Barcelona — North American shale gas is cheap and abundant, factors that have fixed the 

world's attention on the continent to fuel the bulk of future LNG export growth. 

But there are challenges ahead. 

From pressure to consider new pricing mechanisms and more flexible terms to the potential

 of  greater  difficulty  accessing  feedgas  supplies,  the  dozen  or so US projects that are 

expected to make up the second wave of export capacity have a lot to consider, analysts, 

developers and market observers said Wednesday as the Gastech conference in Spain 

wrapped up its third day. 

"LNG buyers could have to be chasing gas around the United States," Kristy Kramer, Wood 

Mackenzie's head of Americas gas research, told a group of several hundred global market 

leaders. 

Kramer said the US Gulf Coast is expected to get more crowded after 2020, and the pipeline 

capacity needed to reach supply will be harder to come by. 

However, US producers' strategies were also changing, with an increasing willingness to take 

US  pipeline capacity  and  gain  exposure  to the international LNG markets. As inter-basin 

pricing  spreads  are  starting  to  wide n out,   producers  are also keener on exploring the 

business opportunities of participating in the global LNG markets. 

While  Henry  Hub  is  expected  to remain under pressure in the years to come, as high oil 

forward price curves keep associated gas production growing, international LNG prices are 

rising, largely driven by growing consumption from China and emerging Asian markets. 

The Platts JKM has averaged around $9.50/MMBtu in 2018 to date, up by more than 50% 

year on year, on more balanced fundamentals in the key Asia Pacific region. 

Terminal developers, meanwhile, have sought to address the feedgas access issue by 

proposing to build new pipelines. Others are seeking to tap into increasing associated gas 

production in the Permian Basin that spans parts of Texas and New Mexico. 

Tellurian, the owner of the proposed Driftwood LNG export terminal in Louisiana, went beyo

nd its plans to build three new pipelines in the region. It bought its own acreage in the nearby 

Haynesville shale and plans to drill for its own feedgas for Driftwood, in the hopes of ensuring 

steady access to supply.