Anyone investing in natural gas companies is eagerly awaiting news that the liquefied natural gas (LNG) export boom is officially underway…
While we still have to wait, the good news is that last week Department of Energy Secretary Ernest Moniz told Reuters his department will go through the applications as quickly as possible. He added that he expects the Energy Department to conduct a “fair amount of action” regarding the applications this year.
This falls in step with the Obama Administration’s energy initiatives, which include a push for the development of “a global market for natural gas.”
This global natgas market will replace the current regional gas markets only if there are large exports of cheap natural gas from the U.S.
Such exports are one main reason Money Morning Global Energy Strategist Dr. Kent Moors is bullish on natural gas prices in the years ahead.
He’s also bullish about the prospects for investors in certain natural gas companies – especially ones positioning to profit from Asia’s need for LNG…
The Sea Route to Asia Paved With Riches
As pointed out by Money Morning Resource Specialist Peter Krauth, selling LNG to Asian countries such as Japan, South Korea and increasingly China will be a lucrative business in the years ahead.
Japan and South Korea are the biggest importers of LNG. Japan, in the year ending in March, imported a record 87 million tons of LNG after shutting down 48 of the country’s 50 nuclear reactors.
That is more than one-third of the world's LNG exports of 240 million tons in 2011.
South Korea this year also is facing some nuclear plant shutdowns. South Korean imports were up 32.1% from a year ago in May to 2.9 million tons of LNG. Korea Gas, the world's largest corporate purchaser of LNG, said it would raise inventory levels to 70% of capacity from 60%, which translates to 396,000 tons of LNG.
The major profit opportunity for U.S. natural gas companies lies in the huge price differential between natural gas in the U.S., at around $4 per million cubic feet, and LNG in Asia that is selling for about $14-$14.50 per million cubic feet.