Start the conversation
As Money Morning Global Energy Strategist Dr. Kent Moors told us yesterday, the United States on Aug. 7 finally approved its third application to export LNG (liquefied natural gas).
The delays in the U.S. LNG export approval process have been frustrating an industry that's ready to capitalize on the price differences between North American and Asian natural gas prices. Asia LNG sells for about $16 per million BTU versus less than $4 per million BTU in the United States.
While the U.S. Department of Energy streamlines this lengthy approval process, our neighbor to the north is also using its abundance of shale gas to race into LNG exports.
You see, Canada has a lot of natural gas.
According to the U.S. Energy Information Administration (EIA), Canada has recoverable shale gas resources of 573 trillion cubic feet. That is not much less than the EIA's estimate for the U.S. of 665 trillion cubic feet.
Overall, Canada may have 1,300 trillion cubic feet of shale gas, according to The Wall Street Journal.
These resources, located mainly in the Western Canadian Sedimentary Basin, have yet to be exploited to the extent that they have in the United States. But oil and gas companies are excited about the prospects north of the border. The research and consulting firm, Eurasia Group, forecast that $60 billion will be spent by energy companies building LNG plants from scratch in Canada.
Canada is expected to ship at least 13 billion cubic feet of LNG to Asia within 10 years. That is about how much natural gas the country currently produces.
The major question is which country will win the race to send cheap North American LNG exports to the $150 billion Asian market - where gas prices right now are about four times higher.
The good news for investors: If you know which companies are making moves now to lead the developing LNG export industry, then you'll win no matter which country is in the lead...
Canada Forges Ahead with LNG Exports
So far, the three U.S. LNG export licenses approved have been from Cheniere Energy (NYSE: LNG), privately-owned Freeport LNG Expansion LP, and the recent addition of the joint venture of the U.K.'s BG Group PLC and the Southern Union division of Energy Transfer Partners LP (NYSE: ETP).
Companies that get approved for LNG exporting this year will deliver for investors. Cheniere - recommended by Dr. Kent Moors two months before its export approval came through - soared 300% in the two years after it was approved.
Investors aren't limited to U.S. companies when they pick the big LNG winners, now that Canada is racing for a piece of the market.
And Canada does have two advantages in the race to export LNG...