Most of the world’s supply of LNG is delivered under long-term contracts, which means that any disruption to energy supplies caused by natural or man-made disasters could push spot prices sharply higher almost instantly.
New production, particularly from gargantuan projects in Australia, will improve supplies, but those projects are still a year or more from becoming reality. And costs are exploding. Exxon Mobil Corp. (NYSE: XOM) recently raised its cost estimate for an LNG project in Papua New Guinea and Chevron Corp. (NYSE: CVX) and Royal Dutch Shell PLC (NYSE: RDS-A) have done the same for their massive projects in Australia.
The higher prices may help offset the billions of dollars cost increases these firms have just committed. But by the second half of this decade, these and other new projects, including at least one in the United States, will be on-line and today’s shortages may turn into tomorrow’s glut.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
