This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Natural Gas Prices to Surge 71% on Asian Resource Battle

NEW YORK ( TheStreet) -- Liquefied natural gas prices could jump 71% as Japan and China fight for the resource and India builds out its massive power infrastructure projects.

According to Bloomberg data, record Japanese imports to replace nuclear power after the Fukushima Dai-Ichi March-mega earthquake-induced disaster and a 27% leap in China's first-half purchases may send prices to roughly $20 per million British thermal units this winter, up 71% from last year and the highest since 2008.

"The Asian market for LNG likely will see a material revaluation upward as Japan uses more LNG to offset the loss of Fukushima nuclear power generation capacity," says MKM Partners analyst Curtis Trimble.

With Chinese and Korean demand also growing substantially over the next few years, Trimble expects the global LNG market to remain relatively tight, despite the number of large-scale projects due to come on line in the coming years.

That said, even before the tsunami hit Japan, the major exploration and production companies were already making hefty investments in LNG projects in Australia and the Asia-Pacific region, Raymond James analyst Stacey Hudson says.

"These companies anticipate hefty growth in Asian gas demand for power generation," she said.

Hudson also includes India as one of the countries that will continue to exhibit strong demand for energy as they continue to grow.

"There are millions of people in India who do not have access to the power grid. As infrastructure is built out, gas demand for power generation is poised to increase," she said.

In the meantime, Exxon Mobil (XOM - Get Report) continues to watch its LNG shipments grow, as the company develops its operations, encouraged by the rising prices.

The Bloomberg report indicates that North American exports could see significant growth by 2016 to feed the Asian demand.

Furthermore, the exports could help these rapidly-growing Asian economies keep inflation from rising oil and coal prices in check.

Trimble of MKM Partners cautions that the same economic conditions that likely will lead to reduced crude oil consumption also will likely put a cap on expectations for ever-increasing LNG demand growth.

Liquefied natural gas-exposed stocks were mostly popping.

Golar LNG ( GLNG) was popping 6.3% to $35.85; Teekay LNG Partners L.P. (TGP - Get Report) was rising 1.2% to $34.23; Teekay Corporation (TK - Get Report) was adding 1.4% to $26.68; Cheniere Energy (LNG - Get Report) was down 0.4% to $7.16; Chevron (CVX - Get Report) was up 0.6% to $99.30; Exxon was gaining 1% to $74.46; and EOG Resources (EOG - Get Report) was increasing 1.1% to $88.69.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.
Copyright 2011 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CVX $101.42 0.00%
EOG $81.26 0.00%
GLNG $15.65 0.00%
LNG $36.11 0.00%
TK $9.90 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs