With 9.8 Bcf/d of additional U.S. Gulf Coast LNG import capacity permitted by regulators and another 17.7 Bcf/d of LNG peak sendout capacity planned, domestic producers and LNG importers have good reason to be concerned about a possible supply glut. But there are so many factors involved that it’s too early to predict an outcome, said Merrill Lynch analyst Sam Brothwell in a research note on Friday.

“All of a sudden there is 15 Bcf/d+ [of Gulf of Mexico LNG sendout] capacity that looks fairly serious,” Brothwell noted. “Cheniere is targeting around 10 Bcf/d between Sabine, Creole and Corpus. Freeport is starting out at 1.5 Bcf/d and may double, and Sempra characterizes Cameron as a 1.5 Bcf/d plant (we recall it starting as a 1 Bcf/d proposal). Don’t forget Southern Union, which is upping its 1 Bcf/d capacity at Trunkline (the only GOM facility that currently exists) to peak of [2.1 Bcf/d].

“There [also] is a parallel effort upstream to double the present 17 Bcf/d [of liquefaction] capacity by later this decade. Much of that is aimed at the premium market here,” he said.

Cheniere is adding more projects and capacity because it has so many upstream suppliers interested in its terminals. Sempra also has shown that it’s no tenderfoot in this horse race. It signed an agreement on Thursday to provide Tractebel LNG North America with between 350 and 500 MMcf/d of LNG regasification capacity at its FERC permitted Cameron LNG terminal in southwestern Louisiana.

Meanwhile, earlier this month Freeport LNG announced plans to nearly double its permitted 1.5 Bcf/d terminal on Quintana Island in Texas because of new contract with Mitsubishi and existing deals with ConocoPhillips and Dow Chemical.

In addition to the existing Trunkline terminal in Lake Charles, there are five terminals with permits: Sempra’s Cameron LNG terminal, Freeport LNG, Cheniere’s Sabine Pass project, ChevronTexaco’s offshore Port Pelican terminal and Excelerate’s offshore Louisiana Energy Bridge. Mexico also has permitted Shell’s 500 MMcf/d Altamira project.

Another 11 terminals have been filed with FERC and the Coast Guard/Maritime Administration, including two by ExxonMobil, which signed a massive liquefaction deal with Qatar to support its North American LNG projects. There are at least two other Gulf Coast LNG terminals in the planning stages.

“Are we calling LNG (the concept) the next [independent power producer] story? No,” said Brothwell, noting that there is only 1 Bcf/d of regas in the Gulf today at Trunkline. Excelerate’s Energy Bridge is expected online during the first quarter, but has yet to line up supply contracts. Most of the other permitted terminals won’t enter service until 2008/09.

In December an ExxonMobil executive predicted LNG imports in North America would grow to 9 Bcf/d in 2010, 18 Bcf/d in 2020 and 26 Bcf/d, or 24% of total supply, in 2030.

“Some [proposed LNG terminals] will die long before a yard of cement is poured,” Brothwell predicted. “And there’s the local opposition factor. But remember that the energy industry has demonstrated a capacity for excess capacity, not to mention lenders that never seem to learn.”

If there is an LNG supply glut, it is likely to be short-lived, he added, because North America’s domestic gas supply has entered a long-term decline that cannot be reversed, while demand is likely to continue growing.

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