From the chaos of the coronavirus pandemic can come a new order for LNG markets

The LNG spot market is in no way comparable to the gas hubs of North-Western Europe. In 2009, when those hubs took off there was a fairly liquid market with market makers and flexibility in the chain to serve the market. You could always trade your gas – more or less – it was only a matter of price. Thats not at all the case with LNG. In Asia, when receiving terminals a booked to capacity, there is no place when you can sink your cargo. The only place on Earth that can play this role now is North-Western Europe. To a degree at least. It will need an LNG Market Maker (sort of) to make real spot indices viable. What we have now is necromancy. Sure we can imagine better than the oil link – but the real world is not there yet. Smart contracts won’t resolve us.

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