Oil backtracks as Syria strike may be averted

Saving Face

Natural gas is getting support on hot temperatures and increasing storm activity in the Atlantic. Nat gas demand from power generators has been rising.  Of course the rest of the world still sees our natural gas price as a bargain. Reuters news, Japan's Toshiba Corp  has agreed to buy liquefied natural gas from the proposed Freeport LNG export plant in Texas, joining the ranks of global companies seeking to import some of America's growing fuel supplies. Under the 20-year agreement, Toshiba will buy 2.2 million tonnes of LNG each year from the Freeport plant's third production unit, known as a train, from late 2018, Freeport said in a statement. 

Output from the first two trains, which are expected to start in early 2018, pending regulatory approvals, has already been sold to Britain's BP and Japanese utilities Osaka Gas and Chubu Electric. Companies across the world are queuing up to import U.S. natural gas, supplies of which are at record highs thanks to horizontal drilling and hydraulic fracturing that have unlocked vast reserves of the fuel from shale rock formations, pushing U.S. prices far below global levels.

Meanwhile in Asia, LNG prices have risen since the Fukushima disaster in March 2011 closed most of Japan's large fleet of nuclear power stations and left the country scrambling for substitute fuel for power generation.

Cheap U.S. gas has attracted other Japanese companies, as well as firms in India and Europe, that have agreed to buy LNG from other proposed export plants in the United States. So far, only three of the nearly 20 plants seeking to export LNG in the United States have approval to export to countries without a free trade agreement with the United States, and only one ­- Cheniere Energy's Sabine Pass in Louisiana - has a construction permit.

Freeport has full export approval from the Department of Energy but is awaiting a construction permit from the Federal Energy Regulatory Commission, which Freeport expects will be granted in the first three months of 2014.   

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About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.


Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

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