Exxon Bet Wrong on China? (NYSE:XOM)

Exxon Mobil Corporation (NYSE:XOM) is the energy giant and they are a large supplier of liquefied natural gas.  They have been banking on China’s need for the liquified natural gas, although with new estimates out for a lower demand, Exxon may not be passing as much gas to China.

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Jim Jubak breaks it down for us.  (Jubak) - You wouldn't think that any company, especially a company as savvy as Exxon Mobil (XOM, news, msgs), could overlook China.

But that may be exactly what Exxon Mobil did in formulating its plan to pin the company's growth on natural gas -- and in particular on liquefied natural gas, or LNG.

According to Wood Mackenzie, an oil and gas consulting company based in the United Kingdom, China looks like it will need only half as much additional liquefied natural gas in the decade beginning in 2020 as big energy companies -- among them Royal Dutch Shell, BP (NYSE:BP), Chevron (NYSE:CVX) and, yes, Exxon Mobil -- had projected.

Projects such as Exxon Mobil's Qatargas Trains 4 and 5, RasGas and Al Khaleej Gas in Qatar, the South Hook LNG terminal in Wales and the Golden Pass LNG terminal in Texas, which made investment sense when it looked like China would import an additional 16 million tons of LNG annually in the coming decade, now face a scenario in which China would add only half as much to its annual imports.

That would hit all the international oil and gas companies hard, but it would hit Exxon Mobil especially strongly because the company has based its investing strategy on natural gas in general and liquefied natural gas in particular.

What's changed since, say, March, when Exxon Mobil announced it would increase capital spending 4% in 2010, to almost $28 billion, in a big bet on natural gas? And since its purchase of U.S. natural-gas producer XTO Energy for $28 billion?

Here's what: China is going to put new natural-gas-releasing technologies to work faster than previously thought.

Read the rest of Jubak’s story here.