Say what you will about this year’s GasMart, we think those Gazprom Marketing and Trading guys stole the show. Why? It’s actually a little complicated. When we first saw the company name on the agenda and noted they would also be sponsoring a vender booth, we had visions of thick-necked, heavily accented guys with large hands dolling out the vodka shots -- you know, something out of central casting. Not even close. The only accent we heard was from the firm’s head of global trading, Jon Larsen, who hails from the UK office. We also met NY banker turned Gazprom biz development exec Lester Huang – we think he’s from ‘Jersey. Not a Russian in sight. We put Huang and US subsidiary President John Hattenberger on the spot early on: “So, you guys don’t look like commies...” Hattenberger fielded that one in a typically stoic fashion. “You’re right,” he said, “we don’t.” Yup.

As it happens, Hattenberger, a longtime LNG exec with a variety of big-name operations like Marathon Oil, EP and Transcanada Pipelines, has headed up the Gazprom ops in Houston since 2005. Who knew? The word is they’re hiring. Currently, the Houston group has about 12 people on deck, mostly focused on LNG deals. But all this changes very soon. Industry vet Bruce Sukaly is the new trade chief for North America. Sukaly is a longtime hitter in the industry. He had the foresight to leave Enron well before the fall, make a mark at Williams and for the past several years head up trading for Cinergy’s beefy Houston operation, which was later morphed into the Fortis gas trading operation. Looks like he’ll be scaling up the trade group like Nowsville.

Gazprom’s public foray at GasMart came during the first panel of the show, which was also one of the best. It featured Will Hussey of ConocoPhillips, David Slater of Nexen Marketing and Hattenberger of Gazprom Marketing and Trading. The Q&A following the three presentations was particularly good.

On the subject of imported LNG, Hussey said he expects the numbers to dive in the immediate future. His PowerPoint presentation was quite clear on that point. Hattenberger, on the other hand, said the US LNG import numbers will be up significantly. His charts forecast a much more bullish future for LNG imports. So there we had two of the biggest natural gas producers in the galaxy with widely differing views on LNG imports to the US. How could this be?

Hussey told us the real difference is in the timing. “When is that liquefaction going to happen? I don’t see things happening in 2009 as fast as we thought they were to happen.” He says his comments are in the context of his company’s partners in Qatar. He also said that 2009 deliveries from Russia into Europe by pipe are down about 20-25 percent over last year. “So I assume that, even though the economy is down in Russia, that (supply shortfall) will likely be made up from LNG.” That’s why he doesn’t buy the conventional wisdom that the US will see heavy LNG imports: “Pushing back liquefaction from 2009 to 2010, and making up some potential shortages into Europe, is where my premise comes from.”

In the longer term, he referenced some new EIA data (STEO) that supports the lower LNG import scenario. But assuming the EIA forecast is suspect, which we do, Hussey’s argument for slim LNG tallies seemed a bit thin as well.

The mike was then passed over to Hattenberger. He opened with the notion that “we don’t disagree fundamentally...” Really? “LNG tends to come to the US after everything else has been figured out: demand in Asia, pricing and demand in Europe, pipeline supplies to Western Europe. When all that is said and done, then you come to the US and see how the S/D (pricing) fits. LNG will come, not because it sees the S/D picture, but because it gets the right pricing. The good thing about the US market is that it is a very efficient market. When demand is out of whack, prices react very quickly, unlike in Asia, where its price is tagged to oil, so it doesn’t react to the S/D (situation) for gas. It’s not a very good indicator in the Pacific Basin. The pricing channels in the Pacific Basin tend to be more company-to-company, rather than a transparent (market) number... You have to be very careful about your basic assumptions about the world economy and about gas demand in Asia, Europe and the US, about pricing at HH and global oil. It’s very difficult to project where this happens beyond a six- to 12-month period. (But) fundamentally, I think the drivers are there for increased net imports to the US. The price signals will be key.”

reprinted with permission from Scudder Publishing.