The short-term LNG market: the case for general terms and conditions for cargo sales
The growth of the short-term LNG market and the development of trading have received a lot of attention recently.
Due to the time required to develop an LNG project, it is possible to forecast how much natural gas might come to the market. The same applies to an increase in gas-fired power generation capacity, and so it is possible to have an idea of how the needs for market may evolve over time.
Despite this apparent predictability, the global gas market has recently been subject to dramatic change.
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Figure 1: The short-term LNG market will expand with growing worldwide production capacity through 2017 and beyond as illustrated above |
Progress
Scientific progress (such as the development of technology to extract gas from shale economically), natural disasters and man-made disasters (recent examples will still be vivid in the reader's memory) have modified the market's outlook in the medium and even short term.
These changes have had an impact on supply and demand, and have affected gas pricing differently in various parts of the world.
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