In the shift from fossil fuels to cleaner energy solutions, LNG undoubtedly has and will continue to play a pivotal role in the changing landscape of the industry. Despite big oil driving the energy transition, many of the independent trading houses are following suit and ramping up their activities in the LNG trade, especially following slower growth in the oil space.
While trading houses such as Trafigura, Vitol and Gunvor have been early pioneers of LNG trading, we see a second wave of expansion into the space from producers, utility companies and traditional LNG buyers. As several US based LNG projects look to achieve FID this year, there has been a push to add headcount to focus on third-party trading and shorter-term marketing as these projects become more operational.
At the other end of the spectrum, end users and traditional buyers are becoming more sophisticated, looking to optimise their portfolios and sell LNG cargoes back into the market. This has resulted in three of the largest buyers of LNG, CNOOC, JERA and KOGAS, setting up trading entities in Singapore within the last year. With upstream players moving down the supply chain and downstream players moving up, we are seeing increased levels of hiring for commercial LNG roles, and talent in high demand.
Moreover, LNG professionals today require a very different skill set compared to 10 years ago. A decade ago, third-party LNG traders were scarce and typical commercial professionals were focused on long term deals lasting up to 25 years. While there is steady growth for long term marketers and originators today, individuals with expertise in spot, short term and financial trading & marketing are highly sought after.
With LNG talent in high demand, due to both evolving market conditions and more entrants in the industry, organisations are now paying premiums for LNG professionals or looking at alternative options from other related commodities. We expect this to continue as more players look to enter the space or add headcount to existing teams.