Page 5 - GLNG Week 40 2021

GLNG COMMENTARY GLNG

competitively priced capital for both fleet to hit new highs. S&P Global Platts’ Japan-Ko-
renewal and potential future growth ... which rea-Marker (JKM), an Asian spot benchmark,
has not been available through the public equity rose above $56 per million British thermal units
capital markets for many years,” Teekay Gas ($1,548.96 per 1,000 cubic metres) on October
Group’s CEO, Mark Kremin, stated. 6 for a cargo due to be delivered into North Asia
“Stonepeak has long recognised the growing in November. This marked the largest single-day
global demand for LNG and importance of nat- price increase according to S&P Global Platts
ural gas as a bridge fuel, particularly as the world data.
continues to shift toward cleaner sources of This translates into above $320 per barrel of
energy,” Stonepeak’s senior managing director, oil equivalent (boe), while Brent crude futures
James Wyper, said. “Through this transaction, are currently trading at around $83 per barrel.
we have an exciting opportunity to invest in a It is also the first time ever that JKM prices have
critical energy transition infrastructure busi- exceeded $50 per mmBtu ($1,383.00 per 1,000
ness in the form of Teekay LNG’s high-quality, cubic metres).
modern fleet of vessels and stable long-term Meanwhile, spot prices for cargoes due to The transaction
customer contracts.” be delivered in December are reported to have
Wyper highlighted efforts to bring LNG to risen above $57 per mmBtu ($1,576.62 per comes as LNG
Asia in particular, where he said his company 1,000 cubic metres). prices continue to
had been an active investor in the ongoing shift This comes amid intensifying competition for
to cleaner fuels and renewables. LNG cargoes between Asia and Europe ahead hit new highs.
“We believe this transaction represents a of the winter heating season. Traders have been
unique opportunity to monetise our position in cited as saying that while they had anticipated
Teekay LNG while realising an attractive return higher winter demand, no-one had expected
on investment for Teekay and for Teekay LNG prices to reach such high levels before the win-
common unitholders,” said Hvid. “This trans- ter has even started. The latest increase in prices
action also provides Teekay with greater finan- has also been attributed in part to new concerns
cial flexibility to leverage its existing operating in Asia over production issues at the Sakhalin 2
franchise and industry-leading capabilities to LNG project in Russia, as well as some ongoing
pursue attractive investment opportunities in maintenance work at one train at Indonesia’s
both the shipping sector and potentially in new Tangguh LNG project.
and adjacent markets, which we expect to be For Teekay LNG, the price trends likely sig-
dynamic as the world pushes for greater energy nal high demand for its fleet. Indeed, given the
diversification.” comments made in the wake of the transac-
tion announcement, it would not be surpris-
What next? ing if the company were to start expanding its
The transaction comes as LNG prices continue fleet soon.™

Week 40 08•October•2021 www. NEWSBASE .com P5