watching paint dry.., page-27

AFR published an article yesterday alerting the high risk in LNG industry.

The article reminded me of another that I read awhile ago where an analyst mentioned that currently there is an oversupply of gas in relation to demand, moving forward. From my memory, reason's outlined were:

1) Qatar - The country produces low cost high quality gas. Further simple improvements to its process and supply chain could yield higher output of gas. Because of the high quality + low cost of production, it also stated that a strategy Qatar could utilise in winning market share in the future could entail shipping liquified gas with attached gas components for free (? I wasn't clear on this).

2) The advent rise and acceptance of nuclear energy could dampen the need for gas as an alternative power source. Notice "dampen", not suggesting it won't be used, just that the massive investment to increase supply may not be justified.

3) The rise of smaller suppliers + drillings of natural gas in the US and China means that their natural gas needs would already be met

http://climateprogress.org/2009/06/25/game-changer-3-new-natural-gas-supplies-great-news-for-low-cost-climate-action-bad-news-for-coal/

I do not hold MEO, but have a position in other natural gas companies. They are also down. This is just my analysis and opinion.

Cheers