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CMS Keeps the LNG Ships Cruising

CMS Keeps the LNG Ships Cruising

CMS Marketing, Services and Trading (CMS-MST) continued its liquefied natural gas (LNG) buying binge last week, announcing 10 more deliveries from Qatar to the CMS Trunkline LNG facility in Lake Charles, LA. The deals bring the number of announced LNG cargoes headed to the Trunkline facility over the next two years to 26.

Financial terms of the agreements were not disclosed. The total gas volume to be delivered into the Trunkline system will be 24 Bcf. Three of the cargoes will come from Qatar Liquefied Gas Co. for delivery from August through December. The other seven cargoes will originate from Ras Laffan Liquified Natural Gas Co. (Rasgas) for delivery beginning June through April 2001.

The announcement extends a relationship between CMS and the Qatar suppliers. Last October, CMS and Ras Laffan announced agreements for shipments of seven LNG cargoes this year. Besides Qatar, CMS imports load from the North West Shelf Venture in Australia and the LNG project in Trinidad. CMS-MST also is a partner in a master agreement with Abu Dhabi Gas Liquefaction Co. (ADGAS) of the United Arab Emirates for the purchase of spot LNG cargoes.

The company is still actively developing additional long-term and short-term LNG opportunities, said Tamela Pallas, president of CMS-MST. Overall, the company said it hopes to import around 30 shipments this year. LNG import growth has been a priority of CMS ever since it bought the Trunkline system from Duke Energy in November of 1998. CMS imported more than 25 LNG shipments into the Lake Charles facility in 1999. By comparison, only 17 total shipments were delivered in 1998 (see NGI, Oct. 11, 1999).

Industry reports are in agreement that LNG use is on the rise. Last month, the investment firm Friedman, Billings, Ramsey & Co. Inc. said it expects LNG to rise from 1% of the total U.S. gas supply to 3% by 2002. The firm said high prices in natural gas combined with the abundant LNG supply found abroad "should promote the use of LNG as an everyday supply source rather than strictly a peaking fuel."

And just yesterday, a report issued by the Business Communications Co. predicted that domestic LNG demand would jump nearly 12% by 2004. The firm said $418 million was spent on domestic LNG production in 1999. It expects that number to grow to $727 million by 2004. John Norris

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