Three questions with David Goldwyn
A 'softening' of LNG prices in the cards as market grows more liquid
David Goldwyn, president and founder of Goldwyn Global Strategies LLC, on arbitrage, prices and North American liquefied natural gas
Alberta Oil: Do you anticipate we’ll see more gas-on-gas pricing in Asia?
David Goldwyn: I think you’ll see an erosion in the correlation of gas and oil prices as the spot market for LNG grows. I think there will be a softening in that correlation, but it won’t disappear until you have significant indigenous supplies [of natural gas] in Asia or a much more liquid LNG market. [Asian buyers are] still going to have that insecurity and they’re still going to pay a premium for that long-term supply.
AO: Could that erosion make it difficult for LNG proponents to get financing?
DG: It still remains to be seen whether financial players believe and are willing to invest in the sustainability of shale resources for a 30-year project. They haven’t done it yet. That’s an open question. I think the way you might see that change is some of the Japanese utilities become equity investors in the LNG export projects, so that they’re sharing some of the risk.
AO: How do you view the sustainability of using shale gas as a feedstock for LNG?
DG: We have way more supply than we’re likely to have demand, so I think it is sustainable. People talk about the large ramp-up and then drop-off in shale production, but what they don’t say is it is absolutely a very large flow at the beginning and then it levels off. But it levels off over a long period of time, and so these are sustainable as long as the manufacturing production process can continue.