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Turns out the LNG market isn’t so oversupplied after all..

July 12th, 2010 · No Comments

This is good news..

Perhaps it explains the following:
According to sedi.ca, Mulacek bought the following on the open market:

  • 25,000 shares at 49.60 on 21 May 10;
  • 85,000 shares at 46.45 on 24 May 10;
  • 50,000 shares at 47.10 on 28 June 10,
  • 50,000 shares at 43.98 on 29 June 10.
  • A total of $9.7 million and 210,000 shares.

Spare LNG Capacity May Plunge by 2013, Bernstein Says
July 12, 2010, 3:40 AM EDT
By Dinakar Sethuraman

July 12 (Bloomberg) — Global spare production capacity of liquefied natural gas may plunge to less than 5 percent in 2013 from about 30 percent last year, creating room for supplies from proposed ventures in Australia, Sanford C. Bernstein & Co. said.

“Despite fears of an excess of LNG supply, we believe there is strong demand need for LNG over the coming decade,” analysts Neil Beveridge and Angus Chan said in a report today. “While there is an excess of liquefaction capacity following the startup of Qatar LNG projects, this is only a temporary phenomenon.”

BG Group Plc, Santos Ltd. and ConocoPhillips are among companies planning more than $40 billion of investments in Queensland projects that will convert gas extracted from coal seams into LNG. This is in addition to conventional LNG ventures in western Australia proposed by Chevron Corp., Woodside Petroleum Ltd. and Royal Dutch Shell Plc.

Spare capacity to chill gas before transport by tankers was about 15 percent in 1998 before declining to less than 5 percent in 2003, according to Bernstein data. That gap may rise to about 15 percent in 2017 before declining again to less than 5 percent in 2020, according to a chart in the report.

Southeast Asia

Producers may start less than 20 million metric tons a year of capacity over the next three years, Bernstein said. Supplies of the fuel from Southeast Asia will continue to decline with aging gas fields at Arun and Bontang in Indonesia and fewer new production lines, Bernstein said.

Japan and Korea have the biggest gaps and will be the biggest buyers over the next two years,” the Hong Kong-based analysts said. The world’s biggest LNG buyers may need as much as 10 million tons of new supplies annually over the next five years to help meet demand.

The market window for the startup of new projects in 2014-2015 looks to be attractive in our view and strongly supports expansion of Australian LNG projects,” Bernstein said.

Projects including Ichthys, Pluto expansions, Browse and Wheatstone may benefit from about 60 million tons a year of “uncontracted” LNG demand by 2020, the analysts said. That may still leave some excess supplies unless new markets are developed, they said.

Santos, proposing a $13 billion LNG project in Queensland, may have enough buyers to support the start of work on its first production unit, Bernstein said in the same report.

–Editors: Ryan Woo, Jane Lee.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net.

Tags: IOC · Natural Gas