SOURCE: Zeus Development Corporation

Zeus Development Corporation

November 02, 2009 13:21 ET

LNG Markets Brighten Worldwide, Finds Zeus Development Research

HOUSTON, TX--(Marketwire - November 2, 2009) - Research by Houston-based consultancy and research firm, Zeus Development Corp, finds that LNG markets are brightening worldwide as demand in China, India and Latin America keeps prices higher than expected.

"The good news is that we never saw the 'market of last resort' scenario many expected, where cargos would be dumped into U.S. Gulf Coast terminals at any price," said Bob Nimocks, chief executive of Zeus Development Corp. "Certainly, imports into the USGC were higher this year than last, but demand in Asia, India, and Europe never fully evaporated."

In China, cargos from around the world (e.g., Tangguh, Indonesia; Balhaf, Yemen; and Ras Laffan, Qatar) have been arriving into its three operating terminals at Fujian, Guangdong, and Shanghai.

Long-term contracts for more LNG are being signed. For example, China Petroleum & Chemical Corp (Sinopec) announced intentions to sign a long-term sale and purchase agreement with ExxonMobil to buy Papua New Guinean LNG. On October 22, CNOOC said that it had started construction of a fourth China import terminal at Ningbo, Zhejiang. Many more are planned to give China better negotiating leverage for Russian pipeline gas.

In India, spot prices for LNG cargos have been climbing to around $6/MMBTU as winter in the Northern Hemisphere approaches. On October 29, GAIL announced that it would buy a cargo from Repsol for late November delivery at an ex-ship price between $6.50/MMBTU and $6.60/MMBTU.

LNG fleets are also enjoying higher charter rates with demand across four continental markets: Asia, Europe, North America and South America. Charter rates for standard-sized ships have risen from some $25,000 per day to more than $40,000 per day.

Rising prices are also spurring new LNG project proposals. Zeus is tracking the advancement of plants in Australia, Papua New Guinea, Russia, Iran, Iraq, Egypt, Ghana, Nigeria, Cameroon, Gabon, Angola, Trinidad, Venezuela, Brazil and Alaska.

New import terminals and expansions are advancing in Brazil, Uruguay, Colombia, Jamaica, Chile, South Africa, Italy, Poland, Portugal, Israel, Dubai, Pakistan, India, Vietnam, Indonesia, Singapore and, of course, China.

For more information and continuing updates on these projects and markets, visit Zeus Virtual Energy Library™ (www.zeuslibrary.com/LNG).

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