January 3, 2008 / 9:05 PM / 12 years ago

CORRECTED - US LNG imports a record in '07 despite fall swoon

(Corrects U.S. storage to 3.6 tcf in final graf)

By Bruce Nichols

HOUSTON, Jan 3 (Reuters) - Liquefied natural gas imports to the United States set a record in 2007 despite a sharp decline at the end of the year, analysts said Thursday.

LNG unloaded from ships, regasified and sent to U.S. markets totaled 738 billion cubic feet in 2007, North Carolina consulting firm Pan EurAsian Enterprises reported.

The bulk of deliveries occurred from March through September, said Zach Allen, editor of Pan EurAsian’s North American Terminal Survey (NATS) newsletter.

U.S. deliveries declined in the fall because Asian and European buyers wanted LNG more and paid a lot for it, he said.

Japan, squeezed by nuclear power plant problems, recently paid $18 per million Btu. Korea, short on storage, has paid $16 per mmBtu. Prices in the UK lately hovered around $10.

U.S. gas currently sells for $7 to $8.

Daily U.S. LNG sendouts ranged from a high of 3.9 Bcf in August to a low of 0.6 Bcf in October, according to Houston-based Tudor, Pickering, Holt & Co Securities Inc.

Tudor, Pickering agrees 2007 set a record but does not estimate yearly totals for U.S. terminals, analyst Stacy Nieuwoudt said.

The previous record year for LNG into the United States was 2004 at 652 Bcf, NATS reported.

“The U.S. is becoming the spring and summer market for LNG,” Allen said. “The big winter markets for LNG, worldwide, are Japan, South Korea and Spain.”

Although demand shifts follow weather changes, the main reason for the seasonal U.S. swings is that the United States has storage capacity and overseas markets do not, Allen said.

“We can buy gas when they don’t want it, take advantage of lower prices, put it in storage and take it out when we need it,” he said.

The United States can buy LNG offpeak and store 3.6 trillion cubic feet of the resulting gas, Allen said. Asian and European markets have to buy LNG when they need it, he said. (Reporting by Bruce Nichols, editing by Matthew Lewis)

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