Henry Hub prices present material arbitrage opportunity in Europe

Written by Ian Barker
09 Dec 2021
Energy Market

Bloomberg reporting this morning that 30 Tankers of LNG are en route from the US to Europe.

The tankers contain a total of 4.9 million cubic meters of LNG, which if I've got my maths right is ~1bn therms / ~32TWh - valuing the cargo at more than £4bn.

The cost of processing and shipping the Henry Hub gas is likely ~55p-60p per therm, which at current prices would mean a profit of £3.3bn to £3.8bn for the cargo.

To put this in context - at current usage rates, this represents about 4 days inventory for this time of year in Europe.

Here's a slide showing the arbitrage value from a client presentation last week.

Ian Barker

Ian shapes the BFY vision and inspires our team to bring it to life, while remaining central to complex client engagements in Strategy, Commercial, and Operations.

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