- The new Russia-China gas deal, along with a new trend of setting prices linked to gas prices rather than the traditional crude oil benchmarks, could upset western Canada's plans for launching a liquefied natural gas export industry, according to a new report by TD Bank.
- "With so much LNG supply capacity set to come on stream, Asian buyers have more power to bargain for lower prices in LNG contracts, lowering the potential prices Canadian producers would receive, and could squeeze the economics of certain LNG projects,” TD says.
- Canadian projects still offer attractive spreads and proximity to Asian markets despite the challenges, but proponents must move quickly to grab first-mover advantage, TD says as it expects two LNG projects to secure final investment decisions before the end of the year.
- Relevant tickers include CVX, RDS.A, RDS.B, XOM, TRP, OTCQX:REPYY, OTCQX:REPYF, CEO, OTCQX:BRGYY, OTCQX:BRGXF.