Never fear, U.S. gas producers, LNG is not here. Not much, at least. Frame those newspapers photos of the first liquid natural gas tanker sailing into Sabine Pass, Texas, because they'll be few and far between, according to analysts at Tudor, Pickering, Holt & Co. Securities Inc. Photo 1: Free Republic Photo 2: The Advertiser.com Photo 3: Beaumont Enterprise Room-temp natural gas commodity prices are not in danger from the imported cold stuff. Good news for domestic drillers. Bad news for domestic LNG terminals. Why? Earthquakes in Japan knocked nuclear plants out of commission, droughts in Spain slowed hydroelectric plant output, a cold European and Asian-Pacific winter sapped supplies. The rest of the world needs it more than we do, and they're willing to pay more to get it---$23 per Mcf in Japan and South Korea. For that much, the chilled tankers are steaming away from U.S. shores at $11.30 per Mcf. Five new regas terminals are expected to be completed by year-end 2008 with a capacity of 12.6 Bcf/d. The TPH analysts forecast U.S. imports at 1.3 Bcf/d. "Owners of these terminals are probably the only people you’ll find that don’t like U.S. gas supply growth from shale plays," report analysts Stacy Nieuwoudt and Dave Purcell. "We’ve said it before, we’ll say it again… many of these terminals will sit idle for most of the year." I wouldn't slow down on your shale lease-ups just yet. U.S. gas is still hot. Cold exports may be the way to go. For more detail of the Tudor, Pickering, Holt report, click here: Tudor Pickering Holt LNG Analysis Steve Toon, Editor, A&D Watch; Contributing Editor, Oil and Gas Investor; www.OilandGasInvestor.com; stoon@hartenergy.com
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