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LNG market: In transition
Dec 21:
The LNG market too is going through a period of transition
8Buyers are no longer ready to accept “expensive”, “inflexible” LNG supplies and they are seeking more destination and volume flexibility
8The sanctity of long-term contracts no longer guaranteed
8But there are some inherent contraditions. For example, what will happen if oil prices recover while spot prices stay low?
8New LNG buyers need “affordable” LNG (even $6 is expensive)
8Sellers are trying to adapt to this new business environment through cost reduction, collaboration, new designs, smaller projects
8But long-term contracts still seen as the foundation of LNG projects mostly because banks have not yet caught up with market changes
8The challenge is to ensure how this will be compatible with the investments needed in new LNG supply arriving post 2020 to take care of rising demand.
Click on Reports for more
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8Buyers are no longer ready to accept “expensive”, “inflexible” LNG supplies and they are seeking more destination and volume flexibility
8The sanctity of long-term contracts no longer guaranteed
8But there are some inherent contraditions. For example, what will happen if oil prices recover while spot prices stay low?
8New LNG buyers need “affordable” LNG (even $6 is expensive)
8Sellers are trying to adapt to this new business environment through cost reduction, collaboration, new designs, smaller projects
8But long-term contracts still seen as the foundation of LNG projects mostly because banks have not yet caught up with market changes
8The challenge is to ensure how this will be compatible with the investments needed in new LNG supply arriving post 2020 to take care of rising demand.
Click on Reports for more
