Natural Gas: The Russians Are Coming!

The new trading desk in North America for Gazprom, the largest producer of natural gas in the world, sits halfway up the 56 story Bank of America tower in the heart of the America's energy capital. So far, the office, which started trading contracts last week for the first time, is quiet. That won't last. "Our target for volume growth is pretty strong," says John Hattenberger, president of Gazprom Marketing & Trading USA, an arm of the Russian behemoth that claims 17% of the world’s natural gas reserves. "If we could hit 5% [of the U.S. market] in the next five years, that would be about right. In 10 years, I think we could get to 10%." U.S. demand for natural gas is about 60 billion cubic feet a day.

Gazprom for years has been a dominant player in the natural gas market through the use and control of pipelines. It exports gas to more than 30 countries and meets a quarter of Europe’s needs. The U.S. market, however, the largest in the world, has been too far away for Gazprom to reach. Pricey new liquefied natural gas developments, which allow for worldwide shipping, should change all that. Global LNG demand is expected to double by 2020. "LNG is a strategic way for Gazprom to get into markets that it can’t access by pipeline," says Hattenberger. "It makes a lot of sense for the world’s largest gas company to bring gas to the world’s largest gas market and it has to be done through LNG".....Read the entire article.

Despite sliding prices, the LNG keeps coming

Despite the steady drop in natural gas prices, Gulf Coast liquefied natural gas terminals are expecting a steady stream of shipments in the coming weeks. Cheniere Energy’s Sabine Pass terminal received an LNG shipment at its dock this week and a second tanker is due by the middle of next week. And the Trunkline LNG terminal in Lake Charles, La., could see as many as three new tanker loads of LNG in the coming weeks, according to Waterborne Energy, a Houston-based LNG market tracking firm. “The last place you would expect to see a potential 20 bcf build in LNG imports in today's weak natural gas environment would be the U.S. Gulf,” Waterborne Energy said in a report Thursday.....Read the entire article

U.S. LNG Surge May Have Been Overstated.

Earlier this year there were predictions for a large surge in LNG imports. While the shipments have started to come in, it's hasn't yet been the torrent some had expected.
U.S. daily LNG usage averaged 1.44 Bcf in Q2, according to Pritchard Capital Partners "well short of the earlier estimates that called for 3-5 Bcf a day." According to the Energy Information Administration the U.S. consumed 23.2 Tcf of natural gas in 2008, and is on track to consume around 22.5 Tcf in 2009. With reports of overseas liquefaction plants running..... Complete Story