Mmarrkk

Natural Gas Is Heading to 1997 Levels, Should Stay There Awhile

A large portion of the Qatar LNG has to go to the US receiving plants. They do have re-route rights if they can get a better price, but in the end, if no other home for the gas, the US plants HAVE to take it.

I think the number CS is showing is not an incremental cost to liquify; Total all in costs are about $2.50/3.00 in to the U.S. pipeline (liquify, ship, regas). 15% marketing/admin is way too high!

Natural Gas Is Heading to 1997 Levels, Should Stay There Awhile

You are one of the few folks who "get" the real price of imported LNG! LNG is dirt cheap once the facilities and ships have been built. Those are sunk costs and the operators of the liquifaction plants just want to keep them running and eek out a very small OPERATING PROFIT. Yeah, it makes the several billion dollar investment a poor one, but it would be worse if you shut down the plant completely!

Another thing you didn't note: a huge percentage of the LNG from Qatar is obligated to go to the US. It can be re-routed to Europe or other places if the price is higher and the demand is there. But if there is no demand in Europe, that LNG HAS TO COME TO THE U.S. There it will be pushed into the pipelines, backing out domestic production and keeping prices way down for at least a year. The savoir here: demand pick up...which will only happen after we get this recession off of our backs!