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Maritime Economics & Logistics

, Volume 19, Issue 1, pp 160–181 | Cite as

Global LNG trade: A comprehensive up to date analysis

  • Hamed Nikhalat-JahromiEmail author
  • Panagiotis Angeloudis
  • Michael G H Bell
  • Robert A Cochrane
Original Article

Abstract

The importance of the liquefied-natural-gas (LNG) in global gas trade has grown steadily over the past decades; the article focuses on this significant form of energy and provides an exhaustive portrait of its trade. LNG trade flows both regionally and by country are described and the future of trade is forecast. Next, the business structure is discussed. The traditional LNG trade on long-term contracts (LTCs) is considered and it is explained how vital these contracts are in distributing the volume and price risks in the industry, furthermore, in securing finance for the LNG projects. The essence of gas market liberalization and its effect on LTCs is considered and it is shown that in liberalized gas markets, risk has migrated to upstream. In the light of this risk redistribution, the suppliers’ intent in moving toward vertical integration of the industry is discussed. Later, various types of LNG spot sale in arbitrage, and for uncommitted product to LTCs, are considered and the biggest spot sale markets are identified. Finally, pricing of LNG for different markets in both LTCs and spot sales is discussed and it is forecast that due to the surge of supply, rather than any change in oil prices, LNG prices are anticipated to decrease globally at least for the next 5 years.

Keywords

LNG long-term contracts market liberalization spot sales pricing 

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Copyright information

© Macmillan Publishers Ltd 2016

Authors and Affiliations

  • Hamed Nikhalat-Jahromi
    • 1
    Email author
  • Panagiotis Angeloudis
    • 2
  • Michael G H Bell
    • 3
  • Robert A Cochrane
    • 2
  1. 1.Management Consultant in Oil & Gas IndustryDubaiUAE
  2. 2.Port Operations Research and Technology Centre (PORTeC), Imperial CollegeLondonUK
  3. 3.Institute of Transport and Logistics, University of SydneySydneyAustralia

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