Global LNG markets to remain oversupplied into 2020s despite strong demand
Published by Will Owen,
Editor
LNG Industry,
According to Reuters, the IEA have said global LNG markets will remain oversupplied into the 2020s due to a surge in production, although soaring demand (especially from China) may tighten the market earlier than expected.
“We will see massive amounts of new LNG capacity coming to the market... so we will probably continue to have well-supplied markets into the middle of the 2020s,” said Keisuke Sadamori, director of energy markets and security at the International Energy Agency (IEA).
On the supply side, there is certainly a concerted effort to expand capacity. For example, Qatar, which is being challenged by Australia as the world’s biggest LNG exporter, said in July that it planned to increase its LNG output by 30% to 100 million t within the next five to seven years. LNG production in the United States is also soaring, thanks largely to the shale gas boom of recent years.
However, Sadamori also said soaring demand could rein in rampant oversupply, which has pulled Asian spot LNG prices LNG-AS prices from a peak of US$20.50 per mmBtu in February 2014 to below US$10 per mmBtu since 2014.
“Especially in China, we are already seeing something like 40% of year-on-year growth in LNG imports. So depending on how demand develops, the timing that the market becomes tighter could be earlier than originally forecasted by the industry,” he said.
China’s LNG imports jumped to their second-highest on record in September as the country ramped up supply for households in northern areas set to use gas for winter heating for the first time in the country’s war on smog.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/23102017/global-lng-markets-to-remain-oversupplied-into-2020s-despite-strong-demand/
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