$4 LNG

[Putncalls]

Of all the LNG plants in the world the only one running out of gas is Arun. That said low prices (sub 12-15) probably grow the market.

[jft310]

I also don't expect LNG prices to come all the way down to $4.

How low will the low be, is yet to be determined, unless we have already passed it. Who knows?

One thing to be aware of is that LNG is becoming more of a commodity market, the larger the supply becomes. This means that users will slowly transition a larger proportion of their LNG requirements to the Spot Market, rather than the contract price.

I can well believe as time progresses that the LNG market will eventually become similar to any other mining/oil market (basically a spot price) .... just how long this will take ????? I have no idea.

The only thing we can be sure of is that things will always change, and that the players will have to become larger themselves with good income streams to be able to get their funding for projects.

syd

will never happen much lower contract sold percentages!

Why the upfront costs are $10's of Billions many times ,with 70 percent borrowed many times . The banks will not accept the volatility of wild swings in prices . The buyers want the security the sellers will be in business that requires a give and take contract situation similar to today .

By the Total gets contracts on 100 percent of their LNG contracts . Now that's a good partner

[sydbod]

Hi jft,

I can only go by gut feeling but there appear to be an increasing number of reports of contracted LNG being resold on the spot market by the original buyer as their demand has decreased, or mainly their expected rise in demand has not been as great as they expected. This is what has currently pushed the spot price so low.
This is why I believe there will be a push in the future for customers to want a higher part of their LNG requirement to be spot market related .... just so they don't get caught in this sort of predicament.
We should not regard this as a bad thing in itself, because I also suspect that the spot market price of LNG will then be a floating supply and can easily demand a premium in price compared to contracted price because of its flexibility.
Obviously I am just speculating, but it will be interesting to see if this does come to pass.