"Store Feet" Is Not An LNG Term-Here's What Traders Mean
"Store feet" is not an LNG industry term; in trading contexts it is informal shorthand used by some market participants to describe holding or parking a physical or financial position-often LNG cargo volumes or pipeline capacity-rather than immediately executing a sale or delivery. Within the global LNG market, the closest formal concept is inventory optimization or floating storage, where traders deliberately delay delivery to capture pricing spreads or seasonal arbitrage.
Why "Store Feet" Appears in LNG Conversations
The phrase surfaces in informal trader dialogue, particularly among desks managing short-term cargo optionality. In LNG, "feet" can loosely reference volumetric gas units (derived from cubic feet), so "store feet" implies holding gas exposure. However, no recognized LNG contract, regulatory framework, or exchange documentation uses this wording. Instead, professionals refer to floating storage strategies, linepack management, or inventory positioning.
For example, during the winter 2022-2023 European gas crisis, traders effectively "stored" LNG at sea by delaying regasification. According to Kpler vessel tracking data from January 2023, over 30 LNG carriers were idling near Northwest Europe, representing roughly 2.1 million tonnes of LNG-equivalent to about 100 billion cubic feet (bcf) of gas.
What Traders Actually Mean
When a trader says "store feet," they are typically describing one of several recognized strategies within the LNG supply chain. These strategies are grounded in price arbitrage, logistics constraints, and contract flexibility rather than any formal terminology.
- Floating storage: Holding LNG cargoes offshore to wait for higher spot prices.
- Tank inventory management: Delaying regasification at import terminals.
- Pipeline linepack: Temporarily storing gas within pipeline systems.
- Financial positioning: Maintaining exposure via derivatives rather than physical delivery.
Each of these mechanisms allows traders to optimize timing and margin capture, especially in volatile markets such as TTF (Title Transfer Facility) or JKM (Japan-Korea Marker).
How LNG Storage Economics Work
The decision to "store" LNG volumes depends on the forward curve structure. When the market is in contango-future prices higher than spot-storage becomes economically viable. Conversely, backwardation discourages holding volumes. In the spot LNG pricing environment, this dynamic is critical for portfolio players.
- Identify price spread between current and future delivery months.
- Calculate storage costs (charter rates, boil-off losses, financing).
- Compare net margin against immediate sale.
- Execute storage if spread exceeds total holding cost.
In late 2023, average LNG carrier charter rates exceeded $150,000 per day, significantly raising the cost threshold for floating storage. This constrained the ability of traders to "store feet" in practice, despite favorable price spreads.
Illustrative LNG Storage Economics
The table below shows a simplified example of how a trader evaluates whether to hold LNG volumes under a "store feet" mindset within the LNG trading portfolio.
| Parameter | Value (Example) | Notes |
|---|---|---|
| Spot Price (TTF) | $10/MMBtu | Current delivery price |
| Forward Price (3 months) | $12/MMBtu | Future contract price |
| Storage Cost | $1.20/MMBtu | Shipping, boil-off, financing |
| Net Margin | $0.80/MMBtu | Forward minus spot and costs |
| Decision | Store | Positive arbitrage opportunity |
Why Terminology Precision Matters in LNG
Misunderstanding informal phrases like "store feet" can create confusion in a sector where contractual precision is critical. LNG transactions rely on standardized definitions under SPAs (Sales and Purchase Agreements), DES/FOB terms, and regulatory reporting frameworks. Using non-standard language risks misinterpretation in the LNG contract structures that govern billions of dollars in trade annually.
"In LNG, terminology is not just semantics-it directly impacts risk allocation, pricing, and legal enforceability," noted a 2024 briefing from the International Gas Union.
This is particularly relevant as LNG markets become more financialized, with increasing participation from portfolio players, hedge funds, and utilities managing complex hedging strategies.
Relation to Broader Gas Market Practices
Although "store feet" is informal, the concept aligns with established practices across gas markets. In North America, traders routinely discuss "parking gas" in storage facilities, while in Europe, linepack flexibility plays a similar role. Within the European gas hubs, storage utilization rates exceeded 95% ahead of winter 2023, highlighting the strategic importance of holding physical molecules.
In LNG specifically, the lack of widespread onshore storage capacity-particularly in Asia-makes floating storage a more visible and sometimes necessary tool.
FAQ
Key concerns and solutions for Store Feet Is Not An Lng Term Heres What Traders Mean
Is "store feet" an official LNG term?
No, "store feet" is not recognized in LNG contracts, regulations, or industry standards. It is informal trader slang referring to holding gas or LNG positions.
What is the correct LNG terminology instead of "store feet"?
Professionals use terms such as floating storage, inventory management, linepack, or cargo deferral within the LNG logistics network.
Does "feet" refer to cubic feet of gas?
Yes, indirectly. The term likely originates from volumetric measurements like cubic feet, but in LNG markets, volumes are typically expressed in tonnes or MMBtu.
When do traders choose to store LNG instead of selling?
Traders store LNG when forward prices exceed spot prices by enough to cover storage and financing costs, creating a profitable arbitrage opportunity.
Is floating storage common in LNG markets?
Floating storage becomes common during periods of oversupply or infrastructure bottlenecks, such as the European gas crisis in 2022-2023 within the LNG shipping market.
