The world\u2019s largest energy producers will probably start hitting the\u00a0gas on new projects, according to Goldman Sachs Group Inc.<\/p>\n
Suppliers are better placed than buyers to bear the cost and risk of new liquefied natural gas projects, and may drive the next wave of investment, the bank said in a note. While the industry\u2019s aware of the need for more output, the traditional model, where financing for new LNG capacity is dependent on binding sales agreements, has become an impediment, Goldman said.<\/p>\n
The oversupplied LNG market is at risk of swinging into a deficit early in the next decade if new projects aren\u2019t commissioned soon enough to meet increasing global demand. Large energy companies \u2014 including\u00a0Royal Dutch Shell Plc\u00a0and BP Plc, which have projects in the pipeline \u2014 will probably drive investments, according to Goldman.<\/p>\n
\u201cNatural gas is gaining market share relative to other fossil fuels, but new sources of supply must be developed to sustain this trend post 2020,\u201d analysts including\u00a0Christian Lelong\u00a0said in the May 15 note. \u201cA greater willingness to take on price risk should reduce the historical dependency on long-term contracts and leave producers firmly in the driving seat.\u201d<\/p>\n
Many consumers lack the risk appetite for long-term LNG supply agreements because the visibility on downstream demand is limited, particularly in the power sector given the rise of renewables, the New York-based bank said. Producers, which have stronger balance sheets, are better placed to mitigate these risks, according to Goldman.<\/p>\n
Gas buyers are delaying decisions and declining to go into long-term contracts, even as key markets including China and India need to clean up their air, said\u00a0Charif Souki, chairman of U.S. LNG developer Tellurian Inc., in an interview at the Flame gas conference in Amsterdam.<\/p>\n
\u201cU.S. gas can be delivered to Asia very efficiently,\u201d and so can low-cost Russian gas, Souki said. The fuel is a very attractive way for Asia to shift to cleaner energy, and buyers will need to convince sellers to invest in new capacity, he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
The world\u2019s largest energy producers will probably start hitting the\u00a0gas on new projects, according to Goldman Sachs Group Inc. Suppliers are better placed than buyers to bear the cost and risk of…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[75,119,144,203,233,247,272],"class_list":["post-777","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-christian-lelong","tag-eu","tag-goldman-sachs","tag-oil-and-gas","tag-qatar","tag-roudi-baroudi","tag-tellurian"],"_links":{"self":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/777","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=777"}],"version-history":[{"count":0,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/777\/revisions"}],"wp:attachment":[{"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=777"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=777"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=777"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}