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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: robert b furman who wrote (198181)3/7/2018 3:17:47 PM
From: Elroy Jetson1 Recommendation  Read Replies (1) of 206214
 
Shell has a large LNG transport fleet, so they transported the first Cove Point export and will likely continue to transport the rest. That's great business for Shell.

If Cove Point chooses to sell the cargo to Shell, Shell's net offered price to Cove Point will always give Shell a profit on the transport as well as a profit on the LNG. And that's even better business for Shell.

Cove Point is merely shipping from a disadvantaged location. Natural gas is less costly in the US than in Europe, but American gas delivered to Europe as LNG is more costly than gas from trans-European pipelines.

Cove Point is going to have a tough 5 to 10 years.

The LNG gas they sell will cover their operating costs, but there's not going to be enough revenue to give them any return on their huge depreciating fixed-cost investment.
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