Commoditising – all gas is gas – nationality less important
Equalising prices – spare LNG can go anywhere
- Low cost transport cost versus arbitrage opportunities
- More than 30% of deliveries now NOT on LTCs
- Easier to build re-gas terminals (or hire FSRU) for backup than rely on new pipelines – optionality
Established truths die – several!
- “Everyone gets rich in Japan”/“US wants all the LNG we can make
- Value of optionality in uncertain times – infrastructure and sales
- All fearless developers forget to look around – oversupply
- When will they ever learn?
What next?
- Merit order elasticity?
- Delay projects, optimise flows, turn off completely?
- OR find new demand, risk management or business models?
- New use for gas when LNG is available: transportation
