For sale: fixed price LNG Report

Insight 05 May 2017

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

Report summary

A challenge for LNG fixed pricing offers is the current oil and LNG price outlook. Several Asian LNG buyers have highlighted the a fixed price offer of $8/mmbtu really doesn’t look that attractive. But fixed price LNG could be attractive to LNG into power projects in emerging markets.

Key messages
- Fixed price offer is at a premium to recent Asian LNG prices
- A challenge for fixed pricing LNG offer is the current oil and LNG price expectations
- Fixed pricing could offer index diversification but creates risk of being out of the money
- The fixed pricing offer makes some legacy US LNG supply deals look expensive
- Fixed price LNG improves prospects for gas to into power
- Gas plants are cheaper to build but more expensive to run than alternatives
- Portfolio LNG suppliers have an advantage compared to pre FID LNG projects

Tables and charts

This report includes the following images and tables:

For sale: fixed price LNG: Image 1
For sale: fixed price LNG: Image 2
Fixed price LNG vs oil indexed deals
Cumulative CAPEX and OPEX of a single power plant burning fixed price LNG or coal without CO2 tax