Assessing the Future of Long Term Gas Contracts (LTC) in Asia: The Golden Age of Gas?

February 27, 2017 9:15am

Christopher Goncalves
Chair and Managing Director, Energy Practice
Berkeley Research Group, LLC

Christophe Malet
Senior Vice President Upstream
Hanas LNG Supply & Trading

Historically LTC’s have been essential for suppliers in order to underpin investment and cash flow. In addition, buyers want security of supply and pricing stability. However, with pricing trends increasingly challenging to predict, flexibility in contract terms are now being increasingly sought by purchasers.
  • Is there a need for Long Term Contracts to ensure that multimillion dollar investments can be carried out and can be justified?
  • Is it possible to guarantee the profitability of these investments if they are not structured in the long term?
  • What are the financial constraints to producing LNG without having agreed on a LTC?
  • What are the current trends for existing contracts? How the lack of a harmonised regulation for the Asian market is impacting upon LTC
  • How the Asian market will develop for buyers and the sellers to be able to negotiate price bearing in mind that there is an inherent uncertainly on both sides?
  • Can increased flexibility make LTC attractive again?
    • What is the need for such flexibility?
    • How can this be achieved? (e.g Under what contractual scheme?)
  • How the lack of numerous sources of supply in the Asian market is impacting upon LTC?
  • Forecast for the next 1-3 years