While predicting crude oil price swings is risky business, liquefied natural gas export player and Tellurian chairman Charif Souki said last week the Permian Basin in West Texas/southeast New Mexico is the world market’s gatekeeper, Kallanish Energy reports.
“What I’m thinking now is that the Permian Basin has become the swing producer in the world and, therefore, what happens in America matters more than what happens at Opec,” he said in a sit down interview with CNBC’s Jim Cramer on “Mad Money.”
Opec last Thursday predicted demand for crude would fall in 2020, which caused oil prices to cool. Cheap natural gas prices, Souki said, would boost demand for oil and Tellurian, which deals in natural gas transportation infrastructure, isn’t worried about increasing competition. Souki recalled oil production in the Permian was increasing from 4 million barrels a day (Mmbpd), to 8 Mmbpd.
Souki told Cramer he isn’t worried about losing customers in Europe. “I’m concerned about stopping flaring in the Permian Basin, get the gas on the water and put it on ships — and you can be on the water for less than $2 — and so there is no competition for us out there,” Souki said. “We just have to build the infrastructure.”
This post appeared first on Kallanish Energy News.