LNG prices to rise as UN eco-mandates give edge to LNG bunkering
THE liquefied natural gas (LNG) sector is looking to new markets in ship bunkering as more stringent United Nations air emission requirements create demands for cleaner fuel, according to Drewry Maritime Research.
"While environmental concerns call for enhanced gas use by all economies, these developments on the supply front threaten to cause a permanent upward shift in LNG prices," said the report."We can expect a gradual increase in the numbers of small and medium-scale LNG plants and terminals in the medium to long term," said the report.
"Advances in process technology, standardised designs, manufacturing efficiencies in liquefaction, transport and regasification are all reducing the costs of small and mid-scale LNG plants and making their development more economical," said the report. Given the changes, one problem today is pricing. "It is high time that alternative pricing mechanisms are devised to reflect the LNG supply-demand balance rather than being indexed to proxies like Brent Crude or JCC," said the report.
THE liquefied natural gas (LNG) sector is looking to new markets in ship bunkering as more stringent United Nations air emission requirements create demands for cleaner fuel, according to Drewry Maritime Research.
"While environmental concerns call for enhanced gas use by all economies, these developments on the supply front threaten to cause a permanent upward shift in LNG prices," said the report."We can expect a gradual increase in the numbers of small and medium-scale LNG plants and terminals in the medium to long term," said the report.
"Advances in process technology, standardised designs, manufacturing efficiencies in liquefaction, transport and regasification are all reducing the costs of small and mid-scale LNG plants and making their development more economical," said the report. Given the changes, one problem today is pricing. "It is high time that alternative pricing mechanisms are devised to reflect the LNG supply-demand balance rather than being indexed to proxies like Brent Crude or JCC," said the report.