July 2018

Bonus Report: LNG Technology

Decline in LNG contract lengths and volumes raises future supply concerns

A dramatic acceleration of a trend toward smaller volumes and shorter tenures for LNG contracts in 2017 highlights the growing commoditization of the global LNG market, even as it raises troubling questions about future supply.

Feer, J., Poten & Partners

A dramatic acceleration of a trend toward smaller volumes and shorter tenures for LNG contracts in 2017 highlights the growing commoditization of the global LNG market, even as it raises troubling questions about future supply. Average contract lengths for deals signed in 2017 fell to 6.7 yr—the lowest ever recorded—compared with 11.5 yr in 2016. With many options for supply and uncertainty over future prices, buyers signed dozens of short- and medium-term contracts rather than committing to long-term deals. This trend suits sellers who view the shorter-term contracts as a way to wait out the current soft market, and aggregators who have large volumes of LNG to sell over the next few years

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