Chuck Okie

Natural Gas: Worst Investment Ever?

NG has other troubles. Eventually utilities, and large users, will diversify a portion of their supply by entering into some long term contracts for LNG. Global iquifaction plant capacity has been increasing at the +/- 25% for the last few years and five years ago (before the capacity increase) the breakeven point for shipping and re-gasifying was in the $3-4 per MCF. This creates a nice margin relative to the retail price and if there is any volatility in the domestic wellhead price, the steady volumes and price of LNG only become more attractive.