Friday, 25 May 2007 17:05
Didier Holleaux, Vice President LNG, Gaz de France, Paris, in the first of a three-part series analyses a trading realm weighed down by technical and contractual issues
LNG Transatlantic Arbitrage, the diversion of LNG cargoes from Europe to the US - or the other way round – for a certain higher profit margin makes up only around 25 percent of spot trading and the relative scarcity of such deals is mainly due to technical and contractual issues.
But even when these difficulties are overcome, the significant fixed costs involved, the high volatility of the arbitrage, and its sensitivity to market conditions, means it is a business for the players who have a well-sized and diversified portfolio of LNG supplies.
LNG Transatlantic Arbitrage, the diversion of LNG cargoes from Europe to the US - or the other way round – for a certain higher profit margin makes up only around 25 percent of spot trading and the relative scarcity of such deals is mainly due to technical and contractual issues.
But even when these difficulties are overcome, the significant fixed costs involved, the high volatility of the arbitrage, and its sensitivity to market conditions, means it is a business for the players who have a well-sized and diversified portfolio of LNG supplies.
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Published in
May 07
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