Due to the existing geographical distance between the main consumption and production regions and the resulting
significant logistical costs, the liquefied natural gas (LNG) market has historically been structured around long-term supply contracts indexed to oil prices. With the recent development of shale gas and sluggish European growth,
excess LNG supply now fosters the development of spot markets, particularly in Asia, by nature more flexible and
disconnected from oil prices. In this light, it is not impossible that the LNG industry becomes financialised on a
relatively long-term basis.
