Import LNG should represent an important addition to the gas supply of the United States but there are many political and economic factors which must be considered. It is increasingly apparent that because of rising hydrocarbon values and increasing capital costs, LNG will not be a cheap supply but it should be competitive with other substitute natural gas sources. Of particular importance is the fact that LNG can be stored and should represent the most economical source of short and intermediate seasonal and peak supply. Security of supply and foreign exchange requirements are two subjects that must be studied in major LNG importation programs but the fact that gas is our cleanest form of fuel will be a strong attraction for importing relatively large supplies if they are available at a reasonable price.


On March 9th of this year the Federal Power Commission approved for the first time a long-term LNG import program. While this must be viewed as a landmark decision, the Distrigas project is of such a limited and specialized nature that it certainly will not set the precedent for all future LNG projects. There is no doubt that the case served to educate industry, government and the public in this new and innovative field of liquified natural gas and will therefore have served a useful purpose in setting guidelines for larger and more ambitious LNG projects. The distrigas decision culminates almost four years of activities which led to the Distrigas projects and represents a personal landmark after almost twenty years of work in the LNG field. The development of this project is in itself an interesting story but today I want to give you a broad view of import LNG, describing this new industry as a whole, pointing out its strengths and weaknesses, and even attempting to forecast its ultimate position in our future gas supply.

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