LNG Sellers Seek Credit Letters as Gas Price Spike Stretches Credit Limits

Sellers of LNG are asking for credit letters from companies they deal with to guarantee they can pay as the global spike in gas prices takes them beyond their credit limits, industry sources said on Oct. 4.

Jessica Jaganathan, Reuters

Sellers of LNG are asking for credit letters from companies they deal with to guarantee they can pay as the global spike in gas prices takes them beyond their credit limits, industry sources said on Oct. 4.

Defaults have been rare in LNG, which has typically relied on big players with deep pockets, but over the last two-to-three years, around 20-to-30 companies have entered the market, at least doubling the number of relatively small players.

These companies were lured by a spike in demand, especially in Asia, spurred by relatively cheap gas prices and a global energy transition that saw countries such as China shift from coal to gas.

Already have an account? Log In

Sign up for FREE access to view this article now!

Unlock Free Access