Managing LNG Portfolio Risk in a Diverse Global Energy Market
The LNG market today is vastly different than it was just a few years ago, and it will continue its upward swing into becoming a large portion of the world energy mix. In fact, according to the 2018 BP Energy Outlook, LNG trade is growing seven times faster than pipeline gas, and by 2035, it will account for around half of all globally traded gas.
While expanding into the LNG global export market can be profitable, proper LNG portfolio management represents a series of major, ongoing challenges. The trading life cycle of LNG involves a large number of players responsible for a host of functions – natural gas suppliers, liquefaction plants, transport operators, terminal operators, regasification plants, storage facilities, pipeline operators, and natural gas utilities. With these functions comes the natural gas production, liquefaction, loading transportation, unloading, storage, regasification, and distribution, along with the management of the many associated financial processes. All these functions and processes make an LNG business a complicated undertaking.
Today’s LNG export market is experiencing new levels of complexity. From increased competition and oversupply to a shift from long-term contracts to short-term contracts and spot trading, LNG market participants are in need of flexible and extensible commodity trading and risk management solutions that can help them navigate a diverse and volatile market. Allegro’s Chief Strategy and Customer Officer, Michael W. Hinton, recently addressed this topic in Global Banking and Finance Review Magazine. Click here to read the full article (starting on page 68).