LNG projects face new financing and pricing risks

Changes in LNG pricing structures and contract length could shift some risk from buyers to sellers

LNG producers will need to absorb more risk as trading in the market becomes more complex and dynamic, the LNG19 conference in Shanghai heard this week. What was once an almost static asset market is being forced into a rapid evolution. On the supply side of the market, there are more portfolio players to sit alongside the traditional point-to-point sellers. On the demand side, buyers are now looking beyond long-term contracts and traditional pricing. "Buyers want to benefit from spot markets through smaller contracts, flexible contracts and hub-linked pricing", says Andy Brogan, EY global oil & gas sector leader at consultancy EY. Brogan foresees new contract structures in which LNG exp