LNG Market Model for Long-Term Strategy

BCG’s LNG market model is a simple visual tool that provides an end-to-end view and explains the key trends of the liquefied natural gas market. The LNG market model offers crucial support for companies assessing their LNG strategy.

Natural gas and LNG have become essential sources of energy over the past decade and are poised to remain relevant in the decades to come. Oil and gas players understand this and are placing gas and LNG at the top of their growth agendas.

However, this promise of growth also comes with challenges that stem from a complex environment:

  • Significant oversupply from increased activity
  • Emergence of smaller players
  • Shorter-term contracts
  • Higher counterparty risks

In this context, BCG’s LNG market model helps companies navigate this complexity to better design their LNG strategies. The tool is based on comprehensive market data, including information about liquefaction capacity, regasification capacity, LNG vessels, trade routes, historical trades, and data on a cargo-by-cargo basis. In addition, it provides a view of key LNG players’ current and future footprint, positions, and degree of integration along the value chain.

This comprehensive data is accessible within a fully mobile interface, providing views of market dynamics through quick, ready-to-use maps and standard reports. The LNG market model gives companies insights into the future by leveraging BCG’s perspectives on supply-and-demand balance scenarios, future LNG trade routes, potentially undersupplied markets, and destinations for surplus. The tool also provides a deep dive on end-user markets, potential pricing, and a global supply cost curve for each scenario.

By customizing prebuilt scenarios and exploring different possibilities for the future, the LNG market model can help clients navigate key questions in order to develop a robust LNG strategy. For instance:

  • What could be the effect of anticipating or delaying projects?
  • How will changes in regional consumption affect trade routes and market supply-demand balances?
  • What’s the best way to position a portfolio to profit from possible changes in market dynamics?