from traditional and frontiers gas basins." By 2005,
ICF Consulting expects LNG imports will reach 1.2 Tcf per
year. "Changes in treatment of LNG projects by the Federal
Energy Regulatory Commission, combined with reductions in
costs and increased competition among overseas producers,
have made LNG much more competitive."
Also driving this result is the higher cost of finding and
developing domestic gas resources, as more gas is located
in smaller reservoirs and in more difficult settings. ICF
Consulting anticipates domestic gas supply will remain tight
through about 2005, resulting in historically high prices
($4.00 or more per MMBtu) that will induce producers to go
after riskier exploration and drilling opportunities in the
Rockies, Appalachia, deep offshore Gulf of Mexico, coal bed
methane in Alberta, and the Scotian Shelf. These prices will
also support pipelines to bring frontiers gas—Mackenzie
Delta and Alaskan North Slope—to market around 2010.
Because of the high volumes of frontiers gas, prices will
fall in the post-2010 time frame until the market can absorb
it all.
"We view the next ten years as a window of opportunity
for LNG," Mr. Crook states. "The challenge to the
timing of new projects will be the cost of bringing them on-line
relative to the cost of new continental supply and pipeline
access to markets." Because of pipeline constraints,
LNG will be particularly attractive in certain markets.
The key drivers of ICF Consulting's forecast are the rate
of economic growth, particularly electricity demand growth,
oil prices, and technology improvements in exploration and
production of gas. Federal policies on air emissions regulations,
especially carbon, can have a major impact on gas use.
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ICF International (Nasdaq: ICFI) partners with government and commercial clients to deliver consulting services and technology solutions in the energy, environment, transportation, social programs, defense, and homeland security markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program life cycle, from analysis and design through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 1,800 employees serve these clients worldwide. ICF’s Web site is http://www.icfi.com.
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For Immediate Release
Contact: Douglas Beck
1.703.934.3820
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