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LNG markets are at the crossroads-IV: Balancing likely sooner than later
Mar 14:
The conventional wisdom in the LNG industry has been that the market is poised for a period of surplus, leading to depressed spot prices and the potential shutting in of LNG capacity.
8However, there are some possible indicators of a future that does not see the LNG market out of balance in the period to 2025 to the extent previously anticipated.
8Potential supply-side trends, such as the delay of start-ups of new liquefaction capacity and – perhaps – a more rapid decline of production in mature projects, may reduce forecast supply growth, or at least smooth the curve.
8At the same time, the potential for the behemoth markets of China and India to continue to absorb unexpectedly large volumes of LNG, as well as the frequency and pace of new market openings, may indicate a structural underestimation of additional demand growth. Perhaps the LNG market glut, so long predicted, will disappear before it ever starts.
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8However, there are some possible indicators of a future that does not see the LNG market out of balance in the period to 2025 to the extent previously anticipated.
8Potential supply-side trends, such as the delay of start-ups of new liquefaction capacity and – perhaps – a more rapid decline of production in mature projects, may reduce forecast supply growth, or at least smooth the curve.
8At the same time, the potential for the behemoth markets of China and India to continue to absorb unexpectedly large volumes of LNG, as well as the frequency and pace of new market openings, may indicate a structural underestimation of additional demand growth. Perhaps the LNG market glut, so long predicted, will disappear before it ever starts.
Click on Reports for more
