Bloomberg News

Japan Interest in U.S. Gas Threatens 50 Projects, Hartland Says

March 04, 2013

Japan’s interest in importing U.S. natural gas from shale with contracts linked to the U.S. benchmark at Henry Hub threatens as many as 50 liquefied natural gas projects in Australia that rely on oil-indexed prices, Hartland Shipping Services Ltd. said. The following are comments from the London-based shipbroker in a report dated March 1.

“A move to spot and short-term gas-linked pricing arguably cannot underpin the long-term financing and return expectations of many developers. America is shaking things up.”

“Japanese, Korean and Chinese buyers are pulling back from supporting pricey Australian and other LNG projects that need the old Asian pricing formula to turn a profit, preferring instead to exploit the arbitrage of buying cheaper U.S. exports.”

“Japan was a hesitant mover in America as the only one of 17 U.S. LNG export projects so far approved, Cheniere’s Sabine Pass in Louisiana, has presold its production to Korean, British, Indian and Spanish buyers.”

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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