Natural Gas in Asia: $10; in US: $4 -- When Will Prices Balance?

When will US start shipping natural gas to Asia? Wall Street Journal link.

With natural gas, it's really a problem that it is a regional market, not a global market, and these nonconventional shales have just unlocked such a large volume of gas. And the fact a lot of these companies need to drill that acreage in order to hold it means that they're producing more gas than what the regional or the North American demand is.

And so on the natural gas side we're in a oversupplied market, and a lot of analysts have been calling for a turn in natural gas over the last three years. And it's just a market where the turn on natural gas always seems to get pushed out. And we think this year is no different, as supply is going to exceed demand in 2011. It's not until mid 2012, if anything, that we'll start seeing the market come back into balance.
 
TWST: Why hasn't this developed into a global market like oil?
 
Mr. Arif: Eventually it will. It's just a slower market. We were building regasification facilities thinking we were running out of natural gas five years ago. We've never built any liquefaction facilities to remove our excess natural gas. So there are a few proposals out there. There are a couple off of Western Canada's West Coast for proposal for some liquefaction. So eventually, once we get some liquefaction facilities built by 2015, 2016, we should be able to move towards the global natural gas price.

Investors with a long term horizon might do well accumulating shares in natural gas companies.