A Gastech exclusive: making sense of LNG market volatility

The LNG market is at a critical juncture. The uncertain outlook has affected pricing and contract terms significantly and widened the gap between buyer and seller aspirations. With the volume of contracts signed at the highest peak in more than a decade in 2022, the opportunities are there – but the ongoing volatility is challenging to navigate.

Many LNG buyers face the challenge of ensuring LNG supply security, while keeping their procurement costs competitive and contractual terms flexible. Simultaneously, the terms in LNG sale and purchase agreements (SPAs) are also evolving as LNG trading increases.

This insight emphasises the evolving nature of LNG contracts and buyer-seller behaviors influenced by market dynamics.  Pricing structures vary based on contract terms, raising questions about procurement processes. Getting procurement right has long-term economic and operational benefits, and we discuss the typical questions addressed by Wood Mackenzie's consulting team for LNG buyers.

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