Liquefied natural gas (LNG) has historically enjoyed stable prices as a commodity. Yet the outlook for 2016 is less certain, according to Simon Redmond, Director at Standard & Poor’s and commodities specialist. Writing for specialist monthly journal, Petroleum Review from the Energy Institute, he explains that a glut in global supply has driven down prices.
Redmond argues that while most LNG supply remains covered by long-term off-take contracts, any supply that is deferred or left uncontracted is at risk of these low prices. Importantly, such market uncertainty has important ramifications for the ratings of energy projects.
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