JPMorgan Chase & Co, the second-biggest US bank, said the US may see more "development plans" for natural gas liquefaction terminals if low prices boost export demand.

Global liquefied-natural-gas trading also will become more active, with about one-seventh of the trading in the spot market next year, said Paul Posoli, head of global power, gas, coal and emissions at JPMorgan.

The US's vast storage capacity, about 4.2tn cu ft, and lower prices will help the country play a big role in the global LNG market, he said.
"As long as Europe is trading $2 to $3 over Henry Hub, you'll find other companies attempting" to build export terminals, said Posoli, who is based in Houston.

"The US happens to be sitting on 4 tcf of natural gas storage, and a lack of storage globally will create inefficiencies and arbitrage opportunities."

Eoin Treacy's view The USA has more natural gas than it currently knows what to do with. The simple reason for this is that technological innovation has made unconventional natural gas exploitation an economic reality. Supply is currently outstripping demand by a considerable margin and helping to keep prices comparatively low against a background where other energy commodities have experienced considerable bullish interest.

In a capitalist system, when supply of a vital commodity increases and prices are low, it is only a matter of time before people find more uses for it. T. Boone Pickens believes that a new gas bill will go before Congress by the summer which should pave the way for greater demand for this commodity and potentially even more supply. (Also see Comment of the Day on March 8th).

The arbitrage between Henry hub natural gas prices and the European equivalent has raised the possibility that the USA will become a net exporter of natural gas. At present, the USA does not have an export terminal but at least one is being built.

Cheniere Energy Partners has an LNG import terminal in Louisiana which it is currently upgrading to also function as an export terminal. The share trended consistently higher until four weeks ago when it fell abruptly through the 200-day MA. This appears to have been because of rumours that it had defaulted on a debenture to one of its holders. It is now suing Centerbridge Partners LP for disrupting its business. I do not know whether the rumours have merit but the share found support near $15 on March 9th and has rebounded impressively over the last two weeks. A sustained move below $15 would be required to question medium-term upside potential.

Cheniere Energy Partners has some aggressive capital expenditure planned so it is questionable whether it can sustain its admirable payout record; currently yielding 9.1%. This company offers exposure to the possibility that the USA may become an exporter of LNG. US energy policy is likely to become clearer over the next year.