Official trade data is starting to confirm unofficial suspicions among Canadians that American imports of liquefied natural gas (LNG) are becoming a competitive force on the North American market.

Tanker deliveries of LNG jumped 65.5% to 184.4 Bcf in the first three months of 2007, according to the latest quarterly report by the U.S. Department of Energy's Office of natural gas regulatory activities, which licenses importers.

The growth in LNG traffic outstripped a first-quarter 2007 increase of 5% in U.S. pipeline imports from Canada to 983.4 Bcf. The LNG deliveries added up to 16% of total U.S. first-quarter gas imports of 1.18 Tcf. The LNG growth trend continued through the spring and into the summer, according to Canadian observers of the gas trade.

In a July research note and forecast titled "The Price Ship is Sinking," FirstEnergy Capital Corp. said, "The surge in LNG imports...has proven to have had a much higher degree of longevity than we originally anticipated."

The Calgary investment house predicted "elevated levels of U.S. LNG imports near or above 3 Bcf/d are expected to continue until at least September of this year and possibly beyond."

There is "simply too much gas and not enough places to put it," FirstEnergy warned in lowering its annual average price expectations to C$6.77 (US$6.43)/MMBtu from C$8.40 (US$7.98)/MMBtu for this year and C$8.22 (US7.80)/MMBtu from $C8.65 (US$8.22)/MMBtu for 2008.

"Though not large in the grand context of the 70 Bcf/d North American natural gas market, these additional flows of LNG have proven to be an important incremental source of supply that will likely tally 100 to 150 Bcf more than our original expectations for 2007. In its most simple form this means 100 to 150 Bcf more gas in U.S. storage than originally expected."

The thinking goes the other way, too. Rival Calgary energy investment boutique Peters & Co. is currently calling for a price recovery on partly on the strength of an anticipated reduction in LNG deliveries.

The Canadians credit this year's acceleration in LNG traffic at least partly to unusually low prices this year on European markets, saying that global economic movement prompted tankers to veer off to North America.

So far, financial analyst opinion sees such developments as short term. Official Canadian opinion still largely avoids incorporating prospects for a long-range trend toward global competition into forecasts of North American gas prices, profits and share values.

But Canadian producers see the writing on the wall, especially in trying to formulate long-range supply plans. Prospects of a growing LNG trade are a factor in deciding the fate of the northern pipeline, for instance. Imperial Oil, senior partner in the Mackenzie Gas Project, has emphasized as regulatory proceedings stretched out and construction cost forecasts rose this year that the sponsors will only build the system if they are satisfied Arctic gas will be competitive against LNG.

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