Understanding LNG pricing mechanisms in 5 Logical steps.

What is the LNG price is probably the most commonly asked question with the least obvious answer.

As long as engineers are developing technologies and processes providing economic benefits, new gas resources can be exploited and the LNG market can continue its rapid progression in the world energy markets.

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Presently in 2013, there is no standardized contract for LNG. In the future one benchmark contract will exist, but regional basis will remain and will lead to a complex global prices formation.

  Understanding LNG pricing mechanisms in 5 Logical steps.

I have selected only specifics chapters, and I present you the selected papers in a logical order.

  1. Vivek Chandra. Fundamentals of Natural Gas: An International

Perspective(Tulsa, OK: PennWell Books, 2006). This Book is really the solid rock foundation of the LNG trade thinking.

  • Chapter 2 (transportation and storage)
  • Chapter 4 (Contracts and Projects)

2. PriceWaterhouseCoopers: Today’s LNG Market Dynamics (May 2010). **

3. International Gas Union. Wholesale Gas Price Formation **—A Global

View of Price Drivers and Regional Trends(June 2011). Sections: 1, 2, 3, 4, 5, 8, 9 and 10 only

4. I think that you’ll also appreciate a paper about arbitrage in LNG. See Zhuravleva The Nature of LNG Arbitrage, and an Analysis of the Main Barriers for the Growth of the Global LNG Arbitrage Market

Oxford Institute for Energy Studies **

5. Finally  you’ll be good to jump in Argus, a leading provider of price assessments, business intelligence, market data, consultancy services and conferences on the global crude, oil products, natural gas, LNG electricity, coal, emissions, bioenergy, fertilizer, petrochemical and transportation industries.

Why not request your Free Argus Trial !

http://www.argusmedia.com/Webf/Gas/LNG

Knowledge Sharing

This LNG trade/technology is changing at at a fast pace of rate FLNG, Small-Scale Project, Shipping …

These selected resources will help forming your baseline in LNG.

They are packaged for a minimum  study time and come at a marginal cost and for , so cash out.

If, you read the 5 logical steps and still found something is missing then I would also welcome to any of your suggestions to be added on this list.

Enjoy the readings and put the LNG pricing/technical puzzle together, you’re  all set !

-The Trade Shipping and Finance Wizard

** can be found on the internet.

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2 thoughts on “Understanding LNG pricing mechanisms in 5 Logical steps.

  1. Hi..thanks for the praise for my book (Fundamentals of Natural Gas: An International Perspective) – it is still provides a solid foundation though it was written before the US shale gas revolution. I encourage your users to now visit my site http://www.natgas.info where I have detailed discussions about current LNG and Natural Gas prices. Thanks

    Vivek Chandra
    Kerogen Consultants
    Melbourne, Australia

    Like

    • To all the readers, Chandra’s Fundamentals of Natural Gas is really a Masterpiece for Global Prices NG Formation whereas Fletcher’s Trading Natural Gas: Cash Futures Options & Swaps is a reference for the post-era of FERC Order No. 636 in the U.S Gas Markets.

      We are still awaiting for your next chef d’oeuvre Mr. Chandra and meantime your website provides us a dynamic encyclopedia about the dynamic and fluid LNG Markets.

      I’m much honored that a World reference in LNG did a quick stop here, please come more often! Your comments and presence are always welcome.

      Once more, many thanks for your keen interest in helping understanding and dissecting the NG and Global LNG markets.
      Best!
      Simon

      Like

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