Redburn says golden era for LNG over, downgrades BG Group

Indie equities broker Redburn claimed a ‘golden era’ for Liquefied Natural Gas was over and downgraded BG from ‘neutral’ to ‘sell’.

Redburn said $15bn of LNG earnings in 2014 would contract to $5bn, as terms of trade were deteriorating and would not recover.

Across the industry, this has cut 10% off earnings estimates, the brokerage said.

Shell, BG and Total would see the largest unwinding of windfall profits from 2014, as those companies invested most into the Asia market, which has now unravelled.

BP is the most insulated, Redburn said in a note.

Redburn downgraded its rating for BG due to LNG risks, and said Shell’s planned takeover of BG in 2016 was at risk of non-completion.

BG was down 1.17% to 1096.50p at 13:33 on Friday.