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Massive funding requirement in LNG: Business model is undergoing a much needed tranformation
Apr 16:
The LNG market seems to be going through a four-phase transformation process
8The phases are
-- The established model
-- The Cheniere model
-- The Equity/Cost model
-- The Trading or Merchant model
8Lenders are now looking carefully at the last model and a flow of funds to this kind of an arrangement is now anticipated. Eventually, this will negate the need for long-term contracts and enable full market flexibility.
8Figuring out the right model has become important as an additional 150-170 mtpa of LNG capacity is required by 2030 which means that an estimated $150bn in investments is needed between 2019-2025 in liquefaction, associated facilities and ships. (assuming a cost of $600/MT + associated infrastructure costs and ships).
8Over 6 years this equates to $25 billion/year. To ensure financing of such volumes, a change in the current business model has become all but inevitable.
Click on Reports for more
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8The phases are
-- The established model
-- The Cheniere model
-- The Equity/Cost model
-- The Trading or Merchant model
8Lenders are now looking carefully at the last model and a flow of funds to this kind of an arrangement is now anticipated. Eventually, this will negate the need for long-term contracts and enable full market flexibility.
8Figuring out the right model has become important as an additional 150-170 mtpa of LNG capacity is required by 2030 which means that an estimated $150bn in investments is needed between 2019-2025 in liquefaction, associated facilities and ships. (assuming a cost of $600/MT + associated infrastructure costs and ships).
8Over 6 years this equates to $25 billion/year. To ensure financing of such volumes, a change in the current business model has become all but inevitable.
Click on Reports for more
