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5 Pages

As low as it gets: cash costs of US LNG


As low as it gets: cash costs of US LNG

Report summary

On a full life-cycle cost basis, US LNG linked to northwest European spot prices will struggle to find margin at spreads above Henry Hub of less than $5.00/mmbtu, taking into account the full costs of liquefaction, shipping and regasification. But once operational, the plant economics change. Sunk costs become irrelevant to decision making, and US LNG will flow where offtakers can find margin based on cash costs alone. In thinking about US export potential in an oversupplied market, therefore, cash costs are key.

What's included?

This report includes 1 file(s)

  • As low as it gets: cash costs of US LNG PDF - 310.70 KB 5 Pages, 0 Tables, 3 Figures

Description

This LNG Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

If you want to look at the trends, risks and implications of this topic, this report gives you an alternative point of view to help inform your decision making.

Offering bottom-up market analysis for over 150 LNG supply assets, 28 LNG-importing countries and more than 500 LNG contracts, Wood Mackenzie is the definitive and trusted resource for the LNG industry.

We use our robust database and expert industry knowledge to help you understand the dynamics of the global LNG industry and identify emerging trends and opportunities.

  • Executive Summary
    • Cash costs will drive US LNG flows
    • SPAs vs LTAs
      • Sale and purchase agreements (SPAs)
      • Liquefaction tolling agreements (LTAs)
    • Leveraging cost advantages
    • Spot price formation

In this report there are 3 tables or charts, including:

  • Executive Summary
    • Sunk vs. cash costs of US LNG (FOB)*
    • Cash costs of Gulf Coast FOB: SPA vs. LTA contracts*
    • Delta between SPA and LTA offtakers cash costs
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