In 2011, J. P. Morgan Chase, Jeffery Epstein’s bank, tipped him and others about future LNG development in Kitimat,  US Justice Dept files reveal.

The Justice Department’s wide ranging release of files on convicted sex predator Jeffrey Epstein has yielded a surprising footnote, the first hints of liquefied natural gas development in Kitimat.

Epstein was one of the most valuable clients of the huge U.S. J.P. Morgan Chase, where according to investigations by the New York Times (paywalled) and others, the bank held $200 million of Epstein’s money, in 2003 estimated his worth at $300 million, handled at least 134 accounts for Epstein and his associates. J. P. Morgan Chase would eventually process $1 billion US in transactions on behalf of Epstein.

The Times showed that at times Epstein would withdraw large amounts of cash from his accounts that was likely paid to the women he exploited.

In October 2011, just a year after serving 13 months in a Florida jail for procuring and exploiting “under age prostitutes” that is exploiting vulnerable teenage girls, Epstein met with Jamie Diamond, the powerful chief executive of the bank at top of the skyscraper on New York’s Park Avenue. The Times reported that compliance employees at the bank were increasingly worried about Epstein’s financial operations and were urging top management including Diamond to “fire” Epstein as a client. Other senior officials at the bank, including Jes Staley, Diamond’s then heir apparent, a close Epstein ally, (and later CEO of the British bank Barclays) preferred that he stay largely because of all the other wealthy clients Epstein brought to the bank. After that meeting J. P. Morgan Chase kept Epstein as a client until 2013.

A few weeks after Epstein met with Diamond and other top executives, on November 15, 2011, the Justice Department files reveal that Epstein and other rich clients received a “Global Commodities Report” that predicted that the next decade would see a boom in liquefied natural gas production and sales with China as the main customer, with Kitimat as a possible LNG location.

The attached 24 page pdf  report ( download EFTA01090474 ) gives an insight on how prescient that J. P. Morgan Chase analysts were in forecasting future liquefied natural gas development.

(I could find no evidence so far from the current files that Epstein specifically invested in LNG . The records show that his girl friend and collaborator Ghislaine Maxwell held and traded large amounts of Rio Tinto stock over the years)

The main focus of the J. P. Morgan report was on the continuing United States debt crisis (which is much worse now 15 years later) and how that might be affected by a “break out” in the energy markets including predictions of future large scale demand from China and Japan for liquefied natural gas.

Since Sep 1, US politicians have proposed an oil-and-gas drilling boom to create jobs, Canada granted its first LNG export permit, Sinopec
acquired a Canadian E&P company, and BG/Cheniere's landmark LNG deal punctured oil-linked pricing. Beijing says it is willing to post
$100Bn or more to support Europe, its largest trading partner.

It goes on to stay

Natural gas is one of the markets that can bring these pieces together for mutual benefit. As a result, historic events are
unfolding in natural gas markets that will likely alter the composition of global GDP over many decades. The US and
Canada—the world's first and third largest producers—have moved significantly in 2011 toward building gas export
supply chains (and gas-related plastics, fertilizer, and chemical chains) that will deliver gas into Asia at prices
based on North American gas, not world oil. This is a titanic change from prior pricing schemes and represents an
important evolution for world trade and future inflation expectations among consumers, given the nearly US$100 per
boe price differential between Asian oils and North American gas basis.

The report then pointed to China’s growing demand for natural gas.

China wants natural gas

China's production of natural gas has been growing at a blistering 13.5% compound annual growth rate (CAGR)
since 2000. However, even this fast rate of supply growth has been insufficient to keep up with China's gas demand,
which is growing at a 16.1% CAGR, according to data from the BP Statistical Review. At the current rate of demand
growth, China's annual natural gas consumption would grow in relative size from one-sixth as big as the US' last year to
about 40% the size of US demand within the next five years.

In 2011, both China and Japan, now partners in LNG Canada through Petro China and Mitsubishi were worried about a “shortfall” in future natural gas supplies.

To address its gas shortfall, like Japan and Korea, China has turned to imports of liquefied natural gas (LNG). This is a
logical first choice for a country blessed with a bulging capital account but just beginning to build out its gas
production, storage, and distribution infrastructure. From virtually no import volume in September 2006, the LNG
import trade in China has increased to an average of 1.52 billion cubic feet per day (Bcfd) in 2011... This
volume is equivalent to about 2.5% of US production and was grown within the space of five years.

Adding:

The Beijing leadership is quite clear on its intention to increase gas usage, as clearly spelled out in the Twelfth Five-
Year Plan (12FYP)….
Already, the data show that China today is willing to pay a higher import price than previously in order to boost its
immediately-available natural gas import volumes and thus reduce its vulnerability to its domestic imbalance ...
From 2006 to late 2009, contracted LNG import prices into China tended to be below US$4 per MMBtu, with some
price spikes during the summer of 2008, when global energy prices made their cyclical peak.

 

In estimating China’s future liquefied natural gas imports, the J. P. Morgan Chase report pointed directly at Kitimat

One historic breakthrough was Canada's granting of an export permit to the Kitimat
terminal on October 13, which echoed a similar license granted by the Federal government of the US to Sabine Pass
in May... The Kitimat permit is the first export license granted by Canada's National Energy Board since
deregulation of the gas industry in 1985, according to the Board's website.

Possibly as a result of Canada’s decision, the United States upped its LNG game.

Less than two weeks later, Cheniere and BG announced a 20-year LNG export deal through a to-be-built liquefaction
facility at the existing Sabine Pass terminal in Louisiana. The new train will be the first modern liquefaction plant built
in the US.

The report concluded by saying the low Canadian dollar could be a factor in future LNG development.

Analysis shows that the Canadian dollar tends to exhibit a positive correlation with the prompt NYM gas futures price,
even on low frequency horizons… This relationship has tended to wax and wane with the quantity of US demand for Canadian
imports.