Thursday, November 26, 2009

Re-Exporting LNG from Freeport, TX

Re-exporting sounds like a double negative, but it's for real. News came out today that two shipments of gas that were previously imported to the LNG facility in Freeport, TX will be exported to Europe or Asia, where prices are higher than the U.S.  The Freeport facility received approval to re-export LNG this summer as a means of survival. 

This is interesting because it shows that one can apparently make money liquefying gas, loading it into an expensive boat, shipping it across the ocean, offloading it, storing it for a few months, loading it back on a boat, shipping it across the ocean and offloading it.  What a kooky natural gas market.  I'm sure nobody wrote their business plan to reflect this reality, but the LNG importers are going to have to do whatever they can to survive in a shale gas world.

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