Posted: 09 Oct. 2018 1 min. read

The new era of financing in LNG – a view from Gastech

In one of the most enlightening sessions of the Gastech conference, global leaders from major banks and finance institutions discussed the challenges and opportunities ahead for financing new gas related projects.

They also addressed the question of the future of natural gas and LNG in comparison to ‘green’ energy projects and what are the forecasts for project CAPEX over the next few decades. Some insights below:

Insight #1

The changing face of LNG and gas projects.

As gas projects shift away from foundation long term customers, funding new projects will require a major economic credit-worthy rationale for the project. Whether it is reserve potential, market destination or some other driver, without major long-term contracts the ability to finance new projects is changing in a big way.

Insight #2

Renewables are impacting investment in gas power generation.

On the back of major government subsidies, renewables have arrived at a cost competitive level and are challenging the demand side for gas. The power market is seeing decreased demand for gas turbine generators and the potential for stranded thermal assets is there.

Insight #3

Growth is expected in new areas such as marine transport to replace heavy fuel oil and emerging southeast Asian countries. New IMO regulations coming into effect in 2020 will limit SOx and NOx emissions and will building the business case for LNG as a marine fuel. Improved bunkering at ports around the world has started this process, and this area has significant opportunity to grow for future demand.

Emerging Southeast Asian markets shifting from coal are considering gas, but the required investment in expensive gas infrastructure such as regasification, pipelines, and gas turbines make investment risky. New deal structures sharing risk with turbine OEMs are starting to come to light to open up these markets.

Steve McGill was also an author on this blog

More about the author

Bernadette Cullinane

Bernadette Cullinane

Partner, National Oil & Gas Leader, Consulting

Bernadette is Deloitte’s Australian Oil, Gas and LNG Leader.  Bernadette has more than 26 years of experience across the oil and gas value chain and all stages of the capital project to operations lifecycle. She has worked with companies in the upstream, downstream, midstream, LNG and trading segments as well as in conventional and unconventional oil and gas. Since moving to Australia in 2007, Bernadette focuses on supporting Australian and international companies to be globally competitive. Day to day, she helps companies reduce cost, improve business performance and grow. Bernadette is an active speaker in Oil & Gas industry conferences and is a noted author on the competitiveness of Australian Oil & Gas industry. Bernadette is the co-founder and leader of the Energy Industry Collaboration Group, an organisation comprised of more than 30 service sector and operator companies focused on increasing collaboration and the competitiveness of the Australian oil and gas industry. She is a Director of METS Ignited, the Industry Growth Centre for the mining equipment and technology services sector and is on the board of Women in Oil & Gas. Prior to joining Deloitte, Bernadette was Managing Director for Energy in Accenture’s Perth practice and APAC Energy Lead from 2007 to November 2016. Throughout her career, Bernadette has held a number of senior global oil and gas sector roles, namely with Exxon Company International, Esso Singapore and Arthur Andersen. She was also a Vice President in SAIC’s Oil and Gas consulting practice. Bernadette has an MBA from Columbia Business School in New York City, and has BS and MS degrees in Chemical Engineering.