The LNG market is going to get bloodier before it begins to get better.
8The glut of new LNG terminals may in fact bring down the cost of spot LNG even further, perhaps to $6/mmbtu or $5 or, impossible as it may seem now, even lower.
8Now, why would prices go down lower than what they are currently? Already the Henry Hub price is already low enough, so how much lower can they go?
8But there are those who claim that new LNG suppliers may start a price war just so that they can pick up some market share.
8The attempt will be to cover the variable cost as fixed cost -- in some cases, both in upstream development and consequent LNG liquefaction terminal facilities -- is already a sunk cost.
8Any margin above the variable cost will bring in some incremental cash that will otherwise not be available if the terminal were to remain idle..http://goo.gl/WNluOb
Click on the following links for more on this story:
Gas markets in doldrums: Indian E&P sector will be directly hit
Gas markets in doldrums: Can GAIL be fighting for survival soon?
Gas markets in doldrums: GAIL puts off purchase of LNG ships till 2021; who should be blamed for the fiasco?
Gas markets in doldrums: Is GAIL's corporate culture to blame?
Gas markets in doldrums: Who is going to have the last laugh?
Gas markets in doldrums: Future remains bleak for $5 billion investment by ONGC-OIL in Mozambique
Gas markets in doldrums: Which way will the leadership go?
8The glut of new LNG terminals may in fact bring down the cost of spot LNG even further, perhaps to $6/mmbtu or $5 or, impossible as it may seem now, even lower.
8Now, why would prices go down lower than what they are currently? Already the Henry Hub price is already low enough, so how much lower can they go?
8But there are those who claim that new LNG suppliers may start a price war just so that they can pick up some market share.
8The attempt will be to cover the variable cost as fixed cost -- in some cases, both in upstream development and consequent LNG liquefaction terminal facilities -- is already a sunk cost.
8Any margin above the variable cost will bring in some incremental cash that will otherwise not be available if the terminal were to remain idle..http://goo.gl/WNluOb
Click on the following links for more on this story:
Gas markets in doldrums: Indian E&P sector will be directly hit
Gas markets in doldrums: Can GAIL be fighting for survival soon?
Gas markets in doldrums: GAIL puts off purchase of LNG ships till 2021; who should be blamed for the fiasco?
Gas markets in doldrums: Is GAIL's corporate culture to blame?
Gas markets in doldrums: Who is going to have the last laugh?
Gas markets in doldrums: Future remains bleak for $5 billion investment by ONGC-OIL in Mozambique
Gas markets in doldrums: Which way will the leadership go?
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