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Global LNG trade: A comprehensive up to date analysis

Author

Listed:
  • Hamed Nikhalat-Jahromi

    (Management Consultant in Oil & Gas Industry)

  • Panagiotis Angeloudis

    (Port Operations Research and Technology Centre (PORTeC), Imperial College)

  • Michael G H Bell

    (Institute of Transport and Logistics, University of Sydney)

  • Robert A Cochrane

    (Port Operations Research and Technology Centre (PORTeC), Imperial College)

Abstract

The importance of the liquefied-natural-gas (LNG) in global gas trade has grown steadily over the past decades; the article focuses on this significant form of energy and provides an exhaustive portrait of its trade. LNG trade flows both regionally and by country are described and the future of trade is forecast. Next, the business structure is discussed. The traditional LNG trade on long-term contracts (LTCs) is considered and it is explained how vital these contracts are in distributing the volume and price risks in the industry, furthermore, in securing finance for the LNG projects. The essence of gas market liberalization and its effect on LTCs is considered and it is shown that in liberalized gas markets, risk has migrated to upstream. In the light of this risk redistribution, the suppliers’ intent in moving toward vertical integration of the industry is discussed. Later, various types of LNG spot sale in arbitrage, and for uncommitted product to LTCs, are considered and the biggest spot sale markets are identified. Finally, pricing of LNG for different markets in both LTCs and spot sales is discussed and it is forecast that due to the surge of supply, rather than any change in oil prices, LNG prices are anticipated to decrease globally at least for the next 5 years.

Suggested Citation

  • Hamed Nikhalat-Jahromi & Panagiotis Angeloudis & Michael G H Bell & Robert A Cochrane, 2017. "Global LNG trade: A comprehensive up to date analysis," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 19(1), pages 160-181, March.
    • Handle: RePEc:pal:marecl:v:19:y:2017:i:1:d:10.1057_mel.2015.26
    DOI: 10.1057/mel.2015.26
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    References listed on IDEAS

    as
    1. Peter R. Hartley, 2015. "The Future of Long-term LNG Contracts," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. Kumar, Satish & Kwon, Hyouk-Tae & Choi, Kwang-Ho & Hyun Cho, Jae & Lim, Wonsub & Moon, Il, 2011. "Current status and future projections of LNG demand and supplies: A global prospective," Energy Policy, Elsevier, vol. 39(7), pages 4097-4104, July.
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    Cited by:

    1. Septianto, Felix & Northey, Gavin & Dolan, Rebecca, 2019. "The effects of political ideology and message framing on counterfeiting: The mediating role of emotions," Journal of Business Research, Elsevier, vol. 99(C), pages 206-214.

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