This Delayed Megaproject Raises Questions About Arctic Energy
I confess – Novetek dealt me quite a surprise when it became clear that Yamal LNG is going to go forward. In LNG, we are quite used to a lot of bluster without substance and seeing a project taking off so quickly is pretty impressive. They have earned a tip of the hat for that. OK, back to Earth. In today’s price environment, it’s hard for the cheapest LNG producers on Earth to cut a profit. Qatar is in a league of its own and they still make money when almost anyone else is bleeding like a headless chicken. And they must tighten belts quite a bit in this environment. All the fundamentals indicate that LNG from Yamal must come at a price that’s quite a bit higher than Qatar. If the market does not provide this cash, someone else must. This may help to rationalize some things …
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