Buyers happy to pay above variable cost for US LNG

Friday, 01 June 2018

Against the run of play, LNG buyers are prepared to pay a premium for supply from Australia and the United States – described by Standard & Poor’s as “the swing”, meaning states with the highest cost production. Forward prices, notably for shipments to Asia, imply “LNG buyers are willing to pay above the variable cost of U.S. LNG production (delivered ex-ship),” which, according to S&P analysts “is not what you would expect in an oversupplied market.” 


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