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Two of Us - Portfolio Players Take on Critical Roles in Rapidly Commoditizing Global LNG Market

Russia’s invasion of Ukraine last February upended long-standing expectations about natural gas supplies to Europe and resulted in elevated global gas prices as countries bid for LNG to fill the void. But U.S. suppliers can only produce so much LNG, and how much of it ends up in Europe versus Asia or other gas-consuming regions in 2023 and beyond will depend largely on market forces — in other words, who needs the LNG more and is willing to pay up for it. At the center of these market-based decisions about LNG cargo destinations are large portfolio players like Shell, BP, TotalEnergies and Naturgy and short-side portfolio players like Japan’s JERA. In today’s RBN blog we look at these two types of players, the roles they play, and their contributions to energy security.

News reports on LNG frequently refer to portfolio players without defining what they are. Credit for the name goes to BG Group as it developed supply sources from Equatorial Guinea, Egypt and Trinidad from 2000-03. After years of stellar trading performance, BG was acquired by Shell in 2015. There are currently only four entities that qualify as LNG portfolio players: Shell, BP, TotalEnergies and Naturgy. Several other companies like to think of themselves as portfolio players and are nearly there but lack the full suite of requirements. Those attributes include:

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