RECENT HIGH LNG PRICE AND ITS IMPACT ON NEW ENTRANTS-A BUYER'S PERSPECTIVE

摘要

Continuance of seller's oriented LNG market caused by gas supply shortage, unexpected gas demand increase, nuclear problems, attractive US/European gas prices and higher crude prices provides sellers with a great time for maximum profit. On the contrary, it gives a very hard time to existing buyers and new small-scale entrants. Many experts expect that this sellers' market could be lasted until 2012 or 2013.rnHowever, with a view of mid-long term view, sellers' profit maximum strategies by continuing seller's market may, i) have negative effect on long-term relationship between sellers and buyers which has been lasting for more than forty years and is expected to last a few decades in the future, ii) high LNG prices almost same with oil parity will weaken price competitiveness of LNG compared to competing fuels, leading to reduce LNG demand and total profits of sellers, iii) because the current high LNG price is a hurdle for new small-scale buyers, they will postpone their entrance to the market resulting in the shrinkage of the potential LNG market, the restriction of competition and the decrease of LNG demand in the end.rnConsequently, in-depth study on appropriate LNG prices level should be carried out for the sustainable growth of LNG market on mutual benefit basis of sellers and buyers.