ESAI teams with RBAC to tackle LNG market integration issue

Boston, Mass., Oct. 2, 2003 — Energy Security Analysis Inc. (ESAI) announces two multi-client studies due out in early 2004 that will address the most important issues and impacts associated with domestic and global LNG flow dynamics.

The first deals with the effects on the United States gas market (LNG on the Margin: Modeling the Impact of LNG imports on US Regional Gas Markets), the second deals with the effects of US demand on the world market (Global LNG Trade Flows: Modeling the Impact of US Natural Gas Demand on International Gas Market Dynamics).

In collaboration with system developers RBAC, Inc. (RBAC), ESAI will utilize two proprietary state-of-the-art computer simulation models to develop detailed market analyses. ESAI will model the impacts of increased terminal capacity and import volume on the U.S. pipeline grid using RBAC’s Gas Pipeline Competition Model (GPCM®) and a Global LNG Model (GLNG™).

Both the “LNG on the Margin” and “Global LNG Trade Flows” Studies are designed to help market players affected by domestic and global LNG dynamics to understand the factors that will impact regional prices, import volumes, trade flows, as well as the ability of the physical infrastructure to digest this new foreign source.

Questions to be addressed include:

How will U.S. natural gas spot markets react to this additional resource?

To what extent can current pipeline and storage infrastructure accommodate LNG trade as a “base-load” or as a “spot” resource?

What displacement effects will regional imports have on both the physical flow of gas and basis differentials?

How will increased U.S. LNG demand impact global trade flows and the proliferation of spot cargoes?

How will the scarcity of US firm LNG customers affect global LNG flows?

Where will liquefaction investment dollars flow and where will new LNG “sinks” likely emerge?

Will the rest of the world then be forced to re-visit traditional netback pricing arrangements?

For a copy of the U.S or Global LNG Study Prospectus, or to sign up for a free trial to ESAI’s energy services, go to www.esai.com/lng.htm

Energy Security Analysis (ESAI) is a well-known and respected energy consultant worldwide with expertise in natural gas, petroleum, and electricity markets, risk management, energy project evaluation, and litigation and arbitration support.

For more information on RBAC, go to www.rbac.com