Interview with: Melissa Lindsay,Global Head of LNG, Tullet Prebon
Melissa, can you tell us about the concept behind the LNG Trading Exchange and why you are working with CWC on this?
CWC conferences have always attracted the LNG trading community and we have a strong synergy between our role as a broker and the role of conferences in bringing the global community together. We see the CWC event as the perfect opportunity to take advantage of having so many experienced traders in one location and a chance to exchange ideas on how to take the industry forward. Then there is of course the networking aspect and it makes a lot of sense for us to co-ordinate so people have a chance to both catch up with existing counterparties and meet some new ones.
What changes have you at Tullett Prebon seen in trading over the past five years?
There has been a shift away from the mentality that LNG is predominantly a long term contract industry, and many are keen to understand how they can position themselves to take advantage in the shift towards a liquid spot market. As confidence in the spot market has grown, we see more Producers and End Buyers considering what the optimal blend of long, medium and short term contracts is. For many participants, long term contracts continue to underpin projects but medium term deals and spot cargoes can better help manage price and volume risk. Long term deals are also becoming more flexible leaving producers increasing exposure to the spot market, and giving buyers an opportunity to optimise contracts for commercial gain.
How much more activity can we expect over the next two years?
Data from our TPLNG consultancy arm, estimates that based on the start-ups of new projects, that in 2017 vs 2015 we should expect to see an additional 53Mtpa come on stream. Equating to around 4860 cargoes in 2017, vs 4000 in 2015.
On top of the supply build, we see more markets importing LNG and an increasing number of trade routes. The churn ratio on each cargo is also increasing with more counterparties in the chain as cargoes are re-traded. A shrinking of margins as prices come off (a trend we expect to continue) means traders are working harder and closing more deals than ever before to hit targets.
Why is Singapore a good place to launch the LNG Trading Exchange?
Singapore has established itself as the base for LNG companies in the Asia Pacific. It has both a large permanent growing community of traders from companies around the world and steady flow of traders passing through the region.
Why should traders attend the meeting?
For the market to grow sharing knowing is crucial, and it is important that the industry aligns its thoughts if LNG is to become more commoditised and efficient.
Melissa Lindsay will be speaking on Physical & Financial LNG Trading & Risk Management: Current and New Trends at the 7th World LNG Series Asia Pacific Summit http://asiapacific.cwclng.com/
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Elizabeth Bogue
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Email: ebogue@thecwcgroup.com
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