Global LNG sector poised for accelerated expansion: Moody's

Washington (Platts)--14Dec2004

The liquefied natural gas industry is poised to enter a period of accelerated
expansion driven by "steadily increasing" global gas demand, high market
prices and falling units costs of production and delivery, Moody's Investors
Service said Tuesday an Industry Outlook report. Although the development of
new industry models in response to the changing market is likely to result in
greater variability in credit profiles, the rating agency said it believes the
LNG chain will generally remain an investment-grade business risk. Moody's
added that while Asian demand will continue to dominate the industry this
decade, it believes that in the longer term, the Atlantic basin, particularly
the US, will witness the greatest growth. "In terms of suppliers, we expect
Qatar, which has ample low-cost gas reserves that viably allow it to supply
each major market, to be the primary beneficiary of the LNG boom," Chetan
Modi, a Moody's vice president and senior analyst, said. FPL Group Resources
and subsidiaries of El Paso Corp Tuesday said they have agreed to combine
development efforts and resources to bring natural gas supplies to southern
Florida. FPL Group Resources is a subsidiary of FPL Group, which is affiliated
with Tractebel North America. Upon completion of a series of new agreements,
all three parties will have the ability to come together to create the most
efficient project, the companies said. Under terms of the new agreements, FPL
Group Resources, affiliates of Tractebel North America and El Paso will be
equity owners of both the Seafarer and Calypso pipeline projects, and
ultimately plan to construct one of these pipelines from the Bahamas to
Florida. FPL Group Resources and affiliates of Tractebel North America will be
equal owners of a liquefied natural gas receiving terminal in the Bahamas and
a marketing company based in Florida called Sailfish Natural Gas.

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