Global LNG applies PIRA's rigorous fundamentals analysis to worldwide LNG markets, integrating extensive work done through our retainer services in oil and gas. It treats this commodity as a market, where prices and competition with other fuels matter from month to month and year to year and where economics dictate where the incremental cargo should go. We cover both the traditional — and financially essential — contract flows of LNG as well as market-responsive spot trade. In the LNG market, we see increasing use of flexible delivery in term contracts, as well as frequent spot shipments supplementing the traditional fixed trade routes. PIRA’s highly regarded research of world energy fundamentals is the foundation of our LNG analysis.

The opening up of gas and electricity markets in the U.S., Europe and Asia has added significant market sensitivity to many end-users, making them willing to pay very high prices for an LNG shipment and unwilling to pay for LNG at all at other times. The volatility of these deregulated market prices signal a need for price-sensitive supply, which LNG is capable of providing.

At the same time that downstream values for LNG are rising, the cost of providing the LNG is dropping. Upstream technology has lowered the cost of developing gas reserves, particularly in offshore locations. Liquefaction costs have been dropping at the same time due to the rapid expansion of larger trains at existing facilities. Private and national oil and gas companies are looking at their gas reserves as a source of revenue — rather than as a burden to be flared, re-injected or otherwise disposed. The combination of end-markets willing to pay for flexibility and suppliers who are better able to provide that flexibility leads to profitable opportunities around the world.