Gas Blog

Conventional Wisdom in LNG Markets : Turning on its head in 2014

Much that Conventional Wisdom believed it knew about LNG seems to be turning on its head…what a crazy few months it has been!

First, we expected demand for LNG to grow unabated.  We were led to believe that supply was the key issue – unmet demand was always ready to take more LNG. This was especially supposed to be true for growing markets such as China and India. We now see Asian buyers, especially those with large future commitments, hustling to defer their future supply or seeking buyers in other markets, such as Europe, who would be willing to take over the contracts. Even mature buyers like Korea have been forced to reduce their imports due to oversupply, over commitments, and mild weather conditions. These occurrences may be short-term phenomenon, but it does indicate that LNG is, in fact, a commodity with both short and long term demand / supply characteristics and prices that should move accordingly. 

The US unconventional gas experience...can this be repeated elsewhere?

Vivek Chandra presents his views on the US unconventional gas experience and whether the above ground and below ground factors are uniquely American or can they be repeated elsewhere.

View this presentation by clicking here.

 

Local LNG ventures ignore reality of US exports

(text from Article published in Australian Financial Review Newspaper on 9 January 2014  By ANGELA MACDONALD-SMITH)

Texas LNG chief Vivek Chandra said Australian ventures could not ignore the damage that would be done to customer relationships if they don’t allow some adjustment for the massive changes in the LNG market.

Australia’s new liquefied natural gas ventures are ignoring the far-reaching impact that US exports will have in their key Asian markets, with some likely to struggle to make returns from their ultra-expensive investments, the Melbourne-based head of the US’s latest LNG export venture has warned.

A current view of LNG markets

Vivek Chandra, the author of this site, was recently interviewed by the Papua New Guinea TV station to give his views on global and regional LNG markets. Included in the discussion are impacts of US LNG exports, pricing trends, and future of long-term contracts. The full interview may be watched here

Introducing the Kerogen LNG Project Success Index

As the number of future LNG projects - ranging from those under construction to speculative projects in early stages - grows globally, potential LNG buyers, project financiers, investors, partners, host governments, and contractors are struggling to evaluate which projects are more likely to be ‘successful’ projects and thus deserving of their attention. Large international energy companies may be promoting a number of their own projects – but the projects themselves may not be of equal quality or have the same success factors.

Can Australian LNG projects stay competitive?

In less than a year, the Australian LNG landscape has gone from a feeling of euphoria to one of increasing negativity and pessimism. There is no doubt that the pendulum of sentiment tends to overshoot both extremes - the scale of the exuberance of 2010-2012 was, in hindsight, unjustified and unprecedented in the global LNG arena. Similarly, the pervasive pessimism today may be self-destructive if left unchecked. However, I will argue that some degree of caution is the prudent strategy when facing increasing uncertainty, and may be better for the long term competitiveness of the Australian LNG industry.

2011 has been a hell of a year for the natural gas industry

It has been a few months since my last posting…needless to say, the world of natural gas has been extremely dynamic lately. A couple of key observations…