Just when you thought things couldn’t get worse for natural gas, a glut of global gas is starting to make its way to U.S. shores.
In a global natural gas report, Goldman Sachs says they expect LNG imports to grow 42% in 2010. See the highlighted area in red, below.
Goldman: We expect US LNG imports will increase in 2010, though we do not expect an “inundation.” For 2010, we expect US LNG imports to rise to about 1.7 Bcf/d from 1.2 Bcf/d, reflecting the increase in liquefaction capacity and greater exports of Russian gas to Europe. While this represents an increase, it does not represent the “inundation” of LNG for which others have argued.
Whatever one may want to call it, 1.2 to 1.7 represents a 42% growth in imports.
While imported gas is a tiny fraction of the U.S. market, such a sharp increase in imports will only prolong the pain for natural gas investors, such as those in the ETF United States Natural Gas (UNG), or investing indirectly through companies such as Chesapeake Energy (CHK).
In fact, we already have proof of this growing import trend:
Bloomberg: Murwab, a Qatari liquefied natural gas tanker, carried the first shipment to the U.S. from the Persian Gulf nation since June 2008. Its cargo, enough to heat about 9 million homes for a day, added to the largest gas inventories for this time of year since at least 1994, Energy Department data show.
“We have more gas than we know what to do with in the U.S., we have more waterborne gas floating around the world’s oceans that doesn’t have a home,” Stephen Schork said in an interview from Villanova, Pennsylvania. Prices this winter will “gravitate toward, and remain closer to $4, rather than $7” for each million Btu, he said.