Perhaps The Best Natural Gas Post For The Week

I've brought this comment forward as a stand-alone post to make it easier to go to the links.

This is one of those comments/posts that one needs to read through very slowly and think about the implications (and investing opportunities).

The first time I read through this, three opportunities jumped out at me:

• domestic natural gas industry (duh, obvious)
• specifically, SRE (see connection with Mexico about halfway down; SRE, a "stodgy" California utility, is trading at all-time highs)
• ocean-going transport ships (or whatever you call them) -- huge

I'm sure others can find a dozen more interesting bits of trivia. I have not confirmed all links work. 

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I have to come back to this one later; too much information, but the premise is very, very interesting.

Long comment from a reader:

99% off topic.

100% interesting.

How does the US buy off Pakistan to keep them from getting natural gas from Iran? (Pakistan uses natural gas for vehicles, but has sometimes closed stations because of shortages. They are in a perpetual crisis.)

The Bakken gas, of course. (Maybe a stretch.)

This is why the US will export LNG. Obama likes Paq e stan.

• http://dawn.com/2012/10/02/900m-guarantees-for-lng-likely/

"With Pakistan negotiating liquefied natural gas (LNG) purchases from the United States, the Economic Coordination Committee (ECC) of the cabinet is expected to clear on Tuesday about $900 million rolling guarantees for the LNG import and dedicate its supplies mostly to the power sector without increasing gas tariff for other sectors. [The operative word is "rolling" as in "without end."]

"Dr Asim Hussain, prime minister’s adviser on petroleum and natural resources, told Dawn on Monday that negotiations were currently in progress with two international firms to purchase LNG from its sources in the United States at the Henry Hub prices that are currently much lower than the Middle East and European markets because of LNG glut in North American region."

• http://app.com.pk/en_/index.php?option=com_content&task=view&id=218149&Itemid=2

"Sui Southern Gas Company (SSGC) and United Energy of USA signed a memorandum of understanding (MOU) pertaining to supply of liquified natural gas (LNG) in Houston. According to the MOU, the US will supply 4 million metric tons of liquefied natural gas (LNG) per year.

"As per MOU, Pakistan will also own share in liquefaction facilities in Gulf of Mexico together with United LNG of USA. 

"In order to ensure firm and continuous supplies of LNG, dedicated ships will be inducted for transportation of LNG to Pakistan."

• http://202.83.164.28/mpnr/frmDetails.aspx?id=94&opt=newsevents

"It is expected that the landed cost of LNG with an inbuilt cap, including transportation and re-gasification cost, the price of gas will be less than the price of Iran-Pakistan Gas Pipeline Project and Turkmenistan – Afghanistan – Pakistan – India (TAPI) Gas Pipeline Project."

• http://tacstrat.com/content/index.php/2012/01/27/us-attempts-to-give-pakistan-alternatives-to-the-ip-project/

"The United States is working with Pakistan to help it deal with the consequences if it agrees to abandon the Iran pipeline project, says the US State Department."

• The US JV is http://www.unitedlng.com/mpeh-llc/

McMoran Exploration and United LNG.

Using an offshore platform left over from the days of sulphur mining and the underlying salt dome that can store 1TCF of natural gas.

• http://www.unitedlng.com/mpeh-llc/

And using FNLG. See this.

• http://www.unitedlng.com/liquefaction-project/

Timeline:

• http://www.unitedlng.com/project-timeline/

This is as big as Cheniere's LA LNG exports.

• http://www.cheniere.com/lng_industry/us_opportunity_to_export.shtml
• http://www.cheniere.com/lng_industry/sabine_pass_liquefaction.shtml

Together, they will export about 5BCFD.

More drilling will be required, but there is plenty of gas to produce.

Great for drilling, fracking, sand, etc. etc.

The futures price does not seem to reflect this.

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