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The Obama administration on Monday once again delayed release of a report on expanding liquefied natural gas exports, likely pushing beyond the election a decision on the potentially contentious issue of sending U.S. gas abroad.

Commissioned by the Energy Department to examine the economic impact of LNG exports, the report by an unidentified third-party contractor is now expected to be completed by the end of the year.

Any decision on natural gas exports will likely be made by the victor in the November 6 presidential election – either President Barack Obama or his Republican challenger, Mitt Romney.

The department, which has said it will not make any decision on allowing further LNG exports until the analysis is completed, had previously pledged to release the report by late summer.

“The Department of Energy takes its statutory responsibility to make public interest determinations on natural gas export applications very seriously and is committed to taking the time necessary to get the decisions right,” the department said in a statement.

It was the second delay of the report, which was initially expected in March.

“This is a complicated economic analysis assessing a dynamic market,” a department official said regarding the postponed report. “We’ll release the report once it’s complete.”

Natural gas exports to all but a handful of countries with Free Trade Agreements with the United States require approval from the department.

After years of projections that the United States would increasingly need to rely on foreign sources for natural gas, advances in drilling techniques have led to a boom in shale gas production that has put the country in a position to export excess gas.

But manufacturers and some lawmakers have raised concerns that exports could increase energy costs at home and undercut U.S. industries.

“For members of Congress seeking reelection, LNG exports may be an issue with two wrong sides,” ClearView Energy Partners said in research note on Monday.

Support for exports could leave politicians open to accusations of raising natural gas prices, while opposition could lead to charges of failing to support oil and gas jobs, the research note said.

As a compromise, the Obama administration may be considering capping exports at 6 to 7.4 billion cubic feet initially, ClearView said.

The department has approved exports from just one project so far, Cheniere Energy’s Sabine Pass terminal.

After that approval, the Obama administration put LNG export applications from companies such as Dominion Resources and Sempra Energy on hold pending the outcome of the economic analysis.

“It certainly does not come as a surprise that the report has been delayed yet again,” said Bill Cooper, president of the Center for Liquefied Natural Gas (CLNG), an industry trade group. “However, CLNG is disappointed in the news.”

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MAIN FACTS: French oil and gas company Total SA (FP.FR, TOT) said Thursday it signed an agreement with South Korean national company Korea Gas Corporation for the purchase of 0.7 million metric tons per year of LNG from the Sabine Pass Terminal in Louisiana.

The LNG will be lifted following the startup of the Sabine Pass terminal’s liquefaction train 3, which is scheduled for commissioning in 2017.

This agreement follows on from the recent acquisition by Kogas of an interest in the GLNG project in Australia and the execution of a sale and purchase agreement between Total and Kogas for 2 million metric tons per year of LNG.

Total also signed a cooperation agreement with Sabine Pass Liquefaction that will help to further expand the liquefaction capabilities being developed adjacent to the Sabine Pass LNG terminal.

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It’s clean, abundant and cheap, and a compressed natural gas pump may finally be coming to a auto fueling station near you.

Though northeastern Louisiana remains void of a public CNG fueling station, Hollis Downs of Hunt Guillot & Associates said the Ruston firm has a client who wants to open one in Ouachita Parish in 2013.

“There are a lot of things happening that are close to blowing the lid off of this,” said Downs, who said the firm’s unidentified client is exploring sites on U.S. 165 North near Sterlington.

Five of the state’s 10 current public CNG fueling stations are clustered in northwestern Louisiana, where the Haynesville Shale natural gas play sparked immediate interest.

The others are in Alexandria (one station), Baton Rouge (two stations), Lafayette (one station) and New Orleans (one station) with eight more scheduled to come online this year.

“The Haynesville Shale gave the CNG development a lot of energy in Shreveport,” Downs said. “Monroe hasn’t had similar interest, but it’s coming.”

Today, the state’s CNG stations primarily serve fleets of vehicles from companies that committed to use them like Chesapeake Energy, an exploration and production company among the leaders in advocating for natural gas use in vehicles.

Lott Oil of Alexandria, a traditional fuel distributor, was the first private company to build a CNG station after it received a commitment from Chesapeake to refuel its fleet at Lott’s station in Mansfield. Most of the other public stations have been built by local governments like Bossier City.

“We liked the concept; everything we looked at made sense,” said David Dollar of Lott Oil. “We’re taking natural gas from under our feet and driving with it.”

“Right now it’s simple,” Downs said. “You have to marry the users, which are primarily fleet customers in the early stages, to the fueling station to make sure you have customers to buy the (CNG).”

Chesapeake’s Katie McCullen said it’s not hard to convince companies to convert their fleets once they see the ultimate savings.

CNG currently sells at an average of $1.75 gasoline gallon equivalent.

“Fleet customers get it,” McCullen said.

But so far individual consumers don’t. Few have been willing to convert their existing vehicles to natural gas without reliable sources of fuel.

That’s changing, McMullen said, pointing out that automakers like General Motors, Chrysler and Ford have committed to produce bifuel pickup trucks that run off of CNG and traditional gasoline as early as the end of this year.

“The tipping point comes when original equipment manufacturers are producing vehicles that consumers can buy straight off of the lot,” she said.

But the infrastructure must be in place as well.

“(Automakers) have to have confidence that fueling stations will be there if they produce the vehicles, and consumers have to know fueling stations will be there if they buy them,” she said.

Dollar said installing a public CNG pumping station can cost almost $1 million, but he said their two stations are already breaking even.

“Our business is growing; it’s been a good investment,” he said. “And when individual consumers do buy (bifuel vehicles), we’ll be well positioned. This isn’t going away.”

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Cheniere Energy Partners LP CQP +1.30% is moving ahead with the construction of facilities to liquefy and export natural gas in Louisiana, moving the U.S. one step closer to becoming a major exporter of the commodity.

The company said Thursday it had given engineering contractor Bechtel Oil, Gas and Chemicals Inc. the green light to start building two liquefaction trains at its Sabine Pass, La., import terminal. The first liquefaction train, which will turn natural gas stemming from booming U.S. shale fields into liquid that can be exported overseas, is expected to start operating as early as 2015, and the second train will start six to nine months later, the company said.

U.S. natural-gas producers became victims of their own success when they unleashed unexpectedly massive amounts of the commodity from shale formations, driving down domestic prices. A market glut for natural gas led prices for the commodity to decade-low levels earlier this year; exports could help ease that glut and give producers access to more profitable markets abroad.

The U.S. exports relatively small quantities of LNG to Japan out of Alaska, but the Sabine Pass facility would be the first terminal to do so out of the lower 48 states.

Cheniere, which originally built the Sabine Pass facility to import natural gas at a time when experts perceived there would be shortages of the commodity, began its effort to turn it into an export terminal about two years ago. The company has struck long-term agreements with four global buyers to supply over two billion cubic feet a day of natural gas for 20 years.

“It is a testament to the flexibility of the U.S. markets and institutions that a small company like ours was able to accomplish so much in a short time,” said Cheniere Chief Executive Charif Souki.

Cheniere expects the project to cost about $5.6 billion, funded by $2 billion of equity and $3.6 billion of debt. The effort is backed by private-equity firm Blackstone Group BX +1.46% .

“We are pleased to provide the growth capital to fund the construction of the first LNG export facility in the continental United States, creating thousands of jobs for American workers and providing significant benefits to the U.S. economy,” David Foley, senior managing director of Blackstone, said.

Cheniere is the only company that has received approval from the Obama administration to export LNG to countries lacking a free-trade agreement with the U.S.

Nearly 10 other proposals are pending before the Energy Department, but the agency says it won’t approve any additional projects until it finishes a comprehensive review of the exports’ impacts on the U.S. The Energy Department is expected to complete that review later this summer.

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With the spike in shale-gas drilling and an increase in the domestic production of liquefied fuels comes renewed interest in using both compressed natural gas and liquefied natural gas as cost-effective alternatives to gasoline.

Priced anywhere from $1.50 to $2 lower than its gasoline-gallon equivalent, natural gas is swiftly emerging as a more cost-effective way to put a dent in the nation’s ever-increasing energy consumption, especially as it relates to transportation.

Unlike electric cars, whose manufacturers have had difficulties in pinning down issues with maximum range and keeping retail costs down, CNG and LNG vehicles are garnering more attention from private industries and public entities.

Now, in places such as Ohio, Texas, California and Florida, to name a few, natural-gas filling stations are beginning to proliferate.

A host of companies is seizing on what they anticipate will be a rising demand for the fuel, not only among consumers, but also among the cash-strapped municipalities that are just now beginning to realize the cost benefits of converting their fleets to CNG and LNG.

At the moment, gauging just where these stations will be located, how prominent the fuel will become going forward and which job markets stand to gain the most are anyone’s guess.

“On a broad basis, we’re asking ourselves how do we promote natural-gas vehicles in the state,” said Craig Butler, assistant policy director of environment, energy and agriculture for Gov. John Kasich, in discussing the administration’s plans for CNG and LNG.

“Whether that’s bringing together auto manufacturers, natural-gas companies or conversion companies, we want to be making those sorts of connection,” he added. “We’d like to see natural gas as a fuel for the future in Ohio.”

Identified as one of “10 pillars of Ohio’s energy policy,” the administration’s plans for alternative fuels appear to fall in line with what those inside the industry say is required to continue growing the infrastructure in Ohio.

Many contend that public- private partnerships are necessary to build more filling stations and catalyze the fuel to a place where it can reduce transportation costs for consumers and municipalities alike.

Ohio has joined 13 other states in attempting to stimulate the industry by exploring bulk purchases of natural-gas vehicles for their fleets. Ohio’s fleet includes more than 22,000 vehicles.

“This is not a new technology; it’s been upgraded for the U.S., but we need the political side to step up in terms of assisting infrastructure construction,” said George Wrataric, fleet manager at CNG Solutions of Ohio, a company in McDonald that specializes in converting gasoline-powered cars into ones that use CNG.

“We’ve been in business for about a year-and-a-half now,” he said. “We saw the chicken-and-the-egg scenario. For stations, you need conversions, and for conversions, you need stations. Now those stations are starting to come along and each side should be thinking about how we can build this network.”

Within the last year or so, Ohio has seen a marked increase in CNG filling stations alone.

In June, the city of Dublin installed a fueling station for its newly converted municipal fleet.

The city estimates it will save $30,000 a year with the move. That station will also be open to corporate fleets and the public.

Last month, Westlake-based TravelCenters of America, which operates full-service truck stops in 41 states, announced it would construct 100 LNG filling stations, to meet the rapidly increasing demand from long-haul freight carriers converting their trucks to LNG.

Additionally, Giant Eagle has announced plans to expand its CNG offerings in Pennsylvania and Northeast Ohio.

Costs for installing natural-gas infrastructure varies depending on size, capacity and the type of natural gas being dispensed.

The U.S. Department of Energy estimates those costs to be between $10,000 and $2 million, versus around $1 million for a regular gas station.

Butler said it’s likely that many such stations could land in Ohio, considering its place as a corridor for the long-haul trucking industry.

He added that the state would like to grow its revolving loan fund, which offers competitive grants to individuals or organizations seeking capital for energy projects.

“This industry has the potential to, as long as natural-gas prices remain stable, grow significantly,” Butler said.

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With the surge in U.S. shale gas resulting from the new technology of hydraulic fracturing or “frocking” having brought natural gas prices down to around $3 per million British thermal units , the amount of gas needed to generate the same energy as a barrel of oil is now about $13, while West Texas Intermediate oil is trading at $83 per barrel.

Meanwhile liquefied natural gas (“LNG”) is selling in Japan for about $16.38 per million British thermal units, nearly six times the U.S. price.

It only makes sense, then, you would think, for U.S. gas producers to ship gas to Asia and cash in on the differential. Except for a few things.

To transport gas it needs to be converted into LNG, which is natural gas cooled to -162C. The cooling process reduces the volume to approximately 1/600th. This makes it entirely practical to transport gas overseas by specially designed cryogenic sea vessels (LNG carriers).

But there is a problem. The United States currently has no gas liquefaction plants in the lower 48 states. The only gas liquefaction plant currently in existence, built in 1969, is in Alaska, and its owners, ConocoPhillips (COP) and Marathon Oil (MRO) were recently all set to close it down for lack of gas supplies, until ConocoPhillips bought out its partner’s share.

The LNG plant was closed over the winter. Recently the plant has started making shipments again, but long term plans for the LNG plant beyond 2012 are unclear.

In April 2012 the Federal Energy Regulatory Commission (“FERC”) granted Cheniere Energy (LNG) approval to build an export plant for liquefied natural gas at Sabine Pass in Louisiana, the first new gas liquefaction plant in the United States for 50 years. This plant could be ready by 2015.

Cheniere (LNG) will be able to export up to the equivalent of 16 million tons per year of LNG.

The plant will be built in two stages, the first consisting of two production units, or trains, of 4 metric tonnes per annum each, FERC said.

Cheniere has said it working on raising up to $4 billion in debt to help finance construction at Sabine.

Cheniere has already signed firm supply deals with buyers in Spain, Britain, India and South Korea.

Since giving approval for Sabine Pass, the U.S. government has suspended decisions on expanding U.S. gas exports until a study on the price impact on domestic consumers is completed late summer.

Several companies have applied for licenses to export excess domestic reserves to Europe and Asia, however Reuter’s reports:

..Between 40 and 80 billion cubic meters of liquefied natural gas will be exported each year, starting from 2015.

These figures are below some estimates that expect U.S. LNG exports to rise above 110 billion cubic meters by 2020, but (analysts) have said that political pressure could limit export capacities.

“There is a lot of lobbying in the U.S. to limit LNG exports and to instead use the gas to allow the domestic industry to benefit from low energy prices,” (an analyst) told Reuters.

“Petrochemicals and refined products, as well transportation industries that use natural gas, stand to gain from such a policy, and this could change the entire oil balance in the U.S. economy.”

A report this week by Eurasia Group, the New York-based political risk consultancy, said: “Resource nationalism is the biggest political risk to U.S. LNG (exports), with many opponents to exports concerned about the impact on domestic natural gas prices.”

But for political reasons the U.S. may not export large quantities of the gas that has saved its industry and citizens billions of dollars, thanks to plentiful supply and a slump in prices.

“It remains to be seen whether American citizens, who accept the discomfort of the shale gas activity for reasons of energy security and independence, will willingly accept it to benefit the bank accounts of a few exporters, especially as a likely consequence of higher U.S. gas exports would be higher domestic prices,” said Paolo Scaroni the chief executive of Italy’s Eni SpA (E).

Meanwhile energy-hungry India has been asking the U.S., Nigeria, and Qatar to export more oil and gas to bridge its gap between supply and demand

All of this puts Cheniere Energy with its pre-approval for a new gas liquefaction export plant in a uniquely favored position vis a vis the competition.

Cheniere Partners plans to work with Bechtel Oil, Gas and Chemicals,Inc. (a private corporation) to design and construct the liquefaction facilities, using the ConocoPhillips Optimized Cascade® liquefaction technology. This proven process has been successfully deployed at several LNG export terminals around the world, and offers a high degree of reliability and control.

Over the last year, Cheniere has secured the necessary licenses and regulatory approvals for the project, and it has signed contracts with customers who will buy the gas. It has also secured some equity and debt financing.

Here are the numbers.

There is nothing very impressive here. What the company does have is:

1. The only current permit to build an LNG export facility.

2. The site ready for construction.

3. Signed contracts from willing purchasers of LNG

4. Progress on the liquefaction plant project, so far short of full financing.

Bottom line: This is a speculative stock play.

As CBS news reported, analyst Faisel Khan of Citibank rates the stock a buy, but cautions “building the facility to liquefy the natural gas is complicated and expensive. Cheniere still must get final approval for a $2.5 billion loan and find financing for a second phase of the project. Investors worry that Cheniere may not be able to cheaply finance the full project, or manage the complex construction seamlessly.”

Khan says that Cheniere’s stock should rise as financing is secured and construction started. He also suggests that a larger company with lower borrowing costs and experience building major projects could buy Cheniere.

Since there is no dividend at stake, and this is a long term play, I would suggest that if one wanted to get a piece of the action, a bull call spread on the 2014 LEAP options would be an appropriate play.

With the stock currently at $14, the $15/$20 bull call spread for about $1.70 would pay off as a triple-bagger if the stock holds $20 in January 2014.

If the company gets its financing, this looks very likely to pay off, given the unique niche that the company occupies at this time.

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Swedish truck maker Volvo AB (VOLV-B.SK) said Thursday it is increasing the range of trucks powered by natural gas in the North American market.

MAIN FACTS:

-Under the Mack brand, the range of trucks powered by natural gas will be expanded by a further two models during 2013, Mack Pinnacle and Mack Granite.

-Volvo said it will also be able to offer North American customers trucks powered by natural gas in the distribution and construction segment under the Mack brand. The Mack TerraPro model is already available to customers in the waste management segment.

-All the models will be offered with engines powered by either liquified natural gas, LNG, or compressed natural gas, CNG.

-Earlier this year, the Volvo Group announced it planned to launch a 13-liter LNG engine under the Volvo brand in the North American market in 2014.

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The nation’s slow roll toward cheap natural gas fuel for commercial fleets took another step Thursday as Shell said it’s gearing up to supply liquefied natural gas to 100 interstate highway fueling stations across the nation beginning in 2013.

Under the tentative terms of the agreement, Shell will construct more than 200 LNG lanes for fueling heavy-duty trucks at TravelCenters of America stations and Petro Stopping Centers across the country.

Locations for the LNG pumps will be selected based on the needs of cross-country commercial trucking customers, according to a statement from TravelCenters, a full-service truck stop chain with 165 locations nationwide.

TravelCenters also operates as Petro Stopping Centers.

Natural gas proponents have pushed for greater use of the fuel for transportation. Supporters say the fuel is a way to relieve the glut of domestically produced natural gas on the market. The oversupply has driven down the cost of natural gas fuels, compared to crude-based gasoline and diesel.

The scarcity of natural gas pumps and cars in the country has made the fuel impractical for most private motorists. But natural gas fuels are getting increasing attention from trucking companies and other businesses that operate large fleets.

Houston-based Waste Management said last month it is pushing to convert all of its 18,342 trucks nationwide from diesel to compressed natural gas.

The liquefied natural gas Shell is providing allows for greater range than compressed natural gas, making it more practical for long-haul trucks if drivers can count on a regular supply along their routes.

“Using natural gas for transport gives truck fleet operators a new, strong advantage because it’s abundant and affordable and a viable alternative to diesel,” Elen Phillips, vice president of Shell Fuels Sales & Marketing North America, said in a written statement.

TravelCenters said it plans to train repair technicians and to equip its truck service bays and emergency roadside repair vehicles to respond to the nation’s growing fleet of natural gas-powered trucks.

The agreement with TravelCenters is Shell’s latest move to expand LNG fuel sales across the continent for trucking, marine and rail industries. The company plans to begin supplying LNG to Flying J truck stops in Canada this year.

Shell and TravelCenters have entered an exclusive negotiating period to finalize the agreement.

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