LNG markets are going through significant change in the form of increased customer focus.
The LNG industry has evolved adjacent to the oil industry, but today it is in the throes of a transformation like that of oil in the early 1980s. Then, the oil market changed forever: from a business dominated by vertical integration, official prices and point-to-point flows, to one with a diverse mix of buyers, traders and sellers, and made newly transparent by the Brent benchmark. Something similar is happening to LNG now. Prices are becoming more transparent, the universe of players has expanded dramatically and new suppliers and new markets appear on a regular basis. What was once a straightforward resource-led 'floating pipeline' from liquefaction plant to terminal has become a more flexible arrangement, where new business models and trade opportunities are essential to succeed. It is now less important where the molecules come from and more important where they go. Following demand is not enough: successful LNG suppliers and traders have to create it.
The makings of the market and technological trends in LNG have been simmering for the last decade.
Gas, through LNG, is ideally placed to expand its role as one of the world’s key energy sources in a cleaner future.
For more information please contact Mary Hemmingsen, Global Head of LNG, KPMG in Canada