WorldOil

LNG: Broadening LNG market presents opportunities, challenges

LNG constitutes a global, rapidly evolving industry. The increasing length of LNG supply chains is demonstrated by participation of different National Oil Companies (NOCs), International Oil Companies (IOCs) and energy utilities. The involvement of varied parties aims to realize maximum value, distribute risk and secure LNG supply and/or gas offtake. In many supply chains, the components are becoming quite fragmented. In some cases, full deregulation of downstream gas markets, short-term contracts, swaps and non-dedicated destinations provide increasing flexibility for LNG and gas markets, thereby affecting risks and opportunities. The LNG supply chain requires comprehensive, integrated risk and opportunity assessment, management, mitigation methods and solutions. The US traditionally supplies its gas markets from domestic production, supplemented by significant imports from Canada. LNG regasification plants are now being constructed along Mexico's coasts, ultimately to be linked into the US gas pipeline network.