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What the OPEC deal means for LNG

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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.

What's included

This report contains

  • Document

    What the LNG OPEC deal means for LNG.pdf

    PDF 257.16 KB

Table of contents

    • 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

Tables and charts

This report includes 10 images and tables including:

Images

  • 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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