Natural gas prices expected to remain stable for rest of 2013

By By Eric Cormier / American Press

A group of energy sector executives expect natural gas prices to remain around $4 per million British thermal units through

the rest of 2013.

That information bodes well for companies like Louisiana Pigment, Sasol North America, Westlake Chemical, Cheniere, BG Group,

and Magnolia LNG — which use natural gas as feedstock or are expanding or initiating natural gas projects for export.

International professional services company KPMG LLP’s Global Energy Institute surveyed a group of American business leaders

and found that 73 percent of them expect natural gas prices to remain between $3 and $4.

“Great assurance of supply appears to

be stabilizing commodity price environments and enabling large

investments. At the same

time, marginal production remains ‘shut in’ which could quickly be

reinstated should the price picture become even more robust

for gas,” stated Regina Mayor, oil and gas sector leader for KPMG,

in the report.

More than 100 top managers were polled, with 73 percent responding that prices would remain low and stable.

The survey also found that 79 percent of the respondents support energy companies focusing on the use of natural gas in the

creation of technology that doesn’t adversely affect the environment.

Sixty-two percent of those polled think

low natural gas prices will spearhead the growth of manufacturing and

economic development

in the country.

“Natural gas production, particularly

here in the U.S. has drastically shifted the energy paradigm and will be

key to the

future of the energy industry as exports grow,” Mayor stated. “The

high production rates of natural gas and its reputation

as a low-cost alternative to other energy sources continue to

contribute to the recent growth in manufacturing, and as companies

begin to monetize these new assets we’ll also see significant

benefits for local and national economies.”

While energy processing companies benefit from low natural gas prices, drillers aren’t necessarily reaping a windfall.

Don Briggs, president of the Louisiana Oil and Gas Association, told the American Press that a small rise in prices would make a difference for some exploration companies.

“Low natural gas prices is good for the petrochemical industry for instances. Very good news. However, for us to be able to

drill for natural gas we would like to see them a little higher. At least around $4 or $5,” he said. “Those are the types

of prices that will still be good for the Louisiana petrochemical industry.”

He noted that in Europe and Asia, governments and businesses are spending between $11 and $13 for natural gas, which has to

be imported. Japan is regarded as the largest natural gas importer in the world.

It is no secret that America is

experiencing an energy renaissance compliments of new technology that

allows unconventional

drilling to take place in locations and depths thought to have

been unimaginable a few years ago. As a result, with domestic

energy production at its highest ever, some experts speculate that

the country will be energy independent within a few decades.

At LNG17 in Houston in April, Betsy Spomer, BG Group vice president, global LNG, told an audience she thinks shale gas prices

will increase over time.

“There’s no such thing as cheap LNG, as the (Henry Hub) prices goes back above $4 and will still go higher,” she said. “It

won’t be enough to balance Asian demand by 2020.”

BG intends to export LNG. It has

contracted 5.5 million tons per annum of LNG from Cheniere Energy’s

Sabine Pass facility

for $8.2 million over 20 years and is working on converting the

Trunkline LNG terminal in Lake Charles into an export facility.

BG Group joined with Southern Union to complete the project.