Liquefied natural gas has got a logistic appeal as well

It is hard to look away from the fireworks surrounding Venezuela's firebrand president Hugo Chavez. He's now threatening to cut off oil supplies to the US, following Exxon's move to freeze $12 billion of Venezuela's state-owned oil company's assets after a decision to nationalise four heavy oil projects in the Orinoco Basin.

But there are only so many times I can write about a North American bully (Bush) facing off against a South American blowhard (Chavez). Besides, Opec is sticking to its "we aren't raising production" guns. So let the hot air blow back and forth in the Americas. In the meantime, I find myself being increasingly drawn towards liquefied natural gas.

Although not all the news in LNG is good - there are still not enough regasification facilities in relation to the amount of LNG produced, for instance - 2008 is looking to be a brilliant year as many projects finally reach completion.

New production is set to come on line this year in Russia, Indonesia, Nigeria, Australia, Yemen and Qatar, where production is expected to eventually hit 39 million tonnes per year.

Regasification is finally starting to catch up as well, with more than 65 million tonnes per year of capacity set to open up in the United States, Mexico and Canada, bringing total capacity up to 90 million tonnes per year.

Europe should see roughly 26 million tonnes per year added to its capacity, and Asia will add about the same amount in Korea, China and India. And there is no ignoring that LNG demand is what pushed BG Group's fourth-quarter earnings up 36 per cent, beating analyst expectations.

Taking a quick stroll through the news stories recently, it is easy to pinpoint part of the appeal of LNG. Unlike unprocessed natural gas, which is transported through vulnerable pipelines that often cross international borders, LNG can be easily shipped on supertankers to any corner of the world.

European natural gas supplies, however, are constantly threatened by ongoing issues between Russia and Ukraine. The dispute, which centres around Ukrainian debt of about $1.5 billion in unpaid gas deliveries, has already cut gas supplies to Europe once. Considering that the European Union gets a quarter of its natural gas from Russia, through Ukraine, the situation is unstable at best. And while Russian First Deputy Prime Minister Sergei Ivanov said Europe will not feel the pinch again, Gazprom is still remaining on plans to halt the flow of gas on February 12.

Small wonder the EU is beefing up its LNG regasification capacity.

Meanwhile, those same natural gas pipelines remain entirely vulnerable to attack on both national and international levels. Just last Saturday, suspected militants blew up two gas pipelines in Pakistan. Everywhere from Turkey to Iraq to Georgia, natural gas pipelines have proved to be a tempting target for terrorists.

Then there are the political snarls that plague the transport of natural gas over international borders.

Iran and India have both decided to end negotiations to build an Iran-Pakistan-India gas pipeline, which were scheduled to get underway on Monday. Iran just backed out of the deal, and India pulled out slightly earlier, saying that it wouldn't come to the table until a new government was elected in Pakistan.

So keep watching the pro wrestling match that US-Venezuelan relations have become. But the real action is elsewhere as everything from LNG, gas-to-liquid (GTL) fuels and other energy sectors boom.

The writer is a freelance journalist based in Alaska, USA.

Unlike unprocessed natural gas, which is transported through vulnerable pipelines that often cross international borders, LNG can be easily shipped on supertankers to any corner of the world.