The Development of A Global LNG Market: Is it Likely? If so When?

	James T. Jensen, Jensen Associates
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For many years LNG has been a specialised subject relevant only to a few countries and companies. Costs have been reduced all along the LNG chain and now major reserves of gas, too distant from markets to be served by pipeline, and therefore considered economically “stranded”, are being commercialised as LNG. Indeed such is the enthusiasm for the potential of LNG it is commonplace to read about the prospects for “a global LNG market” in the same terms as a global oil market.

A major aim of this study is to test the proposition that LNG markets will become increasingly “global”. In the process, the study illuminates the very substantial changes unfolding in the Atlantic and Pacific Basin LNG markets. The evolution of short term and spot transactions, and the development of arbitrage opportunities within the Atlantic Basin and between the Atlantic and the Pacific, have been identified as important trends, as demand for LNG increases, particularly in the United States.

Mr. Jensen is President of Jensen Associates, a consulting firm which specializes in natural gas economics. He is recognized for his expertise in international natural gas supply, demand, pricing, regulation and trade. He is particularly well known for his work on LNG markets.

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Contents

The LNG Industry – An Overview
The Role of the Long-term Contract in Traditional LNG Sales
Gas Restructuring – A Challenge to the Traditional System
Term Contracting – Balancing Investment Risk with Market Reward
The Evolution of Short-term LNG Markets
The Emergence of a New Market Structure
How Long Transportation Costs Influence the Flexibility to Match Supply and Demand
Regional Gas Demand Growth and its Influence on Future Trade

pp. 90, figures 54, tables 4

The Development of A Global LNG Market: Is it Likely? If so When?

James T. Jensen, Jensen Associates