In 2007 the US was facing a natural gas shortage and plans to build more than 60 liquefied natural gas (LNG) import projects were proposed. Five years–and a horizontal-drilling-and-hydraulic-fracturing-shale-gas boom–later excitement is now centered on the prospect of the US becoming one of the world’s biggest LNG exporters.

Natural gas output in the US was 66 billion cubic feet a day in 2011, up from 56 billion cubic feet a day in 2001, according to the US Energy Information Administration (EIA). Shale gas now accounts for about 40 percent of US natural gas output; without it domestic production would have declined, and the US would have had to import massive quantities of LNG.

The excess of supply over domestic demand created by the shale gas revolution has stirred dreams of the US once again asserting itself as a global energy power. But the US LNG export idea remains one with a lot of promise but little progress. And realization of the ideal won’t come easy, if at all, due to a number of factors.

The US supply glut has driven down prices from a long-term average above USD5 per million British thermal units (MMBtu) to a low of around USD2 as recently as April 2012. Although prices for benchmark Henry Hub gas are back above USD3.40 as of this writing, the US shale gas boom has caused a glut of inventory that has severed what was a close relationship with crude oil prices.

The EIA forecasts that although gas prices will move higher from present levels, to between USD4 and USD6 per MMBtu there will remain a long-term discount to crude on an energy-equivalent basis.

Domestic hurdles in the way of maximizing US LNG export potential include opposition to shale gas exploitation by environmentalists and their friends in Congress. Industrial and commercial interests have also voiced concerns about the impact exporting gas would have on domestic pricing of the commodity.

Project costs are also immense and rising. And there is considerable competition globally, from other potential producers of shale gas as well as Australia, where several LNG export projects are already far along the path to completion.

The major incentive for aspiring US-based LNG exporters is to realize higher prices for gas available in import markets such as Europe and Asia. Prices in Europe and Asia still correlate to prices for crude oil on an energy equivalent basis; LNG fetched more than USD18 per MMBtu in Japan in July, while in Europe prices ranged between USD12 and USD14 per MMBtu.

There are several names within the MLP Profits How They Rate coverage universe, including one Portfolio Holding, that are levered to the North American and global LNG stories.

There are a handful of US LNG export terminal projects in various stages of the regulatory approval process. Cheniere Energy Partners LP’s (NYSE: CQP) USD5 billion facility in Sabine Pass, Louisiana, which is scheduled to begin exporting cargoes in late 2015 or early 2016, is the furthest along to “first gas.”

Cheniere’s intent to sign contracts to export LNG to European and Asian buyers based on Henry Hub pricing has been described as “a dangerous precedent” and created “unrealistic expectations,” according to one executive of an energy company with similar designs to move the fuel from North America. Most development plans have been based on the traditional oil-linked pricing structure.

Cheniere may benefit in the short term by undercutting potential competitors, and the current unit price reflects the fact that it’s the only LNG export game in town at present.

But it remains burdened by a significant debt load created during the pre-2008 fervor to increase LNG import capacity. And the lower pricing for its contracts will result in compressed margins that also limit distribution growth. Sell Cheniere Energy Partners.

Transport, though fraught with issues of overbuilding during several periods since the Methane Carrier left the Louisiana Gulf Coast for the UK in January 1959 with the first cargo of LNG, is our preferred way to play the story.

Although LNG producers in the US as well as in Australia face increasing pressures due to potential margin compression and rising project costs, their output must be moved to end-markets.

In Japan, for example, already the world’s leading importer of LNG, Prime Minister Yoshihiko Noda recently unveiled a plan to completely eliminate nuclear power on the island nation over the next three decades, a consequence of the March 2011 Fukushima-Daiichi disaster.

Japan shut down all 50 of its reactors following the earthquake/tsunami/meltdown, though two have subsequently been put back to work. Should this plan manage to survive industrial opposition, however, energy-starved Japan will become ever-more reliant on imports to satisfy its fuel demands.

And energy demand in India is forecast to more than double by 2035 to 49.2 quadrillion British thermal units from 21.1 quadrillion Btu in 2008, according to the EIA, while the share of gas in India’s power generation mix will expand from 11 percent in 2008 to 16 percent in 2035.

Growth Portfolio Holding Teekay LNG Partners LP (NYSE: TGP) is the third-largest independent owner-operator of LNG carriers in the world. Its fleet includes 27 LNG carriers as well as five liquefied petroleum gas carriers, 10 Suezmax segment ships and one product tanker. The company’s LNG fleet is largely contracted under long-term arrangements with little opportunity to capitalize, yet, on rising demand from Asia. Without much exposure to near-term rates, distribution growth has been limited. But the company’s access to cheap capital will fuel fleet growth over the long term.

And recent additions to the fleet provide a bit more visibility for payout growth. The company added four LNG carriers delivered between August 2011 and January 2012, and it also bought a 52 percent interest in six LNG carriers, an LPG carrier and a multi-gas carrier.

As of June 30, 2012, Teekay had approximately USD403 million of total liquidity, USD288 million undrawn on its credit facility and USD115 million in cash. Given this and the fact that the partnership has no near-term debt maturities and no restrictive loan covenants, the partnership is in a solid financial position to take advantage of further growth opportunities. Teekay LNG Partners is a buy under USD41.