Gambling on Natural Gas

Excerpt from our One-Page Annotated News Summary:

A Big Bet on Natural Gas (NY Times)

Summary: In a bid to double U.S. imports of natural gas by 2011, Charif Souki’s Cheniere Energy (LNG), in a joint project with Sempra Energy (SRE) and Exxon (XOM), is building three new terminals for liquefied natural gas along the Sabine River Channel by the Gulf of Mexico. Even though natural gas prices have sagged recently, Mr. Souki is forging ahead, because he sees a greater reliance on imported natural gas as U.S. production declines. According to Sempra Energy’s chairman Donald E. Felsinger, liquefied natural gas (“LNG”) “is going to have a growing importance... the gas that we find here in North America is getting more and more expensive to produce. And because there is so much stranded gas around the world, L.N.G. can be shipped here and compete very effectively with traditional supplies.” While LNG currently accounts for 3% of U.S. gas consumption, that figure is expected to rise to 10% by 2010 and 25% by 2020. Mr. Souki is betting that increased demand in the long run will prove him right, regardless of how low gas prices go in the short term.
Related links: Full article • CNX Gas Ready to Rise • Chesapeake is a Natural Pick in Natural Gas • Russian Government Muscling In on Anglo-Russian Gas Field Venture • Nabors Should Capitalize On Strong Natural Gas Demand • Natural Gas Stocks Starting to Feel a Double Pinch From Low Prices, High Seasonal Inventory • Natural Gas a Better Bet Than Crude Oil
Potentially impacted stocks and ETFs: BG Group (BRG), Magellan Midstream Partners (MMP), Plains All American Pipeline (PAA), TEPPCO Partners (TPP)

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Comments

[kkin365]

Perhaps this is not the entry (being a recap of NYT article) to ask this question. How has the liquidation of S---- (the hedge fund which lost $6b in one week) affected the natural gas market? omooc