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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Dennis Roth who wrote (82864)4/11/2007 3:30:53 PM
From: Elroy Jetson  Read Replies (1) of 206184
 
Hopefully you also understand that price is the largest problem facing LNG terminals.

Japanese firms have consistently out-bid North American and other firms for new LNG supplies. Why? Because you can currently buy gas produced in North America well below the cost of LNG gas. Japan has no domestic production so is willing to pay what ever is required to buy LNG.

In reality, the "problem" with LNG terminals is a pretend problem. Once domestic natural gas prices increase to levels closer to the price for LNG, and look like they may head higher, then finally there's an incentive for LNG terminals.

The economics of LNG terminals in North America only make sense for Soviet Commissars, Utilities who can pass on the extra costs to their rate-payers with impunity, and those who can buy LNG below market cost. For the rest of the world that has to make a profit, it doesn't make much sense right now.
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