Fort Worth, TX-area residents who’ve grown weary of Barnett Shale gas drilling commotion in their backyards might want to move near one of the nation’s liquefied natural gas (LNG) regasification terminals for a little peace and quiet. Gas-rich resource plays are booming; U.S. LNG regas terminals, not so much.

Analysts at Tudor, Pickering, Holt & Co. note that the United States will have 17.4 Bcfe/d of regas capacity by the end of 2010. “Owners of these terminals are probably the only people you’ll find that don’t like U.S. supply growth from shale plays,” they wrote in a recent research note. “We’ve said it before, we’ll say it again…many of these terminals will sit idle for most of the year.”

The analysts recently lowered their LNG importation forecast by 0.7 Bcf/d to 1.3 Bcf/d, a decrease of 0.7 Bcf/d year over year. “Nine months ago we thought 2008 U.S. LNG imports would be up 1 Bcf/d year over year (to 3 Bcf/d),” they wrote. “We couldn’t have been much more wrong as today it looks like 2008 will be down 0.7 Bcf/d year over year (at 1.3 Bcf/d).”

For this the analysts blame disruptions to global LNG supply; colder than normal winter weather, particularly in Asia and Europe; and increased Asian demand due to nuclear power outages.

Gas storage in Europe is about 40% full, the analysts note. “Europe will continue to pull LNG cargoes as it works to rebuild storage. Spain is also suffering from severe drought (40% less rain than normal since October), which could impact hydropower this summer…While winter is behind us, both Japan and Korea have ongoing nuclear outages [and] continue to take incremental cargoes.”

Looking at the current LNG spot market — for cargoes produced in excess of contracted volumes or that have destination flexibility in their contracts — the analysts see the Asia-Pacific market offering $12-14/Mcf, Spain offering $12/Mcf, the United Kingdom offering $11.70/Mcf and the United States offering $11.40/Mcf. “Until global arbs open up to U.S. cargoes, we do not expect to see a dramatic ramp [up] in U.S. imports,” the analysts wrote.

Nor are long-term LNG contracts in the offing at current U.S. prices. A typical LNG contract today is priced at about 88% of the Japanese crude cocktail price with a maximum cap on oil price of $150-200/bbl. At $125/bbl oil the LNG contract price would be $18.30/Mcf. The analysts wrote that Japanese customers have even allowed Australia supplier Woodside’s Northwest Shelf LNG project to renegotiate contracts signed before 2006 to increase their price range. “[C]learly the Japanese want happy suppliers as they look to future long-term agreements.

“With U.S. natural gas pricing well below 88% of oil parity ($18.30/Mcfe at $125/bbl oil), it is easy to see why no long-term contracts have been signed for U.S. ports without flexible destination clauses. We’ll say it again…the U.S. remains market of last resort for [the] global LNG market.”

None of this can be good news for Cheniere Energy Inc. The company cut a bold profile during the U.S. LNG regas building boom. Last week it announced a $50 million first-quarter loss and provided further details on the unwinding of its business while it shops its Sabine Pass regas terminal (see Daily GPI, May 12).

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