NGI The Weekly Gas Market Report
CMS Energy moved a step closer to its liquefied natural gas(LNG) goals last week as its energy marketing arm, CMS Marketing,Services and Trading, (CMS-MST) purchased three LNG shipments fromRas Laffin LNG Co. Limited (Rasgas) in Qatar. The three cargoes,carrying a combined 8.1 Bcf, will be delivered in November andDecember of this year and in February of 2000 to CMS’ LNG complexin Lake Charles, LA, then fed into CMS Trunkline’s interstatepipeline system. The overall cost for the shipments was notreleased.
CMS said it expects up to 25 LNG shipments to be delivered intothe Trunkline system this year. The latest deliveries bring thetotal to 23, five of which were purchased from Rasgas by CMS-MST.By comparison, the Lake Charles complex had 17 total shipmentsdelivered in 1998.
CMS set these lofty goals because it believes LNG production andtransportation can create value from its November 1998 purchase ofthe Trunkline system from Duke Energy. Since the purchase, CMS hasintensified the activity of the Lake Charles facility. Thesedeliveries are the second major set of LNG shipments announced inthe past 30 days. Additionally, CMS-MST agreed to buy 9.3 Bcf ofLNG in several shipments from the North West Shelf LNG project inAustralia for delivery to the CMS Trunkline LNG facility lastApril.
“Currently the U.S. gas market provides excellent opportunitiesfor LNG producers around the world. CMS Marketing Services andTrading has the experience and expertise to structure attractiveterms to meet the LNG producer’s requirements,” said David B.Geyer, vice president of CMS-MST.
Although CMS owns Lake Charles, it is not the only company thatimports gas there. Coral Energy, a Shell affiliate, recentlyentered into the LNG market by receiving a 2.8 Bcf delivery fromMalaysia at the facility in July. Coral said it expects more LNGimports in the near future. Two other companies also import LNG toLake Charles as well, a company spokesman said.
CMS-MST has annual operating revenue of more than $1.2 billion,with 7,000 industrial and commercial customers throughout theeastern and central United States and Canada. It markets annuallyabout 370 Bcf, seven million MWh of electricity, and 1.2 millionbarrels of LNG.
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