From Bloomberg.com

U.S. LNG Imports Drop 53% on Domestic Gas Output, Asian Demand
By Dinakar Sethuraman

Feb. 5 (Bloomberg) -- U.S. imports of liquefied natural gas declined 53 percent in 2008 as higher domestic production and increased Asian demand reduced shipments, Pan EurAsian Enterprises Inc. said.

Imports of the cleaner-burning fuel fell to 351.7 billion cubic feet, or 7.5 million metric tons, Raleigh, North Carolina- based energy consultant Pan EurAsian said. U.S. imports were about 3.8 percent of global LNG production in 2008, estimated at slightly less than 200 million tons, it said.

“During the early part of this decade, LNG was perceived by many as the only way to maintain adequate supplies of natural gas to North American markets,” Pan EurAsian President Zach Allen, said in an e-mailed report. “However, that perception didn’t recognize the strong potential that materialized from what was called ‘non-conventional’ natural gas production from shale formations.”

U.S. imports of LNG may climb in 2009 because of an additional 60.2 million metric tons (2,868 billon cubic feet) of supplies from new projects, consultant Waterborne Energy Inc. said. Demand for LNG, which rose in the early part of last year in Japan and South Korea, the world’s biggest LNG buyers, started declining as the global recession reduced demand for gas from power plants and industries.

“Our initial outlook for 2009 is for somewhat more LNG to be imported than in 2008, but less than in 2007,” Allen said in the report. “We believe that there may be a spring-to-summer surge of LNG imports due to the lack of global markets for LNG this year during the normal global summer lull.”

Higher U.S. Prices

The energy consultant expects U.S. LNG imports in 2009 to be as much as 500 billion cubic feet, Allen said.

The average price of all LNG imports into the U.S., on a delivered basis, rose 43 percent in 2008 to $9.52 per million British thermal units from $6.66 in 2007. Natural gas traded at an average $8.893 per million Btu last year on the New York Mercantile Exchange.

In December 2008, LNG delivered prices averaged $8.43 per million Btu, ranging from $6.09 to $13.58. Cheniere Energy Inc. paid the highest price for a cargo at $14.09 in June.

GDF Suez accounted for 47 percent of U.S. LNG imports and BG Group Plc brought in 41 percent, PanEurasian said, based on data from the U.S. Energy Department. Trinidad & Tobago supplied 75 percent of U.S. LNG last year and Egypt 16 percent.

The Everett import terminal at Boston Harbor took 47 percent of all U.S. LNG imports in 2008, followed by the Elba Island terminal in Savannah, Georgia at 39 percent.

In 2008, U.S. LNG import capacity more than doubled as existing terminals were expanded and three new LNG import facilities were commissioned, Pan EurAsian said.

The U.S. was the fourth-biggest LNG importer in 2007 after Japan, South Korea and Spain, according to the BP Statistical Review of World Energy 2008, and its ranking may have fallen in 2008, based on Bloomberg calculations using government data from Asia and Spain.

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

Last Updated: February 4, 2009 22:56 EST