Thread by @anasalhajji

THREAD on the impact of low prices on #LNG

1- Low oil prices will hit US LNG, Qatar LNG, and Russia LNG really hard. Russian govt probably did not count the cost of lower natural gas & LNG prices (they are oil-linked) when it decided not to participate in OPEC+ cut

2- With Brent around $37/b, US LNG is NOT competitive with traditional LNG suppliers with oil-linked contracts such as Qatar, Algeria, and Indonesia. Historically, all #LNG contracts around the world were oil-linked until Cheniere came up with the idea of HH LNG pricing.

3- #Qatar & all traditional LNG exporters with oil-linked LNG contracts will be hit hard by the collapse in oil prices. Qatar exports are equivalent to 5 mb/d of oil, if I remember correctly. All LNG companies operating in Australia will be hit especially hard with the oil rout

4- Russia LNG will also suffer. The irony is, spot LNG prices were already at a record low because of the #Coronavirus and the declaration of force majeure by Chinese companies.

Contracted LNG became the only way to make money until oil prices collapsed. It is a big hit

5- Japan, #China, and India will benefit greatly from lower oil prices, and consequently lower LNG prices. Now #India does not have to ask Qatar for renegotiations of LNG contracts. Expansion in Qatar and other countries might be canceled permanently.

6- If oil prices remain in the $35-$45 range for months, plans to expand LNG capacity will be delayed or canceled. While we are at it: plans to build new oil export facilities will be delayed or canceled too as shale production decline