ABSTRACT

The global gas sector is undergoing a number of fundamental changes which will change the relationship between the seller and the buyer of LNG.  After many decades the old conventions, based on long term take or pay contracts, usually oil indexed and often with restrictive destination clauses, are beginning to crumble. 

The entry of the US with its tolling model and low wholesale prices is creating considerable disruption on the supply side, as LNG developers in other parts of the world try to compete.  Changes on the buyers side are also bringing about new pressures, especially as many Asian markets follow North America and Europe and seek to establish customer choice, retail competition, and third party access to key infrastructure, including LNG regas.  When the impact of technology is factored in, with both floating LNG (FLNG) and Floating Storage and Regasification Units (FSRUs) gaining in popularity, the LNG sector is facing something of a perfect storm.

New markets for LNG are creating exciting new opportunities as well.  With what appears to be a dislocation of oil and gas prices, gas and LNG will be an increasingly attractive and cost-saving option in the transport sector, where already LNG is making rapid inroads into the marine bunkering segment, where new environmental regulations are creating new demand.  The railway industry, and road transport also represent growing sources of demand, which are also likely to leverage new contract mechanisms, based on more numerous, smaller transactions than the sector has been used to.

GCA’s presentation will seek to piece together the moving parts in the LNG value chain, and set out ways in which buyers, sellers, traders and aggregators can interact with one another to capture the undoubted growth opportunities that will exist over the decade to come, and will speculate on emerging pricing mechanisms, and the wholesale/retail market developments which will be most influential.

BIOGRAPHY

Nicholas Fulford, Global Head of Gas and LNG at Gaffney Cline and Associates

Nick, a Chartered Engineer with over 30 years experience in all parts of the natural gas value chain, leads GCA’s gas and LNG practice.  He has a track record in M&A, restructuring and commercial negotiations, with particular emphasis on wholesale and retail gas markets, LNG, unconventional gas and government/regulatory policy.

Prior to joining GCA, Nick held a number of senior roles in various global projects with British Gas, where he was heavily involved in the restructuring of the UKs gas and electricity markets in 1995/6, and the establishment of Centrica plc.  Nick subsequently led Centrica’s entry into North America, and follow-on acquisitions which led to the creation of Direct Energy, the gas and electricity supply business now based here in Houston.  He also held leadership positions in Centrica’s E&P division, with projects in Norway, Egypt, Trinidad and various Middle Eastern states.

Since 2010 Nick has focused on the growth in unconventional gas resources and related LNG export surge in the US and Canada.  Since joining GCA he has led a number of advisory projects for GCA for clients around the world, who have an interest in US LNG, either as a buyer, or as a competitor.  Much of his work in recent months has also focused on LNG to power growth in the developing economies of South Asia, Africa and Latin America.

Nick graduated from Durham University with a degree in Engineering Science, and subsequently received an MSc from the Royal Military College of Science.

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