Business

THE EDITOR, Sir:

In reading your story, 'LNG Financing, Supplies Unsettled' in the Financial Gleaner of July 2, 2010, some thoughts came to mind that might be helpful in the future.

Securing LNG supply prior to terminal permitting is historically difficult, unless the terminal developer owns liquefaction elsewhere.

Perhaps the current world LNG glut, or the Jamaican Government's participation, has changed that, but it may deserve a look.

The reason suppliers are reluctant to make commitments prior to the developer obtaining a permit is that the suppliers do not want to tie up product for speculative projects.

The United States is now experiencing a 100-year natural gas glut from newly accessible domestic shale gas.

This has turned the LNG market on its ear; there is little need for incremental LNG imports to the US. Some industry participants are even predicting a 200- to 400-year supply.

In any case, LNG cargos that were destined to the US are now going elsewhere, and that is expected to be the case for a very long time.

US LNG-import terminals are operating at only around 10 per cent capacity, plus there are 16 newly permitted terminals that are not being constructed due to lack of market.

Sabine Pass LNG, an import terminal, is now applying to construct an LNG-export terminal as a way to profit from the overabundance of natural gas in the US.

Robert Godfrey

LNG Terminal Siting

Standards Organisation

office@lngtss.org