Houston (Platts)--8Nov2012/1253 pm EST/1753 GMT

With Tuesday's re-election of US President Barack Obama and the Democrats keeping control of the Senate, LNG exports from the US' Lower-48 states will likely be limited to the gas equivalent of 4-6 Bcf/d, Macquarie Securities Group oil and gas strategist Vikas Dwivedi said late Wednesday.

"With this election, I think we're still going to be OK with two to three [export projects], but going far above that gets a little tougher," Dwivedi said during a presentation by Macquarie's energy markets division in Houston.

Dwivedi did not specify why he thought Tuesday's elections results would make it more difficult to export greater quantities of LNG out of the US, but some industry observers have said that a Republican administration might have been more welcoming to a market-based approach in determining how much LNG the US could export.

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Dwivedi said that based on preliminary indications from the US Department of Energy, the agency seems to believe US LNG imports should not exceed 10% of domestic production, which is now in the range of 60-70 Bcf/d.

"That means the maximum level of LNG exports would be 6-7 Bcf/d," he said. "Above that, it will get tough politically."

Although there are some industry concerns that the likelihood US Senator Ron Wyden, an Oregon Democrat, would take over as chairman of the Senate Committee on Energy and Natural Resources in January could make it difficult for US projects to export LNG, Dwivedi said Wyden "has been generally a moderate, and, so far, he hasn't shown anything worrisome."

However, he cautioned that "some say once [Wyden] gets in his seat, he will show his true colors."

In the Senate, Wyden, 62, has expressed concerns that large-scale LNG exports would raise domestic gas prices and hurt the US economy. This spring, he said at a public event in Washington that the US government should impose a "timeout" on approving LNG exports until their effects can be better gauged.

Last week, Wyden wrote to US Energy Secretary Steven Chu asking him to explain the "decision-making criteria" that the DOE would use to determine whether to approve all "pending and future applications" to export LNG.

The DOE is required to quickly approve export applications to countries that have a free-trade agreement with the US, as long as the gas is given so-called national treatment in such agreements. But the DOE is required to determine if LNG exports to countries that do not have FTAs would be in the US' interests, and some of the world's major LNG markets, including the top market of Japan, do not have FTAs with the US.

DOE has said it is awaiting a highly anticipated report examining the potential impacts of US LNG exports on the domestic market before deciding how much LNG could be exported to non-FTA countries. Many industry experts expect a decision late this year.

Dwivedi declined to comment on which proposed export projects likely would be built. Only one of the proposed export projects in the Lower-48 states is in the construction phase -- Cheniere Energy's Sabine Pass project in Louisiana. It is the only project to have received export licenses to FTA and non-FTA countries, before DOE said it would hold off on further non-FTA decisions until analyzing the potential cumulative impacts of US exports on the domestic market.

Australia-based bank Macquarie previously had a partnership to market LNG exports from the planned Freeport LNG project in Texas, but that partnership was dissolved. Macquaire and Freeport officials have declined to comment on the matter. Some industry experts, however, have said it was easier for Freeport LNG to enter into long-term capacity agreements with industry heavyweights, rather than Macquarie trying to market supplies. They also said the project may have become less attractive to Macquaire because of rising costs.

Freeport LNG has signed 20-year agreements with Japan's Osaka Gas and Chubu Electric for all the 4.4 million mt/year (equivalent to 563,000 Mcf/d of gas) of capacity from the proposed first train, and has preliminary agreements with Shell for that company to acquire all the capacity on proposed second and third trains.

Nicholas O'Kane, Macquarie's global head of energy markets, said at the same presentation that Macquaire still is serving as a financial adviser to Freeport LNG.

He added that Macquarie, which has some capacity rights at the existing Freeport LNG import facility, is still eying growing its LNG business.

"We are looking at various opportunities for offtake," he said, declining to elaborate.

--Ron Nissimov, ron_nissimov@platts.com --Edited by Carla Bass, carla_bass@platts.com

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