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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (62912)	4/18/2006 4:24:07 PM
From: Tommaso	Read Replies (2) \| Respond to of 206121

Why would anyone sell LNG to the United States for $5 when they can get $10-$15 for it in Europe?

To: Ed Ajootian who wrote (62912)	4/20/2006 6:44:14 AM
From: Dennis Roth	Read Replies (3) \| Respond to of 206121

Ed, you might want to look at Raymond James' Energy Stat of the Week, this week raymondjamesecm.com It touches on some of the things you are wondering about. Most of the world prizes LNG strictly for its BTU content. The world price for gas tends towards the 6:1 BTU parity price ratio except in gas markets isolated from the rest of the world. With oil above $70, not much gas is going to be sold into the US at < $5 prices. Very little LNG is sold in the US under fixed price contracts. We're not going to get a flood of LNG at a super-discount to its BTU parity price ratio, IMO. Of course I could be wrong,.

To: Ed Ajootian who wrote (62912)	5/24/2006 5:44:24 PM
From: Ed Ajootian	Read Replies (1) \| Respond to of 206121

MARKET INSIGHT: US Storage Play (Copyright © 2006 Energy Intelligence Group, Inc.) World Gas Intelligence Wednesday, May 24, 2006 The US is currently offering LNG exporters the lowest netbacks in the world, with front-month Henry Hub futures prices stuck in a relatively low $6-$6.50 per million Btu range (see table). India's state Gail has joined a still-active band of spot buyers in Asia, even as opening of China's first LNG terminal promises to diminish the amount of Australia LNG available elsewhere (p1). Yet the swing US terminal at Lake Charles, Louisiana, is on track to receive record volumes in May, with Energy Intelligence's Gas Metrics reporting sendout averaging 670 million cubic feet (683,410 million Btu) so far this month, and US Waterborne LNG Report forecasting the arrival of as many as nine cargoes, for a total of over 25 billion cubic feet -- three times May 2005 and nearly twice May 2004 levels -- before the month is out. The other terminal where BG is the capacity holder, Elba Island, Georgia, also has strong sendout of 416 MMcf/d so far this month, up 65% from year-ago levels, while the two remaining US terminals are at or below rates of earlier years, leaving total US imports at 1.71 billion cubic feet per day, up 77% from last May. So while the pattern is similar to past springs, with US imports rising as winter ebbs, the extent of the US gain is abnormally large. The explanation may lie in the unique US combination of futures prices for next winter that are in a much more appealing $10/MMBtu range -- as concern about availability next winter overshadows current high US storage levels -- and the continuing availability of ample storage capacity (WGI May3,p6). The market contango allows any company with LNG terminal capacity in or near the US gas producing region to make a bundle. By putting its regasified LNG in storage and locking in winter prices in the futures markets, such a company should be able to make at least $4/MMBtu over the near-month price, minus only storage charges. BG has 9 Bcf of LNG storage at Lake Charles and 4 Bcf at Elba Island, and incremental gas storage capacity is available in salt dome storage fields in the Gulf region, without any requirement to inject and withdraw gas at a fixed pace. In future years, the opportunity for such plays could be even greater, since several new high-deliverability storage projects are now under development in Appalachia and the Gulf Coast. The price curve in the UK futures market offers an even larger spread between prompt-month and winter prices (see table). But storage is not readily available. Although the UK's Isle of Grain Terminal has some storage capacity, it is controlled by BP and Algerian state Sonatrach and may well be full in any case. BP openly tendered both of its Grain slots for May and got no takers. Spain is also an unattractive destination at the moment, despite the high estimated netback on term-contract sales. Vessels have had to wait for days to unload their gas, market sources report, due to low storage capacity, healthy hydropower generation and mild temperatures (p5). ************************************************************* Well whatdayaknow, maybe Joey Allman was right all along! (see article in the post to which this post is replying).