LNG Spot Cargo Trading to Decline Over Next Three Years, BP Says

BP Plc (BP/) said trading of liquefied natural gas cargoes on the spot market will decline over the next three years.

“Liquidity for LNG trading could fall,” Jonty Shepard, head of LNG trading at BP, said today at the Flame conference in Amsterdam. “Spot trading is likely to decline in the next three years if LNG tightens significantly.”

A slowdown in new supply, rising demand for gas cargoes in Asia and more potential demand in Europe as domestic production declines will reduce spare shipments for trading, he said.

The LNG market has become more sophisticated in recent years, Shepard said, pointing to a total of 48 cargoes that were “reloaded” from storage tanks at import terminals in 2011, compared with five in 2009.

Buyers will become more nervous about securing shipments and will try to “lock in mid-term deals,” he said.

To contact the reporter on this story: Ben Farey in London at bfarey@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net