Commercialisation

Commercialisation

Deciding between selling liquefied gas directly on the market or transporting it to a regasification plant for resale to end consumers involves weighing several factors:

1. Market Prices and Trends

  • Selling Directly: If the market price for liquefied gas is high or is expected to increase, selling directly can generate immediate profits.
  • Regasification and Resale: If the market for natural gas (post-regasification) is strong and stable, it may be more profitable to convert and sell to end consumers. Consider long-term price forecasts for both liquefied and regasified gas.

2. Transportation and Logistics Costs

  • Cost of Transport: Transporting liquefied gas to a regasification plant can be expensive, depending on distance, infrastructure, and shipping costs. Evaluate if these costs outweigh potential profits from resale.
  • Storage Considerations: Storing liquefied gas can be costly. If there are delays in finding buyers or price fluctuations, consider how storage and holding costs will impact profitability.

3. Access to End Consumer Markets

  • Infrastructure: If the region has significant demand for natural gas and robust infrastructure (like pipelines and distribution networks), regasification might offer better returns.
  • End Consumer Demand: Understand the demand dynamics of the end consumer market, including potential for long-term contracts that can offer price stability and security.

4. Regulatory and Compliance Factors

  • Export and Import Regulations: Some regions have strict regulations that may impact your ability to sell or transport liquefied gas. Consider the legal and compliance aspects of both options.
  • Environmental Considerations: Regulations around emissions and environmental impact may also affect the feasibility of transporting and processing gas.

5. Operational Considerations

  • Speed of Cash Flow: Selling directly provides quicker cash flow, which may be beneficial for short-term financial needs.
  • Processing Capacity: Ensure the regasification plant has the capacity to handle the volumes efficiently. Consider any operational risks associated with transporting and regasifying.

Conclusion

  • Sell on the Market: If immediate cash flow and reduced risk are priorities, and if the current market prices are favorable, selling directly may be advantageous.
  • Transport for Regasification: If there’s strong end consumer demand, potential for higher long-term profits, and the ability to manage associated logistics and costs, regasification and resale could be more lucrative.