Uncharted Waters: LNG Supply in a Transforming Industry

The global liquefied natural gas (LNG) market is transforming. In early 2016, the US is expected to start LNG exports from the Gulf coast, a plot twist that was unthinkable even 10 years ago. Australia will soon be an exporter on a scale to rival Qatar. LNG importers are becoming exporters and vice versa, but low prices threaten new projects and the profitability of existing ones. This transformation combines three key trends:

• The LNG market is globalizing as the numbers and types of buyers and sellers expand.

• Pricing models are changing under the stress of increased supply and lower energy prices. Prices are set to converge between the major markets, while new pricing nodes may emerge.

• There are major uncertainties over supply. There are many possible new projects, but their progress depends on anticipated demand and price levels, and on the capability of sponsors to see them through to completion.

KPMG recently released a report “Uncharted waters: LNG demand in a transforming industry”, the second in a series exploring LNG markets – how they are changing, why, and how participants should react. Read on to find out more.

By : KPMG