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Buyer/seller tensions could impact LNG projects, Chevron CEO says

  • Oil-linked liquefied natural gas prices make the most sense for Asian buyers, but a lack of consensus among buyers and sellers could impact proposed projects, Chevron (CVX) CEO John Watson says.
  • In that vein, CVX and partner (APA) are proposing the Kitimat LNG export project on Canada's west coast, but CVX did not include Kitimat in the list of projects expected to get a final investment decision by 2016 in today's presentation to investors; CVX says it first must secure long-term supply deals for 60%-70% of production.
  • Shell also is proposing a project on the British Columbia coast but has backing from Asian partners, while Asian companies Cnooc and Petronas also are eyeing projects to feed their home markets.
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Comments (2)
  • Hendershott
    , contributor
    Comments (1622) | Send Message
     
    The buyers aren't buying the oil linked price scheme.
    11 Mar 2014, 07:01 PM Reply Like
  • User 353732
    , contributor
    Comments (5046) | Send Message
     
    Very likely a partial indexation to oil and a partial to some metric of spot LNG will be selected to meet the needs of buyers and sellers together with strong take or pay provisions.
    Dedicated, long lived, very capital intensive energy projects cannot be built on speculation within the next 10 years. Once Big Gas is global, then LNG projects can be constructed to serve the needs of a liquid and deep market for LNG rather than specific buyers
    12 Mar 2014, 08:35 AM Reply Like
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