Breaking taboos in the LNG industry is a time-honored tradition. The disruptors have sometimes succeeded and sometimes failed, but the commercial arc of the LNG universe is unquestionably bending towards change. These changes are happening out of necessity and not out of choice. What always seemed to be formidable obstacles are rapidly deteriorating into historical footnotes. LNG industry mainstays like destination clauses, long-term contracts and oil indexation, are morphing into something resembling a modern, fundamentals-driven commodity market. LNG stakeholders face an acute need to reposition themselves, as gas faces competitive threats from all sides. As a result, investors in LNG, once the most staid of businesses, are probing new facets of the energy space in order to create higher demand for an asset that is increasingly stranded. The cost of moving gas from A to B in any form remains relatively high and problematic, while the number of competitive fuel options are rising within key use sectors for gas. Taking the most expensive form of gas supply (imported LNG) and placing it into the most competitive sector for gas use (power) will be the defining story for gas demand growth in the next decade. It will require a severe curtailment… continue reading
Continue reading The LNG sector is breaking taboos to stay competitive. This article appeared first on CTRM Center.
Source: CTRM Center