There's a lot of competition for lng supplies with demand from China and India growing rapidly. Also, the technology for converting stranded gas to Fischer-Tropsch fuels is advancing rapidly and nations with lots of gas to export will have the option of converting it to diesel fuel and naphta. Long run, the price of lng will sell for a price equal to what it would fetch if converted into liquid fuel.
>> wonder what the capacity is in existing lines to handle lng volume distribution. <<
You need to land and store lng near to where it going to be used. IMO, there is too much capacity planned for Texas and Louisiana and not enough in New England and California. To land gas in Texas and ship it across the continent to supply New England is inefficient. Also, you need the storage in New England as the pipelines can't handle the surge in demand during winter cold snaps.
I don't think there will be enough lng imported in 2008 to significantly move the price of natural gas in that year. Based on what I observed when they restarted the near by Cove Point lng terminal, it takes the best part of a year to go from commissioning to full service.
Further out, in the teens, when the Alaska Highway and Mackenzie Valley pipelines are on line, when more coal gasification comes on line, and more lng supplies have been rounded up, we could see gas prices settle down to something around six to seven dollars per mmbtu, in my opinion. |
