OPPORTUNITIES AND RISKS FOR LNG BUYERS AND SELLERS IN A CHANGING MARKET ENVIRONMENT

摘要

The near-term outlook for the global LNG supply/demand balance, in combination with depressed oil and gas prices, is rapidly changing market dynamics. The situation presents some key observed opportunities and risks to both supply-side and demand-side value chain players. With regard to LNG buyers, in particular end-users/consumers as well as aggregators, we observed that the opportunities presented by the current market may be accessible though in varying extent according to different buyer profile characteristics - LNG sellers are understandably looking to reduce their risk exposure. As expectations carry, "high quality" buyers would be best positioned to capitalise on procurement opportunities. Some LNG buyers may be stifled by the plethora of evolving and uncertain market factors; others, however, may be tempted to overplay their hand as a result of their new found buying leverage. With regard to LNG sellers, notably project sponsors and developers, we observed a base trend towards full risk mitigation mode. Barring a quick recovery in oil and gas prices, LNG supply project economics are set to deteriorate and asset impairment could become mainstay. Whilst proposed projects face increasing challenges to sanction, the ability of existing projects and projects under construction to keep afloat would increasingly depend on their capacity to adapt to the new market environment.