Boston, MA 08/29/2014 (wallstreetpr) – At one end where Morgan Stanley (NYSE:MS) is selling its physical oil business, on the other end it has got plans to enter into the compressed natural gas market. It has filed plans to build and run its first compressed natural gas export facility in the U.S. The bank is trying to make a comeback in the physical commodity markets.
The project
Morgan Stanley (NYSE:MS) has already submitted its application to the U.S. Department of Energy’s Office of Fossil Energy. The application covers the details of the project as to how it will build, own and operate the facility. It intends to start the natural gas export facility near Freeport, Texas.
The facility is expected to have a production capacity of 60 billion cubic feet a year of CNG. The size of the project is small as compared to the other LNG projects. However, with the new facility it will be the second bank to own and operate a facility involved in manufacturing, storage and supply of raw materials. The other bank to have the same privilege is Goldman Sachs Group Inc (NYSE:GS).
The objective
Morgan Stanley (NYSE:MS) foray into compressed natural gas market is the first step towards exporting cheap domestic gas to the power plants that use oil in their operations. The power plants based in Caribbean nations are the target customers of Morgan Stanley. It wants to export the compressed natural gas to the countries that enjoy free trade agreements with the U.S.
Some of the countries in the list are Costa Rica, Dominican Republic, Guatemala, Honduras, El Salvador and Panama. These countries use oil in power plants. By importing natural gas, they can lower down their energy costs. The cost of U.S. gas comes at $5, and the power plants spend as much as $20 on oil fuel. The higher demand from these countries can inflate the price of natural gas.
