The LNG is not headed for oversupply, BG Group’s CEO told investors at the Howard Weil Energy Conference in New Orleans.
Supply vs. demand
Chris Finlayson commented: “As an industry that tends to systematically overestimate future supply and underestimate demand, we have been here before. We believe that some new projects across the industry will probably take longer to deliver than many are expecting, and certainly some will fall by the way side.”
Finlayson provided an outlook on the global LNG market, before explaining how BG Group fits into a period of continued high growth for the LNG industry.
US exports
He explained that the US alone will not fill the LNG supply-demand gap, and that projects in other locations, including Canada and Africa, will be required.
BG Group’s CEO added that although LNG exports from the US will add some flexibility to the industry, the majority of volumes will continue to be delivered primarily to a single market over the contract’s life.
LNG prices
Finlayson concluded by explaining that future LNG prices will continue to remain regionally differentiated, with Asia being the price setting market for the foreseeable future.
Adapted from press release by Katie Woodward