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What the OPEC deal means for LNG


What the OPEC deal means for LNG

Report summary

The oil market is feeling the effects of the OPEC deal of 30 November. Higher oil prices will translate into higher LNG import prices for the majority of LNG consumers. Currently, around 80% of LNG supply is sold on contracts that price LNG as a function of oil. But indexation varies widely. For every US$1/bbl increase Brent, expect a US$0.07- $0.15/mmbtu increase in oil-indexed LNG contract prices. 

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  • What the LNG OPEC deal means for LNG.pdf PDF - 257.16 KB

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
    • OPEC deal set to tighten the oil market
    • Oil indexation remains the dominant feature of the current LNG market
    • Asian LNG prices react more to oil price movements than those in Europe
    • Asian premium increases as oil prices rise
    • Higher oil could improve prospects for US LNG
    • The influence of oil on LNG prices will weaken

In this report there are 10 tables or charts, including:

  • Executive Summary
    • Global Contracted LNG supply by price indexation
    • Indicative relationship between oil and LNG pricing
    • Global Contracted LNG supply by indexation
    • Regional breakdown of indexation in 2017
    • Japan LNG import prices vs Brent
    • South Korea LNG import prices vs Brent
    • Spain LNG import prices vs Brent
    • NW Europe LNG import prices vs NBP
    • LNG Import prices in Japan, South Korea, NW Europe and Spain
    • Appendix: Growth in global spot/short-term LNG trade
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