Spain’s Naturgy published its FY2019 results last week. Closer analysis reveals some interesting insights about it’s hedging strategy.
The firm mentioned it had already sold or hedged 90pc of its LNG volumes for 2020, including all of its volumes indexed to the Henry Hub. Naturgy has offtake from Cheniere’s Sabine Pass and Corpus Christi terminals for a total of 5mn t/yr. And the firm has as also contracted or hedged 57pc of its estimated LNG volumes for 2021-22. Of the remaining uncontracted volumes, only 37pc are indexed to the Henry Hub.
Did Naturgy go down this path because it expects US fob prices to turn even lower than they are now? In any case, large-scale shut-ins of US export capacity may be more unlikely if other firms with US offtake sell their volumes further ahead of delivery.
Source: Livia Gallarati