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, Consulting

Bernadette is the Deloitte Australia Oil, Gas & Chemicals Leader and Global LNG Leader. She has worked with companies in the upstream, downstream, midstream, LNG and trading segments, conventional and unconventional resources and across the end to end project to operations lifecycle. Bernadette has a comprehensive understanding of the Australian and global oil and gas industry, its challenges and future directions as well as the overarching policy and regulatory framework in which the industry operates. Professional Experience: Bernadette supports Australian and international companies improve business performance, implement growth strategies, and transition to a decarbonising economy where LNG and electricity play increasing roles. Bernadette is an active speaker in oil and gas industry conferences and frequently writes about the competitiveness of the Australian oil and gas/LNG industry.  Qualifications and Professional Memberships Fellow, Institution of Engineers Australia (FIEAust) Graduate, Australian Institute of Company Directors (GAICD) Director of METS Ignited, and Chair of the METS Ignited Audit Committee Board of Governors and Life Member, Energy Club of Western Australia APPEA Technical Program Committee member (2019, 2020 and 2021) Organising committee member of AOG Energy Industry Supply Forum (since 2013) Member of SPE and Chair of SPE APOGCE 2020 (Oct 2020) and SPE Emissions Management Workshop (Sep 2020) Founding board member of Women in Oil and Gas in Australia Master of Business Administration, Columbia Business School, New York, USA Master of Science in Chemical Engineering, University of Houston, Texas, USA Bachelor of Science in Chemical Engineering, University of Delaware, Delaware, USA Prior to joining Deloitte, Bernadette was Managing Director for Energy in Accenture’s Perth practice and APAC Energy Lead from 2007 to November 2016. She has also held senior global oil and gas operational and consulting roles with Exxon Company International, Esso Singapore, Arthur Andersen and SAIC.