First, starting with pricing, certainly North America is not a cheap place to develop a resource. It takes a significant amount of capital to get to where we need to go. Certainly we've seen prices come down here very rapidly because of all of that development technology-wise. I'd say the full cost replacement of natural gas in North America is probably around $5, so by the time you add all the costs to ship it overseas, you do need markets of some certain size and price to absorb those cost structures. That's principally what they're talking about when they say most of the gas coming out of the Gulf more than likely has to go to Asia, because that's where the highest prices are. So it's really as a function of cost and profitability that the formula begins to take place.
I think what you are going to see worldwide on LNG prices, and certainly even within the European Union—and this past winter, which was a relatively mild but wet, prices were relatively stable in Europe—is that for volumes to be attractive, the price has to go up. The price will probably eventually settle to one that is somewhere between the price in Asia today and the price in Europe today.
When you look at countries like Qatar or Australia, each of these countries has different advantages from a shipping perspective, so when it comes to getting gas into the Ukraine from different places.... For example, I think RWE, the other major German utility, was just recently able to bring a cargo of LNG into Ukraine—I think more to show it could be done versus that it could be done profitably. In our own discussions on moving gas into eastern Europe, certainly I don't think price-wise it's any less than what currently is being charged by Gazprom. So overall the international price of natural gas is set by different events. If you look at what happened with the Fukushima disaster, in 30 seconds, almost immediately, the value of natural gas changed, because Japan turned off its nuclear fleet so things changed very rapidly. That's probably one of the reasons why long-term contracts are important, in that you can have some price stability. But overall, North America works on a capitalist system, so the volumes are naturally going to move to the highest-price markets regardless of how it works.
Since we don't have a government regulation within our marketplace, whether it be Canada or the United States, that forces volumes to go where one might want them to go for other reasons. You have a scenario where we very much deal on a purely commercial basis. So that makes things a little bit different, from that perspective. If you look at Gazprom as a company, it acts very much the same way. They use energy as a tool more in eastern Europe than they obviously can in western Europe, because there are more alternatives and they can just push them back.
Generally speaking, I would say from an economic perspective, whether it's on the Gulf coast or with Goldboro or in western Canada, pricing certainly has to be at a certain level to ensure an economic return.