Cross-border trade volumes

Falling trade barriers, heavy investment in handling facilities, and improvements in transport have boosted the increasingly liquid markets for commodity and intermediate products. Between 1981 and 1995, cross-border trade volumes grew at double the growth rate of the industry as a whole. Factors like these are undermining the historical benefits of owning assets. Why make upstream products when you can buy them elsewhere more cheaply ... 

There are developed and liquid repo markets throughout the world, in North America, Europe, Asia and Japan. There is a considerable amount of cross-border trading, as well as repo in so-called emerging markets. The size and liquidity of different markets varies but the aggregate whole is considerable, with a large volume of stock being repoed at any one time. 

Last decade LNG trade doubles its volume. Now LNG represents approximately 22% of worldwide cross-border gas trade. And there is a consensus in LNG industry (according to IEA, [4]) that the demand is expected to double to approximately 220 - 270 BCM/y by 2010 and as a consequence LNG trade will experience strong growth. LNG has much higher cargo density than natural gas, so under the development of technology and costs reduction the LNG supply becomes more and more attractive. Figure 6 demonstrates the tendency to equalize the prices for delivered LNG and pipeline NG, see [5]. 

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