Natural Gas Stocks in 2008

Some people are still saying natural-gas stocks should shoot up because prices for the commodity are so low and the winter in North America has been so cold. There could still be a run-up if the cold weather persists and drains gas inventories further -- but gas markets are also becoming less regional due to increased shipments of liquefied natural gas [LNG].

According to the Natural Gas Intelligence Web site, there were five operating LNG import terminals in North America as of March, 2006. Regulators have approved 17 more LNG terminals in North America and another 25 projects are on file awaiting regulatory approval. In the past year, several existing terminals have been expanded and construction has started on at least four facilities.

If shares in North American natural gas producers and explorers do spike upward, the surge could be temporary given the increasingly global nature of markets (unless natural gas producers around the world form their own OPEC-like cartel). Pipeline companies such as Enbridge Inc. and TransCanada Corp., however, should not be adversely affected by LNG shipments – indeed, with cheaper prices for gas, shipments should trend higher and benefit them.

Comments

[flstearns:]

Your headline says UNG but the story cites Cheniere (LNG)...which does or will import LNG, as does SRE or Sempra, a west coast utility. Listing the importers would be useful of you.

2008 Jan 01 01:10 PM