The early movers will definitely have an advantage,” Barcella said in a phone interview last week. “As you build up capacity, you start to get prices softening.”

To entice buyers, Encana said it and its partners are considering selling a stake of as much as 20 percent of their Kitimat project. Apache currently has a 40 percent stake, while Calgary-based Encana and Houston-based EOG each have 30 percent.

John Roper, an Apache spokesman, declined to comment on possible stake sales or contracts, and said it's too soon to say how the company will proceed with its Canadian project.

“We'll make a decision when we have all our i's dotted and t's crossed,” Roper said yesterday in a telephone interview. Apache and its partners have said they want Asian buyers to pay oil-linked prices, which averaged $16.66 per million British thermal units of gas in the first quarter. Gas futures in New York, which touched a 10-year low of $1.902 per million Btu in April, averaged $2.50 per million Btu in the first quarter and settled at $2.218 yesterday.

‘Real Challenge'
“Pricing is the real challenge signing into these 20-year contracts,” Greg Stringham, a vice president for CAPP, the Canadian producers organization, said in a telephone interview. Shell's project has a “big” advantage over Apache's because its partners are also LNG buyers, Brian Youngberg, a St. Louis-based analyst at Edward Jones, said yesterday in an e- mailed response to questions. Youngberg said Shell also has an edge because of its “history of being the global leader in LNG.”

Eoin Treacy's view The spread between US natural gas and Brent Crude Oil has contracted significantly over the last month but is still at a highly attractive level for those seeking to export LNG from North America. Just as producers see the opportunity to profit from this record arbitrage, consumers must be looking at North American pricing and questioning the long held wisdom of agreeing to pricing pegged to oil. The companies with the ability to get their product to market first are likely to enjoy a significant advantage in securing contracts.

Despite the attractive macro story that underlies this sector, the unescapable fact is that related shares are industrially oriented and susceptible to concerns over a slowdown in the global economy. The weakness of the oil price has been an additional headwind. The net result is that while the majority of related shares have advanced over the last few years, they have not posted the most consistent uptrends.

In US Dollars Brent Crude has dropped below the $100 level and while it has steadied it will need to sustain a move above $105 to defray potential for additional downside. Brent Crude has been somewhat weaker in Renminbi. When priced in Euro, Brent Crude has broken a previously consistent medium-term uptrend by failing to sustain the breakout to new highs and pulling back to test the lower side of the underlying trading range. This represents significant technical deterioration and a sustained move above €90 would be required to question medium-term downside potential. When priced in Yen, Brent crude posted a new 18-month low last week and a sustained move above ¥9000 would be required to check potential for additional downside.

Natural gas posted its largest rally in more than a year in the month to the end of May unwinding the oversold condition relative to the 200-day MA. If the $2 area is to prove to be a medium-term low, it will need to find support above that area on the current pullback to demonstrate demand returning at a progressively higher level.

Royal Dutch Shell, produces more gas than oil on an energy equivalency basis. It is a dominant player in the global LNG sector and has been developing tight relationships with Asian consumers and energy companies, particularly in China. (Also see Comment of the Day on November 18th) . The share yields more than 5% and remains in a choppy more than 3-year uptrend. It retested the 2000p level four weeks ago and a sustained move below that area would now be required to question medium-term scope for additional higher to lateral ranging.

BG Group (1.32%) has returned to test the psychological 1200p and Apache Corp has returned to an area of potential support in the region of the 2010 and 2011 lows near $80. Both have bounced but will need to hold above those levels if potential for additional medium-term upside is to continue to be given the benefit of the doubt.

Chevron Corp has been ranging mostly below $100 for the last 18 months. It encountered resistance in the region of the 200-day MA yesterday and will need to sustain a move above $100 to begin to suggest demand is returning to dominance beyond the short term.

Encana declined along with the natural gas price from the middle of last year but has stabilised near C$20 and a sustained move below this year's lows near $17 would be required to question base formation development. The spread between US natural gas and Brent Crude Oil has contracted significantly over the last month but is still at a highly attractive level for those seeking to export LNG from North America. Just as producers see the opportunity to profit from this record arbitrage, consumers must be looking at North American pricing and questioning the long held wisdom of agreeing to pricing pegged to oil. The companies with the ability to get their product to market first are likely to enjoy a significant advantage in securing contracts.

Despite the attractive macro story that underlies this sector, the unescapable fact is that related shares are industrially oriented and susceptible to concerns over a slowdown in the global economy. The weakness of the oil price has been an additional headwind. The net result is that while the majority of related shares have advanced over the last few years, they have not posted the most consistent uptrends.

In US Dollars Brent Crude has dropped below the $100 level and while it has steadied it will need to sustain a move above $105 to defray potential for additional downside. Brent Crude has been somewhat weaker in Renminbi. When priced in Euro, Brent Crude has broken a previously consistent medium-term uptrend by failing to sustain the breakout to new highs and pulling back to test the lower side of the underlying trading range. This represents significant technical deterioration and a sustained move above €90 would be required to question medium-term downside potential. When priced in Yen, Brent crude posted a new 18-month low last week and a sustained move above ¥9000 would be required to check potential for additional downside.

Natural gas posted its largest rally in more than a year in the month to the end of May unwinding the oversold condition relative to the 200-day MA. If the $2 area is to prove to be a medium-term low, it will need to find support above that area on the current pullback to demonstrate demand returning at a progressively higher level.

Royal Dutch Shell, produces more gas than oil on an energy equivalency basis. It is a dominant player in the global LNG sector and has been developing tight relationships with Asian consumers and energy companies, particularly in China. (Also see Comment of the Day on November 18th) . The share yields more than 5% and remains in a choppy more than 3-year uptrend. It retested the 2000p level four weeks ago and a sustained move below that area would now be required to question medium-term scope for additional higher to lateral ranging.

BG Group (1.32%) has returned to test the psychological 1200p and Apache Corp has returned to an area of potential support in the region of the 2010 and 2011 lows near $80. Both have bounced but will need to hold above those levels if potential for additional medium-term upside is to continue to be given the benefit of the doubt.

Chevron Corp has been ranging mostly below $100 for the last 18 months. It encountered resistance in the region of the 200-day MA yesterday and will need to sustain a move above $100 to begin to suggest demand is returning to dominance beyond the short term.

Encana declined along with the natural gas price from the middle of last year but has stabilised near C$20 and a sustained move below this year's lows near $17 would be required to question base formation development.