LNG glut? Exporting countries express concern.

by: Michael McAllister

Today, in the Wall Street Journal there is an article (subscription req.)concerning
the idea that a global LNG supply glut might occur in the next decade. 

It’s been well
promulgated that there could be an impending supply deficit in the United States and that internal prospects will probably not be able to satisfy its needs. The race for LNG imports has already begun
and billions have been spent, with billions more expected, to build the
infrastructure to produce, transport and deliver natural gas to consuming
nations including our own.  However, the
exporters are concerned that overcapacity might occur which would cause
downward pricing pressure and erode their returns on investment.

15 ministers from some of the largest natural gas producers
have discussed the idea of a cartel
similar to OPEC. The minister of Qatar, a country that will probably be the largest exporter of natural gas by the end of the decade,
expressed his concerns to reporters yesterday.

Quick Comment: 

Energy investors, specifically those investing in companies focused
in domestic natural gas production have to be aware of these issues as well as
tracking supply and demand in the United States. Its too early to tell what effect the LNG
imports will have on commodity pricing, but it is not too early to be aware of
what is going on.


There is a web page that tracks natural gas maintained by
the Energy Information Administration (NYSEMKT:EIA). 

You can sign up for weekly email notification of withdraw or
injection of supply as well as read about the state of demand.

Do you need high prices for natural gas supply to keep pace with demand? Is demand being destroyed at these price
levels? There is a lot of cheap natural
gas in other countries, what effect will it have when it reaches our shores?