Japan LNG imports in 2012 ranged from about $15 to $18 per million BTU (MMBTU).
WTI crude oil is about $93/bbl, at 5.8 MMBTU/BBL = $16/MMBTU.
Brent crude at $110/BBL = $19/MMBTU.
So there is a reasonable match in the cost of LNG shipments to Japan, versus the world crude prices.
Now to Natural Gas versus Gasoline in North America.
Natural Gas at the Henry Hub is running about $3.50 per MMBTU.
Gasoline is generally 8 gallons per MMBTU, so at $3.50 a gallon that is $28 per MMBTU
So natural gas is 1/8th the cost of gasoline per MMBTU.
Liguid gasoline is roughly worth 8 times more than natural gas.
This leaves a good amount of margin for a cost-effective NG to Gasoline conversion process here at home.
THIS is also why we need to develop LNG exports, there is a big market for this as well. All in all, exporting LNG and bringing $’s into the US is a good thing.
WTI is the price at land-locked Cushing, Oklahoma. If you bring the same grade oil to the coast, it rises in value about ~$20/barrel. WTI has not represented world prices of light sweet for years. Brent is the new world standard and now trades a higher volume than WTI.
