Quarterly Gas Review – Issue 7

With thanks to Argus Media, we updated our “LNG tightness” metric that measures the spread between the US Gulf Coast LNG FOB and the Henry Hub price. It is interesting to keep track of this ‘LNG tightness’ in a fast-changing energy world. So far it has never been low and/or long lasting enough to force production to shut anywhere. We have therefore not yet seen a price war between LNG and pipeline gas.

After providing a detailed analysis of 2018 hydrocarbon production and reserves for major oil & gas companies, we look at the major challenges IOCs are now facing in a fast energy transition post-COP21. The world has never been addicted to oil so much as to cheap energy. With renewable energy cheaper, the world energy addiction is moving into renewables. Hence, we doubt that fossil-based companies that are dependent on resource prices could continue to thrive when the world moves away from fossil fuels. In our quest for a net-zero carbon emission world, the power of influence is shifting away from energy producers. But the energy transition path is still uncertain.

By: Thierry Bros