The Oil Drum

73 comments on A Megaproject list from the Oil and Gas Journal

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Whitehall on June 19, 2006 - 5:03pm

One question I still have is how much spot market in LNG exists today and how long would a transition take?

I've supposed that almost all LNG traded today is on fixed contract. There may be some on spot markets but the amount is small. Anyone have figures as to spot as percentage of total LNG trade?

Last winter, US LNG terminals ran at well below capacity even with $15/mmBTU prices at Henry Hub and the US still lost ship loads to other countries (Spain?) I read one story of a tanker from Trinidad being diverted from our Gulf Coast to Europe mid-voyage.

If demand is outstripping supply, I'd expect liquefaction plant developers to get full take-or-pay contracts with very little open to selling spot. Given the perishablity of a tanker load of LNG, transport routings are also closely calculated in development. Unlike oil, LNG depletes in transit as it boils off making travel time a critical economic factor.

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nth on July 7, 2006 - 1:03pm

No one trades LNG. The market is simply if you want to buy, you approach a LNG facility and order it. Then you order a tanker to ship it for you.

You just have to hope that some government agency keeps track of LNG to get your stats.

To further boost my claims, LNG trains are coming online slowly and very costly. Getting welders have been very difficult and if anyone seen how LNG trains are put together, you will know how much pipes you need to put together.

I am curious to know where all the natural gas is coming from to fill up all these LNG trains under construction. If these LNG trains are not in full production, there are no way in hell we will have LNG tanker shortages. It is faster to built a tanker than a train. It is even harder to find enough gas to keep the train in full operations.