Henry Hub pricing and Brent slump create LNG buyer’s market

The new pricing system in global liquefied natural gas (LNG) markets was intended to offer a lower-cost alternative to oil-linked sales contracts. As oil prices have slumped and a global LNG supply glut persists, it has become a buyers’ market

When Cheniere Energy’s first shipment of LNG finally leaves its Sabine Pass gasification plant in Louisiana in late February or March, it will mark a new era of LNG exports from the US lower 48. The internationalisation of Henry Hub pricing is on its way – and it’s already influencing global prices. After the slump in Brent oil prices, though, it is no longer the only factor set to drive LNG prices lower. The Department of Energy’s approval of US LNG export projects – made viable by surging domestic gas production over the past decade - has been a lengthy process and was expected to provide a cheaper alternative to oil-linked sales contracts, especially for LNG-hungry Asia. The long-awaited