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Permian gas growth to underpin US LNG exports

Surging production from the Permian Basin will underpin growth in US LNG exports and have implications for pricing, delegates at a roundtable hosted by Interfax and Baker O’Brien heard this week Surging production from the Permian Basin will underpin growth in US LNG exports and have implications for pricing, delegates at a roundtable hosted by Interfax and Baker O’Brien heard this week.
By Peter Stewart 24 October 2018 0 33025
Loading a cargo at Sabine Pass LNG Loading a cargo at Sabine Pass LNG. (Cheniere)

LNG exports from the United States are often touted as a cheap alternative to oil-indexed LNG, but the reality is more complex. 

Although Cheniere’s model uses the Henry Hub as a price reference, LNG sold from the company’s Sabine Pass LNG plant reaches end-users mainly through oil-indexed term contracts on a delivered ex-ship basis or on the spot market. This because of the predominance of portfolio players among those taking gas from operational US LNG plants. Portfolio players typically make a margin between the Henry Hub-related...