Houston-based Waterborne Energy Inc. has long kept a close watch on liquified natural gas (LNG) and liquid petroleum gas (LPG) industries. The company monitors shipping movement around the world, and this morning the company reports that LNG imports to the US will increase 28% for the quarter ending February 2009.
US natural gas futures for March are trading at around $4.30 this morning. That’s low and falling.
According to Waterborne, the reason for increased US receipts is a glutof LNG resulting from a "dramatic drop in demand for LNG throughout theworld, especially in Asia." Because Asia is the biggest consumer of LNG(Japan and South Korea are the largest customers), a slowdown in theAsian economy has sent traders to Europe looking for customers.
Now, Europe is filling up, and the US is the next target for LNG.Waterborne predicts that the next 16 months will see increases to USimports of LNG and that by mid-year 2010, LNG imports will surpassrecord 2007 imports of 2.1 billion cubic feet/day.
Even at those levels, LNG is not much bigger than a single 42-inchnatural gas pipeline. The Rockies Express pipeline alone will carry 1.8billion cubic feet/day from western Wyoming and Colorado to easternOhio later this year.
Total US consumption of natural gas is expected to be more than 62billion cubic feet/day in 2009. LNG imports may be growing, but it’sstill a long way from being a major force in US gas supplies.
Paul Ausick
February 2, 2009
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