The Oil Drum | DrumBeat: October 22, 2006

127 comments on DrumBeat: October 22, 2006

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jkissing on October 23, 2006 - 1:26am

bears might also point out that some industrial users, eg fertilizer and plastic precursors, are moving offshore... or, to put it differently, the onshore producers can't compete against those producing from cheaper supplies. Moving these uses offshore is both cheaper, less risk, and more energy efficient that importing lng to continue doing these things here.

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alistairC on October 23, 2006 - 7:59am

mmm yes but beware of false outsourcing analogies.

Manufacturing labour may be outsourced to places where wages are always going to be significantly lower.

But where are these places that have long-term cheaper energy prices for manufacturing?

... the moons of Saturn?

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AlanfromBigEasy on October 23, 2006 - 8:16am

Qatar

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jkissing on October 23, 2006 - 11:20am

All of those places that are planning large lng projects, including qatar, as noted by alan below, plus australia, iran, even tobago. The total cost of liquifying ng, transporting it in special ships, gasifying it, and finally selling it at current US prices of 7/mcf means the value in the exporting country is maybe half, say 3.50/mcf. Naturally it would be cheaper to make fertilizer/plastic precursors with 3.50 input and then shipping the easily shippable products.

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127 comments on DrumBeat: October 22, 2006

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