Thank you Amber. In regards to the natural gas in storage, who owns that gas and pays the storage fee? Is it the production company planning to put gas in storage in summer and hopefully selling at higher price in winter or is it utility customer or LNG supplier storing until needed. I realize that this is a basic question, but I am wondering which party was able to take advantage of the price swings in late January. Thank you
Just depends on who has contracted for the storage capacity--can be a merchant, consumer, LNG offtaker, occasionally a producer. That company maintains title to the gas in the ground, and the storage company operates the facility.
The contrast between Cheniere's FOB model and traditional tolling is fascinating—basically Cheniere holds a massive embedded optionality that tollers give up in exchange for feedgas control. Estimating $80M-$150M for one weekend is wild, especially set against quarterly EBITDA. I'd be curious how often these dislocations happen in a typical year vs how much upside they represnt in tail scenarios. Venture Global's hesitation makes sense given the pre-commercial litigation overhang.
Thank you Amber. In regards to the natural gas in storage, who owns that gas and pays the storage fee? Is it the production company planning to put gas in storage in summer and hopefully selling at higher price in winter or is it utility customer or LNG supplier storing until needed. I realize that this is a basic question, but I am wondering which party was able to take advantage of the price swings in late January. Thank you
Just depends on who has contracted for the storage capacity--can be a merchant, consumer, LNG offtaker, occasionally a producer. That company maintains title to the gas in the ground, and the storage company operates the facility.
The contrast between Cheniere's FOB model and traditional tolling is fascinating—basically Cheniere holds a massive embedded optionality that tollers give up in exchange for feedgas control. Estimating $80M-$150M for one weekend is wild, especially set against quarterly EBITDA. I'd be curious how often these dislocations happen in a typical year vs how much upside they represnt in tail scenarios. Venture Global's hesitation makes sense given the pre-commercial litigation overhang.
my rough heuristic would be, in a typical winter, once. In a mild winter, zero times, and a really cold one, maybe a few times